ATTACHMENT 04 - Laserfiche WebLink

THE CITY OF 04 CITY COUNCIL WORKSHOP L€ASANTON© May 17, 2011 City Manager's Office TITLE: REVIEW UPDATED USER FEES FOR DEVELOPMENT RELATED SERVICES SUMMARY The last time the City conducted a comprehensive study of the user fees charged by the divisions within development services (i.e., building and safety, fire prevention, engineering and planning) was in 1992. At that time, due to the economic downturn in the real estate market, the City elected to not implement most of the fee increases. Therefore, the majority of the City's development related user fees have not been increased since the late 1980's. Since that time the consumer price index has increased by 59.28% and the engineering news record construction cost index (ENR-CCI) has increased 81.09%. As part of the streamlining of development services and the review of the City's cost of services in the General Fund, the City hired Public Resource Management (PRM) to prepare an analysis of the City's direct and indirect costs associated with the delivery of development related services. Based on the Study, the City recovers approximately 45% of the cost of development related services. Most cities in California, including Pleasanton, have a goal or policy of 100% cost recovery for development related services. The Study recommended that the City increase their cost recovery rate overall to 80% but it varies by individual fee. The permit volume has decreased substantially due to the economy. Therefore, the actual permit revenue increase from the implementation of the proposed fee increases will depend on development activity. Staff is estimating, based on projected permit volume for the next two years that the proposed fee increases will generate $350,000 and $700,000 of additional revenues each year respectively. RECOMMENDATION Receive the updated Master Fee Schedule for various development related services provided by individual divisions including building, fire prevention (Pleasanton only), planning and engineering. FINANCIAL STATEMENT Based upon 2007/08FY data for over 200 development related user fees, the study found that the City is expending $7,404,378 and recovering only $3,333,680 in revenue. The result is a subsidy of $4,070,698 by the General Fund of development related services. The recommended fee increases would reduce this subsidy by approximately $2,830,290 to a new subsidy level of approximately $1,240,409 based on development volume in 2007/08FY. If the Council adopts the recommended fees, the two year budget to be presented to Council in June 2011 for adoption will reflect the new fees and the reduced subsidy from the General Fund for these services.