Agenda

Back to Calendar Return

Agenda Item 22.

City Council Meeting

Meeting Date:	08/21/2018
FROM:	Bill Gallardo

Subject:

Public Hearing to Consider Resolution Increasing Existing Fees for Certain City Services

RECOMMENDATION

Adopt resolution increasing existing fees for certain City services.

BACKGROUND/DISCUSSION

The City of Brea provides a wide range of services which are of general benefit to the public. Examples of these are the maintenance of streets and parks, and police, fire and paramedic response. The City also provides a number of services that benefit a specific user or users of those services.

When a service that is provided benefits a particular user of that service, it is appropriate to charge a fee to recover all or a portion of the cost of providing that service. When the full cost of providing that service is not recovered from the user, it is necessary to subsidize the cost of that service by using general benefit tax dollars that would otherwise be available to support fundamental City-wide services such as street maintenance and police and fire services. The application of user fees is not only an issue of equity in terms of who bears the financial burden for program and service costs, but is also good budget practice in that it better addresses the cost of conducting business in a changing environment. This reasoning also applies to user fees charged in Enterprise Funds such as: the Urban Runoff (410), Water Utility (420), Sewer Utility (430), and Sanitation & Street Sweeping (440) Funds.

To maintain a sound fiscal plan, it is important that fees be reviewed and/or updated on a regular basis. The regular review process is currently applied for all City fees during each budget process to ensure that no fee goes unexamined for a long period of time. Doing so ensures that the City of Brea is keeping pace with internal and external changes that create a financial impact upon City programs and services.

During preparation of the FY 2018-19 Budget, all City user fees were evaluated based upon an analysis of the cost of providing the service, date of last review and/or update, and demand for the program or service relative to resources necessary to provide said program or service except those being evaluated as part of the fee study. Staff is recommending changes (increases and decrease) to certain existing user fees for the applicable programs and services as delineated in Exhibit A to the proposed resolution.

The update of these fees was discussed with the City Council during the Budget Workshop conducted on May 15, 2018.   These fees were also discussed at the June 21, 2018 Public Hearing.   Based upon City Council feedback, the Technology Fee was removed from this staff report and placed with other development related fees. City Council requested that these fees also be brought back with the development related fees.

The Alarm System Permit Application (Commercial) fee is recommended to be reduced.   The current fee is $50 and the proposed fee is $30.   This reduction aligns the Commercial Alarm System Permit Application fee with the Residential Alarm System Permit Application fee since both these processes are similar and require the same processing time.   However, this alignment will decrease annual collection for this fee by approximately $19,480 annually.

A number of fees presented are recommended to be increased in Utility Billing.   With the exception of the New Account/Application, Delinquent Service Charge, Hang Tag Charge and Water Shut-off Charge, these increases will affect a limited number of customers. A question/statement arose at the June 21st meeting that indicated that these services are already included in the customer water rates. In response to and mentioned earlier in this staff report, these revenues are included in the rates; however, if revenue collected for these services better meet the actual costs less is absorbed by the rate payers.   These fees are specific to user and, in general, should be bore by that user to alleviate the overall burden on the rate payers.

Attached to this staff report is a description of each fee that is being proposed for adjusting.   Also, included in the Resolution - Exhibit A are other water related fees listed which have no changes.   This is a housekeeping item to separate miscellaneous water fees from the normal water rate resolution that is presented to City Council from time to time.

All fee adjustments would be effective October 1, 2018.

FISCAL IMPACT/SUMMARY

Adoption of the resolution and implementation of the associated fee schedule will result in additional cost recovery for providing the specified services. Based on a similar volume of services, this would result in an estimated decrease of $10,163 in General Fund (110) due to the reduction of the Commercial Alarm System Permit Fee, a $8,494 increase in Urban Runoff Fund (410) and a $190,748 increase in Water Utility Fund (420) revenues annually.

RESPECTFULLY SUBMITTED:

William Gallardo, City Manager
Prepared by: Alicia Brenner, Senior Management Analyst
Concurrence: Cindy Russell, Administrative Services Director

Attachments
Resolution
Exhibit A
Fees Descriptions