Council approves various fees changes, directs staff on policy to prevent abuse of reservation system prompted by use of human lift at public dock

By SARA HALL

City Council this week unanimously approved various fee changes and directed staff to administratively add a policy that penalizes individuals who abuse a city reservation or rental system or repeatedly waste staff time.

Councilmembers voted 7-0 on Tuesday (April 23) in support of an ordinance and resolution revising, adding, or increasing certain fees within the finance, harbor and public works departments. The action also authorized the waiver of vehicle tow fees, adopted a credit card convenience fee and updated the methodology for annual Consumer Price Index calculations.

The most discussed items were:

–A proposed deposit/late cancellation fee for use of the human lift at Marina Park and the Balboa Marina public dock, which was ultimately rejected in exchange for an administrative approach to add language to city code for a possible fee or prohibiting or limiting future use if a user abuses a city reservation or rental system or repeatedly wastes staff time.

–The implementation timeline for a credit card convenience fee of 2.85% for online credit card payments for utilities, which a majority of council ultimately decided should start in July (and will show up on September to October bills). The fee will be phased in for all other departments over the coming months to year.

The city performs an annual study of user fees and charges to ensure that they do not exceed the cost of providing services, explained city Budget Analyst Abigail Marin. The study focuses on specific departments on a rotating basis so each department is reviewed every three to five years. During fiscal year 2023-24, the city’s consultant, ClearSource Financial Consulting, was directed to analyze the finance, harbor, public works and utilities departments, following a cost recovery analysis.

ClearSource met with department staff to discuss the services provided, the annual volume for those services, and the staff resources and time estimates for delivering the related services. The company then calculated the department staff’s fully burdened hourly rate, which includes both internal administrative as well as citywide overhead costs.

Staff presented the fee study updates on March 12 to the Finance Committee. They recommended the updates move forward as presented.

The fee updates will result in approximately $581,000 of additional revenue to the city next fiscal year, Marin said. There are also a number of fees that are decreasing across the study departments due to streamline operations and more efficient processes, she noted.

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File photo courtesy of City of Newport Beach

The city has a reservation system to use the human lift at Marina Park

In the harbor department, staff initially proposed a deposit/late cancellation fee of the human lift, $31 for use at Marina Park and $117 for use at the Balboa Marina public dock (requires more resources than deployment at Marina Park due to the transport required to the location).

Mayor Will O’Neill noted that, as the council was in session, they received a letter from local Orange County Supervisor Katrina Foley. She had not reached out to prior to the meeting, he pointed out.

On social media on Tuesday, Foley announced that she submitted a letter (dated April 23) of formal opposition to the city’s proposed fee for the ADA accessible lift.

“This lift will provide disabled users of the public dock with affordable access to the facilities on public tidelands,” she commented.

In the social media post, Foley claimed that the proposed fee would “create significant financial barriers for persons who already face physical barriers to dock access and may be in potential violation of the ADA, the tidelands act, and the city’s lease with the County of Orange for the docks.”

In Foley’s letter to council, she wrote that the justification for the proposed fee “does not take into account medical or personal emergencies that may be beyond a user’s control.”

Quoting a section of the lease agreement between the county and the city for the public tidelands, she pointed out that the city is required to facilitate access and use of the public docks and to vessels tied there for disabled and handicapped boat users, including those in wheelchairs. The agreement also requires the city to provide a means for the public to reserve use of the wheelchair lift. Foley notes that while the lease section does not specifically mention the ability for the city to charge a fee, “the implication is that the lift should be open and available” to these users.

“Creating an onerous fee structure that would impair the access to the lift could be contrary to this lease provision and the very idea of creating ADA accessible accommodation,” Foley wrote in the letter.

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O’Neill asked Harbormaster Paul Blank if the proposed fee actually creates a significant financial barrier for people to access the docks or if it is potentially in violation of the polices and agreements that Foley mentioned.

“I don’t believe we are,” Blank responded. “I believe the proposed fee, which is not really a fee, it is a deposit in association with a reservation for use of the human lift. If the reservation is honored and the lift is used as reserved, the deposit will be returned. This is specifically put out there as a deterrent for people irresponsibly using the reservation system for the lift and causing staff to deploy the lift and then not have it used.”

Several councilmembers asked about a potential hardship waiver, if the city would refund the deposit if a person had a health or medical emergency and had to cancel.

There is also “absolutely” room for the deposit money to be returned for those reasons or even for a weather-related reason, Blank confirmed.

There’s nothing currently written as a policy that would specifically cover this issue, as the deposit is new and was only recently introduced, Blank commented.

“However, we do – in all cases – take into account the unique circumstances for any reservation we take, whether it be for a slip, a mooring, or use of the human lift. And we have the discretion to waive those fees or refund deposits whenever it seems reasonable,” Blank said. “Our aim is to keep the harbor clean and safe and well enjoyed. The use of the human lift is a huge component in keeping the harbor well enjoyed and it is our intent to see that it is properly well enjoyed.”

City staff received only one email asking about the policy regarding the lift, Blank confirmed. The policy for use of the lift, reservation form, conditions for use and the liability waiver are all published on the website, he noted.

“It’s all very clear how the lift could be reserved and what its policy for use is,” Blank said.

He appreciated the clarification on the issue, O’Neill commented.

“It’s disappointing to have a representative misrepresenting a proposal from staff,” O’Neill said.

Blank explained that the proposal for the fee was prompted by a single user who was repeatedly absent at the times they scheduled to use the human lift.

“One of the lift’s most frequent users has made reservations in the past and then not honored them,” and either didn’t show up or canceled within an hour of the scheduled use, Blank said.

By that time (within 60 minutes of the scheduled use), the lift has been deployed, the staff time has been spent and the city resources have been expended, he noted.

“We felt that that was irresponsible,” Blank said. “We felt that this new deposit would curb that bad behavior.”

The most reservations this individual has made in a single month is six and only showed up for two in that example, Blank said. Although that is not a regular occurrence, he added. So far in this calendar year, this individual has made three reservations and honored all of them, Blank noted.

But by misusing the system so often in the past, the single bad user will “consume resources that otherwise could have been used to provide services to others,” he commented.

“For the particular heavy user of the lift, we are no longer interested in providing services unless he is committed to making use of them. It is simply protecting all of your tax dollars and the people’s resources that we are putting this one fee in to address the bad behavior of a single user,” Blank said.

It’s unfortunate the abuse of the system and waste of staff time that has occurred in the past, commented Councilmember Erik Weigand, but he also doesn’t like the idea of creating this fee due to a single user.

Other councilmembers tended to agree that a deposit or fee to use the lift didn’t seem to be the right solution in response to one user.

It’s unfortunate that they have these circumstances, but they also need to balance it with the potential impacts of this proposal, said Councilmember Robyn Grant.

“I understand the frustration that you would have and your concern with adequately applying the resources of our community fairly,” she said.

They might want to consider using a softer touch and try to find a good working situation with the individual, she suggested. She’s not in favor of it at this juncture, but they might re-visit the idea later if there’s more inadequate use of the facility when it’s been reserved, Grant said.

“I’m hoping that we can be patient with the community and come to some sort of navigated result that doesn’t require us to have this deposit and then, again, the ultimate ramifications, the ripple effect, of having it and how it can be perceived,” she said.

The solution may be including language in the city code that if someone abuses a city reservation system or repeatedly wastes staff time they are no longer able to utilize the service, O’Neill suggested. It shouldn’t be specific to this use, he added, it should be generally applicable for other city rentals, reservations, and services that requires staff time and resources.

That might be the better approach instead of a fee that’s specific to this issue, he said.

There is a municipal code provision that allows for certain policies and procedures to be adopted administratively, confirmed City Attorney Aaron Harp, so adding that to city code can be handled by staff.

Some people might be deterred by the fee and the expectation that the city will refund it, resident Jim Mosher pointed out during public comment. He suggested an alternative idea to include a warning with the reservation system that if a person fails to show they will be assessed a fee and then it would be on the harbor department to collect it.

In a straw vote, the council agreed not to collect the proposed fee/deposit, but instead move forward with an administrative approach.

Also in the harbor department, other new or changed fees include:

A $377 towing fee for abandoned/impounded boats over 14 feet but less than 25 feet.

–Rhine Wharf permit for $28.

–A $498 fee for variance applications for requests specific to the harbor (limited applicability to dock, pier permits and other structures over tidelands). Use of electrical cord and/or adapter while at Marina Park for $10.

–Purchase (non-return) of electrical cord or adapter for $75.

–Mooring size exchange fee of $302 for mooring permittees if the city reconfigures one or more mooring fields.

–Mooring license application fee of $26.

–Mooring license waitlist fee (one time or annual) of $34.

–$502 fee for group/exclusive use for Marina Park.

–A $200 fee for mooring assists after hours.

The fees in the harbor department would result in a revenue increase of approximately $20,000.

Another fee that was discussed at length during Tuesday’s meeting was the credit card convenience fee of 2.85% for online credit card payments for all departments.

“This fee will be phased in across all departments to allow time for outreach to communicate the change,” Marin said.

The 2.85% is an average of the fees that were studied over the past year for credit cards that have been used to pay for their utility bill, Al-Imam explained.

“We started looking at this for utility bill payments because we found that we’re paying about a half a million dollars on credit card fees for utility bill payments,” he noted.

It would start with utility bill payments, since that’s the largest amount of money being paid towards credit card fees. The fee goes into effect on July 13, said Finance Director/Treasurer Jason Al-Imam, but since utility customers generally pay their bills bi-monthly, it wouldn’t be implemented until the September to October timeframe, which would allow sufficient time for staff to notify customers with messages on their bills.

After implementing it in utility billing, staff would start working on other departments, Al-Imam said, and it could potentially take several months to maybe even a year or two to completely phase in. The new fee would apply to all online payments made using a credit card.

Weigand suggested waiting to implement the fee until January 1.

“If you don’t heed the messaging for that September bill, it’ll just be built in because you wouldn’t have updated your credit card information, so you would essentially be paying 2.85% in addition to your bill,” Weigand said. “It would be nice to give a little bit more time.”

O’Neill noted that the faster the transition happens, the sooner the fees currently collected by the credit card companies will instead be invested into the city.

“This is a lot of money that should actually go toward either infrastructure or the water (service) itself or the service side of the labor, and instead it’s going to credit card companies. I’d really like it go toward what we’re actually trying to provide instead of to credit card companies,” O’Neill said.

In a straw poll, councilmembers voted 6-1 to start the fee in July, as staff recommended. Weigand was the dissenting vote.

Tuesday’s action also made a number of other changes to various fees.

In the finance department, there are some notable decreases (due to improved systems and streamlined processes) in fees, including the business license initial application (in person), Sidewalk vending permit application and sound amplification permit.

Due to an increase of staff involvement with code enforcement regulation, the initial and renewal fees for short-term lodging permits are set to increase. Staff recommended a phased-in approach to full cost recovery over a two-year period to mitigate the impact of the increase in short-term lodging permit fees to the customer.

There are also two new fees for this department: Business license initial application (online) fee of $6; and taxicab operator license fee (after the county program that previously regulated taxi operations dissolved in 2020) with a company permit fee of $1,660, a vehicle permit (per vehicle) fee of $1,399 and a driver permit fee of $1,660.

The finance department fees will have an overall fiscal impact of $171,000 in increased estimated revenues.

In the public works department, there are also a few fee changes.

An additional engineering field inspection fee will be applied with a street closure permit that requires a field inspection.

Recycling service fee of $6.39 per residential unit, per month. This fee would replace the two existing fees with one combined fee.

A construction and demolition fee would make changes to the presentation of the current fees, distinguishing between complete demolition deposit and construction demolition deposit for a series of valuation ranges as identified in the proposed schedule. The construction and demolition deposits are intended to encourage compliance and are refundable if the applicant uses an approved franchise hauler and arranges for an inspection. Should the applicant fail to meet conditions required on the permit, the deposit would be subject to forfeiture. Having two distinguishing fees will aid in achieving waste diversion compliance with state regulations.

An increase of $66,000 in estimated revenues is anticipated for the public works department.

There are only two new fees for the utilities department (other than the credit card convenience fee, which is for all departments):

A fee that consolidates a base of $53 plus a pass-through of the actual cost of materials for a meter, box, lid, etc.

A fee of $52 for remote activation of water and sewer services establishment (decrease because it requires less staff time than onsite activation).

The fee changes will result in an estimated decrease of $115,000 in revenues for the utilities department.

Although not scheduled for a comprehensive fee study, some city departments requested specific fee changes.

The information technology department recommended an hourly rate for A/V technical support related activities for both business hours and non-business hours at $144 and $173, respectively. This fee is intended to be charged in any instance in which an additional level of IT support is required, for example, on-site IT support associated with facility rentals.

The Newport Beach Police Department will rename the civil subpoena fee to civil subpoena (per day; per employee) and include language to clarify that actual cost will be charged in addition to $275 per day. This fee is utilized when any staff member is requested to appear in court for administrative hearings, civil trials, court actions, etc. Actual amounts paid would be calculated in accordance with California government codes.

The police department also revised the fee structure for towing and vehicle release/repossession fees:

–Eliminate the tow operator fee.

–Customer fee increased from $110 to $156.

Vehicle release fee increase from $20 to $29.

The community development department requested minor revisions to descriptions and adding a footnote to the banner permit fee.

The vendor transaction fee for online payment processing will be renamed as the parking meter mobile application payment processing fee.

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Sara Hall covers City Hall and is a regular contributor to Stu News Newport.


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