City Council
May 16, 2023
PUBLIC WORKSWATER UTILITY AND AIRPORTNEW & REVISED FEES 1 2
Fee Study Objectives
Objectives
Identify full cost and revenue gaps associated with providing related services Incorporate new fees and services
Develop rational basis for setting fees, that can be easily updated in the future Maintain accordance with City’s policy and goals, specifically, the City’s Cost Recovery Policy Recover 100% cost for eligible City user services
3 Water Utility & Airport Fee Overview
Water Utility Services
Latest Fee update in 2017 applied an overall 10% increase on all Public Works Fees Comprehensive Fee Update:
Includes Water Plan Checks & Inspection, Water Metering, Temporary & Daily Water Service Charge, and Administrative fees Airport
Latest Hangar Rates Fee update in 2019
Latest Tiedown Rates Fee update was approximately 10 years ago Update includes hangar and tie-downs lease rates and fuel flowage fee
Fee Study Method
Type of Fees
Catalog Existing/ Potential Fees
Time
Analysis
Cost Allocation Plan
Survey Other City Fees
Cost Recovery
Water Utility
Airport
4 Time analysis for each fee – worked with staff to accurately reflect services and time required to deliver such services to customers Cost Allocation Plan – applied overhead and indirect cost (central service dept. cost) Cost Recovery: Gap between costs and revenues
Fee Study Method
5 Water Utility Services
Full Cost Recovery – 2 Options
Option 1 – Full Recovery in Year 1 (FY23-24)
Option 2 – Full Cost Recovery over three (3) years, increase is split evenly over the course of three years.
New Fees and Reduction of existing fees, full cost is proposed in the first year (FY23-24) Airport
Consumer Price Index (CPI) – stay current with market rate Increase of Maintenance cost – Labor and Materials
Other City Fees
WATER UTILITY
Existing
Proposed
City of Orange
Garden Grove
Pomona
Water Reconnection Fee
$23
$73
$70
$50
$47
Fire Flow Test
$0
$143
N/A
$200
285
1”Meter Test Deposit
$193
$303
$198
$348
N/A
6 AIRPORT
Existing
Proposed
Torrance
El Monte
Pacoima
Pomona
Standard Hangar (rate per sqft)
$0.396
$0.43
$0.67 Resident
$0.75 nonresident
$0.43
$0.43
$0.43
Tie-downs (per month)
$110
$150
$133
$104
$132
$84
Fuel Flowage (per gallon)
$0.11
$0.15
$0.15
$0.15
$0.15
$0.15
Note: Fee comparison with other agencies can be challenging given the nature of each city with varying employee compensation rates, full cost recovery method, philosophies, and content of the services and fees.
Revenue Analysis
Water Utility Services
Generally, 50% cost recovery from fee increase; approximately $600,000 additional annual water revenue at full cost recovery Airport
10% increase in Hangar monthly lease rates (60% of Airport Revenue) 36% increase both in Tie-downs monthly lease rates and fuel flowage fee per gallon Overall, these increases translate to 7% of Airport’s Annual Revenue which is approximately $150,000. 7