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CITY OF SAN LEANDRO MEMORANDUM DATE: April 6, 2012 TO: Finance Committee FROM: Chris Zapata, City Manager BY: James H. O'Leary, Interim Finance Director Mary Ann Perini, Budget and Compliance Manager SUBJECT: Discussion Regarding Proposed Resolution Adjusting City Fees and Charges for Services Provided by City Departments (Master Fee Schedule, 2012 -13) SUMMARY AND RECOMMENDATION Staff recommends the Finance Committee approve the proposed adjustments to City user fees and service charges in the Master Fee Schedule for 2012 -13. Following Finance Committee approval, a resolution will be presented to the City Council for approval as part of the 2012 -13 budget approval process. DISCUSSION The City conducts a review of all user fees and service charges as part of its annual budget preparation process. City user fees and service charges are based on a variety of criteria including comparable fee levels in surrounding cities; changes in the local Consumer Price Index (CPI); and the cost to provide the associated service. If approved by the Finance Committee and adopted by the City Council, the following proposed adjustments to the City's user fees and service charges would be effective July 1, 2012. The Master Fee Schedule is a compilation of City Council approved fees for special services requested by some residents in the community. Local agencies are allowed to set fees at rates that obtain fair and reasonable recovery of the costs incurred by the General Fund in providing a special service; thereby minimizing or eliminating the use of limited General Fund revenues. Historically, the City has strived to maximize cost recovery through setting fees at levels appropriate given escalating costs of doing business and market comparisons. Full cost recovery is a policy direction by the City Council and the fee schedule that maximizes cost recovery opportunities through appropriate fee revenues is a critical component of the City's on -going financial stability. In the 2012 -13 General Fund Budget, the proposed estimated department revenues total $4,000,000 or approximately 5% of the General Fund operating revenues. Modifications to the City's fee schedule to remain up -to -date with escalating operating costs are generally completed on an annual basis.