Title
CONSIDERATION OF AMENDING CHAPTER 10 (BUILDING), CHAPTER 11 (ENGINEERING), CHAPTER 14 (PLANNING), AND CHAPTER 15 (FIRE) OF THE CITY’S MASTER FEE SCHEDULE
A. RESOLUTION NO. 2017-131 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CITY COUNCIL POLICY 159-03 (CITYWIDE COST RECOVERY POLICY)
B. RESOLUTION NO. 2017-132 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CERTAIN SECTIONS OF CHAPTER 10 (BUILDING) OF THE CITY’S MASTER FEE SCHEDULE
C. RESOLUTION NO. 2017-133 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CERTAIN SECTIONS OF CHAPTER 11 (ENGINEERING) OF THE CITY’S MASTER FEE SCHEDULE
D. RESOLUTION NO. 2017-134 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CERTAIN SECTIONS OF CHAPTER 14 (PLANNING) OF THE CITY’S MASTER FEE SCHEDULE
E. RESOLUTION NO. 2017-135 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CERTAIN SECTIONS OF CHAPTER 15 (FIRE) OF THE CITY’S MASTER FEE SCHEDULE
F. RESOLUTION NO. 2017-136 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING THE AUTHORIZED POSITION COUNT FOR THE DEVELOPMENT SERVICES FUND TO REFLECT THE ADDITION OF 1.0 DEVELOPMENT SERVICES TECHNICIAN III POSITION, 1.0 DEVELOPMENT SERVICES TECHNICIAN II POSITION, AND 1.0 SENIOR PLANNER POSITION AND APPROPRIATING FUNDS THEREFOR (4/5 VOTE REQUIRED)
G. RESOLUTION NO. 2017-137 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN AGREEMENT TO PROVIDE SOFTWARE UPGRADE, LICENSING, SUPPORT, AND MAINTENANCE SERVICES BETWEEN THE CITY AND SELECTRON TECHNOLOGIES, INC., AND APPROPRIATING FUNDS THEREFOR (4/5 VOTE)
Body
RECOMMENDED ACTION
Recommended Action
Council conduct the public hearing and adopt the resolutions.
Body
SUMMARY
Per City Council Policy 159-03 (Citywide Cost Recovery Policy), a comprehensive analysis of the City’s costs and fees should be conducted every five years. The City’s development and construction-related user fees were last comprehensively updated in July of 2011. An update to reflect the fiscal year 2017-18 adopted budget and current service delivery models is recommended.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
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Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that this activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change to the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
While a primary mission of government is to satisfy community needs such as police and fire protection, many city services solely benefit specific individuals or businesses. It has been the general policy of the City Council that the public at large should not subsidize activities of such a private interest through general tax revenues. Therefore, the City has established user fees to best ensure that those who use a proprietary service pay for that service in proportion to the benefits received.
Long-Term Financial Plan and Cost Recovery Policy
The City’s General Fund Long-Term Financial Plan was updated during the fiscal year 2017-18 budget development process. The Financial Plan identified structural deficits beginning in fiscal year 2018-19 of $6.4 million, rising through the 10-year term of the analysis to more than $35 million. Increasing fee based revenues and reducing permit subsidies is just one part of a comprehensive approach to structurally balancing the General Fund budget, but it is a critical one.
In 2011, the City Council adopted a Citywide Cost Recovery Policy (City Council Policy 159-03, the “Policy”) establishing an ongoing, sound basis for setting fees given the full cost of providing services. The Policy allows charges and fees to be periodically reviewed and updated based upon predetermined, researched, supportable, and transparent criteria. The Policy enables the City to meet desired goals for cost recovery while supporting the values and mission of the organization.
In order to structurally reduce General Fund expenditures associated with development and construction-related activities, several amendments to the Policy are recommended to reflect full cost recovery for previously subsidized activities (Attachment 1).
Cost recovery target range modifications recommended are as follows:
Table 1 - Current & Proposed Target Cost Recovery Ranges
|
Service Area/ Program |
Current |
Proposed |
|
Fire Department Fees, operational permits (except the Fire Company Inspection Program) |
30% - 70% |
70% - 100% |
|
Building Fees, subsidized permits |
|
|
|
Photovoltaic Systems |
30% - 70% |
70% - 100% |
|
Water Heaters |
30% - 70% |
70% - 100% |
|
Gas Line Replacements |
30% - 70% |
70% - 100% |
|
Planning Fees, subsidized permits |
|
|
|
Large Family Daycare |
30% - 70% |
70% - 100% |
|
Historic Designation |
30% - 70% |
70% - 100% |
|
Mills Act Status |
30% - 70% |
70% - 100% |
The Policy recommends comprehensive review of user fees every five years. The City’s development and construction-related user fees were last comprehensively updated in July of 2011. An update to the 2011 cost of service model to reflect current costs, staffing, and service delivery models was recently prepared. An update to the City’s Master Fee Schedule to reflect the new cost of service analysis, as well as the new cost recovery targets is recommended in order to ensure the full cost of providing the associated services is recovered.
Master Fee Schedule - Overview
Originally established in 1982, the Master Fee Schedule (“Schedule”) is a centralized listing of the fees charged by the City for services, administrative acts and other legally required fees. The schedule serves as a resource for the public to determine the costs of various types of City services without the need for extensive research or a specialized understanding of municipal government.
Fees imposed by the City take one of three forms: flat fees, tiered or multilevel fees, and variable fees based on costs (deposit-based).
Flat fees are preferable in most cases, due to their ease of administration and collection. Where the annual volume of activity is high and the per-project costs are reasonably stable, the flat fees are calculated based on the average transaction cost for services provided.
Variable fees require a deposit from which actual costs are debited and any unspent balance is refunded. If the costs of a particular service differ with the size or complexity of the project, deposit-based fees provide a more equitable assessment of those costs than would be possible through a flat fee. Thus, for example, major development projects in Otay Ranch are charged only for the actual staff time spent on their various projects, rather than paying “average” processing costs. Variable fees are difficult to administer, but since they automatically correct for changes in service costs, increased efficiency, and fluctuations in requested or mandated service levels, they seldom require updating. While they do not require frequent updates, it is preferable to regularly update any standardized deposit schedules associated with these fees. Realistic deposit schedules help applicants better understand the financial commitment associated with the City’s provision of these services.
Tiered or multilevel fees serve as a middle ground. These fees are used when the cost of service provision is more closely correlated to a specific project factor. Two or more fee levels are set and the level of the fee is determined by objective measurable criteria. Tiered fees thus offer the stability and administrative ease of flat fees and the enhanced equity of deposits. As with flat fees, however, these fees must be updated periodically to ensure that the City’s general tax support for these services remains at a consistent level.
Master Fee Schedule - Proposed Update
The Master Fee Schedule consists of 18 chapters; four of those chapters are recommended for update with this action: Chapters 10 (Building), 11 (Engineering), 14 (Planning), and 15 (Fire). The cost of providing the subject services has been analyzed and updated fees have been calculated (see Attachment 3 for a summary and Attachment 3 for the full analytical models). The proposed fees include all three fee types (flat, tiered, and variable).
The fee study analyzed the direct services provided in the review of development and construction related permits and activities by staff in the General Fund and the Development Services Fund. Specific workgroups included in the cost of service analysis are as follows:
• General Fund
o Development Services Department - Code Enforcement
o Development Services Department - Long Range Planning
o Fire Department - Fire Prevention
o Engineering - Land Survey
o Engineering - Traffic Engineering
o Engineering - Construction Inspection
o Engineering - NPDES
• Development Services Fund
o Development Services Counter
o Development Planning
o Building
o Neighborhood Services
o Landscape Architecture
o Land Development
As a result of the complex nature of development and construction-related fees, the City contracted with an external consultant (NBS Government Finance Group) to produce a cost of service analysis model for these fees in 2011 (the “Development Services Fee Model” or the “Model”). The Development Services Fee Model identifies actual development review and permitting costs to the City. The actual cost of service is the maximum amount legally recoverable by the City via fees for these services. The Model begins by calculating a fully-burdened blended hourly rate for each workgroup in the fee study. This fully-burdened blended hourly rate is then applied at the individual fee level to estimate an average (reasonable) full cost of service for each fee related service or activity.
Staff has updated the 2011 model to reflect the City Council adopted budget for fiscal year 2017-18, overhead allocations from the recently updated citywide Cost Allocation Plan, current service delivery methods and efforts, and a number of proposed program enhancements. A summary of the updated Model is included as Attachment 2 of this report. Full analytical models are included as Attachment 3 of this report (Appendix to Summary Report).
Proposed Program Enhancements
In consultation with the Building Industry Association and members of the development community, a number of enhancements to staffing and technology are assumed in the Model and recommended for Council consideration with this action.
Staffing
Staffing enhancements include the addition of two positions at the City’s Development Services Counter: 1.0 Development Services Technician III and 1.0 Development Services Technician II. The additional technician support is necessary at this time to address current and anticipated workload for the reasonably foreseeable future. If the additional positions are approved, the Development Services Department will continue to monitor resources and workload demands. Active management of future vacancies will be employed to ensure appropriate staffing balance in the future.
In addition to the supplemental staffing at the Development Services Counter, an additional 1.0 Senior Planner is recommended for funding via Development Services Fees. This position would be dedicated to a municipal code update and maintenance program. If approved, this new position would proactively review and propose regular updates to the City’s land development and zoning regulations that simplify and improve the development process by making regulations more clear, more predictable, and more consistent Citywide. Improvements to simplify the review process would reduce time and costs for applicants. Potential projects could include standardizing the City’s various specific plans and sectional planning area plans for eventual publishing online with the City’s Charter and Municipal Code; reformatting regulations more consistently throughout the code; as well as making regulatory improvements that facilitate business opportunities throughout the City.
Technology
In addition to staffing enhancements, the Development Services Fee Model reflects a number of technology enhancements to improve efficiency and customer service. An agreement with Selectron Technologies to provide software upgrades, licensing, support, and maintenance services (Resolution G) is recommended. Selectron historically provided interactive voice response (IVR) services, integrated with the City’s permit software (Permits Plus). When the City upgraded from Permits Plus to Accela Automation, the IVR option was discontinued. Since that time, the City has received significant outcry from the construction community over the loss of this valuable service. Using IVR, customers are able to schedule, reschedule, and cancel inspections using their phones. They can also leave messages for their assigned inspector. Inspectors are able to verbally post inspection results, hear messages left by the permit holder, and leave messages for the permit holder. Following inspection, permit holders can call the IVR system and listen to the results of their inspection and any messages left for them by their inspector. All voice prompts will be professionally recorded and accessible in both English and Spanish. Restoring this popular service is recommended to improve the customer’s experience and to increase staff efficiency.
Since the City’s original contract with Selectron for IVR services, a number of new services have been added and are recommended for inclusion in the City’s contract with Selectron. The first service enhancement builds off the concept of traditional IVR, but instead of waiting for the customer or permit holder to call the City, it proactively contacts the customer via text or email. Using this software (Relay Cloud Services Outbound), the City will be able to automatically send customers the following information:
• Expiring permit notification
• Inspection time notification
• Plan review status notification
• Inspection results notification
All outbound messaging will be fully integrated with the City’s permit software (Accela Automation) and the Selectron IVR system. As with IVR, the outbound notification system will accommodate both English and Spanish users.
The final component of the proposed Selectron contract is Field Portal. With this program, managers will be able to quickly and efficiently assign (and reassign) daily inspections. With the upgrade from Permits Plus to Accela Automation, the City lost the ability to automatically assign inspections using geographic areas. As a result, the Building Department has adopted a time-intensive process of manually assigning inspections each day. With the Field Portal module, the Building Division will be able to programmatically assign pending inspections based on geography or inspection type. The Field Portal’s geographic location services will also provide a wealth of data that will enhance management of the inspection program in the future. The Field Portal will be fully integrated with Accela Automation, IVR, and outbound messaging.
As a result of the proprietary nature of Selectron’s previous IVR services with the City and their status as Accela Automation preferred vendor for IVR integration, a sole source contract is recommended (see Attachment 4). As a result of the unique performance capabilities of Selectron as preferred vendor for IVR integration with Accela Automation and compatibility requirements of updating the previous Selectron IVR system, the Purchasing Agent has determined the requisition is not subject to competitive bidding requirements.
A total of $150,000 is recommended for appropriation in fiscal year 2017-18 to fund restoration and enhancement of services with Selectron. Annual ongoing costs are anticipated to total approximately $55,000 ($8,500 for IVR; $30,000 for 200,000 prepaid outgoing messages; and $15,500 for Field Portal).
In addition to the contract with Selectron, the Development Services Fee Model includes funding for upgrading the Development Services Counter customer queuing system and transitioning to electronic plan submittals. Staff will return to Council with contracts and appropriations for these enhancements during fiscal year 2017-18, as required per purchasing guidelines.
The proposed changes to the Master Fee Schedule reflect the updated Development Services Fee Model and are consistent with the City’s Cost Recovery Policy (as amended by Resolution A). A redline of the proposed updates to the Master Fee Schedule is included as Attachment 5 of this report. To follow is an overview of the fee amendments proposed.
Chapter 10 - Building
Chapter 10 of the Master Fee Schedule includes all building permit fees. It is divided into the following sections (including summary of significant changes):
• 10-100: General Building Fees
o Updated all fees to reflect cost of service and target cost recovery
• 10-200: Mechanical, Plumbing & Electrical (MP&E)
o Updated all fees to reflect cost of service and target cost recovery
o Permit subsidies removed (furnaces, wall heaters, gas system installations/repairs/replacements, gas outlets, water heaters)
• 10-300: New Construction Permit Fees
o Updated all fees to reflect cost of service and target cost recovery
o Replaced occupancy type I-1 (Institutional - 17+ Persons, Ambulatory) with R-2.1 (Residential - Assisted Living Facility)
o Added new occupancy type R-3.1 (Residential Care Facility - 1-6 Persons)
o Clarify that R-3 fees apply to pool houses/casitas
o Clarify that foundation only permits are charged at 25% of the fees due, per construction and occupancy type
• 10-400: Miscellaneous Item Permit Fees
o Added new fee for demolition of pools, spas, and hot tubs ($404)
o Added new fee for electrical vehicle charging stations (residential: $863; multifamily and commercial: $1,022 first, $105 each additional)
o Added new fee for residential panel upgrades associated with installation of photovoltaic systems ($203)
o Added new fee for expedited/streamlined residential photovoltaic ($453)
o Added new fee for traditional (non-expedited/streamlined) residential photovoltaic ($722)
o Added new fee for residential garage conversion to sales office ($722)
o Added new fee for trash enclosure ($757)
o Added new fee for additional plan checks after 3rd submittal (Building review only $229 first hour, $105 each additional ½ hour)
o Permit subsidy for residential photovoltaic removed
• 10-500: Building Valuation Tables
o Proposed valuations are based on the 2017 valuation schedules adopted by the San Diego Chapter of the International Code Council (ICC), a group of local building officials.
o Valuations are used to determine the State’s Strong Motion Instrumentation Program fee and the State’s Building Standards Administration Special Revolving Fund fee (SB 1473).
The proposed fees have been updated to reflect the current cost of providing building permit review and inspection services with the previously described enhancements. Current costs reflect changes in both direct (salaries and benefits) and indirect costs (citywide and departmental overhead) since the 2011 update. For context, direct personnel costs have increased by approximately 18% since 2011. Time estimates were reviewed, validated, and updated as appropriate. Table 2 below compares the current and proposed fees for several high-volume permit types.
Table 2 - Typical Building Permit Fee Comparison
|
Permit Description |
Current Permit Fee |
Proposed Permit Fee |
|
New Construction: Business - Professional Office (20,000 SF) |
$16,057 |
$18,247 |
|
Tenant Improvement: Business - Professional (3,000 SF) |
$3,646 |
$4,705 |
|
New house (production phase typical - 2,500 SF) |
$2,208 |
$2,412 |
|
Pool, gunite (400 SF) |
$1,052 |
$1,191 |
|
Patio cover, wood (300 SF) |
$619 |
$676 |
|
Residential room addition (300 SF) |
$2,100 |
$2,380 |
Building Permit Fees -Subsidized
The City has historically subsidized water heater, gas line, and heating system permits to encourage residents to obtain these permits, ensuring safety inspections. Photovoltaic permits have been subsidized to encourage residents to adopt alternative energy sources. Staff recommends the elimination of the General Fund subsidy of these permit types, and that full cost recovery be targeted for these activities.
A significant driver in the growth of the permit subsidy from the General Fund to the Development Services fund has been the rapid growth in residential photovoltaic systems. Pursuant to Subdivision (g)(1) of Section 65850.5 of the California Government Code, the City Council adopted a streamlined permitting process for small residential rooftop solar energy systems (Ordinance 3353). This action created two permitting processes for residential photovoltaic systems, the traditional process and a new streamlined/expedited process. The majority of solar permits are now issued using the streamlined/expedited process, which requires fewer staff hours to process. As a result of this change, staff is recommending the creation of separate fees for these two permitting processes, each at full cost recovery. The proposed fee for streamlined/expedited permits is $453 (current subsidized fee amount is $250). The proposed fee for traditional permits is $722.
The adopted budget for fiscal year 2017-18 includes a General fund transfer to the Development Services fund to offset the subsidized Building permits. Adopting the new fees as proposed, without subsidy, structurally reduces ongoing General fund expenses by $397,000.
Code Enforcement Fees
Chapter 10 of the Master Fee Schedule also includes fees charged by the Code Enforcement Division (Section 10-100). The current review did not consider the punitive activities of Code Enforcement (administrative citations, nuisance abatement, etc.), instead focusing on non-punitive activities (Temporary Sign Permits and Housing Permits). For the Housing Permit program, a significant General Fund subsidy was identified. Staff is recommending full cost recovery for this program, consistent with the City’s Cost Recovery Policy. The current and proposed Housing Permit fees are detailed in Table 3 below.
Table 3 - Housing Permit Fees
|
Description |
Current Permit Fee |
Proposed Permit Fee |
|
1 - 6 units |
$192 |
$254 |
|
7 - 10 units |
$260 |
$344 |
|
11 - 15 units |
$312 |
$413 |
|
> 15 units, base fee |
$312 |
$413 |
|
> 15 units, each additional unit |
$7.13 |
$9.44 |
Chapter 11 - Engineering
Chapter 11 of the Master Fee Schedule includes all engineering permit fees. It is divided into the following sections (including summary of significant changes):
§ 11-100: General Engineering Fees
o Updated all fees to reflect cost of service and target cost recovery
o Updated initial deposit amounts for deposit-based fees
§ 11-200: Plan Review & Permit Fees
o Updated all fees to reflect cost of service and target cost recovery
o Updated initial deposit amounts for deposit-based fees
§ 11-300: Street & Tree Fees
o Not included in Development Services Fee Study
The proposed fees have been updated to reflect the current cost of providing engineering permit review and inspection services, including changes in both direct (salaries and benefits) and indirect costs (citywide and department overhead). As with Building fees, direct personnel costs have increased approximately 18% since the 2011 update. Time estimates were reviewed, validated, and updated as appropriate.
Table 4 - Typical Engineering Fee Comparison
|
Permit Description |
Current Permit Fee |
Proposed Permit Fee |
|
Traffic Control Plan Review |
$210 |
$225 |
|
Utility Permit (<$10,000 valuation) |
$495 |
$590 |
|
Encroachment Permit, Minor (roll-off dumpster) |
$65 |
$75 |
The most common deposit-based Engineering activities are the plan review and inspection of Improvement Plans and Grading Plans. The current and proposed deposit schedules for these fee activities are summarized in Table 5 below.
Table 5 - Improvement and Grading Plans - Initial Deposit Schedule
|
Improvement Plans |
|
|
|
|
Current |
Proposed |
|
Improvement Valuation |
Plan Check |
Inspection |
Plan Check |
Inspection |
|
$0 - $10,000* |
$200 |
$240 |
$290 |
$680 |
|
$10,001 - $100,000 |
$3,500 |
$3,000 |
$4,500 |
$4,000 |
|
$100,001 - $500,000 |
$10,000 |
$10,000 |
$15,000 |
$15,000 |
|
> $500,000 |
$20,000 |
$20,000 |
$20,000 |
$20,000 |
|
Grading Plans |
|
|
|
Cubic Yards |
Plan Check |
Inspection |
Plan Check |
Inspection |
|
< 1,000 |
$5,000 |
$3,000 |
$6,000 |
$3,000 |
|
1,001 - 10,000 |
$10,000 |
$6,000 |
$12,000 |
$6,000 |
|
10,001 - 100,000 |
$15,000 |
$12,000 |
$15,000 |
$15,000 |
|
> 100,000 |
$20,000 |
$20,000 |
$20,000 |
$20,000 |
*Improvement Plans with improvements valued less than or equal to $10,000 are considered ‘Construction Permits’ in the Master Fee Schedule. The proposed $290 plan check fee and $680 inspection fee are flat fees, not deposits.
Chapter 14 - Planning
The proposed fees have been updated to reflect the current cost of providing Planning permit services, including changes in both direct (salaries and benefits) and indirect costs (citywide and department overhead). Time estimates were reviewed, validated, and updated as appropriate. Full cost recovery is targeted for all Planning fee items.
The majority of the Planning fee activities are deposit-based. Generally speaking, these activities include hearings by a board, commission or the City Council, or where a substantial environmental document is required to comply with CEQA. Table 6 below compares the current and proposed permit fees for several typical permit types.
Table 6 - Typical Planning Permit Fee Comparison
|
Permit Description |
Current Permit Fee |
Proposed Permit Fee |
|
Conditional Use Permit - Administrative |
$3,000 |
$3,000 (no change) |
|
Permit Modification - Administrative |
$2,200 |
$2,400 |
|
Variance - Administrative |
$3,200 |
$2,200 |
|
Preliminary Environmental Review |
$2,800 |
$2,200 |
|
Official Zoning Letter |
$175 |
$200 |
|
Sign Permit |
$175 |
$200 |
The City has historically subsidized a limited number of Planning activities, including Large Family Daycare and the Historic Preservation activities. Table 7 below summarizes the current (subsidized) fee amount and the proposed full cost recovery fee amounts for these activities.
Table 7 - Subsidized Planning Permit Fees
|
Permit Description |
Current Permit Fee |
Proposed Permit Fee |
|
Large Family Daycare |
$375 |
$1,250 |
|
Application for Historic Designation |
$2,800 |
$4,800 |
|
Application for Mills Act Status |
$3,700 |
$8,725 |
The adopted budget for fiscal year 2017-18 includes a General fund transfer to the Development Services fund to offset subsidized Planning permits. Adopting the new fees as proposed, without subsidy, structurally reduces ongoing General fund expenses by $3,000.
Chapter 15 - Fire
The proposed fees have been updated to reflect the current cost of providing fire safety engineering and fire code inspection services, including changes in both direct (salaries and benefits) and indirect costs (citywide and department overhead) since the 2011 update. For context, direct personnel costs in Fire Prevention have increased by approximately 20% since 2011. Time estimates were reviewed, validated, and updated as appropriate.
Chapter 15 (Fire Prevention Fees) includes Fire Code Inspection Fees (15-100) and Fire Safety Engineering Fees (15-200). Fire Code Inspection fees include renewable and temporary operational permits, including inspections conducted through the Fire Company Inspection Program (FCIP) (billed annually on business licenses). All Fire Code Inspection Fees are currently set at 70% cost recovery, consistent with the City’s Cost Recovery Policy. An increase to 100% cost recovery is proposed, excluding the Fire Company Inspection Program (FCIP). Fire Safety Engineering fees are collected for the plan review, consultation and inspection of fire and life safety systems such as fire sprinklers and hazardous material tanks. Fire Safety Engineering fees are set to recover 100% of the cost of service.
Fire Code Inspection Fees
The Fire Prevention Division collects operational permits/ inspection fees as authorized under the California Fire Code. An operational permit allows the applicant to conduct an operation, process, or a business that produces conditions hazardous to life or property - especially for buildings that can accommodate a large number of people at one time. Operational permits can be either renewable or temporary in nature. Renewable permits require an annual inspection for ongoing use, while temporary permits are for one-time use only. Renewable permits include (but are not limited to) places of public assembly and the storage, use, and dispensing of hazardous materials. Temporary or non-renewable permits include (but are not limited to) public fireworks displays and residential licensed care pre-inspections. No change to the Fire Company Inspection Program Fees is proposed at this time.
Fire Safety Engineering Fees
The Fire Prevention Division collects construction permit/ inspection fees as authorized under the California Fire Code. A construction permit allows the applicant to install or modify fire and life safety systems and equipment for which a permit is required. Construction permits include (but are not limited to) fire sprinkler systems, kitchen fire suppression systems and smoke control systems. Fire Safety Engineering fees are targeted for 100% cost recovery. No significant changes to the fee structure are recommended. Table 8 below compares the current and proposed permit fees for several typical permit types.
Table 8 - Fire Safety Engineering Fees
|
Description |
Current Permit Fee |
Proposed Permit Fee |
|
Fire Sprinkler System, Non-Residential |
|
|
|
1 - 50 sprinklers |
$995 |
$1,050 |
|
101 - 200 sprinklers |
$1,230 |
$1,330 |
|
Fire Sprinkler System, Residential |
|
|
|
1 - 50 sprinklers |
$630 |
$765 |
|
51 - 100 sprinklers |
$765 |
$925 |
Community Outreach
The cost of service analysis and proposed Master Fee Schedule update were substantially completed in early April 2017. From April through June, staff efforts have focused on reaching out to stakeholders to inform them of the fee study, present findings and to receive fee study related comments and concerns. Key groups included in this outreach include the Chula Vista Chamber of Commerce, the City’s Development Oversight Committee, and the Building Industry Association (BIA) of San Diego County.
A total of three presentations were made to stakeholder groups between April and June. In addition, the City made the fee study models available to all members of these stakeholder groups. These models detail both the buildup of the fully burdened hourly rate for all staff involved in the fee study as well as the cost of service calculation for each development services related activity included in the fee study. These models were made available beginning in June, following adoption of the fiscal year 2017-18 budget.
The Cost of Service Analysis was also made available for public review at the City Clerk’s Office starting on July 6, 2017.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section 18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Councilmember, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. The Development Services Fee update supports the Operational Excellence goal by continuing implementation of City Initiative 1.1.1. (Implement Fiscal Recovery and Progress Plan). Approval of an agreement with Selectron to restore and enhance services also supports the Operational Excellence goal by continuing implementation of City Initiative 1.2.2. (Leverage new and emerging technology to provide efficient, effective and secure Information Technology solutions).
CURRENT YEAR FISCAL IMPACT
The proposed Master Fee Schedule update is based on a cost of service analysis, which identifies the maximum amount legally recoverable for providing development and construction related services based on the City’s operating budget for fiscal year 2017-18, including proposed staffing and technology enhancements. The City’s Cost Recovery Policy is then applied to the full cost of service to determine the recommended fee amounts and the estimated General fund subsidy amount.
The cost of service analysis prepared identifies recoverable costs totaling $13.7 million in fiscal year 2017-18 (General fund and Development Services fund). Applying the percent change in hourly rates for flat fee and tiered permits from the 2011 update to the current update would result in additional annual revenues to the General fund and Development Services fund of approximately $250,000 and $500,000, respectively. Additional revenues will be generated based upon revised hourly billing rates applied to deposit-based permits and other reimbursement based billings (CIP, DIF, etc). Applying average hourly rate changes to fiscal year 2015-16 actual revenues indicates increased General fund and Development Services fund revenues of $170,000 and $600,000, respectively. Actual impacts to deposit-based and other reimbursement based revenues will vary based on actual requests for services.
General Fund Permit Subsidy
Full cost recovery for all permit activities conducted by staff in the Development Service Department is recommended. If approved, this proposal would eliminate the budgeted General fund subsidy to the Development Services fund of $400,000 annually, resulting in ongoing structural savings to the General fund.
Increased cost recovery for Fire Code Inspection fees (proposed to increase from approximately 70% to full cost recovery) is anticipated to result in additional General Fund revenues of approximately $115,000 annually. This is in addition to the $250,000 previously described as resulting from the increased flat fee and tiered permit rates. General fund subsidies are limited to discretionary monies (sales tax, property tax, etc.) only. In no instance do fee payers subsidize the cost of providing services to other groups.
Total projected impacts to the General fund and Development Services fund are summarized in the Table 9 below.
Table 9 - Projected Fiscal Impact Summary
|
Description |
General Fund Impact |
Development Services Fund Impact |
Total |
|
FY 2017-18 Cost of Service Hourly Rate Increase |
|
|
|
Flat & Tiered Fees Only |
$ 250,000 |
$ 500,000 |
$ 750,000 |
|
Deposit/Reimb. Based Revenues |
$ 170,000 |
$ 600,000 |
$ 770,000 |
|
Reduced Subsidies |
|
|
|
|
Building and Planning Fees |
$ 400,000 |
$ 0 |
$ 400,000 |
|
Fire Code Inspection Fees |
$ 115,000 |
$ 0 |
$ 115,000 |
|
Total |
$ 935,000 |
$ 1,100,000 |
$ 2,035,000 |
Approval of the resolutions amending the Master Fee Schedule supports optimal cost recovery for the City, per the guidelines of the City’s Cost Recovery Policy. Impacts to revenues in the current fiscal year will vary based upon actual requests for fee based services. No appropriation of additional revenues is recommended at this time.
Enhancements
The proposed personnel and technology enhancements are fully funded by the proposed fees. Approval of Resolution F would amend the Development Services Fund’s authorized position count, adding 1.0 Development Services Technician III; 1.0 Development Services Technician II; and 1.0 Senior Planner and appropriate personnel services funds totaling $330,000. Approval of Resolution G would appropriate $150,000 to enhance the City’s permitting system by restoring IVR services and adding outbound messaging and inspection management tools.
ONGOING FISCAL IMPACT
Approval of the resolutions amending the Master Fee Schedule supports optimal cost recovery for the City, per the guidelines of the City’s Cost Recovery Policy. Impacts to revenues in future years will vary based upon actual requests for fee based services. If the resolutions are approved, future budgets will be based on actual revenues generated under the new fee schedule.
Enhancements
The three new positions added to the Development Services Fund will be reflected in the future baseline budgets.
The proposed Selectron contract is for one year, with up to nine 1-year extensions authorized (total contract term of 10 years). Annual costs are anticipated to total approximately $55,000, but will vary based upon the actual number of outgoing messages sent to customers.
ATTACHMENTS
1. Redline City Council Policy 159-03
2. Cost of Service Analysis Summary
3. Cost of Service Analysis, full analytical models (Appendix to Summary)
4. Selectron Sole Source Justification
5. Redline Master Fee Schedule (Chapter 10, Chapter 11 (Sections 11-100 and 11-200), Chapter 14, and Chapter 15
Staff Contact: Tiffany Allen, Development Services Department