PREPARED BY: LIBBY TYLER DATE OF MEETING: 06/16/2025
SUBJECT:
TITLE
CONSIDER ADOPTING RESOLUTIONS (1) IMPLEMENTING THE FY 2025-2026 BUILDING, PLANNING, AND PUBLIC WORKS USER FEE INCREASES THE CITY COUNCIL PREVIOUSLY DETERMINED SHALL TAKE EFFECT ON JULY 1, 2025 BASED ON THE BUREAU OF LABOR STATISTICS EMPLOYMENT COST INDEX, AND (2) APPLYING THE WEST CONTRA COSTA TRANSPORTATION ADVISORY COMMITTEE (WCCTAC) APPROVED INFLATIONARY FACTOR INCREASES TO WCCTAC SUBREGIONAL TRANSPORTATION MITIGATION PROGRAM (STMP) FEES EFFECTIVE JULY 1, 2025 PURSUANT TO SECTION 15.62.040 OF THE SAN PABLO MUNICIPAL CODE
CEQA: This action is not a project as defined by CEQA. CEQA Guidelines Section 15378(b)(4) states that “project” does not include the creation of government funding mechanisms or other governmental fiscal activities, which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
Focus on Economic Development and Fiscal Diversification is a major adopted policy goal and Explore and Sustain New Revenue Enhancements to the City’s General Fund is Priority No. 405 under the FY 2025-27 City Council Priority Workplan, as adopted on April 7, 2025.
BACKGROUND
City User Fees for Building, Planning and Public Works
In 2020, the City of San Pablo performed a cost-of-service study for Building, Planning, and Public Works user fees. The fees were adopted on August 3, 2020, with an effective date of January 1, 2021. On May 3, 2021, by Resolution 2021-055, the City Council revised the user fees per the methodology described below and determined that the fees would be increased annually based on that methodology effective July 2, 2022, and each July 1st thereafter. The City has recently undertaken a new fee study, consistent with City Council Priority #405.3. This study is expected to be completed in Fall 2025.
City Council Adopted Fee Methodology
Prior to adoption of the updated fee schedule in July 2020, MGT Consulting Group (MGT) prepared information regarding an annual escalation factor to account for inflation and minimize the decrease in cost recovery until the next user fee study. At that time, MGT recommended an annual escalation factor based on the April 2020 Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco Bay Area be applied annually as part of the budget process to make sure that user fees keep pace with inflation. The factor was adopted in Resolution 2021-055 for future year adjustments for Building, Planning, and Public Works fees to be effective July 1 of each fiscal year, starting in July 2021.
MGT subsequently recommended that the annual inflationary adjustment be based on the Bureau of Labor Statistics, Employment Cost Index: total compensation for State and local government workers- all workers rather than on the CPI-U for the San Francisco Bay Area. MGT concluded that the Bureau of Labor Statistics index is more appropriate than CPI because it tracks the cost of government employees, which is largely what affects the cost of City services over time. As part of Resolution 2021-055 (copy attached), the City Council approved the change in the inflationary factor methodology and determined that the new methodology should be used annually to increase Building, Planning, and Public Works user fees effective July 2, 2022, and each July 1 thereafter.
The inflationary factor for the twelve-month (not seasonally adjusted) rate for state and local government workers, reported on April 30, 2025, was 4.3%. This rate has been applied to increase current the Building, Planning, and Public Works user fees to the levels set forth in Exhibit A. These new user rates will take effect July 1, 2025.
West Contra Costa Regional Transportation Fee
In 2019, the West Contra Costa Transportation Advisory Committee (WCCTAC), now renamed West Contra Costa Transportation Commission (WCCTC), conducted a fee study for the West County Subregional Transportation Mitigation Program (STMP) which reviewed West County existing conditions and growth projections, developed criteria for a development project list and identified development projects and determined the nexus between the projects and the maximum potential fee that could be charged. The West Contra Costa jurisdictions share a desire to ensure that new development in West County pays its fair share toward regional circulation and transit improvements that are proportional to the traffic impact the new development will generate.
The fees are collected at the time of issuance of building permits for applicable development projects by each local jurisdiction in West County on behalf of WCCTC. These fees are utilized to fund projects that provide congestion relief to mitigate traffic on regional routes and through improved transit service.
The Final Fee Study for the West County STMP established the maximum potential fees that could be charged to eligible development projects. These fees were approved by each jurisdiction. Ordinance 2019-001, adopted by the City Council in 2019, amended Chapter 15.62 of the San Pablo Municipal Code to update the STMP and establish, consistent with industry standards, that the Engineering News Record Construction Cost Index for the San Francisco Bay Area shall be used annually to determine adjustments to the STMP fees to keep the fees current with inflation or deflation. Under this requirement, STMP fees are to be adjusted effective July 1 of each year based on the Engineering New Record’s SF Bay Area Construction Index for February of that year. This year, based on that methodology, the change to STMP fees effective July 1, 2025, will be a decrease of - 0.8%.
The existing and adjusted fee rates provided by WCCTC are shown below. Under Chapter 15.62, the adjusted fees will be collected for any applicable project issued a building permit after July 1, 2024. According to WCCTC, Commission members are responsible for incorporating the adjusted fees into their municipal fee schedule, as appropriate, with an effective date of July 1, 2024, or as close to that date as Commission member legal counsel permits.
The FY24-25 and FY 25-26 STMP fees are shown below:
2025-2026 Fee Schedules
The Master Fee Schedule for Planning, Building & Public Works Fees are attached. The updated schedule for Building includes a few modifications to match current hourly rates and to assign fees for certain common activities that are not currently captured in the fees schedule, including: Under Demolition: Residential Demo (Exterior Only), total fee $313 and retitle Residential Demo, whole structure; Under Other Processes: Address Assignments, Commercial, total fee $784; Address Assignments, Residential, total fee $313; Temporary Certificate of Occupancy, total fee $714; Special Inspection and Testing Agency Approval (2 years), total fee $313. Under new category of Remodel; Kitchen/Bath Remodel/nonstructural (per room), total fee $627; House Remodel/like for like with floorplan (3,000 sf), total fee $1,094; and House Remodel/Plan Check required (3,000 sf), total fee $2,783.
FISCAL IMPACT
The adopted budget amount for Building, Planning, and Public Works fees (Development Services fund 212) in the FY 2024-2025 budget is $1.582 million. These are user fees that are charged to building, planning, and public works applicants seeking City permits and approvals.
The City Council adopted the Fee Methodology and annual adjustments in August 2020 in Resolution 2020-103. The proposed City fees provide full cost recovery for all applicable fee-related activity or service with the exception of a limited number of fees in the Planning Fee Schedule. The adopted fees were effective January 1, 2021, and the first fees reflecting the escalation factor were adopted by Resolution 2021-055 in May 2021 and were effective July 1, 2021. Since completion of the fee study and adoption of the revised fees, higher revenues have accrued from building, planning, and public works fees, and the General Fund subsidy has been reduced. In addition, the annual adjustment based on the Bureau of Labor Statistics, Employment Cost Index implemented as part of the annual Budget Process in 2021 more accurately reflects the change in cost of fee-related activities or services without having to perform more frequent formal fee studies and is an industry standard.
The adoption of the STMP fees does not cause a fiscal impact to the City of San Pablo budget.
Attachments:
Att A - Draft Resolution adopting Building, Planning and Public Works fees for FY 2025/2026
With Exhibit A proposed fees attached
Att B - Draft Resolution applying the West Contra Costa Transportation Advisory Committee (WCCTC) Approved Inflationary Factor to the West County Subregional Transportation Mitigation Fees effective July 1, 2025
Att C - Resolution 2021-055, adopted May 3, 2021