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Rental Registry Fee Study <br />May 16, 2023 <br />Page 2 <br />3 <br />4 <br />4 <br />9 <br />process, Revenue & Cost Specialists (“RCS”) was selected by the City. RCS entered <br />into an Agreement with the City effective January 3, 2023 to conduct this fee study. <br />In compliance with the Ordinance, staff is now providing the Rental Registry Fee Study <br />to City Council as Exhibit 1. The Rental Registry Fee Study identifies the appropriate <br />Rental Registry Fee to recover all costs associated with the Ordinance and the Rent <br />Stabilization Program. Under Section 50076 of the California Government Code, fees <br />charged for any service or regulatory activity must not exceed the reasonable cost of <br />providing the service or regulatory activity for which the fee is charged and which is not <br />levied for general revenue purposes. In compliance with this law, RCS conducted this <br />Rental Registry Fee Study on behalf of the City. <br />The Rent Stabilization Program’s annual cost is approximately $3.24 million and <br />includes 14.4 full-time equivalent City employees, plus contractual support for hearings, <br />appeals, education and outreach, translation services, equipment, and technology. <br />Appendix E of the Rental Registry Fee Study provides the Work Plan to justify and <br />support this annual cost. The Work Plan served as the baseline of information used by <br />RCS to establish a Rental Registry Fee to offset and ultimately fully recover the costs <br />for the administration and enforcement of the Ordinance. Most cities that have adopted <br />rent stabilization programs have established annual rental registry fees to recover their <br />costs for program administration and enforcement. Based on this precedence, user fees <br />are established in circumstances such as this, where unique benefits are established for <br />a subset of individuals. Under the law, such fees must bear a nexus to the actual costs <br />incurred in administering the program. The Rental Registry Fee Study and Work Plan is <br />intended to serve as the nexus for the development of the Rental Registry Fee to <br />support the administration and enforcement of the Ordinance. <br />Based on the amount of activity projected for the number of rental units in Santa Ana, <br />staffing the Rent Stabilization Program with 14.4 full-time equivalent City employees is <br />appropriate and reasonable for the City. Based upon the Rental Registry Fee Study, <br />RCS recommends Option 1 below: <br />Option 1: Single Rental Registry Fee (Petition Fees included in the Rental Registry Fee) <br />Fee Title Suggested Fee # of Units Revenue <br />Annual Registration $100 per unit 32,450 $3,245,000 <br />After timely payment of the Rental Registry Fee, the landlord may pass through up to <br />fifty percent of the Rental Registry Fee to tenants of the applicable rental unit, to be paid <br />by the tenant in 12 equal monthly installments (Section 8-3161(d)). This is equal to <br />$4.17 per month to be paid by the tenant. <br />Options 2 and 3 below were developed to meet the request of the City Council to <br />present the following options as it relates to the fees associated with a Fair Return <br />Petition, Capital Improvement Petition, and Tenant Petition: <br />Option 1. Financial impact of having petition fees included in the Rental Registry Fee;