REPORT TO COUNCIL
SUBJECT
Title
Annual Review of Proposed Fees and Charges for Fiscal Year 2024/25
Report
REPORT IN BRIEF
The fees and charges of the City are reviewed and adjusted each year in accordance with Council Policy 7.1.1 (Fiscal-Long Range Goals and Financial Policies). This annual evaluation ensures that all fees and charges of the City are aligned with the cost to provide fee-related services, except for those fees that are legally limited, market based, or subsidized per Council direction.
After a detailed staff review of fees, necessary adjustments have been made to the proposed Fee Schedule. Fees that are legally limited remain unchanged. Periodically, staff reviews various fees in detail and adjusts them for cost of service, usually once every three to five years. In the intervening periods, fees are adjusted by a general inflation factor. Those fees that did not receive a detailed cost of service review are proposed to increase 4% based on changes in the City's personnel costs. Fees related to construction price changes are proposed to increase 9.42% in accordance with the Construction Cost Index (CCI) year-over-year change for the period of December 2022 to December 2023, as reported by Engineering News-Record. Another benchmark used to assess the change in certain impact fees for commercial or residential real estate development is the Consumer Price Index for Urban Consumers for the San Francisco-Oakland-Hayward Area (CPI-U SF), which increased by the annual average of 3.7% from 2022 to 2023.
The Recommended FY 2024/25 Fee Schedule (Attachment 1) details all proposed fees. Most fees become effective at the start of the new fiscal year, with the exception of development impact fees which are required to become effective 60 days after adoption pursuant to Government Code Section 66017. These fees will become effective on August 16, 2024.
Each year, the City Council reviews recommended changes to the City's fees and charges. The June 4, 2024 public hearing is to allow public input and comment on proposed fees and charges. This hearing on the proposed fees will be followed by Council consideration to adopt updated and new fees on June 18, 2024.
BACKGROUND
The attached Fee Schedule references all City fees, except the proposed utility rates, SMaRT® Station Public Haul Gate rates, and fees for recreation services. Fees related to utility services (i.e., water, garbage, and sewer) are being adopted on June 25, 2024 by separate Council action when the utility rates are set (RTC No. 24-0246). SMaRT Station® Public Haul Gate Rates are established administratively by the Director of Environmental Services based upon disposition costs for recyclables and residues; allowing the flexibility to adjust rates as market conditions change as is the normal practice for transfer stations and disposal facilities. Fees for recreation services are established administratively by the Director of Library and Recreation Services. Those fees are established based upon market conditions and Council adopted policies to ensure fairness and accessibility.
EXISTING POLICY
Council Policy 7.1.1 Fiscal -Long Range Goals and Financial Policies:
7.1B.5.2 - User charges and fees should be adjusted at least annually to avoid sharp changes.
7.1B.5.4 - User fees should be established at levels which reflect the full cost of providing those services.
7.1B.5.5 - Council may determine for any service whether a subsidy from the General Fund is in the public interest.
California Government Code Section 66016(a): Prior to levying a new fee or service charge, or prior to approving an increase in an existing fee or service charge, a local agency shall hold at least one open and public meeting, at which oral or written presentations can be made, as part of a regularly scheduled meeting. Further, pursuant to Government Code Section 66018, a published notice for this public hearing has been printed in the Sunnyvale Sun.
ENVIRONMENTAL REVIEW
The annual review of the City’s fees and charges does not require environmental review under the California Environmental Quality Act (CEQA) because it is a fiscal activity that does not commit the City to a specific project that will have a significant effect on the environment. (CEQA Guidelines, Section 15378(b)(4).)
DISCUSSION
Council Fiscal Policy guides staff to set fees for services to recover cost where possible and legally allowed. Staff continues to ensure that all fees not legally limited, market based, or subsidized, provide for full cost recovery. The results of these efforts have been incorporated into the Recommended FY 2024/25 Fee Schedule (Attachment 1); the proposed Schedule details all recommended fees. For ease of administration, many fees have been rounded to the nearest logical unit.
The City’s proposed annual inflation rate of 4% is an average derived from the City’s year-over-year changes of citywide personnel costs. Fees related to construction price changes are proposed to increase 9.42% in accordance with the CCI year-over-year change for the period of December 2022 to December 2023, as reported by Engineering News-Record. For the CPI-U SF, the United States Bureau of Labor Statistics shows an annual average increase of 3.7% from 2022 to 2023. New fees or fees that are proposed to be adjusted by an amount greater than the factors discussed above are detailed below. Administrative updates and descriptive language updates are highlighted in red.
New Fees
Environmental Services Department
Section 9.10 Administrative Citation Fine Schedule for Stormwater Management Violations, D. Denial of Access
The Sunnyvale Municipal Code requires property owners to allow access to City personnel for inspection, sampling, and other data collection related to stormwater pollution control. Staff proposes to establish a fine for denial of required access. A similar fine is currently included in the fee schedule for denial of access related to wastewater requirements.
Non-Standard Fee and Charge Adjustments
The following fees are adjusted by an amount other than the City’s labor rate increase, CCI inflation increase, or CPI-U SF inflation increase:
General
Section 1.01 Copies of Printed Material, Section 2.01 Copies of Sunnyvale Municipal Code (SMC), and Section 7.01 Copies of Materials, B. Informal Traffic Discovery Documents, C. Public Records Request Documents
Copies of records can be made available at direct cost recovery except for statutory fees as applicable per Government Code Section 7922.530. Staff evaluated the cost of materials and cost of providing copies of records. Since determining the staff time to provide the service is variable, staff also benchmarked neighboring cities and found a range of $.14 to $.29 per single sided copy. As a result of their findings evaluating the costs associated with copies, staff recommend an incremental increase, 50%, which is a fee of $.15 per copy. An exception applies to copies related to Section 3.01 Political Reform Act Materials, A. Copies of Fair Political Practices Commissions Forms, is limited to $.10 per impression as noted in California Government Code Section 81008.
Department of Community Development
Section 4.02 Planning Permit Fees, K. Other Planning Fees, K9. Park Dedication In-Lieu Fee - Average Fair Market
The Park Dedication In-Lieu Fee - Average Fair Market fee is proposed to be reduced from FY 2023/24, $180.00 per square foot to FY 2024/25, $151.00 per square foot. This reduction was a result of a recent land sale survey and subject to Housing Element Program H19.
Section 4.03 Building Division Fees, D3. Photovoltaic Systems.
Staff propose Photovoltaic Systems fee updates as outlined below to account for Technology fee and Issuance fee. The fee has been set to collect maximum amount allowed by state per Government Code Section 66015 resulting in a lower fee.
|
|
Fee |
FY 2023/24 |
FY 2024/25 |
Unit |
|
D3 |
Photovoltaic Systems |
|
|
Single Family, Two Family and Townhomes |
$440.00 |
$392.00 |
Per Permit |
|
|
All Other Residential, Commercial, Industrial, Retail and Office |
|
|
50 kW or less |
$917.00 |
$916.00 |
Per Permit |
|
|
50kW - 250 kW |
$917 + $7 per kW above 50 kW |
$916 + $7 per kW above 50 kW |
Per Permit |
|
|
> 250+ kW |
$2,317 + $5 per kW above 250 kW |
$2,249 + $5 per kW above 250 kW |
Per Permit |
Section 4.04 Fire Protection Engineering Fees, A. General Fees, A6. Inspection Cancellation Fee.
Staff propose to align the Fire Protection Engineering Inspection Cancellation Fee and the Fire Prevention Inspection Cancellation Fee. The new fee would $312.00 which is a 2% increase from $306.00.
Department of Public Safety
Department staff evaluated fees related to services that require DPS personnel activity with the goal of cost recovery. The previous evaluation took place in FY 2017/18. Staff were surveyed to determine time to complete the task and identify what tasks were performed. As a result of the survey completed, below is a list of proposed fee changes and percent of change.
Section 7.02 Police Services
|
|
Fee |
FY 2023/24 |
FY 2024/25 |
% Change |
|
B |
Vehicle Mechanical or Registration Violation Citation Correction Verification (Fix-it Ticket Sign Off) |
$38.00 |
$48.00 |
26.32% |
Section 7.03 Other Permits and Services
|
|
Fee |
FY 2023/24 |
FY 2024/25 |
% Change |
|
A |
Concealed Weapons Permit* 50% to be collected at time of application, 50% to be collected at issuance of permit |
$238.00 |
$518.00 |
117.65% |
|
|
Amend an Existing License |
$10.60 |
$106.00 |
900.00% |
|
|
Concealed Weapons Permit Renewal |
$26.00 |
$425.00 |
1534.62% |
|
B |
Secondhand Dealer/Pawnbroker Permit - One Owner |
$626.00 |
$513.00 |
-18.05% |
|
|
Additional Owner(s) |
$146.00 |
$132.00 |
-9.59% |
|
|
Permit Renewal |
$542.00 |
$445.00 |
-17.90% |
|
D |
Firearms Sales Permit (New) |
$340.00 |
$383.00 |
12.65% |
|
|
Additional Owner(s) |
$146.00 |
$191.00 |
30.82% |
|
|
Firearms Sales Permit (Renewal) |
$194.00 |
$222.00 |
14.43% |
|
F |
Officer Contract Overtime |
$204.00 |
$265.00 |
29.90% |
|
|
Administrative Fee - Per Event |
$116.00 |
$154.00 |
32.76% |
|
G |
K-9 Officer Deployment Instate (outside Santa Clara County) |
$245.00 |
$245.00 |
0% |
|
|
K-9 Officer Deployment Out of State |
$245.00 |
$245.00 |
0% |
|
H |
Peddler/Solicitor License |
$276.00 |
$288.00 |
4.35% |
|
I |
Juvenile Diversion Fee |
$21.00 |
$24.00 |
14.29% |
|
M |
Explosives Handling Permit |
$141.00 |
$151.00 |
7.09% |
|
N |
Adult Establishment License |
|
|
Application (includes background for first owner) |
$6,105.00 |
$6,445.00 |
5.57% |
|
|
Annual Renewal (includes background for first owner) |
$5,991.00 |
$6,393.00 |
6.71% |
|
|
Additional Owner(s) |
$146.00 |
$218.00 |
49.32% |
* As of January 1, 2024, change to the law lifts fee restrictions and allows agencies to recover full costs of permit processing for Concealed Weapons Permits, new, existing and renewals (background investigations excluded.) Previously the fees only increased by CPI.
Section 7.05 Vehicle Release Fee
|
|
Fee |
FY 2023/24 |
FY 2024/25 |
% Change |
|
A |
Vehicle Release Fee |
$174.00 |
$180.00 |
3.45% |
|
B |
Post Storage Hearing Fee |
$138.00 |
$164.00 |
18.84% |
Section 7.06 Massage Establishments, A. Massage Establishment Permit (Not Certified with CAMTC*)
|
|
Fee |
FY 2023/24 |
FY 2024/25 |
% Change |
|
A1 |
Massage Establishment Permit (Not Certified with CAMTC*) |
|
|
New Business (includes background for one owner) |
$1,522.00 |
$1,634.00 |
7.36% |
|
|
Existing Business |
$1,440.00 |
$1,344.00 |
-6.67% |
|
|
Additional Owner(s) initial application |
$146.00 |
$218.00 |
49.32% |
|
A2 |
Sole Proprietor |
|
|
New Business (includes background for one owner) |
$584.00 |
$639.00 |
9.42% |
|
|
Existing Business |
$584.00 |
$400.00 |
-31.51% |
|
A3 |
Amendments |
$37.00 |
$46.00 |
24.32% |
*CAMTC (California Massage Therapy Council)
Section 7.06 Massage Establishments, B. Massage Establishment Permit (Owner CAMTC* Certified)
|
|
Fee |
FY 2023/24 |
FY 2024/25 |
% Change |
|
B1 |
Fixed Location (on premise with or without outcall services) |
|
|
New Business (includes background for one owner) |
$1,440.00 |
1,582.00 |
9.86% |
|
|
Existing Business |
$1,440.00 |
$1,344.00 |
-6.67% |
|
|
Additional Owner(s) initial application |
$146.00 |
$166.00 |
13.70% |
|
|
Sole Proprietor - New or Existing |
$504.00 |
$587.00 |
16.47% |
|
|
Amendments |
$37.00 |
$46.00 |
24.32% |
|
B2 |
Outcall Only (no on-premises service or treatment of clients) |
|
|
New (single owner) |
$132.00 |
$201.00 |
52.27% |
|
|
Existing (single owner) |
$132.00 |
$167.00 |
26.52% |
|
|
Additional Owner(s) initial application |
$12.00 |
$166.00 |
1383.33% |
|
|
Amendments |
$37.00 |
$46.00 |
24.32% |
*CAMTC (California Massage Therapy Council)
Section 7.10 Animal Control Services Fees and Charges, D. Other Fees
|
|
Fee |
FY 2023/24 |
FY 2024/25 |
% Change |
|
D1 |
Field Service Charge, per trip |
$145.00 |
$145.00 |
0.00% |
|
D6 |
Inspection Fee |
$170.00 |
$215.00 |
26.47% |
|
D7 |
Re-Inspection Fee |
|
|
First 1/2 hour (minimum) |
$50.00 |
$72.00 |
44.00% |
|
|
Each Hour |
$100.00 |
$143.00 |
43.00% |
Section 7.04 Response Fees, B. Alarms
Fees for alarm permitting are based on a survey of county-wide similar services and aligned within the market range for those services. A review of similar fees in other local agencies indicate that the current fees for Alarm Permits are comparable and not in need of inflation.
Section 7.10 Animal Control Services Fees and Charges
Fees for animal control services are based on a survey of county-wide similar services and aligned within the market range for those services. A nominal increase to some license fees in Animal Control Services is recommended based on a fee survey of similar services in other local cities. Additionally, as an incentive to neuter pets, fees are lower than average for altered pets and higher than average for unaltered pets.
Department of Public Works
Section 8.02 Development Projects, A. Public Record Drawing Maintenance Fee.
The FY 2023/24 fee of $191.00 per sheet was based on the cost to convert records to be incorporated into the City’s GIS system through a previous vendor. Recently, the cost has increased to $1,000.00 per sheet due to pricing structure changes and acclimating to a new vendor. Since the GIS integration supports operations performed by City staff, staff propose to increase the fee from $191.00 to $300.00 per sheet (57% increase) to recover a portion of the fee while exploring options to lower the cost of this activity.
Section 8.02 Development Projects (M3 & M4) Public Improvement Construction (costs greater than $50,001)
For FY 2024/25, staff proposes applying the standard labor inflation of 4% to the base fee for Public Improvement Engineering Plan Check and Inspection Fee. Staff reviewed how the fee was calculated for projects over $50,001 and $100,001 and noticed some inconsistent application of inflation at the higher levels. Staff determined one application for the base fee is appropriate. The result is a lowered fee for projects over $50,001.
|
|
Fee |
FY 2023/24 |
FY 2024/25 |
Unit |
|
M1. |
Public Improvement Construction (costs up to $10,000) |
$6,453.00 |
$6,711.00 |
Per Project |
|
M2. |
Public Improvement Construction (costs from $10,001 to $50,000) |
$6,453 plus 35% of cost > $10,000 |
$6,711.00 plus 35% of cost > $10,000 |
Per Project |
|
M3. |
Public Improvement Construction (costs from $50,001 to $1,000,000) |
$22,627 plus 5% of cost >$50,000 |
$20,711 plus 5% of cost >$50,000 |
Per Project |
|
M4. |
Public Improvement Construction (costs $1,000,001 and up) |
$75,395 plus 2% of cost > $1,000,000 |
$68,211 plus 2% of cost > $1,000,000 |
Per Project |
Section 8.03 Transportation/Traffic Fees, C. Residential Parking Permit Parking
Staff propose to increase the Residential Parking Permit Parking Fee from $22.00 to $25.50, which is a 15.9% increase. The proposed increase is associated with the increased costs to print the parking stickers.
Section 8.06 Municipal Golf Course Green Fees
Golf customers play at Sunnyvale Golf Courses based on cost, location, and quality of the course. If fees are raised beyond what other courses are charging, demand and revenue may decrease. Staff completed the annual Golf Market Survey (Attachment 2) and propose to align fees with neighboring courses with the below recommended fee increases. Included with the increases, staff are also proposing to implement dynamic pricing for Weekday and Weekend/Holiday, 18 hole play for non-residents during prime course usage times. Benchmarking showed dynamic pricing was also being offered at other south bay golf courses including Moffett Field Golf and Baylands Golf.
• Weekday
o Sunnyvale - Resident (18 Holes) - $41 to $42
o Sunnyvale - Non-Resident (18 holes) - $45 to $46-$51*
o Sunnyvale - Senior 60+ (18 Holes) - $34 to $35
o Sunnyvale - Junior ≤16 (18 Holes) - $16 to $17
o Sunnyvale - Morning Back (9 Holes) - $34 to $35
o Sunken Gardens - Resident (9 Holes) - $22 to $23
o Sunken Gardens - Non-Resident (9 Holes) - $24 to $25
o Sunken Gardens - Junior ≤16 (9 Holes) - $16 to $17
• Weekday Twilight (starts at 1pm)/Replay
o Sunnyvale - (18 Holes) - $34 to $35
o Sunnyvale - Super Twilight (starts at 4pm) (18 Holes) - $24 to $25
o Sunnyvale - Replay (18 Holes) - $23 to $24
o Sunnyvale - Junior ≤16 (18 Holes) - $16 to $17
o Sunken Gardens Replay (9 Holes) - $16 to $17
• Weekend/Holiday
o Sunnyvale - Resident (18 Holes) - $53 to $54
o Sunnyvale - Non-Resident (18 holes) - $59 to $60-$70*
o Sunnyvale - Junior ≤16 (18 Holes) - $24 to $25
o Sunnyvale - Morning Back (9 Holes) - $36 to $37
o Sunken Gardens - Resident (9 Holes) - $25 to $26
o Sunken Gardens - Non-Resident (9 Holes) - $28 to $29
o Sunken Gardens - Junior ≤16 (9 Holes) - $16 to $17
• Weekend/Holiday - Twilight (starts at 1pm) /Replay
o Sunnyvale - Resident (18 Holes) - $34 to $35
o Sunnyvale - Non-Resident (18 Holes) - $39 to $40
o Sunnyvale - Super Twilight (starts at 4pm) (18 Holes) - $29 to $30
o Sunnyvale - Replay (18 Holes) - $23 to $24
o Sunken Gardens - Resident Replay (9 Holes) - $16 to $17
o Sunken Gardens - Non-Resident Replay (9 Holes) - $18 to $19
o Sunken Gardens - Junior ≤16 (9 Holes) - $16 to $17
• School Team Play
o Sunnyvale - Sunnyvale Schools (18 Holes) - $750 to $800
o Sunnyvale - Non-Sunnyvale Schools (18 Holes) - $800 to $850
• Sunnyvale Advantage Card (Residents Only)
o Sunnyvale (18 Holes) $250 to $260
o Sunken Gardens (9 Holes) - $175 to $185
• Resident Golf Discount Card (Senior 60+, Junior ≤16, Disabled Only)
o Sunnyvale (18 Holes) - $225 to $235
o Sunken Gardens (9 Holes) - $160 to $170
• Non-Resident Monthly Card
o M-F Sunnyvale (18 Holes) - $285 to $295
• Tournament Fee
o Sunnyvale - Cart Fee Per Person (18 Holes) - $17 to $18
o Sunken Gardens - (9 Holes) - $4 to $5
* Dynamic Pricing for Sunnyvale Golf Course
Department of Environmental Services
Section 9.06 Groundwater to Sewer Discharge, A. Annual Discharge Permit and B. One-Time Discharge Permit
Fees were re-calculated for Sewer Discharge permits to reflect the actual cost of issuing the permits.
• Annual Discharge Permit
o Up to 10,000 gallons $1,453.00 to $1,515.00 Per Gallon
o Up to 50,000 gallons $1,774.00 to $1,865.00 Per Gallon
o Up to 100,000 gallons $2,175.00 to $2,320.00 Per Gallon
o Up to 200,000 gallons $2,977.00 to $3,177.00 Per Gallon
o Up to 300,000 gallons $3,780.00 to $4,051.00 Per Gallon
o Up to 400,000 gallons $4,582.00 to $4,925.00 Per Gallon
o Up to 500,000 gallons $5,384.00 to $5,800.00 Per Gallon
• One-Time Discharge Permit
o Up to 10,000 gallons $937.00 to $979.00 Per Gallon
o Up to 50,000 gallons $1,258.00 to $1,329.00 Per Gallon
o Up to 100,000 gallons $1,659.00 to $1,766.00 Per Gallon
o Up to 200,000 gallons $2,461.00 to $2,640.00 Per Gallon
o Up to 300,000 gallons $3,264.00 to $3,514.00 Per Gallon
o Up to 400,000 gallons $4,066.00 to $4,389.00 Per Gallon
o Up to 500,000 gallons $4,868.00 to $5,263.00 Per Gallon
Deletions
General
Section 1.01 Copies of Printed Material, C. Copies on Compact Discs (CD)
Staff propose to eliminate Copies on Compact Discs (CD) since CD burners are no longer standard equipment for staff desktops. The majority of inquiries request emailed copies.
Department of Public Safety
Section 7.06A Massage Establishment Permit (Not Certified with California Massage Therapy Council [CAMTC]), A3. Outcall Only (no on-premise service or treatment of clients)
Since an outcall massage provider must be CAMTC certified pursuant to Sunnyvale Municipal Code Chapter 9.41, staff propose to delete the fee for Massage Establishment Permit for not certified with CAMTC, A3. Outcall Only, new business, existing business and additional owners’ initial application.
Fees Not Expected to Cost Recover
General
Section 1.06 Public Charging Station Use Fee, A. Public Charging Station Use Fee
To align with Sunnyvale’s Climate Action Plan policy OVT-1 Clean Alternative Motor Vehicles and Fuels, staff propose to maintain the $1.50 per hour fee for public charging stations. In FY 2024/25 staff plan to consider how pricing supports electric vehicle adoption and benchmarking nearby municipalities to determine future fee adjustments.
Department of Community Development
Section 4.06 Housing Division Fees, Below Market Rate (BMR) Program Fees
To align with Housing Goals, Policy H-2 Affordable Housing and Home Buyer Assistance all Below Market Rate Program Fees are proposed to be flat and no inflation applied.
FISCAL IMPACT
Most new fees become effective at the start of the new fiscal year on July 1, 2024. Exceptions are changes to Development Processing fees (i.e., filing, accepting, reviewing, approving, or issuing of an application or permit) and mitigation fees; these become effective 60 days after adoption (in accordance with California Government Code Section 66017). The impact of proposed adjustments to these fees has been incorporated in the FY 2024/25 Recommended Budget. Attachment 1 presents the Recommended FY 2024/25 Fee Schedule with proposed fees and charges.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
Notice of the public hearing on the proposed fees and charges was published in the Sunnyvale Sun on May 17, May 24, and May 31. Notice was sent to the Building Industry Association and the Tri-County Division of the California Apartment Association, which requested notice pursuant to the Government Code. Boards and commissions wishing to make comments, suggestions, or recommendations may testify at the public hearing.
STAFF RECOMMENDATION
Recommendation
Conduct a public hearing in order to solicit public input and provide direction to staff on any fee requiring further review prior to the June 18, 2024 Council meeting where the proposed schedule will be considered for adoption.
Staff
Prepared by: Nancy Grove, Senior Management Analyst
Reviewed by: Felicia Silva, Budget Manager
Reviewed by: Dennis Jaw, Asst. Director of Finance
Reviewed by: Tim Kirby, Director of Finance
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. FY 2024/25 Recommended Fee Schedule
2. 2024 Golf Fee Market Survey