[0:04] Everybody's ready to go. Okay, let's

[0:06] start this meeting then. We'll call this

[0:08] Jeremy of the city council.

[0:10] All members except uh council member

[0:13] Lopez is present and u we'll have the workshop which is the master fee

[0:19] schedule presentation. And who wants to

[0:22] lead it off? You guys want to come up? Can you come up to the podium and I

[0:25] think you have a presentation? Not sure

[0:27] if Mikey's online or not.

[0:31] line and Mike, you there.

[0:35] >> Hey, John. Uh, hey, Mayor Drey, can

[0:37] everybody hear me?

[0:38] >> Yes, we can hear you.

[0:39] >> Okay, perfect. So, for tonight's

[0:41] presentation, we will be having Eric

[0:44] Johnson. He's the president of revenue

[0:46] cost services to be providing the

[0:49] PowerPoint presentation as well as

[0:52] Richard Wall from uh Special Legal

[0:55] Council from Best in Creger to help

[0:57] answer any other questions uh after the

[1:00] uh presentation. So Eric, if you'd like

[1:02] to go ahead and start, please do.

[1:05] >> Great. Thank you, Mikey.

[1:07] >> Thank you very much for being here. It's

[1:08] all yours.

[1:09] >> Great. Thank you. Well, good afternoon,

[1:11] uh mayor, members of the council. I am

[1:12] Eric Johnson from revenue and cost

[1:14] specialist. So it's good to be here to

[1:16] with you this afternoon this evening to

[1:18] present the cost of services study that

[1:20] we did for the city. So before we get

[1:22] into that just briefly a little bit

[1:24] about RCS revenue and cost specialist we

[1:27] are actually founded 1980 um with the

[1:29] wake of Proposition 13 and Proposition 4

[1:31] the founders realized the cities would

[1:33] need to know what their services cost.

[1:35] So since then we've studied u over 250

[1:38] agencies in five different states. I

[1:40] myself have been doing this in since

[1:41] 1990 and I've worked with over almost

[1:44] 150 agencies in in five states also. So

[1:47] this is what we do this these cost of

[1:49] services studies. So first off what is a

[1:52] cost study? So we've really recast the

[1:55] city budget with a business orientation.

[1:57] We did this because the voters told us

[1:59] to. In 1978 they passed Proposition 13

[2:02] which limited property taxes as we all

[2:04] know. Then a year later they passed

[2:06] Proposition 4 which said that fees that

[2:09] do not exceed the cost reasonably be

[2:10] born of providing the service are not

[2:13] considered taxes. They wanted government

[2:16] to act more like a business and know its

[2:18] cost. But while governmental accounting

[2:20] does a great job of identifying where

[2:21] the cost funds departments and

[2:23] divisions, it was never designed to

[2:25] identify the cost of services.

[2:28] So we had to create that information.

[2:31] So working with city staff, we identify

[2:32] what it costs, provide the full business

[2:34] cost of services to your customers, to

[2:36] the public.

[2:40] So there's no city council service.

[2:41] There's no city manager service. It's

[2:44] like when you go to the the grocery

[2:45] store and you buy a can of corn. You

[2:47] know when you buy that can of corn that

[2:48] it includes the cost of the farmer and

[2:51] the distributor and the trucker and the

[2:53] people at the grocery store and the

[2:54] chucker there in front of you. You know

[2:56] that. We've done that same kind of thing

[2:58] here. So the city council city manager

[3:00] overhead costs are part of the cost of

[3:03] providing that service. So when you so

[3:06] when we take a look at what is what are

[3:08] these costs that we're saying that

[3:10] you're providing to your customers,

[3:12] these are the full business costs

[3:13] including all these various overhead

[3:15] costs.

[3:18] So this is a comprehensive study. We've

[3:20] looked at user fees. We've looked at

[3:22] rents and use permits related to

[3:24] facility and ballfield rentals. We've

[3:26] looked at fines related to parking

[3:28] fines. This does not we are not looking

[3:30] at impact fees, inloo fees, utility

[3:32] rates, any form of grants or any form of

[3:34] taxes just these above services.

[3:38] So of course there are many good reasons

[3:40] to review these user fees. You want to

[3:42] update your current fees to be able to

[3:44] reflect what you're currently doing

[3:45] today. And we also looked at adding,

[3:48] removing, and redefining fees to again

[3:51] reflect what you're doing today. Want to

[3:53] make sure they're legally defensible.

[3:55] they do not exceed the cost reasonably

[3:57] born of providing the service. In some

[3:59] cases, we look at the revenue collection

[4:01] when we're taking a look at how is this

[4:03] fee currently performing. And there is

[4:05] many fees here that are more market

[4:07] oriented, especially your human services

[4:09] fees that we'll talk about a little

[4:10] later.

[4:13] As I mentioned, we're doing all this

[4:14] because the voters told us to.

[4:17] In pro in 1979 they passed proposition 4

[4:20] as I mentioned defined service fees as

[4:22] being limited to the full cost providing

[4:24] the service. Rents and fines are exempt

[4:27] from cost recovery limitations. In 1996

[4:30] they passed Proposition 218 which placed

[4:32] limits on the creation updates of

[4:34] certain property related fees. And then

[4:37] in 2010 they passed Proposition 26 which

[4:40] codified a lot of existing kind of fee

[4:41] setting practices as article 13C of the

[4:44] state constitution. But it also said

[4:46] that fees must be for for a service

[4:48] directly benefiting the fee payer.

[4:53] So how do we go about doing this? Well,

[4:55] our first step was to sit down with

[4:57] staff in all the various different

[4:59] departments and identify what are the

[5:00] services that you're currently

[5:01] providing. Talk about services I've seen

[5:04] in other places that maybe you want to

[5:06] add here. And we went through that list

[5:08] a couple of times to make sure that this

[5:10] is what we want to take a look at. These

[5:11] are the services that we're providing in

[5:13] each department. We then sat down with

[5:15] the departments again and in many cases

[5:18] many many meetings who's spending time

[5:20] on these services how much time is being

[5:22] spent how many of these are you doing in

[5:24] some cases in in planning area we broke

[5:26] it out into steps because there are many

[5:28] different steps in a planning

[5:29] application so we broke out all the

[5:32] various different steps identified time

[5:33] to it and then we also looked at how

[5:36] many of these you're doing so we could

[5:37] look at what does all that time add up

[5:39] to have we made sure that we're not

[5:42] allocating time that doesn't exist

[5:43] everyone everyone everyone only has so

[5:45] many hours they can work a year and so

[5:47] we reviewed that with that lens also. So

[5:49] not just how much time for one but

[5:52] what's that total time. So we added up

[5:53] and allocated 100% of the of the time

[5:56] for all positions doing something some of the time on fee services some of

[6:00] the time on what what we call tax

[6:02] supported services that we'll talk about

[6:03] in a moment some of the time on on on

[6:06] cost allocation plan services

[6:07] administrative services providing

[6:08] support to the other parts of the

[6:10] organization.

[6:13] We then developed a fully allocated

[6:15] hourly rate for every position. So we

[6:17] looked at the actual salaries for each

[6:19] position. We looked at the actual

[6:20] benefits for each position. We looked at

[6:22] the adopted budget for the non-personnel

[6:24] expenses, things like office supplies

[6:25] and contract services.

[6:28] Then we also looked at the overheads,

[6:29] citywide overhead where we allocated, we

[6:31] did a cost allocation plan where we

[6:32] allocated the the cost of city council

[6:34] and city manager and finance and city

[6:36] clerk and human resources and facility

[6:39] maintenance and um fleet maintenance,

[6:41] all those things that people need to be

[6:43] able to do their jobs.

[6:45] We also looked at departmental overhead,

[6:47] in some cases divisional overhead for

[6:48] the administrative support provided

[6:50] within a department. So we added all

[6:52] that up together and we developed a

[6:54] fully allocated hourly rate for every

[6:56] position, a billing rate, a business

[6:57] rate for every position. We then matched

[7:00] that up with a time detail and now we

[7:02] know what it costs provide that service.

[7:05] So then we went back to the departments

[7:06] and said here's the cost of the service,

[7:08] here's the current fee, and then here

[7:11] are some proposed fees. And then we went

[7:13] through that with the departments again

[7:15] a few times in in many of the

[7:16] departments to make sure that a a the

[7:20] information still looked good, but also

[7:21] that the fees that we're recommending

[7:24] here today are fees that if you were to

[7:26] adopt, they could use and go into place

[7:28] as something that would work at the

[7:30] counter if you chose to adopt them.

[7:34] So I mentioned tax services and fee

[7:37] services.

[7:38] tax services or what we call community

[7:40] supported services typically benefits

[7:42] the community as a whole

[7:45] and supported by tax dollars. Things

[7:46] like police and fire and streets and

[7:48] parks. Those things when people say what

[7:50] do my taxes pay for? This is what their

[7:53] taxes pay for. We also identify personal

[7:56] choice services, fee services. The

[7:59] customer is identifiable. The service is

[8:01] measurable. Most importantly, it

[8:03] benefits an individual or group and not

[8:05] the larger community. You can still

[8:08] choose to subsidize if it for whatever

[8:09] reason you as a council feel is

[8:11] appropriate. Planning fees, development

[8:13] fees, building fees, engineering fees

[8:15] are good examples of these types of user

[8:18] fees, personal choice services.

[8:23] So when we looked at this for

[8:26] Monontlair, we came up with this this

[8:27] subsidy here. But the difference between

[8:30] personal choice and and community

[8:32] supported, I'm kind of a picture person.

[8:33] So when I look at this, it makes a lot

[8:35] more sense to me. If we look at the

[8:37] yellow circle in the upper right, those

[8:39] are taxes. Taxes are there to support

[8:41] community supported services. In the

[8:43] upper left, we have fees and charges and

[8:46] they're designed to support personal

[8:47] choice services. But to the extent that

[8:49] the fee doesn't co cover the cost

[8:51] providing the service

[8:54] that co that money has to come from

[8:55] somewhere that services are being

[8:57] provided, the costs are occurring. So

[8:59] the only other place it can come from is

[9:00] tax dollars.

[9:03] So, we identified about a $7.9 million

[9:06] subsidy of fees that are that we've

[9:10] identified as personal choice services.

[9:12] Now, that's a big number. So, let's dive

[9:13] into that a little bit

[9:16] because you see at the bottom of that

[9:20] third column of numbers over we see the

[9:21] total subsidy $7.9 million. So we have

[9:25] community development subsidi being

[9:27] subsidized about 640,000.

[9:29] Um public safety, police and fire

[9:31] subsidi and code enforcement sub

[9:33] subsidized about 4.1 million. Human

[9:36] services about 3.1 million and

[9:38] administrative services about 60,000.

[9:41] Now if we look at the column on the far

[9:42] right, that's what we think with the fee

[9:45] recommendations that are in this report

[9:47] if you were to adopt is the revenue you

[9:49] would receive on an annual basis. It's a

[9:51] much smaller number.

[9:53] $736,000.

[9:55] And the reason for the difference, let's

[9:57] kind of walk through the reason for

[9:58] those differences. Community development

[10:00] services largely um 100% cost recovery,

[10:03] but there is one service in their

[10:05] general mainten general plan maintenance

[10:07] search charge where we recommended a

[10:08] subsidy that the development community

[10:10] pay for half of it and the the taxpayer

[10:13] pay for the other half of it. So that's

[10:15] about $100,000 difference in what we

[10:18] anticipate being the full cost. So

[10:20] that's why there's a difference.

[10:22] there on community development services,

[10:24] public safety services. There are things

[10:27] there are fee services in here which are

[10:29] not really designed to recover the full

[10:31] cost. Some of them are designed to get

[10:34] people's attention. Um code enforcement

[10:36] services, code enforcement inspections,

[10:38] police false alarm response. Um

[10:42] others are EMS response. There are EMS

[10:46] fees that are you currently have and

[10:48] we're making recommendations that

[10:49] change, but they're never designed to

[10:51] recover the cost of the program of a

[10:53] very large program like emergency um

[10:55] response, emergency medical response.

[10:57] So, there's still going to be a large

[10:59] subsidy there because this is one of

[11:01] those market based fees. You can't

[11:02] charge, you know, $5,000 for a response.

[11:06] Um it just it just won't work. Um we've

[11:09] also included engine company business

[11:10] inspections as a as a no fee service in

[11:14] here. Also,

[11:16] human services, as we all know, are very

[11:18] market based fees. They're they're a mix of providing services to

[11:22] the community as well as being services

[11:24] that you charge a fee for. So, there are

[11:27] some recommendations in here from for

[11:28] some modest changes and to better

[11:30] reflect what the department's doing

[11:32] today, but it's not designed to recover

[11:35] its cost. It's it's going to be

[11:37] subsidized um because otherwise, again,

[11:39] you can't charge $500 for a class. No

[11:41] one will come. Um, and so we wanted to

[11:44] be conservative here. Even though we

[11:45] recommended some some modest changes, we just put zero new revenue and let

[11:52] that uh that roll out to how it's going

[11:54] to roll out. And the administrative

[11:57] services are largely recovering their

[11:59] cost. Also,

[12:02] we are also recommending future

[12:05] increases for inflation be included in

[12:07] the resolution so that the city adopt a

[12:09] policy to increase fees annually for

[12:11] inflation based on the CPI so that on an

[12:15] annual basis you can have a two three 4%

[12:18] increase so that you don't get in a

[12:21] position where five years from now or 10

[12:23] years from now you have to make large

[12:24] increases to your fees. you've kind of

[12:26] kept up with it modestly to um keep up

[12:29] with your cost.

[12:32] Now, the report itself, 501 pages, um is

[12:36] a lot of information. And so, let me

[12:38] just kind of walk you through how to

[12:42] read the report and and get the

[12:43] information out of it that you want.

[12:46] The first 35 pages or so are explanatory

[12:49] text going over a lot of what I just

[12:50] said here in more detail um with with

[12:53] some more um background schedules. also

[12:57] chapter four there's when we first start

[12:59] seeing the S numbers service numbers

[13:01] what what we identified all your list of

[13:03] the services you're providing to the

[13:05] public that you could could either are

[13:07] or could be charging a fee for so on

[13:10] each of those um summary schedules

[13:12] broken out by development services

[13:14] public safety um human services and

[13:17] administration you'll see the S number

[13:20] the service title what the total fee

[13:22] revenue is and on an annual basis

[13:25] for that service, the total service cost

[13:27] on an annual basis and therefore either

[13:28] the profit or the subsidy because some

[13:31] services we are actually recommending

[13:32] that the fee go down because we're

[13:34] showing that the costs are less than the

[13:36] current fee

[13:37] and then the possible new revenue off to

[13:39] the right. Now remember that S number

[13:43] because when we get to appendex A after

[13:45] the text there's that S number again and

[13:47] there appendex A you can see in one

[13:49] place the current fee and the proposed

[13:50] fee side by side so you can kind of see

[13:53] what how the fees are changing on an

[13:55] individual service basis and if you're

[13:57] going why is this fee going up so much

[13:59] you turn to appendix B and appendix B

[14:02] for every one of these S numbers has

[14:04] this detail two matching pages on the

[14:08] left hand side will be a description of

[14:10] service. Below that, what the current

[14:12] fee is below that what the the current

[14:15] fee is recovering in revenue and what it

[14:18] cost on a on a total basis and a per

[14:20] unit basis. That cost detail comes from

[14:23] the righth hand page. And so you can see

[14:25] all the positions involved in providing

[14:27] that service, how much time they're

[14:29] spending on each one of these, what that

[14:31] turns into on a fully allocated hourly

[14:33] rate basis, how many of these the city's

[14:36] doing every year, and then the total

[14:38] cost, and then over in the lower

[14:40] lefthand corner will be that proposed um

[14:43] fee to in most cases recover 100% of the

[14:46] cost.

[14:48] So you can see all that detail from all

[14:49] the meetings that we had with staff to

[14:51] identify who's spending time, how much

[14:53] How are they spending? How many of these

[14:55] we're doing?

[14:59] There are some appendices in the back

[15:00] because some of them just have more

[15:01] detail. Um,

[15:04] building safety fees. You'll see the the

[15:06] details on the building safety fees. We

[15:08] went into a lot of detail with the

[15:09] department to to break out how much time

[15:12] is actually being spent on all the

[15:14] various different services whether it be

[15:15] new construction which is square footage

[15:17] based where some are going up some are

[15:19] going down

[15:21] buildings and then the um the trade

[15:23] permits mechanical electrical plumbing

[15:25] permits are in a separate schedule in

[15:27] appendix C. So you can see the time

[15:29] involved there and in most cases these a

[15:32] lot of these fees are actually going

[15:33] down when we looked at the time spent

[15:34] and the updated cost. So you can see all

[15:37] of that detail there. Appendix D has the

[15:41] fire prevention fees which are really a pass through from your um fire

[15:45] prevention consultant. So wanted to keep

[15:47] up to date so that it's um the city's

[15:50] not having to subsidize because the the

[15:53] consultant is charging more than um you

[15:56] guys are charging the applicant.

[16:00] Parking enforcement fines. Those are u

[16:02] we did a survey of the of the

[16:04] surrounding area to see what other other

[16:06] cities are charging for similar fines

[16:08] and found that the city is is pretty

[16:10] much in line with surrounding cities.

[16:11] So, we did not recommend any any changes

[16:14] to the parking enforcement fines,

[16:18] human services fees. As I mentioned, we

[16:20] do had some um recommendations in here

[16:24] to make changes to the human services

[16:26] fee schedule. So, anywhere from the

[16:28] program fees to the facility and field

[16:30] rental fees there there are not large

[16:33] changes in the dollar amounts, but

[16:34] there's a lot of structural changes. the existing fee schedule just didn't

[16:37] reflect um what the department was

[16:40] currently doing. So you'll see a lot of

[16:42] services where the just remove this fee, and in some cases we

[16:47] broke out in different detail.

[16:49] So all of that is in this 501 pages to

[16:52] provide this information to help you

[16:54] make a decision

[16:56] because our goal really is to identify

[16:58] the full cost for all the various

[17:00] services that the city's providing.

[17:03] We have made fee recommendations for

[17:04] every service that we think you can

[17:06] either are charging a fee for and stay

[17:08] within your cost or could charge a fee

[17:10] for and still of course stay within your

[17:12] cost. But of course, it's up to the city

[17:14] council to decide which services should

[17:17] be charged the full cost, which services

[17:19] are subsidized with tax dollars because

[17:21] again, the services are being provided,

[17:23] the costs are occurring. The question

[17:25] now is who's going to pay for it,

[17:26] taxpayer or the person or group

[17:29] receiving the service?

[17:32] So that concludes the presentation. So

[17:35] certainly available for questions.

[17:37] >> Okay. Well, thank you very much. Uh I

[17:39] want to ask my council colleagues they

[17:40] have any questions. I have no speaker

[17:42] currently on the queue. Anybody?

[17:45] No. Nobody.

[17:50] Okay. Well, um I would just say that I

[17:52] think uh uh you guys done a pretty good

[17:56] job in u calculating or updating the

[17:58] fees for the city.

[18:02] And uh I don't have an issue with it. I

[18:04] think it's something that uh we haven't

[18:06] done this in several years. And uh it's

[18:10] good that we update our fees, but at

[18:11] least we also when we update fees, we

[18:13] also justify how we're going to go about

[18:14] it. Making sure we're not technically

[18:16] making a profit that we actually are

[18:18] covering fees for the costs that that

[18:20] been incurred. Uh Council Member Mendes,

[18:23] go ahead.

[18:25] >> Yeah. Um I I went through this um

[18:29] 500page report u which is u very

[18:32] impressive. Um yeah and I understand you

[18:35] know the costs of services and you know

[18:38] trying to charge fees and you know just

[18:41] going through them all. Um I mean I know

[18:44] that human services is a very important

[18:46] pro program with youth and senior

[18:49] programs and afterchool programs but it

[18:52] just seems like that's a lot that we're

[18:55] not recouping and just I just feel like

[18:58] maybe there can be some other way to you

[19:01] know and I know you give suggestions in

[19:03] there and I know it says you know zero

[19:06] no we're not going to do anything but um

[19:09] I I think it's just something maybe we

[19:10] can look at even closer.

[19:12] you know, just because I I feel like

[19:14] there's a lot of room there and um you

[19:18] know, right now, you know, budgets are

[19:19] tight and, you know, we're trying to

[19:21] figure everything out and, you know,

[19:23] sometimes cuts need to be made just to

[19:27] survive. But like I said, you know, I

[19:30] I'll talk with my colleagues about that.

[19:32] But, uh, everything it's a great report.

[19:35] I like what you guys did and put it

[19:37] together and like I said, I I went

[19:38] through it and, um, it's very

[19:40] explanatory, too. So appreciate that you make it user friendly.

[19:44] >> So but that's just my comments right

[19:46] now.

[19:49] » Well, thank you. Can you discuss that a

[19:51] little bit about human services? I know

[19:53] the total fee revenue was projected to

[19:56] be well total service cost is 5 million.

[19:59] Total revenue fee revenue estimate is

[20:02] 1.9

[20:03] with a being under 3.1. I'm assuming

[20:07] there's a good justification for that.

[20:09] Marsha, you want to tie in on this one?

[20:12] Whoever wants to take the lead.

[20:14] >> Uh, I don't know that you mentioned um

[20:16] about grants that we receive. So, uh,

[20:20] for example, the afterchool program, we

[20:23] receive over a million dollars in grant

[20:25] funding.

[20:26] >> So, that's part of this $5 million

[20:28] service cost. Okay. All right.

[20:29] >> And we don't charge for the afterchool

[20:31] programs, right? So, you know, those are

[20:34] things to

[20:35] >> So, there's really a million. So, it's

[20:36] really $2.9 million if you throw the uh

[20:39] the granny into it. Okay.

[20:43] All right.

[20:44] Anything else on that question? Anybody

[20:46] else? Council Rue.

[20:49] >> Yes. Thank you, Mr. Mayor. Um,

[20:52] very good report. Well done.

[20:56] I too had a question or comment

[21:00] on human services

[21:04] in many and and I understand where we're

[21:06] going with some of this and I appreciate

[21:09] where we can keep the costs low. Many of

[21:13] our families have felt the economic

[21:15] impact of this economy. You know, gas is

[21:18] over $6 a gallon. In many cases, their

[21:21] food bills have gone up quite a bit.

[21:24] They're struggling. They, excuse me,

[21:26] they may not have

[21:28] necessarily had a raise. And in some

[21:31] cases, these families just can't afford

[21:33] it. And these programs are lifelines for

[21:37] them. And so, as much as we can, if we

[21:40] can try to keep the costs low, I

[21:44] appreciate getting grants. I know we

[21:46] were in Washington DC. We talked with

[21:48] Congress member Torres and uh Congress

[21:51] member Cisneros as well as a number of

[21:53] different departments about funding we

[21:55] might be able to get for some of these

[21:57] programs. And I think we're going to

[21:59] have to continue to pursue that because

[22:01] for a lot of our families and our

[22:04] seniors, these programs are all they

[22:06] really have. And so whatever we can do

[22:09] to continue to keep the costs low, it

[22:11] would be greatly appreciated. Thank you.

[22:18] Uh yes.

[22:21] Did any of your

[22:23] analysis or studies did you take into

[22:25] account the income levels of our

[22:27] residents? Did you look at those

[22:29] demographics?

[22:30] >> No, we just look at here are here are

[22:32] the costs. We did break out a resident

[22:34] versus non-resident, but it was working

[22:37] with staff to okay because obviously

[22:38] staff knows the community a lot better

[22:40] than I do and and trying to set fees at

[22:44] a level that will most people will be

[22:48] able to afford um and and because you

[22:50] don't want to get to a point where

[22:52] you're you're pricing yourself out of

[22:53] the market.

[22:54] Um, I've seen other agencies where

[22:57] they'll do scholarships for um,

[23:00] residents that may not be able to afford

[23:01] the fees that are in place. Uh, is one

[23:04] option, but that ultimately is up to the

[23:06] council to decide what level you want to

[23:09] set the fees at. Well, the last time

[23:12] figures were released on our

[23:14] demographics with respect to income, I

[23:16] believe it was at 60,000 for a family of

[23:18] four, which is not a lot given today's

[23:20] economic uh expenses that are required

[23:22] of a family. Um,

[23:26] and I know that there are presently we

[23:28] don't have mass residents showing up to

[23:31] meetings or even community events

[23:32] saying, "I can't afford your fees." or

[23:35] whenever they're asked to pay, they're

[23:36] too high because we've keep we've kept

[23:38] them down and they've been very

[23:40] affordable. Um, so I I I

[23:45] at this time and especially after what

[23:46] my colleague just said, I would have to

[23:49] back him up and agree with him as to the

[23:52] current state of the economic uh

[23:55] situation where they are paying more for

[23:57] gas, for food, healthc care expenses are

[23:59] high and I know those are external

[24:01] issues that don't come to us directly

[24:04] but Nonetheless, our residents are still

[24:05] feeling the pinch. Now, I think you

[24:08] might folks might even say, well, the

[24:11] bulk of these fees, like development

[24:13] fees are paid by developers or those

[24:14] that have property and can afford it.

[24:16] And that might be true to a certain

[24:18] extent, but even then, um you can't

[24:21] squeeze blood out of a turnup and you

[24:22] can't get going to the well all the

[24:24] time. It there's a cap and a limit to

[24:26] that where even right now some

[24:28] developers may um be holding back

[24:31] because of interest rates and whatnot.

[24:33] uh qualifying for loans with banks to

[24:36] invest in their properties might be a

[24:38] little bit too high for them right now.

[24:40] So there is this um angst if you will or

[24:42] some are just keeping their cards to

[24:44] their vest close to their vest and

[24:45] withholding from doing anything. I just

[24:47] don't think this is an appropriate time

[24:48] to do this. I know we maybe haven't done

[24:50] it in a while. Um but I think our

[24:52] budgets are absorbing whatever um

[24:55] outstanding expenses that we are having

[24:57] to face and endure. Um, and I think the

[25:00] present situation is working and I would

[25:02] hope that we would have some other uh

[25:05] revenue streams coming in perhaps marijuana that we're going to

[25:08] look at in a month or two. Um, that we

[25:10] might have some additional income where

[25:12] this probably isn't going to be so much

[25:13] of a factor, but um, anyhow, if you have

[25:17] any more comments, I'm welcome to hear

[25:19] them.

[25:20] >> No, ultimately this this does come down

[25:22] to the the will of the council um, as to

[25:25] like I said, these are market based

[25:26] fees. We set them at a level that we

[25:29] working with departmental staff was

[25:30] appropriate for the market, but not

[25:33] obviously everybody. And so it's up to

[25:35] you as a council to decide where we want

[25:37] to set these fees. And again, costs are

[25:39] occurring, services are being

[25:41] subsidized. They're going to continue to

[25:42] be subsidized no matter what. It's just

[25:44] a question of what level do you want to

[25:46] subsidize it because these are something

[25:48] services that are important to the

[25:49] community.

[25:50] >> Um, it's not just our residents that

[25:52] sometimes have to pay fees. I understand

[25:54] it's business owners, folks that don't

[25:56] live in the city, but nonetheless, they

[25:58] invest in the city because of their

[25:59] business. And that's predominantly um

[26:02] the main uh source where I can see folks

[26:05] having to pay for fees, changes,

[26:07] permitting, you name it, habitually or

[26:10] continually more so than a resident

[26:12] because I believe you stated you you

[26:14] phrased it very well and I wanted to

[26:16] quote you on it. The fees are e are

[26:21] identifiable. They're measurable. the

[26:24] benefits benefit an individual or group

[26:26] and they are like a development permit

[26:28] or inspection and that's very much an

[26:30] accurate description. But that said, um

[26:33] I just know you know folks that are even

[26:35] having to do or wanting to do ADUs

[26:38] presently and they're having to pay a

[26:40] high number of fees and they're even

[26:42] paying fees to the school district um

[26:45] that is in the thousands and that's even

[26:47] out of our hands but it's something that

[26:49] is asked of them from a separate entity.

[26:51] So, we're asking them to pay for

[26:53] inspections and permitting and yet

[26:55] they're having to also pay another

[26:56] entity for for um requirements for

[27:00] school uh fees and whatnot. So, um I've

[27:03] always just been a little bit leerary of

[27:04] this stuff whenever it comes up, but

[27:06] thanks for your time. And if you didn't

[27:09] look at the income of our residents,

[27:10] staff should have, and I'm disappointed

[27:12] that they didn't.

[27:18] » Mr. Mayor, if if I may respond, go

[27:20] ahead.

[27:21] >> You know, I think the point here is that

[27:23] the city is subsidizing fees by the tune

[27:27] of $8 million on an annual basis. And if

[27:30] we're only going to be recovering by

[27:32] making adjustments here, the tune of

[27:34] about uh uh $736,000.

[27:38] I I think that the city is still making

[27:41] an annual massive subsidy uh on fees

[27:44] that are basically personal driven

[27:46] personal choice services. Um, and so if

[27:50] you're not going to make an adjustment

[27:51] in relation to the fee schedule that is

[27:54] being recommended here this evening, you

[27:56] have to realize that in an effort to try

[27:58] and uh protect low-income households

[28:00] from not paying a personal choice

[28:03] service fee, you're making them pay and

[28:05] subsidize for any other household or a

[28:10] developer that, for example, wants to do

[28:12] a project. So, uh, either way, if you're

[28:14] going to adjust the fees slightly and it

[28:17] does impact, uh, households that are of

[28:19] low income that have made a decision

[28:21] that they want to, uh, get involved in

[28:23] something that is a personal choice, um,

[28:27] that seems to me to be a fair oppos

[28:29] proposition as opposed to making those

[28:32] individuals uh, subsidize everyone else

[28:36] in the community uh, even those who are

[28:38] higher income as well as developers uh,

[28:41] in order to preserve serve and protect a

[28:42] lower cost fee for them. So, as the

[28:44] council goes forward and wants to weigh

[28:46] this issue, uh I think this is an

[28:48] important decision for you to make, but

[28:50] also keep in mind that uh I think the

[28:53] discussion in the report points out uh

[28:56] revenues coming into cities are um

[28:59] strained as it is now. uh particularly

[29:02] with uh uh what is going on across the

[29:05] nation uh right now in relation to the

[29:07] impact on uh local revenue sources and

[29:10] as we continue to struggle with trying

[29:12] to produce a balanced budget for your

[29:14] consideration. The fees that you're

[29:16] asking to be the fees you're asked to

[29:18] consider not tonight but at another time

[29:21] when this comes back to you are part of

[29:23] the effort to try and recover uh from

[29:25] what is happening. And one of the big

[29:27] issues that the council is struggling

[29:29] with is in relation to sales tax revenue

[29:32] and how other larger cities that have

[29:35] brought in Amazon and other fulfillment

[29:38] centers into their communities have

[29:39] entered into tax sharing agreements with

[29:41] them and in turn have changed the point

[29:44] of sale uh to that particular community.

[29:48] Uh those taxes for everything that is

[29:51] purchased online is going to those

[29:53] cities. it's not going to the cities of

[29:55] Montlair or the 430 other cities in the

[29:57] state of California that do not have

[29:59] fulfillment centers. Uh so we're losing

[30:01] tax revenues from that perspective as

[30:03] well. So this is one effort to try and

[30:05] recover and I ask that the council uh be

[30:07] open-minded when we do bring it forward

[30:09] for your consideration.

[30:12] » Okay. C Mayor Pen Martinez.

[30:16] >> Hi. No questions. I just wanted to thank

[30:18] you for your time and your presentation

[30:20] and the thoroughess of your report. It's

[30:22] very well written, well thought out.

[30:24] >> Right. Thank you.

[30:26] >> Well, thank you very much. Uh I think

[30:28] the biggest uh cost uh in the city of

[30:32] Montlair, which is many cities, is

[30:34] public safety. Uh which very few of that

[30:37] cost is recovered. Kind of wish, you

[30:39] know, somebody commit a crime, send them

[30:41] a bill, and then uh you know, covers our

[30:44] cost for that. It doesn't it's not the

[30:46] way it works. But you know I I I

[30:48] understand that uh you know we are

[30:50] dealing with tiding propositions right

[30:53] now as far as economy is concerned. I

[30:55] realize budgets here in Monontlair

[30:58] family budgets are also getting tighter.

[31:00] Um I think uh when council member uh

[31:03] Mendes brought up human services, you

[31:05] know, we're talking about $5 million in

[31:07] cost, but uh we're doing a 38.4%

[31:11] recovery based on this proposal.

[31:13] Um and then we go to community

[31:15] development services which is really

[31:17] greatly based on uh those those costs

[31:21] and revenues are really based on um the

[31:24] development community um who come to the

[31:27] counter uh want to build something want

[31:29] to have a use or or have other uh

[31:33] service demands. Um this you know we're

[31:36] looking at a 65.7% recovery here or

[31:38] 642,000 which I think is reasonable uh

[31:41] for those services. um for here in

[31:44] Montlair and that's pretty typical with

[31:46] a lot of other cities too. This is kind

[31:47] of usually community development but the

[31:49] building department the uh the planning

[31:52] division public works division again

[31:54] deal with a lot of the developers um

[31:56] that's where uh those those costs are

[31:59] usually uh a high percentage of that is

[32:02] recuperated by the cities those costs

[32:04] the service provider those costs so at

[32:07] this time um I will move that we just uh

[32:11] direct staff to put this on future city

[32:13] council meeting can I get a second that

[32:14] motion

[32:16] I We'll second that.

[32:18] >> Got to second the motion. Any objections

[32:19] to the motion? If there's no objections

[32:22] to the motion, that's so ordered.

[32:24] Thank you very much.

[32:26] >> Thank you.

[32:26] >> Uh this is the opportunity for members

[32:28] of the public to uh address the uh the

[32:32] council. I don't think any members of

[32:34] the public want us want to talk to us

[32:35] right now. So, we're ajourned. Thank

[32:37] you.

Montclair City Council Workshop - May 4, 2026

Transcript