Rancho Palos Verdes Planning Comission
   

FEBRUARY 15, 2005 COST-BASED FEE STUDY FEBRUARY 15, 2005 COST-BASED FEE STUDY TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL

FROM: DENNIS McLEAN, DIRECTOR OF FINANCE AND INFORMATION TECHNOLOGY

DATE: FEBRUARY 15, 2005

SUBJECT: COST-BASED FEE STUDY

Staff Coordinator: Gary Gyves, Senior Administrative Analyst

RECOMMENDATION:

ADOPT RESOLUTION NO. 2005-__ ESTABLISHING A COST ALLOCATION PLAN, APPROVING A COST OF SERVICES ANALYSIS, AND ADOPTING A MASTER SCHEDULE OF FEES AND CHARGES FOR CITY SERVICES.

EXECUTIVE SUMMARY:

The Cost-Based Fee Study ("Cost Study") was performed during FY03-04 by MAXIMUS. The Cost Study was based upon budgeted expenditures in accordance with the FY03-04 Budget. The goal of the Cost Study was to calculate the full cost of user fee related services, provide comparison with current fee rates and consider possible increases of user fee rates. State Law allows user fees to be set at rates less than or equal to the cost of providing each service. In making its recommendation for the proposed increases (summarized below), Staff considered each user and any related special circumstances and comparability with other cities.

Planning - Staff is recommending a 30% increase in planning fees instituted over a two-year period (15% increase each year) based on three factors:

  • Approximately 75% of all planning fees have not been increased since 1992. The Consumer Price Index for all urban consumers in Los Angeles County has increased 31.9% from July of 1992 to July of 2004.
  • Staff completed a "fee ranking" survey (Table 1) of several comparable cities and determined that a 30% increase in fees would not significantly change the City’s fee ranking compared to those surveyed.
  • Staff also conducted a cost recovery survey (Table 2) of several comparable cities and determined that a 30% increase in fees would not significantly change the City’s cost recovery ranking compared to those surveyed.

Building & Safety - Staff is recommending a 20% increase in Building, Electrical, Plumbing and Mechanical Permit Fees instituted over a two-year period (10% increase each year). MAXIMUS worked with Staff to calculate and compare the total cost of the Building function, including Abbott contract costs, Staff salaries and benefits, services and supplies and citywide support costs, with the total revenue generated from building and safety fees. Based on the findings for FY03-04, the City’s costs are approximately 24% higher than the revenues taken in from fees. Based on the fee rankings detailed in Table 5, the "typical homeowner" performing "do it yourself" household repairs and remodels will not be severely impacted from the proposed fee increase because many of the non-construction permits (plumbing, electrical and mechanical permits) are considerably lower than comparable cities. As an example, the permit issuance and inspection fee for a water heater would increase from $34.15 to $40.98.

View Restoration And Preservation - Pursuant to Council direction on June 17, 2003, Staff recommends fee and fine amounts detailed in Table 6, including a City Tree Review Permit of $200, a View Restoration Permit Case Processing Fee of $2,565, a View Restoration Permit Follow-Up fee of $414, a View Preservation Permit Fee of $300, a Site Visit Fee (also a Non-Compliance Fine) of $172 and an Extra Mediation Meeting Fee of $200.

City Manager – Film Permits - Staff is recommending the adoption of a new one-time film permit application fee set at 20% of full cost for the first year and 50% in the second year.

City Manager – Massage Permits - Staff is recommending that the full cost of $104 be charged for Massage Establishment and Massage Technician Permit applications. The City currently charges $55 for Massage Establishment and Massage Technician Permit applications.

Finance And Information Technology - Business License Processing - The Finance Department processes approximately 1,500 business license applications annually. Staff is recommending a fee increase from $5 to $15 to partially recover costs associated with business license processing.

Finance And Information Technology - Solicitation Permit Processing - The Finance Department processes approximately 40 solicitation permit applications annually. Staff is recommending a fee increase from $10 to $40 to partially recover costs associated with solicitation permit application processing.

Public Works - Staff is recommending that all Encroachment Permits be increased 30% (15% increase each year). The current charge for an Encroachment Permit is either $50 or $100, depending on the type and location of the encroachment.

Recreation And Parks - Staff is recommending a 30% rate increase instituted over a two-year period (15% increase each year) for field rental rates and facility rentals at Hesse Park, Ladera Linda and Ryan Park, as well as parking rates at Abalone Cove. Please note that sports field rental rates are not being increased for youth organizations (e.g. AYSO, little league and girls softball). Staff is recommending new PVIC rental rates ranging from $50 to $250 per hour, depending on resident and business status. Based on surveys completed by Staff, these new rates are consistent with or below those of comparable facilities in similar cities. Fee increases are not recommended for REACH activities, docent led hiking and privatized instruction.

Future Analysis Of Fees And Costs:

Staff also recommends that the City perform a periodic thorough analysis of fees and charges in the future, either internally or through a third party. Based on the results of the review, the City Council could revise such fees and charges. Staff is also recommending that the City Council make a determination annually, after conducting a duly noticed public hearing, whether or not to increase fees. Staff recommends that such interim fee increase, if any, be based upon the percentage increase in City salaries and benefits during the two most recent fiscal years, as reflected in the City’s audited financial statements. Staff believes that the change in salaries and benefits costs is the appropriate benchmark for establishing a basis for annual cost changes.

Potential Fiscal Impact:

It should be noted that future economic activity, legislation and policy decisions, as well as any other unforeseen circumstances could affect the City's revenue stream from cost-based fees. A summary of the estimated revenue increases resulting from the proposed fee increases over the next two fiscal years is detailed in Table A of this report. If the proposed user fee increases are adopted, Staff estimates that General fund revenue will increase about $159,000 and $250,000 the first and second year, respectively.

The 2004 Five-Year Financial Model – Revision 2 does not include the estimated revenue from the proposed fee increases because the City Council has not made a determination to increase fees. In the event the City Council elects to increase cost based fees prior to the preparation of the 2005 Model and the budget for FY05-06, staff will include a conservative increase of estimated revenues from cost based fees.

BACKGROUND AND DISCUSSION:

Summary – Cost Study’s Conclusion:

The following paragraph was taken directly from the MAXIMUS Cost Study:

MAXIMUS identified an overall current subsidy provided by the City of Rancho Palos Verdes (City) to "fee-payers" as a whole, whereby the City was charging less than the full actual cost of providing the services. Although subsidies are common in local government, it is MAXIMUS’ opinion that the City is currently subsidizing, in most fee paying categories, beyond what would be considered "equitable" to the general population of the City. This opinion is based on the assumption that the costs of services benefiting individuals, and not society as a whole, should be borne by the individual receiving the benefit.

Cost Study Goals and Purpose:

The City engaged MAXIMUS to conduct a Cost-Based Fee Study. The principal goal of the Cost-Based Fee Study was to calculate the full cost of providing user fee related services, including all indirect (citywide and departmental support) and direct (labor and supplies) costs. In general, "user fee" activities are those services the City provides to individuals who receive a direct or personal material benefit from the services. The City’s FY03-04 adopted budget was used in preparation of the Cost-Based Fee Study, which varied insignificantly from the final budget and the actual costs experienced

The assumption underlying Staff’s attached fee setting recommendations is that the costs of services benefiting individuals, and not society as a whole, should be borne by the individual receiving the benefit. Setting user fees, therefore, is equivalent to establishing prices for services. However, Sate Law establishes that fees can be set, at the maximum, at levels that recover the full cost of providing each service.

As the traditional provider of local services, cities are constantly struggling with securing sufficient funding to pay for the services demanded by the citizenry. Local governments primary funding sources are taxes and subventions, while user fees typically make up a small percentage of general fund revenues, and therefore, general fund expenditures. However, given the nature of government financing, if specialized services are not cost recovered, sometimes there must be a decrease in funding for other "public good" services (e.g. police protection, animal control, street maintenance, park facilities and open space, etc.).

It is generally accepted that recovery of costs should be in direct proportion to the specific gain for services rendered. This means that if a developer wants to amend its approved conditional use permit, the City may want to charge that business a fee at full cost, since to do otherwise would require a subsidy paid by the general citizenry who do not share in the particular benefit. Conversely, a recreation program could logically be subsidized from the general tax base in order to promote the overall well-being of the general population.

Cost Study Methodology:

MAXIMUS initially prepared a central services cost allocation plan (CAP), which is designed to calculate and distribute indirect support costs. The CAP is modeled on the federal government’s method of calculating indirect support costs for grant reimbursement. As part of the CAP preparation, MAXIMUS conducted a cost analysis for each function within each support department (Finance, City Manager, City Clerk, City Attorney and City Council). The costs were then distributed as indirect support costs to receiving departments. For example, the costs associated with the payroll function of the Finance Department was distributed as indirect support costs based on the number of employees working in each department.

To calculate direct costs for each fee, departmental employees were asked to provide time estimates for each fee and non-fee activity performed. An hourly rate determined based on the employees salary, benefits and annual work hours was then applied to the time estimates to calculate the direct labor for each fee. A proportionate share of departmental services and supplies was then added to direct labor costs to complete the cost calculation. For example, if it took an employee five hours to perform a fee related service and that accounted for 1% of the department’s total salaries and benefits, 1% of departmental services and supplies were added to the direct cost for that fee.

The indirect and direct costs are totaled to derive the full (100%) cost for each fee. Based on the full cost detailed in the Cost Study completed by MAXIMUS, the Director from each department is recommending the attached fee adjustments to the City Council. In most cases the department director is recommending a subsidy. However, the City Council may always choose to set the fee at full cost recovery or at any desired subsidy level.

Legal Authority To Charge Fees For Services:

Cities have the general authority to impose fees, sometimes called charges or rates, under the Constitution of the State of California (State Law). Fees are distinguished from taxes in two principal ways: (1) the amount of the fee may not exceed the estimated reasonable cost of providing the particular service or facility for which the fee is charged, while the amount of a tax is not subject to any such restriction; and (2) the service or facility for which the fee is charged bears a relationship to the person or entity paying the fee.

Fees and charges fall into three general categories: (1) user fees charged to a person or entity using or consuming a city service (e.g. sewer fees and park facility rental fees); (2) development fees charged to a person or entity for the privilege of developing private property (e.g. building permits, building inspection fees, map applications and connection fees); and (3) regulatory fees charged to a business to fund a program established to mitigate the effects of the business on the community (e.g. Quimby fees). Rates must be set by resolution or ordinance in accordance with statutory directives. Additionally, certain rates charged to residents may be lower than the rates charged to non-residents (e.g. park facility rental rates). Please see the attached resolutions for a listing of all City fees.

Procedural Requirements:

According to Government Code Section 66016 and 66018, prior to levying a new fee or service charge, or prior to approving an increase in an existing fee or service charge, a local agency shall:

  1. Hold at least one open and public meeting, at which oral or written presentations can be made, as part of a regularly scheduled meeting.
  2. Notice of the time and place of the public meeting, including a general explanation of the matter to be considered, shall be published at least ten days before the public meeting.
  3. Send a notice of the public meeting at least 14 days prior to the meeting to any interested party who files a written request with the local agency for mailed notice of the meeting on new or increased fees or service charges.
  4. At least 10 days prior to the meeting, the local agency shall make available to the public data indicating the amount of cost, or estimated cost, required to provide the service for which the fee or service charge is levied and the revenue sources anticipated to provide the service, including General Fund revenues

 

DEPARTMENT DETAILS:

Planning, Building and Code Enforcement Department:

The Planning, Building, and Code Enforcement Department coordinates activities and programs that ensure the orderly physical development and preservation of the community. The Planning, Building & Safety and View Restoration functions of the Planning, Building, and Code Enforcement Department were included in the Cost Study.

Planning:

On July 7, 1992, the City Council adopted Resolution No. 92-68 establishing a schedule of fees and charges for City services, which was based on a citywide cost-based fee study. The City Council has approved amending the schedule of planning fees periodically over the last twelve years to add, delete, increase, and decrease planning fees. However, approximately 75% of planning fees have not been increased since 1992. Therefore, staff is recommending a 30% increase in planning fees based on the following:

  • As stated above, approximately 75% of all planning fees have not been increased since 1992. The Consumer Price Index for all urban consumers in Los Angeles County has increased 31.9% from July of 1992 to July of 2004.
  • Staff conducted a planning fee survey to determine the City’s "fee ranking" with comparable cities. The survey was limited to a distinct set of fees that are known to be comparable from city to city, as opposed to planning applications that are unique to our City. Based on Table 1 below, staff determined that a 30% increase in fees would not significantly change the City’s fee ranking compared to those surveyed.

TABLE 1

Staff compared fees for a conditional use permit, lot line adjustment, sign permit, site plan review and a variance permit. As detailed in Table 1 above, a 30% fee increase would not affect the City’s fee ranking for a lot line adjustment, sign permit or site plan review. However, the City’s fee ranking would increase from fourth to second for a conditional use permit and from sixth to third for a variance permit. Although a comparison summary was not conducted for every planning fee, Staff believes that the survey results for these five basic planning applications are a good indicator of the City’s overall fee ranking.

  • Staff also conducted a planning cost recovery survey to determine the City’s ranking with comparable cities. The survey compares planning fee revenue as a percentage of the planning function’s costs (excluding the costs associated with building, code enforcement and view restoration). As detailed in Table 2 below, the City recovered only 21% of the planning function’s cost through fees for services in FY02-03, which is the lowest recovery rate of the eight cities surveyed. Based on FY02-03 data, a 30% increase in fees would have increased the City’s recovery rate to approximately 27%, which would have increased the City’s ranking from eighth to sixth. The information contained in Table 2 was extrapolated from city financial statements and budget documents.

TABLE 2

Although staff is recommending a 30% increase for planning fees, there are some cases where this methodology does not make sense because the Cost Study has revealed that some existing fees are either too high or too low. In these special cases, fees are proposed to be set at 47% of full cost, which is the average cost recovery level (excluding all planning costs not directly related to fee services) for all planning fees if fees were increased by 30%. This was calculated using information extrapolated from the Cost Study. The reasons this alternative methodology was used is discussed below:

  • State Law establishes that fees can be set at levels that recover the full cost of providing each service, but cannot exceed full cost. Four current planning fees, as detailed in Table 3 below, are close to or above the full cost to provide the service. In these cases, a 30% increase in current fees would exceed full cost and violate State Law. Therefore, Staff is recommending that these four fees be decreased to 47% of the full cost of providing the service.
  • Four current planning fees, as detailed in Table 3 below, are extremely low compared to the full cost of providing the service. Therefore, staff is recommending that these four fees be increased to 47% of the full cost of providing the service.

TABLE 3

Modifications to Existing Fees and New Fees:

During the preparation of the Cost Study, planning staff worked with MAXIMUS to ensure that any desired modifications to existing fees were made and that any proposed new fees were added to the study process. As a result of the Cost Study, the following changes to the current fee structure are being proposed:

    • Appeal Fees: An Appeal Fee is charged when an interested party seeks the reversal of a decision rendered by the Director of Planning, Building and Code Enforcement or the Planning Commission. Currently, the Appeal Fee is split into two categories, a Major and Minor Appeal. Since the amount of Staff time and work involved in processing an appeal is relatively similar for a Major and Minor Appeal, Staff is recommending that the two categories be combined into one Appeal Fee.

    • Certificate of Compliance Review: A Certificate of Compliance Review is requested to determine if a property complies with the Subdivision Map Act. Currently, a flat fee is charged to process and record a Certificate of Compliance. Since a Certificate of Compliance is primarily reviewed and processed by the City’s contract engineer and the time involved can differ substantially, Staff is recommending that a trust deposit fee be required rather than a flat fee.

    • Conditional Use Permit: A Conditional Use Permit (CUP) is required for most major development projects in non-residential zoning districts. The application fee for a CUP is currently divided into four categories: A revision to an existing CUP, a new CUP for pre-existing use; a new CUP, and a Residential Planned Development CUP. Staff is recommending that the four existing CUP categories be scaled down into two categories: a new CUP and a revision to an existing CUP. Staff believes that the analysis and the amount of Staff time spent on processing a new CUP is the same whether it’s a pre-existing use or a new use. The same logic applies to an existing CUP.

    • Encroachment Permit: An Encroachment Permit fee is charged when improvements, such as walls and fences, are proposed within the City’s public right-of-way. Currently, an Encroachment Permit fee is broken into two categories: a fixed fee and a trust deposit. The applicable fee is based on the type of project being proposed. Since the review process (City Council Policy No. 31) was amended by the City Council in 2000, Staff is recommending eliminating the trust deposit fee and requiring a flat fee to better reflect the changes made by the City Council in 2000.
    • Radius Map Fee: Currently, an applicant is responsible for providing the City with a vicinity map and mailing labels for projects requiring a public notice. To ensure accuracy and up to date information, Staff is proposing to use the City’s GIS system to generate radius maps and mailing labels for projects requiring a public notice. As such, Staff is recommending establishing a Radius Map Fee in the amount of $40 to partially cover the supplies and Staff time involved in preparing the vicinity map and mailing labels.

    • Grading Permit: A Grading Permit is required to conduct earth movement on a property. Grading permits are currently divided into 5 categories based on the requested amount of earth movement (cubic yards). Since the Development Code categorizes grading as either major (Staff level and Planning Commission) or minor (Staff level) based on review criteria from the Development Code. Staff is recommending establishing three fixed fees that correspond to the Development Code criteria. A separate fee would be required for a Minor Grading Permit, a Major Grading Permit reviewed at Staff level, and a Major Grading Permit reviewed by the Planning Commission.
    • Height Variation Permit: A Height Variation Permit is required for residential projects that exceed 16-feet in height. The current fixed fee is divided into two categories depending on who reviews the Height Variation application; the Director of Planning, Building and Code Enforcement or the Planning Commission. Staff is recommending that the two fees be combined into one fee because Staff time and the level of analysis involved in processing a Height Variation application is generally the same whether the Director or the Planning Commission reviews the application.

    • Sign Permit: A Sign Permit is required for the installation or replacement of an identification sign. Currently the sign permit fee is broken into four categories: temporary sign permit reviewed by Staff, temporary sign permit reviewed by the Planning Commission, permanent sign permit reviewed by Staff, and Permanent Sign Permit reviewed by the Planning Commission. Since the Development Code limits the Planning Commission’s review to permanent signs relating to shopping centers, Staff is recommending replacing the current fee structure with the following three flat fees: Temporary Sign Permit, Permanent Sign Permit, and Permanent Sign Permit reviewed by the Planning Commission.
    • Site Plan Review: A Site Plan Review allows the City to check development proposals for conformity with the Development Code when no other specific planning application is involved. Currently, the Site Plan Review fee is broken into six fees based on the scope of the proposal. In order to simplify the current fee structure so that it better represents the level of Staff time involved in processing a Site Plan Review application, Staff is recommending combining the current fees into three flat fees: a Minor Site Plan Review Fee, a Major Site Plan Review Fee and an Antenna Site Plan Review Fee.

Building and Safety:

The City’s Building and Safety division sets building permit and plan check fees based on the California Building Code (CBC) and construction valuation tables published by the building officials national organization (International Code Council), which, according to the City’s consultant, is the method used by approximately 97% of California municipalities. Staff is recommending a 20% increase in building permit and plan check fees, as well as plumbing, electrical and mechanical permit fees. Staff is recommending a 20% increase over two years (10% increase each year) based on the following:

  • Staff conducted a building permit and plan check fee survey to determine the City’s "fee ranking" with comparable cities. Staff compared permit and plan check fees for a 500 square foot room addition. As detailed in Table 4 below, a 20% fee increase would increase the City’s fee ranking from 6 to 4 for total permit and plan check fees.

TABLE 4

  • Staff also conducted a fee survey for a commonly used application in each of the plumbing, electrical and mechanical permit categories to determine the City’s "fee ranking" with comparable cities. As detailed in Table 5 below, a 20% fee increase would increase the City’s fee ranking from 7 to 5 for a water heater installation permit and inspection, from 6 to 3 for a 200 amp electrical service installation permit and inspection, and from 7 to 6 for a 50,000 BTU wall heater installation permit and inspection.

TABLE 5

Based on the fee rankings detailed in Table 5 above, the "typical homeowner" performing "do it yourself" household repairs and remodels will not be severely impacted from the proposed fee increase because many of the non-construction permits (plumbing, electrical and mechanical permits) are considerably lower than comparable cities. As an example, the permit issuance and inspection fee for a water heater would increase from $34.15 to $40.98.

Since a private vendor performs the primary work in the Building and Safety program, MAXIMUS’ Cost Study took a broader approach (compared to other departments studied) to ensure compliance with State Law. MAXIMUS worked with Staff to calculate and compare the total cost of the Building function, including Abbott contract costs, Staff salaries and benefits, services and supplies and citywide support costs, with the total revenue generated from building and safety fees. Based on the findings for FY03-04, the City’s costs are approximately 24% higher than the revenues taken in from fees. Therefore, Staff’s recommendation to increase Building, Electrical, Plumbing and Mechanical Permit Fees by 20% instituted over a two-year period (10% increase each year) will not violate State Law. In addition, due to the method of payment for Building and Safety contract services (percentage of revenues), Staff has estimated that the City will see approximately 40% to 50% of the revenues derived from the proposed increase.

View Applications:

As part of the FY03-04 budget hearing process, the City Council held a Budget Policy Issues Workshop on April 14, 2003. At the workshop, the City Council directed Staff to take steps to make the overall program more efficient and cost effective through a combination of disincentives for non-compliance, new fees and revised review criteria for City Tree Review Permit requests.

Pursuant to Council direction, on June 17, 2003, Staff presented specific cost reduction proposals for view restoration services to the Council for its consideration. At that time, the City Council directed Staff to: 1) Develop a new fee structure to better cover the costs of view restoration services, as part of the Cost Study; 2) Develop penalties to deter non-compliance with the City’s foliage maintenance directives; and 3) Initiate a Code amendment to streamline the City Tree Review Permit (CTRP) process and establish a fee for the permit process.

In accordance with Council direction, Staff included these tasks in the Cost Study. As a result of the Cost Study, Staff recommends that the following fees and fine amounts be established by the City Council:

TABLE 6

Staff is recommending that the City Council defer its consideration and adoption of the proposed City Tree Review Permit fee until after the Council reviews and approves the proposed streamlined City Tree Review Permit process, which is being presented as a separate agenda item this evening.

Provided below is an explanation of Staff’s recommendations for the different view application types. Should the City Council decide to increase existing fees or adopt new fees as proposed, the View Restoration guidelines will need to be updated in the future to explain the new fee process. The updated guidelines would require City Council approval after review by the Planning Commission.

City Tree Review Permit (CTRP) Applications:

As directed by the City Council in 2003, Staff initiated a code amendment for City Tree Review Permits and presented a report to the Planning Commission on April 27, 2004. The staff report recommended that the Planning Commission review and consider amending Section 17.76.100 of the City’s Municipal Code to streamline the CTRP process and add a permit processing fee. Staff believes that a streamlined CTRP process would reduce the amount of Staff time required to process CTRP applications, which would help reduce City costs. In addition, adding an application fee would help offset the costs associated with permit processing.

On June 22, 2004, the Planning Commission forwarded its recommendations to the City Council to streamline the CTRP process. However, the Commission felt that a processing fee should not be charged. Notwithstanding the Commission’s recommendation regarding the fee, Staff proposes that a nominal fee of $200 be established to help recover some of the City’s costs and discourage frivolous applications. Although staff does not believe it is necessary to adopt a fee that would recover the City’s full cost of $2,271, Staff does believe an application fee set at $200, as detailed in Table 6 above, would be fair to the public and reduce the number of frivolous permit applications.

The proposed CTRP code amendment is being presented to the Council for its consideration as a separate agenda item this evening. Since the Council has not taken final action on the proposed CTRP changes, the proposed CTRP fee is not part of the fee adjustments being recommended with this Staff Report. Staff is recommending that the decision on the appropriate CTRP fee be made after the Council has an opportunity to review the proposed streamlined CTRP process as a separate agenda item.

View Restoration Permit Applications:

If mediation through the pre-application process (which involves no fee) fails to resolve a view matter, a property owner may submit a formal View Restoration Permit application to restore their view. When an application is submitted, the

City currently charges a fixed application review fee of $185. This fee covers the cost of reviewing a View Restoration Permit application for completeness and for conducting an initial site visit to assess the scope of the application. Once the application is deemed complete by Staff, then a case-processing fee is charged to the applicant. The case-processing fee is dependent on the complexity of the application and is used to cover the costs of site visits, preparing staff reports and public hearings. The existing criteria used to determine the case-processing fee amount is listed in Table 7 below.

TABLE 7

The average View Restoration Permit case-processing fee was $1,168 for FY03-04, for a total average fee of $1,353 when combined with the fixed application fee of $185. Staff is proposing to combine the application fee and the formula-based case-processing fee into a single fee set at $2,565, which is set at 80% of the full cost as calculated by MAXIMUS (see" View Restoration Permit Processing Fee", Table 8).

Staff is also proposing a new "View Restoration Permit Follow-up Fee" of $414, which is set at 80% of the full cost as calculated by MAXIMUS. The new View Restoration Permit Follow-up Fee, detailed in Table 8 below, is meant to offset the cost of the staff follow-up work associated with implementing Planning Commission (and City Council on appeal) decisions on View Restoration Permits. This work includes reviewing tree trimming contract bids, monitoring the tree-trimming work, and documenting restored views. The follow-up fee would only be charged of applicants if the Planning Commission approves their application and would be requested before the City notifies the foliage owner to perform the required tree trimming and/or removal.

View Preservation Permit Applications:

Whereas a View Restoration Permit is the mechanism for a resident to restore a view that has been impaired by foliage on or before November 1989, a View Preservation Permit is the mechanism for a resident to protect or preserve a view that existed on or after November 1989. Because view preservation is a concept that previous City Councils felt should be provided to residents at no cost, no fees for the filing of View Preservation Permits currently exist. However, as previously discussed by the City Council at an April 14, 2003 budget workshop and at a June 17, 2003 City Council meeting, the view preservation process has evolved into a process that’s almost as staff intensive as the View Restoration Permit process. As a result, the Council directed that the appropriate fee be imposed on the View Preservation Permit process.

At this time, Staff is proposing that a new application fee titled "View Preservation Permit Processing Fee" be adopted by the City Council. Although the Cost Study has revealed that the full cost of processing View Preservation Permits is $738 (Table 8 below), Staff is proposing that a nominal View Preservation Permit Processing Fee of $300 be established. Staff believes that the nominal fee would partially offset the costs incurred for site visits and preparation of the Director's Notice of Decision and help avoid the filing of frivolous applications. Furthermore, the subsidized fee would be in keeping with the concept that view preservation should be more of the City’s responsibility.

TABLE 8

Fee for Site Visits:

Sometimes Staff is asked to go out in the field to assess a view or assess foliage growth. In such instances, when there is no City decision (View Restoration or Preservation Permit) associated with the site visit, Staff charges a site visit fee of $110. As a result of the Cost Study, Staff is proposing to increase the site visit fee to $172 (80% of full cost) to partially recover costs associated with the site visit.

Fees for Non-Compliance and Frivolous Site Visit Requests:

When the City Council formally adopted the most recent version of the View Restoration Guidelines in June of 2003, the City Council added procedures to deter non-compliance and to deter frivolous or unfounded foliage maintenance requests to the City. The new language added to the Guidelines states that foliage owners who do not comply with City orders (30-day notice) to trim or remove foliage in accordance with View Restoration or View Preservation Permit decisions are subject to a fine for non-compliance. Therefore, at this time, Staff is proposing to establish a penalty fine of $172 (80% of full cost for a Site Visit) for such non-compliance violations. Conversely, the City Council approved Guidelines also state that view owners may be assessed a fine if upon their request Staff inspects the foliage and determines that the subject foliage is in compliance with the prescribed City maintenance requirements. Staff is proposing that a $172 (80% of full cost for a Site Visit) fine be imposed for such cases. The intent of the fine is to discourage frivolous site visit requests where view owners repeatedly ask staff to go out and assess foliage growth when only a short amount of time has elapsed since the previous assessment request. Staff is recommending using the new Department site visit fee of $172 as the penalty fee for both types of cases.

Extra Mediation Meeting Fee

No fees are currently charged for mediation meetings held as part of the pre-application process. In order to encourage mediation, Staff does not recommend imposing a fee for mediation services. However, Staff believes that a nominal $200 fee should be established for applicants requesting more than one mediation meeting in a one-year period. Rather than dealing with all the properties with view –impairing foliage at one mediation meeting, applicants are starting to piecemeal the process by submitting mediation requests for one property at a time.

Since the mediation process involves a professional mediator that is paid by the City, a piecemealed mediation process results in unnecessary costs to the City. Therefore, Staff believes that charging a property owner a mediation fee if more than one mediation meeting is requested in any one-year period would encourage applicants to deal with the entire view problem at a single mediation meeting (at no cost) rather than allowing applicants to piecemeal mediation meetings over the course of a year. Should the City Council adopt such a fee, Staff recommends that the fee be set at $200 to partially cover Staff's administrative time and the mediator's direct cost of attending the meeting.

Fiscal Impact of Planning, Building, and Code Enforcement Departmental Personnel Changes Included In Cost Study:

At its meeting held on December 21, 2004, the City Council approved Staff’s proposed departmental changes which includes ending the contract view restoration services by Willdan and hiring two full-time City employees to manage View Restoration activities. MAXIMUS analyzed the cost to provide the services (fees/potential fees) listed in Table 8 under both the current Willdan contract and under the proposed City staff scenario. The fees detailed in Table 8 are based on the proposed City staff scenario, which translates into lower costs and associated fees. Therefore, the City would ensure compliance with State Law.

City Manager:

The City Manager’s Office ensures that the policies of the City Council are executed effectively and efficiently. The City Manager’s Office is also responsible for overseeing the budget, risk management and the City’s Public Safety program, as well as managing community Outreach, Personnel and the Employee Benefits programs. The City Manager’s Department also monitors and processes film permits and massage permits. MAXIMUS calculated the costs incurred related to providing film permits and massage services and documented a current subsidy.

Film Permits:

Currently, film permits have two fee components, a daily permit fee and a daily public location use fee. Filming on private property requires a daily permit fee, while filming on public property requires a daily permit fee and a public location use fee. The new fee structure proposed by City staff combines the daily permit fee and public location fee into one Daily Use (City Impact) fee and institutes a new one-time application fee that is based on actual staff time to process a film permit application.

The Daily Use (City Impact) fee is similar to a rental fee and does not have to be based on the cost to provide the service. The Daily Use (City Impact) fee will be assessed to all film permit applicants regardless of whether filming takes place on private or public property. The Daily Use (City Impact) fee, which combines the current daily permit fee and daily public location use fee, will not be increased. Therefore, the only increase to the film permit applicant will be the new one-time application fee.

Staff is concerned that the film industry might react negatively to establishing a new one-time application fee set at full cost recovery amounts. Therefore, staff is proposing that the new one-time application fee be set at 20% of full cost for the first year and 50% in the second year. In addition, Staff proposes charging a new application revision fee of one-half the original application fee for revisions made to the original film permit application. After reviewing the application process and total costs incurred by the City, Staff identified that each application amendment (i.e. changing dates or adding new locations) significantly increases staff involvement. Hence, Staff feels that this methodology recuperates a fair share of City costs in a reasonable manner without penalizing applicants that submit complete applications. In addition, a film permit survey was performed and the City’s film permit fees are in line with comparable cities.

Massage Permits:

The City established a comprehensive regulatory program to license massage establishments and massage technicians providing massage services within the City’s borders. These Regulations require health and safety inspections of massage establishments and qualifying examinations of prospective massage technicians as part of the Massage Permit application process.

The Los Angeles County Department of Health Services administers both the examinations and facility inspections on the City’s behalf and then bills the City for services rendered. In addition, the Los Angeles County Sheriff’s Department performs background investigations on Massage Permit applicants. To offset these costs, the City recuperates County charges from the applicant.

The Los Angeles County Department of Health Services recently informed the City of increased fees for inspections and examinations, which have been incorporated into the attached resolution along with the Sheriff’s fee for background investigations. In addition to County fees, the City currently charges a $55 Massage Permit administration fee for application processing. City staff is recommending that the full cost of $104 be charged for Massage Establishment and Massage Technician Permit applications.

Finance & Information Technology:

The Finance and Information Technology Department is responsible for managing all financial and information technology affairs of the City. The Finance Department also monitors and processes business licenses and solicitation permits. MAXIMUS calculated the costs incurred related to providing business licenses and solicitation permits and documented a current subsidy.

Business License Processing:

The Finance Department processes approximately 1,500 business license applications annually. The City collects a business license tax based on the business’ gross receipts. However, the business license tax is a general tax and was not designed to cover the cost of processing the business license application. Staff is recommending a fee increase from $5 to $15 to partially recover costs associated with business license processing.

Solicitation Permit Processing:

The Finance Department processes approximately 40 solicitation permit applications annually. The City currently charges a solicitation permit application processing fee of $10. Staff is recommending a fee increase from $10 to $40 to partially recover costs associated with solicitation permit application processing.

Public Works:

The Public Works Department manages City engineering, refuse and recycling activities, grant administration, undergrounding districts, and transit coordination. The Public Works Department also performs engineering services for a number of Planning applications, including Grading Plan Reviews, Final Tract Map Reviews and Tentative Tract Map Reviews. Due to the differing complexities for each application associated with each engineering service, Staff is recommending that Grading Plan Reviews, Final Tract Map Reviews and Tentative Tract Map Reviews remain on a trust deposit basis.

The only flat fee that the Public Works Department charges is for Encroachment Permits. The current charge for an Encroachment Permit is either $50 or $100, depending on the type and location of the encroachment. Staff is proposing that all Encroachment Permits be increased 30% (15% each year for two year). Staff is making this recommendation because Encroachment Permit fees have not been increased since 1992. As stated above, the Consumer Price Index for all urban consumers in Los Angeles County has increased 31.9% from July of 1992 to July of 2004.

Recreation and Parks:

The Recreation and Parks Department is responsible for managing a comprehensive park system and numerous community activities. The Recreation and Parks Department provides a variety of revenue generating programs and services to the community including facility rentals, beach access parking, REACH, and the Point Vicente Interpretive Center.

As discussed in the Methodology Section of this report, MAXIMUS calculated the total cost of providing each fee related service, which included all indirect and direct costs. However, MAXIMUS’ Cost Study took a broader approach for the Recreation and Parks Department. MAXIMUS worked with City staff to calculate and compare the total costs and revenues generated from each program in the Recreation and Parks Department, rather than for each fee related service.

This broad-brush approach was taken because the services provided by the Recreation and Parks Department provides benefits to the community at large, as well as the individual purchasing the service. Therefore, cost recovery does not factor into fee setting policies as much as the ability to offer rentals and services at rates that would encourage strong community involvement. In addition, knowing that fees would be set at very low cost recovery levels made the calculation of full costs unnecessary.

Staff’s recommendation for all revenue-generating services provided by the Recreation and Parks Department follows. Please note that facility rentals are not cost-based fees and do not need to be based on the cost to provide the service.

Facility Rentals – Hesse Park, Ladera Linda, Ryan Park and Fields:

Recreation and Parks staff performed a survey that compares the City’s rental rate for the Multi-Purpose Room at Hesse Park with similar facilities in comparable cities. Please find this survey, titled "Facility and Field Rate Comparisons", attached as Exhibit 1. Based on the findings of this survey and the fact that the City has not raised facility rental rates since 1992, Staff recommends a 30% rate increase instituted over a two-year period (15% increase each year) for facility rentals at Hesse Park, Ladera Linda and Ryan Park. Based on the results of Exhibit 1, these new rates are consistent with or below those of comparable facilities.

Exhibit 1 also compares the City’s field rental rates with similar facilities in comparable cities. Based on the findings of this survey and the fact that the City has not raised field rental rates since 1992, Staff also recommends a 30% rate increase instituted over a two-year period (15% increase each year) for field rental rates. Based on the results of Exhibit 1, these new rates are consistent with or below those of comparable facilities. Please note that field rental rates are not being increased for youth organizations (e.g. AYSO, little league and girls softball).

Facility Rentals – Point Vicente Interpretive Center:

On May 18, 1999 the City Council awarded a contract for the expansion of the Point Vicente Interpretive Center (PVIC).  The expansion of PVIC is expected to be completed in late 2005. Recreation and Parks staff performed a survey that compared the proposed indoor and outdoor rental rates for the renovated PVIC with similar facilities. Please find these surveys, titled "PVIC Outdoor Rental Rate Comparisons", "PVIC Indoor Public Facilities Rental Rate Comparisons", and "PVIC Indoor Privately Owned Facilities Rental Rate Comparisons" attached as Exhibit 2, 3A, and 3B, respectively.

Staff proposes PVIC rental rates ranging from $50 to $250 per hour, depending on resident and business status. Based on the results of Exhibits 2, 3A and 3B, these new rates are consistent with or below those of comparable facilities. In addition, staff is proposing a "suggested donation" for PVIC admission of $2 for children and seniors and $5 for adults.

Parking – Abalone Cove:

Recreation and Parks staff performed a survey that compares the City’s parking rates with similar areas in comparable cities. Please find this survey, titled "Beach Parking Rate Comparison Table", attached as Exhibit 4. Based on the findings of this survey and the fact that the City has not raised parking rates since 1992, Staff recommends a 30% rate increase instituted over a two-year period (15% increase each year) for parking rates at Abalone Cove. Based on the results of Exhibit 4, the new parking rates are consistent with those of comparable facilities. However, Staff recommends keeping parking for buses at the current rate.

REACH, Hiking Fees and Privatized Instruction:

Fee increases are not recommended for REACH activities, hiking and privatized instruction. The estimated resulting revenue increase is immaterial, and there could be an undesired negative impact on groups and organizations the City has traditionally supported (e.g. seniors, youth athletic leagues and scout groups).

TRUST DEPOSITS:

In addition to the fees and charges for an application, each applicant shall be responsible for the full cost of services provided on behalf of the City by outside consultants that have been retained by the City to render services specifically in connection with the processing of the application. Each applicant shall be required to pre-pay, in the form of a trust deposit with the City, the estimated amount of the cost of any such services to be provided in connection with the processing of the application. The trust deposit shall be remitted to the City prior to commencement of covered services. The trust deposit required shall be sufficient to cover the estimated costs of the services to be provided plus ten percent (10%) to cover Staff time for overseeing outside consultants and administering the trust deposit. Based on Staff’s informal review of past trust deposits, the ten percent (10%) administrative charge does not exceed the actual cost to provide these additional services.

Trust deposits shall include the costs of extraordinary services, including, but not limited to, geological reviews, preparation of environmental impact reports and other environmental documentation, and special services by the City Attorney that arise directly from the particular application and are not within the scope of services that are routinely provided to the City. "Fully Burdened Rates" shall be applied to all trust deposit charges or to fees that are to be collected for which a flat rate or per unit cost cannot be established due to the nature of the regulation, product, or service to be provided. Please see the attached resolution for the definition and example of Fully Burdened Rates.

The attached Resolution includes the following provision regarding trust deposits:

"In the event the trust deposit exceeds the actual costs incurred for a particular application, the City will refund the surplus. If, conversely, the actual costs will exceed the amount on deposit, the City shall notify the applicant in writing that additional funds are required to replenish the trust deposit. The applicant shall replenish the trust deposit within ten days of receipt of notice from the City that additional funds are needed. However, in such cases, the applicant shall replenish said trust deposit accounts in amounts requested by the City, based upon an estimate by City Staff of the cost of services that will be provided by the City during the next 90 days. If an applicant fails to timely replenish a trust deposit, the City shall suspend all processing of the application until such time as the applicant remits the required additional funds."

Staff believes that the proposed provision, especially the 10 day notice for additional funds and the requirement to advance an estimate of cost of services for at least the next 90 days, will minimize the possibility that the City will be in a deficit balance in any respective trust deposit account.

FISCAL IMPACT:

If the City Council adopts Staff’s recommendations for fee adjustments, the estimated revenue increase to the City could be as much as $159,000 in year one and $250,000 in year two when fee recommendations have been fully implemented. As detailed above, fee adjustments for Building and Safety Permits, Planning Permits, Recreational Facility Rentals, Parking Lot Fees and Film Permits are recommended to be instituted over a two-year period, while Solicitation Permits, Business License Processing Fees and View Restoration Applications are recommended to be fully implemented during the first year.

Please note that the estimated revenue increase to the City is based on FY03-04 volume for all fee categories. Therefore, demand for City services could potentially impact revenue estimates. Please see Table A below for estimated revenue increases.

TABLE A

The 2004 Five-Year Financial Model – Revision 2 does not include the estimated revenue from the proposed fee increases because the City Council has not made a determination to increase fees. In the event the City Council elects to increase cost based fees prior to the preparation of the 2005 Model and the budget for FY05-06, staff will include a conservative increase of estimated revenues from cost based fees.

Respectfully submitted,

Dennis McLean

Director of Finance and Information Technology

Reviewed,

Les Evans

City Manager

RESOLUTION NO. ___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES ESTABLISHING A COST ALLOCATION PLAN, APPROVING A COST OF SERVICES ANALYSIS, AND ADOPTING A MASTER SCHEDULE OF FEES AND CHARGES FOR CITY SERVICES

 

THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DOES RESOLVE AS FOLLOWS:

WHEREAS, the City of Rancho Palos Verdes ("City") has conducted an extensive analysis of its services, the costs reasonably borne by the City in providing those services, the beneficiaries of those services, and the revenues produced by those paying fees and charges for special services; and

WHEREAS, the City retained an independent consultant, MAXIMUS Inc. ("MAXIMUS"), to conduct said analysis of the City’s services and related costs. MAXIMUS completed that certain Cost Allocation Plan and Cost of Services Analysis (the "Fee Study") dated November 17, 2004, a copy of which is attached to this resolution and is on file with the City Clerk. The Fee Study set forth a mechanism for ensuring that fees adopted by the City for services rendered do not exceed the reasonable estimated cost for providing the services for which the fees are charged; and

WHEREAS, California Government code Section 66000, et. seq. authorizes the City to adopt fees for municipal services, provided such fees do not exceed the cost to the City of providing the service; and

WHEREAS, on February 15, 2005, the City Council conducted a duly noticed public hearing concerning the fees proposed to be adopted; and

WHEREAS, the adoption of this Resolution approves and sets forth a procedure for determining fees for the purpose of meeting the operating expenses of City departments and is, therefore, exempt from the California Environmental Quality Act (Public Resources Code Sections 21080 et seq.) pursuant to Public Resources Code Section 21080 (b) (8) (A); and

WHEREAS, all requirements of California Government Code Sections 66016 and 66018 are hereby found to have been satisfied.

NOW, THEREFORE, the City Council of the City of Rancho Palos Verdes does hereby resolve as follows:

Section 1. The facts set forth in the Recitals of this Resolution are true and correct and are hereby incorporated by reference as though set forth in full.

Section 2. The City Council hereby finds that none of the fees set forth in the Master Fee Schedule ("Master Fee Schedule") attached hereto as Exhibit 1 and incorporated by reference, exceeds the cost to the City of providing the service to which such fee applies. The basis for the fees and charges contained in the Master Fee Schedule is set forth in the Fee Study, which is on file with the City Clerk and incorporated herein by this reference.

Section 3. The City Council hereby approves and adopts the Master Fee Schedule as the master schedule of fees applicable to specified municipal services provided by the City of Rancho Palos Verdes.

Section 4. Costs Reasonably Borne Defined. "Costs reasonably borne," as used and ordered to be applied in this Resolution, shall consist of the following elements:

A. All applicable direct costs including, but not limited to, salaries, wages, overtime, employee fringe benefits, services and supplies, maintenance and operation expenses, contracted services, special supplies, and any other direct expense incurred by the City.

B. All applicable indirect costs including, but not restricted to, building maintenance and operations, equipment maintenance and operations, communications expenses, computer costs, printing and reproduction, vehicle expenses, insurance and like expenses, when distributed, based on an accounted and documented rational proration system.

C. Fixed asset recovery expenses, consisting of depreciation of fixed assets, and additional fixed asset expense recovery charges calculated on the current estimated cost of replacement, divided by the approximate life expectancy of the fixed asset. A further additional charge to make up the difference between book value depreciation not previously recovered and reserved in cash and the full cost of replacement, also shall be calculated and considered a cost so as to recover such unrecovered costs between book value and cost of replacement over the remaining life of the asset.

D. Citywide support, expressed as a percentage, distributing and charging the expenses of the City Council, City Attorney, City Manager, City Clerk, and Finance and Information Technology Department, and all other staff and support service provided to the entire city organization. Support shall be prorated between tax-financed services and fee-financed services on the basis of said percentage so that each tax and fee and charge shall proportionately defray such support costs.

E. Departmental support, expressed as a percentage, distributing and charging the cost of each department head and his or her supporting expenses.

F. Debt service costs, consisting of repayment of principal, payment of interest, and trustee fees and administrative expenses for all applicable bond, certificate, or securities issues or loans of whatever nature or kind. Any required coverage factors or required or established reserves beyond basic debt service costs also shall be considered a cost if required by covenant within any securities ordinance, resolution, indenture or general law applicable to the City.

Section 5. Fully Burdened Rates. "Fully Burdened Rates" shall be applied to all trust deposit charges or to fees that are to be collected for which a flat rate or per unit cost cannot be established due to the nature of the regulation, product, or service to be provided. Fully burdened rates shall be consistent with the definition of "costs reasonably borne" as defined above and shall be applied as follows:

Direct Hourly Salary (1)

+ Services and Supplies (2)

= Direct Expenses

+ Departmental Support (3)

+ Citywide Support (4)

= Fully Burdened Rate

(1) Includes employee salary and benefits and is based on a 1,800 hour productive work year.

(2) Proportionate share is based on total departmental services and supplies divided by total departmental productive employee work hours (services and supplies/(total departmental employees x 1,800).

(3) Proportionate share is based on the director as a percentage of total departmental employees multiplied by the director’s hourly salary (1/total departmental employees) x director’s direct hourly salary).

(4) Proportionate share is based on the total departmental productive employee work hours as a percentage of departmental total citywide support costs (total departmental employees x 1,800)/citywide support costs).

Section 6. Separate Fee For Each Application. All fees set by this resolution are for each identified application that is being processed. Additional fees shall be required for each additional application or service that is requested or required. Where fees are indicated on a per-unit of measurement basis, the fee is for each identified unit or portion thereof within the indicated ranges of such units.

Where additional fees need to be charged and collected for completed staff work, or where a refund of excess deposited monies is due, and where such charge or refund is ten dollars ($10.00) or less, a charge or refund need not be made, pursuant to California Government Code Sections 29373.1 and 29375.1 and amendments thereto.

Section 7. Trust Deposits. In addition to the fees and charges for an application, each applicant shall be responsible for the full cost of services provided on behalf of the City by outside consultants that have been retained by the City to render services specifically in connection with the processing of the application. Each applicant shall be required to pre-pay, in the form of a trust deposit with the City, the estimated amount of the cost of any such services to be provided in connection with the processing of the application. The trust deposit shall be remitted to the City prior to commencement of covered services. The staff member responsible for processing the application shall establish the initial amount of the trust deposit for a given application. The trust deposit required shall be sufficient to cover the estimated costs of the services to be provided plus ten percent (10%) to cover staff time for overseeing outside consultants and administering the trust deposit. Services routinely provided to the City by the City Attorney and other consultants that are included in the Fully Burdened Rates shall be exempt from this condition. However, the trust deposits shall include the costs of extraordinary services, including, but not limited to, geological reviews, preparation of environmental impact reports and other environmental documentation, and special services by the City Attorney that arise directly from the particular application and are not within the scope of services that are routinely provided to the City. In the event the trust deposit exceeds the actual costs incurred for a particular application, the City will refund the surplus. If, conversely, the actual costs will exceed the amount on deposit, the City shall notify the applicant in writing that additional funds are required to replenish the trust deposit. The applicant shall replenish the trust deposit within ten days of receipt of notice from the City that additional funds are needed. However, in such cases, the applicant shall replenish said trust deposit accounts in amounts requested by the City, based upon an estimate by City Staff of the cost of services that will be provided by the City during the next 90 days. If an applicant fails to timely replenish a trust deposit, the City shall suspend all processing of the application until such time as the applicant remits the required additional funds.

Section 8. The fees specified in the Master Fee Schedule shall become effective on April 18, 2005, and shall not be applicable to any "deemed complete" application received by the City prior to that date.

Section 9. The City Council shall direct staff, either internally or through a third party, to perform a periodic thorough analysis of fees and charges. Based on the results of said periodic review, the City Council shall revise such fees and charges as warranted. Until a periodic analysis is completed, and after the fee adjustments detailed in Exhibit 1 are implemented, the City Council shall make a determination annually, after conducting a duly noticed public hearing, whether or not to increase fees by the percentage increase, if any, in City salaries and benefits during the two most recent fiscal years, as reflected in the City’s audited financial statements.

Section 10. Any person paying a given fee who feels that any fee or charge determined and set is in excess of the percentage of costs reasonably borne by the City and to be recovered as set out in this Resolution, or that such fee or charge has been reviewed prior to, or has not been reviewed within the review schedule as set forth herein, may appeal in writing to the City Council.

Section 11. The City Clerk shall certify to the passage, approval, and adoption of this resolution, and shall cause this resolution and her certification to be entered in the Book of Resolutions of the City Council of the City.

PASSED, APPROVED and ADOPTED this15 day of February 2005.

_____________________________

Mayor

ATTEST:

_________________________

City Clerk

State of California )

County of Los Angeles ) ss

City of Rancho Palos Verdes )

I, Carolynn Petru, City Clerk of the City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2005- , was duly and regularly passed and adopted by the said City Council at a regular meeting thereof held on February 15, 2005.

______________________________

City Clerk