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City insists new fees still competitive with neighbors

DEL MAR — The cost of doing business in Solana Beach will soon be going up, but city staff initially insisted it would remain less expensive than in neighboring jurisdictions.
Council voted unanimously at the Nov. 9 meeting to increase two existing fees and create three new ones to ensure the city is recovering its costs to provide those five services.
The city currently charges a flat rate of $75 for any new business certificate or changes in address, name or ownership.
The new fee will be $110 for home-based businesses and those located outside the city, neither one of which requires a fire inspection.
Businesses within city limits will be charged based on the size of the building, ranging from $150 for those less than 1,000 square feet to $570 for those larger than 10,000 square feet.
The current rate to renew any business certificate is $16.
For full cost recovery, that will increase to $17 for home-based businesses and those outside the city.
For all others it will be based on square footage, ranging from $55 to $474.
Short-term vacation rentals will be treated as home-based businesses and subject to the new fee of $110 and renewal fee of $17. Late fees for all renewals will also increase.
The fees are calculated to include accepting the application, data entry, zoning verification, printing, signatures, fee collection and, when applicable, an annual fire inspection.
The mandatory adoption of the California green building standards has resulted in more in-depth and costly building plan checks and inspections so the city is adopting a surcharge on top of the standard fee for those services.
The cost will be an additional 3 percent each for the plan check fee and building permit for buildings less than 50,000 square feet and 1 percent more for the plan check and building permit for buildings larger than 50,000 square feet.
Another new fee is for commercial photovoltaic plan checks and inspections.
City Council adopted a flat fee based on valuation that ranges from $695 to $1,120.
For example, according to the staff report, the fee for a system valued at $700,000 will be $750.
Finally, in response to an increase in requests for zoning verification and past permit histories on multiple properties throughout the city, there will be a $135 charge per lot.
The city has been conducting routine studies since 2009 to ensure full cost recovery for the services it provides.
No one addressed council during the public comment period; however, Councilman Joe Kellejian wanted to ensure Solana Beach was remaining competitive with neighboring cities.
“In this time of the economic problems that we’re having, usually we’re trying to encourage the businesses any way we can,” he said. “One of the ways is not having huge fees.
“At the same time we have a city to run,” Kellejian said. “I just want to make sure that we’re competitive, we’re not going to lose anybody to a neighboring city, and that we’re within the ball park.”
“We did a study about three years ago and we’re still significantly less than Del Mar,” City Manager David Ott said, noting the fees in those cities haven’t gone done.
Although he also told council members the new fees would still be less than those in Encinitas, he later said that was incorrect.
“I made an error,” he said.
Encinitas charges a flat fee of $35 for a business registration certificate. Ownership changes require a new certificate but new locations do not. Annual renewals are $20. Both fees were increased last year by $10 and $5, respectively.
Del Mar charges a business license tax based on gross receipts. According to a sample calculation on its website, the cost of a license in that city for a business with estimated gross receipts of $300,000 is $289.50.
Some businesses, such as fairgrounds vendors and caterers, must pay a flat tax that ranges from $6 a day to $250 a year, while others like massage technicians are required to pay for an operations permit as well as a business certificate.
According to Del Mar’s website, the minimum cost is $30.
Ott said the Solana Beach fees are based on actual cost. For renewal permits, he said nothing has been added to the process.
“We’ve just captured what costs we weren’t charging for before,” he said.
As business owners in the city, Kellejian’s wife and Councilmen Tom Campbell and Mike Nichols will be subject to the new fees.