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CITY COUNCIL
Staff Report
November 7, 2017
ORDERS OF BUSINESS
RECOMMENDATION:
That Council provide direction on special event fees.
BACKGROUND/SUMMARY:
The City provides a variety of services that benefit a specific customer or user. In accordance with State law, the
City is legally allowed to charge the user of the service a fee to recover the cost of providing the service.
In order to determine the cost of providing services, the City hired Revenue and Cost Specialists, LLC ("RCS")
to complete a cost of services study (Study). The Study also identified options to adjust fees in order to more
equitably finance services.
The Study looked at the fees charged by various departments, including community activities. During this time, a
new special event policy was being developed. As such, the discussion on special event fees was deferred until
a later date. As staff are on the cusp of preparing for the second year of the special event grant cycle, it is an
appropriate time for Council to provide direction regarding the special event fees as such guidance may affect
the special event policy and its associated grant program.
The basis for Councils direction regarding fees centers on its overall philosophy regarding special events and
whether applicants should pay the full cost of the service. Some services are considered to be personal choice
services as the individual decides on whether to undertake the activity that generates the fee, such as having a
special event on the beach, and the service, such as issuance of a permit, may be withheld if payment by the
applicant is not received. However, Council may determine that a service has a community (public) benefit, as
compared to benefiting the specific user (private sector). As such, Council may direct that the fees be
subsidized by other City general fund revenues instead of the user bearing the full cost of the service. Staff
seeks direction from Council regarding special event fees.
As described below, many of the special event fees have two components: (1) the actual cost to the City, be it
the cost of staff to process a permit and/or the actual cost of special event items like barricades and traffic
delineators that staff have determined to be necessary for a safe event and (2) the cost for exclusive use of a
City asset, be it the beach, park or road. The first component of the fee is based on the Study while the second
part is discretionary. This component may be based on such factors as the market; the price the applicant is
willing to pay for the use; the price of private sector alternatives and/or the possible cost incurred by the City
should the asset be damaged. The proposed fees recommended by the Study, as well as some staff-
generated options, are included for discussion. However, staff seeks direction on the policy regarding cost
recovery of special event fees at this time and will bring forth an actual fee schedule for consideration and
adoption at a later time.
In addition to the processing fee, a beach special event fee includes a rental fee of $400 per hour, plus a
refundable $200 damage deposit. Similarly, the park special event fee includes a rental fee of $400 for the first
four hours, then $300 per hour and a refundable damage deposit of $350. The Study did not recommend any
adjustments to this part of the fees. These fees (permit, rental and deposit) do not distinguish between public or
private events nor do they tier the fees based on other criteria.
Staff does not recommend that the refundable damage deposits be reduced or subsidized. Rather, staff
recommends this amount be increased (and the same amount for both the beach and parks) due to the potential
cost the City would incur for damage of these community resources. Staff requests concurrence by Council to
come back with options to increase this part of the fee. While Council has discretionary regarding the amount of
all fees, the rental fee for the beach and parks is most malleable. Depending on Councils cost recovery goals, it
could increase the processing fee as recommended by the Study (as this is an actual cost to the City) and
simultaneously reduce the rental fee as an option to achieve a more equitable cost recovery.
However, staff does not recommend basing costs on the size or type of event. Rather, staff recommends that
the fee be the same for processing an event within the ROW as a beach or park special event, with the
additional fee for a street closure as applicable. In addition to allowing for consistency, the size of the event
does not necessarily dictate the time involved in processing a permit, as many other factors, such as the
responsiveness of the event organizer, the complexity of the event and safety protocols influence the permitting
process. In addition, staff recommends that the City determine the appropriate number of police and other
employees necessary for an event and that the applicant be charged the fully allocated rate of the City staff
assigned to the event. This applies to all private events, although events within the ROW tend to require
additional City resources compared to other events.
Other fees
In addition, the City charges for the actual cost of supplies related to the event like no parking signs ($3 each),
traffic cones ($3 each), A Frames ($25 each), and barricades ($65). These costs were not examined as part of
the Study as they are considered a pass-through cost. As these are required supplies to meet City rules and
safety requirements, it is recommended that the City either pass through the actual cost of these, and any new
items like bollards, to the applicant or allow the applicant to procure these items elsewhere as long as the
number and type of items comply with City requirements.
Street Closure
The Study also recommended that events with a road closure be charged $935, which reflects the cost of staff
time necessary to receive approval from the Community Activities and Cultural Commission and Council.
Currently there is no fee for these ancillary services. Staff recommends that a fee be charged for street closures
due to the time involved in both (1) receiving the approval from Council and (2) working with the applicant on the
noticing and actual street closures before and during the day of the event.
Parking stalls
The City currently charges for the use of parking stalls, which currently is $100 for each stall except for certain
special events which increases the cost to $200 for each stall. There is a two stall minimum for valet parking
stalls during Car Week, PGA Golf event and the last two weeks in December at a cost of $200. These fees
were set in 2011, and updated in 2014 to reflect inflationary costs as determined by the consumer price index at
that time. The Study did not recommend any adjustments to the fee except that the fee be applied to the use of
the Del Mar parking lot (at $100 for each parking stall per day). Staff concurs that Del Mar parking lot should be
subject to the same fees as parking stalls in the commercial district.
The current fee schedule is outdated and, keeping the fees intact, is in actuality, continuing the existing subsidy
that exists within the fee structure. If Council seeks to subsidize special event fees due to their public, or
community-wide benefit, staff recommends that Council consider a new methodology for the fee subsidy and
base any subsidy on the recommended fees presented within the Study.
During various public workshops and meetings on the Study and associated fees, suggested criteria for a fee
schedule included:
1. If the applicant is a resident or non-resident
2. If the event is new or reoccurring
3. If the event sponsor is a non-profit or for profit entity
4. If the event is free and open to the public
5. The number of people attending, the size and/or complexity of the event
6. The purpose of the filming such as for educational purposes or marketing of the City as a visitor
destination
Of the options presented above, the status of the event sponsor as a non-profit entity is easier for staff to
determine and consistent with the criteria to be eligible for a special event grant. Should Council use this as a
criteria, it will also need to determine: (1) which fees to subsidize and (2) the percentage, or amount of the fee to
subsidize. Once Council has provided direction regarding its philosophy on the fees, staff will return with actual
dollar amounts for the various fees for Councils consideration.
FISCAL IMPACT:
The City received about $41,000 in special event fee revenue for Fiscal Year 2016-2017. The Fiscal Year
2017-2018 adopted budget did not include any increase in fees or additional revenue. However, Council
approved special event grants (community promotions fund) totaling about $47,000 thus far.
ATTACHMENTS: