Full Cost Allocation Plan and User Fee Study Results Presentation - - PowerPoint PPT Presentation

Full Cost Allocation Plan and User Fee Study Results

Presentation Goals

t Present scope of services and study objectives t Present basic costing methodology and approach t Discuss a summary of findings and results t Questions

Scope of Services

t Citywide Cost Allocation Plan

è Identify Central Support Services (i.e. HR, Payroll, Budget) è Allocate direct and indirect costs è Ensure compliance with cost principle standards (OMB 2 CFR Part 225)

t Citywide Cost of Service Study

è Streamline fee schedules by collapsing or expanding categories è Document and define services and service level assumptions è Ensure compliance with local and state laws

t Provide staff with the knowledge and tools to update annually.

Cost Allocation Plan Overview

t A document designed to identify and allocate indirect costs of

central service and other administrative support cost centers to the users of those services in a “fair and equitable” manner.

t Benefits / Uses:

è Provides a detailed picture of the total indirect / administrative cost

associated with Funds, Departments, Divisions, or Programs.

è Can help justify transfers from Non-General Funds to the General Fund. è Can be incorporated into Fee Studies to ensure Full Cost calculations.

User Fee Study Overview

t Documents fee related services and service level assumptions,

as well as detailing the full cost associated with each permit or unit.

t The fee study is specific to user fees and does not include land

use fees or property-based fees.

t Benefits / Uses:

è Ensures compliance with State and local laws. è Identifies full cost associated with providing permit related services and the

revenue gaps associated.

è Can streamline fee schedules to eliminate outdated fees or ranges, or

incorporate new fees and services.

Fee Study Process

t Catalog existing and potential fees for service. t Establish time estimates by position for each service provided. t Allocate overhead costs across all fee and non-fee services. t Analyze and discuss the gaps between cost and revenue. t Discuss current cost recovery levels and goals.

Updated Fee Schedules

t Worked with staff to ensure that fee schedules accurately

reflected the services being provided.

t Fees for services no longer provided were eliminated. t Fee categories were expanded to better reflect the level of

effort to perform different types of services.

Establishing Time Estimates

t Staff were asked to estimate the amount of time it takes to

provide services at each step in the process.

t Estimates are provided for each position involved. t Estimates take into account desired service levels. t Extraordinarily complex or simple projects are excluded from

estimates.

Intake and Processing

• Permit

Tech

• 15 min

Routing

• Permit

Tech

• 10 min

Initial Review

• Engineer
• 1 hr

Final Review

• Engineer
• 30 min

Issue Permit

• Permit

Tech

• 15 min

Determining Total Cost

t Once time spent for a fee activity is determined for each

individual or position, applicable City costs are calculated.

t Salary, benefit, and departmental costs are based on FY 18

budget.

t Citywide overhead was calculated through the Cost Allocation

Plan.

Direct (Salaries, Benefits, and allowable dept. expenditures) Dept. Overhead (Dept. Admin / Mgmt e.g. supplies, utilties, etc.) Citywide Overhead (Costs associated with Central Services such as Payroll, HR, etc.) Total Cost

Results Overview

t When comparing FY 17/18 fee-related costs with projected fee-

related revenue, the City is under-recovering its costs by approximately $489,000.

Department FY18 Projected Revenue FY18 Projected Annual Cost Surplus / (Deficit) Cost Recovery Percentage General Administration $35,137 $68,099 ($32,962) 52% Cemetery $138,778 $183,841 ($45,063) 75% Building $182,925 $193,972 ($11,048) 94% Planning $332,595 $482,861 ($150,266) 69% Police $14,543 $43,090 ($28,547) 34% Public Works $60,257 $112,406 ($52,149) 54% Recreation $171,514 $340,108 ($168,594) 50% TOTAL $935,749 $1,424,377 ($488,629) 66%

Results Highlights: General Administration

t Several fee services are regulated by State guidelines:

è Photocopies è Notary Services

t Proposed Fee Schedule Modifications:

è Combine services relating to reproduction of digital information materials è Eliminate early business license application category

t Overall, General Administration Services are being subsidized by

approximately $33,000.

è Business License Administration is currently being subsidized by $19 per

application.

è With approximately 1,600 applications annually, this represents the bulk of

the subsidy ($30,000)

Results Highlights: City Clerk

t Several fee services are regulated by State guidelines:

è Photocopies è Election related filings

t No fee schedule modifications were proposed. t While the City Clerk performs various services for the public, the

lack of significant fee workload combined with state set fees, resulted in no annual results being calculated.

Results Highlights: Cemetery

t No fee schedule modifications were proposed. t A majority of the City’s fees shown an under-recovery on a per

unit basis.

è The largest subsidy relates to Adult Open / Close Burial Sites ($642). è The largest over-recovery relates to Double Garden Crypt Disinter Casket

($4,550).

t El Carmelo Cemetery is currently under-recovering its fee-related

costs by approximately $45,000.

è The largest source of annual subsidy relates to Adult Open / Close Burial

Sites at $15,401.

t The study only focused on labor-related fees for services not any

land based or land sale services offered by the Cemetery.

Results Highlights: Building

t The City current contracts Building services, including Plan

Check and Inspection, to the City of Monterey.

è The City of Monterey receives 75% of permit fees, while Pacific Grove keeps

the remaining 15%.

è Pacific Grove staff are responsible for overseeing the Building contract,

including review of major project plans.

t The City should consider mirroring Monterey’s Building fee

schedule:

è Using the same categories and valuation ranges è Help ensure both City’s are recovering their costs.

t Building services are currently being subsidized by $11,000

annually.

è If full cost recovery is a goal, the City could implement an 33% surcharge on

Monterey’s Building Fees.

Results Highlights: Planning

t Proposed Fee Schedule Modifications:

è Several line items were recommended for removal, as the City no longer

provides those services, or permits are no longer needed.

­ E.g. Certificate of Use of Occupancy, Revocable License for Encroachments,

Housing Monitoring Fees.

è Tentative Parcel Map fees were converted from a base and per lot fee to a

singular flat fee.

t A majority of Planning fees shown a per unit subsidy:

è The largest subsidy relates to Environmental Impact Reports ($5,378). è The largest surplus relates to Tentative and Final Tract Maps ($3,935).

t Overall, Planning services are being subsidized by about

$150,000.

è Nearly half of the Division’s under-recovery relates to Counter Review and

Determination – New Square Footage ($80,000).

Results Highlights: Fire

t The City current contracts all Fire services to the City of

Monterey.

è The City of Monterey bills for all services provided, prevention and

suppression, on a monthly basis for services provided.

è Pacific Grove staff are responsible for overseeing the Fire contract, and are

the final authority on Pacific Grove related codes and issues.

t The City may want to consider mirroring Monterey’s Fire

Prevention fee schedule:

è Provide a schedule that is reflective of the services being provided è Help ensure both City’s are recovering their costs.

t The City is currently only subsidizing overhead costs associated

Fire prevention.

è If full cost recovery is a goal, the City could implement a 7% surcharge on all

Fire permits and services.

Results Highlights: Hyperbaric Chamber Fees

t The City owns the Pacific Grove Hyperbaric Chamber Facility,

which is staffed by volunteers to provide hyperbaric chamber treatment to residents in the community.

t Proposed Fee Schedule Modifications included eliminating the

Facility Use and Administrative Overhead fee as they are part of all treatment fees.

t The City is currently only recovering 26% of its hyperbaric

chamber treatment costs, representing a $16,000 deficit.

Results Highlights: Library & Lighthouse

t Fee Schedule Modifications included:

è Eliminating Temporary Resident Borrower’s Card è Developing a Singular Fine Category

t Majority of services provided by the library are standardized (i.e.

photocopies) or fines.

t There is no annual impact associated with the services provided

by the Pacific Grove Library.

t There are no fees, only suggested donations for the Lighthouse -

$4 for Adults and $2 for kids.

t The City should continue to assess this as a donation to enable

the City to collect more than the suggested donation amount.

Results Highlights: Police

t Fee Schedule Modifications included:

è Adding new fees for Temporary Overnight Parking, Drone Permits, and

Livescan Fingerprinting

è Eliminating fees for Solicitor / Peddler License, and Streamlining Dog

License fees to yearly instead of monthly permits.

t Majority of the permits and applications are showing an under-

recovery, with subsidies ranging from a low of $4 for Garage Sale Permits to higher levels such as $313 for Abandoned Vehicle Removal.

t Annual impact for PD Applications and Permits is approximately

a $28,500 deficit, which represents a 34% cost recovery level. Sources of this annual deficit include dog licenses and sound amplification permits.

Results Highlights: Public Works

t No fee schedule modifications were proposed. t The largest per unit subsidy relates to Memorial Bench

maintenance (5 years) at $211, while the largest surplus relates to the Annual Solid Waste Exemption Application at $120.

t The Department is currently subsidizing its fee-related services

by approximately $52,000. The largest contributor to this subsidy is Memorial Bench maintenance, which with 200 applications last year, resulted in a subsidy of $42,000.

Results Highlights: Recreation

t No fee schedule modifications were proposed. t The majority of Recreation services are currently under-

recovering, with the largest subsidy being $464 for Preschool 5 day.

t Overall, Recreation services are being subsidized by

approximately $169,000 annually. The largest impact relates to group swim lessons, which represent approximately $71,000 of the deficit.

t The City is currently under-recovering for facility rentals at the

Youth Center and Community Center, and should consider implementing rental rates for the Little House at Jewel Park.

t All recreation services are market-based and fees should be

reviewed accordingly.

Results Highlights: Filming Fees

t The City of Pacific Grove allows for Photography and Motion

Picture shoots to happen on City property or within City Limits, but does not have a fee for the application.

t Three tiers of filming permits / applications were created to

represent the impact to the community – minor (little to no impact), medium, and major (multi-department review and large film / tv productions).

t In addition to filming fees, the project team recommends that the

City charge any facility rental fees for use of city properties / facilities, as well as any property use fees similar to an outdoor dining license / encroachment fee.

Comparison of Cost Recovery

52% 75% 94% 69% 34% 54% 50% 0% 20% 40% 60% 80% 100% A d m i n / C l e r k C e m e t e r y B u i l d i n g P l a n n i n g P

• l

i c e P u b l i c W

• r

k s R e c r e a t i

• n

Current Cost Recovery vs. Typical Cost Recovery

Typical Cost Recovery Current

Cost Recovery Policies and Annual Updates

t The City should develop cost recovery goals for each City

Department.

è Goals should represent the baseline target for each Department. è Documented exceptions should be noted on a fee-by-fee basis, for example

if fees are already at a higher cost recovery level than the target those should remain unchanged; while other fees should be reviewed to determine the impact of their increase upon the community.

t An annual fee increase mechanism should be adopted.

è The mechanism should be directly relatable to the City such as annual cost

• f living adjustments (COLA) or other labor factor increases.

Questions and Comments