75B - ESTABLISH AND UPDATE VARIOUS DEVELOPMENT PROCESSING FEE AMTS

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