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HomeMy WebLinkAbout13 - Approval of the Fee Study Update - CorrespondenceReceived After Agenda Printed July 24, 2018 Item No. 13 July 24, 2018, City Council Agenda Item 13 Comments The following comments on items on the Newport Beach City Council agenda are submitted by: Jim Mosher ( jimmosher(c)yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229) Item 13. Approval of the Fee Study Update There was a time when the fees the City charged for the services it provided, as well as the taxes it charged (the two terms being then essentially interchangeable), were listed in the Council's ordinances (see, for example, Ordinance No. 6, "Dog Licenses," and Ordinance No. 5, "Licenses."). When the ordinances later became codified, this meant such charges could be found in one place (that is, in the Municipal Code), although as the number of pages of code increased they became harder to find and it seems there may have been some charges whose source in the code was unclear (City Charter Section 413 continues to require that acts establishing fines and penalties be by ordinance, although it is less clear the dollar amount has to be part of the ordinance). I believe the City's "Fee Schedule" began as an effort to reduce staff and resident confusion about the sometimes seemingly arbitrary charges imposed by the City by attempting to list in a single place all the charges found in various places, with references to code governing each transaction. But in recent years, it changed into an effort to remove the dollar amounts from the Code, and have the Code refer to the Fee Schedule for the amount, rather than the other way around — something that brings with it the danger that in the future the fees could be changed more casually and with less public process and scrutiny than when they were in the governing ordinances. Although undoubtedly prepared with good intentions, I believe much of what is being presented for Council action in the present item, instead of simplifying, adds new layers of confusion to those that continue to exist, and will make it harder than ever for the public to know they are being charged the right amount. I have these specific comments: The Council and public are asked to place a great deal of faith in MGT and the accuracy of the present report. Although MGT's methodology has been explained, we have seen no detailed evidence supporting the vast majority of the proposed changes, and have not even, to the best of my knowledge, seen MGT's report. 2. The report says the Finance Committee approved the recommendations on June 14. While that is true, and while the Committee received a presentation, the minutes of June 14 meeting indicate questions and discussion came only from the Chair and a single member of the public, so I don't think the Council as a whole should take too much confidence from this or assume the details thoroughly reviewed. a. Moreover NBMC Section 3.36.010.D suggests that "The Finance Committee has submitted recommendations to the City Council regarding the appropriate cost July 24, 2018, Council Agenda Item 13 Comments - Jim Mosher Page 2 of 5 recovery percentage." I believe the citizen members of the present Committee felt that was a Council decision, not theirs, although I could be wrong about that. b. In any event, I believe the percentages presently being considered are staff recommendations, not numbers independently put forward by the Finance Committee. 3. The proposed Resolution No. 2018-55 (staff report page 13-11), in particular, has never been reviewed, and there is much in its language I find problematic: a. The third "Whereas" implies the fees being adopted are by the resolution were determined using the cost recovery percentages in the accompanying Ordinance No. 2018-13. But Ordinance No. 2018-13 has not yet been adopted, and will not be adopted until the Council's August meeting, at the earliest. This assumption that an ordinance will surely be adopted once it's been introduced makes a mockery of the idea that the Newport Beach City Council holds meaningful second readings of its ordinances after the required advertisement and period for public review. i. Shouldn't Resolution No. 2018-55 contain an escape clause in the event Ordinance No. 2018-13 isn't adopted as currently proposed? Is that what the last phrase of Section 3 (on page 13-12) is about? If so, how does one know which fees are based on changes to cost recovery percentages made by Ordinance No. 2018-13 and hence — unlike the others — aren't effective until 30 days after its second reading? b. The fifth "Whereas" implies MGT is operating under a 2010 contract. If so, I cannot find it on the City Clerk's Laserfiche contracts database. The only contract I can find is C-2857-1, awarded in 2016 and amended in 2017. c. The eighth "Whereas" says "pass through costs for actual services or tangible goods do not include staff time." I personally do not know what this means or what it's trying to say. I thought all the fees were passing the cost of the services provided, including staff time, on to those served. Are some of the fees in the Schedule not that? d. The final "Whereas" at the bottom of staff report page 13-11 is grammatically very difficult to untangle. It might be better to say: "WHEREAS, historically, at the time the studied fees were adopted by the City Council, the non -studied department fees have been updated by the change in the Consumer Price Index ("CPI') since their last update, which has at times spanned over multiple years;" e. The third "Whereas" at the top of staff report page 13-12 appears to be missing at least one word: "WHEREAS, the City desires to update certain fees and charges to reflect the decreases and increases in the MGT studied costs, the changes in fees due to CPI, and the cost recovery percentages established by NBMC Chapter 3.36, to add new fees for City services or and delete outmoded fees, and to update fines, charges, and statutory fees." July 24, 2018, Council Agenda Item 13 Comments - Jim Mosher Page 3 of 5 The inclusion of "in part" in the proposed wording of Section 1 on page 13-12 is extremely confusing. Unlike the list seen at the June 26, 2018, Study Session, Exhibit 1 appears to be a comprehensive Fee Schedule, although possibly not including Fines (and some Rents?). What parts of the existing Schedule are intended to remain because they are not "explicitly revised by Exhibit 1"? 1 would submit it is very difficult to know what parts of the old Schedule "continue in full force and effect' because of that provision. In this regard, parts being deleted by Exhibit 1 can be seen as strike -out, but parts being changed or added ("explicitly" or not) are not at all evident, at least to me. The new Schedule also appears to be missing the ordinance references that justify most of the fees (unless the new Council policy and interpretation of NBMC Chapter 3.36 is to charge for everything whether another ordinance allows/requires it, or not). g. Regarding Section 2 ("Direct pass through, or actual, fees maybe updated, without further action by the City Council, by the Finance Director as necessary to ensure recovery of cost"), I am again uncertain what line items are "actual fees" and hence which can be changed in the future without public process and presumably without changing the Council's adopted Schedule, thereby putting the fees charged by the City out of sync with what the public would assume were the approved fees. i. As best I can tell, the "actual" and "pass through" words appear only as a note to line items 86 ("Nuisance Abatement Service") and 156 ("Subpoena Duces Tecum"), but I don't know those are the only fees to which Section 2 applies. Section 4 puts in place a system of CPI increases which implies the amounts charged by the City will start to differ from those published in the Council's "approved" Schedule. Unless a revised Schedule is re -adopted each year, how — other than taking it on faith -- will anyone know they are being charged the right amount? On the last line of page 13-12, it looks like the word "reset" was intended to be "restart." ii. On the first line of page 13-13, it looks like "this" was intended to read "these." Section 7: saying "any one (1) or more" is — like "every three (3) years" earlier -- silly. The "(1)" and the "(3)" add nothing. j. As to the substance of the Schedule: i. It is many pages of fine print which I have not attempted to go through line by line. July 24, 2018, Council Agenda Item 13 Comments - Jim Mosher Page 4 of 5 I know I object to the proposed flat fee for line 310 ("Coastal Development Permit (CDP) -- Stand Alone"). While most of the CDP's for residential development passing through the Zoning Administrator at present are very similar, the definition of "development" in the Coastal Act is very broad and it would not seem a single fee is appropriate for all circumstances. iii. It is not obvious to me the new Schedule includes amounts charged by our new Utilities Department (which seem adopted by separate resolutions?), or that it incorporates the new department and division names. Or that it lists all fines, despite its title. iv. It appears every line in the new Schedule is marked "Yes" in the CPI column, but it would appear impossible to tell from the Schedule which are actually eligible for an increase and which are "on pause" for not having been studied in the last three years. 4. Like Resolution No. 2018-55, the proposed Ordinance No. 2018-13 (staff report page 13-41) has never been reviewed, even though there has been a preview of its Exhibit «A„ a. As previously mentioned, the final "Whereas" notwithstanding, it is not obvious the Finance Committee actually weighed in on the propriety of the proposed cost recovery amounts — but rather passed them on as decisions the Council needed to make. b. Many of the numbers make no particular sense to me. I can think of no rational policy objective that would dictate the cost recovery for "Life Safety Services" rendered to a 299 room hotel should be 36%, while that to a 300 room hotel should be 92.4%. How does the public benefit differ? ii. And why choose 36% instead of 35% of 34% or ??? And why 92.4% and not 92.3% or 90% or 75% or ??? c. In addition, the description of the "Service" to which these often seemingly arbitrary numbers apply is frequently so cryptic that an immense amount of interpretation is needed to guess what service a particular number is supposed to apply to. i. In many cases, a given service would seem to fall in several of the cryptically identified categories, making it difficult to know what percentage is intended to apply. For example, how do "Commercial Day Care Facilities," with one percentage, differ from "Care Facilities >99 Clients," with a different percentage? And what if they are in a "High Rise Building" (however we define "high rise"), with yet another percentage, as well ? July 24, 2018, Council Agenda Item 13 Comments - Jim Mosher Page 5 of 5 d. I am pleased staff has incorporated the idea of refundable appeal fees under Community Development — Building. i. I endorse this idea, which might bring some life back to the Building and Fire Board of Appeal, and I know Council member Peotter proposed it at the Study Session, but I don't know if the remainder of the Council is on board with this, so it seems strange this change isn't highlighted in the staff report. 1. If the Council is indeed on board, I would like to see the concept applied to other kinds of code interpretation appeals, such as questioning the Community Development Director's readings of the Zoning Code or LCP, as the public is supposed to be able to do per NBMC Sections 20.12.020.A and 21.12.020.A. ii. Are there other changes that have been made since the Study Session and the "review" by the Finance Committee? e. To me, the existing entries that give a range of cost recovery percentages, such as "Adult Sports: 50%-95%" or "Special Events- Resident, Level 1 and Late Fees for Level 1: 0%-20%" provide no Council policy direction to staff at all. Who decides what amount to charge? And how does the public no they are being charged fairly and equitably? ii. The latter instance provides a particularly infinite range of amounts that could be charged, apparently depending on staff's mood. f. I am unable to fathom why the Council's Cost Recovery Table contains three specific Library fees (on staff report page 13-45) out of the many fees the Board of Library Trustees charges per Section 9.0 ("Circulation Policies Schedule of Fines/Fees") of their adopted Circulation Policy. Does the $1 "Use Fees -Materials" charge in the Council's Cost Recovery Table mean the Library is now being ordered to end free service and charge $1 to check out (or even use in-house) any book?