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However, only approximately $6,000 of that relates to the building permit fees being contemplated this evening. Of the remaining amount, approximately $10,000 goes towards development impact fees and a good portion of the rest are actually pass through fees paid to other agencies for things like water connection and sewer treatment. The city last reviewed its user fees for Development Related services in 1992 and again in 2011. The Council declined to implement fee increases at either time; therefore the majority of fees have not been increased since the 1980s. User fees are collected for the administration of Building and Safety Division services (permit processing, plan checking, building inspection, and building, plumbing and electrical permits), Planning Division services (conditional use permits, PUD reviews, and appeals), Engineering Division services (public and private improvements and improvement plan checking review, both onsite and off), and Fire Prevention Division services (inspection services). Per the General Plan, the city's fiscal policy requires that development pay for 100% of its cost of services, with the goal of course being full cost recovery. In 2009 the city hired Public Resource Management to complete a study of its development related user fees. The study revealed an approximate cost recovery of 45% and recommended at that time that the city work towards an 80% cost recovery, with annual fee increases based on a Construction Cost Index (CCI) adjustment and a biannual review and update of fees to move towards 100% cost recovery. The study was most recently updated with budget data for FY 2014-15. It is important to note that not all costs in these departments are fee related and in fact part of the study was determining the direct cost of fees related to the activities described. In FY 2014-15 the combined budget for these departments totaled approximately $12 million, a little over which $7 million of that is fee related. The remaining budget costs typically relate to development of the city's Capital Improvement Program and other advanced planning efforts. The study then determined the direct (staff time) and indirect (prorated share of administrative departments such as Finance, City Attorney, City Manager) costs per activity for the more than 200 different fees being addressed as part of this update. When combined, the fully burdened cost of all fee related services in FY 2014-15 totaled $8.8 million. FY 2014-15 revenues based on the current fee schedule were projected to recover only $4.2 million, equaling a cost recovery rate of 48%. On February 25, 2015 the city's Finance Committee, comprised of Councilmembers Brown and Olson, supported a recommendation to increase city fees to recover 79% of the total cost of all fee related services. It is important to note that cost recovery is not equal amongst divisions. As proposed, Building and Safety would achieve 100% cost recovery, Fire Prevention 75%, Engineering 43% and Planning 25%. Based on input received from the Chamber of Commerce in 2011, in which the Chamber requested the deferral of certain planning fees later in the building process when financing is easier to secure, staff is recommending that 36% of planning fees to the building stage. The true recovery rate in Planning is therefore 61%. The proposed increase across all divisions would approximately generate an additional $2.7 million in revenues, which would directly reduce the subsidy from the General Fund. Ms. Wagner explained that Fire Prevention services is comprised of 2 primary segments — plan check fees for new construction and tenant improvements, and annual fire and CUPA inspections of commercial properties. Pleasanton current charges nothing for annual fire and CUP inspections performed by LPFD. However, LPFD provides the same services for the City of Livermore who charges the full 100% of that cost. Total costs for Fire Prevention in FY 2014-15 were slightly less than $1 . million versus fee collections of $62,500. In addition, the city pays state fire code fees on behalf of commercial properties operating in Pleasanton. Staff is therefore recommending that the city adopt the same fees as Livermore, given that they share the same staff and the same services are provided to both communities. City Council Agenda Page 7 of 11 April 07,2015