Chapter 7
COST COMPARISON SYSTEM FOR FEE AND SERVICE CHARGE REVENUE¹

Sections:

7.1    Intent.

7.2    Delegation of authority and direction to city administrator.

7.3    “Costs reasonably borne” defined.

7.4    Schedule of fees and service charges.

7.4-1    Expired.

7.5    Provision of data.

7.6    Appeal to city council.

7.7    Severability.

7.1 Intent.

(a) Pursuant to Article XIIIB of the California Constitution, it is the intent of the city council to require the ascertainment and recovery of costs reasonably borne from fees and charges levied therefor in providing the regulation, products or services hereinafter enumerated in this chapter.

(b) The fee and service charge revenue/cost comparison system set forth in this chapter provides a mechanism for ensuring that fees adopted by the city for services rendered do not exceed the reasonable estimated cost for providing the services for which the fees are charged.

(c) The adoption of this chapter is exempt from the California Environmental Quality Act (Public Resources Code Section 2100 et seq.), because it approves and sets forth a procedure for determining fees for the purpose of meeting the operating expenses of city departments, as set forth in Public Resources Code Section 21080(b)(8)(1). (Ord. No. 90-5, § 1, 3-19-90; Ord. No. 91-15, § 1, 5-20-91)

7.2 Delegation of authority and direction to city administrator.

The city administrator is hereby delegated the authority and directed to adjust fees and charges to recover the percentage of costs reasonably borne in providing the regulation, products or services enumerated in this chapter in the percentage of costs reasonably borne and on the schedule of fee and service charge rate review and revision as hereinafter established.

“Costs reasonably borne” shall be as defined in section 7.3. In adjusting fees and charges, the city administrator shall act in an administrative and ministerial capacity and shall consider only the standards and criteria established by this chapter and the procedures set by applicable state law. (Ord. No. 90-5, § 1, 3-19-90; Ord. No. 91-15, § 2, 5-20-91)

7.3 “Costs reasonably borne” defined.

“Costs reasonably borne,” as used and ordered to be applied in this chapter, are to consist of the following elements:

(a) All applicable direct costs including, but not limited to, salaries, wages, overtime, employee fringe benefits, services and supplies, maintenance and operation expenses, contracted services, special supplies, and any other direct expense incurred.

(b)  All applicable indirect costs including, but not restricted to, building maintenance and operations, equipment maintenance and operations, communications expenses, computer costs, printing and reproduction, vehicle expenses, insurance, debt services and like expenses when distributed on an accounted and documented rational proration system.

(c) Fixed assets recovery expenses, consisting of depreciation of fixed assets, and additional fixed asset expense recovery charges calculated on the current estimated cost of replacement, divided by the approximate life expectancy of the fixed asset. A further additional charge to make up the difference between book value depreciation not previously recovered and reserved in cash and the full cost of replacement, which also shall be calculated and considered a cost so as to recover such unrecovered costs between book value and cost of replacement over the remaining life of the asset.

(d) General overhead, expressed as a percentage, distributing and charging the expenses of the city council, city administrator, city clerk, elections, city treasurer, finance department, city attorney, unallocated nondepartmental expenses, and all other staff and support service provided to the entire city organization as now organized and as it may be reorganized at any time in the future. Overhead shall be prorated between tax-financed services and fee-financed services on the basis of said percentage so that each of taxes and fees and charges shall proportionately defray such overhead costs.

(e) Departmental overhead, expressed as a percentage, distributing and charging the cost of each department head and his or her supporting expenses as enumerated in subsections (a), (b), (c) and (f) of this section.

(f) Debt service costs, consisting of repayment of principal, payment of interest, and trustee fees and administrative expenses for all applicable bond, certificate, or securities issues or loans. Any required coverage factors of added reserves beyond basic debt service costs also shall be considered a cost if required by covenant within any securities ordinance, resolution, indenture or general law applicable to the city.

When developing the cost allocation plan or service charge model which establishes the said fees and service charges, certain expenses may be considered for exclusion from the calculation which may not be directly attributable to a service being provided. (Ord. No. 90-5, § 1, 3-19-90; Ord. No. 91-15, §§ 3, 4, 5-20-91; Ord. No. 2022-05, § 2, 7-5-22)

7.4 Schedule of fees and service charges.

The primary factor for the cost of a city’s service or fee is usually the costs of the personnel which typically increase year over year. As such, tying an inflationary factor to annually adjust the fees and services charges is deemed reasonable. Unless otherwise specified by resolution, the fees and service charges set pursuant to this chapter shall be automatically adjusted annually in July for Consumer Price Index (CPI) increase so as to recover the listed percentage of costs reasonably borne necessary to provide the listed regulation, product or service. The CPI increase shall be based on the published CPI for San Francisco Area (San Francisco—Oakland—San Jose) April Edition or, if said index ceases to be published, according to a comparable measure of inflation as determined by the city’s finance director, and rounded to nearest dollar unless a different edition or rounding is otherwise specified by resolution. The city administrator, finance director and each city department head, under the direction of the city administrator, shall review the fees and services charges periodically and provide, if necessary, an adjusted fee or charge schedule to the city council for its consideration, in place of or in addition to the automatic annual CPI increase for the regulation, product or service below. A full analysis of city costs reasonably borne, as defined in Section 7.3, shall be conducted not less than every five (5) years.

Regulation, Product, or Service	Percentage of Cost Reasonably Borne to Be Recovered (percent)	Method of Cost Recovery (F=Fee) (H=Hourly)
General Administration:
Miscellaneous:
Letters of verification, certification and clearance	100	H
Notary service	100	F
Notice of intention to file	100	F
Research	100	H
Special services/inspections	100	H
Publications	100	H and F
Reproduction	100	H and F
Subpoena-witnesses/duces tecum	100	H and F
Finance:
Business license—New/move/change	100	F
Miscellaneous:
Abandoned shopping cart	100	F
Delinquent account receivables	100	H
Refuse collection lien process	100	H
Returned check fee	100	F
Rentals	100	F
Sewer enterprise	100	F
Water enterprise	100	F
Backflow inspections	100	H
Construction water	100	F
Delinquency services	100	F
Locking services	100	F
Meter installation, removal and testing	100	H and F
Portable meter rental	100	F
Water meter	100	F
Water (tank truck)	100	F
Water service initiation	100	F
Water and wastewater rates	Fees set by resolution, not subject to CPI adjustment
Community Development Department—All Divisions:
After hours building and fire inspection	100	H
Building and fire re-inspections	100	H
Special inspections	100	H
Community Development Department—Building:
Building plan change review	100	F
Building plan check	100	F
Building permit	100	F
Miscellaneous:
Alternative materials review	100	F
Building code appeal	100	F
Building moving/demolition	100	F
Lot change	100	F
Pre-roof inspection	100	H
Temporary certificate of occupancy	100	F
Permits and inspection	100	F
Community Development Department—Fire Prevention:
Fire clearance inspection	100	H
Fire code/gen. fire insp.	100	F
Fire flow test	100	F
Fire plan check, including energy storage systems	100	F
Hazmat/CUPA inspection	100	F
Fireworks—Aerial display	100	H
Fireworks—Retail sales	100	F
Fireworks—Warehouse	100	H
Special event	100	F
Weed abatement	100	F
Community Development Department—Hazardous Materials:
Facility closure	100	H
Hazardous materials storage permit	100	F
Hazardous waste generators	100	F
Protected aboveground or underground storage tank	100	F
Spill cleanup and investigation (including fire dept. costs)	100	H
Tank removal/installation	100	F
Tiered permit	100	F
Community Development Department—Pretreatment:
Pool drain inspection	100	F
Pretreatment plan check and inspections	100	F
Special events plan check	100	F
Community Development Department—Planning:
Annexation	100	F
Appeals	100	F
Architectural and site	100	F
Conditional use	100	F
Continuance request by applicant	100	F
Development time extension	100	H
Environmental:
Categorical exemption	100	F
Initial study	100	H
Expanded initial study	100	H
Initial study—City preparation	100	H
Environmental impact report	100	F
General plan map amendment	100	F
General plan text amendment	100	F
Habitat conservation	100	F
Historic neighborhood	100	F
Historic site	100	F
Home occupation	0	—
Home occupation appeal	100	F
Minor deviation appeal	100	F
Minor deviation variance	100	F
Mobile home rent	100	F
Planned unit development	100	F
Sign permit	100	F
Temporary use	100	F
Tentative parcel map	100	F
Tentative tract map	100	F
Urban service area	100	F
Variance	100	F
Williamson Act cancellation	100	F
Zoning change	100	F
Zoning code enforcement	100	H
Zoning ordinance amendment	100	F
Public Works Department—Engineering:
Development impact fees	100	F
Miscellaneous:
Assessment/ reapportionment map	100	F
Certificate of compliance	100	F
Encroachment:
Handicap signs	100	F
Curb painting/signage	100	F
Wide/oversized vehicle	100	F
Stormwater best management practice (BMP) setup and monitoring	100	F
Public improvement plan check and inspection	100	F
Subdivision final map and parcel map	100	F
Recreation Services—Parks and Facilities:
Facility and parks rental*	100	F
*Recreation facility and park rental has four categories (Category A, B, C, and D) as outlined below. Category D represents 100 percent cost recovery. Fees for Categories A through C are set in the adopted resolution.
Category A—City and GUSD programs and special events
Category B—Nonprofit organizations
Category C—City of Gilroy residents (private functions and/or open to the public)
Category D—Nonresidents or any company/business or group holding an event (social, business, education or for profit)
Recreation Services—Seasonal Classes, Programs, and Events:
Aquatics	Fees for recreation classes and programs are established seasonally at the time recreation activity guide is prepared. As such, these fees are to be adjusted based on seasonal market analysis and should consider fluctuations and trends in participation rates to attain maximum cost recovery.
Recreation programs
Adult programs
Cultural classes/events
Preschool
Youth and teen programs
Special events
Fire Department:
False alarm	100	F
Police Department:
Permits—Regulatory:
Firearms sales	100	F
Mobile vendor	100	F
Massage	100	F
Solicitors	100	F
Animal control	100	F
Bingo	100	F
Cardroom	100	F
Concealed weapons	100	F
Dance hall	100	F
Pawnbrokers, junk and secondhand dealers	100	F
Regulatory bar	100	F
Taxi cab—Company	100	F
Taxi cab—Driver	100	F
Tow truck	100	F
Other Services:
Call back/second response	100	H
Crime analysis services	100	H
DUI investigation	100	H
False alarm	100	F
Graffiti abatement	100	H
Provision of special services	100*	H
School truancy	100	H
Tow truck driver	100	F
Vehicle equipment inspection	100	F
Vehicle impound/release	100	F
Reproduction of documents	100	F
False alarm	100	F

*    100% cost recovery except for events where the public safety benefit, as determined by the police chief, is of community concern. In this case the event may be subsidized at 55%.

All fees and charges set pursuant to this section shall take effect immediately upon the passage of a resolution by the city council setting forth said specific fee amounts, with the exception of the annual automatic CPI adjustment, which shall take effect every July 1st and shall not require passage of a resolution by the city council. Said fees and charges will be initially adopted via resolution by the city council after a public hearing. The city clerk shall cause notice to be provided as set out in Government Code Section 6062.a. (Ord. No. 90-5, § 1, 3-19-90; Ord. No. 91-15, § 6, 5-20-91; Ord. No. 2000-17, § I, 11-20-00; Ord. No. 2011-03, § 2, 3-7-11; Ord. No. 2022-05, § 2, 7-5-22)

7.4-1 Elimination of development impact fees and the charging of costs reasonably borne to development projects in the zero fee area.

Expired. (Ord. No. 2011-03, § 1, 3-7-11)

7.5 Provision of data.

Pursuant to the California Government Code, at least ten (10) days prior to the required public hearing set out herein, the city administrator shall make available to the public appropriate data indicating the cost, or estimated cost, required to support the fees and charges for which changes are proposed to be made or fees or charges imposed. The city administrator also shall provide a summary of the present fee and charge schedules and those proposed at such public hearing. A general explanation of such changes also shall be published per the requirements of Government Code Section 6062.a. (Ord. No. 91-15, § 8, 5-20-91; Ord. No. 2022-05, § 2, 7-5-22)

7.6 Appeal to city council.

(a) Any person who feels that any fee or charge determined and set is in excess of the percentage of costs reasonably borne to be recovered as set out in this chapter, or that such fee or charge has been reviewed prior to or has not been reviewed within the review schedule as set out herein, may appeal in writing to the city council.

(b) No fee or charge for which an appeal has been filed shall take effect until heard by the city council. Such appeal shall be placed on the agenda of the next ensuing council meeting. Such appealed fee or charge shall take effect immediately upon hearing by the city council unless ordered otherwise by the city council by ordinance amending this chapter. (Ord. No. 91-15, § 9, 5-20-91)

7.7 Severability.

If any portion of this chapter is found to be unconstitutional or invalid, the city council hereby declares that it would have enacted the remainder of this chapter regardless of the absence of any such invalid part. (Ord. No. 90-5, § 1, 3-19-90; Ord. No. 91-15, § 7, 5-20-91)

---

Editor’s note: Ord. No. 75-18, adopted Sept. 2, 1975, repealed former Ch. 7 regarding civil defense, which derived from Ord. No. 806, adopted Sept. 5, 1967.