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Home My WebLink About0326.000- -~.' - -. --, . . " -l:--. r-' '" _~~~-_-.=~<_~,." __ ~.." .. THE HONORAB[£ CITY COUNCIL Palo Alto J California Attention: Finance and Public Works Committ~e Members of the Council: ,Fire Department staff .. as a separate part of the User Fee study .. has completed a supplemental review of the h~zardous materIals fee structure. As a re5ult.. staff is recommending an adjustment to the hazardous materials fee structure, -while remaining consistent with tbe User Fee Study recommendation of a 16.3 percent increase in the total hazardO~s materials fees. If the staff recommendations for adjustments to the fees are adopted by Council .. total cost recovery for the hazardous materials inspection program-... ill increase from 54.1 percent to 62.85 percent. Sta ff is recommending the bazardous materials program achieve a recovery level of 70 percent of total costs by the end of fiscal year 91/92. This .. ill allo ... for a one year review of actoals with the proposed changes, and allow for adjustments in fees to ensure the most fair and equItable fee structure for this program and the community. Staff does not believe that 10·0 percent full recovery is achievable .....-ithout significant adverse effect to the business community. When Council first approved ~he hazardous materials program. they directed that the program set fees and charges sufficient to attain 100 percent total cost recovery. 'l'he User Fee study highlights several problems in the program~s fee structure that make this cost recovery goal difficult to attain, given changes in the program since its inception. A number of small auto repa ir and 'Welding sbop o ..... ners have also expressed frustration .. ith the stru-::ture of the fees. as well as the incompatibility of th~ fee structure with the City's stated goals for lJ'1ste rei nimi zation and cecycl ing. Finance and Fi r-e Department '5 staff met .... ith this group separately to develop. a greater understanding of their specific concerns. Fire Department staff has held two public meetings 'With individuals and groups to listen and respond to their concerns. At the last public meetinq, all interested parties present ... ere supportive of the direction staff 'Was recommending. since th.e i:lCcption of the hazardous materials program~ it has continued to be dynamic and highly techni~al. Legislation at the local and state levels have placed an increased demand on staff time. Early in 1988, an agreement ~ith the County, the Fire Department assumeo the responsIbility l of implementing state mandated AS 2185/87 Business Plan requirements. In _~M~ m,. __________________ _ • I. \ . '\ ." -\ \ -\ .~ \.1 • • , I "I I l , " \ ~ \ .~ o o 1989" il.B 2189 further modified State r"",..., by-req1l1Tl.ng the Bllsine~s Plan provisions to satisfy Federal law requirements -=ontained in the Superfund Amendments and Reauthorization Act of 1986 (SARA Title III). Tbese developments required staff attendance and input at many County and State meetings.. Changes in AB 1030.. State underground tank regulations, required simil~r staff commitment. Development of the Model Toxic Gas Ordinance resulted in extensive research and technical consultation.. In addition,. staff time has been spent staying current in other related hazardous materials issues facing ~~e City, including attendance at the Count)"W"ide Tanner Committ.;-e on Haz.l.rdous waste Minimization and SARA Title III :Lcx:;al Emergency Planning c(>!nllIittee for Region II. The staff time impact of keeping current .... ith the ever changing regulations has been signlficant~ Involvement in the above activities is important to the maintenance and development of the hazardous materials program and provides a benefit beyond the original program design~ The impact of the changes occurring results in more staff time being spent in merit s.arvice type activities 'Which provide a benefit to the entire commun ity ~ rather than the original intention of the Bazar-dous Materials storage Or~inance of solely conducting individual services such as on site inspections~ reviewing Hazardous Materials Manage:rnent Plans, and issuing permits. In addition. activities such as ensuring City compliance with hazardous materials regulations, investigations of releases 'Where there is no. identifiable responsible party" public disclosure of information" liaison with other governmental agencies, public education~ specia1 technical traininq, and similar activities have reduced the time available for providIng: -individual services· by approll:i.mately 30 percent. Consequently~ Staff does no,t feel that the CQUN:il's direction to !I1i3intain 100 perce'1t total cost recovery (or the hazardous materIals prog~am is realistic~ and should be adjus~ed to 70 perc~nt. Revi~"![ of ~)C;j. __ § __ tj.ng Fee Structure The User Fee stUdy methodology detenoined that the average costs of ·short and long form-hazardous materials permits arere $5·0,0 and $825 respectively. 'l'be actual fees are $385 and $5-85 respectively. pIes $1.15 for each hazard class of material. In staff review of a sample County ~ide fee comparison, it was found that the h~zardous materials fees in P~lo Alto are above the average for shQrt form peru.its, and below the average for long form permits. For example~ the follo~ing table reflects some typical comparisons that 'Were found: SAMPLE FIRE OEP~RTMENT FEE COXPARlSONS SUNNYVALE SAN JOSE PALO ALTO HARDWARE STORE )57 4 0.0 (40~ 0·0 120~O'O SEI1ICONDUCTOR CO~ 4r365~OC 1,175.00 TFANSMISSION SHOP 351~OO 295.0-0 520.00 • . ~ -I ! , , , ~ , ~ " ~, , \ , . ~ , .''' . . I. \ , V , • , . ~ . ~ . ,. ~ i . , l ........ \ It is impoI'tant to note in review of the average ___ fees~ tl1at .s.ignjficant differenCes liiay resuit. due to differinq :methods of calculating fees. For example~ in Palo Alto the Bazmat fee includ~s all other fire code fees. In Sunnyvale .. a fire c-ooe permit 'Would be an add itional cost. In San Jose~ the cost is calculated on a base fee, plus an hourly rate of time spent at the location. S~rt form permits characteristically represent smaller ~sinesses ~ith smaller quantities of hazardous materials. Long form permits represent larger businesses with larger quantities of hazardous materials present and more staff time is required to ensure compliance. Additionally, more staff time is required for companies .... ith ·provisional permits· as opposed to companies fully in compliance 'With requirements of the ordinance. Provisional permits result in more time spent in consultation~ documentation, and return visits~ often regardless of the size of the busin~ss. 'J'he current fee structure does not have any incentives to er.courage waste minimization or recycl inq, something staff believes 'Would be environmentally beneficial to the ccmmunity. as 'Well as jmprovinq safety. In addition to the three new fees recommended in the User Fee Study, the foll~ing changes to the existing hazardous materials fee schedule are recoouuended: 1. Reduce the short f~ra perait by $100 from $!85 to $295. The projected unit volume is 145. reve __ 'llJ.e reduction of $14,5-0'0. This .ill re:3ult in a 2. Increase the long ~ora permit by $60 from $585 to $'45. The projected ur.it volulPe is 245. revenue increase of $14,700. This 'Will result in a 1. Add a new $lCa ~ee to all provisiona1 permits (sbort and 10nq f"ora) .. The projected unit volume is 115. [-even-t.:e increase of $11. Su'D. This ",ill result in a 41. Provide a $.200 credit to 1!azardous Ilaterials permittees wbo are qenerators of bazar~us waste but recycle 100 percent of the hazardous vaste qeDerate4. The projected unit volume is so. revenue decrease of '$10,0'0'0. This -wi 11 result in a 5. .Reduce .cost recovery goal froll 100 percent to 70 percent ~or hazardous Ilaterials program. • , --'-, T - • \" o o Tbe net effect of thp-r~co~~nd~ ~~~~~~ wi!l r~~lt i~ ~~ i.~z~a~c ~f $1,700 to the total revenues collected for hazardous material s fees during the first )'ear~ More importantly, it results in a more equitable distribution of cost recovery. It provides incentives for rapid COQlpliance,. 'Waste miniJnlzation~ and recyclinq~ It also brings the average fees for businesses in Palo Alto which store hazardou3 materials more closely in line with the average fees being charged Countywide. Respectfully submitted,. /)'. -;(Q'l'k.J . ~YA RUBEN D<'-GRIJALVA Assistaat Pire Chief CMR 326:0 L ~~LL ROBERT R. WALL Fire chief -. l , ,