CC 04-20-2021 Item No. 12 Amended Staff Report (clean)
CITY COUNCIL STAFF REPORT
Meeting: April 20, 2021
Subject
Fiscal Year (FY) 2021-22 Fee Schedule Update.
Recommended Action
1. Adopt Resolution No. 21-XXX amending FY 2020-21 Fee Schedule E to add a
community garden fee effective April 21, 2021.
2. Adopt Resolution No. 21-XXX approving FY 2021-22 Fee Schedules A, B, C, D,
and E effective July 1, 2021.
Summary
User fees are reviewed each year in conjunction with budget preparation. City policy
ensures that, to the extent possible, fees cover the cost of providing services. The majority
of the fees proposed for adoption are based on the estimated actual cost to perform the
service. Some fees, such as those for recreational purposes, are based on market
conditions or fees charged by outside service providers and other governments. Fees that
do not generate sufficient revenue to cover the cost of providing the service are subsidized
by the General Fund.
Background and Recommendation
The FY 2016-17 Fee Schedule was revised after a comprehensive Fee Study was completed
in conjunction with a Cost Allocation Study. Both studies relied upon the same data to
determine costs that can be allocable between City departments and costs that can be
recovered through fees charged to the public. These studies are conducted approximately
every seven years, and in between studies, the City adjusts fees using either the Bay Area
consumer price index (CPI), Bay Area construction cost index (CCI), or the estimated
increase in the cost of labor derived through the City’s budget process. For FY 21-22, the
CPI increase is 1.6%, CCI increase is 2.5%, and the cost of labor increase is 5.7% as shown
below.
CPI for All Urban Consumers (CPI-U)
February 2020 299.690
February 2021 304.387
Index Increase 4.697
% Increase 1.6%
Cost of Labor Increase
Base Salary and Benefits (FY 21 Amended Budget as of 2/26/21) $35,558,070
Base Salary and Benefits (FY 22 Proposed Budget as of 2/26/21) $33,637,669
Index Increase $ 1,920,401
% Increase 5.7%
Construction Cost Index (CCI)
March 2020 12,810.67
March 2021 13,137.16
Index Increase 326.49
% Increase 2.5%
The CPI was applied to Schedule A and C, the CCI was applied to Schedule B, and the
estimated increase in FY 2021-22 labor costs was applied to Schedules B, C, and D to
produce the City’s recommendations as described in more detail below. Schedule E was
revised to simplify and increase consistency.
In FY 2016-17, a comprehensive Fee Study was conducted by a City consultant, Matrix,
which allowed the City Council to update the City fee schedules for FY2016-17. The
changes to fees since FY 2016-17 are summarized in the table below:
Fiscal Year
Schedule A –
General Fees
Schedule B –
Engineering
Fees
Schedule C –
Planning Fees
Schedule D –
Building Fees
2021-22
(proposed)
1.6% CPI 2.5% CCI
5.7% Estimated
Labor Cost
Increase
5.7% Estimated
Labor Cost
Increase
1.6% CPI
5.7% Estimated
Labor Cost
Increase
2020-21 2.906% CPI 6.3% CCI
17.31% Estimated
Labor Cost
increase
17.31% Estimated
Labor Cost
increase
17.31%
Estimated Labor
Cost increase
2019-20 3.526% CPI 1.0% CCI
4.0% Estimated
Labor Cost
Increase
4.0% Estimated
Labor Cost
Increase
4.0% Estimated
Labor Cost
Increase
2018-19 3.546% CPI 3.5% CCI 4.10%
Estimated Labor
Cost Increase
4.10% Estimated
Labor Cost
Increase
4.10% Estimated
Labor Cost
Increase
2017-18 3.44% CPI 11.16% Estimated
Labor Cost
Increase
11.16% Estimated
Labor Cost
Increase
11.16%
Estimated Labor
Cost Increase
2016-17 Varied and comprehensive changes due to Fee Study.
New Fees and Substantial Changes
Schedule A – General: This schedule is being updated by CPI of 1.6% across all applicable
fees. Increases to these fees are mostly impacted by the cost of materials or external prices
that are not under the control of the City. In the process of finalizing this schedule for the
FY 2021-22 Fee Schedule update, the following addition was made:
• An annual “Commercial Kennel Permit Fee” is being proposed at a rate of $302 per
year which is the Community Development staff rate for one hour of work. In
accordance with Cupertino Municipal Code Section 8.05.010, a permit is required
for operating a kennel and the City Council may fix an annual permit fee. The City
has received complaints about residents operating dog kennel businesses.
Charging a fee for this permit would assist cost-recovery levels in the Community
Development Department for issuing permits and conducting inspections and
enforcement. The Community Development Director estimates that $302 per year
would not exceed the City’s reasonable regulatory costs for these activities.
Schedule B – Engineering: In addition to applying a 5.7% increase for anticipated labor
cost increases and 2.5% CCI for FY 2021-22, the fee schedule includes the following
adjustments:
• Professional Services 3rd Party Consultant Review – Previously, Fee Schedule B
included a “geotechnical” and “structural” review fee at a “cost of review + City
administrative” fee. In order to expand the scope of services for these specialized
reviews and clarify the City’s fee schedule, it is proposed to rename the fee to “3rd
Party Consultant Review.” Note, third party reviews are also covered under
“Outside Agency Review/Services” in Schedule A at the same rate.
• Park Land Dedication In-Lieu Fee – The FY 20-21 Fee Schedule B included a fee for
“ADU 750 SF or less” and should have been stated as “ADU 750 SF or more.” No
fiscal impact in FY 20-21 was noted.
Schedule C – Planning: A 5.7% increase for anticipated labor cost increases for FY 21-22
has been applied for all fees in Schedule C, except the Housing Mitigation In-lieu fees.
The Housing Mitigation In-lieu fees increase annually (on July 1 of each year) by the
Consumer Price Index (CPI) for All Urban Consumers for San Francisco, CA.
Additionally, the following additions are being proposed:
• Mobile Vending Registration Fee – This is a new fee for the required permit for
mobile vendors in the City. This annual fee will be charged at a rate of $302 per
year, which covers one-hour of Community Development staff time. The permit
application process has yet to be finalized, but is anticipated to be complete before
fiscal year end 2021. The Community Development Director estimates that $302
per year would not exceed the City’s reasonable regulatory costs for conducting
inspections and enforcement of mobile vendors.
Schedule D – Building: The Building Fee Schedule contains four tables which have been
numbered to facilitate reference between them. The tables are numbered as follows:
1. Table 1 – Plan Check Fees Only
2. Table 2 – Inspection Fees Only
3. Table 3 – Mechanical, Electrical and Plumbing Fees
4. Table 4 – Miscellaneous Items
All of the fees in the Schedule D tables have been increased by the 5.7% anticipated labor
cost increases for FY 2021-22. The following fees are proposed additions to the Schedule:
Table 3 – Mechanical, Electrical, and Plumbing Fees
• Repair/Alter/Add heating appliance, refrigeration unit, cooling unit, absorption unit, or
each heating, cooling, absorption, or evaporative cooling system, including installation of
controls – This fee is being modified to include “split system.” This will ensure
Residential and Commercial units that operate on a “split system” will be charged
the appropriate fee amount.
• Building or trailer park sewer – This fee is recommended to be modified to state
“Building sewer lateral or sewer clean-out” for purposes of applicability and
clarity.
Table 4 – Miscellaneous Items
• “Board of Appeals” – this fee is a new proposed fee to ensure cost-recovery for
applicants that choose to appeal a determination made by the Building Official.
Typically, these appeal hearings require 4 hours of staff time; however, in the event
a hearing requires more or less time, a “per hour” rate of $221 for Building staff
time is being proposed.
Schedule E – Parks & Recreation: City staff are proposing the following modifications to
the schedule:
• Senior Center
o Resident and non-resident rates are increasing by $2 to better align with
membership pricing offered by neighboring agencies (Attachment O).
o A $7 Flex Pass fee is being added to the schedule as it had been omitted
from the schedule in previous years. This is a drop-in pass for Senior
Center members to try out specific fitness classes listed in The 50+ Scene.
• Sports Center/Teen Center
o Various day pass and drop in packages are to be removed from the
schedule as they are rarely utilized. A single “Day Pass” fee charge is
recommended to simplify and shorten the process for customers.
o Monthly and annual membership fee amounts are being revised to
maintain a 20% increase for non-residents compared to residents.
o Childcare fees are being removed from the schedule. Due to cost-recovery
limitations and low enrollment, the service is being eliminated.
• Outdoor Facilities
o Field attendant fee amount is increasing from $14 to $17 per hour to align
with minimum wage requirements.
o Memorial Softball Field fees are increasing by $5 and $10 for residents and
non-residents, respectively. This will incrementally align with the revised
fees in the Joint Use Agreement for the field fees.
• Sports Field Fees
o The sports field fees were updated to incorporate an hourly fee schedule
rather than the prior flat rate. This was done in an effort to bring the fees
into better alignment with neighboring agencies in the County. However,
this shift to an hourly rate results in increased costs for permitted field
users. To ease in this increase, the currently proposed fees are set to achieve
17% to 20% cost recovery and placing the City well below the average for
the agencies surveyed (see Attachment N). It is intended that fees can be
gradually increased annually until 40% cost recovery is achieved. The
proposed hourly field use fees ranging from $10 to $60 based on resident
or non-resident and adult or youth non-profit/for profit.
• Community Garden
o With the opening of Community Garden in the Spring of 2021, it is
recommended fees be enacted at a 40% cost recovery level. Garden beds
will be charged a $110 fee with a $55 PG&E CARES Program Discount. A
refundable security deposit of $150 with a $75 PG&E CARES Program
Discount will also be required (see Attachment M). Because the
Community Garden is opening in the Spring of 2021, the FY 2020-21 Fee
Schedule E is being amended to incorporate the new fee. There are no
changes in the Community Garden fee from FY 20-21 to FY 21-22.
• Blackberry Farm Golf Course
o Weekdays, Resident Second 9 Holes (all players) rates are increasing from
$11 to $12 to reflect a correction of an error in previous fee schedules.
Additionally, club rental rates are recommended to be a flat $10 for all age
groups.
Sustainability Impact
None.
Fiscal Impact
Based on a three-year historical average (FY18 – FY20) and factoring the proposed fee
schedule increases, additional revenues of $351,022 in the General Fund and $180,000
in Parks & Recreation’s Enterprise Funds is estimated in FY 2021-22. If increases are not
adopted, the cost of providing the corresponding services will be further subsidized by
the General Fund and the service cost will compete with tax dollars used for City
services benefitting the general public. Revenues derived from changes to Schedule E
mostly increase Enterprise Funds of the City and not the General Fund.
The recommended increase in fees and estimated revenue are summarized as follows:
Fee Schedule
Additional
Revenue Factor and Basis
Schedule A – General $4,115 1.6% CPI for Bay Area
Schedule B – Engineering $72,590
5.7% for labor costs, 2.5%
CCI
Schedule C – Planning $56,471 5.7% for labor costs, 1.6% CPI
Schedule D – Building $217,846 5.7% for labor costs
Schedule E – Parks &
Recreation
No increase from
existing fees.
$180,000 from
changes to
existing fees. Primarily market driven
_____________________________________
Prepared by: Zach Korach, Finance Manager
Reviewed by: Kristina Alfaro, Director of Administrative Services
Approved for Submission by: Dianne Thompson, Assistant City Manager
Attachments:
A – FY 21-22 Proposed Fee Schedule A – General (Redline)
B – FY 21-22 Proposed Fee Schedule B – Engineering (Redline)
C – FY 21-22 Proposed Fee Schedule C – Planning (Redline)
D – FY 21-22 Proposed Fee Schedule D – Building (Redline)
E – FY 21-22 Proposed Fee Schedule E – Parks & Recreation (Redline)
F – FY 21-22 Proposed Fee Schedule A – General (Clean)
G – FY 21-22 Proposed Fee Schedule B – Engineering (Clean)
H – FY 21-22 Proposed Fee Schedule C – Planning (Clean)
I – FY 21-22 Proposed Fee Schedule D – Building (Clean)
J – FY 21-22 Proposed Fee Schedule E – Parks & Recreation (Clean)
K – FY 20-21 Amended Fee Schedule E – Parks & Recreation (Redline)
L – FY 20-21 Amended Fee Schedule E – Parks & Recreation (Clean)
M – Community Garden Fee Calculator
N – Field Use Fees and Comparison
O – Senior Center Membership Comparison
P – User Fee Study 2016
Q – Draft Resolution No. 21-XXX amending FY 20-21 Fee Schedule E
R – Draft Resolution No. 21-XXX approving FY 21-22 Fee Schedules A, B, C, D, and E