HomeMy WebLinkAbout16 - Master Fee�gWPpRT
CITY OF
NEWPORT BEACH.
°9,Fo City Council Staff Report
Agenda Item No. 16
October22. 2013
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Finance Department
Dan Matusiewicz, Finance Director
949-644-3123, dmatusiewicz@newportbeachca.gov
PREPARED BY: Evelyn Tseng, Revenue Manager
APPROVED: 0 -
TITLE:
TITLE: Approval of Master Fee Schedule (Cost of Services portion) and
Change in Subsidies
ABSTRACT:
Staff requests that City Council approve the update to the City's Master Fee Schedule,
and introduce an ordinance amending Newport Beach Municipal Code ("Municipal
Code") Section 3.36.030 (increasing cost -of -services percentage recovery for Junior
Guard) and Sections 5.04.210 and 12.68.040 (correcting Municipal Code to reflect the
adoption of Council's previously approved fee adoption). Chapter 3.36 of the Municipal
Code requires that user fees for municipal services be recovered at 100%, unless
otherwise provided for in Municipal Code Section 3.36.030.
The proposed fee schedule updates the Newport Beach Fire Department ("NBFD")
fees, reflecting costs for work performed and, in furtherance of the City Charter,
Municipal Code and the City's 15 -Point Fiscal Sustainability Plan ("FSP"), aligning
revenues with the actual (direct and indirect) cost of providing services. The proposed
fee schedule does not impose any new NBFD fees for service. Staff recommends
increasing all other non -Fire related cost -of -services fees by the Consumer Price Index
("CPI") — All Urban Consumers for the Los Angeles -Riverside -Orange County area from
April to April of each year, or 2.44%.
RECOMMENDATION:
Staff recommends that City Council
1. Conduct a public hearing;
Approval of Master Fee Schedule (Cost of Services portion) and Change in Subsidies
October 22, 2013
Page 2
2. Adopt Resolution No. 2013-72 approving the cost -of -services fees (highlighted
within the Master Fee Schedule, attached as Exhibit "A"), as recommended by
staff;
3. Introduce Ordinance No. 2013-18 (Exhibit "B"), amending Municipal Code
Section 3.36.030;
4. Introduce Ordinance No?013-1, updating Municipal Code Sections 5.04.210 and
12.68.040 (Exhibit "D").
FUNDING REQUIREMENTS:
There is no expenditure of funds related to this item.
DISCUSSION:
Background
The City Council has adopted prudent fiscal policies concerning its investments,
reserves, budget administration, competitive contracting, facility replacement planning,
and revenue initiatives. The City Charter, Municipal Code and FSP serve as the
foundation for the City's financial planning and management. Council Policy F-4
(Revenue Measures) and Item 11 of the FSP requires the City to establish appropriate
cost -recovery targets and adjust the fee structure to ensure that fees continue to meet
those mandated cost recovery targets.
Municipal Code Section 3.36 provides that the cost recovery for user services shall be
100%, except for the services listed in Exhibit "A" of Section 3.36.030. A fee may not be
greater than the cost of providing the service. The actual cost -of -services fees collected
are set by resolution of the City Council and included within the Master Fee Schedule.
The Master Fee Schedule includes cost -of -services fees (green highlighted in Exhibit
"A") and non -cost -of -services fees, which include, but are not limited to, fees set by
agreement, State and Federal mandate and previous Council resolutions. There are no
proposed changes to the non -cost -of -service -fees but these fees are still incorporated in
the overall Master Fee schedule. The resolution before Council updates only the cost -
of -services fees portion of the Master Fee Schedule, specifically Fire Department fees,
pursuant to a cost -of -services study conducted by MGT of America, Inc. ("MGT'), and
other cost -of -services fees by CPI. The last cost -of -services Fee Schedule was
approved by City Council on November 22, 2011.
To properly establish the cost of service, the City entered into an agreement in 2010
with MGT for a phased six (6) year comprehensive review and update of General Fund
departmental user fee calculations. In the last three (3) years, MGT has prepared the
citywide cost allocation plan, and performed comprehensive fee studies for the City's
4
Approval of Master Fee Schedule (Cost of Services portion) and Change in Subsidies
October 22, 2013
Page 3
Police, Harbor Tidelands, Finance, Library, Recreation & Services and Utilities
departments. At each phase, the City updated its cost -of -services fees pursuant to
MGT's studies and City Council subsidy recommendations. The current phase of this
agreement required MGT to perform a comprehensive review of the NBFD user fees.
MGT calculates the cost for user services by using the Federal Office of Management
and Budget ("OMB") Circular A-87 as a guide to identify the allowable direct and indirect
costs. Although OMB A-87 is used to identify costs when applying for reimbursement of
cost from state or federal programs, the underlying methodology is the same and is a
well accepted industry practice. The fee calculations include direct costs (those costs
directly associated with the user fee service) and indirect costs (operating and
maintenance, compensated absences and general administration). Costs are excluded
from the user fee calculations when there is no direct or indirect relationship to those
user fee services. Because the City is a public agency, the indirect costs also exclude a
profit layer that would be included in the private sector. In response to a question raised
during Study Session regarding the application and elements of indirect costs, staff has
attached Exhibit G: Application of Indirect Costs to the Calculation of Fees for Service,
which explains the methodology used to incorporate indirect overhead costs in user -fee
calculations.
Fire Department
A comprehensive update to the NBFD user fees was last completed in 2008. NBFD
reviewed the current fee schedule and concluded that it no longer accurately reflected
the services being provided by the NBFD. Using the Orange County Fire Authority
("OCFA") fee schedule as a model for analyzing Life Safety Planning, Development and
Inspection Service fees, NBFD provided MGT with the list of services to be cost -studied.
Working with Fire Department staff, MGT performed the following tasks for all Fire fee
categories:
• Calculated the fully burdened cost (labor -based) to provide user services;
• Applied fully burdened labor rates to time requirement estimates;
• Reviewed and cross checked results to ensure data validity; and
o Benchmarked existing and proposed fees against those charged by the OCFA.
NBFD staff then reviewed MGT's findings for accuracy and reasonableness, and based
upon this review, made its fee and subsidy recommendations pursuant to NBMC
Section 3,36.030. Staff presented the Fire fee schedule to the Finance Committee on
June 24, 2013, and after incorporating Finance Committee's recommendations, brought
it to City Council for review and recommendations at the October 8, 2013, Study
Session. As a result of MGT, NBFD, Finance Committee and City Council's review and
recommendations, staff proposes the attached update for all Fire Department fees with
the exception of fees for Emergency Medical Services.
Approval of Master Fee Schedule (Cost of Services portion) and Change in Subsidies
October 22, 2013
Page 4
Emergency Medical Services ("EMS")
A certified public expenditure program (State Plan Amendment 09-024), just recently
approved by the federal government and adopted by the State on September 4, 2013,
introduces a new process for eligible public ambulance providers to apply for
supplemental payments for Medi -Cal claims without cost to the State General Fund.
Participation is voluntary, but in order to qualify, the City must adopt the State's
standardized methodology for calculating emergency transportation services. This new
legislation could potentially decrease the City's subsidies to Medi -Cal through funds
provided by the State's certified public expenditure program. The City meets the
eligibility requirements for participation. Staff intends to bring EMS fees to Council early
next year, after reviewing the full impacts of the federal program.
Pending next year's review of the EMS fees, the current EMS fees remain unchanged.
Fire Safety Services
The Fire Safety Services section of the proposed fee schedule lists the hourly rates for
all fire personnel that may be called upon to provide reimbursable services such as
hazardous material incident response, private lifeguard services, and fire safety officers
at special events that are not required to be permitted pursuant to Municipal Code
Section 11.03 — Special Events. This cost analysis reflects salaries, equipment,
materials and the associated overhead to provide these standby safety services. Staff
proposes adding the positions indicated below to provide more cost information for
potential users of the services that would require them.
Life Safety Specialist II
Lifeguard Officer
Lifeguard Captain
Lifeguard Battalion Chief
Junior Guard
Lifeguard I
Lifeguard II
Rescue Boat (two persons)
The objective of the Junior Guard Program is to provide children between the ages of 9
and 15 with training in ocean safety. Last summer, there were over 1,409 participants —
the most ever in a single session. MGT's analysis reflects that the cost of the Junior
Guard Program has increased from $809 to $853.
Residents have historically been provided an approximate 15% discount from the cost
of the Junior Guard registration fee through a Council resolution. The Finance
Committee recommended that the Junior Guard — Resident fee be set at $700, a 17.9%
subsidy. Staff supports this subsidy to encourage local participation, but identifying it in
Municipal Code Section 3.36, Exhibit "A".
4
Approval of Master Fee Schedule (Cost of Services portion) and Change in Subsidies
October 22, 2013
Page 5
Staff also recommends the inclusion of a Junior Guard — Administrative Fee ($200) to
the fee schedule for any cancellations prior to June 1 (if the applicant cancels after June
1, the entire Junior Guard fee is forfeited). This administrative fee has historically been
assessed as a matter of policy and its inclusion in the Master Fee Schedule will provide
greater transparency. The administrative fee discourages facetious registrations, which
may shut out other participants in the program, and helps to reimburse the City for
equipment and items already delivered based on the number of registrations. Under
current policy, the entire Junior Guard fee may be refunded due to unforeseen
circumstances, i.e. — valid medical or hardship reasons.
Life Safety Planning and Development
The Life Safety Services Division focuses on educating the community about the
benefits of proper safety practices and identifying and eliminating all types of hazardous
conditions, which pose a threat to life, the environment and property. Furthermore,
proper and effective enforcement of fire and life safety codes helps prevent fires from
starting and minimizes the size and impact of fires that cannot be prevented.
Staff recommends revising the current fee schedule to better reflect the actual work
performed and align revenues with the actual costs associated with providing these
services. These costs include staff time for plan review and field inspections and will no
longer be based on a percentage of building fees. The proposed fee structure is based
upon the Orange County Fire Authority's fee schedule, which is relied upon by 23 of the
34 cities in Orange County. The additional service line items that appear in the
proposed schedule are NOT new fees, but are the result of refining the nature of the
work performed, which in turn, more accurately reflects the actual cost of the service
being performed. Although several fees may increase, the updated methodology is
more cost efficient when compared to OCFA for similar services.
Life Safety Inspection Services
These fees reflect the cost of services to provide various services including issuance of
annual operational permits, special event permits, and providing State mandated
inspections, and other inspection services related to the hazardous material inventory
disclosure program. Although a few increases are proposed based on the actual cost of
service, as with Life Safety Planning and Development, NBFD's methodology reflects a
cost savings when compared to OCFA for like services.
5
Approval of Master Fee Schedule (Cost of Services portion) and Change in Subsidies
October 22, 2013
Page 6
Operational Permits
These annual permits are required pursuant to the CFC in order for certain businesses
to operate in the City. No new operational permits are proposed by City staff. Level 1
permits are required for simple operations that need minimal staff time to review. The
CFC defines these operations as those involving cutting and welding carts, dry cleaning
plants with 1 to 2 machines, liquefied petroleum gases and tents. By streamlining the
review of these operations, staff was able to reduce the amount of time estimated for
Level 1 Operational Permit reviews. Based on this cost -of -services analysis, staff
recommends that the City reduce the fee for new Level 1 permits from $162 to $140
and reduce the fee for annual renewals from $138 to $114.
Level 2 permits are required for complex operations often requiring many hours of staff
time to complete. Staff recommends increasing the fee for new Level 2 permits from
$162 to $258 and increasing the fee for annual renewals from $138 to $192. The
proposed fee increases will, in furtherance of City Council policy, align revenues with
the actual costs associated with providing review services. These costs cover the staff
time necessary to review these complex operations.
Special Event Permits
Special event services are related to one-time events that require inspection and
permitting by NBFD due to the type, size, and nature of the event. The special event
permitting process begins with an application to the Recreation & Senior Services
Department, and the application is then routed to NBFD for fire inspection services,
recommendations and general oversight. Not all special event permits require NBFD
services.
Staff recommends the reduction of the single event permit from $195 to $140 and the
public display (small ground based firework display) from $530+hourly to a flat fee of
$306 to align the cost with actual amount of staff time to review these permits. Staff
also recommends changing the fee for the public display of fireworks (greater than 10
minutes) from a $530 base fee + hourly to a flat fee of $778. This change will result in
lower fees due to the elimination of the hourly component and NBFD's streamlining of
its workflow.
Staff recommends an hourly rate -based "Level 3" special event permit fee for large
scale events. This modification is consistent with the current practice of hourly billing for
NBFD personnel for events of this size. Level 3 inspections typically consist of attending
planning meetings, the issuance of required permits, and required field inspections.
Finally, staff recommends the elimination of numerous special permit fees due to the
11
Approval of Master Fee Schedule (Cost of Services portion) and Change in Subsidies
October 22, 2013
Page 7
limited frequency and duration of such activities and, as stated above, NBFD's
improvement of its staffing workflow.
State Mandated Inspections
State mandated inspection fees include the inspection of facilities such as high-rise
buildings, care facilities, hospitals, surgery centers, and hotels. NBFD staff conducts
these inspections on an annual basis. Staff recommends the reduction of three fees
relating to the inspection of hospitals, high-rise buildings and certain commercial
occupancies due to greater staff efficiencies within the NBFD. Staff also recommends
combining residential and non-residential inspections as one fee type because the work
for each is very similar, and eliminating the "Places of Assembly" fee because it is
captured under the existing operational permit Level 2 fee. Due to the staff time
required to inspect certain care and hotel/motel facilities, there are seven fees that are
proposed to increase between $5 and $187. These proposed fee increases will, in
furtherance of Council policy, align revenues with the actual costs associated with
providing the inspection services of these larger facilities.
Hazardous Material Inventory Disclosure Program
Hazardous material inventory disclosures are required by State and Federal statutes. All
the fees in this category have been reduced due to staff efficiencies and a change from
an annual to triennial inspection cycle as allowed by State statue. No new fees are
proposed.
Finance
General Cleanu
On March 12, 2013, the City Council repealed Municipal Code Section 5.16.030 - Going
Out of Business (Ordinance No. 2013-7). Because the regulation no longer exists, staff
recommends deleting the two (2) Going Out of Business related fees from the fee
schedule.
Municipal Code Sections 5.04.210 and 12.68.040 identify the fees for a business
license change of location and for preferential parking permits, respectively. The
proposed amendments to Sections 5.04.210 and 12.68.040 reflect the most current fees
(to be increased by CPI) as approved by City Council. The proposed amendments do
not increase the fees authorized by Sections 5.04.210 and 12.68.040, but clarifies the
fee increases and refers users to the City Council resolutions.
N
Approval of Master Fee Schedule (Cost of Services portion) and Change in Subsidies
October 22, 2013
Page 8
Conclusion
NBFD continues to offer extraordinary service and programs to our community. Staff
recommends adding the Junior Guard — Resident subsidy to Municipal Code Section
3.36, Exhibit "A", and continuing the existing Emergency Transport subsidies.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will
not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential for resulting in physical change to the environment, directly or
indirectly.
NOTICING:
The agenda item has been noticed according to Government Code Section 66018(a)
(two publications with at least five days intervening between the two dates),
Government Code Section 66016(a) (notice mailed at least 14 days prior to the meeting
to any interested party who files a written request) (mailed notice to the Building
Industry Association of Southern California on October 8, 2013), and the Brown Act (72
hours in advance of the meeting at which the City Council considers the item).
Submitted by:
Attachments: A. Exhibit "A" — Resolution with Master Fee Schedule
B. Exhibit "B" — Ordinance amending Municipal Code Section 3.36.030
C. Exhibit "C" — Municipal Code Section 3.36.030 Legislative Draft
D. Exhibit "D" — Ordinance amending Municipal Code Sections
5.04.210 and 12.68.040
E. Exhibit "E" — Municipal Code Section 5.04.210 Legislative Draft
F. Exhibit "F" — Municipal Code Section 12.68.040 Legislative Draft
G. Exhibit "G" — Application of Indirect Costs to the Calculation of Fees
for Service
9
Exhibit "A Resolution with Master Fee Schedule
RESOLUTION NO. 2013-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT
BEACH, CALIFORNIA AMENDING THE CITY'S MASTER SCHEDULE
OF FEES TO BE CHARGED FOR USER SERVICES
WHEREAS, in 2010, the City of Newport Beach ("City") retained MGT of
America, Inc. ("MGT") to prepare the cost allocation plan and cost -of -services studies
for City services; and
WHEREAS, pursuant to its agreement, MGT prepared the Fire cost -of -services
study; and
WHEREAS, the attached schedule of fees ("Master Fee Schedule") contains
most City fees, including, but not limited to: fees for service, fines, penalties, and
statutory fees;
WHEREAS, the fees for service in the attached Master Fee Schedule are
identified by green highlighting;.
WHEREAS, the fees for service are no more than the cost to the City to provide
such services; and
WHEREAS, the City of Newport Beach adopted Ordinance 2013-1, amending
Section 3.36 (Cost Recovery for User Services) of the Municipal Code; and
WHEREAS, Section 3.36 of the Municipal Code contains cost recovery
percentages for specific services, and provides that the City Council may modify the fee
resolution upon a determination that there has been an increase or decrease in one or
more cost factors relevant to the calculation of the actual cost of providing the service;
and
WHEREAS, the City Council desires the fees for service to be updated to reflect
the decreases and increases in the MGT studied costs, the changes in fees due to the
Consumer Price Index, the cost recovery percentages established by Chapter 3.36, and
to add new fees for City services or delete outmoded fees.
NOW, THERFORE, BE IT RESOLVED by the City Council of the City of Newport
Beach, as follows:
1. Most fees, unless precluded by law, are rounded down to the nearest
dollar.
2. The schedule of fees for service, highlighted in green in the Master Fee
Schedule, attached to this Resolution as Exhibit "A" and the 2013 Building
10
Valuation Table attached to the Resolution as Exhibit "B" are hereby
adopted. Except as provided in Section 3 below, the fees -for -service in
Exhibit "A" shall become effective immediately. All other non -fees for
service shall remain unchanged.
3. The fees for development related services imposed by this Resolution
shall take effect sixty (60) days following adoption of this Resolution.
Adopted this -th of October 2013.
Mayor
ATTEST:
City Clerk
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Building Valuation Table - 2013
Occupancy and Type
Cost per Square
Foot. Average
Occupancy and Type
Cost per Square
Fool.
Occupancy and Type
Cost per Square
Foot. Average
1. APARTMENT HOUSES: R-2
7. HOTELS AND MOTELS:
R-1
12. PUBLIC GARAGES: S2
Type IA +IB
$170.00
Type IA
$173.90
Type IA
$101.75
Type IIA + IIB.
$165.00
Type iB
$170.00
Type IB
$96.75
Type IIIA+B and Type IV
$160.00
Type IIA
$165.00
Type IIA
$92.25
Type VA
$160.00
Type IIB
$165.00
Type IIB
$87.75
Type VB
$150.00
Type IIIA
$160.00
Type IIIA
$79.00
Type IIIB
$160.00
Type IIIB
$74.00
2. BANKS: B
Type IV
$160.00
Type IV
$84.00
Type IA
$154.25
Type VA
$150.00
Type VA
$63.50
Type 18
$148.75
Type VB
$150.00
Type VB
$58.50
Type IIA
$144.00
Type IIB
$137.25
6. MEDICAL OFFICES: B
13. RESTAURANTS: A-2
Type IIIA
$125.00
Type IA
$154.25
Type IA
$169.48
Type 1116
$120.50
Type IB
$148.75
Type 1B
$164.64
Type IV
$132.00
Type IIA
$144.00
Type 11A
$159.01
Type VA
$120.00
Type JIB
$137.25
Type 116
$153.54
Type VB
$110.00
Type IIIA
$125.00
Type IIIA
$143.16
Type 1116
$120.50
Type IIIB
$140.23
3. CHURCHES: A-3
Type IV
$132.00
Type IV
$147.83
Type IA
$201.93
Type VA
$120.00
Type VA
$129.55
Type 1 B
$194.56
Type VB
$110.00
Type VB
$126.83
Type IIA
$1.89.19
Type IIB
$180.53
9. OFFICES: B
14. SCHOOLS: E
Type IIIA
$168.68
Type IA
$154.25
Type IA
$166.50
Type IIIB
$163.49
Type IB
$148.75
Type IB
$161.00
Type IV
$173.95
Type IIA
$144.00
Type IIA
$156.25
Type VA
$152.81
Type IIB
$137.25
Type IIB
$149.50
Type VB
$146.11
Type IIIA
$125.00
Type IIIA
$140.25
Type [IIB
$120.50
Type ITIS
$133.00
4. CONVALESCENT HOSPITALS:
R-4
Type IV
$132.00
Type IV
$144.50
Type IA +IB
$170.00
Type VA
$120.00
Type VA
$123.50
Type IIA + IIB
$165.00
Type VB
$110.00
Type VB
$118.75
Type IIIA + B and Type IV
$160.00
Type VA
$160.00
10. Private Garages
15. SERVICE STATIONS: B
Type VB
$150.00
Type VB
$80.00
Type IA + 1B
$116.00
Open Carports
$30.00
Type IIIA +IIB
$115.00
5. DWELLINGS: ONE AND TWO FAMILY R-3
Type IIIA+ IIIB
$120.75
Type VA +VB
$163.00
11. PUBLIC BUILDINGS: B
Type VA + VB
$103.25
Basements finished
$163.00
Type IA
$154.25
Canopies
$48.50
Basements unfinished: U
$61.00
Type IB
$148.75
Type IIA
$144.00.
16. STORES: M
6. FIRE STATIONS: B
Type IIB
$137.25
Type IA
$127.05
Type IA
$154.25
Type IIIA
$125.00
Type IB
$122.21
Type IB
$148.75
Type IIIB
$120.50
Type IIA
$116.58
Type IIA
$144.00
Type IV
$132.00
Type IIB
$111.11
Type IIB
$137.25
Type VA
$120.00
Type IIIA
$1.01.45
Type IIIA
$125.00
Type VB
$110.00
Type 1116
$98.53
Type IIIB
$120.50
Type IV
$105.40
Type IV
$132.00
Type VA
$87.85
Type VA
$120.00
Type VB
$85.12
Type VB
$110.00
2013 3/18/13
41
Building Valuation Data 2013 - Continued Exhibit "B"
Cost per Square
Cost per Square
Cost per Square
Occupancy and Type
Foot, Average
Occupancy and Type Foot, Average
Occupancy and Type Fool,
17. THEATRES: A-1 (`add 15% w/stage)
22. TENANT IMPROVEMENT (TI):
29. WOOD FENCE per s $5.50
Type 1
$218.44
Office/Retail Services (TI) per sq.ft.
Type IA
$211.06
Type I or II construction
$44.00
30. RETAINING WALLS $18-$27 per sq.ft.
Type IIA
$205.70
of wall depending on height of wall:
Type IIB
$197.03
All other types of
0-4' hi $18.00
Type 111A
$185.03
construction
$35.50
4'1" - 10' hi $21.00
Type 1116
$179.84
Medical Offices (TI)
10'1"+ hi $27.00
Type IV
$190.46
Type I or 11 construction
$53.00.
Type. VA
$169.17
All other construction
$44.00
31. Skylights (each) $800.00
Type VB
$162.46
23. POOLISPA per sq.ft.
$70.50
32. Loft/Storage per sq. $35.50
18. WAREHOUSES: S-1
Type IA
$101.75
24. DECK/BALCONIES per sq
$26.50
33. Carport Encl. per sq $21.00
Type 1B
$96.75
Type IIA
$92.25
25. BLOCK WALLS per sq.ft.
$14.50
34. Garage Conv per sq $72.00
Type 118
$87.75
Example: 100' long x 6' high
Type IIIA
$79.00
X $14.50 = $8,700.00
35. Portable Spa (typica $6,560.00
Type 1118
$74.00
Type IV
$84.00
26 FIRE ALARMS: per sq. ft.
36. Solar Voltaic Valuation Per Watt:
Type VA
$63.50
New Commercial
$1.48
Residential $6.00
Type VB
$58.50
Residential
$0.83
Commercial $4.00
Big Box Retail $2.00
19. HARBOR CONSTRUCTION:
Valuation per roofing
square
Docks (per sq.ft.)
$40.00
27. ROOFING:
With tear -off
Piers (per sq.lineal foot)
$40.00
Built-up/rock roofs
$355.00
Without tear -off
Gangways (per lineal ft)
$137.50
Composition Shingle
$345.00
$268.50 /sq
Seawalls (per lineal foot)
$2,062.00
Wood Shake/Shingle
$550.00
$268.50 /sq
Piles (each)
$3,436.50
Tile, or special product
$650.00
$500.00 /sq
Earth anchor tiebacks
Sheathing
$130.00
(per tieback)
$2,089.00
Metal Roofing
$713.00
Tieback repair (per tieback)
$687.50
Tieback replacement
(per tieback)
$2,695.00
28 FIRE SPRINKLERS:
1-10 heads $1,000.00 min.
20. PATIOS & RES. REMODEL:
per sq.ft.
11-100. heads $1,000.00 for the first 10 heads + $100.00 / each additional head
Patio Covers:
100 + heads $10,000.00
for the first
100 heads + $80.001 each additional head
Open Trellis
$13.50
Solid Roof
$30.00
ADD EQUIPMENT COST:
Patio Enclosure
$72.00
AIR CONDITIONING:
Res Remodel
$80.00
Commercial
$7.50
Modular Home
$70.00
Residential
$9.00
SPRINKLER SYSTEMS:
$4.50
21. TEMPORARY SHORING: per sq ft.
Soldier Pile/Lagging
$50.00
Res Dewatering (Total)
$30,000
2013 3/18/13
42
Exhibit "B"- An Ordinance of the City Council of the City
of Newport Beach amending section 3.36.30 of the
Newport Beach Municipal Code
43
ORDINANCE NO. 2013 -
AN ORDINANCE OF THE CITY COUNCIL OF
THE CITY OF NEWPORT BEACH
AMENDING SECTION 3.36.030 OF THE
NEWPORT BEACH MUNICIPAL CODE
WHEREAS, the City of Newport Beach ("City") funds certain municipal services,
which are typically performed without request by the user, benefit the public generally
and are traditionally funded by tax revenue; and
WHEREAS, the City performs other services which are funded in whole or in part
by the person requesting the service; and
WHEREAS, Newport Beach Municipal Code ("Municipal Code") Section
3.36.030(E), Exhibit "A", provides that the City's cost of providing Newport Beach Fire
Department ("NBFD") services shall be recovered through direct fees charged for
services in the percentages or dollar amounts indicated:
Fire and Marine
Emergency Operations Services
Advanced Life Support—Escorted
Up to
80%
Advanced Life Support—Not Escorted
Up to
80%
Basic Life Support—Escorted
Up to
80%
Basic Life Support—Not Escorted
Up to
80%
Construction and Inspection Services—
State-Mandated Inspections
Day Care Facilities
25%
WHEREAS, Section 3.36.030(D) provides that City Council may modify the cost
recovery percentage for any service by amending Municipal Code Chapter 3.36; and
44
WHEREAS, Newport Beach residents have historically received a 15% discount
from the cost of the Junior Guard registration fee, and the City Council now desires to
identify this resident fee in Section 3,36, Exhibit "A".
WHEREAS, the City commissioned MGT of America, Inc. to prepare a cost of
services study for NBFD services, which found that the cost of the Junior Guard
Program has increased. City Council desires to maintain the resident fees close to the
current level to encourage residents to participate in a valued community benefit, and
therefore, the cost recovery percentages must be modified accordingly to maintain the
current fees.
NOW THEREFORE, the City Council of the City of Newport Beach ordains as
follows:
SECTION 1: Section 3.36.030, Exhibit "A", of the Newport Beach Municipal
Code is hereby amended to read as follows:
Exhibit A
The City's cost of providing the following services shall be recovered through direct fees charged for services in
the percentages or dollar amounts indicated.
Service
Percentage of
Cost to Be
Recovered from
Direct Fees
Building
Preliminary Plan Review
75%
Planning
Appeals to City Council
50%
Appeals to Planning
Commission
50%
Recreation and Senior Services
Adult Sports
Adult Sports
62%
45
Service
Percentage of
Cost to Be
Recovered from
Direct Fees
Adult Drop -In Sports
15%
Rentals
50%
Badge Replacement
45%
After School/Camp Programs
Camps
40%
After-School/Teen Program
20%
Pre -School Program
40%
Aquatics
20%
Contract Classes
60%
Class Refunds
$74 or less
29%
$75 or more
59%
Youth Sports
25%
Special Events—Levels 1, 2,
and 3
Resident
Up to 45%
Non -Resident
Up to 85%
Appeal to City Council
25%
Senior Services
Oasis Transportation
5%
Contract Classes
50%
Oasis Rentals
45%
Fitness Center
50%
Marine Environment
15%
46
Service
Percentage of
Cost to Be
Recovered from
Direct Fees
Services—Marine Preserve
Tours
Library Services
Meeting Room Rentals
1%
Rentals—Materials
20%
Inter -Library Loan
10%
Fire and Marine
Emergency Operations
Services
Advanced Life Support—
Escorted
Up to 80%
Advanced Life Support—Not
Escorted
Up to 80%
Basic Life Support—Escorted
Up to 80%
Basic Life Support—Not
Escorted
Up to 80%
State -Mandated Inspections
Day Care Facilities
25%
Marine
Junior Guards -Resident
82.1%
Police
Initial Concealed Weapons
Permit
Maximum
Permitted by Law
Concealed Weapon Permit
Renewal
Maximum
I Permitted by Law
47
Service
Percentage of
Cost to Be
Recovered from
Direct Fees
Bike Licenses
17%
Subpoena Duces Tecum
Maximum
Permitted by Law
Vehicle Release
91%
Domestic Violence Reports
0%
Missing Persons Report
0%
Second Hand/Pawn Dealer
Tag Check
0%
Registrant—Sex
0%
Registrant—Narcotics
0%
Public Works
Engineering
Encroachment Permit without
Traffic Engineer Review
88%
Encroachment Permit with
Traffic Engineer Review
57%
Appeal of Lease/Permit under
Section 17.60.080
$100
Finance
Parking Reviews
0%
Parking Hearings
0%
Admin. Cite Hearings
0%
Municipal Operations
Construction Water Meter
Establishment
30%
48
SECTION 2: If any section, subsection, sentence, clause or phrase of this
ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall
not affect the validity or constitutionality of the remaining portions of this ordinance. The
City Council hereby declares that it would have passed this ordinance, and each
section, subsection, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses and phrases be declared
unconstitutional.
SECTION 3: The City Council finds that this ordinance is not subject to the
California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in
the environment) and 15060(c)(3) (the activity is not a project as defined in Section
15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3,
because it has no potential for resulting in physical change to the environment, directly
or indirectly.
SECTION 4: The Mayor shall sign and the City Clerk shall attest to the passage
of this ordinance. The City Clerk shall cause the same to be published once in the
official newspaper of the City, and it shall be effective thirty (30) days after its adoption.
49
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach held on the 22nd day of October, 2013, and adopted on the 12d' day of
November, 2013, by the following vote, to wit:
AYES, COUNCILMEMBERS
NOES, COUNCILMEMBERS
ABSENT, COUNCILMEMBERS
Keith D. Curry, Mayor
ATTEST:
Leilani I. Brown, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
5mBy:ktiti �_ h� 1410 /-4
Aaron C. Harp, City Attorney
Exhibit "C"- Municipal Code Section 3.36.030 Legislative
Draft
51
LEGISLATIVE DRAFT
Chapter 3.36
COST RECOVERY FOR USER SERVICES
Sections:
3.36.010
Findings.
3.36.020
Definitions.
3.36.030
Cost Recovery Percentages.
3.36.040
Late Fees and Charges.
3.36.050
Severability.
3.36.010 Findings.
The City Council of the City of Newport Beach finds as follows:
A. The City funds certain municipal services such as fire, police and residential trash collection using
primarily property, sales and other tax revenues. These municipal services are typically performed without
request by the user, benefit the public generally, and are traditionally funded by tax revenue.
B. The City performs other services and offers certain programs which are funded in whole or in part by
the person or entity requesting the service or participating in the program. These services and programs
are typically initiated by an application submitted by the person requesting the service or program
participation, primarily benefit the person requesting the service or participation, and are traditionally
funded in whole or in part from fees charged to the person who initiates the services.
C. The City Council has retained consultants to conduct cost allocation plan and cost of services
studies. Cost allocation studies determine the general City and departmental overhead rates to be used in
calculating the cost of City services. Cost of services studies determine the costs of providing certain City
services by, among other things, identifying the City employees performing the service and the amount of
time spent in performing the service. The City Council has thoroughly reviewed and considered the
studies prior to adopting the ordinance codified in this chapter. In order to ensure that fees charged for
services are an accurate reflection of actual costs, the City Council finds that cost studies should be
conducted at least every five years.
D. The Finance Committee of the City Council has conducted public meetings to discuss the cost
allocation plan and cost of services studies, the factors relevant to the appropriate cost recovery
percentage for the services studied, and to receive public input on the issues. The Finance Committee
has submitted recommendations to the City Council regarding the appropriate cost recovery percentage
and those recommendations have been reviewed and considered by the City Council prior to adopting the
ordinance codified in this chapter.
52
E. The City Council has fully complied with provisions of State and local law in establishing the cost
recovery percentages specified in this chapter, including, Section 66000 et seq. of the Government Code,
and Articles XIIIC and XIIIB of the State Constitution. (Ord. 2008-14 § 1 (Exh. 1) (part), 2008: Ord. 97-8 §
1 (part), 1997)
3.36.020 Definitions.
For purposes of this chapter, the following definitions shall apply:
"Actual cost" means the estimated cost to the City of providing a user service to a user as initially
determined by analysis of the cost factors in the studies and as modified from time to time in accordance
with changes in cost factors.
"Cost factors" means the various factors identified in the studies relevant to the calculation of the actual
cost to the City of providing user services to a user.
"Cost recovery percentage" means the percentage of the actual cost to the City of providing a user
service that the City Council determines should be recovered from the user.
"Cost studies" means the Cost of Services and Cost Allocation Studies conducted by the City's
consultant(s).
"Fee resolution" means the resolution adopted by the City Council pursuant to this chapter which
establishes the fees and charges for user services.
"User" means the person or entity who requests, by fling an application or otherwise, City performance of,
or user's participation in, a user service.
"User services" means the services or programs identified in the cost studies and which are funded, in
whole or in part, by fees or charges imposed on the user of the service. (Ord. 2008-14 § 1 (Exh. 1) (part),
2008: Ord. 97-8 § 1 (part), 1997)
3.36.030 Cost Recovery Percentages.
A. The municipal functions the City Council has determined to be user services and for which the City
Council has initially determined the actual costs and the appropriate cost recovery percentage are
described in the fee resolution. The cost recovery percentage appropriate for each user service shall be
one hundred (100) percent with the exception of the user services listed in Exhibit "A" and those services
for which the fee is limited by statute. The City Council may include in the fee resolution a schedule to
phase in specific fee increases over a period not to exceed four years.
B. The City Council shall establish, pursuant to the fee resolution, the actual fee or charge for each user
service described in the fee resolution. The fee or charge shall be based upon the actual cost of providing
the user service, multiplied by the relevant cost recovery percentage.
53
C. The City Council may, without amending this chapter, modify (increase or decrease) the fee
resolution to amend the amount of any fee or charge for, and the actual cost of providing, any user
service upon a determination that there has been an increase or decrease in one or more of the cost
factors relevant to the calculation of the actual cost of providing that service.
D. The City Council may modify the municipal functions determined to be user services in the fee
resolution and the cost recovery percentage for any service only by amending this chapter.
E. Fees for service established in the fee resolution may not be waived without prior City Council
approval, except that the City Manager may waive fees imposed on non-profit organizations for non-profit
sponsored events in an amount not to exceed one thousand dollars ($1,000.00) per year.
Exhibit A
The City's cost of providing the following services shall be recovered through direct fees charged for
services in the percentages or dollar amounts indicated.
Service
Percentage of
Cost to Be
Recovered from
Direct Fees
Building
Preliminary Plan Review
75%
Planning
Appeals to City Council
50%
Appeals to Planning
Commission
50%
Recreation and Senior Services
Adult Sports
Adult Sports
62%
Adult Drop -In Sports
15%
54
Service
Percentage of
Cost to Be
Recovered from
Direct Fees
Rentals
50%
Badge Replacement
45%
After School/Camp Programs
Camps
40%
After-School/Teen Program
20%
Pre -School Program
40%
Aquatics
20%
Contract Classes
60%
Class Refunds
$74 or less
29%
$75 or more
59%
Youth Sports
25%
Special Events—Levels 1, 2, and
3
Resident
Up to 45%
Non -Resident
Up to 85%
Appeal to City Council
25%
55
Percentage of
Cost to Be
Recovered from
Service
Direct Fees
Senior Services
Oasis Transportation
5%
Contract Classes
50%
Oasis Rentals
45%
Fitness Center
50%
Marine Environment Services—
15%
Marine Preserve Tours
Library Services
Meeting Room Rentals
I%
Rentals—Materials
20%
Inter -Library Loan
10%
Fire and Marine
Emergency Operations
Services
Advanced Life Support—
Up to 80%
Escorted
Advanced Life Support—Not
Up to 80%
Escorted
Basic Life Support—Escorted
Up to 80%
Basic Life Support—Not
Up to 80%
Escorted
57
Percentage of
Cost to Be
Recovered from
Service
Direct Fees
Construction and Inspection
Services—State-Mandated
Inspections
Day Care Facilities
25%
Marine
Junior Guards – Resident
82.1%
Police
Initial Concealed Weapons
Maximum
Permit
Permitted by
Law
Concealed Weapon Permit
Maximum
Renewal
Permitted by
Law
Bike Licenses
17%
Subpoena Duces Tecum
Maximum
Permitted by
Law
Vehicle Release
91%
Domestic Violence Reports
0%
Missing Persons Report
0%
Second Hand/Pawn Dealer Tag
0%
Check
57
Service
Percentage of
Cost to Be
Recovered from
Direct Fees
Registrant—Sex
0%
Registrant—Narcotics
0%
Public Works
Engineering
Encroachment Permit without
Traffic Engineer Review
88%
Encroachment Permit with
Traffic Engineer Review
57%
Appeal of Lease/Permit under
Section 17.60.080
$100
Finance
Parking Reviews
0%
Parking Hearings
0%
Admin. Cite Hearings
0%
Municipal Operations
Construction Water Meter
Establishment
30%
(Ord. 2013-1 § 1, 2013; Ord. 2011-28 § 1, 2011; Ord. 2011-10§ 1, 2011; Ord. 2009-32 § 1 (Exh. A),
2010; Ord. 2009-21 § 1 (Att. 1), 2009; Ord. 2008-14 § 1 (Exh. 1) (part), 2008: Ord. 2004-4 § 3, 2004; Ord.
2002-26 Exh. A, 2002; Ord. 2000-24 § 1, 2000; Ord. 98-18 § 1, 1998; Ord. 97-8 §§ 1 (part), 2, 1997)
3.36.040 Late Fees and Charges.
Notwithstanding any other provision of this Code, the City Council shall establish, in the fee resolution,
late fees and interest to be paid by any user of user services who fails to make payments when required
by this Code or any resolution, policy, or program adopted by the City Council. To the maximum extent
practical, the late fees and interest shall be uniform for all user fees. (Ord. 2008-14 § 1 (Exh. 1) (part),
2008: Ord. 97-8 § 1 (part), 1997)
3.36.050 Severability.
If any section, subsection, sentence, clause or phrase of this chapter is for any reason held to be invalid
or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions
of this chapter. The City Council declares that it would have passed the ordinance codified in this chapter
and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more
sections, subsections, sentences, clauses and phrases be declared unconstitutional. (Ord. 2008-14 § 1
(Exh. 1) (part), 2008: Ord. 97-8 § 2, 1997)
-7
Exhibit "D"- An Ordinance of the City Council of the City
of Newport Beach amending section 5.04.210 and
12.68.040 of the Newport Beach Municipal Code
ORDINANCE NO. 2013 -
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH AMENDING NEWPORT BEACH
MUNICIPAL CODE SECTIONS 5.04.210 AND 12.68.040
WHEREAS, fees for business license location changes and preferential parking
permits are cost -of -services fees identified in the Master Fee Schedule, which updates are
approved by the City Council; and
WHEREAS, Newport Beach Municipal Code ("Municipal Code") Section 5.04.210
provides for a fee of ten dollars ($10.00) to be collected from a business license holder in
order to change the location of the business; and
WHEREAS, Municipal Code Section 12.68.040 provides for fee of ten dollars ($10.00)
to be collected prior to the issuance of each Preferential Parking permit; and
WHEREAS, City Council now desires to update and amend Municipal Code Sections
5.04.210 and 12.68.040 to reflect the cost of those services, as updated by the Master Fee
Schedule.
NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows:
SECTION 1: Section 5.04.210 (License Nontransferable) is hereby amended to read
as follows:
5.04.210 License Nontransferable.
Each license granted or issued under any provisions of this title shall authorize the
licensee to transact or carry on the business therein named, at the place therein
designated and at no other place and the license shall not be assignable or
transferable. A change of location shall be allowed to the holder of the license upon
the payment, set forth by resolution of the City Council, to the Finance Director within
thirty (30) days of such change taking place. If licensee fails to apply for the change of
address within thirty (30) days of such change taking place, his license shall terminate
and expire at midnight of the thirtieth day. In the event of any such termination and
expiration of a license, there shall be no rebate of any portion of the tax or fee paid by
such licensee and in any application for a new license, there shall be no proration of
the required tax or fee. (Ord. 1757 § 1 (part), 1977)
SECTION 2: Section 12.68.040 (Preferential Parking Privileges — Issuance of
Permits), is hereby amended to read as follows:
61
12.68.040 Preferential Parking Privileges—Issuance of Permits.
A. Issuing Authority. The Finance Director shall issue permits for preferential parking.
Applicants for such permits may be required to present such proof as may be required
by the Finance Director, of residence adjacent to the area designated as a preferential
parking zone. Any combination of permanent and visitor permits, up to a total of three
per unit, shall be issued for each qualified dwelling unit to any qualified applicant.
B. Fees. The Finance Director shall collect a fee set forth by resolution of the City
Council for each permit issued pursuant to this section, whether permanent or visitor.
C. Duration of Permits. Permits issued pursuant to this section shall remain effective
for one year, commencing January 1st and ending December 31st, or fraction thereof,
or until the preferential parking zone for which such permit was issued was eliminated,
whichever period of time is less. Notwithstanding the foregoing, permits issued to
residents for the year 1981 shall be valid during 1982 without additional cost.
D. Conditions of Permits. Each permit issued pursuant to this section shall be subject
to all the conditions and restrictions set forth in this chapter and of the preferential
parking zone for which it was issued, including conditions or restrictions which may be
altered or amended from time to time. The issuance of such permit shall not be
construed to be a permit for or approval for any violation of any provision of this Code
or any other law or regulation. (Ord. 84-25 § 1, 1984: Ord. 1897 § 1, 1982; Ord, 1883 §
1 (part), 1981)
SECTION 3: If any section, subsection, sentence, clause or phrase of this ordinance
is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the
validity or constitutionality of the remaining portions of this ordinance. The City Council
hereby declares that it would have passed this ordinance, and each section, subsection,
clause or phrase hereof, irrespective of the fact that any one or more sections, subsections,
sentences, clauses and phrases be declared unconstitutional.
SECTION 4: The City Council finds that this ordinance is not subject to the California
Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment) and
15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
62
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential
for resulting in physical change to the environment, directly or indirectly.
SECTION 5: The Mayor shall sign and the City Clerk shall attest to the passage of this
ordinance. The City Clerk shall cause the same to be published once in the official
newspaper of the City, and it shall be effective thirty (30) days after its adoption.
This Ordinance was introduced at a regular meeting of the City Council of the City of Newport
Beach held on the 22nd day of October, 2013, and adopted on the 12'h day of November,
2013, by the following vote, to wit:
AYES, COUNCILMEMBERS
NOES, COUNCILMEMBERS
ABSENT, COUNCILMEMBERS
Keith D. Curry, Mayor
ATTEST:
Leilani I. Brown, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
By: � / k/V —4W Io1ilc1li
Aaron C. Harp, City Attorney
63
Exhibit "E"- Municipal Code Section 5.04.210 Legislative
Draft
64
LEGISLATIVE DRAFT
5.04.210 License Nontransferable.
Each license granted or issued under any provisions of this title shall authorize the licensee to transact or
carry on the business therein named, at the place therein designated and at no other place and the
license shall not be assignable or transferable. A change of location shall be allowed to the holder of the
license upon the payment, as set forth by resolution of the City Council, to the Finance Director of the
sum ef ten dollars ($10.00 within thirty (30) days of such change taking place. If licensee fails to apply for
the change of address within thirty (30) days of such change taking place, his license shall terminate and
expire at midnight of the thirtieth day. In the event of any such termination and expiration of a license,
there shall be no rebate of any portion of the tax or fee paid by such licensee and in any application for a
new license, there shall be no proration of the required tax or fee. (Ord. 1757 § 1 (part), 1977
65
Exhibit "F"- Municipal Code Section 12.68.040
Legislative Draft
LEGISLATIVE DRAFT
12.68.040 Preferential Parking Privileges—Issuance of Permits.
A. Issuing Authority. The Finance Director shall issue permits for preferential parking. Applicants for such
permits may be required to present such proof as may be required by the Finance Director, of residence
adjacent to the area designated as a preferential parking zone. Any combination of permanent and visitor
permits, up to a total of three per unit, shall be issued for each qualified dwelling unit to any qualified applicant.
B. Fees. The Finance Director shall collect a fee set forth by resolution of the City Council ofrton do oars
($10..99) for each permit issued pursuant to this section, whether permanent or visitor.
C. Duration of Permits. Permits issued pursuant to this section shall remain effective for one year,
commencing January 1st and ending December 31st, or fraction thereof, or until the preferential parking zone
for which such permit was issued was eliminated, whichever period of time is less. Notwithstanding the
foregoing, permits issued to residents for the year 1981 shall be valid during 1982 without additional cost.
D. Conditions of Permits. Each permit issued pursuant to this section shall be subject to all the conditions and
restrictions set forth in this chapter and of the preferential parking zone for which it was issued, including
conditions or restrictions which may be altered or amended from time to time. The issuance of such permit shall
not be construed to be a permit for or approval for any violation of any provision of this Code or any other law
or regulation. (Ord. 84-25 § 1, 1984: Ord. 1897 § 1, 1982; Ord. 1883 § 1 (part), 1981).
67
Exhibit "G"- Application of Indirect Costs to the
Calculation of Fees for Service
M
Application of Indirect Costs to the Calculation of Fees for Service
The purpose of this exhibit is to provide a detailed explanation of the methodology used by the
City of Newport Beach to incorporate indirect overhead costs in the development of the
municipal fee schedule. The nature of indirect overhead costs will also be described. The
same fire pump installation inspection fee example that was used during the October 8, 2013
City Council Study Session will be used to facilitate the explanation.
A fire pump is a part of a fire sprinkler
system's water supply. The pump
intake is either connected to the public
underground water supply piping, or a
static water source. The purpose of
the inspection is to ensure that
installation occurs according to the
approved plan set, and to verify that
the pump performs according to the
required specifications. The following
steps demonstrate how the fire pump
installation inspection fee is derived.
Step 1: Calculate Hourly Staffing
Rates and Burdened Factors
The first step is to determine the ` I—'
hourly rates of staff providing the fire pump installation inspection service. Table 1 below
provides the hourly salary and benefit rates plus the hourly burden factors for the staff that are
responsible for performing this task within the Fire Department's Life Safety Planning and
Development Division. The cost of the service also includes the indirect overhead costs or
"burdened factors". Indirect overhead costs are costs that are not directly attributable to the
expenses incurred for a user fee service, but are necessary and contribute to the total cost of
that service delivery, i.e. - managerial administration, utilities, insurance, legal, information
technology, payroll, and finance, which are all valid components to the analysis of what it costs
the City to provide municipal services.
Table 1- Hourly Rates for Salary, Benefit and Overhead Factors
Salary and Bens Burdened Factors Total
Hourly Rate Hourly Rate Burdened Rate
Administrative Assistant $51.10 + $60.42 = $111.51
Life Safety Specialist II $71.92 + $85.04 = $156.96
The City's cost allocation plan consultant uses the Federal Office of Management and Budget
(OMB) Circular A-87 as a guideline to determine the allowable burdened, or indirect, cost
elements. OMB A-87 is a document that state and local governments use to identify allowable
indirect costs when applying for reimbursement of cost from state or federal programs.
Although the calculation of user fee services is not specific to applying for reimbursement from
any state or federal program, the underlying methodology of identifying costs is much the
M.
same. The relevant sections of OMB A-87 that specify how direct and indirect costs shall be
applied to the calculation of the fire pump installation inspection fee follows below.
Composition of Cost
Direct Costs
1. General. Direct costs are those that can be identified specifically with a particular final cost
objective.
2. Application. Typical direct costs include:
a) Compensation of employees for the time devoted and identified specifically to the
performance of the operation.
b) Cost of materials acquired, consumed, or expended specifically for the purpose of
fulfilling the mission of the operation.
c) Equipment and other approved capital expenditures.
d) Travel expenses incurred specifically to carry out the operation.
Using the personnel identified in Table 1, the direct costs to perform a fire pump installation
inspection are found on line 1.1 (total salary and benefits on an hourly basis) in Table 1a below.
Table 1a
Fully Burdened Hourly Rates
Admin Asst
Life Safety
Specialist II
Annual Salary & Benefits:
$ 106,280
$ 149,592
1. Calculate hourlysalary & benefits
1.1 Divide annual cost by 2,080 hrs
$51.10
$71.92
Total Salary and Benefits
$51.10
$71.92
2. Indirect Overhead
2:1 Compensated Absenses 13.46%
$6.88
$9.68
(vacation/holiday/sick leave)
2.2 General Administration 24.117.
$12.32
$17.34
(supervision, support services)
2.3 Operating Expense 19.017
$9.71
$13.67
(training, vehicle moint, insurance)
2.4 Citywide Overhead 61.66%
$31.51
$44.35
(Finance, City Manager, Bldg Maint)
Total Indirect Overhead
$60.42
$85.04
Total Burden Rate: 118.24%
$111.51
$156.96
Indirect Costs
1. General. Indirect costs are those: (a) incurred for a common or joint purpose benefiting more
than one cost objective, and (b) not readily assignable to the cost objectives specifically
benefitted. The term "indirect costs," as used herein, applies to costs of this type originating
from staff within the Life Safety Services division, Life Safety Services division operating
2
70
expenditures, Fire Department Administration and Training support, as well as those
incurred by other departments in supplying goods, services, and facilities.
Life Safety Planning and Development's cost of service analysis includes four types of
indirect overhead categories or "cost pools" consisting of compensated absences, general
administration, operating expenses, and citywide overhead.
a) Compensated Absences — The compensated absences cost pool is used to account for
employees' time off with pay for vacations, holidays, and sick days. The City is obligated
to pay for these days off and is required by the matching principle to record the expense
when the employees are working, since the benefits are a part of the employees'
compensation. It is estimated that 280 out of 2,080 total available hours per year per
full-time equivalent (FTE) are taken as compensated absences. This translates into a
13.46% burden factor applied to the hourly salary and benefit rate as indicated on line
2.2 in Table 1a above.
b) General Administration — The general administration cost pool includes the cost of Life
Safety Services division staff time spent on such activities as budget planning and
staffing allocations; public counter and telephone time, meetings, and training and
education. The wages of management staff and the workers engaged in administration
and support activities are considered an indirect labor cost. It is calculated that 24.11%
of the Life Safety Services division's overall workload is spent on this general
administrative function as indicated on line 2.2 in Table 1a above.
c) Life Safety Services Division Operating Expenditures —The City's internal service funds
are used to allocate the cost of providing general liability insurance and workers'
compensation; maintaining and replacing the City's rolling stock fleet; and the cost of
maintaining and replacing the City's computers, printers, copiers, and telecommunication
services. This cost pool also includes other general operating expenses such as utilities,
supplies, and training. The operating expenditure burden factor of 19.01 % as indicated
on line 2.3 in Table la above is calculated by comparing the total cost of (allowable
indirect) operating expenditures to the total (allowable direct) labor pool. The division's
operating expenditures cost pool consists largely of Internal Service Fund (ISF) charges
to the division on a cost reimbursement basis.
d) Citywide Overhead - The Cost Allocation Plan ("CAP") distributes the costs of City
departments that serve a central service function supporting the Life Safety Planning
and Development division's operations. These "Central Service Departments/Divisions"
include:
City Council
City Clerk
City Manager
Finance & Treasury
Office of Management and Budget
Revenue
Accounting
Fire Department
Administration
3
71
Human Resources
Risk Management
Municipal Operations Department
Operations Support
In addition to the departments/divisions listed above, the CAP also distributes the
overhead cost of the Fire Department's own Administration and Training divisions to the
all other Fire divisions, including Life Safety Planning and Development. The citywide
overhead burden factor of 61.66% is calculated by comparing the total cost of Life Safety
Planning and Development's share of citywide and department overhead to the
division's total (allowable direct) labor pool (see line 2.4 in Table 1 a above).
Step 2: Calculate Time Spent on the Service
The second step is to calculate the time spent on the service. The task and time in minutes
estimated to complete the task is captured in Table 2 below.
Table 2: Task Descriotion & Time Estimates in minutes
Step 3: Calculate the Cost to Provide the Service
The third and final step is to calculate the cost to provide the service by converting the total
minutes to hours per unit (or staff person). The product of the hourly rate calculation times the
time spent yields the cost of providing the service (see Table 3 below).
Table 3 — Fee is Product of Times and Rates
Fully
Total
Research/
Total Cost
Total
Total
Hourly
to Provide
Re-
Unit
Counter
Clerical
Meeting
Phone
Permit / Re
Time
Inspection
inspection
Drive Time
Time
Support
Time
Time
issuance
(Min)
Administrative Assistant
$349.00
5.00
5.00
Life Safety Specialist II
100.00
20.00
10.00
130.00
Step 3: Calculate the Cost to Provide the Service
The third and final step is to calculate the cost to provide the service by converting the total
minutes to hours per unit (or staff person). The product of the hourly rate calculation times the
time spent yields the cost of providing the service (see Table 3 below).
Table 3 — Fee is Product of Times and Rates
W
72
Fully
Total
Burdened
Total Cost
Total
Hours per
Hourly
to Provide
Minutes
Unit
Rates
the Service
Administrative Assistant 5.00
0.08
$111.51
$9.29
X
_
Life Safety Sepcialist II 130.00
2.17
$156.96
$340.08
Proposed Fee
$349.00
W
72
Summary
The purpose of a CAP is to accurately, fairly, and reasonably distribute the City's central
administrative costs to the operating departments in the City. The development of a CAP follows
a series of general guidelines and principles, which originate from federal guidelines established
in OMB Circular A-87. These principles ensure that allocated costs are necessary and
reasonable to the operation of the government. A cost analysis study is almost entirely reliant
upon the data provided by the City. Since all study components are interrelated, bad data at any
step in the process will cause the ultimate results to be flawed. To avoid accuracy problems and
Other quality flaws, the study included a series of quality control measures including
reasonableness tests and validation; balance and cross checks; and internal City review.
Finally it should be noted that private businesses typically add a layer of profit margin to their
cost analysis, public agencies are not allowed to do so.
73
NOTICE OF PUBLIC HEARING
ON COST OF SERVICES FEES
NOTICE IS HEREBY GIVEN that the City Council of the City of Newport Beach
will hold a public hearing to consider the establishment of cost -of -services fees
which include development review fees. The hearing will take place on
Tuesday, October 22, 2013, at 7:00 p.m., or as soon as possible thereafter, in
the City Council Chambers located at 100 Civic Center Drive, Newport Beach.
As required by Government Code Sections 66016 and 66018, data indicating
the amount of estimated cost required to provide the services, which is the basis
for the proposed fees, is available in the, Revenue Division (Bay A, 15f Floor)
and City Clerk's Office (Bay E, 2nd Floor), located at the Civic Center, 100 Civic
Center Drive, Newport Beach.
Leilani Brown, City Clerk
City of Newport Beach
PROOF OF
PUBLICATION
STATE OF CALIFORNIA)
) SS.
COUNTY OF ORANGE )
I am a citizen of the United States and a
resident of the County of Los Angeles; I
am over the age of eighteen years, and
not a party to or interested in the notice
published. I am a principal clerk of the
NEWPORT BEACH/COSTA MESA
DAILY PILOT, which was adjudged a
newspaper of general circulation on
September 29, 1961, case A6214, and
June 11, 1963, case A24831, for the
City of Costa Mesa, County of Orange,
and the State of California. Attached to
this Affidavit is a true and complete copy
as was printed and published on the
following date(s):
Saturday, October 12, 2013
Saturday, October 19, 2013
I certify (or declare) under penalty of
perjury that the foregoing is true and
correct.
Executed on October 25, 2013
at Los Angeles, California
Adlw &mm
Signature
CITY OF NEWPORT BEACH
NOTICE OF PUBLIC HEARING
ON COST OF SERVICES FEES
NOTICE IS HEREBY GIVEN that the City Council of
the City of Newport Beach will hold a public hearing to
consider the establishment of cost -of -services fees which
include development review fees. The hearing will take
place on Tuesday, October 22, 2013, at 7:00 p.m., or as
soon as possible, thereafter, in the City Council Chambers
located at 100 Civic Center Drive, Newport Beach. As
required by Government Code Sections 66016 and 66018,
data indicating the amount of estimated cost required to
provide the services, which is the basis for the proposed
fees, is available in the, Revenue Division (Bay A,1 st Floor)
and City Clerk's Office .(Bay E, 2nd Floor), located at the
Civic Center, 100 Civic Center Drive, Newport Beach.
WP
/s/ Leilani Brown, City Clerk
u City of Newport Beach
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