Presentation on theme: "Comprehensive User Fee Study"— Presentation transcript:
1 Comprehensive User Fee Study City of GlendaleMay 10, 2011Chris FisherPierce RossumGregg Tobler
2 Overview Project Team Introduction Study Objectives Scope of the Study Project Approach and MethodologyFindings and ResultsQuestions & Answers
3 Project Team Chris Fisher – Consulting Services Group Manager Leading expert in cost of service studiesUnderstands regulatory, political and implementation issuesPierce Rossum – Project ManagerActed as City’s day-to-day contactCost of service expertFamiliar with City (Water Nexus and Rate Redesign)Gregg Tobler – Senior Project AnalystLead data collection and analysis effortsAlso working on the Water Rate Redesign
4 Study Objectives Identify the true cost of providing user fee services Determine fee subsidies and overall revenue impactsIdentify new fees and cost recovery strategiesFairly and appropriately distribute indirect and overhead costsDevelop a strong, defensible, fee schedule
5 Scope of the StudyFull review and calculation of the user fees charged by:City Clerk’s OfficeCommunity ServicesCommunity DevelopmentBuilding & SafetyNeighborhood ServicesPlanning DivisionFire DepartmentHazardous MaterialsLibraryPolice DepartmentPublic WorksParking Fund
6 Project Approach and Methodology Data AnalysisTime EstimatesNon-Labor CostsLaborOverhead CostsBuilding Cost LayersDirect ServicesIndirect ServicesDepartment OverheadCity-Wide OverheadSet FeesDefine the Full Cost of ServicesSet 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-levelsCalculate the full cost of each program, using staff allocation estimates and full costsCompare 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.
11 New & Revised Surcharges Technology SurchargeLong-Range Planning SurchargePurpose: Direct cost recovery of ISD related expendituresCurrent surcharge: 6.7%Recommended full cost recovery rate of 17.5% fee surchargeImpact: $520,000 of additional cost recoveryPurpose: Cost recovery of Long-Range Planning servicesNo existing feeTargeted cost recovery of 10% equals 3% fee surchargeImpact: $145,000 of new cost recovery
14 Neighborhood Services – New Fees Rental Housing Inspection ProgramMandatory Point of Sale InspectionThe 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.
26 Fee Setting Considerations SubsidizationConsistency with Existing Policy and ObjectivesImpact on Demand (elasticity)Social Impact / AffordabilityLegal Compliance
27 Fee Comparisons Issues Fees may be based upon historical or other subjective factors unrelated to costOften no way to know whether cost subsidies existServices included in fees may be combined in some and separated in othersThe methodology used to determine the fees may be designed to recover less than full costDifferent 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 areLong Beach’s fees arePasadena’s fees areSanta Monica’sfees areTorrance’s fees areCity ClerkHigherCommunity PlanningInlineFilm PermitsLowerFinanceFireLibraryParksPolicePublic WorksReproductions
30 RecommendationsFor 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