FROM:
Finance
SUBJECT:
Title
User Fees for City Services
End
RECOMMENDATION:
Recommendation
1. Adopt Resolution No. 2024-054, a resolution of the City of Fontana adjusting existing user fees for various services provided by The City.
2. Adopt Resolution No. 2024-055, a resolution of the City of Fontana adopting new Community Services fees
End
COUNCIL GOALS:
• Practice sound fiscal management by producing timely and accurate financial information.
DISCUSSION:
On July 13, 2021, the City of Fontana (the “City”) adopted a revised User Fee Policy and Resolution No. 2021-697 authorizing the annual adjustment of previously adopted user fees pursuant to the annual change in the Riverside-San Bernardino-Ontario Metropolitan Statistical Area (MSA) Consumer Price Index for All Urban Consumers (CPI-U) for January. The User Fee Policy also stipulated that fees would be adjusted annually based upon the CPI-U through 2026-27 with a comprehensive fee study being conducted in 2027-28.
Over the last couple of years, the CPI-U has been considerably higher than historical rates over the last 10 years. In January of 2022 and 2023, the CPI-U increase was 8.6% and 7.3% respectively, due to a steep elevation in costs of goods and services indexed. Because of this, to relieve part of the added burden on users, the City diverged from the User Fee Policy and instead adopted a 5.0% increase each year to all existing user fees, with the exception of deposits, fees that impact seniors, or any fees regulated by statute that have increased.
City staff has been working with Willdan Financial Services on its comprehensive fee study since early 2023 to standardize processes and recalibrate fees now rather than waiting until 2027-28. The study and the development of a fee calculation model will allow for economic stabilization to occur as well as future personnel costs to be better forecasted. Because of the City’s number of fees and complex fee schedule, it is anticipated that the fee study will be presented to Council for consideration in December 2024 or January 2025.
At present, the CPI-U is reflecting adjustments that align with what was traditionally exhibited, and staff recommends that the City resume utilizing the CPI-U to adjust the user fees for 2024-2025, which will result in a 2.9% increase, until the fee study is completed.
It is determined that the user fees as increased and depicted in Exhibit A, reasonably cover, but do not exceed, the reasonable cost of providing the service for which the user fee is charged. Fees with a resulting increase less than $1.00 were not adjusted. Fees with a resulting increase more than $1.00 were rounded down to the nearest whole dollar amount.
In addition to the increase in existing fees, the Community Services Department is proposing the addition of two (2) new user fees. A summary of these new fees can be found in Exhibit B: Summary Schedule of New User Fees on page 5.
Notices of Public Hearing were published on June 14, 2024 and June 19, 2024 in the San Bernardino Sun newspaper noticing the June 25, 2024 Public Hearing. Copies of the Changes to Existing User Fees, Schedule of New User Fees and Summary and Supporting Detail Schedules containing a detailed cost analysis of each new fee were made available to the public at the City Clerk’s Office for review.
Approval of this report and adoption of the attached Resolutions will provide for all fees to be effective September 1, 2024.
FISCAL IMPACT:
The fiscal impact associated with the approval of this item will result in an estimated 2.9% increase of fee revenue but actual revenue will be dependent upon fee related activities.
MOTION:
Approve staff recommendation.