Item Number: {{item.number}}
City Council / Board of Directors
Public Hearing(s)
Meeting of: December 19, 2023
Submitted By:
Jenele Davidson, Deputy City Manager
Sophie Smith, Deputy City Manager
Subject:
Update of the Master User Fee Schedule
Recommendation:
That the Honorable City Council and Victorville Water District Board of Directors:
1. Open and conduct the Public Hearing;
2. Close the Public Hearing; and
3. Adopt Resolution Nos. 23-101 and VWD 23-016, amending the Master User Fee Schedule by adjusting certain user fees based on the Consumer Price Index (CPI).
Fiscal Impact:
If approved, the updated Master User Fee Schedule will become effective on January 1, 2024. The revenue estimates for the impacted user fees will be evaluated during the midyear budget review process and adjusted as may be necessary.
Strategic Plan Goal:
Annual review and updating of the City/District Master User Fee Schedule helps ensure the City/District is accomplishing Goal A: Financial Sustainability from the current Strategic Plan. These incremental adjustments help ensure the City/District is recouping costs associated with providing various services.
Background:
As part of a general cost recovery strategy, local governments have adopted user fees to fund services that provide limited or no direct benefit to the community as a whole. User Fees recover costs associated with providing specific services which benefit the user, thereby reducing the use of General Fund monies for such purposes. Cost recovery objectives can be based on a variety of factors, including public versus private benefits provided by the service. If an activity has a public benefit, it might be more appropriately supported by the General Fund. Conversely, if an activity has mostly private benefits, it 3 4
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might be more appropriately supported by fees. Activities that have a mix of public and private benefits might be supported by the combination of fees and the General Fund. An example of this would be offering Victorville residents a lower fee for Recreation programs because these programs benefit members of our community. In an effort to both understand and establish appropriate levels of cost recovery for City services that provide benefits to individuals or groups, the City previously conducted a fee study. The City did so to ensure that fees do not exceed the costs of service and to provide an opportunity for the City Council to re-align fee amounts with local cost recovery policies. The quantitative methods used during the study included a cost-of-service analysis and a cost recovery evaluation which 1) provides a measurable analysis that compiles the full cost of providing governmental services and activities; and 2) compares the existing fee for each service or activity to the average total cost of the service quantified through the analysis.
On June 7, 2022, the City Council adopted Resolution Nos. 22-055 and VWD 22-008, adopting a comprehensive user fee study and master user fee schedule. These resolutions also established an annual review process for fees to apply an inflator using the July over July comparison from the Riverside-San Bernardino-Ontario, CA Consumer Price Index for All Urban Consumers (CPI-U). The intent was to consider adoption of revised fees annually, each December, with an effective date of January 1st of each year for any new fees approved. Such inflationary adjustments are discretionary and must be approved by the Council at a duly noticed public hearing.
Discussion:
As part of the City’s effort to maintain financial sustainability and ensure cost recovery for services, when possible, an updated Master User Fee Schedule has been drafted for Council’s approval. The Master User Fee Schedule (Exhibit A of Attachment A) is based on the original rates adopted on June 7, 2022 (which had an effective date of January 1, 2023) with an annual escalator applied using the July 2023 over July 2022 CPI-U, at the rate of 3.29%. This CPI poses a minimal adjustment to user fees, resulting in a smaller impact to customers, in comparison to delaying rates adjustments which could result in a larger increase at a later time.
The update to the Master User Fee Schedule also includes a few new fee categories that were added for programs and services that were not previously listed under Community Services:
•VIP Basketball
•Kids Camp
•Credit Card Processing – at vendor cost for the Library As the need for new rates arises, a cost-of-service analysis and a cost recovery evaluation will be conducted which may result in additional updates to the Master User Fee Schedule before the next annual review. At this time staff expect to bring back such revisions related to new street vendor licensing categories and animal shelter services in 2024. 3 4
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Staff find the proposed increases in rates to be within the reasonable cost to provide related services and recommend moving forward with the adoption of Resolution Nos. 23-101 and VWD 23-016.
Staff is available for any questions the Council/Board may have.
Attachments: A.Resolution Nos. 23-101 and VWD 23-016