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Page 1 of 7 Ogden City Council Meeting: December 20, 2016 PROPOSED MID-YEAR FEE AMENDMENTS Action: Set/not set public hearings for January 3, 2017 Executive Summary The Ogden City Administration is proposing mid-year fee amendments for security alarm permits and false alarm calls that request a police response, and to incorporate a reference of these fees into the citywide fee schedule. The Administration is also proposing to modify the returned check fee in the general fee schedule in order to have the ability to charge for additional collection costs. Background December 6, 2016 A Council work session was held to discuss amendments to the initial proposal. This discussion included amending the ordinance to further define how it applies to businesses, clarifying the responsibility of residential tenants to pay false alarm fees and options to ensure accuracy in the permitting process. As follow up to the discussion, the following amendments have been incorporated into the proposed ordinance: Amending the definition of “alarm user” to any person who owns or leases an alarm system. Clarifying that an additional permit is only required if an additional alarm system is separate in its use. Clarifying that the $25 fee must be filed with business licensing prior to the installation of a system and on or before the business license renewal due date. Prorating an initial user’s permit fee by half if submitted within six months of business license renewal. The addition of a $25 late penalty for all unpaid permit fees on or before the date due, with no late penalty charge if there is proof that the alarm system was installed after obtaining an initial business license but prior to annual renewal. ---PAGE BREAK--- Page 2 of 7 Ogden City Council Meeting: December 20, 2016 November 15, 2016 A Council work session was held to discuss proposed fee changes. The following information was provided and discussed during the meeting: These fee changes are being proposed mid-year as an effort to streamline alarm permit fees with the business licensing process, because many businesses will begin renewing their licenses in January. The Administration described that the city responds to an average of 1,100 alarms each year and about 97% of these are false alarms. The fee changes are being proposed to reduce the overall false alarm calls for police service. The majority of false alarm calls are produced by commercial entities. With the Council discussion, there was an expressed desire to modify the requirement for commercial entities to obtain a permit and to possibly broaden this to non- residential entities. The Council discussed how to ensure accuracy in businesses self-reporting their number of alarm systems as part of the business licensing process. The Council discussed the possibility of including language to clarify residential tenant responsibilities for false alarm fees. The Administration described that the amendment to the dishonored check fee ultimately aligns with state law and allows the city to recoup any additional costs required to obtain funding from a dishonored check. Checks are acceptable for all city services that require payment and currently checks are the most used method of payment. The city processes an average of 6,000 checks a month, and handles about 11 dishonored checks a month and more than 100 each year. Additional Background Fee changes are typically addressed in the budget process, but in some instances a pressing need may necessitate that these changes occur mid-year. ---PAGE BREAK--- Page 3 of 7 Ogden City Council Meeting: December 20, 2016 FY 2017 City Council Budget Guidelines The Council recognizes that some fees are impacted by the calendar year, by seasonal activity, or by the calendars or scheduling constraints of other government agencies or businesses. Certain fees may need to be amended during the fiscal year and therefore cannot be amended with the annual budget process. Mid-year fee increase requests are due October 1 accompanied by sufficient rationale and justification. Fees to be implemented in January (excluding utilities) will be considered by the Council in December if all applicable information is received. Approximately 18 months ago, the City Treasurer’s office began working with the Police Department to actively bill for residential and commercial security alarm permits. Prior to this effort, permits were paid for and issued only if property owners contacted the Police Department directly to gain a permit. These efforts resulted in learning more about who has been issued permits and how many false alarms are occurring in different entities. Although residential entities have more than half of the issued permits, comparatively these only produce a small portion of the false alarm calls. Entities % of Issued Permits % of False Alarms Residential 62% 9% Non-residential 38% 91% There are more than 80 alarm companies in Ogden and so it has been difficult for the City to establish and maintain relationships with each company. Aside from permits received, the City has no way of knowing whether an alarm is installed unless the alarm goes off. Alarm Permits Currently, all security alarm users (commercial, non-commercial and residential) are required to submit a permit and to pay a one- time permit fee of $25. Users of alarm systems with both a robbery and an intrusion alarm system are required to obtain separate permits for each system. Because permits are non- expiring, there is no current mechanism to update property owner contact information. ---PAGE BREAK--- Page 4 of 7 Ogden City Council Meeting: December 20, 2016 A full name, address and telephone number are provided as part of the permit along with the name of the company installing, maintaining and/or servicing the alarm. The application also includes the names, addresses and telephone numbers of three individuals who know how to operate the alarm, and these individuals may be contacted by responding police on an as needed basis. The Police Department also furnishes a copy of the alarm permit to the named licensed alarm business or company that will monitor, maintain and service the system. The revenues for Security Alarm Permit Fees were approximately $8,850 for FY 2016, which is more than double of what was collected in FY 2015. This is likely a result of the City’s concentrated efforts to get more alarm users to submit permits. Security Alarm Permit Revenues FY 2016 $8,850 (as of May 2016) FY 2015 $3,575 FY 2014 $2,925 FY 2013 $4,250 FY 2012 $4,925 False Alarm Response Fee Ogden City charges a fee for excessive false burglary and robbery alarms that request a police response. Currently, false alarms are considered to be excessive if there are more than three false alarms from any one source within a 12-month period, and at this point a $100.00 service fee is charged. The Police Department estimates a $50 cost in wages and overhead costs for each false response, in addition to other administrative costs to bill and collect the false alarm fee. False alarms also result in having less police officers available to address legitimate dispatch calls. An alarm permit may be revoked if a user has more than six false alarms within a 12-month period or if the alarm user fails to pay an assessed service fee. Once a permit has been revoked, the Police Department no longer responds to alarm system activities. A user can reinstate police response to an alarm by submitting a ---PAGE BREAK--- Page 5 of 7 Ogden City Council Meeting: December 20, 2016 new permit and paying a reinstatement fee of $200.00, in addition to paying any unpaid service fees. Between FY 2015 and FY 2016 there has been a substantial increase in the revenues for False Alarm Response Fees. This is also a likely result of city efforts to work with alarm users. False Alarm Response Fee Revenues FY 2016 $10,425 (as of May 2016) FY 2015 $5,700 FY 2014 $3,900 FY 2013 $10,150 FY 2012 $8,240 Returned Check Fee The City currently allows personal checks to be used for various city payments. As permitted by Utah State Law, any checks that are returned are currently assessed a $20 service charge. Current Proposal The Administration has expressed that these proposed fee changes are intended to reduce the frequency of police calls for false alarms. Alarm Permits The proposal includes a change to the permitting process that would require only commercial users to submit a permit with an annual fee of $25, versus the current one-time permit fee that is currently required. In conjunction with this change, the Administration intends to coordinate efforts with business licensing to have submitting an annual alarm permit included in the existing process to license a business. False Alarm Response Fee The proposal entails that a false alarm response fee will continue to apply to all users, regardless of whether an entity is commercial or non-commercial. This also entails that after a second false alarm occurs within a 12-month period a fee of $150 ---PAGE BREAK--- Page 6 of 7 Ogden City Council Meeting: December 20, 2016 will be charged for each consecutive false alarm, as opposed to $100 that is now charged after a third false alarm. Returned Check Fee The proposal is to change the language from “returned check” to “dishonored check.” The proposal also includes having the $20 amount continue to be listed as the charge with the addition of an undefined amount of applicable collection costs. This change is being proposed to align with Utah State Code § 7-15-1, which allows for additional remedies and fees to recover the cost of collections for dishonored checks. The Administration anticipates that the fiscal impact of adding the returned check fee is immaterial and intended only to offset some of the staff costs for handling returned checks. Alarm Fee Benchmark Comparison with Other Communities City Permit Fee Applicable Users Number of False Alarms in 12 months and Associated Fees 1 2 3 4 5 6 7+ Ogden City (current) $25 one-time All alarm users (residential, commercial and non- commercial) $0 $0 $0 $100 $100 $100 Revoke w/$200 to reinstate Ogden City (proposed) $25 annual Commercial $0 $0 $150 $150 $150 $150 Revoke w/$200 to reinstate South Ogden $50 one-time All alarm users $0 $0 $50 $100 Revoke w/$150 to reinstate Salt Lake City None All alarm users $100 $150 $250 $350 $450 $450 $450 Midvale (An $80 fee is also charged for 3+ false alarms in a month) None All alarm users $0 $0 $0 $0 $80 $80 Revoke and misdemeanor Sandy None All alarm users $0 $0 $0 $110 $110 $110 $110 Orem None All alarm users $0 $0 $0 $50 $75 $100 7 to 9 I $100 10+ I $200 ---PAGE BREAK--- Page 7 of 7 Ogden City Council Meeting: December 20, 2016 Attachments 1. Alarm Permit Application Form 2. Administrative Transmittal 3. Draft ordinance for Alarm User Permit and False Alarms 4. Draft ordinance adding Alarms to the Fee Schedule and modifying the Dishonored Check Fee Administrative Memos Prepared by: Administrative Contact: Lisa Stout, [PHONE REDACTED] Administrative Contact: Brandee Johnson, [PHONE REDACTED] Administrative Contact: Gabe Johns, [PHONE REDACTED] Council Staff Contact: Amy Sue Mabey, (801)629-8629 ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK---