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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by Master Fee Resolution No. 12191 which are inconsistent with the fees established by this Resolution are hereby repealed.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 DEPOSIT 1 00 00 0 MM 69 MM ors + 0 69 06 + 00 00 Ln a- 69 2 I- 0 CO 69 M 05 + 00000 0000 0 CO 6H M ors + Ln - 69 2 ors + Ln - 69 2 ors + Lf) -(f} 69 2 ors + L0 N- 2 ors + 0 0 In 69 2 ors + 000 0L0Ln Ln a -69.69 69 222 ors + N- ors + f� ors + 0 0 0 CO 69 2 otS + +T &M $15001 ■ d' M 69 d- co. E9 CD N co 69 $1,347 d- co t N. co H9 N. CO CO t-- CO E9 N- CD E9 N. CD 699- $3381 d- M 6g $3381 Staff time shall be charged at 200% of the highest hourly rate per position. ZONING APPLICATIONS IAmendment to the General Plan Diagram or Text of Chapter 30 "Development Regulations" of the Alameda Municipal Code line Planning & Building Director shall set a deposit schedule Extension of Development Plan not yet vested 1 evelopment Agreement SING DEPARTME Master Plan /Development Plan: Master Plan Master Plan Amendment Development Plan Development Plan Amendment Planned Development: IPlanned Development Final Development Plan Development Agreement: � IDevelopment Agreement IT & M = TIME AND MATERIALS Amendments: Rezoning to add a P All other rezonings 3velopmei c 0 N N L O E 6 L C E .6 N N a) ED) f0 0 ATTACHMENT A 1 DEPOSIT I 1T&M $15001 120% of fee for each I 0 LO 06 I- Co 0 oa H 0 r 2 06 I- 0 CU a) I& a Q) 15 ° N 0 ti 2 0 I- 0 ti I 0 N- g 06 I— + 2222 °tS I- 106 I- 06 I- °ti I- T &M 1 T &M co o ti $3381 $3381 10 EF} $105 $136 co ea $1041 co r 64 ZING DEPARTMENT CONTINUED 'Charge for each additional variance after the first one within the same application 'Charge for each additional use permit after the first one within the same application for those for which a flat fee is charged lit which has not been vested Major (New single family house dwelling unit, addition /expansion New assessory structure, or decks)) (For applications which include a combination of types of permits, (a) thru (e), the highest fee shall be charged, plus .20 times the fee for each of the other design review permits) — which has not been vested — ice, industrial, etc.) U 'Renewal of a Use Permit IOver the Counter Permits Residential 1 Finding pursuant to 30 - 5.7 (k) or (I) 1 Variance a. Residential L.0 LL 1 w cn'i Use Permit DESIGN REVIEW: (retail, o co I U i a) i Ln U • co rrotect with 1-1L) overl O ATTACHMENT A DEPOSIT T &M 2 I- 0 0 0 -r- EF? °606 + 0 0 o E!4 + 0 U) N- EA 0606 + 0 0 LS, •- ER + 0 LO N- 69 2 H 0 LO l� EA- 22 I- 0 LO N. 69 I- 0 L() r- 69 06 + 0 0 Ln 69 06 + 0 o LO %- 69 2 I- T &M $7501 T &M $15001 0 in h- 69 06 + 25% of contract cost 1 $342 $406 $338 l"' t} L[) 6F? $338 $338 $3381 r in 69 $3381 $541 $1361 co M r 69 $1271 $271 Z Ifees Categorical Exemption (included $25 Alameda County Clerk fee) Initial Study 1 Administrative Charge on outside preparation of Initial Study, Negative Declaration or EIR IT & M = TIME AND MATERIALS 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 Final Design Review Extension of Design Review not yet vested 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 LOT LINE ADJUSTMENT ENVIRONMENTAL REVIEW PARCEL MAP Residential Commercial Parcel Map Waiver Amendment TENTATIVE MAP Residential Commercial Amendment Extension C 0 N c N w ATTACHMENT A DEPOSIT 1 0° 1- flat I flat T &M 1 LC) 2 + ° H T & M $1001 0 LO I- )r payment 1 , $25 LO N ee $875 1 $125 $125 1 $136 N- ti Ea because work is incomplete when the inspection is called for, with a minimum charge of one hour $338 r- d} b. Allow the payment of the fees to be deferred, subject to interest and adequate security, such as records against c. A fee reduction where the application is a resubmission and a finding is made that the staff work involved more than other comparable applications and warrants reduced fees because there is Tess staff work involved. TINUED Additional inspections: There will be a T & M charge for additional inspections required fore all requirements are completed a. Payment of the development fees on an installment basis, subject to the applicant entering in1 schedules, interest, and security. The Planning & Building Director shall set a deposit schedule ENFORCEMENT - See Permit Center activity investigative fee Request for payment of parking in lieu fee Performance Agreement to allow occupancy be The City Manager may approve the following: F IPLANNING & BUILDING DEPARTME a. DeMinimums finding Appeal to Planning Board Inspection for Occupancy Permits Residential - one inspection Commercial - one inspection T & M = TIME AND MATERIALS e Declara Appeal to the City C( = 0 :,_. CU C.) 0 0 E O 2 Zoning Compliance c Rebuild Letter Deed Restriction X W U Mitigation M APPEALS I M O O N DEPOSIT 1 0 0 147 EA 06 + 1 T &M $5001 1 1 I r 1005$ lAPRJ..1 0 0 LC) Ea 2 1- 0 0 LC) Ea 06 + co co EA- co co N. fA co co N-- EA co CO •- Ea- $136 b. Detached accessory structure such as a garage At Classification 'Demolition Certificate of Approval a. Principal structure !Historical Sign Designation 'HISTORICAL ADVIS City Mons e and Mal ATTACHMENT A ATTACHMENT B DEPOSIT +T &M $750 1 0 1010100010000 h 49 06 I- ♦ 0 1- CO cdod I- ♦ 0 I- 44 I- ♦ 0 10 49 od I- + 0 in 49 06 F- ♦ 0 1- 49 od I- ♦ 0 In 4, 06 I- ♦ 0 10 69 06 I- ♦ 0 10 40 06 I- t +T &M $250 00 0 in 403. c6 I- + 0 N 4, o I- + 0 0 In 49 o I- ♦ o6 1- ♦ o I- ♦ +T &M +T &M +T &M 0 0 in 49 O I- + 0 10 ti tfi O I- + 0 0 to 49 Cd F- ♦ +T &M $250 1 00 00 h 49 o I- + in 49 cd F- +T &M $250 1 FEE E EEE . _ E .E E .E Minimum 1 Minimum Minimum Minimum E . E E E E .E Minimum E EEE ._ E .E E .E Minimum E E ._ Minimum E E .E Minimum Minimum 1 Minimum Minimum 1 E E ._ Minimum f Minimum E E ._ Minimum C HOURS f rate is determined by the cost allocation plan and is approximately $95.00 per hour CO (0 CD CO M M t0 M CM M • M 1.5 M •t••• a- a- a- e- M CD M in • CD CI 10 Planned Development, Planned Development Amendment, or Final Development Plan Variance or Extension of variance which has not been vested Charge for each additional variance after the first one within the same application not yet vested Parcel Map (4 or fewer lots) or Tentative Map (5 or more lots) ZONING APPLICATIONS Master Plan or Amendment to Master Plan Development Plan Amendment or Extension view of Development Agreement Extension of Design Review not yet vested 1 !PLANNING & BUILDING DEPARTMENT Development Agreement Renewal or Extension of a Use Permit no Project with PD overlay - flat fee only I Finding pursuant to 30 - 5.7 (k) or (I) SUBDIVISION APPLICATIONS: Waiver or Amendment IT & M = Time and Materials Amendment(s) Rezoning(s) Special Services Final Design Review PRELIMINARY PLAN PARCEL MAP TENTATIVE MAP DESIGN RE\ Major Minor Extension Amendmer C 0 N C a W DEPOSIT O in 1- fa 0,5 N + 0 M N E0 08 I- + 0 O N Ef} ea I- + 0 M N EA od I- + 0 u9 1• Ef} ea I- + 0 M r Ef} o6 I— 25% of contract cost 1 0 0 It) E0 oe� I— + +T &M +T &M T &M O 0 in E6 od I— + +T &M od 1— + O 1f) N ER od I— + +T &M $250 1 O in N ER ea I— + O O K) EA od I- + of permit cost Minimum c 1 Minimum Minimum + $25 Minimum $25 $1,275 $875 7 Minimum Minimum 7 E Minimum 1 c E Minimum 7 E 7 E $3.40 0 O if. r in r "1 r O M 1.5 r because work is incomplete when the inspection is called for, with a minimum charge of one hour M r r 11 N-- 1.5 11 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