Tuesday, June 27, 2023

My 6.26.23 Special Meeting Summary

Yesterday afternoon the Council met for a Special Meeting (off cycle) in order to address questions from Council regarding the Master Fee Schedule proposed update directed towards our consultant who was unable to attend the previous regular meeting when this item was agendized. Approval of the proposed fee schedule was not on the agenda as any change to our Master Fee schedule requires a regularly scheduled publicly noticed hearing at least 14 days in advance with the proposal more fully fleshed out. This meeting was for Council to ask questions, discuss, and provide direction to staff.  We are targeting the approval of the update to the fee schedule to take place on August 15.

Due to time constraints regarding retaining a quorum of the Council, public comment was limited to 1.5 minutes instead of the usual 3 minutes. In addition, because this meeting was off cycle, our regular meeting place was unavailable, therefore we met in City Hall.

Questions posed by Council were largely the same as had been asked previously. During our 6.6.23 meeting when we last discussed this, our City Manager stated multiple times that certain questions being asked were matters of policy that the Council sets, not questions of law or process, and that the consultant would largely give the same answer. That is in fact what happened and rather than focus on the actual policy, a significant amount of time was spent asking questions regarding who asked who to do what and who talked to whom, or why during edits of drafts did certain words change and who asked for those changes.

Ultimately the Council engaged a consultant to assess the adequacy of our Master Fee Schedule and propose changes to do two things:

1. Ensure the fees were based on a full recovery method, including direct costs such as salaries and benefits, indirect costs such as departmental administration costs, and citywide support costs such as accounting, personnel, data processing, vehicle maintenance, and insurance.

2. Bring forward a proposal for fees for Special Events including a discount for Clayton based non-profits. 

The proposed update to the Master Fee Schedule did both of these things.  Fees for various services like a tree removal permit, or a building permit were adjusted to reflect actual costs. In addition, a new category of fees for Special Events was created. This would be applicable for a large event that would require streets to be closed, such as Oktoberfest or a parade. For those types of events with 100 participants or greater, a daily Special Event Fee was proposed that would be based on the number of participants, with the smallest tier at $700 for up to 499 participants, and $10K for events with 5,000 participants or greater.  Based on our last  direction at the 6.6.23 meeting, staff also included in this proposal a Special Event discount suggested at 20% for Clayton based non-profits.

Any discount off of stated rates is a policy decision that Council can make.  Discounts represent taxpayer subsidies and should be made judiciously.  We offer discounts in a variety of ways throughout the fee schedule - typically for those that reside in Clayton vs. those who do not.  Endeavor Hall offers a steep discount as the intent of Endeavor is to be a meeting place of residents, and to support the Arts - the uses of which do not typically generate net income.

For the past 15 years, there has been a Master Use Agreement (MUA) between the City and the CBCA whereby virtually all fees for using public property and facilities were waived during Special Events.  Earlier this year the City terminated this MUA, effective July 1, 2023.  The City's regular practice allows permits and reservations to be made up to 1 year in advance locking in the fee method at that time.  Prior to the expiration of the MUA, the CBCA pulled permits for the next year's worth of events, locking in the waiver of virtually all City fees, as is their prerogative under the City's practice and the MUA that is set to expire in a few days.

As an example of the magnitude of figures that are relevant:  for Art and Wine 2022, BBQ 2022, Oktoberfest 2022, and Art and Wine 2023, this portion of direct staff charges paid to the City were $9,888, $6,676, $10,369, and $9,075, respectively.  The fees waived under the MUA for each event represented approximately $5K - $7K.  In comparison, the revenue for the first three events were $284K, $95K, and $281K, and after associated expenses inclusive of the staff time noted above, net income of $137K, $24K, and $115K.

During discussion, Vice Mayor Diaz suggested a two tier discount methodology offering a greater discount to Clayton based non-profits, and a smaller discount to non-Clayton based non profits.  Councilmember Cloven suggested a 50% discount which the majority of the Council felt was too large.  Councilmember Tillman suggested a 40% discount as a compromise which was higher than the majority of the Council was comfortable with.  Ultimately the Council directed staff to update the proposed fee schedule increasing the discount for Clayton based non-profits from 20% to 30%, and to add a 15% discount for non-Clayton based non-profits.  The vote was 3-2, with Councilmembers Cloven and Tillman voting no.