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8A Page 4 At the March 6,2006 meeting the committee made recommendations for all the existing permits and some proposed new permits; and they asked staff to evaluate a variety of methods to adjust fees over time. At the March 20,2006, meeting staff recommended that fees and charges be indexed to staff cost increases, adjusted to July 1, 2006, to reflect the passage of time since the May 2005 survey of costs was conducted. The other indexing methods considered were: the Construction Cost Index; and the Consumer Price Index (CPI). The Construction Cost Index was eliminated because the firm that had been tracking this data for many years had apparently discontinued collecting data. The CPI was considered but the Committee felt that staff cost was the best index, since the City's costs for delivery of service largely consist of staff cost. Analysis of Cost to Deliver Service The Government Code mandates that the City's fees and charges must not exceed the City's actual costs to deliver the service. Accordingly, during 2005 the planning staff developed and implemented a system to monitor costs for issuing permits. From January to May 2005, the amount of time spent on each permit type was recorded. At the end of the sample period the total hours spent on each permit type were added and then divided by the numbers of each permit type issued during the sample period, to give an average number of hours for each permit type. As one example, the planners spent a total of 426 hours on 21 Use Permits during the sample period. This meant that staff spent an average of 20.3 hours on each Use permit. The City had developed billing rates for the planners as part of the Cost Recovery Program. In 2004-05 this billing rate was $118.84 per hour. Multiplying the average number of hours (20.3) per permit by the billing rate of $118.84 indicated that the City's real cost to provide the service involved in issuing a typical use permit was $2,412 (20.3 hours x $118.84 per hour = $2,412). This cost to deliver the service is based upon 2004- 05 information. Staff costs have increased since the original survey, and the service costs for a typical use permit using 2006-07 budget data are now $2,646. The recommended use permit fee is $2,630. Attachment 1 to this report provides the detailed calculations for all the permit types for which fees are proposed. In the case of deposits, the amount of the deposit is based upon the City's estimate of the amount of time that the initial review will take. The initial deposit and the estimated amount of time for initial review are as follows: . $500 . $1,000 . $2,500 . $5,000 4 hours 8 hours 20 hours 40 hours The Minor Project Cost Recovery Policy proposed in Exhibit 1 to the Resolution further describes the process for estimating required deposits. This report and its attachments are intended to provide the data on the costs to provide planning services required by 4