May 15, 2024
Julie Kennicutt, Budget Manager
Luis Navarro, Senior Financial Analyst
Diana Hancock, MGT Consulting
Ruben Rivas, MGT Consulting
The Ask
That the City Council discuss and provide
direction on the Citywide Master Fee
Recovery Schedule.
Comprehensive User Fee Study
Background/Project History, Objectives, Methodology, Process, Results What are User Fees?
• A “user fee” is a charge for service provided by a
governmental agency to a public citizen or group
• California State Law, specifically Government Code
66014(a), stipulates that user fees charged by local
agencies “…may not exceed the estimated reasonable
cost of providing the service for which the fee is
charged…”
Non-Market / Time-Based Fees
• Level of staffing, staffing costs, time allocation, and operating costs
• Goal is to generally recover 100% of costs except as
limited by law or Council direction
Market Fees
• Policy and market conditions
• State Law
• Economic Barriers
• Community Benefit
• Private Benefit
• Managing Demand
• Competition
• Incentives
Diana Hancock
Ruben Rivas
• Primary goal of a User Fee Study is to determine the “reasonable” full cost of providing services
• User fees evaluated every 2 or 3 years
• MGT Consulting hired in mid-2018 to conduct citywide time-based fee analysis update
Fees analyzed:
Analysis conducted:
• Fee-for-service activities
• Based on FY 2024 Adopted Budget
• Does not include Water Utility Rates, Traffic Violations, or fees of that nature • City Clerk
• Community Services
• Finance
• Fire
• Human Resources
• Legal & Risk Management
• Police and Animal Control
• Utilities
• Planning and Development
• Building
• Development Services
• Planning
• Calculate true cost of providing fee-based services
• Address new fees needed to recover new costs
• Assess levels of current cost recovery and evaluate needs for adjustments
• Provide estimated revenue projections based on proposed adjustments
• Make sure fees keep pace with inflation/changes
• Ensure compliance with state law governing user fee cost recovery The analysis to determine the cost of providing fee-for-service activities is comprised of two basic elements:
1. Hourly rates of staff and/or contractors providing the service
2. Average time required to provide the service
The product of the hourly rate calculation and the time spent yields the cost of providing the service
Cost Calculation
• Identify staff members involved with specific services • Calculate direct labor & materials costs
• Calculate indirect costs
• Calculate fully burdened hourly rates times the average time to provide the service
Julie Kennicutt, Budget Manager
Luis Navarro, Senior Financial Analyst
• Increases and decreases in fees vary by department, based on staffing changes and combination of fees
• Overall estimated annual revenue increase of $1,881,835 • Projection based on FY23 volume / revenue increase or decrease based on actual volume in future years
• Projection based on non-market / time-based fee only
New Application
Renewal
User Fee Study Process
Our Timeline
Project Kickoff / Staff
Interviews
September 2023
Data
Collection
October 2023
Analysis / 1st Draft
Results
November 2023
Analysis / Final Draft
Results
February 2024
Development
Community Meeting
March 2024
Recommendations to
City Council
May 2024
Fees go into Effect
(if approved by Council)
July 2024
The Ask
That the City Council discuss and provide
direction on the Citywide Master Fee
Recovery Schedule.
July 15, 2024
(951) 817-5742
[email protected]
www.CoronaCA.gov