COUNTY OF ORANGE v. BARRATT AMERICAN, INC
Under Government Code Sec. 66016(a), which provides that if local agency overcollects building inspection and permit fees, surplus "shall be used to reduce the fee or service charge creating the excess," county may meet its duty to reduce fees in the event of surplus by not only reducing its fees but also spending the surplus fee revenue to cover reasonable and necessary fee related service costs. Section 54985, which provides that "[i]ndirect costs that may be reflected in the cost of providing any product or service or the cost of enforcing any regulation shall be limited to those items that are included in the federal Office of Management and Budget Circular A 87 on January 1, 1984," incorporates the "reasonable and necessary" standard from OMB A 87 into the evaluation of the permissible indirect costs of providing the services for which the fees are charged.
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