To: Board of Supervisors
Department or Agency Name(s): County Administrator’s Office
Staff Name and Phone Number: Peter Bruland, (707) 565-3086
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Fiscal Year 2024-25 Consolidated Fee Hearing Summary
End
Recommended Action:
Recommended action
Receive and adopt resolutions, and/or ordinances, adjusting department and agency fees and charges included in separate items in this agenda, to be effective on July 1, 2024 unless otherwise noted.
end
Executive Summary:
The Constitution and laws of the State of California allows for the collection of certain fees and charges for cost recovery of government activities that provide a specific benefit or service or are in place for regulatory purposes such as issuing licenses or performing inspections. Each year the County departments and agencies review for adjustment and/or new service delivery user fees, rates, and charges based on actual costs incurred to provide service and projected costs estimates for the coming fiscal year. This year seven departments are submitting adjustments to fees as part of this package. Individual items for each department are included separately on today’s agenda. There are three separate staff report items for Regional Parks, as they must separately adopt fees for Spring Lake Park, which they manage on behalf of Sonoma Water, and the Bodega Bay marinas (Marinas), which operate as enterprises, in addition to the principal general government Regional Parks item.
In total, if fees and charges adjustments are approved, the revenue derived from the net changes will be $2,920,750.
Discussion:
Government entities provide a mix of services. Some of these, such as justice services, provide general public benefit and are funded out of general-purpose revenue or specific revenue sources. Others provide specific benefits to those receiving the service, such as use of County property, or issuing of licenses or permits for specific actions. The costs of these services may be wholly or partially offset by collection of fees from those who receive the specific service or benefit.
The County’s Financial Policies <https://sonomacounty.ca.gov/administrative-support-and-fiscal-services/county-administrators-office/budget-and-operations/financial-policies>, which are adopted by the Board Annually during budget hearings, include two items that speak to use of fees:
• Programs financed by charges for services, fees, grants, and special revenue fund sources shall pay their full and fair share of all direct and indirect costs to the extent feasible and legally permitted which will include cost recovery towards future assets and/or system replacement.
• Departments requesting new or increased revenues from fees, permits and user charges shall submit these requests to the Board of Supervisors for consideration during the Board’s annual fee hearing process or at a separate hearing. … If permissible by law, fees and charges should cover all costs of the services provided, unless otherwise directed by the Board of Supervisors, to provide for public benefit.
In line with the second policy, annually staff presents ordinances and resolutions adjusting and adding user fees, rates, and charges based on operating cost estimates for the coming fiscal year, at what is referred to as the Consolidated Fee Hearing. In accordance with Government Code 6062(a) public notice was given through publication of notice of the fee hearing on two successive weeks with at least five days between publications.
Many of the proposed FY 2024/25 fees are increasing at higher rates than in recent years. This is primarily due to costs changes associated with the 2023 labor agreements, as well as higher than typical inflation impacting the costs of various services and supplies. Because fees for Fiscal Year 2023-24 were developed prior to finalization of labor agreements, they included only an estimate of cost increases that was less than final labor agreement negotiated changes. Consistent with the 3-year Labor Agreement staffing costs for FY 2024-25 will increase again on average by 4 to 5%. In addition certain employee benefits have been adjusting up. Factoring in anticipated increases for FY 2024-25 as well as the unrecognized portion of increases from FY 2023-24, the average change to salaries and benefits for County departments is approximately 8.2%. This number is not equal across all departments and all positions. At the high end, the Department of Agriculture/Weights and Measures is seeing an average increase of 12.4% in labor costs, while the comparable increase for Regional Parks is 6.9%. Details are provided below. Due to this great discrepancy, there is not a single County-wide cost-of-business increase for discussion and comparison as has been included in prior years.
Items in the Package
The attached report includes fee adjustments from seven departments: Agriculture/Weights and Measures, the County Administrator’s Office, Health Services, Permit Sonoma, Sonoma Public Infrastructure (for Airport fees), Regional Parks (including items for Regional Parks, Spring Lake Park, and Marinas), and the Sheriff’s Office. Together these items contain adjustments to approximately 1,500 fee items. A summary of these changes is attached, and a brief description of each item appears below.
Department of Agriculture/Weights and Measures
The Department of Agriculture/Weights and Measures is proposing adjustments to 89 fees, including 88 that are increasing and one that is decreasing. Due to several positions that were determined to be significantly under the rate of equivalent positions in comparator counties receiving significant market comparison adjustments during the 2023 labor negotiation process, the department has the highest overall change in salaries and benefits costs in the County, at 12.4% on average, with some units seeing higher averages. Additionally, most fees remain significantly below full cost recovery. The Department is working on a multi-year effort to bring fees closer to cost recovery over a period of time, while continuing to keep some critical fees low.
Most fees in the Land Stewardship division and locally controlled fees in the Weights and Measures division are increasing by 16%. Additionally, the Weights and Measures division schedule includes a number of device registration fees that are set in accordance with the state. These are increasing between 9% and 30%. A few are increasing by larger percentages, however these are low-dollar fees with small absolute increases.
In the Agriculture division, cost recovery has traditionally been better aligned with cost of operations and some fees did not see the same level of cost escalation need. As such, a majority of fees in this unit are increasing by 4%, with primary exceptions for Cannabis (maintaining full cost recovery and increasing from 13% to 16%), hazardous materials (increasing by 16%) and hemp (increasing by 16%).
If approved, the proposed fee changes are estimated to increase revenues by $124,422.
County Administrator’s Office
The County Administrator’s Office prepares two state-authorized fees on behalf of the Sheriff’s Office. The first is the Jail Booking Fee, which would be charged to arresting agencies if the state failed to appropriate $35 million statewide to fund counties for jail bookings. This fee has never been charged and is not anticipated to be charged in FY 2024-25; however, in accordance with state law, the fee is recommended to increase by 4.8%. The second fee is the Jail Access Fee, which per state law, is charged to an arresting agency if certain non-felony bookings exceed a three-year average for these types of bookings. This fee is based on the cost of booking operations. It is recommended to increase by 7% in FY 2024-25, based on the weighted average of 7.8% increase to salary and benefits and a 3.8% CPI. The proposed changes are estimated to increase revenues by $3,821, which is collected by the Sheriff’s Office for support of booking operations.
Health Services
Health Services is adding 13 new fees. Five are in Animal Services, related to rental of traps for control of problem animals and one is a spay/neuter deposit for owners picking up unaltered cats that came to the shelter as strays. The remainder are in Environmental Health, and primarily relate to cost recovery on additional hours needed for various complex reviews. Health Services is also eliminating six fees, which are being consolidated into other categories.
Health Services is also proposing adjustments to levels of 312 fees, with 283 increasing and 29 decreasing. Within Animal Services, 84 fees are increasing to account for increased costs, including changes to services and supplies and to labor costs. All increases are under 7%, with the average being 5.6%. Boarding fees and some vaccination fees are decreasing by between $1 and $15. Overall, Animal Services anticipates a net increase of $24,000 based on changes to their fees. These rates are maintained with relatively moderate adjustments due to significant General Fund ongoing support to help keep fees low, including an additional $287,901 approved in September 2023.
Environmental Health is proposing increases to 200 fees and decreases to 22 fees. The average increase is about 11%, which corresponds to an increase in the hourly unit rate as a result of increasing labor costs. Overall, the Environmental Health anticipates an increase in revenue of $247,787 as a result of proposed fee adjustments.
Note that Dairy fees are not being adjusted in this item and the department will hold public meetings before adjusting those rates.
Permit Sonoma
Permit Sonoma is proposing increases to 660 fees. Most fees are slated to rise by 8.5%, in line with the 8.5% average increase in salaries and benefits in the Department. The CAO presented a 2019 based fee study and in 2022-23 the Board approved increases to fees of approximately 9%, with a proposal to strategically increase fees over several years to bring most fees closer to cost recovery. At that time, an additional General Fund subsidy of $1 million was provided, bringing the total General Fund support for Permit Sonoma to $5.7 million, which offsets the need for full cost recovery fees. Following proposed implementation of the fee study, an increase of 7% was envisioned in FY 2024-25, however, costs have increased at a faster rate than was anticipated due largely to the labor agreements discussed above, leading to the proposed 8.5% increase. A few fees are adjusting by higher or lower percentages due to rounding of very small numbers (e.g. a plan check component moving from $0.08 to $0.09). Should the fee revisions be approved, the department anticipates and additional $1,591,557 in cost recovery revenue is anticipated in FY 2024-25 based on workload activities similar to the current year. These adjustments do not reduce the previously approved subsidy which will remain in place to continue to subsidize cost of delivering services.
As part of the Management Review, Permit Sonoma is working on measures to increase efficiency in the department. As changes are implemented fees will be reevaluated based on the revised processes and systems.
Public Infrastructure (Airport)
Sonoma Public Infrastructure operates the Charles M. Schulz - Sonoma County Airport as an enterprise, where revenues are expected to offset costs as well as long-term capital and other needs. The Airport does not receive any County General Fund support. This year the department is proposing changes to 40 fees, including increases to 35, decreases to four, and an adjustment to the parking schedule to allow for 30 minutes of free parking in short-term parking as opposed to the current rate with two hours of free parking in any lot (patrons of pre-security concessions will be eligible for validation for up to two hours). Of the fees that are increasing, approximately half are going up by less than 5%. Most (15) of the remainder are associated with violations to personnel badging agreements to ensure compliance with Transportation Security Administration directions and maintain security at the airport. These penalties are increasing between 33% and 100%. Additionally, there is a 150% increase to application fees for Commercial Vehicle Operators to offset costs which include insurance and various verification activities. Landing fees for large fire suppression tankers, which cause significant wear-and-tear on the runways, are increasing by 13%. Finally, there are decreases to some terminal advertising rates to match demand. The net impact of all proposed changes would result in $6,646 in additional revenue, however this does not account for the potential for reductions to advertising rates to increase demand for advertisements, as was suggested by a review performed. If sales volume does increase, there could be a large increase in revenues.
Regional Parks
Regional Parks is adding 12 new fees, primarily related to enhanced services that will be offered, including summer camps, tiered fees for utilizing new synthetic turf fields which give preference to nonprofits and local residents, and a new fee to allow fishermen at Mason’s Marina to park their own cold storage trailers and connect them to marina electricity. Additionally, new off-peak rates are being created for the water park to encourage use during less popular hours, and seasonal day use parking fees of $10 are being proposed for popular parks to reduce congestion and encourage use of new park shuttle options.
Regional Parks is also deleting 94 fees. In the Parks and Spring Lake areas these consist primarily of simplification of the fee schedule by eliminating event and program fees that are not regularly used but remain on the schedule. The relevant events can be contained under more general events categories. Additionally, Regional Parks recommends simplifying fees at the Marinas by eliminating separate offloading fees for most seafoods and standardizing at a single rate for all catches other than crab and salmon. Additionally, prices on merchandise sold at the Marinas are currently set individually per item, which is bureaucratically difficult and does not allow for prices to be adjusted if costs for the Department change. Regional Parks proposes eliminating the individual fees and replacing them with a rate of “Cost + 35%” for oil and oil-related products and “Cost + 40%” for retail products such as clothing.
Additionally, Regional Parks is proposing increases for 125 fees in Parks Operations and Community Engagement divisions and at Spring Lake; Marina fees are not recommended to increase given continued challenges faced by the fishing industry. Of the fees proposed to increase, a majority are slated to increase by 5% or less and almost three-quarters by less than 10%. Higher percentage increases primarily relate to fees that have not been adjusted for several years, and in most cases relate to small dollar-value fees where the total increase is less than $10. Annual memberships and day use fees other than for seasonal parking at high-use river area parks will not change. Camping rates will increase by $2 (about 5%).
Total revenues associated with the proposed Regional Parks fee adjustments are estimated at $568,350. The majority of this comes from the seasonal day-use parking rates ($135,000), use fees for Synthetic Turf fields ($118,500), new summer camp fees ($140,000), and camping fees ($75,175).
Sheriff’s Office
The Sheriff’s Office is recommending adjustments of 70 fees, 68 of which are increasing and two of which are decreasing. Of the fees that are increasing, 40 are set to increase by less than 10%, generally in line with direct cost increases. The remainder are increasing by larger amounts due to time studies that have revised the time taken to perform work associated with different tasks. The largest changes are associated with carry concealed weapons permits, which are increasing by 87% for new permits and 331% for renewals based on changes in state law that require background checks for new and renewal applications.
The proposed changes are estimated to increase revenue by $351,758. A majority of this, $238,682, is associated with the changes to the carry concealed weapons permits.
Strategic Plan:
None
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
No
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Prior Board Actions:
6/16/2023 - Adoption of the FY 2023-24 Budget
3/21/2023 - FY 2023-24 Fee Hearings
Fiscal Summary
|
Expenditures |
FY23-24 Adopted |
FY24-25 Projected |
FY25-26 Projected |
|
Budgeted Expenses |
|
$2,920,750 |
$2,920,750 |
|
Additional Appropriation Requested |
|
|
|
|
Total Expenditures |
|
|
|
|
Funding Sources |
|
$2,920,750 |
$2,920,750 |
|
General Fund/WA GF |
|
|
|
|
State/Federal |
|
|
|
|
Fees/Other |
|
$2,920,750 |
$2,920,750 |
|
Use of Fund Balance |
|
|
|
|
General Fund Contingencies |
|
|
|
|
Total Sources |
|
$2,920,750 |
$2,920,750 |
Narrative Explanation of Fiscal Impacts:
If adopted by the Board, the fees included in the attached items are expected to offset cost of providing services in the new fiscal year by $2,920,750.
Staffing Impacts:
|
Position Title (Payroll Classification) |
Monthly Salary Range (A-I Step) |
Additions (Number) |
Deletions (Number) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Narrative Explanation of Staffing Impacts (If Required):
N /A
Attachments:
Summary of fee changes
Fee Hearing Notice
Related Items “On File” with the Clerk of the Board:
None.