Every year the City conducts a Fee Study for service fees. The Fee Study consists of staff reviewing all service fees and updating them as needed. It is important to annually conduct the Fee Study to ensure that those parties that personally benefit from City services pay the full cost of the service. Paying less than the full cost effectively transfers the cost of service to the City’s General Fund.
The Ordinance establishes the services that the City provides for a fee. Staff propose updating the Ordinance in order to update the list of fees. The updated Ordinance lists fifteen (15) new fees and removes six (6) existing fees. The changes will lead to a fee schedule that more closely matches the delivery of services.
The amount charged for services are established by a Resolution that will be presented for the City Council’s consideration on October 25, 2022. A draft of the Resolution is attached to this staff report. It is being provided at this time to allow sufficient time for review and feedback.
Generally, state law requires that fees charged by a local agency may not exceed the estimated reasonable cost of providing the service or regulatory act for which the fee is being charged. Indirect costs may be included. The fundamental purpose of the City's service fees is to reduce subsidies from the general fund for the cost of services that do not benefit the whole community.
In order to meet the legal requirements for service fees, the fee amounts are developed by a detailed analysis to determine the cost to provide each service based on the time spent by all City staff involved in providing the service. Staff determines the “Fully Burdened Hourly Rate” of every City position. This rate includes salary, benefits and direct and indirect overhead expenses based on the City’s Fiscal Year 2022/23 Operating Budget. Staff from the appropriate department provide the time spent by each staff member to complete their part of a fee task.