To: Board of Supervisors
Department or Agency Name(s): Department of Agriculture/Weights & Measures
Staff Name and Phone Number: Gina Lehl, (707) 565-2371
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Consolidated Fee Hearings - FY 2024-25 for the Department of Agriculture/Weights & Measures
End
Recommended Action:
Recommended action
Adopt a Resolution introducing, reading the title, and waiving further reading of the proposed ordinance establishing and amending fees for services provided by the Department of Agriculture/Weights and Measures and making minor related amendments to Sonoma County Code Chapter 30 Article 1. The new fees will become effective on July 1, 2024.
end
Executive Summary:
The County of Sonoma engaged with a consultant, NBS (Consultant) to perform a User Fee Study (Fee Study) in FY 2019-20. The goal of the Study was to present findings regarding maximum allowable cost recovery amounts from the various fee analyses performed as part of the Study, and to provide the County with the information needed to update and establish user and regulatory fees for services. It was determined through that Study that most of the fees collected by the Department of Agriculture/Weights & Measures (Department) were significantly under the cost recovery amount. During the FY 2022-23 consolidated fee hearings, the Board directed staff to implement a phased approach to reaching full cost recovery. The Consolidated Fee Hearings for FY 2024-25 would be the third year of that phased approach.
Discussion:
California cities, counties, and special districts may impose user and regulatory fees for services and activities they provide through provisions set forth in the State Constitution, Article XIII C §1(e)(1)-(3). Under this legal framework, a fee may not exceed the reasonable cost of providing the service or performing the activity. For a fee to qualify as such, it must relate to a service or activity performed at the request of an individual or entity, or their actions specifically cause the local government agency to perform additional activities.
The methods applied by the Consultant to develop the 100% full cost of service calculations presented in the Fee Study rely on industry standard approaches to fee analysis that are quantitative in nature. The Consultant provided the 100% full cost of service calculation, in FY 2019-20 dollars, for each fee as well as the policy making framework the County may consider when adjusting the amount of cost recovery in accordance with its broader goal as they pertain to code compliance, cost recovery, economic development, and social values. However, given that the full cost recovery amount used in the Fee Study was based on FY 2019-20 costs, and once operational cost escalations for FY 2020-21 through FY 2022-23 were factored and estimated at approximately 12%, the Board approved an average increase of 15% in fees in FY 2023-24 to keep up with the increased costs. Using the cost-of-service calculations from the 2019-20 report is still applicable because of the time studies source data. There have been no significant changes to process that would warrant amendments to that data at this time.
Prior to FY 2024-25, Department fee increases were based on the San Francisco Bay Area’s consumer price index or increased labor costs. Through the Fee Study, the Department learned that it was recovering 54% of total estimated costs associated with providing user and regulator fee-related services. There were other local policy considerations that supported adopting some fees at less than the calculated full cost recovery amount. The Department adopted the approach to incrementally increase fees over a three-year period (through FY 2024-25) where reaching full cost recovery was desired. Where there were other considerations to maintain a fee subsidy for the benefit to the community or to encourage compliance, a more modest incremental increase was planned over the same three-year period. The Department is now in year three of these incremental increases. The incremental approach varied for each division and is described in the following sections below. The FY 2024-25 proposed rate increases above current fees are as follows:
|
Operational Division |
FY 2024-25 Proposed Rate Increase (average %) |
|
Agriculture |
9% |
|
Land Stewardship |
16% |
|
Weights & Measures |
16% |
The Department was impacted by increases to salaries & benefits costs under the labor agreements that were signed during 2023.
Over two years, the total increase, including adjustments to bring salaries in line with comparator counties and cost of living adjustments have totaled 17.9% within the Agriculture and Weights & Measures divisions, and 16% within the Land Stewardship division. These rates are higher than for the County as a whole because salaries for many positions in these divisions were well below those in other jurisdictions. Because the negotiations were not completed at the time of fee development last year, only a modest 4% cost of living adjustment was included in calculations. The proposed fee increase is an average of 9% for the Agriculture division and 16% for the Weights & Measures division. These increases will continue to bring fees closer to cost recovery as adopted during the Fee Hearings for FY 2022-23.
Should the Board approve proposed FY 2024-25 rate increases, cost recovery by operational division is estimated to be as follows:
|
Operational Division |
FY 2024-25 Estimated Cost Recovery (%) |
|
Agriculture |
76% |
|
Land Stewardship |
80% |
|
Weights & Measures |
84% |
Agriculture Division
The Agriculture Division acts under the jurisdiction and direction of the California Department of Food and Agriculture (CDFA), and the California Department of Pesticide Regulation (DPR), and works in cooperation with various federal, state, regional, and local agencies. The Agricultural Commissioner enforces the laws and regulations of the California Food and Agricultural Code, the California Code of Regulations, and local ordinances while serving at the discretion of the County Board of Supervisors and the CDFA Secretary of Agriculture.
Historically, fees in the Agriculture Division have remained far below full cost recovery to help support the local agricultural community, and as a result, the General Fund is used to supplement division costs. In turn, the amount of General Fund contributed to the CDFA program activity costs within the Agricultural Division supports the County’s Maintenance of Effort (MOE) for unclaimed gas tax revenue and helps leverage additional funding from the CDFA. Fee revenues for Agriculture services (excluding Cannabis) comprise only about 2-3% of the division’s total revenues. Due to the recognition of the importance of agriculture within Sonoma County, the average increase for fees in the Agriculture division will be 10%, bringing the Department to 76% of full cost recovery and with the understanding that the Department will not reach full cost recovery.
Land Stewardship Division
The Land Stewardship Division administers the Sonoma County Vineyard and Orchard Site Development Ordinance, also known as VESCO, as well as Agricultural Grading and Drainage. Growers planting new vineyards, orchards, or replanting existing vineyards or orchards are required to meet standards within the Sonoma County Code and comply with requirements including best management practices (BMP) as established in the Agricultural Commissioner’s BMP Guidelines. The proposed average fee increases of 16% within the Land Stewardship division will bring the Department to 80% full cost recovery.
Weights & Measures Division
The Weights & Measures Division is committed to protecting the economic health of the community by preserving and maintaining confidence in the accuracy of weighing and measuring instruments, product standards, and business practices used in commerce. Through this balanced commitment and timely response to citizen requests, consumers and businesses are assured the means of accurate value comparison and fair competition.
The Automated Point of Sale Fees are to cover costs for point-of-sale scanner compliance. This is ensuring correct charges when a store scans the bar code on a package and the price rings up at the checkout counter. The Division’s staff inspects to ensure the products sold are charged the correct listed price. Noncompliance with these regulations tend to effect underrepresented communities where small overcharges can have greater effect. In this way these fees support the County’s Strategic Plan pillar of Racial Equity and Social Justice. The proposed fee average increases of 16% within the Weights & Measures division will bring the Department to 84% full cost recovery.
Estimated Revenues and Future Review
The FY 2024-25 estimated revenue projections based on the proposed 10-20% fee increase is approximately $124,422. The Department is approximately 70% self-funded through state grant revenue and costs for services (fees) and receives approximately $2.5 million in General Fund support to offset the balance. While the overarching goal is to implement fees for services that cover departmental costs, significant consideration was given to community impacts. There are fees that have a great community benefit and support additional funding through a maintenance of effort.
The Department plans to conduct an evaluation of its fees and cost recovery every 3-5 years to ensure the fees equate to the estimated cost of providing the service. Efforts are currently underway to examine efficiencies to keep costs for services flat or reduce the costs where warranted.
Strategic Plan:
N/A
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
No
Prior Board Actions:
03/21/2023 - Adoption of Agriculture/Weights & Measures Fees and Staff Hourly Rates
03/22/2022 - Adoption of Agriculture/Weights & Measures Fees and Staff Hourly Rates
05/15/2019 - Adoption of Agriculture/Weights & Measures Fees and Staff Hourly Rates
04/18/2017 - Adoption of Agriculture/Weights & Measures Fees and Staff Hourly Rates
04/26/2016 - Adoption of Agriculture/Weights & Measures Fees and Staff Hourly Rates
Fiscal Summary
|
Expenditures |
FY23-24 Adopted |
FY24-25 Projected |
FY25-26 Projected |
|
Budgeted Expenses |
|
$124,422 |
$124,422 |
|
Additional Appropriation Requested |
|
|
|
|
Total Expenditures |
|
$124,422 |
$124,422 |
|
Funding Sources |
|
|
|
|
General Fund/WA GF |
|
|
|
|
State/Federal |
|
|
|
|
Fees/Other |
|
$124,422 |
$124,422 |
|
Use of Fund Balance |
|
|
|
|
General Fund Contingencies |
|
|
|
|
Total Sources |
|
$124,422 |
$124,422 |
Narrative Explanation of Fiscal Impacts:
The Department anticipates an additional $124,422 in revenue as a result of the proposed fee increases in FY 2024-25.
|
Staffing Impacts: |
|
|
|
|
Position Title (Payroll Classification) |
Monthly Salary Range (A-I Step) |
Additions (Number) |
Deletions (Number) |
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
1. Resolution to Introduce and Waive Reading of Ordinance
2. Ordinance
3. Exhibit to Ordinance
4. FY 2024-25 Fee Summary
Related Items “On File” with the Clerk of the Board:
None