Consideration and Adoption of Ordinance No. 2013-17; An ordinance of the Mayor and Council of the City of Flagstaff, Arizona amending Title 3-10-001-0001, Planning Fees, Section 3-10-001-0002, Engineering Fees, and Section 3-10-001-0005, Recreation Fees; providing for a savings clause; and providing that all ordinances or any part of the Flagstaff City Code in conflict with the provisions of this ordinance shall be repealed upon the effective date of this ordinance.

At the Council Budget Hearings held April 24, 2013 and April 25, 2013 the City Council directed the increase or creation of certain fees to balance the FY2014 budget.  City fees are set forth in Title 3, Chapter 10 User Fees of the City Municipal Code and an ordinance is needed to update the fees stated in the Code.

Increase Planning fees to generate an additional $85,000 annually to fund a Zone 1 Planning Development Manager.  This position will help assure that current  work load demands are met.

Implement direct cost recovery for the Materials Testing Lab to generate approximately $215,000 annually to cover the cost of this service.
Increase Recreation fees to generate an additional $210,000 annually for the General Fund, an amount that will help fund general operations.

Effective governance

Yes.  Council Budget Study Sessions, April 24 and 25, 2013.
City Council Work Session May 28, 2013 (Recreation Fees).
Tentative budget adoption June 4, 2013.
Final budget adoption June 18, 2013.

Approve Ordinance No.2013-17 as written.
Approve Ordinance No. 2013-17with amendments.
Do not approve Ordinance No.2013-17.

The FY2014 Budget focused on two priority areas for FY2014:  Compensation and infrastructure maintenance and enhancement.  To provide resource for these two areas, the City Council endorsed a multi-prong approach including revenue growth in State shared revenues, expenditure reductions, expenditure reallocations, new or increased user fees, Cityscape advertising, and to pass through sales tax on water to account holders.

This action only addresses new and increased user fees by amending Title 3, Chapter 10 of the City Code.

Specifically, Chapter 3-10.001.0001, Planning is being updated to move from an approximate 50% recovery of total costs to 60%.  Such an increase will generate an estimated $85,000 in revenue annually.  These dollars will fund a Zone 1 Planning Development Manager to meet current work load demand.  The 2012 workload is up 300% in comparison to prior years (back to 2008 levels), while staffing is at 50% of the 2008 level.

Chapter 3-10-001-0002, Engineering, is being updated to include direct cost recovery for the Materials Testing Laboratory.  The proposed rate will recover approximately $215,000 in direct cost estimated for a combination of a direct and an outsourced service.

Chapter 3-10-001-0005, Recreation, is also being updated.  Recreation fee increases range from 10% to 57%, with the majority receiving a 17% increase.  These fee increases are intended to generate $210,000 annually to the General Fund to support general operations and infrastructure.

Two comparative charts are provided as attachments to this staff summary to show what the fees currently are and what they are proposed to be.  The comparative chart for Recreation fees is color coded so the reader can quickly see the specific increase applied to that particular fee.

These new or increased fees are an integral part of the FY2014 Budget necessary in order to reach a structural balance.

If the Planning fees are not increased and the City is not able to fund the Planner position, the City will experience delays in review and will be unable to meet defined time frames as required by both SB1598 and HB2443.  During the April 2013 staff presentation of this topic, Council agreed that these reviews/services to the development community are not ones that lend themselves to outsourcing.

If the Material Testing Lab fee is not approved, the City will no longer provide this service directly or through a subcontract.  Each developer and each City capital project would have to directly fund these activities with a private sector lab reducing City quality control and oversight.

If the Recreation fee increases are not approved, reductions to other General Fund expenditures will have to be made as these fee increases are scheduled to support general operations and infrastructure.

The General Fund is dependent on the increased fees in order to maintain a structural balance.  Should the fee changes not be adopted, the General Fund will have to revise its work program for FY2014 or other consequences may occur as described above.

The community benefits globally by the City continuing to provide a structurally balanced budget.

The development community benefits by having adequate staffing to meet current demand for timely review and response.

Inform
Consult
Involve

Planning, Engineering, Recreation User Fees:
Posted on City website May 10, 2013 through the current date.
Numerous work sessions on recreations fees
Parks &  Recreation Commission
E-mail to user groups
Signage at Aquaplex
Advised Northern Arizona Builders Association of Council's budget direction
Notification through media groups and social media

Water Sales Tax:
Posted on City website May 10, 2013 through the current date.
Notice on water bill
Notification through media groups and social media

Approve Ordinance No.2013-17 as written.
Approve Ordinance No. 2013-17 with amendments.
Do not approve Ordinance No. 2013-17.