Item 09 - Rental Registry Fee Study

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Pg. 22 CHAPTER IV – COST RECOVERY RECOMMENDATIONS City of Santa Ana Rent Stabilization Program Fee – March 2023 CHAPTER IV – COST RECOVERY RECOMMENDATIONS User Fee versus Tax The Rent Stabilization Program meets the three criteria of a user fee, based on the following: 1) The customer is identifiable 2) The service is measurable 3) The service benefits the individual or group A tax-based service typically benefits the community as a whole. Police service is a good example of a tax-based service, because it cannot meet the three criteria of a user fee and requires tax revenues to operate. Fee Options The Study shows that the service times involved are reasonable. With the amount of activity projected, staffing the Rent Stabilization Program with 14.4 full-time equivalent city employees is appropriate and reasonable for the City of Santa Ana. The Program’s budget is $3.24 Million. Based upon this Fee Study, RCS recommends Option 1 below: Option 1: Single Rental Registry Fee (Petition Fees Included in the Rental Registry Fee) Fee Title Suggested Fee # of Units Revenue Annual Registration $100 per unit 32,450 $3,245,000 After timely payment of the Rental Registry Fee, the landlord may pass through up to fifty percent (50%) of the Rental Registry Fee to tenants of the applicable rental unit, to be paid by the tenant in twelve (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; Option 2. Financial impact of having petition fees separate from the Rental Registry Fee; or Option 3. Financial impact of having no petition fees.