The City provides a variety of services that benefit specific customers, such as the issuance of business licenses, planning and building permits, and tree removal permits. In accordance with State law, the City is legally allowed to charge a fee to the used of a specific service to recover the cost of providing the service. To help determine the cost of providing certain services, as well as to develop alternative and more equitable ways to finance some services, the City hired Revenue and Cost Specialists, LLC to complete a cost of services study in March 2023. The proposed Fiscal Year 2024-2025 fee schedule is based on this study, reflects previous direction from Council regarding subsidies of certain services like tree permits, and incorporates an inflationary adjustment of 2.6 percent to all existing fees, with the exception of fees set by the State or courts, parking violations, and the fees as noted below.
Public Works: Dead Tree Removal Permit - $200. This is the same cost as the proposed FY24-25 fee for a Tree Evaluation. In an effort to encourage dead tree removal throughout the City, the City Forester is recommending a new dead tree removal permit that is less than the City’s Tree Removal Permit proposed for FY 24-25 at $682. There is staff time involved in permit processing, communication with residents, and an in-person inspection to confirm if the tree is dead, which is compensatory to time associated with a Tree Evaluation.
For comparison, below are neighboring jurisdictions tree removal fees. Please note the actual process undertaken for reviewing a tree permit may be substantially different in other jurisdictions, which would contribute to the amount of the fee.
- Pacific Grove: Application $176 + $33 for each additional tree + Arborist Report ($300-$500).
- Monterey: Application $150 + Arborist Report ($300-$500). Applications for dead trees are free.
- Seaside: Application $126 + sometimes requiring Arborist Report ($300-$500).
- Monterey County: Application is $595. Applications for dead trees are free.
Summary
The purpose of this agenda item is to provide an update regarding fees and for Council to receive and make recommendations to the proposed master fee schedule for the upcoming fiscal year. If Council approves, the fees will become effective on August 4, 2024. A summary matrix of the current and proposed fees is included as reference Attachment #1.
The proposed fees associated with the charges for services are intended to recover 100% of the City’s cost of providing the service from the user, or beneficiary, of the service. However, Council may determine that certain services have a community-wide benefit and choose to reduce fees associated with certain services. If fees are reduced to less than 100% of cost recovery, then the difference between the cost of the service and the fee charged to the user needs to be made up, or subsidized, by other General Fund revenues. This in turn means that there would be less General Fund revenue available for other community-wide services. Staff recommends that Council strive to achieve full cost recovery for all services. Historically, Council has subsidized tree permitting within the City and prior proposed tree permitting fees have not been approved with the adopted Fee Schedule.