Resolution 13747 and Staff ReportCITY OF ALAMEDA RESOLUTION NO. 13 7 4 7
AMENDING MASTER FEE RESOLUTION NO. 12191 TO REVISE FEES CHARGED FOR
DEVELOPMENT REVIEW ACTIVITIES TO INCREASE COST RECOVERY
WHEREAS, the Alameda Municipal Code and the California Government
Code provide that the City Council shall set fees reasonable to recover cost of providing
various services by resolution; and
WHEREAS, the City Council, at the August 27, 1991 Special City
Council meeting, directed City Staff to amend the Alameda Municipal Code to reflect
that City fees shall be set by City Council Resolution; and
WHEREAS, Resolution No. 12191 ( "Master Fee Resolution "), as
amended codifies existing fees for various City services and permits.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of Alameda that the fees charged for development review activities be increased, as
outlined in Attachment `B ", attached to the Staff report submitted to City Council on July
20, 2004, to provide 60% cost recovery for the Development Review Division of the
Planning and Building Department.
BE IT FURTHER RESOLVED that pursuant to Ordinance No. 1928, the
City Fees are subject to administrative adjustments not greater than 5% annually over
existing recovery levels.
BE IT FURTHER RESOLVED that all fees established by Master Fee
Resolution No. 12191 which are inconsistent with the fees established by this Resolution
are hereby repealed.
I, the undersigned, hereby certify that the foregoing Resolution was duly and regularly
adopted and passed by the Council of the City of Alameda in a regular meeting of the City Council
on the 20th day of July, 2004, by the following vote to wit:
AYES: Councilmembers Daysog, Gilmore, Kerr, Matarrese,
and Mayor Johnson - 5.
NOES: None.
ABSENT: None.
ABSTENTIONS: None.
IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the official seal of said City this
21st day of July, 2004.
,
(AVON Wel Lara Weisiger, City C1 k
City of Alameda
City of Alameda
Memorandum
Date: July 7, 2004
TO: Honorable Mayor and
Councilmembers
FROM: James M. Flint
City Manager
RE:
Resolutions to amend the Master Fee Resolution No. 12191 to revise and
streamline the Planning & Building Department Fee Schedule and implement
a Community Planning Fee to partially fund ongoing maintenance and
updates to the General Plan and Zoning Ordinance.
BACKGROUND
In order to reduce the Planning and Building Department's reliance on General Fund support,
the Planning and Building Department Cost Recovery Team has been examining ways to
decrease expenses incurred by the General Fund while recovering more of the actual costs for
services offered by the Department. The Department budget is divided into four cost/revenue
centers: Development Review (4110), Policy Environmental (4120), Building Services
Division (4520), and Code Enforcement (4540). Currently, only the Building Services
Division generates sufficient revenues to offset its operating costs. The remaining divisions
generate revenue to cover between 0% and 70% of their operating expenses. No excess
revenue is currently generated to fund ongoing plan updates, ordinary updates and other long-
term planning activities. Funds for these activities are now obtained from the General Fund
and other outside sources, as available.
Over the past 5 years, Division 4110- Development Review has collected revenue equal to
40% of the division's costs. This level of cost recovery has resulted in a $1,755,000 expense
to the General Fund over the past 5 years. This fiscal year, the Planning and Building
Department has been charged with increasing the level of cost recovery in each division to
move toward an eventual goal of 100% cost recovery. Achieving 100% cost recovery will
ensure that the Department' s cost to the General Fund will be eliminated, necessary
Department services will not be affected by the future reductions in General Fund support
and funds can be gradually accumulated to support required updates to city planning
documents. In order to achieve these cost recovery goals, changes to the fee schedule and
implementation of a new Community Planning Fee are proposed. The proposed amendment
to the fee schedule will simplify and streamline fee collection and convert most activities to
time and materials billing to ensure that all actual processing costs are recouped by the city.
Report #4 -E CC
Dedicated to Excellence, Committed to Service 7 -20 -04
Honorable Mayor and
Councilmembers
July 7, 2004
Page 2
This should significantly improve the Development Review Division's cost recovery ratio.
The proposed new Community Planning Fee would allow the city to recover a portion of the
costs necessary to update and maintain the City's General Plan and Zoning Ordinance. Many
local communities have implemented similar fees pursuant to state law that allows
communities to assess a fee for this purpose. The authorization for and basis of the proposed
fee are discussed below.
DISCUSSION
Authority to Assess Fees
State law authorizes local governments to charge fees for services based on the estimated
reasonable cost of providing the service for which the fee is charged. The procedures and
guidelines for establishing or increasing development related service fees are set forth in the
Mitigation Fee Act (Government Code sections 66000, et seq.). The Mitigation Fee Act was
recently amended by AB 2936, effective January 1, 2003, which clarifies existing law by
providing that service fees may "include costs reasonably necessary to prepare and revise the
plans and policies that a local agency is required to adopt before it can make any necessary
findings and determinations."
Community Planning Fee
Planning and Building Department staff analyzed the costs for maintenance and
comprehensive updates of the General Plan and for ensuring that the Zoning Ordinance
reflects the requirements of State law and is consistent with the General Plan. The intent of
this analysis was to identify and develop a reasonable estimate for the costs to maintain these
essential planning documents.
There are three primary beneficiaries of the City having an updated General Plan and Zoning
Ordinance: the community -at- large, the existing property owners, and new development.
Alameda's General Plan is the official policy document regarding the future character and
quality of development within the City and serves as a guide to this development. The
community -at -large benefits from an updated General Plan as it provides the foundation for a
well - planned community, and includes planning for transportation, parks and open space,
land use, housing, health and safety, community design, shoreline access, and community
facilities. The community -at -large presently helps contribute to the maintenance of the
General Plan through taxes deposited into the General Fund.
Existing property owners receive tangible financial benefits from an updated General Plan.
Property owners see an increase in their property values because the City of Alameda is a
well - planned city with roads and infrastructure that are adequate to the needs placed on
them, 'with parks and open space that contribute to a high quality of life, and with the services
and facilities necessary to address community needs. If the City did not maintain the planning
efforts necessary to ensure these benefits quality of life in the City could decline with
accompanying impacts on existing property values. In addition, the City's authority to grant
any type of development permit could be challenged if the General Plan is found to be
inadequate. The value that existing property owners gain from the potential to add
Dedicated to Excellence, Committed to Service
• Honorable Mayor and
Councilmembers
July 7, 2004
Page 3
improvements to their existing homes and businesses could be lost if the General Plan is not
adequately maintained. Additionally, the Zoning Ordinance is the essential regulatory tool by
which the General Plan is implemented. Without an adequate zoning ordinance in
conformance with State law, the benefits of the General Plan would also not be realized.
New development obtains the most direct benefit from the General Plan and Zoning
Ordinance. Developers seeking to locate a new development in Alameda make a profit by
taking advantage of the high property values in Alameda, values that are due in part to the
quality of the community. One of the primary goals of the General Plan is to guide future
development and ensure that the City' s facilities are adequate to the task of accommodating
expected new development. Therefore, a larger share of the effort associated with
maintaining a General Plan has to do with planning for future development. As noted above,
absence of an adequate General Plan and Zoning Ordinance can lead to the loss of authority
to allow for new development. This could significantly delay or prevent proponents from
going forward with their projects, causing delay costs and lost opportunities.
Currently, property owners and project proponents benefit from the General Plan and Zoning
Ordinance without directly paying for it because the community -at -large through the General
Fund covers all of the costs of updating and maintaining the General Plan and Zoning
Ordinance. Implementation of a Community Planning Fee on all permits issued by the Permit
Center would provide a new funding mechanism for property owners and developers to share
in the cost of maintaining and updating the Zoning Ordinance and General Plan.
It is difficult to place an exact monetary value on the benefits mentioned above. Because
property owners and project proponents receive direct benefits through enhanced property
values, new development and the ability to improve property, it is estimated that property
owners and new development receive far more than 50% of the benefits. The Community
Planning Fee, as proposed is estimated to provide for approximately 70% of the cost of
maintaining and implementing the General Plan and Zoning Ordinance. The proposed fee
would be calculated as a percentage of project valuation. Planning and Building Department
staff has estimated permit valuations will average $100,000,000 annually for the next five to
ten years. In addition, the cost of funding three planning positions dedicated to these
activities totals approximately $357,287.00.
Cost of maintaining and updating the General Plan and Zoning Ordinance
In developing the Community Planning Fee proposal, Planning and Building staff evaluated
the current costs of maintaining and updating the City' s General Plan and Zoning Ordinance.
The primary components of these costs are comprehensive General Plan updates, routine
General Plan and Zoning Ordinance amendments, and associated map changes. Recently, the
City of Alameda spent a considerable amount of funds on the Northern Waterfront Plan,
($400,000) the Housing Element ($100,000) and the Alameda Point General Plan
Amendment ($200,000). Cities typically perform comprehensive General Plan updates every
10 years, depending on the time horizon outlined in the General Plan. In between
comprehensive updates, city staff must often perform smaller updates or minor amendments
and update land use maps in order to ensure the relevance of the policies and regulations.
Dedicated to Excellence, Committed to Service
Honorable Mayor and
Councilmembers
July 7, 2004
Page 4
Sometimes, minor General Plan update work is required to accommodate a specific
development, however, the developer pays for those specific requests. Additionally, the
Housing Element of the General Plan is required by State Law to be updated every 5 years.
The City of Alameda last comprehensively updated its General Plan in 1991. Each update to
the General Plan creates a significant cost burden for the City. It is estimated that the next
comprehensive update to Alameda's General Plan will cost approximately $1 million,
including staff and consultant work and preparation of an Environmental Impact Report.
Additionally, Planning staff spends, on average, $35,000 per year on routine General Plan &
Zoning Ordinance text and map amendments. This General Plan work includes General Plan
interpretation, City- initiated General Plan Amendments, review of the General Plan, and
preparation of annual reports. Currently, the City of Alameda General Fund covers all of the
costs of General Plan updates and Zoning Ordinance maintenance.
Based on the cost figures above, the annual General Plan/Zoning Ordinance maintenance
costs are approximately $35,000. Assuming a ten -year General Plan life and an update cost
of $1 million, the comprehensive update adds an additional $100,000 to the cost per year,
resulting in an annual unfunded update and maintenance cost of approximately $135,000.
Combining these costs results in an estimated annual cost of $492,286.80.
Effect on the Cost of Permits
Types and valuations for permits have a broad range in Alameda. To illustrate the effect of
the proposed Community Planning Fee on the price of permits, the Planning and Building
Department found that the average permit issued is for work valued at approximately
$50,000. The Table below illustrates the potential increase to the cost of an average permit
depending upon the Community Planning Fee recovery cost chosen.
Community
Planning Fee
Options
Approximate Goal
Cost Recovery
Level
Increase in
Average
Permit Fee
Projected
Annual Revenue
Generated
0.4% (1)
100%
$200.00
$400,000
0.3% (1)
75%
$150.00
$300,000
0.2% (1)
50%
$100.00
$200,000
(1) Expressed as a percentage of project valuations assuming 100 million dollar per
year valuation for all permits issued.
Research in Other Local Agencies
Other local agencies throughout the state have also been challenged with the issue of cost
recovery for General Plan/Zoning Ordinance updates and maintenance. Below is a table that
summarizes the fees imposed in other communities for this type of effort.
Dedicated to Excellence, Committed to Service
Honorable Mayor and
Councilmembers
July 7, 2004
Page 5
Agency
Amount of Fee Imposed
Permit Types on which Fee is
Imposed
City of Belmont
15% of project value (to cover
comprehensive update costs only)
All building permits
Town of Tiburon
10% of building permit fee (to cover
comprehensive and annual
maintenance /update costs)
All building permits
City of Riverside
10% of building permit fee (to
cover comprehensive and annual
maintenance /update costs)
All development
applications (entitlement
applications and building
permits)
City of San Rafael
15% of building permit fee (to
cover comprehensive update costs
only)
All building permits
City of Fremont
15% of the building permit fee (to
cover comprehensive and annual
updates)
All building permits
City of Daly City
0.5% of project valuation
All building permits
CITY OF
ALAMEDA
(Proposed)
0.3% of the project valuation for
each permit (to cover comprehensive
and annual maintenance /update
costs)
All Permits issued by the
Permit Center
Development Review Fee Schedule Streamlining
In order to improve the efficiency of the fee schedule, the Planning and Building Department
staff reviewed all services provided and fees charged by the Development Review Division.
The review of fees charged revealed a complex set of fees for services
That, in some cases, has little correlation to the amount of staff time required to provide these
services. The current master fee schedule lists over 80 separate fee categories for
development review activities. Eleven (11) different fee categories exist just for Major
Design Review applications. The proposed schedule would reduce the overall number of fee
categories to 60 including reducing the fee categories for Major Design Review from 11 to 6
categories. In order to ensure that the actual costs of processing applications are recovered by
the city, the fee schedule is proposed to be revised to reflect the actual average costs of
processing each type of activity. Under the proposed fee schedule each development review
activity would be assessed a base fee to cover initial application intake and review costs.
Additionally, a deposit of $250 to $2,500 would be collected at the time of application
submittal on all but over - the - counter activities. The majority of all development applications
processed by the Department (Design Review, Use Permits, Variances, etc.) would require
either a $250.00 or $750 deposit. The current schedule can require a deposit of up to $1,500
Dedicated to Excellence, Committed to Service
Honorable Mayor and
Councilmembers
July 7, 2004
Page 6
for these application lines. Actual staff time and expenses, including the base fee, will be
charged against the deposit. All funds remaining at the end of the review process will be
returned to the applicant.
BUDGET CONSIDERATION/FISCAL IMPACT
If the proposed fee schedule amendment is authorized, it is expected to provide an increase in
the Development Review Division's 5 -year cost recovery average from 40% to 70 % +. This
can amount to an annual savings to the General Fund of $150,000, or more than $1.5 million
over the next 10 years. Reducing the complexity of the fee schedule would also align with
two of the City's strategic initiatives: to provide improved customer service and promote
employee productivity and well- being.
If the Community Planning fee recovery is implemented, a substantial portion of the cost of
updating and monitoring the General Plan and Zoning Ordinance can be shifted from the
General Fund. This could result in a savings of $2 million to the General Fund over the next
ten years. Unused deposit funds will be returned to project proponent within 30 days of
permit issuance.
MUNICIPAL CODE CROSS REFERENCE
Alameda Municipal Code Section 30 -26 is affected by this staff report. The Master Fee
Resolution No. 12191, referenced in Section 30 -26 would be amended.
ENVIRONMENTAL REVIEW
The project is statutorically exempt per CEQA Section 15273 — Rates, Tolls, Fares, and
Charges.
RECOMMENDATION
The City Manager recommends that the City Council adopt the attached Resolutions to
Amend the Planning and Building portion of Master Fee Resolution No. 12191 to streamline
the fee schedule and implement a Community Planning Fee at the 0.3% rate to achieve
approximately 75% cost recovery for general plan and zoning updates and related activities.
By:
Respectfully Submitted,
Gregory Fuz
Planning and Building Director
Vivian L. Day
Building Services Manager
Dedicated to Excellence, Committed to Service
Honorable Mayor and
Councilmembers
GF:vld
July 7, 2004
Page 7
Attachments:
A. Current Master Fee Sheets for the Planning Division
B. Proposed Master Fee Sheets for the Planning Division
J:\Planbldg.adm \Con espondence \Community Planning and Revised Fee Staff Report 10- 7- CC.doc
Dedicated to Excellence, Committed to Service
ATTACHMENT A
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ZONING APPLICATIONS
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The Planning & Building Director shall set a deposit schedule
State Fish and Game Fee (collected by Alameda County Clerk from the City for the State)
PLANNING & BUILDING DEPARTMENT CON
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See other departments for additional
APPLICATIONS:
PRELIMINARY PLAN
Parcel Map (4 or fewer lots)
Tentative Map (5 or more lots)
CONDOMINIUM CONVERSION
CERTIFICATE OF COMPLIANCE 1
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ENVIRONMENTAL REVIEW
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a. Payment of the development fees on an installment basis, subject to the applicant entering in1
schedules, interest, and security.
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ENFORCEMENT - See Permit Center activity investigative fee
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Performance Agreement to allow occupancy be
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ENT (SEE PERMIT CENTER- INCORPORATED WITH OTHER DEPTS.)
m (included $25 Alameda County Clerk fee)
State Fish and Game Fee (collected by Alameda County Clerk from the City for the State)
on outside preparation of Initial Study, Negative Declaration or EIR
Additional inspections: There will be a T & M charge for additional inspections required
REQUEST FOR PAYMENT OF PARKING -IN -LIEU FEE
CHANGES IN HISTORICAL BUILDING STUDY LIST CLASSIFICATION
EEMENT TO ALLOW OCCUPANCY BEFORE COMPLETION
IInvestigation Fees - work without permit 4 x permit fee
;CUPANCY PERMITS
ZONING COMPLIANCE DETERMINATION 1
DEMOLITION CERTIFICATE OF APPROVAL
CERTIFICATE OF COMPLIANCE
ENVIRONMENTAL REVIEW
Mitigation Monitoring
a. DeMinimums finding
HOME OCCUPATION
HISTORICAL SIGN DESIGNATION
Records management fee per page
IT & M = Time and Materials
Initial Study
ve Declara
Fee (Perm
W
U
Revised Fees 04 -05