Budget and Government Efficiency Committee Meeting – January 19, 2022

The Budget and Government Efficiency Committee met virtually on January 19, 2022, to consider the Fiscal Year 2023 Comprehensive User Fee Analysis, the Parks and Recreation Department user fee revision, and to set committee priorities for the year. The committee heard extensive public testimony, reviewed presentations from multiple city departments, and voted on items including forwarding the user fee analysis to the full City Council and adopting the updated parks fee schedule with amendments.

Consent Calendar

• Approval of Minutes: Minutes from October 13, 2021 and November 19, 2021 were approved unanimously.
• Consent Agenda Items:
  • Extension of the Lexus Texas contract and approval of amendment number two.
  • Second amendment to the 1998 Commission Center Management Agreement between the San Diego Unified Port and the City of San Diego.
  • Both items were approved unanimously without discussion or public comment.

Public Comments & Testimony

Non-Agenda Public Comment:

• Judy Strang, parent advocate, spoke against reducing marijuana taxes, calling the industry's request a "bait and switch" and urging the committee not to lower taxes.

On Item 3 – FY2023 Comprehensive User Fee Analysis:

• Luis Montero Adams (San Diego LGBT Community Center) urged freezing all fees for nonprofit special events, citing pandemic hardship and increased costs.
• Brad Ramsey (Road One Towing) opposed the 34% increase in police towing franchise fees, stating it cannot be absorbed without a corresponding storage fee increase.
• Benjamin Nichols (Hillcrest Business Association) asked to reject police fee increases for nonprofit events, noting events like Hillcrest City Fest fund neighborhood improvements.
• Laurel McFarland (San Diego Event Coalition / McFarland Promotions) said proposed police and fire fees feel punitive after the pandemic and urged keeping fees as is for nonprofit and free events.
• Medi (Pacific Auto Center) supported raising the franchise fee but requested it be linked with storage fees to avoid negative impact on license impound providers.
• Jen LaBarbara (San Diego Pride) stated Pride generates $26.7 million in economic impact, and city fees have risen 91% over 10 years, threatening their ability to give back to the community.
• Michael Trimble (Gaslamp Quarter Association) said increases of over 120% in three years will jeopardize small events that support civic improvements.
• Mike Dorvier (I Love a Clean San Diego) opposed increasing costs for charity events, which divert funds from beneficiaries.
• David Casper (San Diego Pawnbrokers Association / Firearms Dealers Association) requested no increase, noting profits are down and fees cannot be passed on due to state/federal regulation.
• Kathleen Lippett argued that the city should increase marijuana business fees to recover costs of addiction and youth impacts, rather than subsidizing that industry.

On Item 4 – Parks and Recreation User Fee Revision:

• No public comments were received.

Discussion Items

Item 3 – FY2023 Comprehensive User Fee Analysis

• Rolando Travel (Finance Director) and Jose Mendoza presented the citywide effort to update user fees, noting that personnel costs rose ~30% from 2019 to 2023. The analysis covers general fund and special revenue/enterprise funds. 501 fees in the general fund are proposed to change: 283 increases, 28 decreases, 115 unchanged, 23 new, 52 eliminated. Non-general fund: 80 fees proposed to change. Projected $8.4 million in new revenue ($7.7M general fund), with $6.3 million subsidy ($6.2M general fund).
• Department Presentations:
  • City Clerk: Proposed increasing lobbyist registration fees and decreasing passport photo fee to $10.50. Passport execution fee recently updated.
  • City Treasurer: Proposed small increases for disabled placard admin fee and police-regulated ID card fee; decrease payment plan fee; eliminate half-year residential parking permit fee.
  • Real Estate & Airports: Proposed new and increased fees at Montgomery-Gibbs and Brown Field airports to align with industry practices, projected $23,000 additional revenue.
  • Development Services (DSD): Proposed 42 fee changes, including large increases to LEA fees (not updated since 2000) and a $1,000 appeal fee. Estimated $488,000 in additional revenue across funds.
  • Fire-Rescue: Proposed 103 fees: 75 increases, 6 decreases, 3 new, 1 elimination. Increases driven by personnel costs; new fees for large assembly inspections and defensible space inspections. Projected $2.5 million additional general fund revenue, plus $133,000 for junior lifeguard program.
  • Library: Proposed no fee increases; 2 decreases (processing fees for lost items), 2 new rental fees for the City Heights Performance Annex, 5 eliminations. Projected $273,000 revenue.
  • Police: Proposed 60 fees: 48 increases, 3 eliminations, 9 unchanged. Major increases include special event police services (commercial rates to $55/hr non-sworn, $178/hr sworn; nonprofit rates unchanged in FY23, phased discounts of 50% in FY24 and 33% in FY25). Tow franchise fee to $11, ticker fee to $90. No changes to alarm fines. Projected $4.2 million additional general fund revenue.
  • Public Utilities: Proposed modifications to reservoir recreation fees (7 increases, 2 decreases) to move toward cost recovery. Fishing, boat launching, water contact activities would reach 80-90% cost recovery. Projected $430,000 additional revenue.
• IBA Comments: No significant comments, but noted they reviewed the fees.
• Committee Discussion: Councilmembers expressed support for cost recovery but acknowledged hardship on nonprofits, especially after COVID-19. Councilmember Moreno encouraged benchmarking for fire fees. Council President Pro Tem Montgomery Stepp asked about tiered systems for nonprofits. Councilmember Elo Rivera questioned parking fee structure and residential permit limits. Chair Kate emphasized that 40% of fees are staying the same, decreasing, or eliminated.

Item 4 – Parks and Recreation User Fee Revision

• Andy Field (Director) and Shelley Stoll (Deputy Director) presented 263 fees: most partially recovered, only 8% are program fees. Proposed 10.8% CPI increase (since 2015) on most fees, generating $225,000 additional revenue. New opportunity fund fee (hourly charges on park use) to support equity programs in communities of concern. Also proposed recreation center fund fees, credit card processing fees, and elimination of outdated fees. Department will develop written policy for opportunity fund distribution.
• Committee Discussion: Councilmember Montgomery Stepp expressed concerns about lack of clarity in relationships with permittees and historical underinvestment, and voted no. Councilmember Elo Rivera made an amendment to keep Mount Hope low-income burial fees at current levels and request a cost-of-service study for beach parking (city lots), mooring fees, and boat launch fees for non-residents. Councilmember Moreno supported the opportunity fund but urged a written distribution policy and highlighted deep inequities in programming (47% higher spending in northern areas). She also asked for continued work on fee waivers and marketing.

Key Outcomes

• Item 3 – User Fee Analysis: Motion to forward the proposed FY2023 Comprehensive User Fee Schedule to the full City Council for review and approval passed unanimously (4-0).
• Item 4 – Parks and Recreation Fees: Motion to adopt the revised fee schedule with an amendment (maintain current low-income burial fees at Mount Hope and request cost-of-service studies for non-resident beach parking, mooring, and boat launch fees) passed 3-1 (Councilmember Montgomery Stepp opposed). The department will also bring a written policy on the opportunity fund to the Public Safety and Livable Neighborhoods Committee.
• Item 5 – Committee Priorities: Motion to approve the committee work plan based on submitted priority memos passed unanimously (4-0). Key priorities include small business outreach, monitoring expenses and revenues, service level reviews, contract and EOC oversight, and review of COVID-19 relief funds.