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development issues, these things would not escalate the way that they do. From staffs perspective, it is an incredible bookkeeping exercise that would be difficult to implement efficiently. She stressed that there will be an opportunity to reevaluate these fees every 2 years and at some point that might be a more viable point of consideration. Councilmember Olson added that time and materials based fees make it much more difficult for developers to effectively pro forma a project. Councilmember Narum asked if staff is proposing a change to the cost of appeals. Ms. Wagner confirmed, stating that as proposed the fee would increase from $12.50 to $250. Ms. Wagner continued her presentation, stating that the total cost of Engineering services in FY 2014- 15 was approximately $4.9 million of which only a little less than $1 million was fee related activity. Additional indirect costs, mainly attributed to the city's Capital Improvement Program, increase the recovery target to $1.3 million. This division currently recovers 22% in fee related charges as compared to most cities who use time and materials based fees to achieve full cost recovery. Staff is proposing increases that would achieve a recovery rate of 43 %. She explained that this is a conservative estimate because engineering and public works inspection fees are paid at the time a permit is pulled, which is sometimes up to 18 months in advance of when those services are provided so there is not always direct connection between fees generated and service costs within the same fiscal year. She also noted that the Finance Committee requested that some fees be increased over what was originally recommended by staff in an attempt to increase cost recovery. Pleasanton currently has no fee for onsite improvements for private development. This was an oversight when the fees were last amended in the 1980s and it has never been corrected. Based on a $1 million improvement project, the city's current plan check fees would increase from 2% ($20,000) to 3% ($30,000). Livermore current charges approximately $40,000 for a similarly sized project. Construction inspection fees for the same sized project would increase from 4% to 5 %. A similar project in Livermore would cost about $77,000. The total cost of Building and Safety fee related services, including indirect costs and fees, totaled just under $5 million in FY 2014 -15. As already mentioned, staff is proposing full cost recovery. As fees are based on the cost valuation of a project, new construction valuation tables would be annually adjusted using the CCI to stay abreast of changes in construction pricing. However, new construction only represents about 18% of the permits issued today versus the 25% when the study was prepared. All other permits for additions and renovations are based on the applicant's valuation, despite the interpretive value of that valuation and the fact that some projects require the same number of site visits regardless of the stated value. Staff is therefore proposing to increase the minimum fee from $23.50 to $85 and to implement a flat fee for 4 types of permits impacting homeowners: kitchen remodels, bathroom remodels, reroofing and swimming pools. Electrical, plumbing and mechanical permit surcharges would be based on a percentage of the building permit fee as opposed to the current method of counting actual fixtures. Staff is also proposing the implementation of new technology fee which will help to maintain and upgrade the permit center computer hardware and software. Under the proposed fee increases, building and safety fees on a new 2,000 square foot house would increase from approximately $5,251 to $6,042. The 5 -city fee average is $6,426. Fees for a new 12,389 square foot retail store would increase from $12,389 to $12,788, versus a 5-city fee average of $12,898. Reroofing fees for a $9,000 new roof would increase from $167 to a flat fee of $210. The 5 -city fee average is $241. Ms. Wagner noted that General Fund budget, which the Council will be reviewing in June as part of the 2 -year Operating Budget, does not include these fees which are estimated to total approximately $2.7 million. Staff and the Finance Committee are recommending that the City Council implement the proposed fee increases in FY 2015 -16 at an overall cost recovery level of 79% as developed in the City Council Agenda Page 9 of 11 April 07, 2015