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  Time Set   #   47.    
Board of Supervisors   
Meeting Date: 07/24/2018  
Brief Title:    2018-19 Master Fee Update
From: Howard Newens, Chief Financial Officer, Department of Financial Services
Staff Contact: Tom Haynes, Chief Budget Official, Department of Financial Services, x8162

Subject
Hold a continued public hearing to approve changes to the 2018-19 Master Fee resolution associated with residential roof-mounted solar system fees. (General Fund revenue $17,000) (Newens/Haynes) 
Recommended Action
  1. Hold a continued public hearing; 
     
  2. Adopt changes to the 2018-19 Master Fee resolution (Attachment A);
     
  3. Approve the proposed fee changes reflected in Attachment A, Exhibit 1; and 
     
  4. Adopt a resolution and finding of fact establishing residential roof-mounted solar energy system fees.
Strategic Plan Goal(s)
Operational Excellence
Sustainable Environment
Reason for Recommended Action/Background
On June 26 the 2018-19 Master Fee Resolution was approved by the Board of Supervisors, with the exception of certain fee changes related to installation of residential rooftop solar systems. California Government Code Section 66015 establishes a maximum fee of $450 plus $15 per kW for each kilowatt above 15kW for permits associated with installation of residential rooftop solar energy systems, unless the local jurisdiction provides substantial evidence of the reasonable cost to issue the permit through a written finding and adoption of a resolution or ordinance.
 
Pursuant to a comprehensive fee study conducted by MGT Consulting for the Department of Community Services, Planning/Building and Public Works divisions, the total cost of issuing a residential rooftop solar permit is estimated to be $619.  This total reflects the combined cost of several applicable fees, as shown in the table below.
 
Residential Rooftop Solar System Fees
Fee Title Current   Proposed Notes
Building Permit Application Fee $65.00 $67.00 Proposed increase to cover cost
Building Permit Issuance Fee $0.00 $56.00 New fee, separated from Application Fee
Plan Review $130.00 $149.00 Proposed increase to cover cost
Photovoltaic/Solar System, Residential-Roof mounted $260.00 $290.00 Proposed increase to cover cost
General Plan Cost Recovery $13.00 $14.50 5% of Building Fee. No change.
Technology Recovery Fee $27.30 $33.72 6% of total permit costs. No change. 
California Building Standards Fee $2.00 $2.00 State pass-through fee. No change.
Seismic Fee $6.50 $6.50 State pass-through fee. No change.
Total $503.80 $618.72  

 A majority of the fees listed in the table above are general fees that apply to all types of permits. In addition, the Building Standards and Seismic fees are required pass-through fees to the State. Only the Photovoltaic/Solar System, Residential Roof Mounted fee, which covers the cost of inspections, is specific to residential rooftop solar systems. However, since all of these fees are charged to solar customers, staff has conservatively interpreted the $450 State maximum to apply to the cumulative total of these fees.
 
Over the last several years, community interest in installing residential rooftop solar systems has increased significantly. Over the last four fiscal years, the County has issued an average of 148 solar permits per year. This compares to just 61 in fiscal year 2012-13. While some of this increase is likely due to improvement in the economy, the market for residential rooftop solar systems appears to have stabilized to the point where subsidies are no longer necessary. In addition, the County’s policy on Cost Recovery and Fees establishes that fees shall be set to recover the full cost of providing services. As a result, staff recommends that the Board adopt a resolution of finding, and approve the proposed increases in residential rooftop solar system fees.
 
Alternatively, the Board may wish to adhere to the statutory maximum of $450 in order to continue providing an incentive for the installation of residential rooftop solar systems. If the Board wishes to pursue this course of action, staff would recommend that the Residential Roof Mounted Photovoltaic/Solar System fee be reduced to $170, but that all of the other general fees be approved so as to not impact cost recovery for other permit types. Based on the average number of solar permits over the past three fiscal years, this option would result in an estimated revenue loss of $25,160, which would be backfilled by the General Fund.
Collaborations (including Board advisory groups and external partner agencies)
The Department of Financial Services worked with the Department of Community Services and County Counsel's Office to develop this item. 
Competitive Bid Process
N/A

Fiscal Information
Fiscal impact (see budgetary detail below)
Fiscal Impact of this Expenditure
Total cost of recommended action
Amount budgeted for expenditure
Additional expenditure authority needed $0
On-going commitment (annual cost)
Source of Funds for this Expenditure
General Fund
Further explanation as needed
Approval of the proposed fees would result in additional General Fund revenue of approximately $17,000 annually. Conversely, reducing solar fees to adhere to the maximum permit fee set forth in California Government Code would result in an annual General Fund revenue reduction of approximately $25,160.  
Attachments
Att. A. Resolution
Att. A. Exh. 1 - Summary of Proposed Fee Changes
Att. B. Solar Fees Resolution

Form Review
Inbox Reviewed By Date
County Counsel Hope Welton 07/17/2018 05:17 PM
Form Started By: Tom Haynes Started On: 07/09/2018 03:49 PM
Final Approval Date: 07/17/2018
Level double AA conformance,
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