TO: Board of Supervisors
FROM: Ryan J. Alsop, County Executive Officer
REPORT BY: Becky Craig, Assistant County Executive Officer
SUBJECT: User Fees Policy Update
RECOMMENDATION
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PUBLIC HEARING - User Fee Update
Conduct a Public Hearing and adopt a Resolution establishing, increasing, decreasing, and deleting certain fees in Part III Fees of the Napa County Board Policy Manual. (Fiscal Impact: $2.3 million Revenue; $2 million General Fund, $320,000 Fire Fund, $19,000 Animal Shelter Fund; Not Budgeted; Discretionary)
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BACKGROUND
State law allows government agencies to recover the cost of providing services by levying fees. Napa County has previously established fees for services and has periodically updated those fees. The most recent comprehensive update was adopted in May 2019 with Resolution 2019-70.
The comprehensive 2024 User Fee Study (attached) includes the consultant’s calculation methodology and data. The cost of services incorporates the hourly rates of staff and the time spent to perform the services. Currently, fees are set to recover 80% for Planning and Public Works. Staff recommends increasing recovery to 100% for all applicant fees, except for all building permits submitted to replace or repair structures damaged in a disaster. Full cost recovery ensures the General Fund isn’t burdened by discretionary development. The County contracted with MGT in 2023 to update certain fees using FY 2023-24 salary and benefit costs. The County’s Public Services Employees’ (PSE) Memorandum of Understanding (MOU) was adopted near the conclusion of the study’s calculations and the 4% cost-of-living adjustment was incorporated.
Applicant processing fees are proposed to increase 10-100+% since the last increase five years ago with an average increase of 30% primarily reflecting staff pay increases. The recommendation to increase to full-cost recovery further affects some of the rates. Projected revenues are estimated based on historical applicant data trends. The proposed effective date for the changes is January 6, 2025. Further, the Resolution provides for annual updates to remain current with costs to coincide with cost-of-living increases matching the PSE MOU. This incorporates increasing fees 3.5% on July 1, 2025, 3.5% on July 1, 2026, and subsequent cost of living adjustments per a federal index.
Many fee types are no longer applicable because of state law, technology improvements, or other processing changes; or have been combined with other types and are recommended for deletion. Staff is working with the consultant to overhaul the Building Permit Fee model and will present the recommendation in 2025, along with other departmental user fees requiring further study.
Study Highlights:
The County currently charges $1,000 for applicants to file an Appeal to the Board of Supervisors seeking to review a land use decision made by a Napa County decision-making body or officer. The County further recovers actual administrative expenses incurred. Upon review, staff recommends the fee be increased to $2,000 to incorporate the supplemental administrative expenses and to provide the applicant certainty.
In addition to permit processing, applicants also benefit from the County’s review and revision of the General Plan and related regulations. The County routinely spends $400,000-$500,000 annually for these services and anticipates spending approximately $1 million annually for the next four years for the General Plan Update. The General Plan Surcharge (“Surcharge”) of 3.3% is currently levied on Building activities, excludes many Planning activities, and recovers less than 50% of the annual expenses. The County subsidizes ongoing updates, such as the recent Safety and Housing Element updates. The Fee Study reflects a Surcharge rate of 7.5% be added to Building and Planning activities that is estimated to generate approximately $452,000 revenue annually.
Staff recommends setting the fees at less than full cost recovery for certain services to incentivize compliance, such as water heater installation permits and animal licensing. Further, the State limits certain fees by statute, including many of fees charged for the Agricultural Commissioner’s services. The General Fund will continue to subsidize these services.
The County installed electric vehicle charging stations for public use in the Fifth Street Parking Garage in January 2024. Usage is high and the utility costs are impacting the County’s operating budget. Staff recommends users be charged a cost recovery fee of $0.20/kWh per the recommendation of third-party provider ChargePoint. The estimated cost per vehicle will approximate $4.00 for a three-hour charging session.
Procedural Requirements:
1. Open Public Hearing
2. Staff Report
3. Public Comments
4. Close Public Hearing
5. Motion, second, discussion, and vote to adopt the Resolution.
Recommended Action:
Adopt a Resolution establishing, increasing, decreasing, and deleting certain fees in Section III Fees of the Napa County Board Policy Manual effective January 6, 2025.
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
No |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
The County may establish fees to recover the cost of processing applications for discretionary actions. |
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Is the general fund affected? |
Yes |
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Future fiscal impact: |
Revenues better offset expenses. |
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Consequences if not approved: |
General Fund tax revenues will subsidize delivery of discretionary services. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is for the recovery of operating expenses as defined by 14 California Code of Regulations 15273 (State CEQA Guidelines) and therefore CEQA is not applicable.