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Ordinance for New Application Processing Fee <br />and Resolution for Development Processing Fees <br />March 2, 2009 <br />Page 2 <br />The methodology analyzes the average volume of development and permit <br />applications during a year. A separate evaluation analyzed the time and <br />motion involved in processing the various project types. The third and <br />final analysis calculated the average overhead and indirect expenses <br />required to provide these city services. The consultants utilized 2006- <br />07 FY general fund salary and operation expenditures for the agencies, or <br />portions thereof, involved in processing development applications and <br />permits. Budget allocations for other agencies, such as City Manager's <br />Office, Clerk of the Council, City Attorney's Office, and Personnel <br />Services were provided to spread these support costs on a pro-rata basis <br />over the various departmental functions within the scope of the study. <br />The basis for the support allocations varied, with some based on full <br />time positions (FTEs), others on percent of budget allocation, and some <br />based on percent of work product generated, such as number of pay checks <br />issued, number of Requests for Council Actions agendized, or number of <br />purchase orders processed. Additionally, as noted above appropriate <br />staff provided times and volume of work for each specific service in the <br />development process. The consultants identified from these data the <br />actual cost of providing each of the various services. The methodology <br />has been used by MGT in dozens of similar fee studies. <br />The analysis found that the majority of the City's development processing <br />fees do not recover the costs of providing the service. This was <br />expected for two reasons: it had been a number of years since the fees <br />were last updated; and, the new methodology for building fees is a better <br />gauge of actual costs. <br />As a byproduct the fee study found a number of instances where the <br />current fees collect more than the cost of providing the related service. <br />In these situations, the fees will be lowered accordingly. <br />The policy question is how much of the City's costs should be recovered <br />and who should pay for them. The MGT analysis provides a solid <br />assessment of these actual costs. The study shows that approximately 21% <br />of Planning, 48% of Building and 48~ of Engineering costs are currently <br />recovered. Therefore, the remainder costs are at present covered by the <br />general taxpayer. <br />75B-2 <br />