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ADOPT A RESOLUTION TO AMEND THE CITY OF STOCKTON FEE SCHEDULE TO ALIGN WITH STATE MANDATED LIMITS FOR SOLAR PERMIT FEES
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Approve an amendment of the Fiscal Year 2022-23 Fee Schedule to adjust the rates collected for Solar Photovoltaic Fees to comply with state law.
2. Authorize the City Manager to take appropriate and necessary actions to carry out the purpose and intent of this resolution.
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Summary
During the Community Development Department’s (CDD) process of implementing the new fee rates approved by Council in the FY 2022-23 Fee Schedule, staff discovered that:
1. In 2018 the State of California reduced the maximum fee that local agencies can charge for residential solar installations. Staff determined that 80 permits that had been charged $50 more than the maximum amount allowed by the state.
2. The 4.5% increase to all CDD permits adopted by the FY 2022-23 Fee Schedule would have made fees for certain solar projects non-compliant with the State-set maximums.
Upon consultation with the City Attorney, staff determined that the State mandated limits preempt the local agency fee amounts. As a result, staff immediately adjusted the amount being collected to align with the State-mandated limits.
Staff is in the process of issuing refunds on the 80 overcharged permits. The proposed resolution to update the Fee Schedule will bring Stockton’s Fee Schedule into compliance with the State-set limits to these permits and will match the rates currently being collected by CDD.
The proposed fee adjustments impact large Residential projects and Commercial projects, which combined account for only 3% of Stockton’s total solar permit volume. The other 97% of Stockton’s Solar permit volume is for Residential projects under 15 kw in size which will be unaffected by this action.
DISCUSSION
Background
Effective January 1, 2018, California Government Code Section 66015 set limits on certain solar permit fees that local agencies may charge for new solar projects. As of that date, the maximum allowed rate for residential projects was decreased $50 from $500 to $450 for projects up to 15kw (Assembly Bill 1414, approved on October 15, 2017)
This change to the Government Code was not realized by staff until July 2022, after the FY 2022-23 Fee Schedule was adopted, but before the adopted fee changes went into effect on August 21, 2022. Upon detailed review by staff, 80 permits were previously charged a fee above the State of California’s maximum allowable fee by $50 each.
Staff verified City of Stockton’s Commercial solar fee rates and confirmed the rates were set at the maximum allowed by the State mandated limits through August 20, 2022. However, Council’s recent approval of CDD’s FY 2022-23 4.5% increase to all fees raised these fees above this threshold. The issue was caught prior to the fee schedule changes going into effect on August 21, 2022 and staff has not been collecting more than the maximum rate that the State of California allows. Staff’s recommended Fee Schedule amendment action also includes updates to all Commercial solar project fee rates, bringing them back into alignment with state set limits (Attachment A - Proposed Solar Fee Schedule Change - Redline Version).
Present Situation
Upon becoming aware of this discrepancy, with advisement from the City Attorney, CDD staff immediately began collecting fee rates that are compliant with the State-imposed maximums. Staff is in the process of issuing refunds to the 80 Residential permits that were charged $50 over the maximum allowable amount.
The proposed Resolution will update the City’s Fee Schedule to comply with the State of California’s maximum allowable fee rates. Therefore, it is recommended that Council adopt a resolution to approve an amendment of the Fiscal Year 2022-23 Fee Schedule to adjust the rates collected for Solar Photovoltaic Fees to comply with state law.
PUBLIC NOTICE
A Public Notice of this hearing was published in The Record on January 27th, 2023.
FINANCIAL SUMMARY
The requested action would adjust the fees in the City of Stockton FY 2022-23 Adopted Fee Schedule according to the following table:
|
Solar/Photovoltaic Fee |
FY 2022-23 Adopted Fee Schedule Rate |
Proposed Rate |
Increase (Decrease) |
|
Residential (below 15 kw) |
$314 |
$314 |
- |
|
Residential (above 15 kw) |
$523+$15 per kw above 15kw |
$450+$15 per kw above 15kw |
($73) |
|
Commercial (50 kw or less) |
$1,045 |
$1,000 |
($45) |
|
Commercial (50 kw-250 kw) |
$1,045+$7 per kw above 50kw |
$1,000+$7 per kw above 50kw |
($45) |
|
Commercial (More than 250 kw) |
$2,508+$5 per kw above 250kw |
$2,400+$5 per kw above 250kw |
($108) |
The refunding of the 80 Residential permits of the $50 that they were overcharged will result in a total amount of $4,000 paid from the Construction Permits Revenue account, which is the same account the fees were originally deposited into.
Based on the amount of the requested fee adjustments and the low volume of impacted permits, CDD staff do not anticipate a material impact to the Department’s fee revenue.
Attachment A - Proposed Solar Fee Schedule Change - Redline Version