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Staff Report

January 9, 2018

TO: Honorable Mayor and City Council Members

SUBMITTED BY: Sharon Friedrichsen, Director of Budget and Contracts

APPROVED BY: Chip Rerig, City Administrator

SUBJECT: Consideration of revised fees for special events and activities.

1. Approve the special event fee schedule
2. Approve definition of “Neighborhood Block Party”
3. Ratify Veteran’s Day, Memorial Day, Homecoming Parade, Sandcastle Contest, and Breakfast with the
Bunny as historic City Events exempt from special event fees
On November 7, 2017 and December 5, 2017 Council received reports on special event fees and provided
direction to staff regarding these fees. The genesis of this discussion was the completion of a cost of services
study in 2016 that examined the City’s cost of providing various services and identified options for adjusting fees
in order to more equitably finance services. Council has the authority to determine the amount of fees to be
charged for these services and adopt a fee schedule that would apply to applicants seeking a special event or
activity permit.

Event Fees and Subsidies

At the December 5, 2017 Council meeting, Council was provided with a series of options based on full cost
recovery of all services and potential subsidies to those services based on certain criteria. After reviewing these
options, Council directed staff to return with a fee schedule which includes: (1) 100% cost recovery for Permit
Fees for all event applicants and a 75% subsidy of those fees for events sponsored by non-profit organizations
or schools; (2) 100% of proposed Rental Fees for all events and a 50% subsidy of the proposed fees for non-
profit organizations and schools; (3) 100% of proposed Refundable Deposit for all events, with no subsidies for
non-profits organizations or schools; and (4) current fees being assessed for parking stalls requested for special
events, Car Week, Professional Golfers Association (PGA) Tour, and the last two weeks of December.

High Season Events

Further, Council also directed staff to develop a “high season” fee schedule for consideration. The proposed
“high season” schedule includes the following components: (1) 100% cost recovery for permit fees for all
events during the months of July and August; (2) the doubling of the rental fee for all event applicants during
July- August and (3) the doubling of the refundable damage deposit for all event applicants during July-August.
Article XIIIB of the California Constitution allows governments to fully recover the costs reasonably borne for
providing special services of a voluntary and limited nature. The $685 permit fee is based upon the City’s
reasonably bourne cost of processing a special event permit. The City is able to recover its costs; however, it is
not allowed to charge more than the costs of providing this service. Therefore, the application of a “high season”
surcharge is not applicable for the permit fee. The City may, however, charge the full cost recovery fee to all
event applicants during the “high season” and remove the subsidy for non-profit organizations and schools for
events that occur during this timeframe.

Unlike the permit fee, the rental fee of the beach, park and streets is at Council’s discretion and is based on a
fee to allow the exclusive private use of these community assets. Council may charge a rate based on what the
market will bear. Accordingly, staff has proposed that the rental fee during the “high season” be set at $1,000 as
compared to $500 during the rest of the year, as illustrated on the Proposed Special Event Fee Schedule
included below. Consistent with this approach, staff has also put forth a proposal to increase the refundable
damage deposit during the “high season” to $1,000. Staff seeks Council direction on the approach to use for
the “high season” in order to incorporate this component into a finalized fee schedule.

Neighborhood Block Parties

Council directed that staff include Neighborhood Block Parties in the fee schedule, which fully subsidizes block
parties for residents, as well as a definition of resident block parties. Staff is proposing the current following
definition of “Neighborhood Block Party” for review by Council and upon approval staff will include this definition
in any future relevant policy or municipal code updates as applicable:

“Neighborhood Block Party” is defined as a gathering, sponsored solely by owners, residents or tenants
of properties fronting a residential street, which causes a closure of the entire street, or a portion thereof,
to vehicular traffic and use of the street for the gathering.


Activity/Event All Events Non-Profits or High Season Events

Schools (July and August)
PERMIT FEES 100% cost recovery 75% subsidy
Special event at
$685 $172 $685
the beach
Special event at $685 $172 $685
the park
Special event in $685 $172 per permit $685
the street
Staffing for 100% fully allocated 100% fully allocated
25% fully allocated
event in the hourly rate of rate hourly rate of
street personnel involved personnel involved
Event with $170 $43 $170
Film permit $406 $102 $406
Sound permit $25 $12 $25
Resident Block
Exempt Exempt Exempt
RENTAL FEES 50% subsidy
Beach event $500 per day $250 per day $1,000 per day
Park event $500 per day $250 per day $1,000 per day

Street event $500 per day per $250 per day per $1,000 per day per
block block block
Beach event $500 $500 $1,000
Park event $500 $500 $1,000
Street event $500 per block $500 per block $1,000
$100 $100 $100
Car Week, PGA
Tour, last two
$200 $200 $200
weeks of
*Temporary encroachment permit fees may also apply

Historic City Events

Staff was also directed to exempt the Veteran’s Day ceremony, Memorial Day ceremony, Homecoming Parade,
Sandcastle Contest, and Breakfast with the Bunny, from special events fees and to recognize them as historic
City events in future revisions to City Policy C16-01. These events are all long standing events that have been
held in the City in partnership with local organizations and Council would like to recognize their historic status.

Staff is seeking further direction on the proposed final fee schedule, specifically the newly proposed fees for
“High Season” events held in July and August. Once Council provides direction, staff will return with a master
fee schedule that reflects the final Special Event Fee schedule for adoption.

Overall the special event fees are a minor source of revenue to the City currently generating less than $50,000
in a fiscal year.


Council considered special event fees at its November 7, 2017 and December 5, 2017 regular meetings and
provided staff with direction.