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N. On June 20, 1994, the City Council adopted Resolution No. 94-026, which approved and adopted the "Gold Seal Incentive Program" whereby particular residential properties or residential apartments may be certified as having met standards of excellence in property maintenance and as certified, would be exempted from payment of the surcharge fee for a three-year period. O. In October 1999, the City Council adopted Ordinance No. NS-2408 which extended the PREP fee until December 31, 2003 based on a fee study. P. This 1999 fee study reported that funding the cost of the required staff and operational costs associated with the continuation of the Proactive Rental Enforcement Program would amount to an estimated $608,410. The 2003 fee study for PREP reports an increase in required staff and operational costs from $608,410 to $617,360. O. In 1999, business license records indicated an inventory of 28,500 rental units generating $498,750 in revenue. Business license records for calendar year 2003 indicated an inventory of 27,231 rental units, 958 less than in 1999 which, at $17.50 per unit, generated annual revenue of $476,542. R. From 1999 to 2003, the decrease of 958 rental units and increase in staffing and operational costs created a further widening of the deficit between program costs and revenue generated by the Rental Inspection Fee. S. To offset a percentage of the revenue versus costs deficit in the 1999 program budget, and given that inspection emphasis for the extension was to be placed primarily on the exterior of the rental properties, PREP staffing was reduced form six to five inspectors. T. Staffing for the PREP program during the extension period of calendar years 2004 through 2007 was reduced from five to four. U. It is anticipated that, for the 2008-20011 extension, the Proactive Rental Enforcement Program will generate $454,158.73 a year in revenue based upon the $17.50 fee per unit and the estimated number of units (approximately 25,951). V. A fee study conducted for the calendar year 2006-2007, found that the Proactive Rental Enforcement Program will cost the City of Santa Ana $641,923.92 a year. W. It is anticipated that the deficit for the Proactive Rental Enforcement Program will be $187,765.19 a year for the extension period of 2008-2011. Ordinance No. NS-_ Page 3 of 6 75A-8