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8.B. - Page 2 of 72 BACKGROUND In June 2016, the City entered into a professional services agreement with Matrix Consulting Group ("Matrix") to conduct a two-phase Comprehensive Fee Study ("Fee Study") as part of the City's goal for improving cost recovery services for all City services, including services related to special events. It is the general policy of the City to charge for the full costs of services provided by City staff when such services benefit individual users (such as those attending community events) rather than members of the community as a whole. The Fee Study identified the fully burdened cost for staffing and review time to issue various permits. These calculations were then used to identify the true cost of providing City services for special events and recommend revisions to any fees associated with these special events to ensure cost recovery. Between June and November 2016, Matrix held numerous meetings with City staff and conducted interviews to confirm the actual amount of staff time expended to provide each specific service. Once Matrix determined the amount of staff time spent providing a service, all applicable City costs were considered in the calculation of the fully burdened cost of providing each service. The three major cost components in determining the fully burdened cost of providing services included: 1) direct staff time and materials, 2) department and citywide overhead (based on the City's Cost Allocation Plan), and 3) direct and indirect costs from other divisions to provide the service. The Fee Study created well- documented and defensible fees based on sound public policy goals. On February 27, 2017, the City Council held a Study Session to review the first phase of the Fee Study, including a proposed fee schedule and preferred cost recovery levels from the Community Development, Fire, and Police Departments. The City Council provided feedback on the proposed fee schedule and preferred cost recovery levels and requested that staff conduct public outreach efforts related to the proposed fee schedule. Members of the City Council and the public expressed concerns about fees related to small businesses, homeowners, historic preservation, and nonprofit organizations. A number of recommended fees were modified in order to address these concerns. On April 9, 2018, the City Council approved a resolution amending and adopting certain Community Development Fees and new special event fees for the Fire, and Police Departments. The schedule of fees in the resolution aimed to capture the true cost of providing City services, which included fees related to processing special event permits and included additional review and inspection fees by the Police and Fire Departments. The Parks, Recreation and Community Services Department works closely with several nonprofit organizations to host special events at Courthouse Square and throughout the downtown area that are open to the entire community. These events include Circulo Cultural's Dia de los Muertos event, the Downtown Business Group's Hometown Holidays, the Lebanese Festival, Police Activities League Music Festival, the Redwood City Education Foundation's OktobeRun, Redwood City International/Latino Leadership Council's Fiestas Patrias and Peninsula Celebration Association Fourth of July parade. At the time the new fees were adopted, the City Council recognized the impact the new special event fees would have on nonprofit organizations and appointed an Ad Hoc Committee to look into whether a different approach should be taken for nonprofit organizations. On August 27, 2018, the City Council approved a delay in the application of the new special event fees for further study. City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org 194