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Comprehensive User Fee Study (2024)
COMPREHENSIVE CITYWIDE USER FEE STUDY CITY OF SAN LUIS OBISPO , CA Final Report May 17, 2024 © 2024 MGT Consulting Group 3600 American River Drive, Suite 150 Sacramento, CA 95864 916.276.8807 mgtconsulting.com City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 1 City of San Luis Obispo , California C OMPREHENSIVE C ITYWIDE U SER FEE STUDY REVI SED DRAFT REPORT MAY 7 , 2024 TABLE OF CONTENTS CHAPTER 1. EXECUTIVE SUMMARY ......................................................................................................................... 3 INTRODUCTION ........................................................................................................................................ 3 STUDY SCOPE AND OBJECTIVES ............................................................................................................... 3 CHAPTER 2. SUMMARY OF FINDINGS ..................................................................................................................... 4 USER FEE FINANCIAL OVERVIEW .............................................................................................................. 4 METHODOLOGY ....................................................................................................................................... 5 LEGAL, ECONOMIC & POLICY CONSIDERATIONS ...................................................................................... 8 CHAPTER 3. ANALYSIS HIGHLIGHTS ..................................................................................................................... 11 BUILDING & SAFETY ................................................................................................................................ 11 ENGINEERING ......................................................................................................................................... 15 FIRE .................................................................................................................................................... 17 GENERAL GOVERNMENT ........................................................................................................................ 19 PARKS AND RECREATION ....................................................................................................................... 20 PLANNING .............................................................................................................................................. 21 POLICE .................................................................................................................................................... 22 PUBLIC WORKS ....................................................................................................................................... 24 UTILITIES ................................................................................................................................................. 25 CHAPTER 4. PEER COMPARISON SURVEY ........................................................................................................... 27 CHAPTER 5. RECOMMENDATIONS ........................................................................................................................ 27 APPENDIX A - USER FEE RESULTS ........................................................................................................................... 29 TABLE OF CONTENTS, continued City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 2 BUILDING ................................................................................................................................................ 30 ENGINEERING ......................................................................................................................................... 39 FIRE .................................................................................................................................................... 48 GENERAL GOVERNMENT ........................................................................................................................ 60 PARKS AND RECREATION ....................................................................................................................... 63 PLANNING .............................................................................................................................................. 68 POLICE .................................................................................................................................................. 733 PUBLIC WORKS ....................................................................................................................................... 78 UTILITIES ................................................................................................................................................. 80 APPENDIX B – PEER COMPARISON SURVEY RESULTS .................................................................................... 84 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 3 CHAPTER 1. EXECUTIVE SUMMARY Introduction MGT Consulting Group (MGT) is pleased to present the City of San Luis Obispo with this summary of findings for the recently completed comprehensive citywide user fee study. The City contracted with MGT to perform a citywide user fee study using fiscal year 2023-2024 budgeted figures, staffing and operational information. The current fees listed in this study represent the fees being charged at the beginning of this study. The last user fee study was completed in 2017. In the interim, fees were adjusted by annual changes in the Consumer Price Index . A comprehensive analysis is conducted every five years to determine if any fees need to be adjusted beyond the annual inflator. This report is the culmination of an extensive study conducted by MGT in collaboration with the City’s management and staff. MGT would like to take this opportunity to gratefully acknowledge all management and staff who participated in this project for their efforts and coordination. Their responsiveness and continued interest in the outcome of this study contributed greatly to its success. Study Scope and Objectives The study included a review of fee for service activities within the following areas: • Building • Engineering • Fire • General Government • Parks and Recreation • Planning • Police • Public Works • Utilities The goal for this study was to present a well-documented and defensible user fee study that would identify rates that would be used to recover billable costs for services and to develop user fees that comply with Proposition 26, Proposition 218, and other applicable statutory requirements. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 4 It should be noted that many of the facility rentals can be based on market rate and therefore fall outside of the restrictions set by Proposition 26 and 218. The study was performed under the general direction of the Business Services and Administrative Manager. The primary goals of the study were to: • Define what it costs the City to provide the various fee-related services. • Determine whether there are any services where a fee should be collected. • Re-align fee amounts with the adopted cost recovery policies. The information summarized in this report addresses each of these issues and provides the C ity with the tools necessary to make informed decisions about any proposed fee adjustments. CHAPTER 2. SUMMARY OF FINDINGS User Fee Financial Overview The study's primary objective was to provide the City's decision-makers with the basic data needed to make informed pricing decisions. This report details the full cost of each service for which a fee is charged and presents the staff’s recommendations which are in alignment with the City’s cost recovery policies. The fee analysis adheres to Proposition 26 which is based on the "estimated reasonable cost of providing a service". The exhibit below shows the annualized costs and revenues for the City’s user fees that were part of this analysis. The analysis was based on the average volumes from fiscal year 2022/2023 and the fiscal year 2023/2024 fee schedule. It is difficult to predict future revenues due to the fluctuation in the volumes and economic conditions. MGT has based the annual cost off of the individual full cost for each service analyzed and then multiplied that cost by the average volumes. The results are shown below in Exhibit 1: City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 5 Exhibit 1 • Column A, User Fee Costs – This column represents what it is actually costing the City to provide the annual user fee services based on the average volumes listed above. In total, this study evaluated $21,861,879 of costs to provide user and regulatory related services. It is this amount that is the focus of this study and represents the total potential for user fee-related revenues for the city. • Column B, FY 2023/2024 Estimated Revenues – This column represents the City’s published fees for fiscal year 2023/2024 multiplied by the volume numbers from fiscal year 2022/2023 and estimated volumes for any new fees. Based on this information, the City receives fee- related cost recovery in the amount of $11,249,625 and is experiencing an overall 51% cost recovery level. The details of individual fees may be found in and in Appendix A of this report. • Column C, Current Subsidy – This column shows the difference between what it is actually costing the city to provide services versus what is being recovered in revenue for these same services. Current fee levels recover 51% of full cost, leaving 49% or $10,612,254. This difference is being subsidized by other funding sources such as tax revenues which are intended to support services provided to the general User Fee Categories (A) Full Cost User Fee Services (E) Increased Revenue Building 4,097,808$ 3,952,334$ 96%145,474$ 4%4,097,808$ 100%145,474$ Engineering 2,169,022$ 1,372,852$ 63%796,170$ 37%2,115,061$ 98%742,209$ Fire 1,301,320$ 962,996$ 74%338,324$ 26%975,990$ 75%12,994$ General Government 486,453$ 533,154$ 110%(46,701)$ -10%447,953$ 92%(85,201)$ Parks and Recreation 9,841,859$ 1,906,407$ 19%7,935,452$ 81%3,423,282$ 35%1,516,875$ Planning 2,074,235$ 1,026,898$ 50%1,047,337$ 50%1,978,767$ 95%951,869$ Police 338,367$ 358,404$ 106%(20,037)$ -6%273,725$ 81%(84,680)$ Public Works 67,138$ 64,954$ 97%2,184$ 3%67,138$ 100%2,184$ Utilities 1,485,677$ 1,071,626$ 72%414,051$ 28%1,375,310$ 93%315,652$ Totals:21,861,879$ 11,249,625$ 51%10,612,254$ 49%14,755,034$ 67%3,517,376$ Note: Annual cost includes all cross support costs from other departments. (B) FY2023/2024 Estimated Revenue (C) Current Subsidy (D) Cost Recovery Policy Current Recommended City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 6 public. This subsidy represents an opportunity for an updated and more focused cost recovery effort by the city for fee -related services. It should be noted that much of the subsidy is due to the Parks and Recreation recovery levels. • Column D, Recommended Recovery – This column shows the proposed cost recovery that is based on the City’s cost recovery policy. If adopted as recommended in this study, user and regulatory fee revenue would increase to $1 4,755,034. This would result in an overall cost recovery level of 67%. • Column E, Increased Revenue – $3,517,376 in potential new revenue could be generated through aligning fees with the cost of providing services and existing policies around cost recovery. Methodology A user fee study is comprised of two basic elements: Hourly rates of staff providing the service. Time spent providing the service. The product of the hourly rate calculation multiplied by the time spent yields the cost of providing the service. HOURLY RATES The hourly rate methodology used in this study builds indirect costs into hourly salary and benefit rates to arrive at fully burdened hourly rates. The fully burdened hourly rates calculated are a mechanism used to calculate the total cost of providing services. Total cost is generally recognized as the sum of the direct cost together with a proportionate share of allowable indirect costs. The proper identification of all costs (including labor, operating expense, department administration, and citywide support) as “direct” or “indirect” is crucial to the determination of the total cost of providing services. Direct costs are typically defined as those that are specifically tied to a particular function or activity, including the labor of persons working directly on the specific service for which the fee is charged, and possibly materials or supplies for people to work on the service. Indirect costs are those that support more than one program area and are not easily identifiable to specific activities. Examples of indirect costs are: 1) departmental administrative and support staff, 2) training and education time, 3) public counter and telephone time, 4) some service and supply costs, and 5) citywide overhead costs from outside of the department as identified in the City’s cost allocation plan. MGT’s hourly rate calculation methodology includes the following: City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 7 Personnel Services Analysis – each staff classification within the department or division is analyzed in the study. The first burden factor is comprised of compensated absences such as vacation/holidays/sick leave days taken in a year’s time. Staff classifications are then categorized as either direct (operational) or indirect (administrative or supervisory) labor. In some cases, a classification will have both direct and indirect duties. The total indirect portion of staff cost is incorporated into hourly overhead rates. Indirect Cost Rate – a ratio of indirect cost to direct labor (salaries plus benefits) is established. There are three elements of indirect cost incorporated, including: Indirect Labor – includes total compensation, administrative and supervisory staff costs. Other Operating Expenses – most services and supplies are included as a second layer of indirect cost and are prorated across all fees and services. There are some service and supply expenses classified as “allowable direct.” Some examples of these are professional services expenses, or sports supplies. These allowable direct expenses would be directly associated with specific fees or programs, as opposed to being allocated across all activities through the indirect overhead. External Indirect Allocations – this represents the prorated portion of citywide overhead (from the City’s cost allocation plan) which is attributable to the service for which the fee is charged. Fully Burdened Hourly Rates – The fully burdened hourly rate was calculated by taking the total operating expenditures (the numerator) and dividing that by the number of direct employees. This creates the average cost per employee. MGT then looked at each direct employee, which has a base number of hours of 2,080 per year, and reduced the hours by the average holiday, sick and vacation hours. The result is a base of 1,800 direct hours available per employee. Next, MGT worked with each department/division to determine the average amount of training, meetings and administrative or supervisory hours spent per each employee. The reduction of these hours leaves the remaining employees’ direct hours available to provide services. The average direct hours are then divided into the average cost per employee which creates the average hourly rate per department/division. TIME SPENT Once fully burdened hourly rates were developed for departments/divisions, staff and the consultant worked to identify the time spent directly on each of the user fee activities. Each staff person involved in the user fee services identified time spent to complete each task associated with all user fee services. To inform this analysis, staff and the consultant based this exercise on time spent on delivering various services in FY 2022- 23 (the most recently completed fiscal year). City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 8 FEE CALCULATIONS AND REVENUE PROJECTIONS Based on the time spent and fully burdened hourly rates, MGT was able to prepare both a per‐unit cost and total annual cost (per‐unit cost multiplied by annual volume equals total annual cost). As stated above, costs were calculated by multiplying per‐unit time estimates by the fully burdened hourly labor rate; additional operating expenses directly associated with certain services were also added in. Finally, if ot her departments or divisions provided support to certain user fee activities, this time was accounted for and added into the anal ysis as a crossover support activity. Full costs are then compared to current fees/revenues collected, and subsidies (or over‐recoveries) are identified. User fee summaries may be seen in Appendix A of this report. Legal, Economic & Policy Considerations Calculating the true cost of providing city services is a critical step in the process of establishing user fees and corresponding cost recovery levels . The City has a very well thought out cost recovery policy for user fees that incorporates many of the items below. The City’s cost recovery policy can be found on the City’s website https://www.slocity.org/home/showpublisheddocument/34666/638333225626500000 . The following legal, economic and policy issues help to illustrate these considerations: State Law ‐ In California, user fees are limited to the "estimated reasonable cost of providing a service" by Government Code section 66014(a) and other supplementary legislation. California voters approved Proposition 26 in November of 2010, which defined “taxes” as “any levy, charge, or exaction of any kind imposed by a local government” subject to seven exceptions. Most of the exceptions require that the city charge a fee which does not exceed the reasonable cost to the city to provide the service for which the fee is charged. Thus, if the fee exceeds the reasonable cost of service, it may be considered a “tax” which must be approved by the voters. MGT has calculated each fee to recover no more than the reasonable cost of each service so that none of the fee adjustments recommended herein w ill be considered taxes under Proposition 26. An implementation guide for Proposition 26 and 218 can be found on the League of California Cities website at this link: https://www.calcities.org/resource/propositions-26-and-218-implementation-guide. Additionally, it should be noted that some fees may be limited by state law and may not change, regardless of any cost analysis performed. Economic barriers ‐ It may be a desired policy to establish fees at a level that permits lower income groups to use services that they might not otherwise be able to afford. Community benefit ‐ The Council may wish to subsidize some user fees in order to reflect policy considerations other than pure cost recovery. For example, some agencies may choose to use general purpose revenues for community wide services such as recreational fees for youth programs or senior programs. These fees may be set lower than full cost recovery as they are a benefit to the community. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 9 Private benefit ‐ If a user fee service primarily benefits the fee payer, the City may set the fee according to the City’s cost recovery policy and set the fee at a 60-100% cost recovery level. Development related fees generally fall into this category; however, exceptions are sometimes made for services such as appeal fees or fees charged for certain types of residential projects. Service driver - In conjunction with the third point above, the issue of who is the service recipient versus the service driver should also be considered. For example, it could be argued that the applicant is not the beneficiary of the City’s development review efforts: the community is the primary beneficiary. However, the applicant is the driver of development review costs, and as such, cost recovery from the applicant is appropriate. Managing demand ‐ The level of cost recovery and related pricing of services can significantly affect the demand and subsequent level of services provided. At full cost recovery, this has the specific advantage of ensuring that the City is providing services for which there is genuinely a market that is not overly-stimulated by artificially low prices. Competition - Certain services, such as park usage or facility rentals, may be provided by neighboring communities or the private sector, and therefore demand for these services can be highly dependent on what else may be available at lower prices. Furthermore, if the City's fees are too low, demand enjoyed by private-sector competitors could be adversely affected. Incentives ‐ Fees can be set low to encourage participation in a service, such as a youth sports program or the issuance of a water heater permit. A sample of the decision-making process considerations when setting cost recovery levels can be found below Exhibit 2: City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 10 Exhibit 2 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 11 CHAPTER 3. Analysis Highlights Below is a brief discussion of the findings for each department/division’s analysis. Please see the user fee summary sheets in Appendix A of this report for the details on each fee calculation and cost analysis. Fees are charged in a variety of ways including: Flat (or fixed) fees – the fee is always the same, regardless of size or complexity of the service provided in each instance. Per square foot – the fee is calculated based on the size of the project under review. Hourly (or time‐and‐materials) – City staff track time and materials expenses, and fees are calculated to recover actual costs. Actual Costs – this fee is charged to recover consultant costs as billed to the city, or time and materials of staff. Percentage of permit – the fee is calculated as a percentage of the original permit fee. Percentage of Engineer’s Cost Estimate – fees are calculated as percentage of engineer’s estimate of construction value. Building & Safety The Building & Safety division oversees the construction or renovation of buildings. Before a building is constructed or altered, a building permit must be obtained. The division reviews plans to ensure all construction codes are satisfied. Once the permit is issued, certified building inspectors will conduct inspections for building code compliance and to make sure that the work is consistent with plans approved by the City . Building permits and plan checks benefit individuals and the development community and are therefore eligible for cost recovery. In general, because permits primarily benefit the fee payer, these fees are typically set at or close to 100% cost recovery. However, there may be some fees that are historically set at less than 100% cost recovery by the City Council to encourage certain types of projects/permits. Within the Building and Safety division, current fees recover 96% ($3,952,334) of the total costs of providing these services, which are calculated to be $4,097,808. The difference between the current cost recovery and the total identified cost is $145,474 or about 4%. MGT is recommending some fee reductions on certain permits and some fee increases in order to keep the cost aligned with the time and expenses required to provide the services and to keep within State cost recovery limits. In addition to performing an analysis of the costs, MGT worked with the department to modify the fee structure allowing it to reflect the current permitting process and to be a more user-friendly fee schedule. It must be noted that a major restructuring is proposed for building construction permits. In doing this, the division was able to reduce the complexity of fees significantly. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 12 Building & Safety division has two main types of permits: • Fixed priced permits, such as a heat pump fee which has a current fixed fee price of $64.40. – These types of permits tend to have a price that does not vary with the size of the project, because all applications tend to need a similar level of effort. • Variable permits, such as building construction permits, have fees that are dependent on the square footage/type of construction. The assumption is that as projects increases in size, so does the effort required to process the permit. The building analysis followed the following approach: • MGT developed a fully burdened hourly rate and applied it to the average time spent performing services that were listed as fixed price permits. Subtracting the cost of activities associated with fixed price permits from the total cost of the division reflects the cost of activities associated with variable price (construction) permits. Dividing this figure by the square footage of projects permitted results in a cost per square foot for variable price (construction) permits. 1. Hourly rate x hours spent on activities associated with fixed price permits = cost of fixed price permits 2. Total cost of division minus non-fee related activities and cost of fixed price permits = cost of activities associated with variable price permits 3. Cost of activities associated with variable price permits divided by total square footage of projects permitted = cost per square foot for variable price permits • Construction permits were then analyzed by the building division to identify how much effort is dedicated to plan review and inspection of construction permits. “Plan review” covers all activities related to the approval of the building plans. “Inspection” covers all activities to confirm that construction is according to approved plans and to close out the permit when work is completed. Using the identified effort and the previously determined variable price cost per square foot, a cost per square foot for plan review and a cost per square foot for inspections is determined. 1. Effort for plan review activities x cost per square foot for variable price permits = cost per square foot for plan review 2. Effort for inspection activities x cost per square foot for variable price permits = cost per square foot for inspection Below are some of the changes being proposed (details can be found on the executive summary listed in Appendix A at the end of this report): City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 13 CONSTRUCTION PERMIT CATEGORIES Construction permits were consolidated into 12 categories, differentiating between new construction and alterations or additions and 26 total fees with a price per square foot for plan review and a price per square foot for inspections This restructuring resulted in a major reduction in the number of fees from 840 to 26, which greatly simplified this section of the building fee schedule and provides a more user-friendly fee schedule. In addition, establishing a minimum and/or maximum square footage for each category ensures that the fees for very small or v ery large projects are not disproportional to the work effort required. Staff selected the following construction categories: • Alteration/Addition – Accessory Dwelling Unit • Alteration/Addition – Commercial • Alteration/Addition – Mixed Use or Multi Family • Alteration/Addition – Single Family • New Accessory Building • New Accessory Dwelling Unit • New Commercial Building • New Commercial Shell • New Mixed-Use • New Multi Family (R2) • New Multi Family (R3) • New Single Family BUILDING FIXED PRICE PERMITS (M ECHANICAL, E LECTRICAL, P LUMBING , MISCELLANEOUS ) This section of the fee schedule also contains recommended structural changes. Most of these changes are related to one of the following: updating fee name, adding new fees, removing fees. Recommended Fee Name Updates – Staff recommended updating fee names for 25 categories. These recommendations are intended to help users and staff have a better understanding of the service being provided. In some instances, the fee name update intends to set minimums and maximus. Some examples shown below (blue font represent the changes made to fee name): • After Hours Call Out (Building) (2 hour minimum plus per additional hour) - BLDG o In this example, this fee name update makes sure the user pays at least a 2 hour minimum for work being done after hours, as this is the minimum amount of expense required for staff to respond to an after-hours call. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 14 • Balcony/Porch/Deck - BLDG (up to 500 sq ft) o In this example, the fee name update limits the square footage covered by the current fee. Recommended New Fees: • Appeal of Building Official Decision - BLDG Minor* • Appeal of Building Official Decision - BLDG Moderate* • Awning/Canopy - BLDG - Each Additional (Up to 10) • Balcony/Porch/Deck - BLDG Each Additional 500 sq ft • Doors/Windows- Box Structural - Each Additional • Doors/Windows- Box Non-Structural - Each Additional • Access Board of Appeals - BLDG – Minor* • Access Board of Appeals - BLDG Moderate* • New/Altered Circuits - Per Circuit - BLDG • New/Altered Circuits - Per Duplex Circuit - BLDG • Patio - Enclosed - BLDG - Each Additional 500 sq ft • Patio Cover - Open - BLDG - Each Additional 500 sq ft • Roof Structure Replacement - BLDG - Each Additional 250 sq ft • Skylight - Each Additional • Window Retrofits (non-structural) -BLDG - Each Additional • Paper Plan Disposal Fee + Disposal Actual Cost • Phased approval - Hourly • Alternative Means and Methods (AMMR)(found under fire fees) • Expired permit/application extension fee • Permit Reissuance - Hourly • Annual Stormwater Review • Duplicate Single Family Plan (35% of plan review) • Duplicate Multi Family Plan (35% of plan review) *Minor projects are permits for Alt/Addition of a Single-Family or ADU (including duplexes), a demolition permit, or any item permitted under the “Additional Building Fees” schedule. Moderate projects are all other permits that are processed under the alt/addition work class, New Single-Family permits (including duplexes), and New ADU permits. Major projects are all other new projects. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 15 Recommended Fees for Removal: • Deferred Submittal (Building) – Removed entirely • Driveway – Removed entirely • Electrical Volume & Current Fee Analysis – BLDG – Removed entirely • Fence or Non-Engineered Wall - BLDG - each Additional ln. ft. – Consolidated with “Fence or Non-Engineered Wall – BLDG – Base” fee • Guest Quarters Permit – Removed entirely • Inspection Fee – Removed entirely • Manufactured Homes – Removed entirely • Mechanical Volume & Current Fee Analysis – BLDG – Removed entirely • Minor Lease Space Improvements – BLDG – Removed entirely • Misc Electrical Items NOS – BLDG - Removed entirely • Misc Mechanical Items NOS – BLDG - Removed entirely • Misc Plumbing Items NOS – BLDG - Removed entirely • New/Altered Circuits - 15 or 20 amp – BLDG – Consolidated with “New/Altered Circuits – Per Circuit – BLDG” fee • New/Altered Circuits - 200+ amps – BLDG - Consolidated with “New/Altered Circuits – Per Circuit – BLDG” fee • New/Altered Circuits - 25 to 40 amp – BLDG - Consolidated with “New/Altered Circuits – Per Circuit – BLDG” fee • New/Altered Circuits - 50 to 175 amp – BLDG - Consolidated with “New/Altered Circuits – Per Circuit – BLDG” fee • Other Electrical Inspections – BLDG – Removed entirely • Other Mechanical Inspections – BLDG - Removed entirely • Other Plumbing & Gas Inspections – BLDG – Removed entirely • Plumbing Volume & Current Fee Analysis – BLDG – Removed entirely • School Tenant Permit – Removed entirely • Secondary Dwelling Units – Removed entirely • Stand Alone Electrical Plan Check – BLDG – Removed entirely • Stand Alone Mechanical Plan Check – BLDG - Removed entirely • Stand Alone Plumbing Plan Check – BLDG - Removed entirely • Water Heater - BLDG - additional – Consolidated with “Water Heater – BLDG” fee Engineering City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 16 The Engineering Division of the Community Development Department oversees the review of private development projects and subdivisions for compliance with applicable design standards, project conditions of approval, environmental mitigation measures, and code compliance regulations. These services benefit the development community as well as individuals and are therefore eligible for cost recovery. In general compliance with the City’s cost recovery policy, these projects primarily benefit the fee payer, and these fees are set at or close to 100% of the cost of recovery. Within the Engineering Division, current fees recover 63% of the cost of providing the service or $1,372,852, with current total costs at $2,169,022, which is a difference of $796,170 or about 37%. Some of the Engineering services include cross support from other departments. This cross-support represents the time that other departments/divisions may spend performing tasks in support of services provided by the Engineering division, and the costs of this cross-support are included in the total costs identified above. The fee analysis shows a mix of fees recovering less than 100% cost recovery and some that are at or above 100% cost recovery. Those showing an over-recovery are proposed to be reduced in compliance with Proposition 26 which states you may not charge more than 100% cost recovery. • Thirty (30) fees are proposed to have the fee name changed to better reflect the service being provided. • The fee for sewer laterals currently distinguishes between whether the lateral is installed via open trench or by way of boring. The fee titled sewer lateral plus per linear foot (trench) became unnecessary after renaming the sewer lateral (bore) fee to remove the bore or trench designation, thus the (trench) designation is duplicative and is proposed to be removed. The fiber infrastructure protection fee, and the fee for unpermitted encroachments have not been utilized and are proposed to be removed. • Four (4) new fees are proposed to be added: Stormwater Control Plan Private Stormwater Conveyance System Agreement Other Minor Encroachments Not Listed Temporary Encroachment Agreement PUBLIC IMPROVEMENT PLANS – REVIEW AND INSPECTION The current fee structure for the Public Improvement Plan Check and the Construction Inspection are a base fee plus increments based on estimated construction costs (valuation). This fee structure was created during the last fee study in 2017. The Engineering division suggested a redesign to simplify the way the fee is calculated. The public improvement plan check is proposed to consist of a base fee of 15% of estimated construction costs for the first $100,000 of valuation plus 1% thereafter. This change reduced the number of fee line items from ten (10) to two (2). The Construction Inspection fee is proposed to consist of a base of 8.4% of estimated construction costs for the first $500,000 plus 3.3% thereafter. Restructuring this fee reduced the number of fee line items from eleven (11) to two (2). Proposed new fee structure: City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 17 • Improvement Plan Check: 15% of estimated construction cost for first $100,000 plus 1.0% thereafter • Construction Inspection: 8.4% of estimated construction cost for first $500,000 plus 3.3% thereafter Due to the complexity and variety in scope of these types of projects, revenue may be recognized during one year but some of the labor may cross between fiscal years. In addition, these fees are intended to cover cross support from multiple other departments, including Planning, Fire, Public Works, and Utilities, which is included in Engineering’s revenue. It is difficult to predict what the revenue will be for these two fees from year to year. Over the next year or two, MGT recommends tracking labor associated with these fees and testing it against the new fee struct ure in order to validate that the City’s costs are being recovered in compliance with City policy. Fire Within the Hazardous Prevention division, current fees recover 99% ($962,996) of current total costs at $975,990 which is a difference of $12,994 or about 1%. The division also has additional cost of approximately $325,000 that are not related to fees. That cost was excluded from the analysis. The division is recommending 100% cost recovery on all services. In keeping with State law, the target cost recovery percentage must not exceed 100%. We are proposing some fee reductions for flat fee categories in order to keep within State cost recovery limits. There are also some flat fee categories recommended to increase to keep the cost aligned with the level of effort to provide the services. In addition to performing an analysis of the costs, MGT worked with the department to modify the fee structure, allowing it to reflect the current process and to be a more user-friendly fee schedule. The Hazardous Prevention division of the Fire Department currently charges fees for building construction related permits (variable permits) for plan checks and inspections separate from Building division fees. For building construction, the department currently has a similar structure to the building division, charging a base fee plus increment fee. Currently there are 128 fees in this schedule. At the beginning of the study, fire staff recommended following the same methodology/structure as building fees. The division also provides services for which fees are not collected, such as arson investigations, community education, and weed abatement. Fee recoverable activities represent approximately 75% of the services provided. The methodology used to calculate Fire Prevention’s building construction permits (plan review and inspections) was the same as the methodology used for Building. The total cost of the division minus the cost of activities associated with fixed price permits and non-fee related services leaves a residual cost for activities associated with variable price permits (construction permits). 1. Hourly rate x hours spent on activities associated with fixed price permits = cost of fixed price permits City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 18 2. Total cost of the division minus non-fee related activities and cost of fixed price permits = cost of activities associated with variable price permits 3. Cost of activities associated with variable price permits divided by total square footage of projects permitted = cost per square foot for variable price permits Construction permits were then analyzed by the Hazardous Prevention division to identify how much effort is dedicated to plan review and inspection of construction permits. “Plan review” covers all activities related to the approval of the building plans. “Inspection” covers all activities to confirm that construction is according to approved plans and to close out the permit when work is completed . Using the total annual square footage for each construction category, it is possible to calculate a cost per square foot for plan reviews and inspections. Fire will continue to charge separate fees from Building but will now charge as a cost per square foot for the construction categories selected. In addition to building construction related permits, the Hazard Prevention division also oversees other flat fee types related to fire sprinkler/alarm systems (development related) and other miscellaneous fire fees (non-development related). DEVELOPMENT RELATED FIRE FIXED PRICE PERMIT This section of the fee schedule had a significant structural change. Currently, fees for fire sprinklers and fire alarm systems are charged as a single flat fee that intends to recover the cost for plan review and inspection activities. Fire staff is recommending charging each activity as its own separate fee to remove any ambiguity related to the activities performed. The proposed structure provides a separate fee for plan review and inspection activities. In addition, 5 new fee categories were added. They are: • Supplemental Fire Plan Review • Supplemental Fire Inspection • Alternative Method and Material Review • Expedited Plan Review Fee • Commercial Solar/Energy Storage System NON -DEVELOPMENT RELATED FIRE FIXED PRICE PERMITS The services provided in this section are related to fixed price permits and are intended to cover hazardous occupancy permits, mandated inspections, fire false alarm fees, CUPA fees, and Life Safety Inspections. This section had minimal changes to its structure. Eight (8) new fees were added and three (3) fees are recommended for removal. Beyond the structure, results found this section currently recovers slightly more than total cost on most fees. This will result in small fee reductions to ensure compliance with California user fee regulations. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 19 In addition, the study calculated the cost of providing non-mandated inspections for commercial businesses, as was done in the prior study . It is MGT’s understanding that although the costs associated with these activities was identified, fees were not established for these activities by Council policy. Recommended New Fees: • Lithium Battery Storage > 15 Cubic Feet - New Category • Outdoor Assembly Event > 1000 participants • Annual permit fees received 31-60 days after original invoice day • Annual permit fees received 61+ days after original invoice day • Administrative/Clerical standby (per hour) • Lift Assistance Fee - New Category • Extraordinary Response/High Use Fee - New Category • Defensible Space/Home Hardening Inspection - New Category General Government The General Government fee schedule contains a variety of fees from the City Clerk’s Office, Finance Department, and the City Attorneys’ Office. Annual volumes for fees such as photocopies and returned check fees are difficult to track, therefore the detail schedule in Appendix A does not show annual revenue. Other services such as business license applications and renewals and appeals to advisory bodies, volume was provided, and the current recovery is 110% or $533,154 with actual costs at $486,453 which is a difference of -$46,701 or about 10% over recovery. The city no longer offers microfiche copies, audio recordings and electronic documents and therefore it is recommended that these fees be removed from the city’s fee schedule. A new fee was added for reproduction of microfiche, audio or electronic copies to be charged at actual cost since the city would need to send out for these services. The Appeals to Advisory Bodies fees are recovering less than 100% of costs, however this is likely due to setting this fee below full cost recovery as a policy. As a best practice, Appeal fees are typically set lower than full cost recovery, so the process is affordable to all consumers. The Business License renewal fee of $55 is recovering more than 100% of costs. The full cost is $42, and the current fee is $55. This fee would need to be reduced to meet 100% full cost recovery which would result in a loss of approximately $117,388 in revenue. The reduction in cost to provide the business license renewal is primarily driven by process efficiencies the City has implemented and increased participation of businesses renewing using the online platform. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 20 Two (2) fee categories are recommended for removal that were not utilized, and one was transferred to another fee schedule. • Community Service Worker Registration Fee • Business License & Tax Certificate Replacement Fee • Home Occupancy Business o Renewal or New Application - Costs incorporated into Planning fee schedule. Parks and Recreation The Parks and Recreation Department provides quality parks and facilities (such as the SLO Swim Center, Damon-Garcia Sports Complex, and Laguna Lake Golf Course) where recreation programs, special events, activities for youth and seniors, and cultural and educational opportunities occur in an effort to encourage wellness and develop community through leisure, cultural, and social pursuits. The Department also protects and preserves the City’s natural resources and open spaces and manages the Public Art Program and the Citywide Volunteer Program. MGT used a different method for analyzing Park and Recreation fees. Rather than analyzing cost per unit or by class, services were analyzed by category. The annual revenue was reviewed for services provided in each category versus the annual cost for these same services to provide an overall cost recovery in that category. Additionally, the non-fee categories were also included in the review process. These are services that are provided by Parks and Recreation where no fee is charged, such as City sponsored community events (for example Boo Bash and Spring Fling Egg Hunt) and environmental education programs. Currently, the comprehensive cost analysis shows that Parks and Recreation fees recover 19% ($1,906,407) of the cost for all fee related services with an 81% ($7,935,453) subsidy. This percentage includes the cost allocated by the central service departments through the cost allocation plan, as well as any Parks Maintenance and Swim Center maintenance costs. If these central service costs were removed, the cost recovery would increase to approximately 35%. Individual program recoveries range from 3% to over 100%. Parks and Recreation fees are not strictly limited to 100% full cost recovery, rather they are often driven by the need and demand for services as well as benefits to the community. The City has a well-established cost recovery policy recommending recovery ranges for different activities and services. However, in many cases, the ability to increase fees is limited by market rate, particularly in the case of indoor and outdoor facility rentals, which can affect the Department’s ability to meet the current cost recovery policy targets as listed below: City Cost Recovery Policy: • High Range Cost Recovery Activities – (60% to 100%) o Adult athletics City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 21 o Banner permit applications o Childcare services (before and after school care during the school year) o Facility rentals (indoor and outdoor; excludes use of facilities for internal City uses) • Mid-Range Cost Recovery Activities – (30% to 60%) o Golf o Summer and Spring Break Camps (Child-care camps and sports camps) o Classes (Contract classes) o Major commercial film permit applications • Low-Range Cost Recovery Activities – (0 to 30%) o Aquatics o Community gardens o Junior Ranger camp o Minor commercial film permit applications o Skate park o Parks and Recreation sponsored events (i.e., Boo Bash and Spring Fling Egg Hunt) o Youth sports (leagues and clinics) o Teen services o Senior services In order to better support cost recovery targets, staff are recommending that particular fees be charged based on the participant’s residency status of San Luis Obispo. Not all of the services would receive this fee, it is proposed only for camps, impacted classes and facility rentals at the Jack House and Swim Center. In addition to establishing a non-resident fee, some of the fees would need to be increased to recover policy levels. Staff also reviewed the demand for these fees to determine if an increase in the fee would be likely to impact access for community members in relation to participation. In addition, staff are recommending the addition of two new fees to their fee schedule: Damion Garcia Overflow Parking Use fee and a Single Court rental fee for tennis and Volleyball courts. If policy recovery levels are implemented, the overall cost recovery would increase to $3,423,282 or 35% which result in additional revenue of $1,516,875. Planning The Planning division assists the community with land use and development. Staff evaluates all applications to ensure compliance with City’s zoning codes and land use policies. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 22 Within Planning, current fees recover 50% or $1,026,898 with actual costs at $2,074,235, which is a difference of $1,047,337. A combination of fee increases and decreases are recommended to align fees with the City’s policy of 100% cost recovery. The Planning fees include cross support from other departments totaling $845,350 leaving $1,228,885 related directly to Planning itself. This cross support represents the time that other departments/divisions may spend performing tasks for services provided by the Planning division. By incorporating cross support costs into the fee, the full cost of providing the services is calculated and the City can set fees accordingly. Some planning fees are recommended to have a significant increase which could be due to one or several factors. First, employee time is more expensive in 2023 than it was during the last 2017 study. Additional state laws continue to make the planning review process more complex and time consuming. Finally, some fees from the previous study could have been intentionally set below 100% cost recovery levels due to policy considerations at that time. The Planning division is proposing the removal of three fees that are no longer necessary and merging several fees for simplicity and consistency. Below is a list of fees recommended for addition to the Planning schedule: Recommended New or transferred Fees: • Business License Change of Location Only (moved from General Government) • Historic Property Listing/Delisting • CHC Development Review • CHC Staff Referral Review • SB 9 Lot Split • Pre-Application with site visit + ARC Review • Cannabis Transfer of Ownership Transfer Fee – All Types • Tree Removal Permit (moved from Public Works) • Tree Committee Recommendation (moved from Public Works) Police The Police Department maintains the safety of the City by working in partnership with the community to protect life and property, prevent and reduce crime, and improve the quality of life in the City’s neighborhoods while preserving the rights of all through a commitment to Service, Pride, and Integrity. Its primary purpose is to protect the City. The department also provides a series of other services, including permit issuance and records management. The current fees recover 106% or $358,404 (fees and penalties) with actual costs at $338,367 which is a difference of - City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 23 $20,037 or an over recovery of about six percent (6%). However, when penalties of $108,750 are taken out of the equation, the cost recovery is approximately 74%. Many of the fees for services offered through the Police department are set by statute and cannot be changed. There are two primary reasons for the current recovery calculations: 1. The department contracts with a third party to administer the alarm permit program. In addition, an internal staff member collaborates with the contractor to facilitate data transfers and provide support to local businesses with questions or appeals. Since the last fee study was conducted, this responsibility transferred from a sworn position to a civilian position, which results in a decreased hourly rate. The police department’s average hourly rate for a sworn position was calculated at $226.66 compared to a civilian (non -sworn) position at $127.06. This is about a 44% decrease. The fee for new alarm permits and renewals should be reduced to reflect the full cost of providing services considering the change of responsibility. It is estimated that this change may reduce the revenue for these two fees by approximately $38,472. o Current fee for alarm permit or renewal is $46 o Updated full cost is $32 2. As part of the City’s burglary alarm compliance program, the department charges for successive false alarm responses based on a tiered schedule. The first and second false alarm police responses do not incur a fee and subsequent false alarm responses for one address in a 12-month period incur increasingly higher penalties based on the fee schedule. After consulting with the City Attorney’s office, the methodology is sound, however the fee cannot exceed $500 per instance. The department is permitted to recover costs for responding to false alarms and may also impose a progressive penalty, tiered to successive incidents. Department staff are recommending the continuance of the tiered structure to preserve limited resources, which aligns with City Attorney recommendations. The impact to annual revenue if progressive penalties are continued is estimated to be approximately $2,200 or less; however, eliminating the penalty component of subsequent false alarms entirely would be a reduction of approximately $108,000 in revenue. In December 2023, Senate Bill 2 (SB2) was introduced and went into effect on January 1, 2024 (for Phase 1). SB2 amended various laws related to Concealed Weapons permits (CCW); specifically related to costs, updates were made to how licensing authorities can charge fees. Fees for permits and renewals were previously set and limited by statute; the language has been revised to allow for a licensing agency to charge an amount that is “reasonable” for processing the application. The department conducted a time analysis, and the data reflected a significant increase in the costs. The Police Chief is recommending 50% cost recovery for CCWs based on the following: achieving 100% cost recovery at this time could substantially increase the department’s fees in comparison to other agencies, the fee should be accessible for the public, as significantly higher fees may exclude access to people seeking to exercise their Constitutional rights related to CCW permits. Due to this change in law being recent, other agencies (such as the San Luis Obispo County Sheriff’s Office) have not had the opportunity to conduct a time study, nor are they positioned to address fee changes at the time of this report. The new fee results are listed under Exhibit 3 on the next page. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 24 CCW Fees Current Fee (previously limited by Statute) Full Cost Analysis (100% Cost Recovery) Department Recommendation 50% Cost Recovery New Permit - Investigative costs and permit processing $100 $537 $269 New Permit - Livescan Fee (pass through fee) $93 $93 $93 New Permit Social Media Check (new requirement/pass through fee) n/a $33 $33 Renewal - Concealed Weapons Permit: No new firearms $25 $261 $131 Renewal - Concealed Weapons Permit: Adding new or replacing firearms $25 $374 $187 Amendment - Concealed Weapons Permit: Adding new firearm $10 $324 $162 Amendment - Concealed Weapons Permit: Change in Address $10 $143 $72 Exhibit 3 There are currently 45 active permits; during the last year there were 17 new permits, 14 renewals and 10 amendments. Based on volume data and the recommendation regarding 50% cost recovery, these fees would generate approximately $7,902 in annual revenue. Lastly, the department is recommending less than 100% cost recovery for the property damage-only collision investigations. Currently the fee is $139 with the full cost analysis at $227, an increase of 163%. The department is recommending the fee be set at 50% cost recovery, or $113. Setting the fee at 50% cost recovery is recommended to ensure that the City is unlikely to collect more than 100% cost recove ry in the event that the fee is paid by multiple parties involved in a collision. Public Works The City of San Luis Obispo’s Public Works Department provides two primary services: one is providing safe mobility options for residents and visitors so that all may enjoy the cultural, recreational, economic, educational, and quality of life amenities in San Luis Obispo. The other is to build and maintain the City’s assets and infrastructure to enhance community safety, health, and wellness. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 25 The Public Works department has very few fees on the fee schedule but does provide considerable cross support to other depart ments such as Planning and Engineering. For the fees that are under the Public Works fee schedule the current cost recovery is 97% or $64,954 with actual costs of $67,138 a difference of $2,184 or 3%. With the exception of Parking fees that are outside the scope of this study, the department has only a few primary fees: Final Inspection Approval/Department Signoff for Site Disturbance, Abandoned Shopping Carts, Tree /Shrub Hazardous Abatement and Commemorative Tree Planting. Final Inspection Approval/Department Signoff of for Site Disturbance: Engineering has separate fees for the services performed however, Public Works provides the final signoff. The structure of the fees is in alignment with Engineering. The City recently implemented the Abandoned Shopping Cart fee structure and the costs have not changed in the interim; therefore, the City excluded evaluation of these fees from this study. The fees are listed in Appendix A for transparency. There are two tree fees on the Public Works fee schedule: • Tree/Shrub Hazardous Abatement - recommended to charge actual cost. • Commemorative Tree Planting – recommended that the fee increase to 100% cost recovery at $661. UTILITIES The Utilities Department provides essential services that support the community’s health, well-being, and quality of life. Through its efforts, water for the community is safely transported, treated, distributed, used, collected, recovered, and beneficially reused. These efforts are accomplished by the department’s water and wastewater divisions. Additionally, the department manages the City’s solid waste program and a dministers the City’s stormwater compliance program. Long range planning for water resources and infrastructure needs, environmental stewardship, and business management are required to provide these vital services and are critical functions of the Utilities Department. In total, there are fourteen programs that constitute the Utilities Department. As enterprise funds, the Water and Sewer Funds primarily finance operations with charges for service under the requirements of Proposition 218. The water and sewer rates must be sufficient to cover all expenses, operations, capital improvements, maintenance, and debt obligations. The water and sewer rates were not part of the utilities user fee study. The fees included in the analysis were miscellaneous fees (account creation, service fees, late charges), meter sales, and meter installation and removal. The primary goals of the department were to determine the total cost of fees based on time and materials, and to identify services provided that City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 26 do not currently have associated fees. Within the Utilities department, current fees recover 72% ($1,071,626) with actual costs at $1,485,677 which is a difference of $414,051 or about 28%. Staff recommends continuing less than 100% cost recovery for Industrial User Fees in compliance with prior City Council direction (Resolution 6981). Nineteen (19) new fees were listed for services the department is currently providing to standardize plan review processes and begin to recover certain costs. Fifteen (15) of the new fees are tied to Recycled Water Construction Permits, which are currently administered as a single rate at $1,260 annually and have not been updated since 2009 (Resolution 10076). Staff recommends separating this fee by duration of construction and number of vehicles, to better reflect the volume of water consumed and the cost to administer these permits, which varies considerably based on these factors. Staff believe that this approach will make recycled water sales for construction uses more equitable. Recommended New Fees • Water meter cellular data transmitter cost (All Sizes) – material only • Water meter cellular data transmitter installation (All Sizes) • Recycled Water Construction Permit Fee (Full Year 0-2 Vehicles) • Recycled Water Construction Permit Fee (Full Year 3 Vehicles) • Recycled Water Construction Permit Fee (Full Year 4 Vehicles) • Recycled Water Construction Permit Fee (Full Year 5 Vehicles) • Recycled Water Construction Permit Fee (Full Year 6+ Vehicles) • Recycled Water Construction Permit Fee (Half Year 0-2 Vehicles) • Recycled Water Construction Permit Fee (Half Year 3 Vehicles) • Recycled Water Construction Permit Fee (Half Year 4 Vehicles) • Recycled Water Construction Permit Fee (Half Year 5 Vehicles) • Recycled Water Construction Permit Fee (Half Year 6+ Vehicles) • Recycled Water Construction Permit Fee (Quarterly 0-2 Vehicles) • Recycled Water Construction Permit Fee (Quarterly 3 Vehicles) • Recycled Water Construction Permit Fee (Quarterly 4 Vehicles) • Recycled Water Construction Permit Fee (Quarterly 5 Vehicles) • Recycled Water Construction Permit Fee (Quarterly 6+ Vehicles) • Muni Code non-compliance water restoration fee • Temporary wastewater discharge application • Sewer lateral CCTV review City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 27 • Sewer WYE installation Comparison surveys were conducted for account set-up, disconnect/reconnect, and plan check review water service. CHAPTER 4. Peer Comparison Survey The purpose of a peer comparison survey is to provide the City with a sense of the local market pricing for services, and to use that information to gauge the impact of recommendations for fee adjustments . MGT worked with the City of San Luis Obispo’s staff to identify the list of fees that would be part of the peer comparison survey. The following peer jurisdictions were included as part of the comparison survey for San Luis Obispo County, City of Santa Barbara, City of Ventura, and the City of Monterey. The fee amounts were determined by the jurisdictions published fee schedules at the time of the survey. It is good to keep in mind that comparison surveys do not always provide an “apples to apples” comparison of the fee. When comparing fees there are several key factors to keep in mind: • When was the last time that agency updated their fees? • We do not know if the agency has set their fees below full cost recovery. • Salaries and benefits can vary from agency to agency and can impact the cost of services. • Often fee structures can differ, and a comparison is only an estimate of the fee that may be charged. In general, a comparison survey paints only part of the picture and can only provide a high -level comparison. Results of the survey can be seen in Appendix B of this report. CHAPTER 5. Recommendation s City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 28 MGT recommends the following: • Staff are looking for guidance from Leadership and the City Council on recommendations. • MGT recommends that the city continue to evaluate their user fees every three to five years or sooner if there are significant changes to the organization or process. • MGT recommends that for the period between analysis, that the City continue to increase fees based on a CPI factor in order to maintain cost recovery as salaries and benefits and services and supply costs increase. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 29 Appendix A - User Fee Results The following pages provide the individual fee study results. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 30 BUILDING City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 31 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 32 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 33 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 34 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 35 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 36 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 37 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 38 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 39 ENGINEERING City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 40 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 41 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 42 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 43 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 44 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 45 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 46 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 47 Ord Service Name Fee Description Annual Volume Current Fee Full Cost Current Recovery %Annual Cost Annual Revenue Annual Subsidy Recovery Level Fee @ Policy Level Annual Revenue2 Increased Revenue Recommended Subsidy 95 Single Family Residential (Net Impervious Area per SCP) 2500+Fixed Fee - 675$ 669$ 101%-$ -$ -$ 100%669$ -$ -$ -$ 96 Drainage Report/Flood Study Review 97 Minor Fixed Fee 144 338$ 1,672$ 20%240,792$ 48,600$ 192,192$ 100%1,672$ 240,792$ 192,192$ -$ 98 Major Fixed Fee 25 844$ 3,344$ 25%83,608$ 21,094$ 62,514$ 100%3,344$ 83,608$ 62,514$ -$ 151 Fiber Infrastructure Protection Fee Remove - -$ -$ 0%-$ -$ -$ --Recommend to remove-- Total User Fees $2,169,022 $1,372,852 $796,170 $2,115,061 $742,209 $53,961 % of Full Cost 63%37%98%54%2% Footnotes *MGT did not receive volume and revenue for all of the fees therefore the user percent recovery level may be in accurate. 1 ORD 1- Improvement Plan Check 2 ORD 2 - Construction Inspection Fee 3 Unpermitted Encroachments 4 Plus per linear foot (trench) 5 Fiber Infrastructure Protection Fee 6 Fee Name Revisions Current Recommendations Per Unit Annual Per Unit Annual City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 48 FIRE City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 49 Agency: City of San Luis Obispo Department: Fire - Hazardous Prevention Fiscal Year: FY2024 Ord Construction Type Sample Square Footage Project Plan Review Inspection Total Plan Review 2 Inspection2 Total2 Plan Review Inspection3 Total3 Dollar Amount Change +/- Percentage Change +/- 1 Building Construction Permits 2 New Accessory Building 22,011 sq ft $ 0.15 0.09 $ 0.24 $ 0.32 $ 0.32 $ 0.64 $ $0.16 $0.16 0.32 $ 0.08 $ 33% 3 New Commercial 13,097 sq ft $ 0.31 0.20 $ 0.51 $ 0.11 $ 0.17 $ 0.28 $ $0.06 $0.09 0.14 $ (0.37) $ -73% 4 Alt/Addition-Commercial 1,226 sq ft $ 0.70 0.46 $ 1.16 $ 0.14 $ 0.18 $ 0.32 $ $0.07 $0.09 0.16 $ (1.00) $ -86% 5 Alt/Addition-Mixed Use 4,037 sq ft 0.55 $ 0.36 $ 0.91 $ 0.19 $ 0.25 $ 0.44 $ $0.19 $0.25 0.44 $ (0.47) $ -52%% 6 New Mixed Use 26,575 sq ft $ 0.20 0.13 $ 0.33 $ 0.16 $ 0.26 $ 0.42 $ $0.08 $0.13 0.21 $ (0.12) $ -36% 7 Alt/Addition ADU 904 sq ft $ 1.23 0.80 $ 2.03 $ 0.92 $ 0.92 $ 1.84 $ $0.46 $0.46 0.92 $ (1.11) $ -55% 8 Alt/Addition- Single Family No current fee data 0.51 $ 0.51 $ 1.02 $ $0.51 $0.51 1.02 $ 9 Alt/Addition-Multi Family 392 sq ft $ 1.53 0.99 $ 2.52 $ 0.19 $ 0.25 $ 0.44 $ $0.19 $0.25 0.44 $ (2.33) $ -92% 10 New Multi Family 21,516 sq ft $ 0.23 0.15 $ 0.38 $ 0.12 $ 0.08 $ 0.20 $ $0.06 $0.04 0.10 $ (0.28) $ -74% 11 New Single Family 5773 sq ft $ 0.07 0.05 $ 0.12 $ 0.42 $ 0.28 $ 0.70 $ $0.21 $0.14 0.35 $ 0.23 $ 192% Current Full Cost Price Per Square Foot Recommendations City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 50 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 51 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 52 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 53 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 54 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 55 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 56 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 57 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 58 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 59 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 60 GENERAL GOVERNMENT City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 61 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 62 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 63 PARKS AND RECREATION City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 64 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 65 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 66 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 67 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 68 PLANNING City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Draft Report P a g e | 69 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 70 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 71 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 72 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 73 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 74 POLICE City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 75 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 76 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 77 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 78 PUBLIC WORKS City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 79 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 80 UTILITIES City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 81 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 82 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 83 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 84 Appendix B – Peer Comparison Survey Results The following pages provide the results of the peer comparison survey. City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 85 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 86 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 87 City of San Luis Obispo - Peer Comparison Study City of San Luis Obispo Current Fee Proposed Fee San Luis Obispo County Santa Barbara City Ventura City Monterey City POLICE 1st False Alarm no charge no charge 325.00$ -$ -$ -$ 2nd False Alarm no charge no charge 325.00$ -$ -$ 50.00$ 3rd False Alarm 100.64$ 175.00$ 325.00$ $ 246.00 -$ 100.00$ 4th False Alarm 168.14$ 225.00$ 325.00$ $ 380.00 180.00$ 250.00$ 5th False Alarm 277.38$ 350.00$ 325.00$ $ 380.00 180.00$ 500.00$ 6th False Alarm 498.29$ 500.00$ 325.00$ $ 380.00 180.00$ 500.00$ 7th False Alarm 759.71$ 500.00$ 325.00$ $ 380.00 180.00$ 500.00$ PLANNING Minor Use Permit (Admin)3,663.00$ 3,740.00$ 3,562.00$ 1,960.00$ 4,866.00$ 2,278.50$ Subdivision Services 5+ Lots (Tentative Tract Map) 13,263.32$ 32,635.00$ 10,947.00$ 26,920.00$ $ 19,221.00 6,000.00$ CANNABIS Total One Time Application Fees 26,698.87$ 25,002.00$ $13,455 deposit + processing cost $5,180 - $10,450 9,642.00$ Varies Retail 44,309.53$ 19,597.00$ $12,496 deposit + processing cost 5,727.00$ 9,642.00$ Varies Peer Agencies City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 88 City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 89 City of San Luis Obispo - Peer Comparison Study City of San Luis Obispo Current Fee Proposed Fee San Luis Obispo County Santa Barbara City Ventura City Monterey City UTILITIES Account Set-up 42.30$ 48.00$ n/a 59.00$ 108.00$ n/a Water Meter Cost (1") [Meter Installation 1] - peers may combine the two 216.00$ $325-$395 $ 77.97 31.09$ 20.75$ Plan check review water service $614 774.00$ 325.00$ $ 113.00 $350-$1290 363.00$ Retirement of Service (2" or smaller)$956 change to deposit n/a 108.00$ Retirement of Service (larger than 2")$956 change to deposit n/a 108.00$ Disconnect/Reconnect for Non-Payment $50 57.00$ n/a $ 59.00 n/a n/a ENGINEERING Improvement Plan Check Base plus incremental 15% of Estimate Construction Costs for first $100,000 plus 1.0% thereafter $1.80 - $2.97 $1,937-15,743 $1,123.50-$3.302.25 $111/hr Construction Inspection Base plus incremental 8.4% of Estimate Construction Costs for first $500,000 plus 3.3% thereafter 0.84$ $16,137-$23,822Bill hourly w/ $1,248 Deposit $100.89-$13,637.65 Annual Encroachment Permit for Utility Companies Changed to Temporary Encroachment Agreement $10,545 20,902.00$ Varies $2,796-$4,200 (initial deposit) Varies 277.00$ Stormwater Post-Construction Requirements $168.75- $1,012.50 $334-$1,003 Varies 2,847.00$ $913-$1,826 2,458.00$ Peer Agencies City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 90 City of San Luis Obispo - Peer Comparison Study City of San Luis Obispo Current Fee Proposed Fee San Luis Obispo County Santa Barbara City Ventura City Monterey City FIRE Fire Sprinkler System (New installation) 1-25 heads Plan Review $1,114 752.00$ $ 433.00 $ 413.00 $ 1,208.00 $428 + Contractor Cost Fire Alarm System (New installation) 1-50 devices Plan Review $1,114 841.00$ $ 435.00 $ 656.00 $ 790.00 $ 858.00 Hazardous Occupancy Permits - Garages - Repair $338 487.00$ $ 255.00 374.00$ 279.00$ 428.00$ Hazardous Occupancy Permits - Places of Assembly $338 398.00$ $ 451.00 374.00$ $ 372.00 428.00$ Hazardous Occupancy Permits - Welding and Cutting Operations $254 221.00$ $ 255.00 374.00$ 279.00$ 428.00$ CUPA - Hazardous Materials Handlers - 1-4 Materials Handled $374 354.00$ $ 451.00 433.00$ $ 558.00 $ 235.00 CUPA - Waste Generators - 1-5 waste streams $374 354.00$ 451.00$ 433.00$ 558.00$ $ 584.00 CUPA - Underground Storage Tanks - 1st Tank $2,157 1,947.00$ 1,588.00$ 1,165.00$ $ 1,859.00 1,345.00$ Fire and Life Safety Inspection, Apartments, 0-10 units $404 354.00$ $ 637.00 265.00$ $ 484.00 Not available PARKS AND RECREATION Ludwick Community Center Gymnasium (Non-Profit) 3060 sqft $45.15 60.00$ N/A Resident rate: $46/hr Non-resident rate: $51/hr Currently not doing rentals, no pricing Resident rate: During operating hours - $33.30/hour Not operating hours - $273.60 (first 2 hours) Gymnasium (For-Profit)$79.54 95.00$ N/A Resident rate: $58/hr Non-resident rate: $64/hr Currently not doing rentals, no pricing Non-resident rate: During operating hours - $37.00/hour Not operating hours - $304.00 (first 2 hours) Peer Agencies City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 91 City of San Luis Obispo - Peer Comparison Study City of San Luis Obispo Current Fee Proposed Fee San Luis Obispo County Santa Barbara City Ventura City Monterey City PARKS AND RECREATION Assembly Room (Non-Profit) 1457 sqft $35.44 45.00$ N/A 40/hr Currently not doing rentals, no pricing Facility Rental – Community Centers Private Party Use - Per Hour Fee w/ 2 Hour Minimum Resident rate: $111.69 Assembly Room (For-Profit)$74.55 85.00$ N/A Resident rate: $50/hr Non-resident rate: $60/hr Currently not doing rentals, no pricing Facility Rental – Community Centers Private Party Use - Per Hour Fee w/ 2 Hour Minimum Non-resident rate: $146.00 Senior Center Main Room (Non-Profit) 6128 sqft $35.44 45.00$ N/A N/A Currently not doing rentals, no pricing N/A Main Room (For-Profit)$74.55 85.00$ N/A N/A Currently not doing rentals, no pricing N/A Conference Room (Non-Profit) 500 sq ft $19.16 20.00$ N/A N/A Currently not doing rentals, no pricing N/A Conference Room (For-Profit)$24.68 35.00$ N/A N/A Currently not doing rentals, no pricing N/A Meadow Park Building 3400 sqft Non-Profit $19.16 20.00$ N/A N/A Currently not doing rentals, no pricing Meeting Room Use - Nonprofit (During Community Center Operating Hours) - $27.00/hr Meeting Room Use - Nonprofit (During Community Center Non-Operating Hours) - Peer Agencies City of San Luis Obispo, California May 7, 2024 Comprehensive Citywide User Fee Study Revised Daft Report P a g e | 92 City of San Luis Obispo - Peer Comparison Study City of San Luis Obispo Current Fee Proposed Fee San Luis Obispo County Santa Barbara City Ventura City Monterey City PARKS AND RECREATION For-Profit $24.68 35.00$ N/A N/A Currently not doing rentals, no pricing N/A City/County Library Community Room (Non-Profit) 1683 sqft $35.44 45.00$ N/A $150.00 for initial 3 hours, 305 each additional hour $10-$25 $10/hr max $50/day if user does not have valid library card Community Room (For-Profit)$74.55 85.00$ N/A $300.00 for initial 3 hours, $100.00 each additional hour $10-$25 N/A Community Room (Municipality)$22.00 35.00$ N/A N/A N/A N/A Conference Room (Non-Profit) 503 sqft $19.16 20.00$ N/A $100.00 for initial 3 hours, $35 each additional hour $10-$25 $5/hr max $25/day if user does not have a library card Conference Room (For-Profit)$24.68 35.00$ N/A $200.00 for initial 3 hours, $70 each additional hour $10-$25 N/A Conference Room (Municipality)$7.25 15.00$ N/A N/A N/A N/A Community Gardens - 148 plots (19,649.25 total sqft) $34/year + .03 per square ft $36/year + .03 per square ft N/A 134 plots 219 plots Residents: $30-$85/6- months Non-residents: $33- $93.50/6-months N/A Peer Agencies