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Analysis of Los Angeles Public Health Fees 6.30.11

Analysis of Los Angeles Public Health Fees 6.30.11

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Published by: Paresh Dave on Oct 31, 2011
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 Analysis of Environmental Health Permit and Service FeesRevised June 30, 2011
County of Los Angeles - Department of Public HealthEnvironmental Health DivisionBureau of Environmental Planning and Support
Analysis of Environmental Health Permit and Service FeesRevised June 30, 2011
SummaryThe Environmental Health (EH) Division is a regulatory agency responsible for enforcing Stateand local laws for the protection of public health. The Division regulates a variety of entitiesincluding restaurants, retail and wholesale markets, mobile food vehicles, rental housing of 5units or more, hotels, motels, public swimming pools, theatres, laundries, and landfills.The regulatory work of the Division is funded by permit and service fees assessed on ownersand/or operators pursuant to the California Health and Safety Code, and the Los AngelesCounty Code. These codes authorize the Division to recover the reasonable expenses and, inthe case of retail food code enforcement, the actual costs associated with its regulatory work.Fees are reviewed annually and were last revised in 2007.In early 2010 the Department of Public Health (DPH) retained the consulting firm MGT of America, Inc. to conduct a study of the fees charged by the EH Division. The purpose of thestudy was to examine the services provided by the EH Division and to determine the "true"costs of each of those services. The consultant was asked to recommend changes in the EHDivision's fee-setting methodology to ensure that annual fees were better aligned withreasonable expenses and actual costs.Accordingly, the study analyzed each of the regulatory services provided by the Division andfound some of the current fees to be higher, and others to be lower, than the "true" costs of providing the services. Although none of these deviations rendered the fees unlawful, as allfees were set to recoup the EH Division's "reasonable expenses" or "actual costs," inaccordance with all applicable laws, the fee study revealed that the fees could be better andmore precisely calibrated. Additionally, the study identified a number of services for which feeswere not currently assessed.As a result, the study recommended that each of the fees be better aligned with the costsdetermined by the consultant, and that new fee categories be established for those services for which fees were not currently assessed. The EH Division implemented the consultant'srecommendations. However, the EH Division determined that several modifications to the feesproposed in the MGT study were required. For example, corrections were required in theestimated number of entities subject to regulation, the estimated workload times, and the hourlylabor rates used to determine costs. Also, the EH Division decided to remove from overheadthe direct labor costs of several services which could not be associated with fee payers.An ordinance proposing these new fees was first submitted to the Board of Supervisors on April19, 2011. At that time, the Board of Supervisors continued the item so that DPH and the EHDivision staff could meet with impacted parties regarding the proposed changes in annualpermit fees.DPH held a total of 16 meetings with associations representing the impacted parties betweenApril 26 and June 16, 2011. In addition, public meetings were held on May 3, May 4, May 31,June 13, June 14, and July 7, 2011. Prior notice of the meetings was provided via e-mail, web
posting, and direct mail. Notice of the June and July meetings was sent to 130,000 existing and3,000 proposed new fee payers. EH also established an e-mail address and dedicated phoneline to receive public comments.As a result of the industry and public input received, the following modifications were made tothe proposed ordinance.1. The component of food facility permit fees related to costs associated with illegal foodvending enforcement was reduced from 9.9% to 7%. This reduction was made to easethe burden on permitted food facility operators. The Division is exploring alternativefunding sources, as well as program efficiencies, to minimize the impact of this reductionon enforcement efforts.2. The workload estimates for “temporary food booth inspection,” including thoseconducted at Certified Farmers’ Markets, were revised downward. The revisions werebased on a decrease in estimated travel and inspection times. This resulted in acorresponding reduction in the proposed fees for the majority of categories.3. The workload estimates for “swimming pool inspections” have been revised. The firstrevision was the reduction of travel time for multiple pools at the same location. Inaddition, swimming pools were classified into 3 "risk" tiers -- “low,” “moderate” and “highrisk.” These revisions resulted in a decrease in fees for approximately 10,000 multi-family residential pool sites. However, an increase in fees resulted for approximately1,300 health clubs, hotels, schools and theme parks, which operate pools classified as“moderate” and “high risk.”4. The fee for food vending machines was frozen at $62, rather than the previouslyproposed fee of $275. This change was made in consultation with the vending machineindustry to allow for development, during the next Fiscal Year, of a more effectiveapproach to regulating this industry.5. The definition of the “fee exempt charitable activity” was expanded to include non-profitentities that provide permanent housing with free supportive services for the homeless.DPH also made several other revisions in the workload estimates. These revisions resulted infee reductions in plan check services for retail food facilities, and inspections of garmentmanufacturers, wiping rag establishments, commercial laundries, and solid waste facilitieswhich handle construction and demolition debris. In addition, the revisions resulted in feeincreases in plan check services for swimming pools undergoing “moderate” or “major renovations” and recycled water projects.DPH will continue discussions with the regulated industries during the coming Fiscal Year toaddress other identified issues related to public health fees, policies, and service quality. Theseinclude an incentive program that would reduce inspection frequencies, and associated fees,based on a permittee's good compliance history.The following Summary Sheets include a complete list of the proposed fees. They havebeen modified to reflect the changes indicated above and have been approved by the County'sAuditor-Controller. In addition, the MGT report, “
FY10 Department of Public Health Environmental Health, Fee Development Special Study, Report of Findings, August, 2010,
” isincluded as Attachment I.

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