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HomeMy WebLinkAbout16 - Approval of the Fee Study Update - CorrespondenceReceived After Agenda Printed March 24, 2020 Agenda Item No. 16 March 24, 2020, City Council Item 16 Comments The following comments on an item on the Newport Beach City Council agenda are submitted by: Jim Mosher ( iimmosher(@-yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229) Item 16. Approval of the Fee Study Update Resolution No. 2020-29 (revising fee schedule) Aside from the fact that the fee revisions assume the cost recovery policies will be modified as proposed in the as -yet -not -adopted Ordinance No. 2020-10 (something one should never presuppose), I noticed these problems: Page 16-13: "Section 5: Except as provided in Section 6, beginning July 1, 2020, all fees and charges within the SRFF indicated by "Yes" under the CPI column shall be automatically adjusted to reflect the percentage change, from March er of the prior year to March of the current year, as it may be prorated from the fee approval date, in the cost of doing business measured by the CPI, all fees of five dollars or more shall be rounded down' to the nearest dollar and fees less than five dollars shall be rounded down to the nearest quarter dollar. "CPI" shall mean the Los Angeles - Long Beach, Anaheim, CA Area, All Urban Consumers, All Items, Base Period (1982-84=100), or successor index, as published by the United States Department of Labor, Bureau of Labor Statistics. Automatic CPI adjustments, by department, shall occur annually on July 12 for a period of three (3) consecutive years following adoption of the studied department fees. After the third (3r°') consecutive annual increase, automatic CPI adjustments shall cease until the departments' fees are updated and adopted, at which time the automatic CPI adjustments will reset', commencing the following July 1...." Page 16-15: Although not mentioned in the staff report, in a confusing innovation that may have been introduced at the July 24, 2018, meeting, the Council is being asked to approve the Schedule of Rents, Fines, and Fees in a format that differs significantly from that in which the SRFF is posted on the City website. In particular, the "Description" field (which comes immediately after the "Service Name" field in the posted version and contains essential information about what the fee is charged for, including whether it is hourly or per day or per page, etc.) has, in the Council version, been merged, on the right, with the posted "Notes" field (which, in the posted version, ' Since the CPI tracking is limited to three years this probably doesn't matter, but I would suggest the Council consider omitting "down" and simply instructing staff to "round" the fees. Staff is recommending stating small fees to the nearest quarter dollar to more accurately track small CPI changes, yet in a time of deflation, the directive to "round down" means fees will drop by full steps even when the calculated reduction from the previous step is insignificant. Likewise, in times of inflation, increases will be ignored even when the calculation puts the adjusted fee extremely close to the next higher step. Straight rounding to the nearest step, up or down, would more accurately track the cumulative effect of the reported CPI changes. 2 The last Whereas on page 16-13 states an intention for the CPI adjustments to be effective on July 1 of each year. "On July 1" needs to be added to the operative section since the day of the year on which the adjustments become effective is not completely clear from the reference, in the opening sentence, to July 1, 2020, as the effective date of Section 5. 3 Was "reset' intended to be "resume"? March 24, 2020, City Council Item 16 Comments - Jim Mosher Page 2 of 4 may contain additional explanatory information). Apparently in the Council version, the part of the "Description/Notes" field before the 'T' mark is what will be posted as the "Description" and the remainder as "Notes". Line 1 (Credit Card Fees): It is not at all clear what the Council is being asked to approve in a proposed fee of "TBD". Presently, it seems to be a "pass thru" of the full merchant processing fee. The note that 100% of that fee will be added to charges over $20,000 implies that for charges under $20,000 the surcharge will be something different. But what? Line 3 (Appeals Board Hearing- Applicant Unsuccessful): The $1,715 fee is shown as subject to CPI adjustments. It is hard to reconcile this with the seemingly permanent flat fee shown in the cost recovery table proposed to be adopted by Ordinance No. 2020-10.4 Page 16-31: Lines 330-331: Per page 16-6, the ALS/BLS fees should indicate they are "with transport." Why the cost of advanced and basic life support is so similar is not clear to me. Line 335: The transportation cost per mile is incorrectly listed in the "Incr." (Incremental) column.5 My understanding is it is the total fee per mile and should be in the "Total or Basic Fee" column. Lines 336-337: 1 do not recall what the ALS/BLS "First Responder" fee is, whether it is assessed in addition to or in lieu of the other EMS fees, and whether it is assessed per EMS responder (as the name suggests), per truck, per call or what. The "Reference" to "M.C. 5.60.020" provides no clarity. It says in its totality: "The City Council shall by resolution establish reasonable fees and charges to be paid by persons using the City's paramedic field services. Upon written application, the City Manager, or his or her designee, may waive all or part of the paramedic user fees referenced in this chapter." The "Notes" cite the cost recovery table, which similarly provides no explanation.' The $400 fee on these lines (and 333 and 334) is also shown as subject to CPI adjustment, which, like for Line 3 (see above) is difficult to reconcile with a fixed number being stated in the cost recovery table. Page 16-38: Lines 457-458 (Boarding Fee): Per page 6-8, the fee is per day, but I see no indication that it is "per day" in the proposed SRFF. 4 Per the subsidy table on page 16-64, the $1,715 is roughly 50% of the estimated full cost of a building appeal. However, it is now less than 50% of what that table shows as the estimated current full cost for a planning appeal: $4,121.28. 5 The "Incremental" column is used when a fee is computed by adding to a basic fee an extra incremental part per hour, page, dollar or other unit. See, for example, lines 115-121. The cost of photocopies ($0.03) is, for example, similarly listed in the wrong column on lines 5 and 6 of the posted SRFF. It is the total cost per page, not an incremental cost added to a basic copying fee. Incidentally, despite this direction to all departments, the City's libraries charge $0.15 per page for copies — an amount apparently far greater than the cost could or should be. 6 Staff report page 16-7 suggests this relates to EMS responses when a paramedic is not present, but the SRFF does not reference the fee's source or rules. March 24, 2020, City Council Item 16 Comments - Jim Mosher Page 3 of 4 Page 16-41: Line 492: The "Franchise Tow Fee" of "$91 Customer -- $55 Tow Operator" is inscrutable to me. Is the operator charged by the City for providing the tow? I would guess not. Was this intended to say those whose vehicles are towed by a franchisee are expected to pay "$91 to City -- $55 to Tow Operator"? Ordinance No. 2020-10 (cost recovery) The proposed table of Exhibit A has a number of problems. 1. As to the formatting, for those not familiar with the City's frequently changing administrative structure it would helpful to further distinguish the major heading lines by adding "Department" — for example: "Community Development Department," "Recreation and Senior Services Department," "Library Services Department," "Fire Department" etc. 2. Regarding the proposed removal of any fee for "Coastal Development Permit Application Appeals from Zoning Administrator to Planning Commission" (page 16-47), the staff report does not explain the motivation for this. Since the Coastal Act involves statewide issues, and local agencies might not agree as to the value of those issues and try to discourage appeals regarding them by charging excessive fees, it requires a cost-free path for appealing local approvals (but not denials) to the state review body, the Coastal Commission. As a result, if a local agency charges anything for a local appeal, the issue can be appealed directly to the Commission. If no local fee is charged, local appeal opportunities must be exhausted before a matter can be appealed to the Coastal Commission. Staff suggested to the Finance Committee that no -cost appeals from Zoning Administrator to the Planning Commission are particularly appropriate since the Zoning Administrator is an unelected City employee. Staff forgets that some CDP applications, especially those for the most sensitive projects (including those involving variances), may go directly to the Planning Commission, bypassing the Zoning Administrator. Since staff is not proposing to eliminate the appeal fee for those, any person unwilling to pay the $1,715 fee to appeal to the Council could still appeal the Planning Commission's decision directly to the Coastal Commission, bypassing the Council.' Staff may suggest this is OK because if the Council members have the power to call the PC decision up for review if they sense a problem with it. But then, the PC members also have the power to call up the ZA decisions. So, the Council may wish to consider a bit more carefully the logic of its policy.$ The incident that prompted this proposal may be the Planning Commission's 2017 approval of a CDP with variances for a home at 2607 Ocean Blvd (above China Cove), appealed directly to the Coastal Commission rather than the Council due to confusion as to whether the City charged an appeal fee or not. That CDP, as an example, went directly to the PC and was never heard by the ZA. 8 It might be noted that unlike the parallel provisions in Title 20 (the Zoning Code), Subsection 21.64.030.B.1.b of our Local Coastal Program Implementation Program does not give the Council clear authority to establish an appeal fee. It says only that no local fee will be charged for calls for review or appeals directly to the Coastal Commission. And as originally submitted to the Coastal Commission, it specifically said no local appeal fees would be charged. March 24, 2020, City Council Item 16 Comments - Jim Mosher Page 4 of 4 3. On page 16-49, the Harbor Department is listed as if it were a subsidiary of "Public Works" — which it is not. More seriously, the reference to a $100 fee for "Appeal of Lease/Permit under Section 17.60.060" is confusing and likely obsolete. Prior to the recent comprehensive revision of the Harbor Code by Ordinance No. 2020-5, this referred to the directive in former NBMC Subsection 17.60.080.B for the Council to establish a fee for a hearing officer to resolve disputes about the areas used to calculate the new dock tidelands rental fees imposed in 2013, refundable in the event the City's calculation was deemed incorrect by the independent hearing officer. Although Ordinance No. 2020-5 changed the reference in the cost recovery table to its present form, this does not appear to have been carefully thought through. Section 17.60.060 appears to have to do only with commercial tidelands leases, and the $100 fee was never intended to apply to them (certainly not exclusively).9 While a flat $100 fee was never intended to apply to the appeal of harbor -related decisions in general, the question of what fee is appropriate, remains open. 4. Also on page 16-49, two items are listed under "Municipal Operations" (establishing construction water meters and FOG permits). I suspect they may now be under the purview of the new Utilities Department. 5. This last observation leads to a question about the many fees charged by the new Municipal Operations/General Services divisions of the Public Works department. Particularly those related to parkway trees and appeals regarding them. As I recently attempted to relate to the Finance Committee, the fees charged in connection with those do not appear to be approved by the Council anywhere in the SRFF. If correct, the uncertain origin of the fees being charged should be of considerable concern. Attachment F (Fiscal Impact to the General Fund from Subsidies) This display of the cost to the City of providing the Council -approved subsidies is an interesting new feature that I do not recall seeing in previous fee study update presentations. It might be noted that under Fire -EMS, the cost (or revenue?) to the City of the Fire Medic program is not listed — nor does the fee for that service seem to appear in cost recovery table. It also a mystery why, having been told on page 16-4 that the recovery percentage for appeals remains at 50%, the full cost of It is unclear why two items on page 16-64 have no estimated volume, and hence no estimated annual subsidy. It is similarly unclear why on page 16-65 there is neither an estimate volume or full cost for calls for review. One would guess the costs of a call for review are similar to the costs for appeals by private individuals, listed earlier, and it should be possible to estimate the number of calls for review with about the same accuracy as any of the other estimates. 9 1 believe a similar misreading of the former Section 17.60.080 may have caused the initial Riddle/Vallely issue, still before the Council in closed session, to have been incorrectly directed to a hearing officer rather than being heard by the Harbor Commission, as would have always been expected.