Agenda Packet_2023-05-16 - Laserfiche WebLink

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Rental Registry Fee Study May 16, 2023 Page 2 process, Revenue & Cost Specialists ("RCS") was selected by the City. RCS entered into an Agreement with the City effective January 3, 2023 to conduct this fee study. In compliance with the Ordinance, staff is now providing the Rental Registry Fee Study to City Council as Exhibit 1. The Rental Registry Fee Study identifies the appropriate Rental Registry Fee to recover all costs associated with the Ordinance and the Rent Stabilization Program. Under Section 50076 of the California Government Code, fees charged for any service or regulatory activity must not exceed the reasonable cost of providing the service or regulatory activity for which the fee is charged and which is not levied for general revenue purposes. In compliance with this law, RCS conducted this Rental Registry Fee Study on behalf of the City. The Rent Stabilization Program's annual cost is approximately $3.24 million and includes 14.4 full-time equivalent City employees, plus contractual support for hearings, appeals, education and outreach, translation services, equipment, and technology. Appendix E of the Rental Registry Fee Study provides the Work Plan to justify and support this annual cost. The Work Plan served as the baseline of information used by RCS to establish a Rental Registry Fee to offset and ultimately fully recover the costs for the administration and enforcement of the Ordinance. Most cities that have adopted rent stabilization programs have established annual rental registry fees to recover their costs for program administration and enforcement. Based on this precedence, user fees are established in circumstances such as this, where unique benefits are established for a subset of individuals. Under the law, such fees must bear a nexus to the actual costs incurred in administering the program. The Rental Registry Fee Study and Work Plan is intended to serve as the nexus for the development of the Rental Registry Fee to support the administration and enforcement of the Ordinance. Based on the amount of activity projected for the number of rental units in Santa Ana, staffing the Rent Stabilization Program with 14.4 full-time equivalent City employees is appropriate and reasonable for the City. Based upon the Rental Registry Fee Study, RCS recommends Option 1 below: Option 1: Single Rental Re istr Fee Petition Fees included in the Rental Registry Fee Fee Title I Suggested Fee # of Units IRevenue Annual Registration $100 per unit 32,450 1 $3,245,000 After timely payment of the Rental Registry Fee, the landlord may pass through up to fifty percent of the Rental Registry Fee to tenants of the applicable rental unit, to be paid by the tenant in 12 equal monthly installments (Section 8-3161(d)). This is equal to $4.17 per month to be paid by the tenant. Options 2 and 3 below were developed to meet the request of the City Council to present the following options as it relates to the fees associated with a Fair Return Petition, Capital Improvement Petition, and Tenant Petition: Option 1. Financial impact of having petition fees included in the Rental Registry Fee; City Council 9-2 5/16/2023