REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager
PREPARED BY: Gilbert Garcia, Chief Financial Officer
Subject:
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Adopt Ordinance No. 4148 adding Chapter 10.50 to the Code, both relating to On-Street Parking Meter Zones and Off-Street City Parking Lots
Approved for introduction December 17, 2018 - Vote: 7-0
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Statement of Issue:
As we look ahead to FY 2019-20 and beyond budget development, we expect deficits in the base budget as a result of rising costs, notably those associated with retirement benefits. Consequently, one of the City Council’s Strategic Objectives for 2018 is to “conduct a City Council Study Session on budget balancing options, including looking at current revenue sources, potential new revenue options and sale of surplus property.” A study session was held on May 7, 2018, in which staff presented the City Council with a wide range of budget balancing options. At that study session, the City Council referred the item to the Finance Commission for follow-up and recommendations. At the regularly scheduled Finance Commission meetings on May 23, 2018, June 27, 2018, July 25, 2018, and November 14, 2018, proposed budget balancing options were reviewed and discussed. At the City Council Study Session on August 6, 2018, the Finance Commission presented its recommendations for both revenue and budget reduction options. Based on the recommendations of the Finance Commission and feedback from the City Council during study sessions and the Council Meeting held November 5, 2018, staff recommends the following actions:
(1) Adjust the Citywide Master Fee and Charges Schedule to increase certain fees to 100 percent cost recovery and increase other fees to achieve a higher rate of cost recovery;
(2) Adjust parking meters to a single year round rate and remove seasonal changes; and
(3) Adjust fines for certain parking citations.
Financial Impact:
Citywide Master Fee and Charges Schedule: Citywide user fees and charges generate approximately $19.7 million in annual revenue across all funds, with $18.5 million in the General Fund. In the Adopted General Fund Budget of $226.4 million for FY 2018/19, this represents approximately eight percent of total General Fund revenue. The monies generated by City-wide user fees and charges support a wide range of City services, including public safety. If adopted as proposed by staff, the updated Schedule may generate up to $269,500 in additional General Fund revenue.
Parking Meter Rates: Parking Meters currently generate approximately $3.1 million in General Fund revenue. Metered parking rates are $1.75 per hour during the peak season (May 1 through Labor Day) and $1.50 per hour during the off-peak season. Changing the parking rates to $2.00 year round may generate an additional $600,000 in revenue annually.
Parking Citations: Parking Citations currently generate approximately $3.6 million in revenue. The proposed changes may generate up to $243,000 in additional General Fund revenue annually.
Recommended Action:
recommendation
Adopt Ordinance No. 4148, “An Ordinance of the City of Huntington Beach Amending Huntington Beach Municipal Code Chapters 10.04, 10.52, 10.56, 10.60 and 10.68, and Adding Chapter 10.50 to the Code, Both Relating to On-Street Parking Meter Zones and Off-Street City Parking Lots.”
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Alternative Action(s):
Do not approve the recommended actions and direct staff accordingly.
Analysis:
Citywide Master Fee and Charges Schedule: Local government operations are primarily funded from taxes, user fees and charges, fines, and grants. The City of Huntington Beach charges fees for providing various services and programs to residents, businesses operating in the City, and visitors. These fees include providing cultural and recreational activities, issuing business permits, activating residential water and sewer accounts, and many other services.
In some cases, fees are charged at full-cost recovery for providing services. In other cases, fee recovery is less than 100 percent, which can be due either to market conditions, government-mandated caps or the recognized benefit of subsidizing certain programs to the community. Pursuant to Proposition 26, service fees cannot exceed the City’s cost to provide the service.
Revenue received from fees is deposited into the applicable funds to establish fees based on full-cost recovery. In order to establish fees, it is necessary to first determine the cost of services. To ensure appropriate fee amounts are being assessed, the City employed NBS, a professional fee study and cost allocation plan consultant. Based on the results of that study, the City Council reviewed and approved adjustments to multiple fees and created a Consolidated Master Fee and Charges Schedule on November 7, 2016.
The Schedule was subsequently amended in accordance with Resolution Nos. 2017-46, 2018-01, 2018-29, and 2018-48. If the Master Fee and Charges Schedule is amended as proposed, General Fund revenue could increase by $269,500 and Automation Fund revenue could increase by $65,000, as detailed below:
Community Development Fees and Charges - There are a number of fees and charges associated with services rendered by the Community Development Department. Under the California Environmental Quality Act (CEQA) the City is required to review projects that require discretionary review and determine and disclose any environmental impacts associated with that project. Currently, a flat fee is collected for all types of environmental documents, as prescribed in the Master Fee Schedule, with the exception of an Environmental Impact Report (EIR). The current fee schedule prescribes a deposit methodology where the City contracts with an environmental review firm to prepare the EIR and the applicant pays the actual cost of the service plus a flat amount to cover staff’s time to administer the contract.
Staff desires to utilize the current EIR deposit methodology for the preparation of all environmental documents. Staff currently prepares all non-EIR environmental documents in-house. This work consumes approximately 15-20% of planning staff time. The applicants are paying a flat fee, as established in the NBS fee study, to cover the costs incurred to provide this service. These fees are established in a manner that ends up averaging the cost so that smaller projects are typically subsidizing larger projects. By moving to a deposit methodology, each applicant will pay the actual costs for this service associated with their project. This methodology allows staff the ability to contract for this service, thus freeing staff time to assist applicants, particularly homeowners and small businesses that do not frequently go through the entitlement and permit process.
The deposit methodology also enables staff to continue to do the environmental review in-house if the economy slows and the volume of work goes down. If the staff resources are available, staff can conduct the reviews in-house and continue to provide a high-touch customer experience for applicants. Staff is recommending the deposit approach for all environmental review. Most cities contract out this function and therefore there are a number of qualified firms to provide this service. It also provides flexibility to effectively manage and balance resources with the goal of providing a superior customer experience.
Staff is proposing to eliminate the flat fee for the non-EIR environmental review services and move to a deposit methodology based on a time and material basis, including staff time to administer the contracts. The hourly staff rates provided in the Master Fee Schedule will be utilized for determining the staff cost to administer the contract or to prepare the environmental document if done in house. Staff will estimate the hours necessary to oversee the contract and provide the estimated cost of staff time along with the actual fee proposal from the consultant (when the environmental review is outsourced) so that the applicant will have a reasonable idea of the costs associated with the environmental review.
Section 21089 of the Public Resource Code allows the City, as a lead agency, to charge and collect a reasonable fee for the preparation of environmental documents. No additional information related to the amount of the fee or the noticing procedures is provided. However, pursuant to Government Code Section 65104, any fees established to support the work of a planning agency shall not exceed the reasonable cost of providing the service and shall impose the fees pursuant to Government Code Section 66016. Government Code Section 66016 requires the matter to be considered at a regularly scheduled meeting at which oral and written presentations can be made.
The data required by Government Code Section 66016 includes the estimated cost to provide the service and the revenue sources anticipated to provide the service. The estimated cost will vary depending on the complexity of the environmental document being prepared. Under the deposit methodology, the applicant will never pay more than the actual cost to provide the service and the service will be funded directly through the applicant’s deposit.
Community Services Fees and Charges - Certain charges for recreation/cultural programs collected by the Community Services Department are not limited to the cost of service, and are set at the City’s discretion. After a review of current charges, staff is recommending rate increases for oversized vehicle and disabled placard passes, room rental hourly rates, specific and special events, as well as parking meter hourly rates as described below.
Annual Beach Parking Pass for oversized vehicles (up to 40 feet in length): Increase from $225 to $300, since the standard annual beach vehicle pass is $150 and oversized vehicles take up two parking spaces. In addition, staff is proposing to increase the Disabled Parking Placard Pass from $50 to $75 to match the Senior Pass rate.
Community Centers and Newland Barn Room Rentals: Staff is proposing a $5/hour room rental rate increase at the Community Centers, as well as a $5/hour to $10/hour increase at Newland Barn.
Special Events: Staff recommends increasing the Day Use rate for Special Events, as well as expanding the rate categories to differentiate between Huntington Beach Nonprofit organizations, Non-Huntington Beach Nonprofit organizations, Residents, Nonresidents, and Commercial entities. In addition, staff is recommending to change the existing set-up/take down rate from a flat $75 to a range between $187 to $275 per day.
Special Events are the City’s smaller events that are permitted solely by the Community Services Department. Special Events do not require the collaboration of multiple departments in order to host the event. Examples of these types of events include such things as local surf contests, weddings, or smaller tournaments. Event revenue sources include three different types of fees/charges:
1) Application fees,
2) Day Use Charges for the use of the city’s property, and,
3) Staffing reimbursement charges for direct costs associated with the event itself (such as lifeguard services for surf contests). Parking charges may also apply.
The complete listing of current and proposed rates associated with these Special Events is shown below:
For Day Use Charges, staff is recommending the expansion of Special Event categories to include Huntington Beach Nonprofits, Non-Huntington Beach Nonprofits, Resident, and Nonresident categories, in place of the current two-rate structure of Nonprofit and Commercial/Standard. The charge to local nonprofit organizations will remain the same at $375. Under the proposed new fee structure, residents will realize a $100 savings as their rate decreases from $500 to $400.
Staff is also recommending the implementation of a new set-up/take down daily charge for staging and breaking down an event. Staff believes that the implementation of set-up/take down daily charges will provide an incentive for groups to mobilize efficiently, thereby freeing up the space as quickly as possible. This methodology is consistent with other facility rental charges, which are calculated based on the length of time the space is reserved, rather than the duration of the actual event. As noted above, the proposed set-up and take down rates are 50% of the proposed day use charges.
Comparisons to other cities are difficult as the methodologies used by each jurisdiction in calculating these charges varies; however, the City of Newport Beach has an overall range of $481-$1,216 for similar types of events. Long Beach and Hermosa Beach both charge set-up and take down fees ranging from $155-$510 per day. In addition, no other city surveyed provides discounts to nonprofit agencies.
Specific Events: Staff recommends increasing Application Fees and Day Use charges, as well as expanding the rate categories to differentiate between Huntington Beach and Non-Huntington Beach Nonprofit Organizations, as shown in the table below. A new set up/take down daily charge for Specific Events is also recommended.
Specific Events are the City’s major events that require the collaboration and staffing of multiple departments and outside agencies in order to host the event, such as the US Open, HB Air Show, and Surf City Marathon. Per Municipal Code Chapter 13, events that fall into this category must be reviewed and recommended for approval by the Specific Events Committee.
Revenue streams are similar to Special Events and include the same three different types of fees/charges:
1) Application fees based on the estimated number of attendees (greater or less than 2,000),
2) Daily Use Charges for the use of the city’s property, and
3) Staffing reimbursement charges for direct costs associated with the event itself (such as lifeguard services for surf contests). Parking charges may also apply.
The complete listing of current and proposed rates associated with Specific Events is listed below.
Staff is recommending increasing Application Fees to $225 and $450 in order increase cost recovery from 44% to 50%. Application fees for Specific Events are higher than those for Special Events due to the increased staff time associated with these types of events.
For Day Use charges, staff is recommending breaking out nonprofit charges into the two categories of Huntington Beach and Non-Huntington Beach Nonprofits. Staff is also recommending slight increases to the charges, which are set at the discretion of the City. By implementing set-up and take down charges, there will be a greater incentive to expedite the set-up and take up of events. Due to the complexity and nature of these major events, no separate rates are needed for Resident and Nonresident categories since individuals do not file applications for Specific Event permits. As previously mentioned, no other city surveyed provides discounts to nonprofit agencies for Special or Specific events.
As with Special Events, staff is also recommending the implementation of a new set-up/take down daily charge for staging and breaking down an event. In FY 2016/17, the total number of set-up days was 94 compared to 91 actual event days. Attachment 2 provides a comprehensive summary of event and set-up/take-down days for Special and Specific Events. By implementing set-up and take down charges, there will be a greater incentive to expedite the set-up and take down of events. As noted above, the proposed set-up and take down rates are 50% of the proposed daily use charges.
Hourly Parking Meter Rates: Staff conducted a review of surrounding beach cities, including Newport Beach, Laguna Beach, Long Beach, and Seal Beach and proposes changing the metered parking rate to $2.00 per hour, year round. The current peak season hourly rate is $1.75 and is in effect from May 1st through Labor Day. The off-peak season hourly rate is $1.50 and has been in place for over 15 years. The proposed rate is comparable to rates at surrounding beach cities. The projected General Fund revenue increase of up to $600,000 also assumes the purchase of more efficient, user-friendly replacement pay stations and other parking equipment designed to increase parking efficiencies.
The ordinances pertaining to on-street and off-street parking lots have been reorganized in conjunction with the proposed hourly parking meter rate increase. Off-street parking lots which have previously been included in the Huntington Beach Municipal Code (such as the Pier Plaza lots north and south of the pier, the lots located on the blufftop north of Goldenwest Street, the new lot located at 1st/Atlanta, and the Warner lot) will be transferred from the City’s Municipal Code to the Citywide Master Fee and Charges Schedule. On-street parking meter zones (such as the business zone located in the downtown area, the residential zone, as well as Pacific Coast Highway, and Beach Blvd.) will remain in the City’s Municipal Code as on-street parking meter rates must be set by ordinance per California State Law.
This reorganization of rates is required in order to have all hourly parking rates for off-street lots in the Citywide Master Fee and Charges Schedule. Currently the rates for the Main Promenade Parking Structure, the south beach lots (between Beach Blvd. and 1st Street), the Sunset Vista RV Campground, and the Huntington Central Park Sports Complex are included in the Citywide Master Fee and Charges schedule. Moving the remaining off-street lots to the Master Fee and Charges Schedule will keep all the off-street lot rates together and provide for more efficient, consistent changes as needed in the future.
Other administrative changes pertaining to the proposed ordinances include codifying the establishment of off-street parking lots and correcting the parking meter zones to include only on-street parking meter zones.
Finance Fees - Fees collected by the Finance Department represent charges to recover the cost of City services such as business permits, parking citations, and water billing. The proposed increase in credit card convenience and parking citation processing fees to $3.28 would bring these fees to 100 percent cost recovery.
Entertainment Permits: The permitting process for Entertainment Permits is completed pursuant to Chapter 5.44 of the Huntington Beach Municipal Code. The staff time involved with the certification process includes Finance and Police staff time to ensure the business conforms with applicable zoning requirements, completing background investigations pursuant to the requirements of the ordinance, and issuing printed permits as well as other official documents.
Massage Establishment Permits: The permitting process for massage Establishment Registration Certificates is completed pursuant to Chapter 5.24 of the Huntington Beach Municipal Code. The Finance and Police staff time involved with the certification process includes ensuring that the business is not within 1,000 feet of another massage establishment, completing background investigations pursuant to the requirements of the ordinance, and issuing printed permits as well as other official documents.
The intent of requiring the permit is to ensure that law-abiding operators are able to conduct business within the City. The permitting program makes it difficult for bad actors to establish and operate businesses in the City. The program has successfully resulted in a significant decrease in illegal operators.
Special Business Permits Overview: These types of permits are required by the Police Department for certain types of business activities such as live entertainment, fortune telling, and massage. Fees for these types of permits are determined by the cost of the staff time used to process the permits. The detailed cost breakdown by staff type is listed below:
Staff recommends phasing in fee increases for Special Business Permits related to entertainment, fortune tellers, and massage establishments over a five-year period that would ultimately bring these fees to 100 percent cost recovery. Special Business Permits related to all other business types are currently at full cost recovery. The first year of proposed increases to Business Permits would bring the average cost recovery for these fees from 47% to 57%. Attachment 3 lists massage and entertainment fees currently assessed by six surrounding cities as of November 2018.
Fire Fees - Fees represent charges to recover costs of City services pertaining to life safety and valuation based inspections for building permits, State mandated inspections for high rise inspections and large family day care centers, and an increase in certain Marine Safety fees.
Inspection and Plan Review Fees: These inspections and plan checks focus on compliance with the California Fire Code and Chapter 17.56 of the Huntington Beach Municipal Code, which provide for the safeguarding of life and property from fire and explosion hazards through the review and inspection of plans, buildings, and Special and Specific Events for compliance with proper exiting, hazardous materials storage and handing, fire sprinklers, and other fire-related regulations. Fire Prevention Inspectors and personnel assigned to fire stations (i.e., Firefighters, Paramedics, Fire Engineers, and Fire Captains) perform these inspections. The time required to complete these inspections ranges from 30 minutes (for small occupancies) to over six hours for high-rise buildings. Fire Protection Analysts perform the plan checks, which ranges from 45 minutes (for small projects) to upwards to 20 hours to complete (for Specific Events such as the U.S. Open of Surfing). The proposed fee increases would bring the average cost recovery for the fees from 60% to 82%.
Marine Safety Fees: The Marine Safety hourly rate fee recovers costs for Marine Safety staff activities related to Special and Specific Events, such as the Air Show, Surf City Marathon, and U.S. Open of Surfing. This fee is paid by the promoters of the events and is based on the hourly rates for Marine Safety Officers and Ocean Lifeguard IIIs, who provide area closures, beach safety and oversight of the event areas. During FY 2016/17, over 2,000 hours were billed for these services. The proposed fee would increase cost recovery from 54% to 60%. The City’s Sand Crab Program introduces 6-8 year olds to the beach and ocean environment, in preparation for future participation in the Junior Lifeguard Program. It is staffed by Junior Lifeguard Program Instructors and consists of two sessions per week for six weeks. During 2018, the first year of the program, the program had 137 participants.
Information Services Fee - The Technology Automation Fee is a five percent charge on all user fee services that utilize the City’s land management software systems. The fee recovers the cost of annual maintenance and update of the software system, as well as some staff resources. Staff recommends an increase to six percent, in order to increase cost recovery from 57 to 68 percent while keeping the fee sustainable.
Public Works Fee - The dock construction plan review and inspection fee recovers costs of City services to review plans for conformance with City, State, and other local agency regulations as well as staff resources required to inspect dock construction for structural soundness and adherence to wharf regulations. Staff is proposing an increase to this fee in order to achieve 100 percent cost recovery.
Library Charges - Charges for the rental of the Theater and meeting room spaces at the Central Library are not limited to the cost of service, and are set at the discretion of the City. The practice of supporting cultural and educational programs allows for the continued provision of affordable cultural services to the residents of Huntington Beach, while maintaining consistency with current market rates for similar services in neighboring cities. Charges for the larger meeting rooms and Theater are being increased to make costs more consistent with other services, while keeping the rates within the range of other community meeting spaces in Orange County. The increases are minimal and should have limited impact on potential clients.
Parking Citations: Staff conducted a review of parking citation rates for 13 nearby surrounding cities, including Newport Beach, Garden Grove, and Fountain Valley (see Attachment 5). The Uniform Bail Schedule includes many types of violations and fines; however, staff proposes increases for street sweeping, expired registration, and 72-hour violations in order to bring these fines in line with the average of the other cities surveyed. If adopted, the anticipated increase in General Fund revenue of $243,000 is summarized below:
Environmental Status:
Not applicable.
Strategic Plan Goal:
Improve quality of life
Enhance and Maintain Infrastructure
Strengthen Economic and Financial Sustainability
Enhance and Maintain Public Safety
Enhance and Maintain City Service Delivery
Attachment(s):
1. Resolution No. 2018-55, “A Resolution of the City Council of the City of Huntington Beach Amending the Fees and Charges for Entrance to or Use of City Property, Fees and Charges Collected by the Community Services, Finance, Fire, Information Services, and Public Works Departments, and the Fees for Environmental Review, All as Established Pursuant to Resolution Nos. 2016-59, 2017-46, 2018-01, 2018-29 and 2018-48 which Established A Consolidated Comprehensive Citywide Master Fee and Charges Schedule (Supplemental Fee Resolution No. 7)”
2. Summary of Special and Specific Event Fees
3. Entertainment and Massage Permit Fee Survey conducted November 2018
4. Resolution No. 2018-83, “A Resolution of the City Council of the City of Huntington Beach Adopting An Amended Uniform Bail Schedule for Parking Violations”
5. Parking Citations Survey conducted April 2018
6. Ordinance No. 4148, “An Ordinance of the City of Huntington Beach Amending Huntington Beach Municipal Code Chapters 10.04, 10.52, 10.56, 10.60 and 10.68, and Adding Chapter 10.50 to the Code, Both Relating to On-Street Parking Meter Zones and Off-Street City Parking Lots”
7. Legislative Draft of Ordinance No. 4148