TO: LINDA REICH, CITY MANAGER
FROM: KIM SAO, DIRECTOR OF FINANCE
SUBJECT
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Comprehensive User Fee Study.
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RECOMMENDATION
recommendation
Conduct a public hearing to consider the proposed Resolution No. 2025-029 to adopt new and changed City fees for service per the Comprehensive User Fee Study Report.
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FISCAL IMPACT
The revenue generated by the adoption of these fees will offset the associated costs of providing these City services. Staff will monitor and provide an update on user fee revenue estimates at the FY 2025-26 midyear budget review.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Financial Stability
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BACKGROUND
In 1988, pursuant to Article XlllB of the California Constitution, the City Council adopted an ordinance requiring the ascertainment and recovery of costs reasonably borne from user fees and charges levied in providing services to the public. Costs reasonably borne consist of all applicable direct and indirect costs associated with the provision of those services, as well as overhead costs for support services, as defined in Chino Municipal Code Section 3.50.030.
Since 1999, an analysis of existing fees is conducted by City staff annually, utilizing current budget information and updated staffing allocations. Each service associated with a significant fee change has been scrutinized to ensure staff time is accurately represented.
On November 2, 2010, California voters passed Proposition 26. This proposition reclassified some fees as taxes and placed additional requirements to establish or raise taxes without voter approval. City staff reviewed the City’s user fees and confirmed that these fees are not taxes, and that the City is in compliance with Proposition 26.
In September 2021, the City contracted with Willdan Financial Services (Willdan) to prepare a Comprehensive User Fee Study (CUFS) to determine the true costs of City provided services, and recommendations for changes in the fees charged for those services. The CUFS required input from virtually every City department to determine the direct, indirect and overhead costs of each service.
A notice of public hearing was published in the Chino Champion on June 7, 2025 and 14, 2025 and all requesting parties were sent written notice 14 days in advance of the public hearing pursuant to California Government Code Section 66016 and 66018.
ISSUES/ANALYSIS
The City charges user fees for various services provided by the departments. The majority of the fees, both in number and in dollar impact, are in the Planning, Building and Engineering Divisions. The CUFS prepared by Willdan analyzed the cost of providing those services. By State law, the City cannot charge more than the cost of the service.
The City has not had a comprehensive fee study conducted since the late 1980’s. All fees within the CUFS were reviewed to identify existing and potential new fees, resulting in the elimination of some and adjustments of others. Based on the actual costs to provide services, the CUFS was updated to capture 100% of the costs for most services.
The proposed fees are based on the estimated costs of each department or division performing the service as presented in the City’s Fiscal Year 2024-25 Mid-Term Budget as well as salary adjustments pertaining to the Classification and Compensation Study approved at the June 18, 2024, City Council Meeting. The resolution would authorize an annual CPI adjustment to the fees moving forward. This annual adjustment will ensure fees cover the established level of cost recovery set forth at this time. Any new fees, increase to the cost recovery level of current fees, or elimination of existing fees would be brought before the City Council for separate action.
The proposed changes in fees have been discussed with the various stakeholders, such as the Building Industry Association (BIA) and various Developers. Their comments, if any, will be transmitted to the City Council in a separate report.
Included in the CUFS are comparisons of the proposed fees with the fees charged in neighboring jurisdictions.
It is recommended that the City Council conduct a public hearing, consider the adoption of Resolution 2025-029 to approve new and changed City user fees, effective July 1, 2025, with development fees effective 60 days after approval by the City Council.
Attachments: Resolution 2025-029
Exhibit A - User Fees
Exhibit B - Comprehensive User Fee Study Report