TITLE
Recommendation to receive supporting documentation into the record, conclude the public hearing and adopt resolution amending the Master Fee and Charges Schedule. (Citywide)
DISCUSSION
City Council approval is requested for the List of Proposed Fee Adjustments for the Second Quarter of Fiscal Year 2013 (FY 13), which describes the proposed changes to the City's Master Fee and Charges Schedule. On February 5, 2013, the City Council approved an amended Master Fee and Charges Schedule for specified City services. The basis for this schedule of fees and charges is the Fee Study, which was originally recommended by the Budget Oversight Committee and commissioned by the City Council on June 3, 2004 to complete a cost accounting of the most significant City services and their related user fees. The fees developed under this schedule are updated at least twice a year to encourage full cost recovery for the City's services.
One of the findings of the Fee Study was that the City's process to offset its costs to provide fee-based services did not provide for an inflationary adjustment or other cost growth factors. To provide for a more effective cost recovery, per the City Council's Financial Policy on User Fees and Charges, a mechanism to allow broad-based changes to the City's fees became necessary. Hence, the Master Fee and Charges Schedule, along with periodic fee updates, was initiated. City staff will continue to bring proposed fee adjustments on an ongoing basis to keep fees up to date. Please see Attachment A for the latest List of Proposed Fee Adjustments.
Proposed changes to the Master Fee and Charges Schedule involve several factors as follows:
City Council Financial Policy on User Fees and Charges - The Financial Policy states that departments are expected to recover 100 percent of their actual costs for user fees and charges unless the City Council approves a subsidy. Departments have proposed 164 changes related to keeping cost recovery efforts in line with actual costs.
Increased Service Demands - Certain new fees are being introduced to address the increased demand for City services. Charging a fee allows residents to enjoy the benefits of a service that may otherwise not be possible without sufficient revenue to offset the cost of providing the service. Some services in low demand are not initially assigned a fee because of the cost of developing a billing process. As demand increases, the impact on the organization increases, resulting in an improved cost/benefit ratio. In addition, services sometimes grow from a minimal impact to a larger impact resulting in the need to assign a cost to the service being provided. Changes in the regulatory environment may also result in new fees being developed.
This matter was reviewed by Assistant City Attorney Michael J. Mais on April 29, 2013 and Budget and Performance Management Bureau Manager Dennis Strachota on April 23, 2013.
TIMING CONSIDERATIONS
In order for the fee adjustments to be implemented and new revenue to be generated, the attached Resolution must be adopted by the City Council. Therefore, City Council action is requested on May 21, 2013 to allow for increased cost recovery at the earliest possible time.
FISCAL IMPACT
Any revenue changes described in Attachment A are only estimates, and are based on anticipated service usage in FY 14. The City's FY 13 adopted General Fund revenue estimates assumed natural growth of fees and charges; therefore, the requested fee increases are required to meet current revenue commitments in the respective departments and will support each department's General Fund operations during the current fiscal year. FY 14 revenue projections from proposed fee changes for all funds included in Attachment A are estimated to be about $280,000, but could be lower depending on market or economic conditions at the time.
City Manager's Office
Special Events and Filming
The attached Special Events and Filming fee adjustments are intended to better align cost recovery efforts with actual costs in accordance with a new, tiered fee structure. The new structure will provide a more user-friendly business model while allowing the City to collect fees at a rate that is more consistent with the size and type of event being offered. Proposed fees will replace the existing fee structure and recover costs associated with providing services related to Citywide special event and filming activity. Staff monitoring fees have also been revised in order to reflect hourly rates, instead of a flat staff monitoring fee.
Prior to making this recommendation, Special Events and Filming studied FY 12 fees and found that utilizing non-profit versus for-profit criteria to establish event rates is no longer the most appropriate method, as the number of non-profit events has increased dramatically over the years. The study found that staff costs are commensurate to the scale of the event and, in order to fully recover costs, events should be grouped into a tiered event structure. Consequently, Special Events and Filming has grouped events into Tier I, II and III categories, with fees calculated to fully recover costs.
· A small event determined to be free and open to the public, which does not block public access, will be issued a permit at the lowest rate, or Tier I.
· An event on public property with minimum setup and that requires a ticket, fee, or donation, will be rated at the next level, or Tier II.
· An event is identified as a Tier III when public property becomes an enclosed venue with controlled access and exclusive use.
· An event on public property will be charged a venue fee using this same, tiered fee structure, with move in and move out days being billed at half the daily event venue use rate.
Also, in order to become more business friendly, a fee for Business Improvement District Associations has been established to cover application and permit fees for up to six like events annually. Combining continuously scheduled event programs streamlines the permitting process while creating business-generating foot traffic in business districts.
Development Services
Housing Services Loan Programs
The Department of Development Services processes subordination agreements at the request of beneficiaries of various second mortgage assistance and rehabilitation loan programs. This fee standardizes the charge for processing those requests currently collected under the Department's "Special Project" fee. The proposed fee has been calculated based on the historical cost to the Department of providing this service. Approximately $4,500 in the Housing Development Fund (SR 135) is expected in FY 13 as a result of these transactions.
Long Beach Gas and Oil
Contractor Personnel Qualification Testing
Federal regulations state that no person shall make a plastic pipe joint unless that person has been qualified. Long Beach Gas and Oil (LBGO) requires the testing of all contractor personnel to comply with federal regulations. The person being qualified has to successfully perform pipe section joints. LBGO charges contractors a fee to recoup the cost of conducting these tests. LBGO is proposing to split the charges for qualification testing to account for two different types of work, a comprehensive test that includes all work on LBGO pipelines and a service line test that limits the qualification to installing gas services only. Generally, a contractor will have crews that install both mains and services and separate crews that install just services. This split allows the crews that run services to test only for the work that will be performed.
Financial Management
Business License and Permit Fees
Pursuant to Long Beach Municipal Code (LBMC) 5.68.060, pedicab (bicycle rickshaw) owners and operators are required to pay application and annual permit fees to offset administrative costs. The proposed fee adjustments for pedicab operators/drivers are being presented to reflect the full cost recovery model from which City fees are calculated. The investigative process has been reviewed and streamlined, resulting in a reduced fee.
Fire
Training Center
The Long Beach Fire Department (LBFD) Training Center is designated by the Los Angeles Area Fire Chiefs Association (LAAFCA) as a Regional Training Center. LAAFCA has designated six of these regional training sites throughout Los Angeles County. Serving the southeast region of Los Angeles County, the LBFD facility provides initial training and continuing education for hazardous materials and urban search and rescue teams from across the region.
These new fees are proposed to offset the cost of staff, as well as wear and tear on facilities and classrooms utilized by outside entities. Fees will be assessed to achieve full recovery for the costs of providing fire service-related classes. In addition, the fee for Carbon Dioxide inspection is being reduced to more accurately reflect the costs of providing the inspection.
Health and Human Services
Cottage Food Permit/Registration
Assembly Bill 1616, known as the Cottage Food Bill, was approved by the Governor on September 21, 2012 and became effective January 1, 2013. This bill requires local health departments to allow and regulate certain low-risk foods to be made in a private home and sold to the public. Currently, the Department does not have a fee for these types of Cottage Food Operations. To comply with this new State requirement, the Health and Human Services Department requests the approval of these two new cottage food health permit/registration fees. The law requires a health registration for Class A Cottage Food Operators who sell food directly to the public, or a health permit for Class B Cottage Food Operators who sell directly to other food facilities. These fees have been calculated to cover the cost of reviewing and approving applications, billing and issuing permits/registrations and, in the case of Class B operations, conducting inspections.
Certified Unified Program Agency (CUPA)
The Electronic Reporting Surcharge is no longer required by the California Environmental Protection Agency and, thus, is no longer applicable as a fee. The requested fee adjustment removes this fee from the Master Fee and Charges schedule.
West Nile Virus Tests
The proposed fee changes to West Nile Virus tests (EIA and IFA) reflect the increase in cost of reagents, consumables, and include the staff time associated with performing these tests. The fees are consistent with other laboratories performing the same tests.
Immunizations
For 2013, the Medicare regional maximum for vaccine administration fees was raised to $26.03. The Health and Human Services Department is increasing its fees to match the Medicare maximum to better recover costs associated with administering vaccines.
The fee for Malaria Prophylaxis (RX) is being deleted because clients that need the prescription undergo a Travel Nursing Assessment, which includes the Malaria Prophylaxis prescription as part of its fee.
Copies and Duplications
The cost for duplicating all medical documents is being standardized throughout the Health and Human Service Department clinics. The value for these services exceeds the current fee. Research conducted on the provision of these documents in Health Departments and local doctors offices demonstrated that $10.00 is the industry standard. Therefore, we are requesting that the fee for this service be increased to match the industry standard.
Tuberculosis Skin Tests
The usual and customary industry standard fee for a Tuberculosis Skin Test is $25.00. Therefore, we are requesting that the fee for this test be increased to match the industry standard.
Office/Patient Visits and Child Health and Disability Prevention (CHDP)
The New and Established Office Visit Codes (99201-99205 and 99211-99215) have been added to the City Fee Schedule in order to standardize and ensure compliance with the billing practices of all third party payers. Medicare plus 10 percent has been selected as the standard rate. Currently, the Health and Human Services Department is charging different fees for the same services depending on the payer, which is not compliant with standard billing practices. Therefore, the former clinic and assessment visit fees are being deleted and being replaced by new Office/Patient Visit fees. The "High Risk TB Contact Screening" will also be charged as an office/patient visit, with the option to waive the fee, at the City Health Officer's discretion, per the Health and Human Services Department Fee Schedule Header, which will remain in place for all core public health services.
Consequently, the CHDP fees have been updated to match the standard of Medi-Cal plus 10 percent.
Tuberculosis Medication
The former "Tuberculosis Medication" fee name has been deleted and separated into the individual fee names for each medication provided or prescribed by the Health and Human Services Department Tuberculosis Clinic. This action will increase clarity of the fee schedule and facilitate the billing and invoicing of these medications to the patients.
HIV Testing and Counseling
The former "HIV Testing and Counseling Clinic Visit" fee name has been deleted and separated into individual fee names for each form of HIV testing and counseling service offered by the Department of Health and Human Services. This action will increase clarity of the fee schedule and facilitate the billing and invoicing of these services to patients.
Vital Statistics
The fee for "Expedited Copies of Birth or Death Certificates" is being changed from a flat rate to make the distinction between the fee for the actual certificate and the fee for the cost to "expedite" the certificate. This will assist in differentiating the administrative cost associated with expediting the certificate, versus issuing the certificate under normal operating procedures.
The fee for "Expedited Birth Certificate Registration" is being added to cover the costs associated with expediting the registration of the birth certificates. The fee is in line with what other local Health Departments are charging for this service.
Conference Room Rental
The Family Health Education Center Fees have been expanded to cover all facilities under the Health and Human Services Department. Therefore, the fee named "Conference Room Rental" has been deleted due to redundancy.
Parks, Recreation, and Marine
The attached list includes nine fee adjustments proposed for FY 13, resulting in an estimated net revenue increase of approximately $1,775 to provide cost recovery for user fees consistent with City Council policy. Staff recommends adjustments to the fees effective May 21, 2013 due to the registration period for the upcoming summer season. The fee for Leeway Sailing Center covers the actual staff time needed to conduct the skills check for rentals as well as to cover the cost of wear and tear on testing the vessel, and the late pick-up fee for Aquatics Day Camp is being raised to be consistent with the same rate currently charged in the General Park fee schedule.
Marine Bureau
The adjustments listed under Beach Parking for the annual and monthly beach parking passes are intended to clarify the current fees. Prior to this adjustment, the fee schedule listed a range that was later applied to each category of beach parking passes, which confused our patrons. The revised fee schedule lists the cost per category. The fee for FY 13 remains the same. The beach pass replacement and beach key fob fees reflect cost recovery.
The Liveaboard Permit Fee listed was inadvertently deleted from the FY 13 schedule adopted by City Council in September 2012. This adjustment reflects the addition of that fee to reflect the rate for FY 13.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHN GROSS
Director of Financial Management
APPROVED:
PATRICK H. WEST
CITY MANAGER