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Comprehensive User Fee Study

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Presentation on theme: "Comprehensive User Fee Study"— Presentation transcript:

1 Comprehensive User Fee Study
City of Glendale May 10, 2011 Chris Fisher Pierce Rossum Gregg Tobler

2 Overview Project Team Introduction Study Objectives Scope of the Study
Project Approach and Methodology Findings and Results Questions & Answers

3 Project Team Chris Fisher – Consulting Services Group Manager
Leading expert in cost of service studies Understands regulatory, political and implementation issues Pierce Rossum – Project Manager Acted as City’s day-to-day contact Cost of service expert Familiar with City (Water Nexus and Rate Redesign) Gregg Tobler – Senior Project Analyst Lead data collection and analysis efforts Also working on the Water Rate Redesign

4 Study Objectives Identify the true cost of providing user fee services
Determine fee subsidies and overall revenue impacts Identify new fees and cost recovery strategies Fairly and appropriately distribute indirect and overhead costs Develop a strong, defensible, fee schedule

5 Scope of the Study Full review and calculation of the user fees charged by: City Clerk’s Office Community Services Community Development Building & Safety Neighborhood Services Planning Division Fire Department Hazardous Materials Library Police Department Public Works Parking Fund

6 Project Approach and Methodology
Data Analysis Time Estimates Non-Labor Costs Labor Overhead Costs Building Cost Layers Direct Services Indirect Services Department Overhead City-Wide Overhead Set Fees Define the Full Cost of Services Set Cost Recovery Policy

7 Two Methodologies Case Study Method:
This approach estimates the actual labor and material costs associated with providing a unit of service to a single user. This analysis is suitable when City staff time requirements vary dramatically for a service, or for special projects where the time and cost requirements are not easy to identify at the project’s outset. Programmatic Approach: This methodology utilizes a cost/revenue analysis approach that establishes the cost recovery performance of the department at various sub-levels Calculate the full cost of each program, using staff allocation estimates and full costs Compare the annual revenues to the full costs to establish the percent of cost recovery for each program. Identified program-wide potential fee changes that the department can use to address the cost recovery goals of the department.

8 Police Department – Time Survey Sample

9 Findings and Results

10 Community Development - Planning

11 New & Revised Surcharges
Technology Surcharge Long-Range Planning Surcharge Purpose: Direct cost recovery of ISD related expenditures Current surcharge: 6.7% Recommended full cost recovery rate of 17.5% fee surcharge Impact: $520,000 of additional cost recovery Purpose: Cost recovery of Long-Range Planning services No existing fee Targeted cost recovery of 10% equals 3% fee surcharge Impact: $145,000 of new cost recovery

12 Community Development – Building & Safety

13 Neighborhood Services

14 Neighborhood Services – New Fees
Rental Housing Inspection Program Mandatory Point of Sale Inspection The State of California requires local cities to ensure that housing units meet minimum standards of habitability. The City of Glendale has operated and subsidized the code enforcement program for many years. The proposed $28 fee would be charged on the property tax bill, annually. Neighborhood services may recover up to an estimated $1.2 million annually. The Division finds that such a program is needed so that residential and commercial properties are adequately inspected before ownership of such property is transferred. The cost analysis, calculated the full cost to provide such a service at $400 per inspection.

15 City Clerk

16 Public Works - Engineering

17 Community Services – General Fund

18 Community Services – Recreation Fund

19 Fire – Paramedic Fund

20 Fire – Hazardous Materials

21 Public Works - Parking Fund

22 General Fund Contribution

23 Library

24 Police - Administration

25 Fire - Administration

26 Fee Setting Considerations
Subsidization Consistency with Existing Policy and Objectives Impact on Demand (elasticity) Social Impact / Affordability Legal Compliance

27 Fee Comparisons Issues
Fees may be based upon historical or other subjective factors unrelated to cost Often no way to know whether cost subsidies exist Services included in fees may be combined in some and separated in others The methodology used to determine the fees may be designed to recover less than full cost Different policy goals and considerations that affect the desired level of cost recovery

28 Macro Level Fee Benchmarking Analysis (in relation to the City of Glendale)
Burbank’s fees are Long Beach’s fees are Pasadena’s fees are Santa Monica’s fees are Torrance’s fees are City Clerk Higher Community Planning Inline Film Permits Lower Finance Fire Library Parks Police Public Works Reproductions

29 Community Services Fee Benchmarking

30 Recommendations For all private benefit services, Willdan recommends pursuing a full-cost recovery strategy. For public benefit services, it is recommended the City develop a formal policy on desired subsidy levels.

31 Next Steps Discussion and determination of cost recovery goals
City Staff to develop “Recommended” Fees for the Council’s Consideration (based on determined goals) July Implementation of Recommended Fees

32 Questions? Thank you

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