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CHAPTER I - THE NEED FOR USER FEES <br />from, the governmental activity. For example, a fee on liquor store owners to fund an alcohol <br />education program would not be allowed. <br />While Proposition 26 was built on the foundations of Propositions 4 and 218, it provided a sharper <br />definition of the reach and limits of service fees, and the courts have looked to it when reviewing <br />fee challenges. <br />Legal Approach to User Fees <br />This Fee Study presents the analytical advantages which are available to the City through the <br />institution of a comprehensive system designed by RCS to implement Article XIIIB of the California <br />Constitution. <br />Systematic and Documented Approach. This analysis was designed to provide the City with a <br />systematic and documented approach to understand, control, and recapture the costs which are <br />forced on it by normal service demands, growth and general economic inflation. <br />Constitutional Methodology. The methodology used for this analysis is the "costs reasonably <br />borne" test established by Section 8(c) of Proposition 4, now Article XIIIB of the California <br />Constitution. In following that process, RCS has analyzed the ways in which City services can be <br />financed more equitably to assure the City's future financial viability. <br />Full Business Costs Determined. The methodology followed by both the Authors of Proposition 4, <br />and consequently by RCS, determines the full business cost of providing the reported City services. <br />It also identifies the beneficiaries of those services and determines if they are paying in <br />relationship to benefits derived or if they are deserving of a subsidy paid from the taxes paid by all <br />local citizens and businesses. Thus, the City Council will have full knowledge and cannot ignore <br />costs which are actually occurring. <br />Financial Integrity Established. This text summarizes the work accomplished and presents <br />recommendations. These recommendations, if implemented, would firmly establish the financial <br />integrity of the analyzed City services and would establish a continuing cost control system <br />following the business principles which are generally espoused for government, but often are <br />ignored in application. <br />Icy <br />arch 2023 <br />City Council — / 23 <br />