TO: The Honorable Mayor and City Council Members

FROM: Charles J. Schwabe, Deputy City Manager

THROUGH: Robert S. LaSala, City Manager

SUBJECT: Potential Fees and Charges for Police Services

DATE: June 13, 2003

COPIES: Ernie Bakin, Director, Public Safety Department

City staff reviewed the current fee structure for fees charged for services provided by the Public Safety Department. This review was completed in response to a request made by Mayor Julia Miller at the June 3 City Council meeting. The review was designed to determine whether either new fees could be established, or existing fees could be raised, for public safety services that would result in additional revenues. Based on an initial review completed by staff, it does not appear that additional, new fees or increases to existing fees will raise significant new revenues. The demand for public safety services where fees are not charged, or for selected services where the City's current fee may be too low, is not great enough to generate significant additional revenue to the City.

Mayor Julia Miller asked at the June 3, 2003 City Council meeting that staff examine whether existing fees could be increased or new fees established to provide additional revenue to fund public safety programs. Currently, the City charges fees for a range of services provided through the Public Safety Department, including permits, emergence responses, vehicle release from impoundment, taxicab franchises, fire and hazardous materials services, and animal control services. Current fees and rate schedules are listed in Attachment A to this report. In addition, several new fees have been recommended, including a false fire alarm fee and a fee for address searches and research. The proposed fee schedule for next fiscal year raises many existing public service fees to reflect increasing costs and inflation.

Staff reviewed the existing or proposed fee schedules from five nearby cities to determine if they have enacted a public safety fee that Sunnyvale is not using, and that could be used to establish a new revenue source to offset the costs of public safety services provided by the City. Fee schedules were examined from Palo Alto, San Jose, Redwood City, Mountain View, and Santa Clara. (See Attachment B). Staff also contacted staff members from these cities and four other Bay area cities to discuss the public safety fees in more detail. Finally, staff also accessed the California League of Cities web site to request information regarding fees used in other California cities to help pay for police, fire, and emergency medical services. Staff also used the information from fee schedule reviews and replies to the League requests to see if existing DPS fees were in line with similar fees and rate schedules in other California cities. Under the current fee schedule, the City projects to collect $500,000 for public safety services this fiscal year.

Staff has completed a very preliminary, initial review of the information collected as of June 12, 2003. (We anticipate that additional information will be provided in response to our League request.) Three key findings emerge based on this initial assessment.

1. The Cities of Palo Alto and San Jose have established fees for more police, fire, and/or emergency medical services than Sunnyvale. For example, Palo Alto charges fees for temporary street closure permits, for registering alarm systems, and for carnivals and circuses. San Jose charges fees for billiard and poolrooms, for copies of police manuals, and for funeral escorts.
2. However, a significant amount of new revenue would not be generated if Sunnyvale incorporated a fee structure that is similar to Palo Alto or San Jose for public safety services. The reason--the number of occurrences or demand for temporary street closures, billiard and pool room permits, funeral escorts and other types of fee based services is too low in Sunnyvale to generate a significant revenue stream. In addition, staff has not determined the administrative cost that would be required to collect revenues. It makes best sense to establish a new fee when both the potential for revenue is high, and the cost of administering the permit and collecting the revenue is low.
3. Staff also examined how Sunnyvale's fee schedule compares with other nearly cities for public safety related services. It appears that the City's existing fees in four areas (concealed weapons permit, firearms sales permit, application for a massage therapist permit, and taxi franchise-related fees) may be "below market". Staff will be submitting a report to council next fiscal year regarding taxi franchise ordinance, which will provide Council with an opportunity to address fee increases at that time. The anticipated demand in the other three service areas is too low to generate significant new revenues. For example, requests for concealed weapons permits are referred to the Santa Clara County Sheriff's for processing.

Staff will continue to review existing fees schedules for public safety services as part of annual updates to the City's fee schedule, and in response to any additional policy direction provided by City Council.

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