HomeMy WebLinkAbout16 - Approval of Short Term Lodging Permit and Renewal FeesQ SEW Pp�T
CITY OF
z NEWPORT BEACH
c�<,FORN'P City Council Staff Report
September 22, 2020
Agenda Item No. 16
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dan Matusiewicz, Finance Director - 949-644-3123,
dmatusiewicz@newportbeachca.gov
PREPARED BY: Theresa Schweitzer, Senior Accountant
tschweitzer@newportbeachca.gov
Monique Navarrete, License Supervisor
mnavarrete@newportbeachca.gov
PHONE: 949-644-3148
TITLE: Resolution No. 2020-85: Approval of Short Term Lodging Permit and
Renewal Fees
ABSTRACT -
On July 14, 2020, the City Council adopted Ordinance 2020-15, approving a revision to
the short term lodging ordinance. The amendment requires additional staff oversight
related to regulating the short term lodging program. Consistent with City ordinance and
policy, staff recommends the establishment of a user -based cost -of -services fee, to be
paid with the submission of a short term lodging permit or renewal permit application in
order to recover the cost of the administration of the program, as well as the third party
24-hour/seven days per week (24/7) live operator hotline. The proposed fee for the initial
permit application is $169 and for the annual renewal the fee is $96.
RECOMMENDATION:
a) Conduct a public hearing to receive comments on the initial Short Term Lodging
Permit and Short Term Lodging Permit Renewal fees;
b) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
c) Adopt Resolution No. 2020-85, A Resolution of the City Council of the City of Newport
Beach, California, Modifying the Schedule of Rents, Fines, and Fees and Adopting
Short Term Lodging Permit Initial Fee and Renewal Fee.
FUNDING REQUIREMENTS:
Staff estimates that these fees, if approved by Council as recommended, will amount to
approximately $112,234 in additional revenues annually. If the fees are not approved as
proposed, the additional costs will be subsidized by the General Fund.
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Resolution No. 2020-85: Approval of Short Term Lodging Permit and Renewal Fees
September 22, 2020
Page 2
DISCUSSION:
BACKGROUND
In response to an increasing number of short term lodging permits, and an increasing
number of resident complaints, the City Council adopted Ordinance 2020-15, which
substantially amended Newport Beach Municipal Code (NBMC) Section 5.95, the City's
short term lodging ordinance, for the first time in 15 years. This new ordinance
incorporated suggestions from both residents and short term lodging property owners,
balancing the needs of both, in order to allow for continued short term lodging rentals,
while also maintaining the quiet residential character of Newport Beach neighborhoods.
The Ordinance provided new requirements for short term lodging, some of which include:
1) Owner must disclose the number of parking spaces available on-site;
2) Occupancy is limited to the maximum permitted by the Building Code and Fire
Code;
3) Owner must provide a nuisance response plan; and
4) Advertisements for short term lodging must contain the permit number provided by
the City.
In addition to the above requirements, the City will provide a 24/7 live operator hotline to
receive and track any neighborhood complaints related to short term lodging activity.
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The Finance Department and Community Development Department staff will administer
the program to ensure compliance. Business licenses and short term lodging permits are
required prior to advertising and operating a short term lodging unit. The annual short
term lodging permit renewal is due annually, every October 31.
Permit renewals were introduced in 2018 to ensure that owners acknowledged the short
term lodging conditions associated with their permits. However, no fee was charged while
staff evaluated the renewal process and studied the fee.
In order to implement the new ordinance, staff must now review all applications and
renewals for compliance with the new requirements listed above. The proposed fees
include staff time, including one part-time senior fiscal clerk in the Finance Department
who is now fully dedicated to the short term lodging program, as well as additional time
from other City staff to support the short term lodging program, which includes, but is not
limited to, setting up and billing the accounts, processing payments, and responding to
complaints. The fees also include the cost of monitoring home sharing web platforms
and the 24/7 live operator hotline. An initial short term lodging permit fee of $104 is
currently charged to the applicant. The proposed fee for the initial permit application is
$169, an increase of $65, and the proposed fee for the annual renewal is $96. The fees
do not include costs related to Code Enforcement at this time.
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Resolution No. 2020-85: Approval of Short Term Lodging Permit and Renewal Fees
September 22, 2020
Page 3
As staff continues to implement the short term lodging program, staff will study and update
the fees accordingly. In the future, the fees may be revised to include additional Code
Enforcement time. Staff will return to City Council for any further fee adjustment.
Pursuant to NBMC Section 5.95.040, a fee shall be established to accompany the
application or renewal application for a short term lodging permit, to defer the cost
incurred to administer the provisions of the program, and for providing the 24/7 live
operator hotline. NBMC Section 3.36.030 provides that the cost recovery percentage
appropriate for each user fee shall be one hundred percent (100%) of the cost of the
program, with the exception of fees that are subsidized under NBMC Section 3.36.030
Exhibit A, and those services for which the fee is limited by statute. A recommendation
for less than one hundred percent (100%) cost recovery rate occurs, for example, when
a service is beneficial to the community at large, or when there is an economic incentive,
or disincentive, to do so. In those cases, the General Fund subsidizes the service.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to Government Code Section 66018(a) (two
publications with at least five days intervening between the two dates), Government Code
Section 66016(a) (notice mailed at least 14 days prior to the meeting to any interested
party who files a written request) (mailed notice to Building Industry Association of
Southern California, AT&T, Southern California Edison, and Southern California Gas
Company on September 8, 2020), and the Brown Act (72 hours in advance of the meeting
at which the City Council considers the item).
ATTACHMENT:
Attachment A — Resolution No. 2020-85
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Attachment A
Resolution No. 2020-85
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RESOLUTION NO. 2020-85
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH, CALIFORNIA, MODIFYING THE
SCHEDULE OF RENTS, FINES, AND FEES AND
ADOPTING SHORT TERM LODGING PERMIT INITIAL FEE
AND RENEWAL FEE
WHEREAS, on July 14, 2020, Ordinance No. 2020-15 amended Chapter 5.95 of
the Newport Beach Municipal Code ("NBMC") relating to short term lodging, which
resulted in additional staff oversight;
WHEREAS, NBMC Section 3.36.010 (Findings) provides that services and
programs that primarily benefit a person requesting the service are traditionally funded in
whole, or in part, from fees charged to the person who initiates the service;
WHEREAS, Exhibit A of NBMC Section 3.36.030 (Cost Recovery Percentages)
contains cost recovery percentages for specific services, and provides that the City
Council may modify the fee resolution upon a determination that there has been an
increase or decrease in one or more cost factors relevant to the calculation of the actual
cost of providing the service;
WHEREAS, on May 28, 2019, the City retained MGT of America Consulting, LLC
("MGT") under a Professional Services Agreement to prepare the cost allocation plan and
cost -of -services studies for the City ("Agreement"),
WHEREAS, pursuant to its Agreement, MGT has conducted cost -of -services
studies for the City; and
WHEREAS, pursuant to its Agreement, MGT has determined an updated cost
incurred by the City for short term lodging permits (initial and renewal) due to the
additional staff oversight required.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
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Resolution No. 2020 -
Page 2 of 3
Section 1: The City Council hereby revises the Schedule of Rents, Fines, and
Fees ("SRFF"), in part, as set forth in Exhibit 1, attached hereto and incorporated herein
by reference. Except where prohibited by law, all fees of five dollars ($5.00) or more shall
be rounded down to the nearest dollar and fees less than five dollars ($5.00) shall be
rounded down to the nearest quarter. Except as explicitly revised by Exhibit 1, all other
provisions of the SRFF shall continue in full force and effect.
Section 2: As set forth in Resolution 2020-29, the first CPI adjustment to fees
and charges adopted by this resolution, as set forth in Exhibit 1, shall commence on July
1, 2021.
Section 3: Any portion of any prior resolution that is in conflict with this
resolution is hereby repealed and of no further force or effect.
Section 4: The recitals provided in this resolution are true and correct and are
incorporated into the operative part of this resolution.
Section 5: If any section, subsection, sentence, clause or phrase of this
resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this resolution. The City
Council hereby declares that it would have passed this resolution, and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
Section 6: The City Council finds the adoption of this resolution is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3,
because it has no potential for resulting in physical change to the environment, directly or
indirectly.
IR
Resolution No. 2020 -
Page 3 of 3
Section 7: This resolution shall take effect immediately upon its adoption by the
City Council, and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this 22nd day of September, 2020.
Will O'Neill
Mayor
ATTEST:
Leilani I_ Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
;; - � C.
Aaron C. Harp
City Attorney
Attachment: Exhibit 1 —Revision to the Schedule of Rents, Fines, and Fees— Short Term
Lodging Permits (Initial and Renewal)
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Exhibit 1 - Revision to the Schedule of Rents, Fines, and Fees - Short Term Lodging Permits (Initial and Renewal)
Current Charges Proposed Charges
® P.11— 1 —i.l I Adiuctment Fram P-1— Vcar Full CasVMarl i,t Value
SERVICE NAME DESCRIPTION Total or Basr Fer Incremental - Total or Base Fee lncremental - Total or Base Incremental
(il appllcahle} lif applicable] Fee
REFERENCE riPE Total or Base Incremental - CEJNotrs
Fce If applicable]
Implementation
D.I.
FINANCE
Revenue
Short Tetm Lodging Permits - Initial Permit 5 104.00 S 159.00 $ 65 a0
M C- 5,95.040 COS -Fee 5 169.39 res
9/22/2024
Shon Term Lodiling Permits- Renewal Permit N/A S 96.00
M.C. 5.95, 040 COS -Fee 5 96.41 Yes New Fee 2020
9122!2020
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