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 è Can streamline fee schedules to eliminate outdated fees or ranges, or incorporate new fees and services.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. Intake and Routing Initial Review Final Review Issue Permit Processing •Permit •Permit •Engineer •Engineer •Permit Tech Tech Tech •1 hr •30 min •15 min •10 min •15 min 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.
Determining Total Cost t Once time spent for a fee activity is determined for each individual or position, applicable City costs are calculated. Citywide Dept. Overhead Direct Overhead (Costs (Salaries, (Dept. Admin / associated with Total Cost Benefits, and Mgmt e.g. Central allowable dept. supplies, Services such expenditures) utilties, etc.) as Payroll, HR, etc.) t Salary, benefit, and departmental costs are based on FY 18 budget. t Citywide overhead was calculated through the Cost Allocation Plan.
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 . FY18 FY18 Cost Surplus / Department Projected Projected Recovery (Deficit) Revenue Annual Cost 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.
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