City of P Beach
Comprehensive User Fee Study
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What are User Fees
• Provide private benefit with limited or no community benefit • State law requires that 1 ) individual use of the service must be voluntary, and 2) fees must reasonably relate to the services provided
• Fee levels & cost recovery determined through City Council fee adoption
• Does not include development impact fees , utility rates , taxes , etc.
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2 Policy Considerations
• State regulations require that municipalities update their fee schedules to reflect the actual costs of certain public services primarily benefiting users. • General standard : individuals or groups who receive private benefit from service should pay 100% of cost
• In certain situations, subsidization is an effective public policy tool :
o Encourage participation
o Ensure compliance when cost is prohibitive to residents o Promote access to services
• Recommend that City utilize inflation factor to annually adjust fees based on CPI , MOU , or another factor
• Comprehensive fee study every 3-5 years
3 Why Update User Fees
• Subsidies in services impact the General Fund o Private & specific benefit services are subsidized by general fund o Reduces ability to fund general benefit activities like public safety & community events/programs
• Decreased department funding can impact service quality/delivery • Cost recovery knowledge and planning
o Provides clarity of pressures on City resources o Enables City to strategize and set fees to benefit of the City and community
o State requirements for reasonable cost-based fees 4 40
User Fee Objectives & Steps
• Determine full cost of providing services or programs • Review fee schedules based on service delivery
• Identify potential new fees (not currently collected) • Remove or restructure obsolete fees
• Using fully-burdened rates, calculate full cost recovery • Update fees for services based on cost analysis • Incorporate or establish cost recovery goals
Subsidies allow access to services and can facilitate compliance • Identify appropriate fee levels that:
• Enhance reasonability and applicability where desired • Maintain consistency with local policies and objectives • Maintain legal compliance with state law
5 Scope of the Study
• Review and calculate cost of providing services and related fees charged by the following departments and divisions :
• Administrative Services Building
• City Manager's Office Public Works
• Tourism & Events 0 Engineering • Recreation 0 Fire
• Planning 0 Police
6 Data & City Staff Participation
• Primary types of data used :
o Expenditure data
o Staffing structures
o Central service/Indirect overhead
o Productive/billable hours
o Time estimates to complete tasks
o City/Department input, feedback and policies
• Staff support throughout process essential to ensure analysis fidelity
Summary of th
e Study
Set Cost Fee Study Updated Fee
Development Cost Analysis Pecovery Peport Adoption Data Staff Current cost Create draft Public collection meetings recovery report Hearing Build fee Update fee Target cost Staff report model schedules recovery review
Overhead Staffing and Finalize
and FBHR time data report
Calculation
Full cost for
services
8 Fee Structures
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• Reasonable time estimates for providing service
Actual Cost'/'"DrepositTased Feesl -
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• Services are billed using Fully Burdened Hourly Rates Fees determined by project s-p.
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• Programmic analysis determines the cost relationship between project size and cost of service
Recreation Activities / Programs / Rental / Use Fees • Fees can be set based on policy, usage characteristics, comparison, and market based • Not a cost-based fee, set to deter activity, without being overburdensome 9 Cost of Service Calculation
• Primary types of data used :
o Salary & Benefits
o Services and supply costs
o Indirect support costs
o System and maintenance costs
• Hourly rates structured to account for direct work hours FrSala Fr 1, Fully
Prod 'rSalary &I I r
Benefit Indirect Hourly
Benefits Hours its Rate Overhead Ra r_. - -,I F71 �1
10 Fee Cost Composition Example
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• Fully Burdened Hourly Permit
Reviewer
rates predominately used
to calculate full cost for Department � fees Director Inspector
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• Important to keep in mind Fee or
all processes, personnel, Service
cross department, and �
city
indirect support involved -� Engineer
to calculate full cost for L6
services I L City Clerk
Administrative Services
• Time based analysis using fully burdened hourly rates and the time it reasonably takes to provide service . • Suggested fee notes :
* An increase to 7 fees
1 fee would decrease
5 fees would remain as currently set
* Average remaining fee subsidy would be 28%
City Manager's Office
• Analysis of services relied upon a time- based analysis • Suggested fee notes :
An increase to 3 fees
* 4 fees would remain as currently set
* 1 new fee for Agenda Mailing Services ( Entire Agenda Packet) would be added
Fees would be at full cost recovery
Tourism & Events
• Fees for use of government owned facilities can be set based on policy considerations , usage factors , and market factors • Fees which have direct staff involvement utilized a time- based analysis
• Suggested fee notes :
o An increase to 17 fees
0 4 fees would remain as currently set
0 7 new fees to tier the Private Parade/Special Event Permit fee into beach weddings, small , medium , and large events with separate categories for non- profit organizations would be added .
14 Recreation
• Facility rental fees and recreation programs are set based on policy considerations , usage factors , and market factors • Staff fees utilized a time-based analysis
• Suggested fee notes:
o An increase to 13 fees
0 3 fees would decrease
0 25 new fees would be added , which include changes to the methodology for Park rentals from hourly to half day/full day fees 0 59 fees would remain as currently set
o Overall Recreation cost recovery is around 21 % 15
Planning
• Time based analysis for flat fees
• Suggested fee notes :
o An increase to 44 fees
0 6 fees would decrease
0 2 new fees would be added
0 12 fees would remain as currently set
o Most fees would be at or near full cost recovery, with largest remaining subsidies for appeals (59%) and non-profit/student film permits (free)
16 Building
• Time based analysis
• Suggested fee notes : Building Permit Program o An increase to 85 fees o Cost analysis found that 0 11 fees would decrease program is currently operating at 82% cost
0 4 new fees would be added recovery
0 24 fees would remain as o Staff is recommending fee currently set table be increased to full o Average remaining subsidy for cost recovery flat fees would be 15%
Public Works
• Time based analysis for flat fees
• Suggested fee notes :
o An increase to 6 fees
0 3 fees would decrease
0 12 fees would remain as currently set
o Most fees are proposed at levels to achieve full cost recovery
40 Engineering
• Time based analysis for flat fees
• Suggested fee notes :
oAn increase to 14 fees
0 5 fees would remain as currently set
° Average remaining fee subsidy would be 23 % 19 Police
• Time based analysis
• Suggested fee notes :
o An increase to 11 fees
0 8 fees would decrease
0 1 fee for Noise Disturbance Response Call-Back would change from actual cost to a flat fee
0 8 fees would remain as currently set
o Proposed fees are at full cost recovery, except for subsidies in the concealed weapon permit fees 20 Fire
• Time based analysis
• Suggested fee notes :
o An increase to 16 fees o 1 fee for the Weed Abatement Program would change from actual
0 4 fees would decrease costs to a flat fee plus 3rd party costs 0 2 new fees would be added o 10 fees would remain as currently set 0 12 Fire Department fees for o Average remaining fee subsidy would Equipment would change to be 25%
reflect current OES or FEMA
rates
21 Questions
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