[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.