Santa Cruz County Grand Jury • 2003-2004

Grand Jury Investigation of County Procedures for Determining Fees and Assigning Cost of Local Government Services

Published: January 29, 2004 18 pages
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Findings and Recommendations 12 findings

F1
In general, the county department or agency responsible for providing the government service being charged for formulates the fees. The results of this formulation are then forwarded to the County Administrative Officer who reviews and compiles a proposal to the Board of Supervisors for modification to the counties “Unified Fee Schedule.” Response: Santa Cruz County Board of Supervisors AGREES County Procedures for Determining Fees -59
No recommendations for this finding
F2
The “Unified Fee Schedule” is adopted by the Board of Supervisors and constitutes the direct legal authority for a department or agency to recover its cost through the collection of fees from the “beneficiary” of the service provided. Response: Santa Cruz County Board of Supervisors AGREES The County agrees with this finding with the clarification that most fees charged by the County do not fully recover the costs of providing the service, but rather recover a portion of the costs expended in providing a service.
No recommendations for this finding
F3
In general, the amount charged as a fee is limited by law to an amount required to recover the cost expended in providing the service to the beneficiary who is charge the fee. Response: Santa Cruz County Board of Supervisors PARTIALLY AGREES The fees charged for many County services are statutory and cannot be amended by the County. Those that are not governed by statute cannot exceed the cost of providing the service.
No recommendations for this finding
F4
In practice, full or even substantial cost recovery is rare in any department other than the County Planning Department. Response: Santa Cruz County Board of Supervisors PARTIALLY AGREES The County Planning Department, like other departments, does not recover fees to cover the cost of service delivery.
No recommendations for this finding
F5
Therefore, revisions to existing fees are often based on some “reasonable” adjustment to the current fee. Response: Santa Cruz County Board of Supervisors AGREES
No recommendations for this finding
F6
These adjustments to prior fees are sometimes based on factors unrelated to the actual costs being recovered such as the local CPI or similar charges in other jurisdictions. Response: Santa Cruz County Board of Supervisors AGREES The County agrees with the finding that adjustments are sometimes related to the local CPI or similar charges in other jurisdictions, but believes that these factors are related to the costs being recovered and are appropriate in determining fees.
Related Recommendations (1)
R2
Unless required by some outside authority, the Board of Supervisors should not approve proposals for adjustments to fees based on factors unrelated to the actual cost being recovered. Response: Santa Cruz County Board of Supervisors This recommendation is already in place.
F7
The fee increase form or worksheet used by county departments to request adjustment or additions to the fee schedule, does not specifically identify the cost that are being recovered by the indicated fee. Response: Santa Cruz County Board of Supervisors PARTIALLY AGREES -60 County Procedures for Determining Fees On the fee worksheet, departments must cite the authority under which the fee can be charged, indicate whether the fee is mandatory, and describe the services for which the fee will be charged. Sufficient information is provided to the Board of Supervisors to justify the recommended fee.
Related Recommendations (1)
R3
The County Administrative Office should improve its fee request form to require a worksheet attachment that specifically identifies the cost being recovered. Response: Santa Cruz County Board of Supervisors This recommendation will be partially implemented. The County will add a section to the fee form to assure that the fee does not exceed the cost of the service delivered. However, as the Grand Jury pointed out, full or even substantial cost recovery is rare in any department. The County has elected to subsidize various services for the public’s benefit. For instance, if the Health Services Agency charged fees sufficient to cover their costs, their clients would not be able to afford to seek services. Likewise, if the Swim Center charged participants the full cost of the pool, few people would swim there. Because most fees are set by statute, and many fees cannot be expected to cover the actual costs of the services provided, it is doubtful that preparing additional worksheets would be useful.
F8
Public frustration with and confusion about planning department fees are one of the most important challenges facing the planning department. Response: Santa Cruz County Board of Supervisors The fees associated with the processing of ministerial permit applications, such as building permit applications or over-the-counter plumbing or electrical permits, typically are very simple, straight-forward, and easy to understand fee calculations that do not present problems for members of the public wanting to obtain these types of permits. The majority of fees fall into this category. However, fees associated with the processing and review of discretionary permit applications have at times been a significant source of confusion for some members of the public. The Board of Supervisors, in connection with the adoption of the County’s FY 2003-04 budget, directed the Planning Department to implement a phased conversion of its current method of fee collection to a largely “At Cost” collection procedure. The Board also authorized funds in the Planning Department’s budget to undertake a study of the department’s fees during FY 2003-04. The Planning Department is currently reviewing its cost estimate worksheets, billing invoice forms and related materials for the purpose of clarifying assumptions and explanations that provide the basis of fee costs or estimates. Response: City of Capitola DISAGREES The City Council of the City of Capitola disagrees with this finding as it may be applied to the City of Capitola Planning Department. Recently the City conducted a voter survey of 351 residents, none of whom commented on the Planning Department fees. Response: City of Santa Cruz DISAGREES The City has a clearly written fee schedule for planning-related activities. Response: City of Scotts Valley PARTIALLY AGREES The issue of fees can be confusing and most concerns raised are not about “processing” fees but impact fees, which have a greater burden than processing fees on most projects. We agree that more clarity as to the purpose of fees and the amounts charged would improve relationships with our customers for all fees charged, not just for the planning process Response: City of Watsonville DISAGREES County Procedures for Determining Fees -61 The City disagrees with this finding to the extent that it relates to the City. The City has printed fee schedules that are available to the public and City Staff is not aware of confusion related to fees.
Related Recommendations (2)
R4
To improve public confidence in Planning Department fee structures, the County Administrative Officer and each City Manager should require a “from scratch” analysis of all fees for Planning department services during the next regularly scheduled review cycle. Response: Santa Cruz County Board of Supervisors This recommendation will be implemented. As previously indicated, the County Planning Department is presently implementing a phased conversion of its fee collection system to a largely at cost arrangement fee collection system. In connection with the project, the department is reviewing ways to increase clarity and understanding regarding how fee estimates are determined. The Board of Supervisors has authorized the reservation of funds in the Planning Department’s budget to conduct a fee study during Fiscal year 2003-04. The Planning Department reviews its fees on an annual basis and will continue to do so. The County cannot speak for cities. Response: City of Capitola This recommendation will not be implemented because of the following reasons: 1) It is unfounded. At no time has the City of Capitola received any information that its fees were unreasonable. 2) The meaning of “from scratch” is unclear. 3) The City has just implemented a cost recovery system for planning fees that is based on actual time spent on processing applications for development. -64 County Procedures for Determining Fees Response: City of Santa Cruz The recommendation requires further analysis. This idea will be considered over the next six months and then a determination will be made about the timetable of implementing an analysis of this nature. Response: City of Scotts Valley The City implemented this finding when our fee structure was reviewed in 1991. In 1991, the fees were established based upon a detailed analysis of processing times for specific types of permits. An updated comprehensive analysis is proposed over the next fiscal year, if enough cases are filed to allow for adequate review. Adequate time to develop a cost basis for each fee is critical for such an evaluation to be accurate. This analysis will be “from scratch” analyzing each fee and the actual time required to process each type of permit. In order to ensure the fees are reasonable, a minimum number of similar cases must be reviewed. Depending on the cases analyzed, the City may update the fee schedule in phases as enough historical data becomes available to have the “from scratch” data available. Response: City of Watsonville DISAGREES The City disagrees with this finding to the extent that it relates to the City. The City of Watsonville has recently completed a detailed assessment of its fees with the assistance of Maximus Consulting. We are confident in the analysis and have implemented changes accordingly. We cannot speak to other jurisdiction fees.
R5
The detailed cost basis for each planning department fee should be identified and made available for public review at each planning department office. Response: Santa Cruz County Board of Supervisors This recommendation has been implemented. Project sponsors who have their permit application processed at cost are provided a detailed cost breakdown of services provided, including time allocated by position. When the department completes implementation of the phased conversion of fee categories to the single at cost arrangement method, project sponsors will uniformly receive detailed cost breakdowns of fees applied to their permit applications. Response: City of Capitola This recommendation is in the process of implementation and should be complete within the next three months, in the form of assessing the results of the new cost recovery based approach to planning fees. Response: City of Santa Cruz County Procedures for Determining Fees -65 The recommendation requires further analysis. Along with the analysis of the fee schedule (above), this idea will also be reviewed within the next six months. However, it should be noted that to implement this properly would require a sophisticated cost-benefit analysis and may be beyond the capacity of local governments right now. Response: City of Scotts Valley AGREES The City has implemented this recommendation. We have made our 1991 study available to those who request documentation. However, upon completion of the updated comprehensive fee analysis discussed in response 4 above, a detailed cost basis for each fee can be provided. Response: City of Watsonville DISAGREES The City disagrees with this finding to the extent that it relates to the City. The City of Watsonville has adopted fees which are equal to, or less than, the actual cost of proving the service in accordance with state law. The report and recommendations are public documents. The vast majority of City Council-adopted fees are set well below the actual costs of providing service due to the implication on home owners and property owners and as an acknowledgement that a City’s General Fund bears some responsibility to cover a portion of costs related to City “ Police Powers”.
F9
Public dissatisfaction with the planing process and its expense leads to poor public compliance. Response: Santa Cruz County Board of Supervisors The County is not aware of any studies that support this finding, but agrees that it may be true to some unknown degree. There are members of the public who, because of their perceptions about the County’s planning process, have decided to build projects or implement land uses without obtaining the requisite permits. However, a variety of other reasons exist for people not obtaining permits. For example, many individuals indicate that they were unaware that a permit was required to do their project. When it is brought to their attention, and many times not at the urging of the County’s Code Compliance staff, they voluntarily make application to secure the necessary approval(s). Another reason that a person may build a structure or introduce a land use and may not want to obtain necessary approvals or permits is because the new structure or use will trigger an unwanted increase in the property’s assessed valuation, associated tax obligations, obligatory impact fees, etc. Response: City of Capitola PARTIALLY AGREES As a general rule if permit fees so far outpace expenses that they are unreasonable, the public will forego the permit process and risk the penalties for non-compliance. However, it is unclear how this matter relates to the City of Capitola or upon what evidence this finding was made. In Capitola we believe we have a very high degree of compliance. Response: City of Santa Cruz DISAGREES The Santa Cruz Planning Department is not aware of public dissatisfaction regarding the planning process. Response: City of Scotts Valley PARTIALLY AGREES The planning process and basis for the rules being applied needs to be clearly conveyed at all times in the process. The rules and regulations are complex, however, and often influenced by outside factors such as State and Federal laws. Therefore, local government does not always have the choice about how to apply regulations at another government level. This is particularly the case for issues related with the Endangered Species Act. We agree that the process can be confusing and difficult at times, especially when a case is controversial and where neighbors oppose a particular project. Often, local government is blamed for the controversy even though it is the private sector which opposes the development. A reasonable process to allow for public comment as well as a program to assist applicants is needed. Also, a paramount issue is to ensure that -62 County Procedures for Determining Fees planners uniformly apply rules in the same manner so that there is equity in the process. Reasonable access to persons with authority to make decisions is also necessary so that applicants can move forward through the process. We agree that trust in the process is very important to encourage compliance with the regulations. Response: City of Watsonville DISAGREES The City disagrees with this finding to the extent that it relates to the City. The City has continually worked to improve customer service and to acknowledge that growth is necessary for the financial and social health of the City. The City provides timely response and full service permit center that is open five days a week, nine hours a day. Conclusions
No recommendations for this finding
F10
Interest in challenging such charges is thought to increase during tight budgetary times. Response: Santa Cruz County Board of Supervisors DISAGREES County departments are always concerned with the accuracy of the Plan.
No recommendations for this finding
F11
County departments are generally not allowed to seek outside alternatives even when the cost is significantly more than private sources.
No recommendations for this finding
F12
The experience of this year’s Grand Jury is illustrative: The Grand Jury, as with many county departments, is charge by the County Information Services Division for internet access and access to the county’s main frame on a per connection basis. The Grand Jury has little or no need to access the county mainframe. However, it is our understanding that if we objected to the charge for this access we would be disconnected from all access and the line item would be deleted from next year’s budget. Thus there is little or no incentive to object to this charge. Similarly, many Grand Jury members familiar with technology issues felt that the amount charged to the Grand Jury for computer assistance -68 County Procedures for Determining Fees and internet access was for beyond that available commercially. However, since this is an established process, our options seem to be to decline internet access entirely, to fight for outside access which would potentially limit our access to the county intranet, or to accept the current service as presented. Conclusions
No recommendations for this finding

Additional Recommendations 1

These recommendations are not explicitly linked to specific findings.

Conclusions 15