That the City Council:
A. APPROVE AND ADOPT RESOLUTION NO. ______ ENTITLED A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA HABRA, ORANGE COUNTY, CALIFORNIA AMENDING THE MASTER SCHEDULE OF FEES PERTAINING TO FEES FOR GENERAL SERVICES, ADMINISTRATIVE SERVICES, COMMUNITY DEVELOPMENT SERVICES, BUILDING SERVICES, FIRE SERVICES, POLICE SERVICES, AMBULANCE SERVICES, PUBLIC WORKS SERVICES, UTILITY SERVICES AND PENALTIES FOR MUNICIPAL CODE AND VEHICLE CODE PARKING VIOLATIONS; and,

B. APPROVE AND ADOPT RESOLUTION NO. ______ ENTITLED A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA HABRA, ORANGE COUNTY, CALIFORNIA EXTENDING REDUCED RATES FOR SOLID WASTE SANITATION FEES AND SOLID WASTE FRANCHISE FEES.

Section 4.08.010 of the La Habra Municipal Code requires the City to adjust various fees and charges it assesses for services by the increase or decrease in the Bureau of Labor Statistics Consumer Price Index for all Urban Consumers.  The City utilizes changes in the Consumer Price Index (CPI) for the Los Angeles-Long Beach-Anaheim “all items” as the benchmark for these annual adjustments.  The CPI change for this index in 2022 was 7.45 percent higher than 2021; therefore, it is recommended that eligible user fees contained in the Master Schedule of Fees be increased by 7.45 percent, rounded to the nearest whole dollar. 

Some fees contained in the Master Schedule of Fees may not be adjusted by the Consumer Price Index.  These include fees related to Enterprise Funds (water, sewer, refuse), franchises (such as cable, pipelines, etc.), or fees for which the State sets the rate.  These fees, while listed in the Master Schedule of Fees, remain at the levels, rates and formulas previously authorized by Council or other governing law.

User fees listed in the Master Schedule of Fees were most recently set in 2015-16, after the completion of a comprehensive user fee study to determine the actual cost of providing the services that fees paid for.  Under state law, fees may only be set in an amount not to exceed the actual cost of providing the service for which the fee is being assessed.  The cost to provide the service is based on factors such as personnel costs, materials, personnel time, and overhead.

The Community and Economic Development Department is proposing to compress the current building valuation fee table in order to establish a valuation schedule that can be accommodated in the City’s new Land Management System. The current valuation table is 44 pages long for New Constructions and Tenant Improvements/Additions and creates technical challenges when trying to configure this level of fee detail into the new Land Management System. The proposed compressed valuation table simplifies the building plan check, grading plan check, and building permit fee structure to a much shorter schedule, with staff recommending that the City assess the lowest fee within each of the new valuation ranges.

Last year, the City Council approved a temporary one-year reduction in the City's sanitation and franchise fees to offset some of the inflationary impacts that were increasing refuse collection costs. Staff recommends extending the reduced rates for an indefinite period or until the City Council adopts a resolution restoring the full rates in the future. The refuse fund has sufficient fund balance and projected cash flow to accommodate this recommendation. If approved by the City Council, the franchise fee for residential refuse rates will remain at 9.0% (reduced from 9.5%), the franchise fee for commercial refuse rates will remain at 11.0% (reduced from 11.5%), the sanitation fee for residential refuse rates will remain at 18.0% (reduced from 22.3%), and the sanitation fee for commercial refuse rates will remain the same at 12.5%.

If approved by the City Council, the increase in revenue from CPI adjustments to eligible fees will result in additional resources for the City’s General Fund; however, any new revenues will be used to directly offset the costs of providing the services for which the fees are being assessed. Fee adjustments will become effective immediately upon passage of the resolution, with the exception of Community Development and certain Public Works related fees which, consistent with State law, will become effective 60 days after passage of the resolution.  Furthermore, if approved by the City Council, the continuation of reduced sanitation and franchise fees will not adversely impact the Refuse Fund operations or cash flow and the fund is projected to have sufficient fund balances to maintain adequate reserves and provide for budgeted expenses.