City Council

4.3 COST ALLOCATION AND COST-BASED FEE STUDY, AND ADOPTION OF A RESOLUTION APPROVING PROPOSED FEE REVISIONS, ADDITIONS, AND CREDIT CARD TRANSACTION FEE, AND ADOPTING THE FISCAL YEAR 2026–27 MASTER FEE SCHEDULE Executive Summary: The City last comprehensively updated its Master Fee Schedule in June 2018, under Resolution No. 2018.090. The City subsequently adopted targeted fee revisions in June 2023, under Resolution No. 2023.062. Since that time, the cost of providing City services has continued to increase, and a number of the City's user fees no longer reflect the full, reasonable cost of providing the related service, as required by Government Code Section 66016. To address this gap, the City retained Willdan Financial Services to prepare an updated Cost Allocation Plan and Cost-Based Fee Study covering the Planning, Building and Safety, Code Enforcement, Business License, Animal Control, Recreation and Community Services, Facility Rentals, Natatorium, City Clerk, Communications, Human Resources, and Public Works fee schedules. The study calculated the full cost of providing each fee-related service using updated labor rates, department overhead, and central citywide overhead allocated through the City's Cost Allocation Plan, and compared those costs to the fees currently in effect. Willdan reviewed a total of 766 fee entries across ten fee structures, including eight fee structure modifications (seven per-use to per-hour conversions and one flat-fee to contract-rate conversion). Of the remaining 758 fee actions, staff recommends 27 new fees, 493 fee increases, 20 fee decreases, and 218 fees remain unchanged. In addition, staff recommends establishing new citywide Credit Card Convenience Fee for credit card transactions to recover the costs of merchant fees. The City contracted with ClearSource to study the impacts of a credit card processing fee, analyze the surrounding municipalities’ practices, and the estimated subsidy amount of providing this payment option to customers. A summary of the proposed changes, organized by fee schedule, is provided as Exhibit A to the resolution ( Attachment 2). This report and the accompanying resolution refer to Fire Department's Fire-Code Fee Schedule (for services rendered by order of the Fire Code and related fire- and life-safety laws). It is currently codified at LACC Title 32, Appendix QQ : and the Health Hazardous Materials Division (HHMD) for fees charged by the Los Angeles County Fire Department for services HHMD are required to provide businesses. The fees are usually codified at LACC Title 12: These fees remain governed by the Los Angeles County Fire Department's fee schedule under the City's existing service agreement. (CD) Recommendation: Staff recommends City Council: 1. Open the public hearing, receive public testimony, and close the public hearing; 2. Adopt a resolution (Attachment 1) approving the proposed fee revisions and additions identified in the Cost Allocation and Cost-Based Fee Study, establishing credit card transaction fee, and adopting the Fiscal Year 2026–27 Master Fee Schedule, including Exhibit A to the resolution ( Attachment 2); and 3. Direct the City Clerk to file the adopted Fiscal Year 2026–27 Master Fee Schedule and make it available for public inspection at Lynwood City Hall. 5. CONSENT CALENDAR ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION.