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The San Ramon City Council is set to hold a public hearing and consider voting Tuesday on the adoption of a new user fee schedule that would raise a number of fees in order to balance them with the cost of services, in a move that would bring in $1.5 million in additional revenue in the next fiscal year.
The proposed new fee schedule follows a study from consultants and city staff that compared and contrasted the city’s current fee schedule with the cost for services versus the revenue brought in, as well as with the fees assessed in neighboring communities.
The report and proposed new fees have been the subject of multiple council discussions in recent meetings, serving as the first comprehensive fee analysis ever for the city, as well as the first proposed change to its service fee structure since a 2017 update following a review of fees in the planning and engineering departments.
“The purpose of this study was to evaluate time and cost assumptions and determine the full cost (direct and indirect) of providing City services based upon the current organizational structure and processes,” analysts from Matrix Consulting wrote in the study connected with the proposed fee changes.
Consultants looked at the relationship between costs of service in the city’s general fees, building and safety, planning services, public works, police, and parks and community services.
“The results of this Study provide an updated understanding of current service levels and the maximum justifiable cost for those services,” consultants wrote.
According to the analysis of the city’s current fee structure, the cost of services provided exceeds the fees collected by an estimated $1.5 million, with the city currently recovering 79% of costs overall. For building and safety services, 77% of those costs are recovered, 58% are recovered for planning services, and 91% are recovered for public works.
The largest deficit is found in building and safety, where current costs for services amount to $5,231,607 per year and the revenue collected in fees amounts to $4,045,732 for a gap of $1,185,875. The discrepancy between costs and revenue is $205,688 for planning services and $132,809 for public works.
“Expanding the tiers and updating the ranges to better reflect cost of service will allow the city to achieve greater cost recovery,” consultants wrote. “Lower deficits were expected for Planning and Public Works as those fees were evaluated more recently in 2017 and their deficits are due to changes in hourly rates.”
While revenue recovered via the current fee schedule is exceeded by the cost to the city for services provided, consultants noted that this was not across the board, with some fees functioning as an “over-collection” according to consultants with “undercharges” in other areas.
“The results of this analysis provide each Department and the City with guidance on how to right-size their fees to ensure that each service unit is set at an amount that does not exceed the full cost of providing that service,” consultants wrote.
While numerous discrepancies between costs and revenue are documented in the study and used to guide the recommended new fee schedule from city staff, consultants noted that it is ultimately up to the council to decide how closely – if at all – the fees collected for services should align with costs to provide them.
The proposed new master fee schedule was first presented to the council in a special meeting on March 26.
“Given the City’s current financial condition, Council gave direction to return with a proposed Master Fee Schedule that moves toward full cost recovery where feasible, in addition to other more specific recommendations,” Administrative Services Director Kelly Sessions wrote in a staff report prepared for the upcoming meeting.
This week’s public hearing on the topic – required by state law before the adoption of a new fee schedule – was scheduled by the council at their regular meeting later that day, with an updated draft and reports presented at the April 9 council meeting for feedback and direction.
The San Ramon City Council is set to meet at 7 p.m. on Tuesday (April 22). The agenda is available here.
In other business, the council will receive the Open Space Advisory Committee’s annual report before a closed session meeting on labor negotiations with the San Ramon Police Officers’ Association and the department’s chief, captain, and police lieutenant.
