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HomeMy WebLinkAbout08.03.2020 SP Minutes @3:30MINUTES SPECIAL MEETING BUDGET STANDING COMMITTEE LIP0OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 MONDAY, AUGUST 3, 2020 3:30 p.m. Teleconference via Zoom Housing Standing Committee conducted this meeting in accordance with California GovernorNewsom's Executive Orders N-25-20 and N-29-20 and COVID- 19 pandemic protocols. Call to Order. Time: 3:30 p.m. Roll Call. PRESENT: Councilmember Nicolas and Vice Mayor Addiego. AGENDA REVIEW No changes REMOTE PUBLIC COMMENTS Remote Public Comments Received Members of the public wishing to participate were encouraged to submit public comments in writing in advance of the meeting to all-cc@ssfnet 1:30 p.m. on Monday, August 3, 2020. The comments were distributed to the Committee Members, uploaded to the website for public viewing, and are part of the record. Assistant City Clerk Avila read into the record the following comment: Lisa Niehuser, I'm a resident of South San Francisco and I want you to reconsider revisiting the finalized general funds budget. Our children deserve an education that doesn't have funds taken out every year and put into other departments. Education first, always. The police department has way more than enough funds, why is it that the police are more funded than our kids? Why does that make sense, it doesn't. Our kids are our future. MATTERS FOR CONSIDERATION 2. Report regarding proposed amendments to the Master Fee Schedule for Fiscal Year 2020-2021 (Heather Enders, Management Analyst II) Management Analyst Enders presented the report to the Budget Standing Committee. She advised the proposed FY 2020-21 Master Fee Schedule was based upon the results of the Study and contained a description by department of each user fee -- both current and recommended fee amounts. Based upon the current schedule, if adopted by Council, the fees would become effective on November 22, 2020. An overview of changes to the fees is provided below: Total number of proposed fees: 705 • Number of fees to increase: 433 Reasons for increase include: — Consolidation of services into a singular permit. — Process or time estimate changes due to code changes or service level increases. Number of fees to decrease: 159 Reasons for decrease include: — Process efficiencies such as reducing time estimates due to technology or requirement changes. — Position changes such as utilizing lower level staff to perform work in lieu of higher- level staff. Number of fees remaining the same: 111 The fees that are decreasing will result in less revenue, while the fees that are increasing will result in more revenue. Overall, the City was effectively recovering the costs for providing services to the community and will continue to do so after the new fees are implemented. The methodology for calculating fees begins with time spent per unit of fee activity for each position within a department or program. Once time spent for a fee activity was determined, all applicable City costs are then considered in the calculation of the "full" cost of providing each service. Direct costs include FY 2019-20 budgeted salaries, benefits, and allowable expenditures. Indirect costs include departmental or division administration including management and clerical support and a proportionate share of operating expenses, overhead, and replacement costs for assets involved in the delivery of the service. Together, the cost components comprise the calculation of the total "full" cost of providing any particular service, regardless of whether a fee for that service is charged. City Clerk: It is important to note that the majority of these fees are set by the State. Total number of proposed fees: 13 — Number of fees with 100% cost recovery: 9 — Number of fees based on other fee calculation: 4 City Manager: Total number of proposed fees: 1 — Number of fees with 100% cost recovery: 1 Finance: Total number of proposed fees: 11 — Number of fees with 100% cost recovery: 11 Library Department: • Total number of proposed fees: 27 SPECIAL BUDGET STANDING COMMITTEE MEETING AUGUST 3, 2020 MINUTES PAGE 2 — Number of fees with 100% cost recovery: 11 — Number of fees less than 100% cost recovery: 5 — Number of fees based on other fee calculation: 11 The industry standard for cost recovery for a Library department is on the lower end at 20-40% levels. Staff requested guidance from the Budget Standing Committee related to charging of late fines. The City of South San Francisco Library is part of the Peninsula Library System, which currently has a policy to charge users for overdue materials. The Peninsula Library System fees are set system -wide. However, each library within the system can elect whether or not to charge the fees based upon the desire of the community in which it operates. The San Mateo County Library System, for example, no longer charges late fees for overdue materials. In FY 2019-20, the department collected an estimated $10,000 in late fees from constituents. While attempting to quantify staff effort in the collection of late fees is imperfect, it is the department's position that the cost of staff time to administer and collect these fines outpace the actual collections. Moreover, studies have shown that late fines can be a significant barrier to library access and drive borrowers away, particularly among individuals with low or fixed incomes. Vice Mayor Addiego asked for clarification on the amount of staff time, dollar wise, went into collecting fines. Library Director Sommer advised it was roughly $25,000 annually. Vice Mayor Addiego suggested other departments with a similar situation when collecting fines outweighs the costs to bring it to the attention of the Budget Standing Committee. Police Department: Total number of proposed fees: 44 — Number of fees with 100% cost recovery: 38 — Number of fees less than 100% cost recovery: 4 — Number of fees based on other fee calculation: 2 Cab company driver permits were previously discounted in an effort to discourage cab operators from driving without a valid permit. Because of the popularity of ride -share companies such as Uber and Lyft, which are overseen by the State, the City was seeing less and less permit applications for cab driver permits. Technically, if a cab company was picking up in South San Francisco, they need to hold a permit with the City. Staff recommends 100% cost recovery for this particular fee to right -size a previous discount aimed at incentivizing compliance. With so few applications to process, the need for a discount was no longer needed. Vice Mayor Addiego inquired whether it would be possible to lower the cab company driver permit after the first vetting processing conducted by the Police Department. Sergeant Rudis advised that the renewal vetting process was similar to the first. Fire Department: Total number of proposed fees: 167 — Number of fees with 100% cost recovery: 149 — Number of fees less than 100% cost recovery: 5 — Number of fees based on other fee calculation: 13 Staff recommends that the City continue to under -recover for Ambulance Transport. The service is a pillar of the community and responds to over 5,100 calls per year. Current cost recovery is 66% and staff recommends a modest increase to recover 81 %. Staff recommends that the Budget Standing Committee recommend to City Council 100% cost recovery for all other Fire services, which is consistent with the SPECIAL BUDGET STANDING COMMITTEE MEETING AUGUST 3, 2020 MINUTES PAGE 3 industry standard. It is important to note that even if fees are set at a higher cost recovery, the City's revenue received were based upon the payments made by insurance or Medical/Medicare fees and reimbursement amounts. Economic and Community Development - Planning: Total number of proposed fees: 59 — Number of fees with 100% cost recovery: 55 — Number of fees less than 100% cost recovery: 4 As part of the Study, it was identified that certain services provided by Planning had a greater than 100% cost recovery while certain services were being under recovered. Economic and Community Development - Housing: Total number of proposed fees: 20 — Number of fees with 100% cost recovery: 4 — Number of fees less than 100% cost recovery: 16 All of the proposed Housing Division Fees were new and designed to recover the cost of processing development applications including affordable housing. Staff's recommendation was to start with 50% cost recovery across the board, with the exception of certain real estate transactions which should be set at 100% cost recovery where the City facilitates the transaction. Economic and Community Development - Building: Total number of proposed fees: 72 — Number of fees with 100% cost recovery: 66 — Number of fees based on other fee calculation: 6 The Study showed that the current fee schedules in place based upon the fee methodology calculation was resulting in over -cost recovery for certain fees within the Building Division. As a result, the City must right -size the fees collected for services to ensure the City is recovering the industry standard of somewhere between 80% and 100%. It is important to note that the lower absolute dollar amount required now for some of the Building permits was because of operational streamlining that have taken place that necessitates lower staff time to process those permits than in prior years. Staff recommends that the Budget Standing Committee recommend 100% cost recovery for the Building Division to City Council. Public Works - Engineering: Total number of proposed fees: 98 — Number of fees with 100% cost recovery: 88 — Number of fees less than 100% cost recovery: 7 — Number of fees based on other fee calculation: 3 The Engineering Division is recommending 100% cost recovery for the majority of its fees. Exceptions include fees related to sewer lateral permits and the associated fees for video reviews of sewer laterals. Engineering was previously under -recovering for many of the services it provides. The methodology for Engineering's fees had changed slightly as new staff had come on board and began to make process improvements. The Engineering Division previously achieved recovery by accepting deposits from developers and then drawing down from those accounts as the Engineers worked on the projects. In an effort to make the fees more predictable to the end user and to move to a simpler -to -administer flat -based SPECIAL BUDGET STANDING COMMITTEE MEETING AUGUST 3, 2020 MINUTES PAGE 4 fee, the fees appear to have jumped significantly higher. Much of the optics of this is just right -sizing a history of under -cost recovering from deposit -based accounts. Staff recommends a move to flat -based fees and most fees at 100% cost recovery. Public Works - Water Quality Control: Total number of proposed fees: 28 — Number of fees with 100% cost recovery: 10 — Number of fees less than 100% cost recovery: 3 — Number of fees based on other fee calculation: 15 Fee No. 11.11 (Stormwater Inspection Fee). This was a new fee and some anticipated pushback from the businesses in the service area. This fee would apply to the approximately 200 businesses per year that the Environmental Compliance Program inspects as part of the City's requirements under Section CA of the Municipal Regional Stormwater Permit (MRP). This fee would help to offset the large deficit between Stormwater Program funding and costs to meet all of the MRP requirements. As it is a new fee, staff was recommending a phased approach to implementation. The industry standard cost recovery for a water quality control treatment service was typically between 80-100%. Vice Mayor Addiego inquired how staff determined that 200 businesses were impacting the stormwater. Public Works Director/City Engineer Kim stated he would look into it and report back to the Budget Standing Committee members. Vice Mayor Addiego requested an update at the August 22, 2020 Master Fee Schedule meeting. Parks and Recreation: Total number of proposed fees: 165 — Number of fees with 100% cost recovery: 13 — Number of fees less than 100% cost recovery: 136 — Number of fees based on other fee calculation: 16 Parks and Recreation class fees are subject to what the market can bear and the offerings vary by season. Therefore, the fees are usually included in seasonal activity guides to reflect the specific price and offerings for each season. A modest 3% increase across the board was applied over last year's fees in alignment with the 3% increase made to most fees citywide. The recommendation is widely based on the rise of labor costs and parallels the average percentage increase in employee compensation. The industry standard cost recovery for a Parks and Recreation department was between 20-50%. Councilmember Nicolas inquired whether staff had tried searching for a lower credit card processing fee from the current 3%. Director Salisbury advised that the credit card fees were collected and set by the City's commercial bank. She stated the bank sets their fees based on transaction volume and the City was considered a medium sized business. Vice Mayor Addiego asked whether the City allowed hotels to pay their TOT with a credit card. City Manager Futrell stated hotels were given the choice to pay with a credit card if they'd wish. He added that the last year when they brought this to Council, the amount was around $300,000 the City was subsidizing with the fees. City Manager Futrell advised he would get the current numbers and report to Council. City Manager Futrell stated staff would change the staff recommendation on the library overdue fines to say the Budget Standing Committee agreed with staff and recommended to do away with fines for SPECIAL BUDGET STANDING COMMITTEE MEETING AUGUST 3, 2020 MINUTES PAGE 5 overdue books. Report regarding proposed amendments to Development Impact Fees (Janet Salisbury, Director of Finance) Director Salisbury stated this report was for any fine tuning any remaining questions the Budget Standing Committee may have. Councilmember Nicolas asked what the engineering cost index was. Director Kim stated the engineering cost index was the construction cost and construction projects. Councilmember Nicolas inquired about the average adjustment. Director Kim stated it varies a lot due to the economic times in the Bay Area but can go anywhere between 0 and 5 or more. Vice Mayor Addiego congratulated Director Kim on his newborn baby. ADJOURNMENT Being no further business Vice Mayor Addiego adjourned the meeting at 4:13 p.m. Submitted by: Gabriel Rodri'gb107- ",'tieputy City Clerk City of South San Francisco Approved by: -�� 4z&00 Mark Xddiego, Mayor City of South San Francisco Approved by the Budget Standing Committee: � / 2 X / U'z t SPECIAL BUDGET STANDING COMMITTEE MEETING AUGUST 3, 2020 MINUTES PAGE 6