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HomeMy WebLinkAbout05.25.2017 SP Minutes @2:00 MINUTES z�S,�y SPECIAL MEETING a,.� �'4 BUDGET STANDING o COMMITTEE °,.... � OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at: CITY HALL, CITY MANAGER'S CONFERENCE ROOM 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA WEDNESDAY, MAY 25, 2017 2:00 p.m. Call to Order. Time: 2:01 p.m. Roll Call. PRESENT: Vice Mayor Normandy and Mayor Gupta PUBLIC COMMENTS —None. MATTERS FOR CONSIDERATION 1. Motion to approve the Minutes from the meeting of May 3, 2017. Motion—Vice Mayor Normandy/Second-Mayor Gupta: to approve the minutes. The motion carried unanimously. 2. Report regarding a study session on Fee Study results and certain Developer Impact Fees. (Richard Lee, Director of Finance) Director Lee presented a PowerPoint outlining the Developer Impact Fees including Parkland Acquisition and Construction Fees. He presented staff's recommendation including amending the ordinance to account for the increased cost of construction. Mayor Gupta asked why staffs recommendations were not rounded off. Director Lee explained the common factor applied to the maximum fee allowed in order to come up with a reasonable fee. Vice Mayor Normandy asked if benefits were included. Director Lee stated benefits were not included in impact fees. Director Lee stated staff was recommending the addition of commercial development to the Parkland Acquisition and Construction Fee. He explained the Sewer Capacity Fee based on population and replacement costs. Mayor Gupta asked if the cost was per dwelling unit,per year.Director Lee stated the table displayed the current fee, study recommendations,market average and staff's recommendation.He reviewed the new Bicycle and Pedestrian Impact Fee pursuant to the City's 2011 Bicycle Master Plan and based on average daily trips.Mayor Gupta asked why the deviation from market average.Director Lee referenced Page 5 of Attachment 5 comparing fees with other Bay Area agencies. City Manager Futrell explained how the Sewer Capacity Fee related to Sewer Fees. Director Lee explained that new development would be subject to the new fees. City Manager Futrell stated new developments bought into the system, then the residents paid the sewer fees. Vice Mayor Normandy requested assurance that those with current development agreements were under previous fees. City Manager Futrell explained that new developments would be under the new system. He stated staff might recommend the Summerhill Development at Chestnut and El Camino Real fall under the old fees. Vice Mayor Normandy asked for clarification on the study recommendation and market average on Page 9. Director Lee explained that the study recommendation accounted for the Bicycle Master Plan,list of improvements, and increased costs based on inflation. He stated the market average was available for reference and the Council could deviate. City Manager Futrell stated most cities did not have the fee.He stated the market average was probably closer to zero. Mayor Gupta stated the average was zero but the study determined the City's cost. Vice Mayor Normandy discussed all the fees required by developers. Director Lee stated developer impact fees were divided between existing development and new development. City Manager Futrell discussed Page 6 and 7 of the staff report displaying the overall impact fees.He stated consideration was given as to whether the City was pricing itself out of the market. Director Lee stated the comparison for all impact fees was on Page 5. Mayor Gupta explained the process for estimating the fees with service to new customers and previous customers. Director Lee stated the increment applied to the total cost. He clarified that the fees under discussion were not service fees,rather developer impact fees. City Manager Futrell explained that new residents triggered the need for new parkland. Mayor Gupta confirmed that the cost of old parks did not impact new fees. Vice Chair Normandy asked how the bicycle Pedestrian Impact Fee was calculated. Analyst Dino Serafini,Michael Baker International stated the average daily trips based on square footage were used.He stated the fee was assessed per 1,000 square feet. City Manager Futrell stated the fee was$243 for each single family home. City Manager Futrell discussed Page 5 of Attachment 5 showing the City was$2,000 less for residential and but$20,000 more than the average for commercial due to the East of 101 Traffic Impact Fee. Mayor Gupta stated it was necessary to make it clear to the Council that the$20,000 was for the East of 101 Traffic Impact Fee. BUDGET COMMITTEE MEETING MAY 25,2017 MINUTES PAGE 2 Director Lee stated user fees were based on Prop 218 and 26. Gretta Davis, MBS, presented a PowerPoint discussing the key issues framing the study, defensible methodology,and reasonable,validated costs. She explained the cost components utilized to determine the full cost recovery rate. She summarized the fee study methodology and $8.2 million subsidy. Mayor Gupta requested an explanation of the table. Ms. Davis reviewed the City Clerk revenue, actual cost, and recovery level. Vice Mayor Normandy expressed concern with the need to triple the amount for service. City Manager Futrell stated staff was sensitive to that fact and there were many cases that were not 100%recovery. Vice Mayor Normandy expressed concern with trying to get full recovery on the backs of residents.City Manager Futrell stated the proposed fees still required a$2 million subsidy. Ms. Davis continued review of the City Clerk user fee related services and recommendation. She stated the current recovery for all City fees was $10.8 million and the recommendation was to recover$16.1 million. Mayor Gupta noted that five departments would be recovering 100%of costs. Ms.Davis summarized City Clerk,City Manager,Finance,and Economic and Community Development Department fees stating the reductions, increases and any new fees. Director Lee pointed out an addendum with staff recommending 50% cost recovery or current fee, whichever was higher,for jobs valued at$100,000 or less.City Manager Futrell explained the logic of the recommendation. Vice Mayor Normandy questioned the increase from $400 to $6,000 and if that was based on staff shortage. Director Lee explained that staff time was used to calculate the fees. City Manager Futrell explained that the actual cost to process the application was $6,000. Vice Mayor Normandy expressed difficulty with accepting the increase.ECD Director Greenwood acknowledged that it was unnerving to ask the customers to pay the increased fees but the actual cost for services was presented. He discussed efforts to reduce costs. City Manager Futrell recommended conducting the fee study every 3 to 5 years. Director Greenwood stated feedback from contractors and permit applicants indicated that the City provided more efficient services at lower fees that other cities. Mayor Gupta asked the market average of the $6,000 fee. Director Lee stated the challenge was comparing fees to other cities. Mayor Gupta asked if other cities had Precise Plan Modification for Residential Only fee. Vice Mayor Normandy asked if the other cities were looking for full recovery. City Manager Futrell suggested consideration of whether the City expected commercial developers to pay 100%recovery. Mayor Gupta discussed the importance of the City remaining competitiveness in the market. Director Greenwood stated the overall fees were competitive with surrounding communities. He discussed the Design Review Fee on Page 69. Director Lee pointed out the comparison with Palo Alto charging significantly more. BUDGET COMMITTEE MEETING MAY 25,2017 MINUTES PAGE 3 Vice Mayor Normandy asked the definition of a temporary use permit (TUP). Director Greenwood explained that a TUP was for a temporary use such as a food truck or construction trailer. Vice Mayor Normandy discussed SAP's Food Truck Friday. She questioned the length required to process a TUP. Director Greenwood confirmed that the analysis showed it took 10-hours of staff time to process a TUP. Director Lee explained collection of deposits and reduction of burden the burden on administrative staff by having a higher deposit amount.Vice Mayor Normandy questioned whether St.Monica's would have to pay$1,500 for the All Souls Festival.Director Greenwood stated that would be a special event permit. City Manager Futrell provided the example of the TUP for FedEx truck parking. City Manager Futrell noted there were no changes to Library fees. Vice Mayor Normandy asked which other cities MBS had worked with. Ms. Davis stated they had worked with Half Moon Bay, San Carlos, and San Mateo. Director Lee explained the selection of comparable cities. City Manager Futrell discussed Parks and Recreation Fees and recommendation to increase fees by 5%. He stated fees had not been raised for two years.Director Lee discussed the analysis of cost recovery rate by program. City Manager Futrell presented specific cost recovery of Parks and Recreation programs. Mayor Gupta suggested rounding the fees. Parks and Recreation Director Ranals explained the need to utilize an hourly rate. City Manager Futrell presented Police Fees. Vice Mayor Normandy asked about the increase for the annual renewal bingo fee. Police Chief Azzopardi explained the time required by the Community Relations Sergeant to conduct the audit. Mayor Gupta asked why the initial bingo permit was $55 and renewal was $500. Sergeant Rudis explained the operation audit requiring more staff time. Vice Mayor Normandy asked about the fees for vehicles for hire. Sergeant Rudis explained the background and research required by the Municipal Code. He reminded the Committee that the fee had not been reviewed in over 15 years.He stated Uber and Lyft were not regulated by the City.Mayor Gupta questioned the cost estimate of 40 hours.Director Lee explained that the recent application revealed the intensive amount of staff time and true cost.Vice Mayor Normandy as the decrease for the special event permit. Sergeant Rudis disagreed with the staff recommendation. Vice Mayor Normandy discussed massage establishments or bath houses. Sergeant Rudis explained that the State of California issues licenses and the City's fee would be rarely used. Vice Mayor Normandy asked about the pawn broker fee. Sergeant Rudis discussed the need to conduct background checks. Vice Mayor Normandy asked about fire arm storage administration fees. Sergeant Rudis explained the process of booking a fire arm and ammunition. He stated the fee was when people wanted to get their belongings back. Vice Mayor Normandy expressed concern with increasing Candidate Statements from $600 to $1000. Ms. Davis stated it was a deposit. Vice Mayor Normandy and Mayor Gupta indicated no questions with the City Manager and Finance fees. BUDGET COMMITTEE MEETING MAY 25,2017 MINUTES PAGE 4 Mayor Gupta asked about the fee for the list of all businesses within the City being reduced from$50 to $9. Vice Mayor Normandy stated she could support leaving the fee at$50. City Manager Futrell stated the City could not charge more than the fee study indicated for 100%recovery. City Manager Futrell presented Public Works fees Vice Mayor asked what an easement abandonment request was. Public Works Director Kim explained the process. Mayor Gupta stated the fee could not be higher than the results of the study. He asked if all costs that needed to be included were included.Director Lee stated staff had adequate time to review the study and indicate the appropriate time measurements.He explained the quality check performed by the consultant. Vice Mayor Normandy asked about the increase for grading plan check and permit processing. Administrator Lovell explained that additional tiers were created for smaller grading amounts. Mayor Gupta about the deposit for increased cubic yards. Ms. Davis explained the addition of incremental tiers beyond the initial base check. City Manager Futrell presented the Fire fees.Director Lee stated it was necessary to pull Fee F5 on Page 29. Fire Chief Kohlmann stated the fees would be considered in the Fire Operations Financial Review. Vice Mayor Normandy asked about Fee F35,Annual Fire Inspection,and questioned full cost recovery. She asked about Fee F68 for lumberyards increasing from $125 to $664. Fire Chief Kohlmann stated $125 was a flat fee and the new fee incorporated all review.Vice Mayor Normandy asked about special event permits for carnivals and fairs. Fire Marshall Da Silva explained that the site was inspected multiple times.He stated the hourly rate had not been increased in over ten years which contributed to the increases. City Manager Futrell requested feedback on the fair fees. Fire Marshall Da Silva suggested the fee be increased to two hours rather than four. Member of the public discussed tiered building values stated tier increases looked innocuous but had a large impact. City Manager Futrell presented ECD fees.Director Greenwood explained the planned unit development fee. Vice Mayor Normandy stated the increases were"painful."Mayor Gupta requested reviewing fees line by line. Director Greenwood acknowledged and expressed concern over substantial increases but efforts to charge appropriate fees and not burden the General Fund. He stated a large developer would not be concerned with the large fees.He explained the conditional use permit(CUP)process.He requested the opportunity to review the time for PL6. He explained the difference between a TUP and minor use permit. Mayor Gupta asked about the process for a zoning amendment. Director Greenwood stated the fee included all costs associated with the process. Director Greenwood explained the fee for a variance-PL12 and appeal to Planning Commission to City Council - PL16. BUDGET COMMITTEE MEETING MAY 25,2017 MINUTES PAGE 5 Vice Mayor Normandy asked about PL 23 and expressed concern with increases to residents. Director Greenwood stated the policy decision was whether to obtain 100%recovery.City Manager Futrell asked if a distinction could be made between developer and resident.ECD Director Greenwood recommended 50%recovery for residents. City Attorney Rosenberg suggested 50%recovery across the board. Vice Mayor Normandy asked why there were so many hours for single family versus multi-family. City Manager Futrell suggested reviewing PL24 and 50%cost recovery for PL23,with additional review next year. Vice Mayor Normandy asked for clarification on PL34,PL36 and PL37.Director Greenwood explained the process. City Attorney Rosenberg stated a minor change would not need to go to the Planning Commission, rather would be handled administratively. He explained the Historical Preservation Alteration certificate. Director Greenwood anticipated the customer would not perceive the dramatic increase. Vice Mayor Normandy disagreed. Mayor Gupta observed the need to remain in the competitive market; dispel the building industry's accusation that cities were making it difficult to building housing;and determine true costs and attempt to recover. Director Lee stated he will prepare a table of six common permits and the current fees, proposed and comparison. He stated the matter would be presented to Council on June 14, 2017. Vice Mayor Normandy recommended providing the information to Council as early as possible and meeting with them to respond to questions prior to the meeting. Mayor Gupta thanked staff and the consultant for the information provided.He stated he was comfortable making his recommendation to the full Council. Vice Mayor Normandy stated full cost recovery was still a hard pill to swallow. ADJOURNMENT Being no further business, Vice Mayor Normandy adjourned the meeting at 4:20 p.m. Submitted App ved .y: IF Gabrie' n""•ez, Deputy City Clerk Pradeep Gupta, Mayor City of South San Francisco City of South San Francisco BUDGET COMMITTEE MEETING MAY 25,2017 MINUTES PAGE 6