Regular 10.A.
Regular City Council Meeting
- Meeting Date:
- 09/28/2020
- TITLE
- Public Hearing and Resolution Revising Fees for Encroachment Rentals
- PRESENTED BY:
- Jennifer Duray
- Department:
- Public Works
- Division:
- Administration
RECOMMENDATION
Staff recommends Council hold a public hearing and approve the resolution revising the fees for encroachment rentals.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
The City charges an annual rental fee for approved encroachments in the right-of-way. Some examples of encroachments are awnings, fences, landscaping, restaurant patios, signs, and conduit. The City needs to assure safety and accessibility of the right-of-way, and for this reason, it requires an encroachment permit any time a property owner requests to use part of the right-of-way. Encroachment permit applications are processed and approved by the Public Works Engineering Division. A fee is collected with the permit application to cover the administrative costs of processing the application. If the encroachment is approved, annual assessments of the encroachment fee for the rental of the right-of-way will begin. The assessments will continue until the permit is revoked. Awnings and canopies in the Central Business District are not charged an annual rental fee in accordance with Resolution 86-15316.
The annual encroachment rental fee has been set at $1.00 per square foot of the surface area of the encroachment since 1985. Staff presented various options for changing the methodology and the amount of the annual rental fee at the September 8, 2020 Council Work Session and has since further analyzed the rates to make a recommendation to Council.
The proposed methodology is a tier structure consisting of two tiers. Tier 1 encroachments have minimal impact to the right-of-way. Tier 1 encroachments include awnings, overhanging signs, conduit, and other encroachments that minimally impact accessibility of the right-of-way. Tier 2 encroachments have a major impact to the right-of-way and cause the part of the right-of-way that is encroached on to be unusable. Some types of Tier 2 encroachments are restaurant patios on the sidewalk, fences, stairways, and sheds.
The proposed annual rental rate for Tier 1 encroachments is $2.00 per square or linear foot per year to cover engineering and administrative costs. Staff's recommendation for Tier 2 encroachments rates is to utilize 50% of the average taxable value of the adjacent properties. This is currently $7.00 per square foot. Staff is proposing a 5-year plan to increase Tier 2 encroachments gradually to this amount and the recommended FY21 rate is $2.00 per square foot. If Tier 2 rates are increased in the future to align with 50% of the average taxable value, this additional revenue is recommended to be utilized in the beautification of the right-of-way in areas that are impacted by their neighbors' encroachments.
The annual encroachment rental fee has been set at $1.00 per square foot of the surface area of the encroachment since 1985. Staff presented various options for changing the methodology and the amount of the annual rental fee at the September 8, 2020 Council Work Session and has since further analyzed the rates to make a recommendation to Council.
The proposed methodology is a tier structure consisting of two tiers. Tier 1 encroachments have minimal impact to the right-of-way. Tier 1 encroachments include awnings, overhanging signs, conduit, and other encroachments that minimally impact accessibility of the right-of-way. Tier 2 encroachments have a major impact to the right-of-way and cause the part of the right-of-way that is encroached on to be unusable. Some types of Tier 2 encroachments are restaurant patios on the sidewalk, fences, stairways, and sheds.
The proposed annual rental rate for Tier 1 encroachments is $2.00 per square or linear foot per year to cover engineering and administrative costs. Staff's recommendation for Tier 2 encroachments rates is to utilize 50% of the average taxable value of the adjacent properties. This is currently $7.00 per square foot. Staff is proposing a 5-year plan to increase Tier 2 encroachments gradually to this amount and the recommended FY21 rate is $2.00 per square foot. If Tier 2 rates are increased in the future to align with 50% of the average taxable value, this additional revenue is recommended to be utilized in the beautification of the right-of-way in areas that are impacted by their neighbors' encroachments.
ALTERNATIVES
City Council may:
- Approve the resolution to revise the fees for encroachment rentals, or;
- Approve an amended resolution to revise the fees at another specified rate, or:
- Disapprove the resolution. If not approved, the encroachment fee will continue to be assessed at $1.00 per square foot per year.
FISCAL EFFECTS
The revised encroachment rental fee for FY21 will generate an additional $26,462.76 to cover the costs of Engineering's time in managing the right-of-way.