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<br />N. On June 20, 1994, the City Council adopted Resolution No. 94-026 which <br />approved and adopted the "Gold Seal Incentive Program" whereby <br />particular residential properties or residential apartments may be certified <br />as having met standards of excellence in property maintenance and as <br />certified, would be exempted from payment of the surcharge fee for a <br />three-year period. <br /> <br />O. In October 1999, the City Council adopted Ordinance No. NS-2408 which <br />extended the PREP fee until December 31,2003 based on a fee study. <br /> <br />P. This 1999 fee study reported that funding the cost of the required staff and <br />operational costs associated with the continuation of the Proactive Rental <br />Enforcement Program would amount to an estimated $608,410. The 2003 <br />fee study for PREP reports an increase in required staff and operational <br />costs from $608,410 to $617,360. <br /> <br />Q. In 1999, business license records indicated an inventory of 28,500 rental <br />units generating $498,750 in revenue. Business license records for <br />calendar year 2003 indicated an inventory of 27,231 rental units, 958 less <br />than in 1999 which, at $17.50 per unit, generated annual revenue of <br />$476,542. <br /> <br />R. From 1999 to 2003, the decrease of 958 rental units and increase in <br />staffing and operational costs created a further widening of the deficit <br />between program costs and revenue generated by the Rental Inspection <br />Fee. <br /> <br />S. To offset a percentage of the revenue versus costs deficit in the 1999 <br />program budget, and given that inspection emphasis for the extension was <br />to be placed primarily on the exterior of the rental properties, PREP <br />staffing was reduced form six to five inspectors. <br /> <br />1. Staffing for the PREP program during the extension period of calendar <br />years 2004 through 2007 was reduced from five to four. <br /> <br />U. It is anticipated that, for the 2008-20011 extension, the Proactive Rental <br />Enforcement Program will generate $454,158.73 a year in revenue based <br />upon the $17.50 fee per unit and the estimated number of units <br />(approximately 25,951). <br /> <br />V. A fee study conducted for the calendar year 2006-2007, found that the <br />Proactive Rental Enforcement Program will cost the City of Santa Ana <br />$641,923.92 a year. <br /> <br />W. It is anticipated that the deficit for the Proactive Rental Enforcement <br />Program will be $187,765.19 a year for the extension period of 2008-2011 . <br /> <br />11A-3 <br /> <br />Ordinance No. NS- <br />Page 3 of 6 <br />