Chapter 3.36 — COST RECOVERY FOR USER SERVICES

The City Council of the City of Newport Beach finds as follows:

A. The City funds certain municipal services such as fire, police and residential trash
collection using primarily property, sales and other tax revenues. These municipal services
are typically performed without request by the user, benefit the public generally, and are
traditionally funded by tax revenue.

B. The City performs other services and offers certain programs which are funded in whole or
in part by the person or entity requesting the service or requesting to participate in the
program. These services and programs are typically initiated by an application submitted
by the person requesting the service or program participation, primarily benefit the person
requesting the service or program participation, and are traditionally funded in whole or in
part from fees charged to the person who initiates the service or program participation.

C. The City Council has retained consultants to conduct cost allocation plan and cost of
services studies. Cost allocation studies determine the general City and departmental
overhead rates to be used in calculating the cost of City services. Cost of services studies
determine the costs of providing certain City services by, among other things, identifying
the City employees performing the service and the amount of time spent in performing the
service. The City Council has thoroughly reviewed and considered the studies prior to
adopting the ordinance codified in this chapter. In order to ensure that fees charged for
services are an accurate reflection of actual costs, the City Council finds that cost studies
should be conducted at least every five years.

D. The Finance Committee of the City Council has conducted public meetings to discuss the
cost allocation plan and cost of services studies, the factors relevant to the appropriate cost
recovery percentage for the services studied, and to receive public input on the issues. The
Finance Committee has submitted recommendations to the City Council regarding the
appropriate cost recovery percentage and those recommendations have been reviewed and
considered by the City Council prior to adopting the ordinance codified in this chapter.

E. The City Council has fully complied with provisions of State and local law in establishing
the cost recovery percentages specified in this chapter, including California Government
Code Section 66000 et seq., and Articles XIIIC and XIIIB of the State Constitution.
(Ord. 97-8 § 1 (part), 1997; Ord. 2008-14 § 1 (Exh. 1) (part), 2008; Ord. 2022-10 § 1, 2022;
Ord. 2023-22 § 183, 2023)

For purposes of this chapter, the following definitions shall apply:

“Actual cost” means the estimated cost to the City of providing a user service to a user as initially determined by analysis of the cost factors in the studies and as modified from time to time in accordance with changes in cost factors.

“Cost factors” means the various factors identified in the studies relevant to the calculation of the actual cost to the City of providing user services to a user.

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City of Newport Beach, CA § 3.36.020 NEWPORT BEACH CODE § 3.36.030

“Cost recovery percentage” means the percentage of the actual cost to the City of providing a user service that the City Council determines should be recovered from the user.

“Cost studies” means the Cost of Services and Cost Allocation Studies conducted by the City’s consultant(s).

“Fee resolution” means the resolution adopted by the City Council pursuant to this chapter which establishes the fees and charges for user services.

“User” means the person or entity who requests, by filing an application or otherwise, City performance of, or user’s participation in, a user service.

“User services” means services or programs that are initiated by express request or by an application submitted by the person requesting the service or requesting to participate in the program, which primarily benefits the person requesting the service or program participation. User services include the services and programs identified in the user fee resolution adopted by the City Council and which are funded, in whole or in part, by fees or charges imposed on the person requesting the service or program participation in an amount based on the most recent cost of services studies. User services do not include municipal services traditionally funded by tax revenue, that are typically performed without the express request of a person, or for the public benefit generally. (Ord. 97-8 § 1 (part), 1997; Ord. 2008-14 § 1 (Exh. 1) (part), 2008; Ord. 2022-10 § 2, 2022)

A. The municipal functions the City Council has determined to be user services and for which the City Council has initially determined the actual costs and the appropriate cost recovery percentage are described in the fee resolution. The cost recovery percentage appropriate for each user service shall be 100%, with the exception of the user services identified in the fee resolution as being subject to a lower cost recovery percentage and those services for which the fee is limited by statute. The City Council may include in the fee resolution a schedule to phase in specific fee increases as provided in the fee resolution.

B. The City Council shall establish, pursuant to the fee resolution, the actual fee or charge for
each user service described in the fee resolution. The fee or charge shall be based upon the
actual cost of providing the user service, multiplied by the relevant cost recovery
percentage.

C. The City Council may, without amending this chapter, modify (increase or decrease) the
fee resolution to amend the amount of any fee or charge for, and the actual cost of
providing, any user service upon a determination that there has been an increase or decrease
in one or more of the cost factors relevant to the calculation of the actual cost of providing
that service.

D. The City Council may modify the municipal functions determined to be user services in the
fee resolution and the cost recovery percentage for any service by amending the fee
resolution.

E. Fees for service established in the fee resolution may be waived as provided by resolution
of the City Council.
(Ord. 97-8 §§ 1 (part), 2, 1997; Ord. 98-18 § 1, 1998; Ord. 2000-24 § 1, 2000; Ord. 2002-26
Exh. A, 2002; Ord. 2004-4 § 3, 2004; Ord. 2008-14 § 1 (Exh. 1) (part), 2008; Ord. 2009-21 § 1
(Att. 1), 2009; Ord. 2009-32 § 1 (Exh. A), 2010; Ord. 2011-10 § 1, 2011; Ord. 2011-28 § 1,

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City of Newport Beach, CA § 3.36.030 REVENUE AND FINANCE § 3.36.040

2011; Ord. 2013-1 § 1, 2013; Ord. 2013-18 §§ 1, 2, 2013; Ord. 2015-9 § 1, 2015; Ord. 2015-29 § 1, 2015; Ord. 2016-14 § 1, 2016; Ord. 2018-13 § 1, 2018; Ord. 2018-15 § 1, 2018; Ord. 2020-5 § 4, 2020; Ord. 2020-10 § 1, 2020; Ord. 2021-7 § 1, 2021; Ord. 2021-13 § 1, 2021; Ord. 2022-10 §§ 3, 4, 2022; Ord. 2023-7 § 1, 2023; Ord. 2023-22 § 184, 2023; Ord. 2024-12 § 1, 2024; Ord. 2025-37, 1/13/2026; Ord. 2026-4, 5/26/2026; Ord. 2026-11, 8/25/2026)

Notwithstanding any other provision of this Code, the City Council shall establish, in the fee resolution, late fees and interest to be paid by any user of user services who fails to make payments when required by this Code or any resolution, policy, or program adopted by the City Council. To the maximum extent practical, the late fees and interest shall be uniform for all user fees. (Ord. 97-8 § 1 (part), 1997; Ord. 2008-14 § 1 (Exh. 1) (part), 2008)

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City of Newport Beach, CA