City Council approves new fee increases
by Mark McDermott
The Manhattan Beach City Council Tuesday approved an array of fee increases residents and businesses will pay for city services ranging from building permits to fire inspections.
The increases total more than $550,0000, but fall short of the $931,000 a consultant’s report determined was the full cost of services the city is currently not recovering, largely due to state and federal mandates. But the Council also chose to subsidize fees in several areas council members agreed should be incentivized, such as solar permits, commission appeals, and historic preservation.
“Anything you don’t put at 100 percent cost recovery has a subsidy associated with it,” Courtney Ramos, a manager for Matrix Consulting, told the council.
Matrix spent nine months working with city staff in order to update the city’s fee structures to more accurately reflect the costs associated with hundreds of different services. The last such update occurred in 2014. All totaled, the consultants proposed 175 fee increases, 52 new fees or consolidated fees, and 55 fees remain unchanged. The biggest and perhaps most controversial area of change had to do with building permits, which through inspections and other processes cost the city $6,184,349 annually but only generate $5,844,963, resulting in a deficit of $339,386.
Matrix suggested a change in methodology in which building permit fees will no longer be calculated by project valuation but instead the square footage of the project, which is intended to mitigate the issue of varying market value. But the new methodology, as well as a more detailed and presumably accurate analysis of city processes and a new across-the-board technology surcharge, also resulted in some very steep fee increases.
Councilperson Steve Napolitano was the lone vote against the new methodology. He pointed out a new charge of $1,362 for inspections of retaining walls that previously had no charge as an example that troubled him.
“We’re charging nothing and then we’re going to charge $1,360 for review and inspection of a retaining and block walls….And we can cherry-pick a lot of these things out here,” Napolitano said. “Philosophically, the change in the valuation is fine. But I think there is going to be some heartburn out there over this, especially on the small folks. I mean, there is a lot of money added onto some low-cost items.”
Napolitano had successfully tabled the new fee structure at the Council’s Nov. 19 meeting in hopes of hearing more public input. Only one contractor spoke at that meeting, and one resident at this week’s meeting.
Mayor Nancy Hersman said she trusted the methodology was accurate, but that any fees that proved too high could be revisited on a case-by-case basis should objections be raised. The alternative, a line-item examination of the entire fee structure, Hersman said, was simply beyond the council’s capacity.
“At some point, we have to trust the information we’re given,” Hersman said.
The council extensively debated the merits of subsidizing solar permit plan checks, which it has long held at $100. The new study showed that the actual costs to the city were $703 for a residence and between $1500 and almost $1900 for businesses; the consultants recommended keeping the residential subsidy and raising the commercial fee to actual costs, resulting in a 1735 percent increase.
Councilperson Richard Montgomery said this would send an illogical message.
“One part of the council says, ‘let’s support renewable energy…’ At the same time, you are jamming businesses,” Montgomery said. “Right now it’s $100, let’s jam it to $1,700. I mean, I have a problem with that. Either keep it the way it was…or don’t jam them. You can’t do both.”
Napolitano suggested that given the high cost of installing solar, the subsidy was little more than symbolic.
“This is false environmental compassion,” he said. “It is a drop in the bucket compared to what the typical cost is.”
Councilperson Hildy Stern disagreed.
“It’s a false proposition,” she said. “I think this is a community-wide benefit, and I would hesitate to now send a message out to the community when we already have a policy encouraging as much responsibility with respect to our environmental concerns to now say, ‘Yeah, we don’t really feel that way. Now we want to hit you.’”
The council agreed, after a failed motion by Napolitano, to leave the solar subsidy as it was, also agreeing to keep historical preservation subsidies. Councilperson Suzanne Hadley had voted to support the new fee structure but later expressed misgivings.
“Our budget goes up every year. We’re blessed to have rising
property tax revenues,” Hadley said. “This can come out of the general fund. We don’t have to charge anything for these things. The fact we’re this close just delights me because I think government usually way overcharges or way undercharges. We’re very close. We don’t micromanage the purchase of staples and the hourly wages of certain employees. And here we are literally talking about 100 bucks on this and 500 bucks on this.”