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~ITf OF SAN BERNARDIQ. - REQUE9r FOR COUNCIL AC11bN
From:
Michael W. Loehr
Interim Director of Planning
Recommencations to Increase Fees
Su~~: for Planning Department Services
Dept:
Planning
Mayor and Council Meeting 0
July 18, 1988, 2:00 p.m.
Dau: July 14, 1988
Synopsis of Previous Council action:
Resolution No. 83-201, dated June 21, 1983, was the last action
of the Mayor and Council for reviewing and setting planning fees.
At the ways and Means Committee meeting held June 27, 1988 an
increase in fees for Planning Department services was recommended
for approval.
Recommended motion:
That the Mayor and Council close the public hearing and ask
the City Attorney's Office to prepare the necessary documentation.
hJ1vj{~t;#i
Michael W. Loehr
Contact person:
Michael W. Loehr
, Phone:
384-5057
Supporting data attached:
Staff Report
Ward:
City-wide
FUNDING REQUIREMENTS:
Amount:
Source: (Acct. No.)
(Acct. DescriPtion)
Finance:
Council Notes:
Anf:mn;:l Itp.m Nn_
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CiTfoF SAN BERNARDIt8 - REQUEa FOR COUNCIL ACMrt
STAFF REPORT
Subject: Recommendations to Increase Fees for Planning
Department Services
Mayor and Council Meeting of July 18, 1988
BACKGROUND
Section 54990 of the Government Code requires that fees for
planning services not exceed the estimated reasonable cost of
providing the service for which the fee is charged. There-
fore, fees should be established based on documentation of
the actual time and cost to process various types of applica-
tions. Actual direct costs indicated in this report reflect
ONLY the direct cost incurred by the Planning Department in
salaries, benefits, and supplies and do NOT include any
expenses incurred by other departments which participate in
the processing of planning applications. These departments
include, but are not limited to, the City Attorney's office,
the Administrative office, and the departments of Public
Works, Building and Safety, Fire, Police, Parks and
Recreation, Water, Public Services, etc.
In considering the following options, remember that in
February the Council approved four new positions for the
Planning Department. At the time there was agreement to fund
these for the balance of 1987-88 with increased Building
Permit fees, but the on-going annual cost was to be looked at
in relation to increased planning fees. The on-going cost of
the new position is approximately $135,000 per year at
today's salaries.
~~~~s... .QF_l'-p~L.LCP..TIONS PROCESSED
There are currently over thirty types of applications pro-
cessed and/or services provided by the Planning Department.
These may be categorized in a variety of ways, but for fee
purposes they are defined as follows:
Serv ice$ .for . W.hich .'1'OE;lre. .is. P..Q:iutc.t. J;.p.sJ~...E.ecovery
There are only two types of applications which
recover full costs: preparation of Environmental
Impact Reports and Preparation of Specific Plans.
In both cases, the City awards a contract to a
consultant who prepares the document. The
applicant pays the full consultant cost plus
fifteen percent for City processing costs.
75-0264
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Recommendations to Increase Fees for Planning Dept.
Services
Mayor and Council Meeting of July 18, 1988
Page 3
.S.~r;v ~P.~l? _..f-o_J;.. . . .wb i9.b. . . tl1~.r.e. . . .if;; Consult.~tU; Cost
Recoverv
The City contracts with outside geologists to
review geology and liquefaction reports for
development projects. The City charges the
applicant for the full cost of the geologist review
($60/hour) but does not charge any fee for City
expenses incurred in the processing of those
reports.
p'~~-,(~c;:t!.s. .fot.. .Wl)ic1L..':fueJ;JLAre Fees
There are twenty-two Planning Department services
for which the City has established fees. These
have not been updated since July 1, 1983. These
fees include Zone Changes, General Plan Amendments,
Sign Permits, Review of Plans, etc. (See
Attachment A)
p.e.r.v ice!> .wtd..c.n AJ:.eclU"..r.ent.ly Prov...igeQ. .qt. No Cost
There are at least eight services currently
provided for which no fee has been established (See
Attachment A). This category includes things like
Certificates of Occupancy, Minor Revisions,
Temporary Trailer/Mobile Home Permits, etc.
Serv ices CUJ;.r:ep.t.l.y. Not ?roV Ulea. Bu.\; ~~~_r._ike.:),y To
B_e
This category includes such things as Development
Agreements, Vesting Tentative Maps, Amendments to
the Interim Policy Document, etc., which are
services the City does not yet provide but is
likely to initiate in the near future.
PHILOSOP!n~.1\4. ~?PJl.oM~H];:S .TO _~LANNIN~t FEES
There are several basic philosophical approaches to estab-
lishing planning fees. All are used throughout the state and
it is strictly a policy matter which is selected by the
elected body. To assist in the preparation of this report,
the Planning Department has reviewed three fee studies: a
study of 69 Southern California cities conducted by the City.
of South Pasadena in 19871 a study prepared by David M.
Griffith and Associates, Ltd., in 1987 using 17 cities in
California1 and a study of ten local cities conducted by the
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Recommendations to Increase Fees for Planning Dept. Services
Mayor and Council Meeting of July 18, 1988
Page 4
Planning Department early in 1987 (Attachment B) .
Basic to any fee philosophy is the fact that planning is an
exercise of police power delegated to local jurisdictions by
the state for the protection of. the health, safety and
welfare of the general public. To carry out this responsi-
bility, cities and counties are required to adopt a General
Plan and implementing ordinances, including zoning. Once
those plans and ordinances are in place they become the
mechanism to protect the public. Keeping these two factors
in mind, the basic approaches to planning' fees are as
follows:
Option_~_~ No ChanQe
The philosophy behind the "No Change" approach is to
leave the fees as they are for the purpose of keeping
development costs down and remaining competitive with
other local jurisdictions. However, as the cost to
process applications increases, the greater the general
fund contribution becomes. Increased planning costs
decrease the amount of funds available to other city
departments and services. There is usually no direct
relationship between the people who benefit from the
planning services and those who suffer from reduction of
other services. Therefore, this is the least equitable
of the concepts reviewed herein.
Based on
current
$114,125
the workload projections for
fees are expected to generate
in revenue.
19B8-89, the
approximately
OPTION 2 - Dit~~t_CoAt.~ecovery
This approach assumes that the individuals benefiting
from the planning services should be the ones to pay for
them, and that the applicants are the sole beneficiaries
of the process. If the General Plan and ordinances
already protect the health, safety, and welfare of the
general public, then changes to them or processing ofa
project which, by definition, could be detrimental,
benefit the applicant and not the public.
Although recovering the direct processing cost from
applicants has not been the traditional approach, more
and more jurisdictions in California are adopting this
kind of fee structure. Unless an hourly rate fee based
on actual cost is established, a disadvantage of this
concept is the fact that "Direct Cost Recovery" fees
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Recommendations to Increase Fees for Planning Dept. Services
Mayor and Council Meeting of July 18, 1988
Page 5
represent an 'average cost' to process any given type of
application. Therefore, some applicants will pay more
than the actual cost of their project, while others will
pay less. However, this is true with any fee structure
unless the fees are so low they cover the most minimal
processing. The hourly rate system works only if the
jurisdiction has a good cost accounting system to track
time on at least fifteen minute increments
For the purposes of this report, the term "Direct Cost
Recovery" refers only to the direct costs incurred by
the Planning Department for salaries, benefits, and
supplies. It does not include indirect costs or other
department expenditures. Some jurisdictions do compute
other departments into "Direct Cost Recovery" fees. This
is most easily done if the City has a state-approved
cost allocation plan.
Another option considered was the top of the local range
or the actual cost, whichever was lowest. This produced
a revenue which was within a few thousand dollars of
this "Direct Cost Recovery" approach. This is because
the computation used the lowest figure and at least one
city is charging fees which are higher than our direct
costs.
Based on workload
Cost Recovery" fee
io&luding fees for
cost.
projections for 1988-89, a "Direct
would generate approximately $254,166
services currently provided at no
Using a "Direct Cost Plus" approach to account for City
overhead and other departments, the revenues produced
would be higher. Although San Bernardino has no cost
allocation plan, overhead figures from other cities
average about 25 to 35 percent. Applying a 30 percent
cost plus figure, the revenue generated would be
$254,166 times 30 percent or $330,416, which is more
reflective of the full cost to the City.
OPTION ,]..- J>\IP.i.c;tt'rivate Sulit
A third concept is based on the assumption that both the
general public and the applicants stand to gain benefits
through the planning review process. Since the general
public profits as well as the applicant by receiving
protection as well as indirect economic benefits, one
can argue that the general fund (i.e. the general
public) should bear at least a portion of the processing
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Recommendations to Increase Fees for planning Dept. Services
Mayor and Council Meeting of July 18, 1988
Page 6
costs. The applicant is
stands to benefit as well
and therefore, also should
making a request and he/she
if the project is approved,.
share in the cost.
The degree of benefit to each is a policy issue.
Assuming a 50~50 public/private split, the projected
revenues would be $126,609 using the percentage split OR
the existing fee, whichever is hi9her. Obviously
different percent splits render different revenues.
Applying the same approach, a 30/70 pUblic/private split
would generate a projected $194,754 in revenues.
QP.'~l;ON. .4 . :-. )?Elr;c;:!,!n.t~g!,!. .l\no\1A-J. . Ipg ease
Since the fees have not been updated for five years, a
fourth approach is to increase them on a percent per
year basis. Assuming a five percent increase in City
costs per year over a five year period, the fees would
be adjusted upward by 25%. This concept would generate
approximately $lB2,3l0 in 1988-89 based on projected
workload.
ANALYSIS
The current fee structure is anticipated to generate approxi-
mately $114,125 in revenue during FY 1988-89, or 12 percent
of the Planning Department budget and 45 percent of the
actual direct cost to provide services. If it is the City's
intent to generate enough revenue to off-set the cost of the
additional staff, then the fees must generate approximately
$250,000. The only option which accomplishes that is Number
2, the direct cost recovery which is a legitimate approach
and does not reflect full cost recovery to the City.
Staff is recommending this basic approach with some modifica-
tions, including two major differences. First, staff is
recommending that the direct cost of an appeal is unreason-
able for the average aggrieved party to pay. In that the
Council has already set $75 as the fee for appealing a
Development Review Committee decision, and this amount is
seen to be reasonable and in line with appeal fees charged by
other jurisdictions, staff is recommending that a fee of $75
be set for appeals to the Planning Commission and to the
Mayor and Common Council.
Second, staff is also recommending that the fees charged for
subdivisions be left as they are until such time as the
General Plan is adopted and the City has had time to track
actual direct costs to process. The estimate shown in Option
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Recommendations to Increase Fees for Planning Dept. Services
Mayor and Council Meeting of July 18, 1988
Page 7
No. 2 is based on a very limited number of tracts processed
during the past year. It is felt that these are not indica-
tive of the actual amount of time required under a normal
workload. Therefore, until this can be assessed, fees should
remain as they are. Since the processing of subdivisions
does require substantial review by several departments, at
the time the analysis of actual direct costs is made, the
processing cost from other departments should be included.
The number of hours required to process the anticipated
workload is 11,080 hours or 32 percent of the total available
hours (not including overtime). The revenue generated using
the staff recommendation, $259,360, covers the cost of
increased staff and represents 28 percent of the FY 1988-89
budget for the department, reducing the General Fund contri-
bution from 88 percent to 72 percent.
.R~CP_M.M~DATION
The Planning Department is recommending Qp~QO.?
Cost Reg9~ex~ including services for which no fee
currently with the following changes and additions
in Attachment A - Fifth COlumm-Recommendation):
Direct
is charged
(as shown
1. Fees be rounded up the nearest five dollar increments
except those under $15. In that these fees do not cover
the full cost, only the direct cost, and since they
represent an average fee, the rounding up will not
violate state law.
2. Fee for appeals to the Planning Commission and to the
Council be set at $75 rather than the direct cost. One
of the Development Review Committee resolutions estab-
lishes a $75 appeal fee which has never been implemented
and it is an amount consistent with appeal fees charged
by many jurisdictions. The other most common fee for
appeals is one half the original fee.
3. The fee for Conditional Use Permits for alcohol permits
in an existing building (not a new development project)
be set at one half the direct cost OR $530.
4.
Establish a Minor variance procedure for single
homes and leave the fee for Minor Variances
current rate of $300.
family
at the
5.
Leave all Tentative Tract
Parcel Maps, and Lot Line
fees but review as part of
Maps, including subdivisions,
Adjustments at their current
1989-90 budget process.
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Recommendations to Increase Fees for Planning Dept. Services
Mayor and Council Meeting of July 18, 198B
Page 8
6. Adopt a "Direct Cost Recovery" fee including Ul.
departments for Vesting Tentative Maps, Development
Agreements and Development Agreement Amendments, and
Specific Plans and Specific Plan Amendments.
7. Direct staff to develop an enforcement and public
information program for Home Occupations during Fiscal
Year 1988-89. There are large numbers of persons who
conduct businesses from their homes who do not have home
occupation permits pursuant to the existing Municipal
Code. In addition to a source of revenue currently
untapped, these occupations often cause problems for
adjacent neighbors.
8. Set the fee for Landscape Plan Review based on the
Planning Department cost but direct staff to study the
actual cost to all departments during fiscal year 1988-
89 and make a recommendation for a fee adjustment
concurrent with the 19B9-90 budget process. Landscape
Plan Review has been modified and fees are now collected
by the Public Works Department. The majority of the
time and cost to process these plans is in the Public
Works and Parks and Recreation Departments.
9. Establish a fee of $585 for Amendments to the Interim
Policy Document.
10.
Establish a policy that
applications, that full
tion shall be paid.
if a project involves
fees for each type of
multiple
applica-
ll. Direct staff to prepare the necessary resolutions and
set necessary hearings on these fees, including a
provision for an automatic increase in fees based on the
annual salary adjustment for the General Employees Unit
and establish a three-year review process for Planning
fees (i.e. If in 1988-89 the general employees receive a
six percent salary increase, then the fees in 198B-89
will be increased by six percent) .
MICHAEL W. LOEHR
Interim Director of Planning
mkf
Attachment A - Comparison of Fee Alternatives and Revenues
B _ Comparative Studies of Planning Fees in
Southern California in Dollars
Memo: 8806-2107
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TYPE OF APPLICATION
ENV.REVIEW/NEG.DEC.
ENV.REVIEW/EXEMPTION
ENV.REVIEW/EIR
EXTENSION OF TIME
GPA - 100A or less
GPA - 100A or more
HOME OCCUP. PERMIT
LANDSCAPE PLAN REVIEW
LIQUEFACTION REPORT
P.C. INTERPRETATION
REVIEW OF PLANS
SIGN PERMIT
SPECIFI C PLAN
TENTATIVE TRACT MAP
SINGL~ FAMILV
CONOO/flRD
EXTENSION OF TIME
REVISION
PARCEL MAP
LOT U NE ADJUST.
OATTACHMENT A 0 J}
OF FEE ALTERNATIVES AND REVENUES
Option 4
5% Per year
Increase
COMPARISON
[Option 1 Option 21 Option 3 .
N 0 ChangE Direct 50-:-50 Pubh
(c) Cost Recov Pr~vate
(a) Split
100 1$' 219 $ 110
75
233
AMENOMENT TO CONDITIONS $
aUILDING MOVE ON I 175 229
CHANGE OF ZONE \350+25/A I 742
CUP \ 350 1 1,059
CUP /CONDO/PRD 1350+l0/U~it
I
25
82
229
1,167
229
63
50
1'"
229
359
23
10
~OO+40/lot
1,059
r.l00+10/1.U1it
\ 10% fee I
I 50% fee
bOO+30/lot
p00+30/lot
229
638
380
225
175 (c)
375
530
530
117
41
115
500(c)
1,000(c)
159 (c) I
50(c)
115
180
12
125
219
438+3l/A
$
I
I 438+l3/A
438
94
31
125
625
1,250
188
63
o
Recx:mnerda-
tion
$
220
230
745
.
t-
1,060
235
80
Consultant
+ '''%
230
Cost
1,170
230
65 __d _', .'.
$150 + additional
actual cost
63
230
156 360
13 25
Consultant Cost
+ 15%
all (c):
400+40/lot 500+50/lot
400+1o/1.U1itI500+l3/1.U1it'
10% fee
50% fee
200+30/1ot
200+30/lot
10% fee
50% fee
.
250+38/lot
200+30/lot
400+40/lot
400+l0/lot
(.-'
10% fee
50% fee
200+30/lot
200+30/lot
o
A~A-Cont'O
carparison of Fee Alternatives and Revenues
o
Option 1 I Option 2 I ~icn 3 I Option 4 I ~LIlIC.Lrla:
No Change Direct j 50-50 Publi4: 5% Per Year I tion -. - -
(e) Cost Reoov Private i Increase !
TYPE OF APPLICATION 1,.\ I""H+- ,
.
VARIANCE $ 300 $ 480 $ 300 (e) $ 375 $ 480
CERTIFICATE OF OCC. 0 12 6 12 (a) 12
CHRISTMAS TREE LOT 0 12 6 12 (a) 12 .
APPEALS I
COUNCIL 0 360 180 360 (a) 75
PLAN. COMM. 0 I 229 115 I 229 (a) 75
LETTER/ZONING CONSIST. 0 66 33 66 (a) 70
METAL BUI LOI NG 0 229 125 (c) 2291a) 230
MI~OR REVISIONS 0 94 47 94 (a) 95
.
SEWER HOOKUP EXEMPTION 0 229 115 2291a) 230
TEMP. TRAILER PERMIT. 0 94 47 Q41,.\ QC;
-Amendments to Interim -
policv Document 585 / .
PRO:I&:l'W 88-89
REVENUES $114,125 $254,166 $126,609 I $182,310 $259,360
(e) = Existing (current) fee
(a) = Actual planning Dept. cost
(t) = Top of local range
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A '" ACRE
L '" LOT
P = PARCEL
COMPARATIVE STUDIE~ ~EES Q SOUTHERN CALIFORNIA
IN OOLLARS
o
69 CITY SURVEY IN SO. CA. 17 CI TV SURVEY 10 CITY
1987 1986-87 LOCAL
R~ SURVEY
TYPE OF APPLICATION HII ;r- 1987 (RANGE)
, S 100 to
AMENDMENT TO CONDITIONS - - - - - S 470 + SlO/A
BUILDING MOVE ON - - - - - -
CHANGE OF ZONE S 5 785 S SOD S 662 S 175 - 1,615 S 614 S 400 to 1. 65~
CUP 3,830 300 482 100 - 1,.900 619 300 to 1,89E
CUP/CONDO/PRD
ENV.REVIEW/NEG.DEC. 600 100 134 86 - 300 162 45 to 250
ENV.REVIEW/EXEMPTION 298 75 95 50 - 500 169 25 to 100
-....-...... -
ENV.REVIEW/EIR COST COST COST COST COST CDST
EXTENSION OF TIME 50% fee 100 94 - - 25 to 154
GPA - 100A or less 5,815 500 827 550 - 1,.500 844 400 to
GPA - 100A or more 2.390 + 20/A
HOME OCCUP. PERMIT - - - - - 35 to 150
50 to 75
LANDSCAPE PLAN REVIEW - - - - - + 40/A
LIQUEFACTION REPORT - - - - - -
P.C. INTERPRETATION - - - - - -
REVI EW OF PLANS 1 000 200 259 25 - 500 200 75 + 10/A
to 1.087
10 + 30lt/sq
SIGN PERMIT - - - 25 - 75 42 ft. to 200
SPECIFIC PLAN COST COST COST COST COST COST
TENTATIVE TRACT MAP
300 + lOll
SINGLE FAMILY 7 200 500 787 150 - 2.510 742 to 1.855
CONDO/PRD 2.250 500 614 - 400+l0/lot to
- 1855+l2/lot +
10/A
EXTENSION OF TIME 50% 100 94 - - Z:l to 50% fe
IUD to T,3ZC
REVISION - - - - - + 10/L
200 + 20/L t
PARCEL MAP 6,385 335 597 100 to 1,925 358 1.262 + 27/F
LOT LI NE ADJUST. 1,501) 155 251 55 to 480 260 158 to 20C
'0
A :.ACRE
l : lOT
P " PARCEL
ATJlP'IlIlMENT B - Cant '~
COMPARATIVE STUDIE~F PLANNING FEES'-t SOUTHERN CALIFORNIA
1 N DOLLARS
TYPE OF APPLICATION
VARIANCE
CERTIFICATE OF OCC.
CHRISTMAS TREE LOT
APPEALS
COUNCI L
PLAN. COMM.
LETTER/ZONING CONSIST.
METAL BUILDING
MINOR ADJUSTMENT
SEWER HOOKUP EXEMPTION
TEMP. TRAILER PERMIT.
STREET VACATION
KDM
6-16-88
DISK TABLEII/ANNFEEPI-2
69 CITY SURVtY iN SO. CA.
1987
HI GHtST
MEDIAN AV
$ 1,750
.
$ 300
$ 391
1/2 fee 1/2 fee
119
1/2 fee 1/2 fee
119
- -
- -
- -
- -
1. 500
275
389
11 CITY .)UI<V,-
1986-87
RANGE AVERAGE
$ 20 to 1.285 $ 601
- -
25 to 64/hr.
25 to 64/hr
o
10 C1 fY
LOCAL
SURVEY
1987 (RANGE)
. Mi nor 3D to
125 +10/L or I
Major 272 -
1,080
25 to 1/2 fee
25 to 1/2 fe,
40 to 200