CITY OF SANTA BARBARA
CITY COUNCIL
Randy Rowse
Mayor
Rebecca Bjork
City Administrator
Alejandra Gutierrez
Mayor Pro Tempore
Oscar Gutierrez
Ordinance Committee Chair
Sarah J. Knecht
City Attorney
Eric Friedman
Finance Committee Chair
Meagan Harmon
Mike Jordan
Kristen W. Sneddon
City Hall
735 Anacapa Street
http://www.SantaBarbaraCA.gov
MONDAY, MAY 22, 2023, 1:00 PM
SPECIAL COUNCIL MEETING AGENDA
COUNCIL CHAMBERS, CITY HALL, 735 ANACAPA STREET,
SANTA BARBARA, CA 93101;
AND 320-A WEST ORTEGA STREET, SANTA BARBARA, CA 93101
IN-PERSON PUBLIC COMMENT: Any person wishing to address the City Council should first complete and deliver a "Request to Speak" form prior to the time that public comment is taken up by the City Council. Each speaker will be given a total of 3 minutes to address the Council. The City Council, upon majority vote, may decline to hear a speaker on the grounds that the subject matter is beyond their jurisdiction.
WRITTEN PUBLIC COMMENT: Public comments may also be submitted via email to [email protected] prior to the beginning of the Council Meeting. All public comments submitted via email will be provided to City Council and will become part of the public record.
PUBLIC COMMENT LIMITED TO SPECIAL MEETING TOPICS: Public comment on matters not listed on the agenda will not occur at the beginning of the meeting because this is a special meeting.
REPORTS: Copies of the reports relating to agenda items are available for review at http://www.SantaBarbaraCA.gov/CAP.In accordance with state law requirements, this agenda generally contains only a brief general description of each item of business to be transacted or discussed at the meeting. Should you wish more detailed information regarding any particular agenda item, you are encouraged to obtain a copy of the Council Agenda Report (a "CAR") online at the City's website (http://www.SantaBarbaraCA.gov/CAP). Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are posted to the City’s website as soon as reasonably feasible.
SPANISH INTERPRETATION: If you need interpretation of your communications to Council from Spanish into English, please contact the City Clerk’s Office at 564-5309 or by email at [email protected]. If possible, notification of at least 48 hours will usually enable the City to make arrangements.
INTERPRETACIÓN EN ESPAÑOL: Si necesita una interpretación del español al inglés, para sus comunicaciones al Consejo, comuníquese con la Oficina del Secretario Municipal al 564-5309, o por correo electrónico a [email protected]. Si es posible, la notificación de al menos 48 horas generalmente permitirá a la Ciudad hacer los arreglos.
AMERICANS WITH DISABILITIES ACT: If you need auxiliary aids or services or staff assistance to attend or participate in this meeting, please contact the City Administrator's Office at 564-5305 or by email at [email protected]. If possible, notification at least 48 hours prior to the meeting will usually enable the City to make reasonable arrangements. For those who need accessibility accommodation in using the “raise hand” function and/or registering to participate in the Zoom session, please contact the Clerk’s office by 5:00 p.m. the day before the meeting for assistance. Additionally, a speaker may email [email protected] by 5:00 p.m. the day before a meeting, stating which item they wish to speak on. Specialized services, such as sign language interpretation or documents in Braille, may require additional lead time to arrange. 05/22/2023 Santa Barbara City Special Meeting Agenda Page 1 MONDAY, MAY 22, 2023, 1:00 PM
SPECIAL COUNCIL MEETING AGENDA
PLEDGE OF ALLEGIANCE
ROLL CALL
PUBLIC COMMENT FOR ITEMS LISTED ON THE AGENDA
PUBLIC HEARINGS
1. Subject: Fiscal Year 2024 Recommended Operating and Capital Budget (230.05)
Recommendation: That Council hear a presentation from the City Administrator’s Office, Mayor & Council, City Attorney’s Office, Human Resources Department, and Finance Department regarding their Fiscal Year 2024 Recommended Budgets.
ADJOURNMENT
CITY OF SANTA BARBARA
COUNCIL AGENDA REPORT
AGENDA DATE: May 22, 2023
TO: Mayor and Councilmembers
FROM: Administration Division, Finance Department
SUBJECT: Fiscal Year 2024 Recommended Operating and Capital Budget RECOMMENDATION:
That Council hear a presentation from the City Administrator’s Office, Mayor & Council, City Attorney’s Office, Human Resources Department, and Finance Department regarding their Fiscal Year 2024 Recommended Budgets.
DISCUSSION:
In connection with City Council’s review of the Fiscal Year 2024 Recommended Budget, public hearing dates have been scheduled during which City departments will present their respective budgets and City Council will have the opportunity to deliberate and make final decisions prior to adoption. All public hearings have been publicly noticed and are special budget work sessions scheduled separately from the regularly scheduled City Council meetings held on Tuesdays. Members of the public are encouraged to participate and will have the opportunity to make comments and provide feedback in person or via electronic meeting format on any aspect of the Fiscal Year 2024 Recommended Budget at the work sessions.
At this fourth special budget work session, scheduled from 1:00 p.m. to 5:00 p.m., the City Administrator’s Office, Mayor & Council, City Attorney’s Office, Human Resources Department, and Finance Department will present their budgets.
Staff also drafted a cost recovery and revenue policy with the purpose of establishing and identifying cost recovery factors and concepts that should be considered for setting cost recovery target levels for each program offered by the City. The policy allows the City services users, staff and general taxpayers to better understand the philosophy behind pricing of a program or service. The policy is based on the cost recovery goal for the service established by the City to provide the service and whether the service is a public, public and individual, or primarily an individual benefit service.
Agenda Item No. 1
File Code No. 230.05
Council Agenda Report
Fiscal Year 2024 Recommended Operating and Capital Budget May 22, 2023
Establishing a citywide cost recovery and revenue policy is a best practice in local governments, increases transparency and standardization among fee setting and is in line with the purpose and goals of Vision 2030 to ensure adequate and appropriate cost recovery of city services. The Finance Committee received this draft policy on May 2, 2023 and voted unanimously to recommend approval of the policy to the City Council on May 16, 2023. Staff is seeking the City Council’s review of the policy and will request the City Council to approve of the policy, along with the budget, on June 13. 2023.
At the next meeting, scheduled on May 24, 2023, from 9:00 a.m. to 12:00 p.m., City Council will receive a presentation from the Community Development and Information Technology Departments.
The public can access the City Administrator’s Recommended Budget for FY2024 and FY2025 on the online budget tool at https://santabarbaraca.gov/finance/budget-reports or clicking here.
ATTACHMENT: 1. Schedule of Proposed Council Budget Review Meetings and Public Hearings
2. Cost Recovery and Revenue Policy
PREPARED BY: Natalija Glusac, Budget Manager
SUBMITTED BY: Keith DeMartini, Finance Director
APPROVED BY: City Administrator's Office
CITY OF SANTA BARBARA
Budget Hearing Schedule - Fiscal Years 2024 & 2025
PROPOSED Schedule of ALL Budget Review Meetings & Public Hearings Please Note: Meeting dates and times are subject to change on short notice.
MEETING DATE BUDGET AGENDA ITEM(S)
SPECIAL BUDGET
WORK SESSION
Thursday, March 9, 2023
2:00 p.m. – 5:00 p.m.
Carrillo Recreation Center
• Overview of City fund structure, enterprise, and
ICS funds
• Vision 2030
• Major economic indicators
• General Fund multi-year forecast and budget
balancing considerations
FINANCE
COMMITTEE
Tuesday, April 11, 2023
12:30 p.m. – 1:30 p.m.
Notice of Prop. 218 Hearing on Proposed Increases to
Solid Waste Rates
REGULAR
CITY COUNCIL
MEETING
Tuesday, April 18, 2023
2:00 p.m. – 5:00 p.m.
• Filing of the Recommended Budget for Fiscal
Years 2024 & 2025
• Schedule of Special Budget Work Sessions and
Public Hearings Approved
• Overview of Recommended Budget
• General Fund Balancing Strategy
FINANCE
COMMITTEE
Tuesday, May 2, 2023
12:00 p.m. – 1:30 p.m.
• General Fund departmental proposed fee changes
SPECIAL BUDGET
WORK SESSION AND
PUBLIC HEARING #1
Wednesday, May 3, 2023
8:30 a.m. – 12:00 pm
Department Budget Presentations for:
• Airport
SPECIAL BUDGET
WORK SESSION AND
PUBLIC HEARING #2
Wednesday, May 3, 2023
1:00 p.m. – 5:00 p.m.
Department Budget Presentations for:
• Police
• Fire
SPECIAL BUDGET
WORK SESSION AND
PUBLIC HEARING #3
Friday, May 5, 2023
1:00 p.m. – 5:00 p.m.
Department Budget Presentation for:
• Sustainability & Resilience
• Waterfront
• Library
FINANCE
COMMITTEE
Tuesday, May 9, 2023
12:00 p.m. – 1:30 p.m.
• Enterprise Fund departmental proposed fee
changes
FINANCE
COMMITTEE
Tuesday, May 16, 2023
12:30 p.m. – 1:45 p.m.
Recommendations to the City Council
• General Fund Taxes and Revenue Assumptions
• Follow up on items requested by Finance
Committee
• Staff recommended and other changes
ATTACHMENT 1
CITY OF SANTA BARBARA
Budget Hearing Schedule - Fiscal Years 2024 & 2025
PROPOSED Schedule of ALL Budget Review Meetings & Public Hearings Please Note: Meeting dates and times are subject to change on short notice.
SPECIAL BUDGET
WORK SESSION AND
PUBLIC HEARING #4
Monday, May 22, 2023
1:00 p.m. – 5:00 pm
Department Budget Presentations for:
• City Administrator’s Office
• Mayor & Council
• City Attorney
• Human Resources
• Finance
SPECIAL BUDGET
WORK SESSION AND
PUBLIC HEARING #5
Wednesday, May 24, 2023
9:00 a.m. – 12:00 p.m.
Department Budget Presentations for:
• Community Development
• Information Technology
SPECIAL BUDGET
WORK SESSION AND
PUBLIC HEARING #6
Thursday, May 25, 2023
9:00 a.m. – 12:00 p.m.
Department Budget Presentation for:
• Parks & Recreation
SPECIAL BUDGET
WORK SESSION AND
PUBLIC HEARING #7
Wednesday, May 31, 2023
9:00 a.m. – 12:00 p.m.
Department Budget Presentations for:
• Public Works
• Water and Wastewater Fee Changes
• Capital (General Fund & Measure C)
SPECIAL BUDGET
WORK SESSION AND
PUBLIC HEARING #8
Monday, June 5, 2023
2:30 p.m. – 6:00 p.m.
Department Budget Presentations for:
• IF NEEDED
REGULAR
CITY COUNCIL
MEETING
Tuesday, June 6, 2023
2:00 p.m. – 5:00 p.m.
• Prop. 218 Hearing on Proposed Increases to Solid
Waste Rates
SPECIAL BUDGET
WORK SESSION AND
PUBLIC HEARING #9
Wednesday, June 7, 2023
6:00 p.m. – 9:00 p.m.
• Finance Committee Budget Recommendations to
Council
• Council Budget Deliberations
• Final Council Budget Direction to Staff
• Planned Close of Budget Hearings (unless
additional Work Sessions needed)
REGULAR
CITY COUNCIL
MEETING
Tuesday, June 13, 2023
2:00 p.m. – 5:00 p.m. • City Council Budget Adoption
CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:
COST RECOVERY & REVENUE POLICY
Policy No.
Issued by: Date:
ATTACHMENT 2
Purpose
The purpose of this policy is to establish a Citywide cost recovery and revenue policy by identifying cost recovery factors and concepts that should be considered for setting cost recovery target levels for each program offered by the City. This Policy allows the City services users, staff, and general taxpayers to better understand the philosophy behind pricing of a program or service. The policy is based on the cost recovery goal for the service established by the City to provide the service and whether the service is a public, public and individual, or primarily an individual benefit service.
Background
The City of Santa Barbara is simultaneously accountable for maintaining a sustainable budget that benefits the overall community and one that also responds to the interests of the individuals who live here. While the primary mission of government is to satisfy community needs, many City services solely benefit specific individuals or businesses. It is the intention of this policy to establish cost recovery levels so that the public at large is not subsidizing activities that benefit individual recipients through general tax revenues. The foundation of effective cost recovery is a well-conceived, regularly reviewed policy. Such a policy provides a guideline for setting equitable fees given the full cost of each service, allowing optimum cost-recovery rates for defined services, and alleviating unintended subsidization of these services from General Fund resources.
A cost recovery policy provides guidelines for setting fees given the full cost of service. It does not bind policymakers to increasing or decreasing fees but does provide rationale for doing so. The lower fees are set, relative to full cost recovery, the more General Fund dollars are required to maintain the service. This additional support must then be weighed against the other needs for General Fund resources, including needs which may not have similar cost recovery options.
Cost recovery does not imply that the target is total recovery of the cost; however, a target is established according to a variety of considerations and may range from 0% to more than 100% of direct costs.
Principles, Definitions, & Criteria:
The guiding principles for the creation of an effective pricing policy are as follows:
Accessibility, Fairness, and Affordability based on the category of service and benefit level. Effective and appropriate funding strategies from General Fund, user fees, and other sources.
Improved efficiency in the cost of providing programs, services, and facilities. Financial sustainability by achieving established cost recovery targets.
CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:
COST RECOVERY & REVENUE POLICY
Policy No.
Issued by: Date:
DEFINITION OF TERMS:
Public Services are services the City offers that provide all users the same level of opportunity to access the service. The level of benefit is the same to all users. Public Services normally have low or no user fees associated with their consumption. The cost for providing these services is borne by the General Fund.
Public and Individual Benefit Services are services whereby the user receives a higher level of benefit than the general taxpayer. The taxpayer benefits as a whole because the service provides a more livable community and the service has a good public benefit as well. Public and Individual Services can be priced using either a partial overhead pricing strategy or a variable cost pricing strategy. Partial overhead pricing strategies recover all direct operating costs and some determined portion of fixed indirect costs. Variable cost pricing strategies recover a determined portion of the fixed direct costs by adding a markup to the variable costs. The expectation is that the markup will contribute to meeting all or a part of fixed direct costs and generate some level of indirect cost recovery. The portion of fixed indirect costs not recovered by the price established represents the subsidy. Whatever the level of subsidy, staff needs to inform the users by letting them know that the City is investing a certain dollar amount and/or what percentage level of investment they are making in their experience.
Individual Benefit Services are services where only the user benefits. For these services, the City should implement a pricing strategy to achieve full cost recovery. The price of this service is intended to recover all direct and indirect costs associated with providing the service.
Direct Expenses are City costs associated with staff, materials and supplies, and other resources associated with providing the program, service, or operating the facility. Direct expenses also include the proportional cost of the program or facility supervisor, coordinator, or administrative personnel based on the time required to plan, organize, and direct the operation of that program, service, or facility.
Indirect Expenses are the cost of the City Departments to provide the program or facility. Indirect expenses include Department Administration, marketing, information technology, and facility or maintenance staff. Indirect expenses also include City wide functionalities such as Human Resources, Information Technology, Fleet, Facilities, Finance, City Administrator, and City Attorney time associated with supporting the operation of the program or facility, among other expenses.
Cost Recovery Percentage outlined in this Policy is based on Direct Expenses only and does not include Indirect Expenses. It is generally recommended that an additional 5%-10% be added to the fees established for Important and Value-Added programs, services, and facilities, and 0%-5% for Core Services programs, services, and facilities, to attempt to offset some portion of the Indirect Expenses associated with providing those activities.
CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:
COST RECOVERY & REVENUE POLICY
Policy No.
Issued by: Date:
CORE SERVICES (0%-20% Cost Recovery)
Core services are those programs, services, and facilities that the City of Santa Barbara must provide and/or are essential in order to capably govern the municipality and operate. The failure to provide a core service at an adequate level would result in a significant negative consequence relative to the City’s health and safety and economic and community vitality. The criteria for a core service are:
City of Santa Barbara is mandated by law or is contractually obligated by agreement to provide the service.
The service is essential to protecting and supporting the public’s health and safety. The service protects and maintains valuable City assets and infrastructure. The City’s residents, business customers, and partners would generally and reasonably expect and support the City in providing the service, and that service is one that cannot or should not be provided by the private sector, and provides a sound investment of public funds.
Examples of City functions that are considered Core Services include elections, City Council material distribution, Boards and Commissions, filings, records management, fire services, library services, Parks and Recreation Centers and Community Centers, maintenance of parks, and safety and noise enforcement by Police.
IMPORTANT SERVICES (20%-80% Cost Recovery)
Important services are those programs, services, and facilities the City should provide, and are important to governing the municipality and effectively serving its residents, businesses, customers, and partners. Providing important services expands or enhances the ability to provide and sustain the City’s core services, health and safety, and economic and community vitality. The criteria for an important service are:
Service provides, expands, enhances, or supports identified core services. Services are broadly supported and utilized by the community, and are considered an appropriate, important, and valuable public good. Public support may be conditional upon how the service is paid for or funded.
Service generates income or revenue that offsets some or all of its operating cost and/or is deemed to provide an economic, social, or environmental outcome or result within the community.
Examples of Important Services include water heater installation permits, hazardous materials fees, fire permit/safety inspection/safety plan check fees, Parks & Recreation after school programs, and animal/vehicle impounding.
CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:
COST RECOVERY & REVENUE POLICY
Policy No.
Issued by: Date:
VALUE-ADDED SERVICES (80%-100% Cost Recovery)
Value-Added services are discretionary programs, services, and facilities that the City may provide when additional funding or revenue exists to offset the cost of providing those services. These programs and services provide added value to the residents, businesses, customers, and partners above and beyond what is required or expected of a municipality. The criteria for added value services are:
Individual users or participants receive most or all of the benefit of the service. Other private or public sector alternatives provide the service. The service benefits commercial uses and activities.
Service expands, enhances, or supports Core or Important services, and the quality of life of the community.
Services are supported and well utilized by the community and provide an appropriate and valuable public benefit.
Service generates income or funding from sponsorships, grants, user fees, or other sources that offsets some or all of its cost and/or provides a meaningful economic, social, or environmental benefit to the community.
Examples of Value-Added Services include semi-private tennis lessons, facility rentals for private events and development related permit fees.
ACCESSIBILITY, FAIRNESS AND AFFORDABILITY
This Policy supports equity and fairness because it requires those who personally benefit from a program or service above what the general taxpayer receives to pay for that added benefit.
Affordability should be based on both the level of benefit and ability to pay. For example, the City should not subsidize programs with tax support solely based on the age of the user. The type of service and benefit received will directly determine the cost recovery level or pricing strategy to be used in the pricing of the services and products.
SUPPLEMENTAL FUNDING
Supplemental funding from user fees and prices charged for programs, activities, and services assist in the overall funding of the City’s operations. The revenue produced through supplemental funding provides the City the needed revenue for operations, capital costs, and marketing to promote programs and services available to the community. These dollars can come from any source that supports operations and include grants, sponsorships, partnerships, permits, special rental uses, concessions, and many other options. The City should identify supplemental funding opportunities whenever possible and where appropriate.
CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:
COST RECOVERY & REVENUE POLICY
Policy No.
Issued by: Date:
EFFECTIVENESS
City staff can evaluate how the service is delivered and if it is delivered in the most effective and efficient manner, based on the cost to deliver the service. Priorities to enhance user or visitor experiences are clearly defined, because the services provided are made visible and the priorities are established based on the direct user costs that are associated with the activities that users want. Pricing City services correctly can achieve these positive results:
1. Reduces overcrowding of programs and facilities, which enhances supervision and improves visitor experience.
2. Indicates user and visitor demand and support for the service.
3. Increases positive user and visitor feedback.
4. Provides encouragement to the private sector to partner with Departmental programs through contracts that can bring greater revenue to the City.
5. Ensures stronger accountability on staff and management of the service.
6. Creates program choices for those who want a higher level of quality or individual attention. (i.e., private lessons versus group lessons) through differential pricing.
DISTRIBUTION OF REVENUE FUNDS TO ACHIEVE COST RECOVERY GOALS Distribution of Revenue means dollars generated from each activity are redistributed back to the area they came from to pay direct and indirect costs in some situations, and for future improvements associated with a facility or activity. The staff will document the cost of services provided through a costing model. The true cost of each activity is designated as direct and indirect costs associated with providing a product or service. An annual review of all prices is recommended to document the changes that have occurred within the products or services provided by City. This will help staff to evaluate which program, product, or service should have adjustments based on the Policy.
City of Santa Barbara City Council and staff will set prices for services based on the following assessment:
What is the cost to provide the service and what is the unit cost per registered participant or attendance at the program or facility?
Is the program or service core, important, or value added based on the criteria established and the level of cost recovery and subsidy?
What level of benefit does the program provide? Is the benefit public, individual and public, or primarily an individual benefit based on the definitions in the pricing policy? Does this price support the cost recovery goal desired for the program or facility to support sustainability?
CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:
COST RECOVERY & REVENUE POLICY
Policy No.
Issued by: Date:
Pricing Policies & Procedures:
Key Elements in implementing the Pricing Policy include:
Create appropriate value based on benefit level and price accordingly. Calculate the costs (direct/indirect) and level of cost recovery goal as established for that service.
Compare how the program price of facility use cost compares in the marketplace of private and public providers.
Price services correctly the first time based on cost and target for cost recovery. Use differential pricing based on participant, product, and times to encourage greater use of the service or facility.
Educate staff, volunteers, boards, and officials on the methodology to establish cost recovery, level of subsidy, and eventual price for program, service, or facility. Communicate cost of service to program and facility users so they understand how their fees contribute to the total cost of the service and level of subsidy from City.
ESTABLISH PRICING/COST RECOVERY CRITERIA
Does this program/service align with the Departmental Vision and Mission? The program/service meets at least one of the City’s strategic directions. The program has a strong social value that is supportive of an identified strategic direction. The program, service, or facility is capable of achieving its established cost recovery target. The program has strong economic appeal and creates a positive return on investment. The program has a high partnering capability to expand or enhance service and/or offset operational costs.
The program/service currently meets the capacity performance measures developed by staff. What classification of Benefit Level does it fall under (Public, Public and Individual, or Individual)?
What is the true cost to provide the service and current level of subsidy? What is the current price of the service and what level of cost recovery does it support now? What pricing alternatives are currently being used?
PRICING AND COST RECOVERY GOALS
Public Benefit Services = Core Direct Cost Recovery (0%-20%) Core services provide the broadest public and community benefit to the City of Santa Barbara, and should be primarily funded by the City’s General Fund and tax support. A higher level of tax support is appropriate, as it helps the City achieve key elements of its strategic plan and support the values of the City in serving the public.
CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:
COST RECOVERY & REVENUE POLICY
Policy No.
Issued by: Date:
Public and Individual Benefit Services = Important Direct Cost Recovery (20%-80%) Important services provide both a public, as well as individual, benefit to the program or service user.
The City should provide these services at a shared funding strategy that requires the participant to pay a portion of the cost through user fees. Additionally, the City may utilize grants or partner funding to augment the cost of the program/service. The City should subsidize these programs/services with the General Fund based on a targeted percentage of cost recovery.
Individual Benefit Services = Value Added Direct Cost Recovery (80%-100%) Value added services primarily provide an individual and private benefit to the program or service user. Consequently, the City should recover the cost of providing these programs and services through user and rental fees. Additionally, the City may provide value added programs when outside funding, grants, or sponsorships exist that substantially offset the cost of providing these programs. Pricing for these programs, services, or facility use should be established based on a consideration of cost to the City and market rate for comparable programs, services, or facility use.
PRICING METHODOLOGIES
Pricing programs, services, and use of facilities should be based on a consideration of both direct and indirect cost to City of Santa Barbara as well as the “market-based value” of the service. Pricing should be evaluated annually, and comparison rates should be considered during that process as needed. Flexibility is needed to maximize Department revenues and to respond to changing market conditions such as demand versus capacity, weather, changes to the cost of providing the service, and/or additions or changes to existing programs.
Pricing Options to consider:
Differential between resident and non-resident rates
Prime time/non-prime time rates
Group or Volume Discount rates
In season/off season rates
Increase the minimum numbers required to hold the program (low cost-high volume approach) to spread cost to more people while keeping price the same Reduce the staffing or material cost or length of a program/service to keep existing price Change the City/Contractor percentage split to increase revenue to the City
NON-RESIDENT FEE DIFFERENTIAL
The criteria for establishing the differential percentage charged for non-residents for programs, services, or facility rentals will generally be as follows:
CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:
COST RECOVERY & REVENUE POLICY
Policy No.
Issued by: Date:
A higher general fund subsidy by the City will justify a higher non-resident fee. Conversely, a lower non-general fund subsidy of a program or service will justify a lower or no fee differential.
Higher demand by City residents or limitations in capacity will justify higher non-resident fees. Conversely, a low demand or high capacity will justify a lower or no fee differential.
ADMINISTRATIVE OVERHEAD COST RECOVERY (INDIRECT COSTS)
In addition to the direct cost recovery targets established for individual programs, the City should establish a percentage of cost recovery for programs, services, and facility use. The administrative overhead fee is designed to recover the proportional cost of the administration, marketing and advertising, and general support staff which contribute time and expense in supporting the programs.
In general, this fee should be established to recover an additional 5%-10% of the cost of the programs.
It is important to note this does not address building maintenance, replacement, etc.
FEE CHANGES
On an annual basis, coordinated with the City’s budget process, department staff will propose changes to existing fees, new fees, and deleting obsolete fees in line with this policy. The proposed fee changes will be presented to the Finance Committee for initial consideration. Proposed fee changes will also be presented to the City Council as part of the budget review process and adopted along with the annual budget.
Fee changes may be considered as part of a fee study as well as being annually adjusted based on a commonly used index for a specific type of fee or service, such as a consumer price index (CPI) inflationary assumption.
Fee changes can be considered outside of the annual budget review process as necessary and coordinated with the Finance Director and City Administrator.