HomeMy WebLinkAboutStaff Report 6331
City of Palo Alto (ID # 6331)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 2/2/2016
Summary Title: Cost of Services Study
Title: Recommendation to City Council to Accept the Cost of Services Study
for Planning Fees and Adopt a Schedule for Implementation of Fee Increases
and Adjustments
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that the Finance Committee review the Cost of Services Study and staff’s
recommended changes to Planning & Community Environment fees, and recommend that the
City Council adopt the schedule for fee increases and adjustments (Attachment A) and Hourly
Rates (Attachment B) to better reflect the City’s User Fee Cost Recovery Level Policy (adopted
May 8, 2015).
Background
Fees for services (sometimes called user fees) are charged to recover some or all costs incurred
in providing a special service from which one or more individuals obtain a special benefit.
Public agencies can establish fees to recover up to 100% of the estimated reasonable cost of
providing such service. Any amount of a particular fee that is more than 100% of the cost is
considered a special tax and, by law, requires approval by two-thirds of the electorate. Fines,
rents, and certain other charges are not considered user fees and are not required to be based
on actual costs. These types of charges are more typically governed by policy based on market
rates, reasonableness, or public goals.
The Department of Planning & Community Environment charges user fees to applicants
requesting planning entitlements and related services. While these fees have been annually
adjusted across the board based on inflation factors, it’s been at least five years since they have
been subject to a full evaluation based on the cost of providing services.
Council adopted a User Fee Cost Recovery Level Policy (Staff Report 5735) on May 18, 2015 that
suggests high, medium, and low levels of cost recovery based on policy considerations, such as
the degree of public versus private benefit associated with the activity for which a fee is
established. As shown below, services that are regulatory in nature (e.g. review for compliance
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with zoning regulations) and for which individual users receive most or all of the benefit (e.g.
developers requesting approval of a planning approval), generally fall in the “high” cost
recovery level group.
Table 1. Cost Recovery Policy Summary
Cost Recovery
Level Group
Cost Recovery
Percentage Range
Policy Considerations
Low 0% -30%
No intended relationship between the
amount paid and the benefit received
Fee collection would not be cost effective
and/or would discourage compliance with
regulatory requirements
No intent to limit the use of the service
Public at large benefits even if they are not
the direct users of the service
Affordability of service to low-income
residents
Medium 30.1% -70%
Services which promote healthy activities
and educational enrichment to the
community
Services having factors associated with the
low and high cost recovery levels
High 70.1% -100%
Individual users or participants receive most
or all of the benefit of the service
Other private or public sector alternatives
provide the service
The use of the service is specifically
discouraged
The service is regulatory in nature
Source: Palo Alto City Council Staff Report No. 5735, May 18, 2015
The cost of services study report, included as Attachment C, identifies the cost of providing
planning services for which the City charges fees. Under State law, fees cannot be set above
the cost of service for one fee to compensate for a lower cost recovery decision for another fee
(sometimes referred to as cross-subsidization). Thus, while Council is not bound to set fees to
match the cost of providing services, fees cannot be set that exceed the cost of delivering the
service in question. As described in the adopted Cost Recovery Policy cited above, Council has
the discretion to determine the level of cost recovery in which each of these fees fall and
traditionally assigns lower levels of cost recovery to some fees, like appeal fees, where a higher
cost might limit the use of appeals.
The City retained the services of Capital Accounting Partners (CAP) to assist in the preparation
of the cost of services study for planning fees in the Planning and Community Environment
Department (PCE) and a limited number of Development Services (DS) fees. As the study
progressed, the contract was amended to add Development Services fire prevention fees.
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These fees are not part of this report; instead they will be part of the Development Services
study. Development Services is examining all their fees under a separate study, now underway.
The operating budget for the Planning and Community Environment Department relies on two
major sources: the General Fund and fees charged for services. The Department’s Fiscal Year
2016 Adopted Operating Budget is $8.9 million, and approximately $1.2 million in revenue is
generated from user fees. Other sources of revenue account for approximately $0.6 million, so
the department’s General Fund support comprises approximately $7.1 million, or
approximately 80 percent of the Department’s budget.
Chart 1
Source: Planning & Community Environment Adopted Operating Budget, FY2016
It is important to note that the Department has many activities that are not related to fees,
including many activities in the transportation, long range planning, and code enforcement
divisions of the department. This means that a high level of General Fund support is not
surprising, however the consultant’s analysis has confirmed that the current level of General
Fund subsidy of fee-related services is not consistent with the adopted cost recovery policy and
fee adjustments are warranted.
Discussion
The methodology used in C!P’s study is fairly standard for analyzing the cost of providing fee-
related services:
1. The costs of services that are not fee-related, including transportation and parking
fees, are not included in the scope of this particular study. Most of those are set by
City Council as a matter of policy, or by a State agency.
2. CAP identified all direct staff time spent on the fee-related activity or service. Direct
staff costs are incurred by employees who perform tasks directly related to the
service, for example the cost of staff time to review an Architectural Review
application. CAP conducted a series of meetings with staff from PCE, DS, Fire, and the
City !ttorney’s office to identify every employee, by classification, who performs work
directly in support of a fee related service. Through the meetings with staff, CAP
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gathered estimates of how much time each of those employees spends, on average,
working on that particular service or program.
3. CAP calculated direct cost of the staff time for each fee using productive hourly rates.
A full-time employee typically has 2,080 paid hours per year. In keeping with standard
methodologies, CAP reduced that number to account for non-productive hours (sick
leave, vacation, holidays, training, meetings, participation in non-core services, etc.).
CAP calculated the productive hourly rate for each position, by person, based on the
salary and benefit information provided by the City. Their report indicates that annual
productive hours range from 1,400 to 1,600.
4. CAP identified other operational costs that are also considered direct costs. For
instance, PCE relies heavily upon on-call consultants to provide expertise and address
increased demand. These costs are directly attributable to certain services and are
included in direct cost computations.
5. CAP then determined indirect (or overhead) costs. These costs include citywide and
department overhead. Citywide overhead costs are allocated to each operating
department through Cost Plan Allocation. Allocated costs include expenses incurred
by central services departments; in other words, departments in the City that provide
services to all departments. These include the offices of the City Manager, City
Attorney, City Auditor, City Clerk, Administrative Services, People Strategy and
Operations, Information Technology, and Facilities Maintenance. Department
overhead costs include managers, supervisors and support staff as well as other
operational costs that are incurred for a common purpose. For instance, customer
service, reception, staff report preparation, support of the Architectural Review Board,
Historic Resources Board, Planning and Transportation Commission, and overall
management are part of these costs. They are not assigned to a particular service or
program. Once these costs are determined, they are proportionally allocated to fees.
Fees for services are structured in two ways: flat fees and time and materials fees, for which
the Department collects and charges against deposits. Flat fees apply to those activities for
which an average amount of processing time and effort can reasonably be determined.
Deposits are taken when staff time to provide the service is expected to vary widely.
Applications such as Site and Design or major projects requiring Architectural Review Board
involvement may require 50 hours of work or 500 hours, depending on the project. In these
cases, a deposit amount set at the minimum needed to complete staff work is identified in the
Municipal Fee Schedule. Once a deposit is received, staff track the amount of effort involved in
providing service and charges are made against the deposit using the appropriate hourly billing
rate(s), including overhead. The applicant is kept informed of all charges against the deposit
and if the deposit is exhausted and additional work is still required, the applicant is billed for
additional charges. Similarly, the applicant is refunded if costs total less than the deposited
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amount. Staff involved in these activities generally span several departments. If consultants
are required, consultant fees are also charged to the applicant.
Council may want to assign lower levels of cost recovery to some or all fees. Council may wish
to consider fees for major development projects involving the Architectural Review Board
Council at a very high level of cost recovery whereas they may prefer to assign a lower level of
cost recover to activities like Individual Review. As an example, the current fee for a Use Permit
for a childcare facility is set at a significantly lower rate than the fee for a Regular Use Permit
(about 4% of regular permit fee), based upon a past policy decision.
Recommended Adjustments to Fees
The Fiscal Year 2016 Municipal Fee Schedule includes 88 Planning fees for services. Of these,
18 are deposit-based fees and 71 are flat fees. In the attached recommendations, some fee
structures have been changed to make them simpler, for better accuracy, or to make it easier
to recapture full costs. Specifically:
- 32 existing fees are recommended for deletion
-20 new fees are recommended to be established (16 flat fees, 4 deposit-based fee)
- Hourly billing rates which are charged against deposits are recommended to be
increased an average of 57 percent to better capture direct and indirect costs.
Although the attached report identifies the cost of delivering services, whether to set fees to
full cost recovery and whether to adjust to full cost recover immediately or phase in the
changes are Council decisions. For most fees, the proposed fees were adjusted based upon the
methodology described above with an intent to achieve full cost recovery in two phases, as
shown in Attachment A1. The first phase would close 50 percent of the gap between current
fees and full cost recovery, beginning Fiscal Year 2017 (FY 17). The second phase would bring
the fee to full cost recovery in Fiscal Year 2018 (FY 18), assuming no changes outside the
standard cost of living increases to provide services in the interim. Phasing-in fee adjustments
is a common practice, and staff feels it is appropriate here because of the magnitude of some of
the changes proposed.
Recommended fee adjustments include:
Changes to legal fees: There are currently 23 legal review fees in the Planning
Department section of the Fiscal Year 2016 Municipal Fee Schedule. Under this
study, when only a few hours of legal time is involved in providing the service,
that time has been incorporated in the planning fee and the separate legal fee
has been eliminated. Five new legal fees are recommended to be established
and 22 existing legal review fees are recommended to be deleted, since they
have now been included in the appropriate planning fee.
1 For the three new tiers of wireless fees, the rates will not be phased. Also, where fees are decreasing, the new
fee will be instituted without phasing.
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Contract administration: Assess a 25 percent charge for the City to administer
and manage cost recovery contracts for projects handled by consultants. In
many instances, the City charges applicants for consultant time dedicated to a
particular project. The costs of these contracts are deducted from deposits paid
in accordance with the Municipal Fee Schedule. Customers are invoiced if
contract costs exceed the deposit. This study institutes new fees which can be
applied to recoup the cost of City overhead for contracts administration and
project management given that even the best consultant work product needs to
be reviewed by staff.
Tiered wireless fees: to reflect the full range of effort involved in wireless
facilities.
Additional public noticing: This new fee covers the cost of noticing beyond a 600
foot radius and additional rounds of noticing.
A cost recoverable research fee which will be charged at the level of the staff
position conducting the research.
A planning compliance fee for ensuring compliance with entitlements and zoning
that go beyond the building permit review.
A full cost-recovery pre-screening fee: for applicants proposing rezoning, zoning
text amendments, development agreements, Comp Plan amendments, or
specific plans.
a fee, borne by the project applicant, to recover the full cost of appeals.
adjustment of hourly rates charged against deposits to include updated
overhead (Attachment B). An example of how these rates compare to other
cities is shown in Table 2, below. (It should be noted that only Beverly Hills
reported recently completing a fee study to set or update fees.)
City of Palo Alto Page 6
r on Cities Table 2, Hourly Charges for Comparis
Senior Planner Salaries-September, 2015
Sources: c;ty websites
Principal Planner Salaries-Rates charged to public
September, 2015 Sources: Con tad \Wth ;ndMduol
cities via email or phone, December, Souces: City websites 1015
With With
Performance Performance
Incentive: Incentive: Hourly Annual
City Hourly top step Annual maximum Hourtymax• Annual max• top step maximum
$125.17/hr. Sr. Planner
$ 53.33 $ 110,926.40 Palo Alto N/A N/A (current);
$195/ hr. Sr. Planner
(proposed) (proposed)
San Mateo+ $ 59.13 $ 122,994.84 $ 66.69 $ 138,726.72 $149/hr. regardless of
position
Los Gatos $ 55.87 $ 116,209.60 N/A N/A Not available
Sarato11a • $ 58.01 $ 120,660.80 $ 63.96 $ 133,036.80 N/A N/A $112.04
Mountain View $ 64.13 $ 133,390.40 $ 76.22 $ 158,537.60 $181/hr Principal Planner;
$138/hr. Sr. Planner
$143.15/hr. Principal
$ 58.71 $ 122,116.80 $ 62.71 $ 130,436.80 Planner;
Redwood Citv $123.30/hr. Sr. Planner
$ 51.13 $ 106,356.00
Beverly Hills
$ 58.78 $ 122,256.00 $482/hr. Principal Planner;
$383/hr. Sr. Planner
•Saratoga has Performance Incentive Compensation for those at top step for 5 years with a cumulative performance rating of satisfactory
+San Mateo charges a flat $149 for all planning positons.
Implementation and Timing
Adjust ing fees as recommended will result in some significant fee increases and staff will be
providing a draft of proposed fee and hourly rate changes t o members of the Development
Customer Advisory Group (DCAG) for t heir input. If all fixed fees and deposits are increased to
bring t hem to a 100 percent cost recovery level, the estimated revenue increase is $1 million:
$.5 million in Fiscal Year 2017 and the full $1 million in Fisca l Year 2018.
Chart 2, below, displays the impact on the General Fund subsidy if Council approves the fee
changes in the attached st udy. Recommendations (shown as Fee Study revenue increases in
the t able below) will reduce the General Fu nd subsidy for the department budget from 80
percent to 69 percent.
Chart 2
City of Palo Alto Page 7
Source: Planning & Community Environment, January 2016
Possible Adjustments Below Cost Recovery
Staff recommends that Council identify any services to be subsidized and the level of
subsidization. Among the fees staff recommends subsidizing are appeal fees and use permit
fees for day care facilities. (Since this fee has been subsidized in the past, the proposed final
fee shown equals 50 percent of the cost of service.) The Council may also wish to consider
subsidizing Individual Review (IR) fees, although the staff’s recommendation is based on the full
cost of cost of services. Subsidizing these fees (perhaps for smaller homes) would have to be
justified by the scale of the projects and the public benefit of the IR process, which ensures
neighborhood compatibility of new single family homes.
Timeline & Next Steps
Staff recommends the increase of fees in two phases:
Phase 1 – Adjust fees by 50 percent of suggested increases concurrent with the FY17
budget. Estimated revenue impact = $.5 million or a 42 percent increase in fee based
revenue.
Phase 2 – Adjust fees by the remaining 50 percent concurrent with the FY18 budget.
Estimated revenue impact = $1 million ($.5 million in FY 17 and an additional $.5 million
effective FY 18), or an 82 percent increase in fee based revenue.
Based on State law, fee adjustments become effective 60 days after Council’s adoption of the
ordinance.
Following receipt of the Finance Committee’s input, staff will adjust the proposal as necessary
and notice the item for consideration and possible adoption by the City Council. Staff will also
City of Palo Alto Page 8
be reaching out to stakeholders regarding the proposed changes, and identifying any areas of
concern where adjustments to the proposed fees could be considered.
Following adoption and implementation of the new fees, Staff will review procedures related to
billing for cost recovery projects, with the goal of identifying necessary improvements and
resources to achieve a level of cost recovery that is consistent with the City’s adopted policy.
Resource Impact
If the Committee recommends and Council approves the proposed fee adjustments, the result
would be to eliminate the General Fund subsidy for processing of planning applications over a
two year period, resulting in an estimated increase in revenue of $1million.
Attachments:
Attachment A: Fee Schedule with Recommendations (PDF)
Attachment B: Hourly Billing Rates with Recommended Adjustments (PDF)
Attachment C: City of Palo Alto User Fee Study Report, dated 1.20.16 (PDF)
City of Palo Alto Page 9
Attachment A -
Fee Title Current Fee Fee Proposed for FY 2017 Fee Proposed for FY 2018 *
Planning and Community Environment
Planning
Architectural Review j
Project
Note: 100 percent of processing costs
will be recovered plus any Environmental
Impact Assessment and any other
entitlements necessary to complete the
project, whether indicated as 100
$3,846 initial deposit plus Legal Review
fees and applicable Other Application
fees
$7,123 initial deposit plus legal review
fees and applicable Other Application fees
$10,264 initial deposit plus legal review
fees and applicable Other Application fees
percent cost recovery in this schedule or
not.
Architectural Review ‐Minor
Project (ARB Review)
Architectural Review ‐Minor
Project (Staff Review)
Design Enhancement Exception
Preliminary Review
Signs ‐(ARB Review)
Signs ‐(Exceptions)
Signs Erected Without Approval
Signs, Minor Facade Changes,
Landscaping, Accessory
Structures, or Similar Minor
Changes to a Building Exterior ‐
(Staff Review)/Master sign
program
Temporary Sign Permit
Comprehensive Plan Change
Comprehensive Plan Change
Note: 100 percent of processing costs
will be recovered plus any Environmental
Impact Assessment and any other
entitlements necessary to complete the
project, whether indicated as 100
percent cost recovery in this schedule or
not Comprehensive Plan
Maintenance Fee
Note: Collected at Building Permit
issuance.
$3,000 plus applicable Other Application
fees
$1,500 plus applicable Other Application
fees
$1,642 plus applicable Other Application
fees
$1,247 plus applicable Other Application
fees
$996 plus applicable Other Application
fees
$1,500 plus applicable Other Application
fees
$1,992 plus applicable Other Application
fees
$372 plus applicable Other Application
fees
$63 per 15 days plus applicable Other
Application fees
$6,118 initial deposit plus Legal Review
fees
$0.55 per $1,000 of construction
valuation
$4,982 plus applicable Other Application
fees
$2,112 plus applicable Other Application
fees
$3,623 plus applicable Other
Application fees
$3,371 plus applicable Other
Application fees
$2,261 plus applicable Other Application
fees
$2,653 plus applicable Other Application
fees
DELETE ‐code enforcement penalty
$611 plus any applicable Other
Application fees
$110 per 15 days plus any applicable
Other Application fees
$6,118 initial deposit
$0.55 per $1,000 of construction
valuation
$6,860 plus applicable Other Application
fees
$2,672 plus applicable Other Application
fees
$5,544 plus applicable Other
Application fees
$5,451 plus applicable Other
Application fees
$3,491 plus applicable Other Application
fees
$3,753 plus applicable Other Application
fees
DELETE ‐code enforcement penalty
$835 plus any applicable Other
Application fees
$154 per 15 days plus any applicable
Other Application fees
$6,118 initial deposit
$0.55 per $1,000 of construction
valuation +
* Reflects total estimated cost of providing the service uness noted with a +
Fee Title Current Fee Fee Proposed for FY 2017 Fee Proposed for FY 2018 *
Development Agreement D l p gr
Note: 100 percent of processing costs
will be recovered plus any Environmental
Impact Assessment and any other
entitlements necessary to complete the
project, whether indicated as 100
$7,058 initial deposit plus Legal Review
fees and applicable Other Application
fees
$7,058 initial deposit plus Legal Review
fees and applicable Other Application fees
$7,058 initial deposit plus Legal Review
fees and applicable Other Application fees
percent cost recovery in this schedule or
not.
Development Agreement ‐
Annual Review
Note: 100 percent of processing costs
will be recovered.
$2,471 initial deposit plus Legal Review
fees and applicable Other Application
fees
$2,471 initial deposit plus Legal Review
fees and applicable Other Application fees
$2,471 initial deposit plus Legal Review
fees and applicable Other Application fees
Development Projects Preliminary Review
Development Projects ‐
Prescreening (PTC & CC Review)
Note: 100 percent of processing costs
will be recovered plus any Environmental
Impact Assessment and any other
entitlements necessary to complete the
project, whether indicated as 100
percent cost recovery in this schedule or
not.
$3,671 initial deposit plus Legal Review
fees and applicable Other Application
fees
$3,671 initial deposit plus Legal Review
fees and applicable Other Application fees
$3,671 initial deposit plus Legal Review
fees and applicable Other Application fees
Director's Approval
Home Improvement Exception
Neighborhood Preservation
Zone Exceptions
Director's hearing requested ‐
per hearing
$996 plus applicable Other Application
fees
$2,304 plus applicable Other Application
fees plus Environmental Impact
Assessment fees
NEW
$2,070
$3,861
$1,186
$3,109
$5,337
$2,372
Documents and Photocopies
Administrative Extensions and
Zoning Letters $168.00 per hour/one‐hour minimum Applicable hourly rate/1 hr. mininum Applicable hourly rate/1 hr. mininum
Comprehensive Plan $90.00 plus $4.00 if mailed $90.00 plus $4.00 if mailed $90.00 plus $4.00 if mailed
Copy from Optical Disk $28.00 minimum plus $0.50 per page $28.00 minimum plus $0.50 per page $28.00 minimum plus $0.50 per page
Tree Manual or Other Bounded
Documents $33.00 plus $4.00 if mailed $33.00 plus $4.00 if mailed $33.00 plus $4.00 if mailed
Zoning Map Booklet $98.00 plus $4.00 if mailed $98.00 plus $4.00 if mailed $98.00 plus $4.00 if mailed
Property Research requiring
more than 30 minutes NEW Applicable hourly rate/1 hr. mininum Applicable hourly rate/1 hr. mininum
Environmental Impact Assessment
CEQA Categorical Exemption $336 each $400 $451
Environmental Impact
Assessment ‐Mitigated Negative
Declaration
$3,428 plus Legal Review fees
Initial deposit of 100 percent of estimated
costs due upon application plus 25% for
contract administration and applicable
Legal Review and Other Application fees
Initial deposit of 100 percent of estimated
costs due upon application plus 25% for
contract administration, and applicable
Legal Review and Other Application fees
Environmental Impact
Assessment ‐Negative $1,801 plus applicable Other Application Delete Delete
Declaration fees
Environmental Document
(Consultant Prepared)
Note: If estimated costs eceed $100,000, Initial deposit of 100 percent of Initial deposit of 100 percent of estimated Initial deposit of 100 percent of estimated
alternative deposit and payment estimated costs due upon application costs due upon application plus 25% for costs due upon application plus 25% for
schedule arrangements may be made at
the discretion of the Director of Planning
and Community Environment. 100
plus Legal Review fees and applicable
Other Application fees
contract administration and applicable
Legal Review and Other Application fees
contract administration, and applicable
Legal Review and Other Application fees
percent of processing costs will be
recovered
* Reflects total estimated cost of providing the service uness noted with a +
Fee Title Current Fee Fee Proposed for FY 2017 Fee Proposed for FY 2018 *
Environmental Document:
Note: 100 percent of processing costs
will be recovered plus any other
entitlements necessary to complete the
project, whether indicated as 100
NEW $5,000 initial deposit plus any applicable
Other Application fees.
$5,000 initial deposit plus any applicable
Other Application fees.
percent cost recovery in this schedule or
not Mitigation Monitoring ‐
Environmental Impact Report
Note: 100 percent of processing costs
will be recovered, including any charges
for specialized consultants.
Mitigation Monitoring ‐
Mitigated Negative Declaration
Note: 100 percent of processing costs
will be recovered, including any charges
for specialized consultants.
$3,671 initial deposit plus applicable
Other Application fees
$1,224 initial deposit plus applicable
Other Application fees
$3,671.00 initial deposit plus applicable
Legal Review and Other Application fees
$1,224 initial deposit plus applicable Legal
Review and Other Application fees
$3,671.00 initial deposit plus applicable
Legal Review and Other Application fees
$1,224 initial deposit plus applicable Legal
Review and Other Application fees
Historic Resource
Demolition Application for
Historic Buildings
Historic Resource Review ‐
Major Project
Historic Resource Review ‐
Minor Project (Staff Review)
Historic Resource Review of
Individual Review Application
Mills Act Contract ‐Establish or
Withdraw
Note: 100 percent of processing and
legal costs will be recovered.
$2,472 plus applicable Other Application
fees
$3,241 plus applicable Other Application
fees
$684 plus applicable Other Application
fees
$1,986 plus Individual Review fees and
applicable Other Application fees
$1,835 initial deposit plus Legal Review
fees and applicable Other Application
fees
$1,001
$1,502 plus any applicable Other
Application fees
$855 plus any applicable Other
Application fees
$250 plus Individual Review fees and
applicable Other Application fees
$1,835 initial deposit plus any applicable
Other Application fees
$1,001
$1,502 plus any applicable Other
Application fees
$1,001 plus any applicable Other
Application fees
$250 plus Individual Review fees and
applicable Other Application fees
$1,835 initial deposit plus any applicable
Other Application fees
Transfer of Development Rights
Projects
Note: 100 percent of processing costs
will be recovered plus any Environmental
Impact Assessment and any other
entitlements necessary to complete the
project, whether indicated as 100
percent cost recovery in this schedule or
not Williamson Act Contract ‐
Establish or Withdraw
Note: 100 percent of processing and
legal costs will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
$611 initial deposit plus Legal Review
fees
$1,929 initial deposit plus Legal Review
fees and applicable Other Application
fees
$611 initial deposit plus any applicable
Other Application fees
$1,929 initial deposit plus any applicable
Other Application fees
$611 initial deposit plus any applicable
Other Application fees
$1,929 initial deposit plus any applicable
Other Application fees
complete the project, whether indicated
as 100 percent cost recovery in this
sched le or not
* Reflects total estimated cost of providing the service uness noted with a +
Fee Title Current Fee Fee Proposed for FY 2017 Fee Proposed for FY 2018 *
Individual Review
Expansion of Existing Two‐Story
greater than 150 sq. ft.
Individual Review ‐Minor
Revisions to Approved Projects
New Two‐Story Addition or New
Two‐Story Home
Preliminary Individual Review
with Architect
$2,878 plus applicable Other Application
fees and any other entitlements
necessary to complete the project,
including historic review
$1,65 plus cost of notices
$4,166 plus applicable Other Application
fees and any other entitlements
necessary to complete the project,
including historic review
$112
$4,310 plus applicable Other Application
fees and any other entitlements
necessary to complete the project,
including historic review
$2,320 plus cost of notices
$5,679 plus applicable Other Application
fees and any other entitlements
necessary to complete the project,
including historic review
$245
$5,641 plus applicable Other Application
fees and any other entitlements necessary
to complete the project, including historic
review
$2,931 plust cost of notices
$7,046 plus applicable Other Application
fees and any other entitlements necessary
to complete the project, including historic
review
$375
Legal Review Fees
Legal Review for Additional
hearings
Note: Legal review fees cover up to 3
public hearings. Additional hearings are
charged at 1/3 of the applicable fee.
NEW Additional hearings are charged at 1/3 of
the applicable fee.
Additional hearings are charged at 1/3 of
the applicable fee.
Appeal of Planning &
Transportation Committee,
Architectural Review Board, City
Council, or Administrative
Decision Appeal costs exceeding appeals
filing fee
Note: Appeal costs exceeding appeals
filing fee will be fully cost recovered from
$280
NEW
$280
$3,000 initial deposit plus any applicable
Other Application fees.
$280
$3,000 initial deposit plus any applicable
Other Application fees.
project applicant.
Legal Review ‐Appeal to City
Council
Legal Review ARB Major
Legal Review (legislative review,
zone change, plan amendment,
etc.)
Legal Review Complex Projects
over 50,000 sq. ft.
Note: 100 percent of legal services and
costs incurred relating to complex
matters requiring specialized legal
services or documents will be recovered.
Legal Review Comprehensive
Plan Change
NEW
NEW
NEW
$1,680.00 initial deposit
$1,121.00
$3,457
$2,606
$5,003
Delete. Incorporated in another fee.
Delete. Incorporated in another fee.
$6,914
$5,211
$10,006
Delete. Incorporated in another fee.
Delete. Incorporated in another fee.
Legal Review Demolition
Application for Historic Buildings $1,680.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Legal Review Development
Agreement
Note: 100 percent of legal services and
costs incurred will be recovered. Legal Review Development
Agreement ‐Annual Review
Legal Review Development
Projects Preliminary Review
Legal Review Environmental
Legal Review Environmental
Impact Report
$5,603.00 initial deposit
$840.00
$840.00
NEW
$2,241.00
Delete. Incorporated in another fee.
Delete. Incorporated in another fee.
Delete. Incorporated in another fee.
$4,720
Delete. Incorporated in another fee.
Delete. Incorporated in another fee.
Delete. Incorporated in another fee.
Delete. Incorporated in another fee.
$9,439
Delete. Incorporated in another fee.
* Reflects total estimated cost of providing the service uness noted with a +
Fee Title Current Fee Fee Proposed for FY 2017 Fee Proposed for FY 2018 *
Legal Review Historic Resource ‐
Major Project
Legal Review Major Subdivision ‐
$1,121.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Tentative Map $2,241.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Legal Review Mills Act Contract ‐
Establish or Withdraw $2,241.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Legal Review Minor Subdivision ‐
Preliminary Parcel Map
Legal Review Minor Subdivision ‐
$560.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Preliminary Parcel Map with
Exception
Legal Review Mitigation
$1,121.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Monitoring ‐Environmental
Impact Report
Legal Review Mitigation
$1,121.00 $500 $500
Monitoring ‐Mitigated Negative
Declaration
Legal Review Non‐conforming
$560.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Use Exception
Legal Review Planned
$1,121.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Community Zone Change
Legal Review Planned
$2,241.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Community Zone Change ‐
Minor Change
Legal Review Site and Design
$840.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Fee
Legal Review Variance ‐
$1401.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Commercial & Manufacturing $840.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Legal Review Williamson Act
Contract ‐Establish or Withdraw
Legal Review Zone Change ‐
$1,680.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Regular
Legal Review Transfer of
$1,401.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
Development Rights Projects $1,121.00 Delete. Incorporated in another fee. Delete. Incorporated in another fee.
* Reflects total estimated cost of providing the service uness noted with a +
Fee Title Current Fee Fee Proposed for FY 2017 Fee Proposed for FY 2018 *
Other Application Fees
Public Noticing ‐150 ft. Radius
Note: If noticing is required. Covers cost
of up to three rounds of noticing.
Public Noticing ‐600 ft. Radius
Note: If noticing is required. Covers cost
of up to three rounds of noticing.
Public Noticing beyond 600 ft.
Radius
Note: If noticing is required
Record Management Fee
Recording Fee with County
Records Retention
Technology Enhancements
Pre‐screening fee
Note: All costs will be recovered for the
prescreening of applicants proposing
rezoning, zoning text amendments,
development agreements, Comp Plan
amendments or specific plans Planning Compliance Fee
Note: 100 percent of processing costs
will be recovered plus any Environmental
Impact Assessment and any other
entitlements necessary to complete the
project, whether indicated as 100
percent cost recovery in this schedule or
not Contract Administration
Note: 25% Contract Administration and
project management costs are in
addition to direct cost of consultant
services and will be charged to deposit‐
based fees
$125 per occurrence
$697 per occurrence
NEW
$26 per file
County cost of recording, if required
$4.00 per plan sheet
$20 per application
NEW
NEW
NEW
$484
$825
$931
$26 per file
County cost of recording, if required
$4.00 per plan sheet
Delete. Replaced by Citywide Tech
Fee
$3,000 initial deposit plus any applicable
Legal Review and Other Application fees
Initial deposit equal to 3 hrs of applicable
staff rate
25% of direct cost
$529
$927
$1,236
$26 per file
County cost of recording, if required
$4.00 per plan sheet
Delete. Replaced by Citywide Tech Fee
$3,000 initial deposit plus any applicable
Legal Review and Other Application fees
Initial deposit equal to 3 hrs of applicable
staff rate
25% of direct cost
Site & Design g j
Note: 100 percent of processing and
legal costs will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$6,118.00 initial deposit plus any Legal
Review fees and applicable Other
Application fees
$13,059 initial deposit plus any Legal
Review fees and applicable Other
Application fees
$22,523 initial deposit plus any Legal
Review fees and applicable Other
Application Fees
Subdivision ‐Five or More Parcels
Subdivision Final Map
entative Map
Note: 100 percent of processing costs
will be recovered plus any Environmental
Impact Assessment and any other
entitlements necessary to complete the
project, whether indicated as 100
percent cost recovery in this schedule or
not.
$3,491.00 plus applicable Other
Application fees
$6,118.00 initial deposit plus Legal
Review fees and applicable Other
Application fees
$4,140 plus any applicable Other
Application fees
$7,224 initial deposit plus any applicable
Other Application fees
$4,663 plus any applicable Other
Application fees
$8,622 initial deposit plus any applicable
Other Application fees
Subdivision (Minor)
Parcel Map
Preliminary Parcel Map, Minor
$1,116.00 plus applicable Other
Application fees
$2,711.00 plus Legal Review fees and
applicable Other Application fees plus
Environmental Impact Assessment fees
$2,527 plus any applicable Other
Application fees
$3,738 plus any applicable Other
Application fees and Environmental
Impact Assessment fees
$3,899 plus any applicable Other
Application fees
$4,671 plus any applicable Other
Application fees and Environmental
Impact Assessment fees
Subdivision (Minor) with Exceptions
Parcel Map, Minor with
Exception
$1,296.00 plus applicable Other
Application fees
$2,098 plus any applicable Other
Application fees
$2,855 plus any applicable Other
Application fees
* Reflects total estimated cost of providing the service uness noted with a +
Fee Title Current Fee Fee Proposed for FY 2017 Fee Proposed for FY 2018 *
Preliminary Parcel Map, Minor
with Exception
$5,351.00 plus Legal Review fees and
applicable Other Application fees plus
Environmental Impact Assessment fees
$6,464 plus any applicable Other
Application fees and Environmental
Impact Assessment fees
$7,388 plus any applicable Other
Application fees and Environmental
Impact Assessment fees
Subscriptions
Board or Commission Agendas
Board or Commission Minutes
$112 annually per board or commission
$224 annually per board or commission
$112 annually per board or commission
$224 annually per board or commission
$112 annually per board or commission
$224 annually per board or commission
* Reflects total estimated cost of providing the service uness noted with a +
Fee Title Current Fee Fee Proposed for FY 2017 Fee Proposed for FY 2018 *
Use Permit
Day Care Center
Minor Change to Existing
Regular Use Permit
Temporary Use Permit ‐Minor
Note: Does not include hearing.
Conditional Use Permit ‐
Director level
Conditional Use Permit ‐
additional upon hearing request
Use Permit for Alcoholic
Beverage Service Only
Wireless Facilities
Note: 100 percent of costs will be
recovered.
Wireless ‐Tier 1: Minor AR
Wireless ‐Tier 2: Conditional
Use Permit
Wireless ‐Tier 3: Major ARB
$186 plus applicable Other Application
fees plus Environmental Impact
Assessment fees
$996 plus applicable Other Application
fees
$3,936 plus applicable Other Application
fees plus Environmental Impact
Assessment fees
$197 plus applicable Other Application
fees
NEW
NEW
$996.00 plus applicable Other
Application fees
$3,921.00 initial deposit plus Legal
Review fees, Entitlement, and Other
Application fees
NEW
NEW
NEW
$992 plus any applicable Other
Application fees plus Environmental
Document fees
Delete
Delete
$674 plus any applicable Other
Application fees
$4,914 plus any applicable Other
Application fees
$4,650 plus any applicable Other
Application fees
Delete
Delete
$2,672 plus any applicable Other
Application fees
$5,754 plus any applicable Other
Application fees
$6,109 plus any applicable Other
Application fees
+ $1,793 plus any applicable Other
Application fees plus Environmental
Document fees
Delete
Delete
$1,143 plus any applicable Other
Application fees
$5,754 plus any applicable Other
Application fees
$9,645 plus any applicable Other
Application fees
Delete
Delete
$2,672 plus any applicable Other
Application fees
$5,754 plus any applicable Other
Application fees
$6,109 plus any applicable Other
Application fees
Variance
Commercial & Manufacturing
Variance
$5,323.00 plus Legal Review fees and
applicable Other Application fees plus
Environmental Impact Assessment fees
Delete Delete
Variance ‐Director's level NEW $3,144 plus any applicable Other
Application fees
$3,675 plus any applicable Other
Application fees
Variance ‐additional upon
hearing NEW $4,823 $9,645
Fence Variance $1,236 plus applicable Other Application
fees Delete Delete
Residential Variance $2,524 plus applicable Other Application
fees Delete Delete
Zone Change
Planned Community Zone
Change
Note: 100 percent of processing and
legal costs will be recovered
Planned Community Zone
$7,341 initial deposit plus Legal Review
fees $7,341 initial deposit $7,341.00 initial deposit
Change ‐Minor Change
Note: 100 percent of processing and
legal costs will be recovered
$1,500 plus Legal Review fees and
applicable Other Application fees $1,500 initial deposit $1,500 initial deposit
Zone Change Regular
Note: 100 percent of processing and
legal costs will be recovered
$6,118 initial deposit plus Legal Review
fees $6,118 initial deposit $6,118 initial deposit
* Reflects total estimated cost of providing the service uness noted with a +
Attachment B -
Hourly staff recovery rates
Staff Rates
Administrative Assistant
Administrative Associate I
Administrative Associate II
Administrative Associate III
Assistant Director Planning &
Community Environment
Associate Engineer
Associate Planner
Building/Planning Technician
Business Analyst
Chief Planning Official
Chief Transportation Official
City Legal Counsel
Code Enforcement Officer
Code Enforcement Lead
Coordinator Transit
Management Systems
Director of Planning and
Community Environment
Management Analyst
Planning Manager
Planner
Project Engineer
Senior Assistant City Attorney
Senior Management Analyst
Senior Planner
Current Hourly Rate Proposed for FY 2017 Proposed for FY 2018
$90.93 $114.22 $130.87
$84.72 $101.69 $112.19
$88.91 $109.79 $123.62
$92.70 $116.53 $132.50
$158.09 $233.39 $292.56
NEW $144.90 $177.57
$108.26 $139.58 $161.83
$94.65 $121.82 $130.12
NEW $150.00 $188.78
$139.57 $206.67 $260.15
$139.57 $189.53 $227.16
$206.77 $248.41 $273.64
$104.35 $135.95 $158.53
NEW $150.56 $175.56
NEW $149.04 $160.38
$182.45 $258.32 $316.95
NEW $143.87 $168.48
$125.82 $171.70 $205.91
$113.23 $146.44 $169.62
NEW $163.53 $208.21
$171.78 DELETE DELETE
NEW $168.09 $195.46
$125.17 $168.09 $195.61
City of Palo Alto, California January 2016
CONTENTS
Introduction And Scope ................................................................................................................................ 3
Summary of Costing Methodologies............................................................................................................. 3
Driver Based Costing Models ................................................................................................................ 3
Summary of Results ...................................................................................................................................... 7
Summary of Results .................................................................................................................................. 7
Actual Revenues vs. Projections of Revenues........................................................................................... 7
Calculating Productive Hourly Rates.............................................................................................................7
Results for the Planning and Community Environment Department...........................................................8
Summary ................................................................................................................................................... 8
General Observations of PCE ................................................................................................................ 9
Cost of Consultants .................................................................................................................................11
Appeals:...................................................................................................................................................11
Services for Individual Homeowners: .....................................................................................................11
Comparison Review ....................................................................................................................................12
Planning Fee Comparisons..................................................................................................................13
Observations and Recommendations.........................................................................................................14
General Observations .............................................................................................................................14
Adjusting the Fee Schedule.....................................................................................................................14
Section V: Planning Fee Table .....................................................................................................................15
Capital Accounting Partners 2
City of Palo Alto, California January 2016
INTRODUCTION AND SCOPE
As part of its effort to manage its financial resources wisely, the City of Palo Alto engaged Capital
Accounting Partners to prepare a detailed cost analysis of some Planning and Community Environment
(PCE) Department and Development Services user fees. The City's objectives for the study were to
ensure that the City is fully accounting for all of its costs and recovering adequate revenues to reimburse
the City for its expenses.
The scope of this study included the following:
Reviewing the Planning and Development Services current fee schedules;
Interviewing key City staff from relevant departments;
Calculating the total cost of fee generating services;
Analyzing cost recovery levels for fee generating services;
Developing costing models that reflect the most update organizational structure;
Reviewing the results with staff;
Surveying other cities;
Developing a fee schedule that fully accounts for the large range of services that Planning and
Development Services provide; and
Providing recommendations or methodologies on how to adjust fees annually.
The process used for collecting and analyzing the data required active participation by the City’s
management and staff. We want to take this opportunity to recognize their participation, time, and
effort to collect the data and discuss the analysis, results, and recommendations.
Note: since the analytical phase of this study was completed, Development Services engaged Capital
Accounting Partners to conduct a more thorough and detailed studies of its cost and revenues. The
results of which will be addressed at a later time and in preparation to the department becoming an
enterprise fund.
SUMMARY OF COSTING METHODOLOGIES
DRIVER BASED COSTING MODELS
Developing driver based costing models is a detailed and robust method of calculating the cost of a
specific service. It is based on the principles of activity based costing so it seeks to understand cost at an
operational level. This means it relies on understanding the time staff invests in core business processes
to provide fee and non-fee services. This provides the ability to understand staff time and cost as each
staff position participates in providing fee services. Graphically, the following figure illustrates this
methodology.
Capital Accounting Partners 3
City of Palo Alto, California January 2016
Identifying core business processes or activities – This step also involves discussions with staff
to understand, at an operational level, the work of the operating unit. Core business processes
used to provide services are identified and then defined by the tasks that are involved.
Processes are also organized by direct and indirect categories:
Direct processes and activities – Those processes that directly contribute to the processing of
an application or permit are first identified. Examples of a direct activity are electrical building
inspection, application intake, and pre-application review.
Indirect processes and activities – Those processes that support, but do not directly apply to the
processing of a specific application or permit. An example of an indirect activity is customer
service or staff training to maintain certifications. Most jurisdictions highly value customer
service, but it is difficult to assign a specific cost or unit of time to an individual service.
Step 2: Building cost structures – This second step involves significant interaction with staff and the
development of time estimates for both direct and indirect processes in each department. Specifically,
this step is at the core of the analysis. There are four processes that comprise this step:
Gathering time estimates for direct processes – By interviewing staff in individual and group
meetings, an estimate of time was assigned to each service by the process that is indicated. For
example, in processing planning fees the following specific steps are involved in the processing of
these fees:
Application intake;
Application completion review; and
Application processing which may include the activities of reviewing applications for code
conformance, preparing CEQA documents and staff reports, attending public hearings, and
developing conditions of approval.
In this analysis, staff time is estimated and assigned to each step. The sum of all the process steps is
the total time that is required to provide that specific service.
Assigning indirect and annual process time – An annual time estimate is gathered from staff for
those indirect or support processes in which they are involved. These may include activities such as
program administration, customer service, and department administration. These costs are
allocated to all services proportionately to all services provided by the department.
Calculating fully loaded hourly rates and the cost of service – Once the total time for each direct
and indirect service is estimated, the cost of service is calculated by using the fully loaded hourly
rates for each staff member or position that is involved with the service. The fully loaded hourly
rate for each employee is based on the employee's salary and benefit costs plus a share of non-
personnel and City overhead costs divided by the employee's available work hours (i.e. 2,080 hours
minus all leave hours). Thus, the direct and indirect cost by activity also includes departmental and
citywide overhead as well as non-labor costs. The source of City indirect costs and non-personnel
costs is from the annual budget or cost allocation that has been established by the City.
Gathering activity or volume data – A critical element in the analysis is the number of times a given
service is provided on an annual basis. This is critical data for three reasons:
It allows a calculated projection of current revenue based on current prices. This is compared
with actual revenue to see if there is a close match as the data should match.
It allows for a calculated projection of revenue at full cost. This is compared to actual
expenditures to see if there is a close match as the data should match.
Capital Accounting Partners 5
City of Palo Alto, California January 2016
• It allows for a calculation of total hours consumed. Hours consumed must closely match actual
hours available.
If any of the three calculations do not approximate actual numbers, then time estimates and/or volume
data need to be re-eva luated. These are critical quality checks for costing accuracy.
Step 3: Calculating the full cost of services -Th is third step calculates the fu ll cost of service for each
direct service in a department. In the previous step, the cost of service was calculated for each direct
and indirect service. In this step, the cost layers are brought together to establish the full cost of service
for a specific direct service, program, or activity. As previously mentioned the cost of each direct service
is calculated. To determine the full cost of service, the cost of indirect services is allocated to each direct
service. The indirect services costs are allocated to each direct service based on each direct services
proportion of labor spent processing each permit and application. By summing the direct and allocated
indirect costs and multiplying that by the activity data, a total cost of service is calculated for both an
individual service and the operating unit as a whole .
The following figure illustrates an example of these calculations.
Hypothetical Illustration of Calculating the Cost of a Single Fee (service)
ADolication or Fee Title Assianina Staff Cost and Time
Community Planning Associate Executive Signing Programs (Five or More Signs) Development Ma nager Planner Assistant Totals
Director
Pre-submittal meetina 0.5 0.5 1
Land Use Application Intake 0.25 0.25 0.25 0.75
Application Review 1 6.5 7.5
De-.elopment Review Committee (DRC) 0.5 2 2.5
Prepare for decision 0.5 1.25 5 1 7.75
Public hearina 0.33 0.33 2 0.33 2.99
Plan Check of accepted plans -post entitlement 1.25 0.5 1.75
Total Time bv Position 0.83 3.83 17.50 2.08 24.24
Calculated Full Loaded Hourlv Rate 203.67 183.96 152.38 128.66
Total Direct Cost bv Position 169 705 2 667 268 3 808
Total suooort or indirect costs assianed $ 574
Total Cost Assianed $ 4,382
Step 4: Set fees
Based on any new, existing, or revised cost recovery policies, the recommended fees can be established.
The recommended fees will be established based on City staff recommendations and Council discussion
in the future. The fee analyses in this report are based on full cost recovery.
Capital Accounting Partners 6
City of Palo Alto, California January 2016
SUMMARY OF RESULTS
SUMMARY OF RESULTS
In general, our results show significant opportunity for additional cost recovery. Given that this is the
first formal review of fees in many years, we would expect this. Our general recommendation is that
user fees be updated annually but then a robust review be completed every 3-5 years. We find that
changes in regulations, operating procedures and staffing can change significantly during this time
frame.
ACTUAL REVENUES VS. PROJECTIONS OF REVENUES
One of our checks for quality data is to compare our projections of revenues against actual revenues.
Our projections of revenues are based on a simple formula: # of times a fee is processed X the current
price of that fee. Since we were doing the analysis mid-way through the fiscal year we were using actual
activity data based on the first six months and extrapolating out for twelve months. However, it should
be noted that we use the projections of activity data for two reasons:
1. Predict annual revenue at the full cost of services; and
2. To make sure we fully account for staff time.
CALCULATING PRODUCTIVE HOURLY RATES
The calculation of productive hourly rates is central to our methodology. Costs incorporated in these
rates include:
1. All salary costs;
2. All benefits costs;
3. Prorated non personnel costs such as services and supplies;
4. Department & division administration (includes cost to administer and manage the department
and specific divisions such as current planning, long range planning, etc;
5. City overhead costs; and
6. Other services such as customer service that is specific to planning applications.
The calculation of productive hours includes reduction in annual hours for:
7. Personnel leave such as vacation or personal leave time;
8. Sick leave;
9. Paid Holidays: and
10. Training and routine staff meetings.
When productive hours are calculated in this way, we typically see 1400 – 1600 productive hours on an
annual basis.
Capital Accounting Partners 7
City of Palo Alto, California January 2016
RESULTS FOR THE PLANNING AND COMMUNITY
ENVIRONMENT DEPARTMENT
The Planning and Community Environment (PCE) Department provides a breadth of services for the City
of Palo Alto. Among these are both current and long range planning, transportation planning and code
enforcement. Many of these services are not fee supported nor are they intended to be. For example
Transportation and Code Enforcement are not fee support although Transportation may contribute
costs to a Current Planning fee. To the extent that a group such as Transportation contributes cost to a
Planning fee, these costs were captured. In addition, there are Planning fees that are seldom fully
recovered such as Appeal fees. It is highly unlikely that the Department can or should fully recover the
cost of Appeals.
The principle objectives for this phase of the project were:
1) Calculate the full cost of processing current planning applications; and
2) Compare selected fees and projects with designated benchmark cities in the area.
SUMMARY
Based on Fiscal 15 costs, the Current Planning Division is currently under recovering its costs by an
estimated $851,653. These revenues are exclusive to the processing of Current Planning applications
and does not represent any projected sources of revenues other than these. As the following chart
illustrates, if fees were to be brought to full cost recovery the Division would generate approximately
$1,899,741. This compares w ith our projection of current revenue of $1,048,089. As noted above, these
projections are based on a simple formula: Total cost assigned to each fee X the number of t imes the fee
is projected to be processes in a year. The results for each fee are then added to arrive at an annual
projection of revenue.
Annual
Revenue at
Full Cost
Recovery
$1,899,741
Annual Revenue
at Current Fee
Level
$1,048,089
Annual
Difference
($851,653)
FNOTE: THESE DA TA HAVE BEEN UPDATED TO REFLECT FISCAL 2016 COSTS
IN THE REPORT TABLE
There are several reasons why the City is failing to fully recover its cost for processing current planning
applications. Among these are:
1) Hourly rates that are charged to time & material fees are only sufficient to cover direct labor
costs but largely insufficient for materials & services, City overhead, Department or Division
overhead, or customer service functions;
2) Fees have not been revised for several years and therefore, they have just not kept pace with
either regulatory changes or total PCE costs;
3) Charging time to deposit accounts by groups external to the basic planning function has not
been as thorough as possible; and
4) It just takes longer to process applications than current fees reflect.
Capital Accounting Partners 8
City of Palo Alto, California January 2016
GENERAL OBSERVATIONS OF PCE
We have observed the complex and demanding nature of the PCE Department. Its services are under
high review by both the public and by regulatory authorities and the very nature of this creates
challenges. Furthermore, the recent split of Development Services into its own department creates
additional challenges as its budget and structure stabilizes. Furthermore, it provides a breadth of
services including:
Current planning;
Advanced planning;
Transportation planning;
Code Enforcement; and
Building permit review.
While it goes beyond the scope of this project to provide an assessment of the organization and its
structure, we do find an opportunity to simplify some of the challenges. (These opportunities may even
be minor in the overall challenges facing the PCE.) Our observation is that the split funding of PCE staff
with Development Services may be adding to the challenges facing both organizations.
While we understand the logic of split funding staff positions between the two organizations and we
also observe continuing discussions on how to improve the split funding methodology. This appears to
be the continuing and ongoing process off improving the workflow of the two organizations.
In our view a simpler approach to the split funding of individuals and positions is to setup clear
allocations of cost that are simple and verifiable. For example:
Code Enforcement (CE). Instead of split funding CE staff between the two organizations, keep all of
them in the PCE but then allocate costs to Development Services based on the number of cases. For
example, if the total cost of the CE function is $500,000 and 10% of the CE cases is related to
enforcement of building codes than allocate 10% ($50,000) to Development Services. This removes the
debates over split funding.
Code Compliance. Reviewing construction projects for code compliance and prior approval is an
important function of any planning organization. While split funding planning staff between current
planning and building & safety organizations is relatively common we have seen other models work that
may reduce the challenges.
Allocate one person or positon to this function (at .30 of an FTE) rather than split three positions
for this purpose (at .1 FTE each).
Establish separate fees within the planning fee schedule that captures code compliance costs.
This will keep code compliance expenses within PCE as well as revenues.
Customer Service (public counter). In our observation, debates over who pays for the public counter or
for customer service are endless. Some agencies say that it is a public benefit so the general fund should
pay for all or some of it. Others give it its own cost center and then charge the cost out to supported
organizations like PCE and Development Services. When the location of the public counter is on city
property the debate is somewhat simplified. The discussion is centered on labor cost. However, when
the counter is in a commercial building and rent is paid, then additional costs are involved and how to
allocate these costs.
Capital Accounting Partners 9
City of Palo Alto, California January 2016
In our view, there is no right or wrong way, nor are there any perfect models for allocating these costs.
However, the model that we have seen that creates the least debate is to allow building and safety to
manage the function but then assign planning staff on a rotational basis to assist those customers with
planning questions. The logic of this model is simple:
The majority of the customers that come to the counter have issues or concerns with
building related functions;
Counter staff spend comparatively more time with building and safety customers while their
support of planning customers is less on a comparative basis, (but not insignificant).
It is usually easier to pay for the counter from building and safety fees as these tend to keep
up with inflation better than planning and/or engineer fees.
In addition, we also observe a smoothness to the operation when counter staff are trained and certified
as Permit Technicians and can provide basic plan review services. This speeds the process of plan review
and permitting by allowing technicians to do simple plan review, thus freeing more experienced staff to
focus on complex projects.
Observations and Considerations in Calculating and Structuring Fee Schedules
Fees are charged when the City provides services that benefit an individual person or organization. For
example a commercial developer wants to develop a piece of property. The value of the City’s time
effort and energy to review the application and issue the permits is primarily received by the developer.
In addition, the State of California prohibits the City from charging more than full cost. While the State
does not determine what is and is not cost, we take the view that full cost means all direct cost of the
application review and/or permitting process, all support costs required to serve the customer (counter
time for example), an allocated amount for Departmental administration, and an appropriate allocation
of Citywide overhead.
The City currently utilizes a fee structure that is fairly common in the San Francisco Bay area – a
combination of both flat fees and time and material (or deposit based) fees that are calculated from
billable hourly rates. Every city manages these differently. Some cities in the area utilize 100% time and
material fees and others have a balance of both. Our bias is to push cities to adopt flat fees wherever
reasonably possible. The reasons for this follow:
Flat fees are easier to administer. Since deposit accounts do not have to be monitored and
adjusted there is far less administrative work involved;
Flat fees are easier to budget for developers; and
In our experience, cities that rely on time and material fees exclusively have very poor records of
cost recovery. This are two primary reasons for this. 1) Hourly rates seldom capture the full cost
(we do not anticipate this being an issue with Palo Alto) and 2) poor time tracking to deposit
accounts.
In our analysis of planning fees and modifying the current fee structure we took every opportunity to
restructure deposit based fees to flat fees wherever reasonable. This was done in conjunction with staff
and planning leadership. In our view of Palo !lto’s Planning fees, as we have structured them, is a
reasonable balance of the two types. They use flat fees where it is reasonable to do so but still retains
the use of deposit based fees for those project that are so complex that a flat fee does not work. In our
view, setting deposits do not need to be in compliance with Prop 218 or AG Opinion 92-506 – which
state that the final fee must aligned with actual cost. A deposit is just the starting point to establish cost.
If cost is less than the deposit then the difference is returned. A deposit is an internal mechanism to
Capital Accounting Partners 10
City of Palo Alto, California January 2016
capture an estimate of cost and then time will be charged to the deposit. Therefore, it is our view that
the deposit should not be written into resolution, even though most cities do this. In our view, staff
need the flexibility to collect a deposit that may be less than or more than what is listed.
The City does however utilize billable or productive hourly rates. As part of our analysis we developed
new rates that fully account for all labor costs and costs associated with services and supplies, City
overhead, and PCE overhead. In addition, these rates also include costs associated with customer
service and program specific administration such as administration of current planning. In summary, we
treated each staff position just like an individual user fee and allocated all costs on the same basis.
In setting user fees for planning services there is often more issues to consider than cost recovery. Many
communities often struggle with two areas: 1) how to price appeals, and 2) how to price fees and
services that are consumed primarily by individuals and individual homeowner.
COST OF CONSULTANTS
The City frequently hires outside consultants for specialty work or to augment staff. We understand that
the practice in recovering consultant cost is to pass the direct cost of their time to the applicant. In our
view. This under recovers cost to the City. We would recommend adding an overhead amount to the
hourly rates charged by consultants, just like actual staff.
APPEALS:
Appeals are often discussed in fee studies and we make every effort to be sensitive to the requirements
of the City. However, we have never seen a City intentionally recover full cost of these services. Our
observations is the city legal counsel has clear opinions on appeals and this does not typically involve full
cost recovery. Therefore, our standard recommendation is to set appeal fees reasonably but not spend
significant project resources on calculating their full cost.
SERVICES FOR INDIVIDUAL HOMEOWNERS:
Services and fees that impact individual homeowners are often the source of concern for cities. The
question usually comes down to this: should we reduce the price for the fee to something less than full
cost? For the services of the City’s Current Planning Division these fees would center on the Individual
review fees. In our view a city has a limited number of options in setting fees:
1. Charge full cost;
2. Subsidize the cost by lowering the price.
It should be noted that the State of California does not allow subsidizing one fee and then raising
another fee above cost to pay for the subsidy. In short, any fee can be priced up to full cost but no more
than full cost.
In our view, fees should be set at full cost unless there is a compelling interest to the City to do
otherwise. These reasons usually include social and economic considerations.
Capital Accounting Partners 11
City of Palo Alto, California January 2016
COMPARISON REVIEW
As part of this analysis, a survey was conducted of comparative fees and projects. We caution the reader
about these comparisons. Many communities do not routinely update their fees, and when they do, it
might not be based on a thorough analysis of cost. This means the data that we are often comparing is
the City’s cost compared to another city’s price.
The challenges of fee comparison can be summarized by the following:
Communities have different policies regarding user fees. Some desire to subsidize their fees
while others want to charge full cost.
Service levels can vary dramatically from one community to the next.
Service descriptions can be very different.
Multiple services will be included in one fee for one community but be separated in another
community.
Pricing structures can vary. Some cities will use flat fees, while others will use a combination of
deposit accounts with time and material charges. It is not unusual to find cities that publicize
deposit fees but never collect anything less or more than the deposit. Nor is it unusual to see
cities publicizing deposits but in reality a planner will estimate the deposit and then charge
against it for full cost recovery.
One city can have one Conditional Use Permit (as an example) while another may have several
types. Similarly, one city may have one Temporary Use Permit while another may have multiple
types that cover a range of potential uses. In addition, some cities may subsidize use permits
based on the occupant.
Therefore, comparing one service that is provided by the City of Palo Alto with the same service for a
neighboring city can be challenging – at best. We urge caution. We advise looking at trends. Do the
trends show high fees, low fees, or fees that are within a reasonable range? In our view, the trends show
about what we would expect -fees that are near the upper end of a range but are, on balance,
reasonably aligned with its benchmark cities.
The selection of benchmark municipalities was made in conjunction with staff. The selection criteria
were primarily municipalities that the City of Palo Alto routinely uses for benchmark purposes.
The following Cities were selected:
San Mateo;
Los Gatos;
Saratoga;
Mountain View;
Redwood City; and
Beverly Hills.
Capital Accounting Partners 12
City of Palo Alto, California January 2016
PLANNING FEE COMPARISONS
The following table provides the results of the comparison study.
I I Current I I I I I . Calculated Cost . . . . Planning Fees . Fee/Deposit San Mateo Los Gatos Saratoga Mountain View Beverly Hills •
I Deposit levels
$2,170 deposit plus $2,000 initial
1,448 actual cost s 1,791 deposit, actual cost s 2,31S s S61 AR· Minor Project (staff review only) 2,849 s s
$719 deposit plus plus
1,077 actual cost s 7,104 N/A s 1,947 s 14,232 s Subdivision · Parcel Map 3,776 s
$2, 710 deposit plus plus $2,000 initial Conditional Use Permit· Director level S S,272 ................................................................................................................................................................................................. $. ................... },?.9.9. .. _a.c.tlJ.a.1 .. C.O.S.t ......................................... $. ........................................... ?.,0.?.4. .. ~.l!P..()~!t.,_a.c.tlJ.a.1 .. C.O.S.t. 9.. ............................................. 3.,.~.8. ... $. ..................... !?.,2..2.?. .. .
999 $S76 deposit plus actual $SOO initial
190 cost N/A deposit, actual cost s 368 s S,8S2 Temporary Use Permit (TUP) s s
$1,149 deposit plus $2,SOO initial
2,436 actual cost s 3,732 deposit, actual cost s 2,4S7 s 17,227 s Variance· Directors Level 3,80S s
$2,934 deposit plus $3,SOO initial Individual Review· New two story residence or addi S 7,866
•..................................................................................................................................................... • ...............................................•.. $. .................. 4.,0.2.1.. actual cost .......................................... $. ........................................ 4.,9..8.2. .... d.l!PO..sit,a.<:t.IJa.1 .. <:()S.t .... N./~ ...................................................... $. ........................... 2.2.8.~ .. .
N/A ·do not issue or nothing comparable.
*Soon to be adopted fees
Capital Accounting Partners 13
City of Palo Alto, California January 2016
OBSERVATIONS AND RECOMMENDATIONS
GENERAL OBSERVATIONS
We note that the PCE is under recovering their costs. There are several reasons for this:
1) Hourly rates may recover the direct cost of individual staff but are not sufficient to recover the
full costs associated with each work group;
2) Costs for outside consultants are not being marked up to recover department or City overhead;
and
3) More time is required to process individual permits and applications than previously estimated.
ADJUSTING THE FEE SCHEDULE
We recommend annual adjustments to fees wherever possible. We also recommend a complete review
of costs for fee services every three to five years. With the annual update of fees we recommend using a
simple CPI type increase that is attached to the City’s labor cost. For example, if the labor cost for the
City goes up by 2% then adjust each fee by 2%. This is the simplest and most common method of
adjusting fees annually. It is our observation that the regulatory requirements change enough within a
three to five year time frame that a comprehensive review of costs is then warranted.
We understand that the City’s policy is to adjust fees annually based on changes to salaries and benefits.
We would affirm this practice and find that those cities that do this, maintain better cost recovery levels
over the long term.
14
City of Palo Alto, California January 2016
SECTION V: PLANNING FEE TABLE
Capital Accounting Partners, LLC 15
City of Palo Alto
Planning Fees
Fee Name Unit / Notes Actual Work
Volume
MISCELLANEOUS PROCESSING FEES
Public Notice: 600 foot radius
Public Notice: 150 foot radius
Record Management Fee
Records Retention (microfilming) Recording Fee with the County
Public Notice beyond 600 foot radius
Additional noticing beyond 3 Pre-screening fee
ARCHITECTURAL REVIEW BOARD Preliminary Review
Minor Project (staff review only) – sign and façade changes only or similar minor changes. Minor Project (staff review only)
Minor Project - Board Review Major Project
Master sign program
Signs (requiring Board review)
Signs Erected without Approval
Sign Exception Design Enhancement Exception (DEE)
Temporary sign permit (15 days)
ENVIRONMENTAL ASSESSMENT
Environmental Impact Assessment (EIA) mitigated/negative declaration
Environmental Impact Assessment (EIA) CEQA Categorical Exemption
Environmental Impact Report (E R)
Environmental Impact Report (E R) Legal Review
Mitigation Monitoring (MND)
Mitigation Monitoring (EIR) Mitigation Monitoring (EIR) Legal review
Legal review - categorical exception class 32 and mitigated/negative declaration
HISTORIC Demolition of Historic Building Demolition of Historic Building Legal Review
Major Project Major Project Legal Review
Minor Project requiring staff level review Historic Review of Individual Review Application
Floor Area Bonus and/or Transfer of Development Rights (TDR) Floor Area Bonus and/or Transfer of Development Rights (TDR) Minor project requiring Historic Board review
If noticing is
required, per occurance If noticing is
required
Delete
Delete At cost
If noticing is required
Deposit
Deposit
Code Enf penalty
Consult cost
plus mgt fee Delete
Deposit (100% of Estimated Costs) plus 25%
for project mgt and overhead
Delete
Deposit
Deposit
Delete
Delete
Delete
Deposit
Delete ???
14
114
10
16
2
6
8
Direct Unit Cost Indirect Unit
Allocated Costs
External
Costs
Total Cost
Assigned
Update to Fiscal
15-16
Current
Fee / Revenue /
Deposit
Unit Surcharge
or (Subsidy)
Based on fiscal
15-16
Annual Revenue
at Full Cost
Recovery
Annual Revenue at
Current Fee Level
Annual
Difference
3.5%
490$ $406 $896 $927.31
$ 673
($254) $0.00 -$ $0.00
279$ $231 $511 $528.63 $ 121 ($408) $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 25 $25 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 4 $4 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
653$ $541 $1,194 $1,235.86 ($1,236) $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 2 500 $2 500 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
2 880 $ $2 387 $5 267 $5 451.56 $ 1 204 ($4 248) $76 321.78 16 856.0 $ ($59 465.78)
441$ $366 $807 $834.89 $ 359 ($476) $0.00 -$ $0.00
1,412 $ $1,170 $2,582 $2,671.97 $ 1,448 ($1,224) $304,604.51 165,072.0 $ ($139,532.51)
3,624 $ $3,004 $6,628 $6,859.60 $ 2,896 ($3,964) $68,596.04 28,960.0 $ ($39,636.04)
5,422 $ $4,495 $9,917 $10,264.37 $ 3,712 ($6,552) $164,229.93 59,392.0 $ ($104,837.93)
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
1 937 $ $1 606 $3 543 $3 667.15 $ 359 ($3 308) $0.00 -$ $0.00
1,844 $ $1,529 $3,373 $3,491.17 $ 961 ($2,530) $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1,923 $1,923 $0.00 -$ $0.00
1,983 $ $1,644 $3,626 $3,753.05 $ 1,448 ($2,305) $0.00 -$ $0.00
2,929 $ $2,428 $5,357 $5,544.25 $ 1,585 ($3,959) $0.00 -$ $0.00
81$ $67 $149 $154.04 $ 61 ($93) $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1,738 $1 738 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 3,309 $3,309 $0.00 -$ $0.00
238$ $198 $436 $451.04 $ 324 ($127) $0.00 -$ $0.00
1,322 $ $1,096 2,418 $ $2,502.43 ($2,502) $0.00 -$ $0.00
264$ $219 $484 $500.49 $ 2,163 $1,663 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1 181 $1,181 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 541 $541 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 3,543 $3,543 $0.00 -$ $0.00
264$ $219 $484 $500.49 $ 1,082 $582 $0.00 -$ $0.00
529$ $438 $967 $1 000.97 ($1 001) $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
529$ $438 $967 $1,000.97 $ 2,386 $1,385 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1,622 $1,622 $0.00 -$ $0.00
793$ $658 $1,451 $1,501.46 $ 3,128 $1,627 $3,002.92 6,256.0 $ $3,253.08
-$ $0 $0 $0.00 $ 1,082 $1,082 $0.00 6,492.0 $ $6,492.00
529$ $438 $967 $1,000.97 $ 660 ($341) $8,007.79 5,280.0 $ ($2,727.79)
132$ $110 $242 $250.24 $ 1 917 $1 667 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 590 $590 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1 082 $1,082 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
Annual Cost Calculations (Fiscal 15 16) Unit Cost Summary
Capital Accounting Partners Page 1 of 5 Planning Unit Cost Calcs
City of Palo Alto
Planning Fees
Fee Name Unit / Notes Actual Work
Volume
SITE AND DESIGN Site and Design - Major Deposit 6
Site and Design - Major Legal Review Delete
SUBDIVISION Preliminary Parcel Map
Preliminary Parcel Map Legal Review Delete Preliminary Parcel Map w/Exception
Preliminary Parcel Map w/Exception Legal Review Delete Parcel Map 8
Parcel Map w/ Exception Tentative Map Deposit 2
Tentative Map Legal Review Delete
Final Map of Five or More Parcels 2
ZONING ADMINISTRATOR Conditional Use Permit (CUP) - Director level 18 Conditional Use Permit (CUP) additional upon hearing request
CUP – Wireless Facilities Delete CUP – Use Permit for alcoholic beverage service only Delete CUP – Minor Change to Existing CUP Delete
CUP - Day Care Center (50% of CUP)
Temporary Use Permit (TUP) No hearing
option 10 Variance - directors level 6
Nonresidential Variance Delete Nonresidential Variance Legal Review Delete
Variance - additional for hearing Home Improvement Exception (H E) 6 Preliminary Review meeting with Architect 124
Individual Review Minor Revisions to approved projects 44 Individual Review - New Two Story Residence or addition to existing one story 44
Individual Review - Second Story expansion >150 s.f. Neighborhood Preservation Zone Exception
If a directors hearing is requested (additional) Per hearing Wireless - Tier 1: Minor AR
Wireless - Tier 2: Conditional Use Permit Wireless - Tier 3: Major ARB OTHER
All Appeals (File with City Clerk) All Appeals (File with City Clerk) Legal Review Delete
Comprehensive Plan Change (not annual review) Deposit Comprehensive Plan Change (not annual review) Legal Review Delete
Development Project Preliminary (pre-screening) Deposit Development Project Preliminary (pre-screening) Legal Review Delete
Development Agreement Deposit
Development Agreement Legal Review Delete
Development Agreement Annual Review Deposit
Development Agreement Annual Review Legal Review Delete Planned Community Zone Change Deposit
Planned Community Zone Change Legal Review Delete Minor Change to Planned Community Zone Deposit
Minor Change to Planned Community Zone Legal Review Delete Zone Change - Regular Deposit 2 Zone Change - Regular Legal Review Delete
Williamson Act - Establish or Withdraw Deposit
Williamson Act - Establish or Withdraw Legal Review Delete
Mills Act – Establish or Withdraw Deposit Mills Act – Establish or Withdraw Legal Review
Direct Unit Cost Indirect Unit
Allocated Costs
External
Costs
Total Cost
Assigned
Update to Fiscal
15-16
Unit Cost Summary
Current
Fee / Revenue /
Deposit
Unit Surcharge
or (Subsidy)
Based on fiscal
15-16
Annual Revenue
at Full Cost
Recovery
Annual Revenue at
Current Fee Level
Annual
Difference
Annual Cost Calculations (Fiscal 15 16)
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
11,898 $ $9,863 $21,761 $22,522.91 $ 5,905 ($16,618) $135,137.44 35,430.0 $ ($99,707.44)
529$ $438 $967 $1,000.97 $ 1,352 $351 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
2,468 $ $2,046 $4,513 $4,671.01 $ 2,617 ($2,054) $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 541 $541 $0.00 -$ $0.00
3,903 $ $3,235 $7,138 $7,387.54 $ 5,165 ($2,223) $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1,082 $1,082 $0.00 -$ $0.00
2,059 $ $1,707 $3,767 $3,898.51 $ 1,077 ($2,822) $31,188.12 8,616.0 $ ($22,572.12)
1,508 $ $1,250 $2,758 $2,854.46 $ 1,251 ($1,603) $0.00 -$ $0.00
4,555 $ $3,776 $8,330 $8,621.90 $ 5,905 ($2,717) $0.00 11,810.0 $ $11,810.00
529$ $438 $967 $1,000.97 $ 2,163 $1,162 $0.00 -$ $0.00
2,464 $ $2,042 $4,506 $4,663.52 $ 3,370 ($1,294) $0.00 6,740.0 $ $6,740.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
3,039 $ $2,519 $5,559 $5,753.10 ($5,753) $103,555.80 -$ ($103,555.80)
5,095 $ $4,224 $9,319 $9,644.84 $ 3,799 ($5,846) $0.00 -$ $0.00
4,239 $ $3,514 $7,754 $8,025.09 $ 3,785 ($4,240) $0.00 -$ $0.00
1,702 $ $1,411 $3,113 $3,221.81 $ 961 ($2,261) $0.00 -$ $0.00
1,438 $ $1,192 $2,629 $2,721.33 $ 961 ($1,760) $0.00 -$ $0.00
1,894 $ $1,570 $3,465 $3,586.05 $ 180 ($3,406) $0.00 -$ $0.00
604$ $501 $1,104 $1,143.04 $ 190 ($953) $11,430.37 1,900.0 $ ($9,530.37)
1,942 $ $1,610 $3,551 $3,675.67 $ 2,436 ($1,240) $22,054.00 14,616.0 $ ($7,438.00)
1,343 $
-$
$1,114 $2,457
$0
$2,542.97 $ 5,138 $2,595 $0.00 -$ $0.00
$0 $0.00 $ 811 $811 $0.00 -$ $0.00
5,095 $ $4,224 $9,319 $9,644.84 $ 1,193 ($8,452) $0.00 -$ $0.00
1,642 $ $1,361 $3,004 $3,108.84 $ 961 ($2,148) $18,653.06 5,766.0 $ ($12,887.06)
118$ $98 146.8 $362 $374.89 $ 108 ($267) $46,486.55 13,392.0 $ ($33,094.55)
1,548 $ $1,284 $2,832 $2,931.13 $ 1,595 ($1,336) $128,969.91 70,180.0 $ ($58,789.91)
3,723 $ $3,086 $6,808 $7,046.66 $ 4,021 ($3,026) $310,052.92 176,924.0 $ ($133,128.92)
2,980 $ $2,470 $5,450 $5,641.06 $ 2,778 ($2,863) $0.00 -$ $0.00
2,820 $ $2,338 $5,157 $5,337.79 $ 2,224 ($3,114) $0.00 -$ $0.00
1,253 $ $1,039 $2,292 $2,372.39 ($2,372) $0.00 -$ $0.00
1,412 $ $1,170 $2,582 $2,671.97 ($2,672) $0.00 -$ $0.00
3,039 $ $2,519 $5,559 $5,753.10 ($5,753) $0.00 -$ $0.00
3,227 $ $2,675 $5,902 $6,108.87 ($6,109) $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
264$ $219 $484 $500.49 $ 136 ($364) $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 270 $270 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 5,905 $5,905 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1,082 $1,082 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 3,543 $3,543 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 811 $811 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 6,813 $6,813 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 5,408 $5,408 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 2,385 $2,385 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 811 $811 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 7,086 $7,086 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 2,163 $2,163 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1,448 $1,448 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 811 $811 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 5,905 $5,905 $0.00 11,810.0 $ $11,810.00
-$ $0 $0 $0.00 $ 1,352 $1,352 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1,862 $1,862 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1,622 $1,622 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 1,771 $1,771 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 2,163 $2,163 $0.00 -$ $0.00
Capital Accounting Partners Page 2 of 5 Planning Unit Cost Calcs
City of Palo Alto
Planning Fees
Fee Name Unit / Notes Actual Work
Volume
Consult plus project mgt 25% plus direct
cost
DOCUMENTS & GENERAL FEES
Administrative extensions and zoning letters Per hour, 1 hr min
Property research or research requiring more than 30 minutes Applicable hourly
rate Records Retention (microfilming) Per plan sheet
Comprehensive Plan Plus $4 if mailed
Zoning Map
Comprehensive Plan map (200-scale) Per page, plus $4
if mailed
Tree Manual or other bound documents Plus $4 if mailed
Subscription – Agendas ( annual) Per board or
commission
Subscription – Minutes (annual) Per board or
commission
Copies – Optical Disk Per page, $27.
min Photocopies Per page Planning compliance fee Deposit
Long range planning 1 Comprehensive Plan Implementation 2
Legal review (ARB major) 6
legal review (legislative review, ie zone change, plan amendment, etc) 16
Legal review (environmental) 20 Note: Legal review fees cover up to 3 public hearings, additional
hearings 1/3 of the applicable fee Legal review (appeal to City Council) Productive Hourly Rates By Position
Administrative Assistant Administrative Associate I
Administrative Associate II Administrative Associate III
Assistant Director Planning & Community Environment Associate Engineer
Associate Planner Building/Planning Technician Business Analyst
Chief Planning Official Chief Transportation Official
Code Enforcement Officer Coordinator Transportation System Management
Director Planning/Community Environment Management Analyst
Manager Planning Planner Project Engineer
Senior Management Analyst Senior Planner
Senior Project Engineer Outside Consultant adjustment
City Legal Counsel
Direct Unit Cost Indirect Unit
Allocated Costs
External
Costs
Total Cost
Assigned
Update to Fiscal
15-16
Unit Cost Summary
Current
Fee / Revenue /
Deposit
Unit Surcharge
or (Subsidy)
Based on fiscal
15-16
Annual Revenue
at Full Cost
Recovery
Annual Revenue at
Current Fee Level
Annual
Difference
Annual Cost Calculations (Fiscal 15 16)
100$ $83 $183 $189.30 ($189) $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 162 $162 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 123 $123 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 4 $4 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 87 $87 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 95 $95 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 13 $13 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 32 $32 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 108 $108 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 216 $216 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 0.50 $1 $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 0.13 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
1,573,500 $ $857,569 $2,431,068 $2,516,155.83 ($2,516,156) $0.00 -$ $0.00
-$ $0 $0 $0.00 $ 201,298 $201,298 $0.00 402,596.6 $ $402,596.56
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
3,259 $ $1,776 $5,035 $5,211.54 ($5,212) $31,269.23 -$ ($31,269.23)
6,258 $ $3,411 $9,668 $10,006.67 ($10,007) $160,106.80 -$ ($160,106.80)
5,903 $ $3,217 $9,120 $9,439.35 ($9,439) $188,787.05 -$ ($188,787.05)
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
4,323 $ $2,356 $6,680 $6,913.51 ($6,914) $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
82$ $45 $126 $130.87 $ 91.96 ($39) $0.00 -$ $0.00
70$ $38 $108 $112.19 $ 84.01 ($28) $0.00 -$ $0.00
77$ $42 $119 $123.62 $ 88.14 ($35) $0.00 -$ $0.00
83$ $45 $128 $132.50 $ 91.87 ($41) $0.00 -$ $0.00
183$ $100 $283 $292.56 $ 154.03 ($139) $0.00 -$ $0.00
111$ $61 $172 $177.57 ($178) $0.00 -$ $0.00
101$ $55 $156 $161.83 $ 107.21 ($55) $0.00 -$ $0.00
81$ $44 $126 $130.12 $ 93.79 ($36) $0.00 -$ $0.00
118$ $64 $182 $188.78 ($189) $0.00 -$ $0.00
163$ $89 $251 $260.15 $ 136.13 ($124) $0.00 -$ $0.00
142$ $77 $219 $227.16 $ 136.13 ($91) $0.00 -$ $0.00
99$ $54 $153 $158.53 $ 103.35 ($55) $0.00 -$ $0.00
100$ $55 $155 $160.38 ($160) $0.00 -$ $0.00
198$ $108 $306 $316.95 $ 177.59 ($139) $0.00 -$ $0.00
105$ $57 $163 $168.48 ($168) $0.00 -$ $0.00
129$ $70 $199 $205.91 $ 122.84 ($83) $0.00 -$ $0.00
106$ $58 $164 $169.62 $ 112.10 ($58) $0.00 -$ $0.00
130$ $71 $201 $208.21 $ 129.17 ($79) $0.00 -$ $0.00
122$ $67 $189 $195.46 ($195) $0.00 -$ $0.00
122$ $67 $189 $195.61 $ 123.87 ($72) $0.00 -$ $0.00
130$ $71 $201 $208.28 ($208) $0.00 -$ $0.00
100$ $55 $155 $159.91 55% ($159) $0.00 -$ $0.00
-$ $0 264.39 $264 $273.64 ($274) $0.00 -$ $0.00
-$ $0 $0 $0.00 $0 $0.00 -$ $0.00
Capital Accounting Partners Page 3 of 5 Planning Unit Cost Calcs
City of Palo Alto
Planning Fees
Unit Cost Summary
Fee Name Unit / Notes Actual Work
Volume Direct Unit Cost Indirect Unit
Allocated Costs
External
Costs
Total Cost
Assigned
Update to Fiscal
15-16
Current
Fee / Revenue /
Deposit
Unit Surcharge
or (Subsidy)
Based on fiscal
15-16
Annual Revenue
at Full Cost
Recovery
Annual Revenue at
Current Fee Level
Annual
Difference
Annual Cost Calculations (Fiscal 15 16)
Annual Revenue
at Full Cost
Recovery
Annual Revenue at
Current Fee Level
Annual
Difference
$1,939,661 $1,048,089 ($891,573)
Capital Accounting Partners Page 4 of 5 Planning Unit Cost Calcs