Milpitas Municipal Code Ch. 3 Fee and Service Charge Revenue/Cost Comparison System

1.01 It is the intent of the City Council to provide the ascertainment and recovery of specified percentages of "costs reasonably borne" through the imposition of fees and charges for provision of the regulation, products and services hereinafter enumerated in this Chapter.

1.02 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 cost for providing the services for which the fees are charged.

(Ord. 164.2 (part), 8/1/95)

The City Manager is hereby delegated the authority and directed from time to time to calculate and propose adjustments to fees and charges to assure full recovery of the percentage of "costs reasonably borne" in providing the regulation, products or services enumerated in this Chapter, as established by the City Council in its policy schedule in Section IV-3-4 of this Chapter. The City Manager acts in an administrative capacity in carrying out his/her duties under this Chapter and is to consider only the standards and criteria established herein in calculating and proposing adjustments to fees.

(Ord. 164.2 (part), 8/1/95)

"Costs reasonably borne," as used and ordered to be applied in this Chapter consist of the following elements:

3.01 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 expenses incurred.

3.02 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 service, and like expenses when distributed on an accounted and documented rational proration system.

3.03 Fixed asset 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, 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.

3.04 General overhead, expressed as a percentage, distributing and charging the expenses of the City Council, City Attorney, City Manager, City Clerk, City Treasurer, Economic Development, Finance Department, Personnel Office, and City Promotion, and all other staff and support service provided to the entire City organization. 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.

3.05 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 3.01, 3.02, 3.03 and 3.06 of this Section.

3.06 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 of whatever nature or kind. Any required coverage factors or required or established 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.

(Ord. 164.2 (part), 8/1/95)

The City Manager and department heads will review the fees and service charges listed in the Master Fee Schedule and calculate and propose adjustments to said fees and charges necessary to assure recovery of the specified percentages of "costs reasonably borne" on an annual basis, as part of the budget process The City Council will determine, at a public hearing, whether such proposed adjustment should be implemented. The cost recovery percentages are included in the Master Fee Schedule, which will be updated annually.

(Ord. No. 301, § 17, 8/20/19; Ord. No. 164.3, § 2, 6/17/14; Ord. 164.2 (part), 8/1/95)

The City Council may periodically hold a noticed public hearing to receive oral and written presentations concerning proposed adjustments to the fees and charges contained in the Council Resolution No. 5762. Following conclusion of said public hearing, the City Council may adopt, by resolution, the proposed adjustments to the fees and charges to assure recovery of the specified percentages of "costs reasonably borne" referred to in Section IV-3-4.

The services listed in Section IV-3-4 shall be defined in the report entitled "Cost Control System for the City of Milpitas, California" dated October, 1994 as produced by Management Services Institute, Incorporated and as periodically supplemented or updated by City staff.

The frequency of fee adjustment hearings may be varied by the City Manager to adjust revenues sufficient to meet debt service coverage requirements of any bond, certificate or ordinance, resolution, indenture, contract, or action under which securities have been issued by the City which contain any coverage factor requirement.

The frequency of fee adjustment hearings may be varied by the City Manager if, in his/her judgement and that of the requesting department head, a gross inequity would be perpetrated by the existing rate schedule or because of a new, and unanticipated event.

(Ord. 164.2 (part), 8/1/95)

At least ten (10) days prior to the required public hearing set out herein, the City Manager will 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 Manager will also provide a summary of the present fee and charge schedules and those proposed at such annual public hearing. A general explanation of such changes also shall be published per the requirements of Government Code Section 6062a.

(Ord. 164.2 (part), 8/1/95)

Any person who is liable to pay, any fee or charge, and who believes that the fee or charge has been improperly calculated, or that costs are allocated to the services or commodity which exceed the actual cost thereof, may file an appeal with the City Manager. Said appeal shall be in writing, and shall contain each fact, contention or basis for the appeal. The City Manager may make such investigation as deemed necessary, may hold a hearing, and may at the conclusion of said investigation or hearing make such reduction in fees, on a temporary basis, as he/she shall deem justified, and shall thereafter, during the normal fee adjustment period, show the changed amount in the proposed adjustments to the fees and charges submitted to the City Council.

The appellant may, if aggrieved by the action of the City Manager, within ten (10) days after written notice of the City Manager's decision, file a written appeal with the City Council by delivering same to the City Clerk. Said appeal shall specify the grounds therefor with particularity. The City Council may conduct an investigation, may hold a hearing if it so desires, and is to advise the appellant, in writing, of its decision. In all proceedings under this section, the burden of proof shall be on the appellant. The decision of the City Council shall be final, and be subject to court review in accordance with Code of Civil Procedure Section 1094.5.

(Ord. 164.2 (part), 8/1/95)