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F. In order to correlate the amount of the fee with the actual cost of the services provided, the fee shall be adjusted annually in accordance with the consumer price index as published by the United States Department of Labor for the Los Angeles-Riverside-Orange County (formerly Los Angeles-Long Beach-Anaheim) metropolitan area, as detailed in section 21-121 of the Municipal Code. G. A 2011 fee study reported the total projected expenditures for the PREP would amount to an estimated $614,400.00, which includes an estimated $422,250.00 for required staff and an estimated $192,150.00 in operational costs. H. 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 residential rental surcharge fee for a three-year period; and The funding for the Gold Seal Incentive Program is $110,000.00, which currently provides for 5,640 units to receive exemptions from the existing $19.50 per unit annual fee. The number of units that can be approved to participate in the Gold Seal Incentive Program will fluctuate with the adjustment of the annual fee in line with the consumer price index. J. According to the 2011 fee study, records indicate an inventory of 32,277 rental units licensed for inspection. Subtracting out the 5,640 units qualified for the Gold Seal Incentive Program, 26,637 units were accountable for the $19.50 per unit fee, thus generating annual revenue of $519,422.00. K. Thus, it is anticipated that the deficit for the PREP will be $94,978.00 for the last year of the PREP term based on the estimated $614,400.00 in expenditures and $519,422.00 in revenues. L. Continuation of the Proactive Rental Enforcement Program is essential to the neighborhoods in Santa Ana to provide assurances that the rental housing will not be allowed to revert to the condition which led to the initial concerns for the implementation of an inspection program in 1992. Section 2. In accordance with the California Environmental Quality Act, the recommended action is categorically exempt from further review per section 15321, Class 21, as the project involves an enforcement action by a regulatory agency for an inspection program. A Categorical Exemption for Environmental Review No. ER-2011- 54 will be filed for this project. Ordinance No. NS- 2824 Page 2 of 5