TITLE
Recommendation to receive supporting documentation into the record, conclude the hearing, and adopt resolution amending the Master Fee and Charges Schedule. (Citywide)
DISCUSSION
On September 14, 2010, the City Council approved an amended Master Fee and Charges Schedule that included proposed fee adjustments for Fiscal Year 2011. Subsequently, the California legislature enacted Senate Bills 856 and 857 (SB 856 and SB 857), which added additional fees to Enterprise Zone Voucher applications and a surcharge to all parking citations issued by cities, respectively. Attachment A lists the proposed parking citation amounts necessary to implement the surcharge, as well as the proposed Enterprise Zone Voucher Application fee amounts necessary to implement the increase.
On October 19, 2010, the Governor signed SB 857, which states that cities shall collect an additional $3.00 for each parking citation and remit it to the State to be deposited in the Trial Court Trust Fund until July 1, 2013. The effective date for the surcharge is 60 days after the Budget Act of 2010 was enacted by the State of California (State) or December 7, 2010.
The SB 857 surcharge brings the total collected on each parking citation for the State and County Courts to $12.50 or an average of 23 percent of each citation amount. Of this amount, $5.00 is sent to the County of Los Angeles for the Court House Construction Fund and the Criminal Justice Facilities Construction Fund. The remainder, $7.50, goes to the State for the Immediate & Critical Needs Facilities Construction Fund - Parking Penalty, State Court Facilities Construction Fund - Parking Penalty and the Trial Court Trust Fund.
The governor also signed SB 856, which states that agencies administering local economic development areas such as Enterprise Zones shall collect an additional $5.00 for each tax credit application-in this case, the Hiring Tax Credit Voucher application. Through policy guidance received on November 10, 2010 from the State Department of Housing and Community Development, the effective date for the fee increase has been set at December 1, 2010.
The SB 856 fee increase brings the total collected on each Voucher application for the State to $15.00, or an average of 22 percent of each application fee. The legislation has created a statewide Enterprise Zone Fund in which the fees are deposited, and appropriated by the Legislature for administration costs of such economic development strategies.
In addition to the above described changes, the Master Fee and Charges Schedule was reconfigured to match the realignment of department activities approved by City Council as part of the Fiscal Year 2011 Budget. The following fee-based activities were reassigned to new departments in the Master Fee and Charges Schedule:
· Human Resources - Workforce - Enterprise Zone Fees
· City Manager - Special Events and Filming
· Development Services - Code Enforcement
· Public Works - Parking Management and Parking Meter Fees
This matter was reviewed by Assistant City Attorney Michael J. Mais on November 10, 2010 and Acting Budget and Performance Management Bureau Manager Lou Palmer on November 9, 2010.
TIMING CONSIDERATIONS
The City must start to collect the parking citation surcharge 60 days after the State Budget Act of 2010 was enacted on October 8, 2010. Each month of delay is anticipated to cost approximately $85,000. The Enterprise Zone fee is required to begin December 1. Therefore, City Council action is requested on December 7, 2010 to allow the surcharge and application fees to be collected without loss to the General Fund.
FISCAL IMPACT
The City does not realize any revenue from the changes, but is obligated to remit the new surcharge and fee amounts to the State. If the City fails to pass the surcharge on to the violator through increasing the parking citation penalty, the City will have to use the General Fund to offset the required amount. In Fiscal Year 2010, 340,746 citations were issued. Based on a similar citation rate in Fiscal Year 2011, the annual loss of General Fund revenue would be $1,022,238. For Enterprise Zone Voucher Application fees, the annual loss to General Fund revenue would likely be $22,500.
SUGGESTED ACTION
Approve recommendation.
BODY
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LONG BEACH AMENDING THE MASTER FEE AND CHARGES SCHEDULE FOR SPECIFIED CITY SERVICES FOR THE CITY OF LONG BEACH
Respectfully Submitted,
LORI ANN FARRELL
Director of Financial Management/CFO
APPROVED:
PATRICK H. WEST
CITY MANAGER