User Fee Study
Finance Committee Presentation
June 26, 2024
City of San Leandro – Finance Committee Presentation
1 Presentation AgendaPresentation Agenda
1. Project Goals / Scope2. Project Approach3. Summary of Results4. Questions City of San Leandro – Finance Committee Presentation
2 Fee Programs StudiedFee Programs Studied
City Manager City Clerk Finance Planning
Building Housing Services Fire PW - Engineering & Transportation PW –
Maintenance
PW –
Environmental
Services
Police Library Services
Recreation &
Parks
Human
Services
City of San Leandro – Finance Committee Presentation
3 Project GoalsProject Goals
Understand
Full Cost of
Providing
Services
Set
Municipal
Fees
Accordingly
21 City of San Leandro – Finance Committee Presentation 4 Project ScopeProject Scope
• Example: Building
Permits
Cost-Based User Fees – Prop 26
Fees limited to recovering the cost of
providing the service
• Example: Facility
Rentals
Use Gov’t. Property – Prop 26
The City can charge whatever price the
market will pay (must be competitive)
• Example: Library
Fines
Fines and Penalties – Prop 26
Fines are not subject to cost recovery rules
and may be set by Council
• Example: Returned
Check Fee
Fees Set by Law
Some fees are set by Federal or State Law
• Example: Utility
Rates, Impact Fees
Rates (P218), Impact Fees
(AB1600)
Separate legislative authority and process
Focus of
this Fee
Study
Not
Studied
City of San Leandro – Finance Committee Presentation
5 Authority for FeesAuthority for Fees• Proposition 26
Article XIIIC§1(e)(3) Inspections and Regulatory Permits are exempt…however are still limited to the local government’s reasonable costs. • CA Government Code §66014(a)
“Those fees may not exceed the estimated reasonable cost of providingthe service for which the fee is charged” City of San Leandro – Finance Committee Presentation
6 Project ApproachProject Approach
Data
Collection
Fee
Structure
Review
Annual
Total Cost
Analysis
Hourly
Cost
Analysis
Per Unit
Cost
Analysis
Cost
Recovery
Outcomes
and Fee
Setting
Policy
City of San Leandro – Finance Committee Presentation
7 Data CollectionData Collection
3 Time estimates (annual and per fee item)1 Adopted budget and staffing Permit activity from a prior completeFiscal Year
24 Current fees
City of San Leandro – Finance Committee Presentation
8 Fee Structure ReviewFee Structure Review
Flat Fees
Variable Fees Based on Project Characteristics
Variable Fees Based on Actual Time Tracked
(with Deposits Managed as Needed)
City of San Leandro – Finance Committee Presentation
9 Defining Total CostsDefining Total Costs
• Salaries and benefits• Services and supplies
Direct
• Program, Division, Departmental and City-wide
Indirect
• Review required from internal departments for
approval
Support
• Community Planning Fee• Technology Fee
Systems and Maintenance
City of San Leandro – Finance Committee Presentation 10 Hourly Cost AnalysisHourly Cost Analysis
$ per hour
=
/ Hours
Direct Services
Indirect Services
Support
City of San Leandro – Finance Committee Presentation 11 Hourly Rate OutcomesHourly Rate Outcomes
City Department / Division Hourly Rate City Department / Division Hourly Rate City Manager Administration Division 212$ Police Department City Clerk Division 112$ Sworn 302$
Finance Department 174$ Non-Sworn 147$ Planning Division 257$ Library Services Department 167$ Building and Safety Division 212$ Recreation and Parks Department 88$ Housing Services Division 291$ Full-Time 249$ Fire Department 256$ Part-Time 70$ Public Works - Engineering and Transporation 249$ Human Services Department 219$ Public Works - Maintenance 139$ Full-Time 265$ Public Works - Environmental Services 194$ Part-Time 74$ City of San Leandro – Finance Committee Presentation 12 Per Unit Cost AnalysisPer Unit Cost Analysis
FullyBurdened
Hourly Rate
(FBHR)
Time to
Complete
Maximum
Fee
Amount
City of San Leandro – Finance Committee Presentation 13 Detailed Summary of ResultsDetailed Summary of Results
Fee Category
Annual
Estimated
Revenues at
Current Fee
Annual
Estimated
Revenues at
Full Cost
Recovery Fee
Annual Cost
Recovery
Surplus/
Deficit
Existing Cost
Recovery
Percentage
Annual Estimated
Revenues at
Recommended
Cost Recovery Fee
Recommended
Cost Recovery
Percentage
City Manager Administration Division 312$ 381$ (69)$ 82% 381$ 100% City Clerk Division* - - - n/a - n/a
Finance Department 9,052 45,669 (36,617) 20% 45,669 100% Planning Division 505,045 1,275,833 (770,788) 40% 1,037,822 81% Building and Safety Division 3,272,907 3,652,047 (379,140) 90% 3,595,586 98% Housing Services Division - 47,266 (47,266) 0% 42,079 89% Fire Department 520,574 532,040 (11,466) 98% 532,040 100% Public Works - Engineering and Transporation 285,239 1,496,943 (1,211,705) 19% 1,458,167 97% Public Works - Maintenance 5,031 5,978 (947) 84% 5,978 100% Public Works - Environmental Services 981,351 1,093,278 (111,927) 90% 976,720 89% Police Department 129,580 98,965 30,615 131% 98,965 100% Library Services Department 437 2,000 (1,563) 22% 500 25%Recreation and Parks Department 1,506,152 5,400,944 (3,894,792) 28% 1,506,152 28% Human Services Department 43,311 143,917 (100,606) 30% 43,311 30% Community Planning Fee 188,574 422,090 (233,517) 45% 211,045 50% Technology Surcharge 205,160 408,182 (203,022) 50% 408,182 100% Total 7,258,991$ 13,795,263$ (6,536,272)$ 53% 9,343,373$ 68% * There were no instances of activity during the time period reflected in this analysis, therefore no projected revenue impact is provided.
City of San Leandro – Finance Committee Presentation 14 The City currently recovers approximately 53% of the total annual cost of providing services.
Should Council adopt all fees at 100% of the Cost of Service per Activity amounts shown, an additional $6.5 million could be recovered. City staff provided initial recommended fee amounts for Council’s consideration. If Council adopts fees at these recommended fee amounts, an additional $2.1 million in costs could be recovered, for an overall 68% cost recovery outcome.
Summary of ResultsSummary of Results
Annual
Estimated
Revenues at
Current Fee
Annual
Estimated
Revenues at
Full Cost
Recovery Fee
Annual Cost
Recovery
Surplus/
Deficit
Existing Cost
Recovery
Percentage
Annual Estimated
Revenues at
Recommended
Cost Recovery Fee
Recommended
Cost Recovery
Percentage
Total 7,258,991 13,795,263 (6,536,272) 53% 9,343,373 68% City of San Leandro – Finance Committee Presentation 15 Appendix A to the Final Report displays the results of the analysis for the City:
– Cost of Service per Activity = fee amount at 100% cost recovery
– Existing Cost Recovery % = comparison of the full cost calculation to the current fee/deposit
Appendix B to the Final Report displays the Comparative Fee Survey for Fee Related Activities and Services to neighboring agencies.
Understanding Results of Fee AnalysisUnderstanding Results of Fee Analysis City of San Leandro – Finance Committee Presentation 16 Cost Recovery/Fee SettingCost Recovery/Fee Setting
Full Cost of
Service ($)
Revenue from
Current Fee ($)
Funding from Increased Fee or Non-Fee Revenue Sources
Current Cost Recovery Level
Maximum Cost Recovery 100%
Minimum Cost Recovery 0%
City of San Leandro – Finance Committee Presentation 17 Comparison agencies: Alameda, Concord, Dublin, Hayward, and Walnut Creek.
– Additionally included the following agencies for Recreation comparison: Hayward Area Rec & Park District, and cities of Berkeley, Union City, Oakland, and El Cerrito.
Reasonable attempt to compare readily available information Caveats:
– Differing cost recovery policies or procedures– Varied terminology for provision of similar services – Basis of fees and frequency of review differs among
jurisdictions
Comparative SurveyComparative Survey
City of San Leandro – Finance Committee Presentation 18 Next StepsNext Steps
June 26, 2024
July –
December
2024
Spring 2025 60 days post adoption
Finance Committee Fee Study Presentation
Finance Committee Fee Discussions
City Council Adoption Hearing
Date fees are effective
City of San Leandro – Finance Committee Presentation 19 Questions or Comments?Questions or Comments?
800-676-7516
[email protected]@nbsgov.com
Nicole KissamProject DirectorLauren GuidoSenior Consultant