COURT CLARIFIES HOW INDIRECT COSTS OF PROVIDING GOVERNMENT SERVICES SHOULD BE CALCULATED FOR DETERMINING THE FEES CHARGED FOR THOSE SERVICES

By Glen C. Hansen

California Public Records Research, Inc. v. County of Stanislaus (2016) 246 Cal.App.4th 1432.

In California Public Records Research, Inc. v. County of Stanislaus (2016) 246 Cal.App.4th 1432, plaintiff California Public Records Research, Inc., sought a writ of mandate to compel the County of Stanislaus to reduce the fees it charges for copies of official records. Plaintiff alleged the fees of $3 for the first page and $2 for each subsequent page exceeded County’s cost of providing the service. Plaintiff argued that such rates violated Government Code section 27366, which provides that copying fees “shall be set by the board of supervisors in an amount necessary to recover the direct and indirect costs of providing the product or service ….” The trial court denied the writ. Plaintiff appealed. The Court of Appeal reversed.

The evidence demonstrated that the County’s Board of Supervisors based its decision on a study that estimated the cost of a particular service by multiplying (1) the amount of staff time used to provide the service by (2) the cost to County of that staff time. The time figure included an estimate of the average number of minutes needed by staff to provide the service plus an allocation of general and support minutes. The study estimated it cost County an average of $2.97 to process a request for a copy of an official record. The study therefore recommended charging $3 for the first page copied and $2 for each subsequent page. However, the study and other evidence presented information on a per document basis, not a per page basis. The Court of Appeal concluded that the record lacked evidence showing that the fees charged per page reflect the County’s actual costs.

The court then explained how the fee determination should be made. Section 27366 requires an exercise of judgment and is not simply a matter of performing a mathematical calculation that produces a single correct answer. Thus, that section grants a board of supervisors some discretionary authority when setting copying fees, limited by the phrase “direct and indirect costs.” The term “direct costs” is unambiguous. The term “indirect costs” requires that such costs be “reasonably attributed to (i.e., reasonably related to) the service of providing copies and by excluding costs not reasonably attributed to the service of providing copies.” The choice of methodology for calculating a county’s cost of providing copying services is a matter committed to the discretion of the board of supervisors because there is no single legally correct methodology. The court therefore remanded the case for further proceedings consistent with this proper determination of the copying fees.

Glen C. Hansen is Senior Counsel at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

 

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