CITY OF GLENDALE MAY 10, 2011 CHRIS FISHER PIERCE ROSSUM GREGG TOBLER Comprehensive User Fee Study.

C I T Y O F G L E N D A L EM AY 1 0 , 2 0 1 1

C H R I S F I S H E RP I E R C E R O S S U MG R E G G T O B L E R

Comprehensive User Fee Study

2

Overview

Project Team IntroductionStudy ObjectivesScope of the StudyProject Approach and MethodologyFindings and ResultsQuestions & Answers

3

Project Team

Chris Fisher – Consulting Services Group Manager Leading expert in cost of service studies Understands regulatory, political and implementation issues

Pierce Rossum – Project Manager Acted as City’s day-to-day contact Cost of service expert Familiar with City (Water Nexus and Rate Redesign)

Gregg Tobler – Senior Project Analyst Lead data collection and analysis efforts Also working on the Water Rate Redesign

4

Study Objectives

Identify the true cost of providing user fee servicesDetermine fee subsidies and overall revenue impactsIdentify new fees and cost recovery strategiesFairly and appropriately distribute indirect and

overhead costsDevelop a strong, defensible, fee schedule

5

Full review and calculation of the user fees charged by:

City Clerk’s Office Community Services Community Development

Building & Safety Neighborhood Services Planning Division

Fire Department Hazardous Materials Library Police Department Public Works Parking Fund

Scope of the Study

6

Project Approach and Methodology

Data Analysis

Time Estimates

Non-Labor Costs

Labor

Overhead Costs

Building Cost Layers

Direct Services

Indirect Services

Department Overhead

City-Wide Overhead

Set Fees

Define the Full Cost of Services

Set Cost Recovery Policy

7

Two Methodologies

Case Study Method: This approach estimates the

actual labor and material costs associated with providing a unit of service to a single user.

This analysis is suitable when City staff time requirements vary dramatically for a service, or for special projects where the time and cost requirements are not easy to identify at the project’s outset.

Programmatic Approach: This methodology utilizes a

cost/revenue analysis approach that establishes the cost recovery performance of the department at various sub-levels Calculate the full cost of each

program, using staff allocation estimates and full costs

Compare the annual revenues to the full costs to establish the percent of cost recovery for each program.

Identified program-wide potential fee changes that the department can use to address the cost recovery goals of the department.

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Police Department – Time Survey Sample

PositionPD - Offi ce Services

Specialist IIPD - Crime Analyst

PD - Community Service Offi cer

PD - Police Offi cer

Fully Burdened Hourly Rate 45.22 61.58 58.53 137.79

Service TitleFull Cost Recovery Fee Current Fee

Communications Recorded Reproduction 20 15 54 15.00 Data Analysis Services 60 62 53.00

False Alarm-Alarm Response Permit 1st 50 53 158 No chargeFalse Alarm-Alarm Response Permit 2nd 50 53 158 No chargeFalse Alarm-Alarm Response Permit 3rd 50 53 158 100.00 False Alarm-Alarm Response Permit 4th 50 53 158 150.00

False Alarm-Alarm Response Permit 5th and subsequent 50 53 158 200.00 False Alarm-Alarm Response No Permit 1st 50 53 158 150.00

False Alarm-Alarm Response No Permit 2nd 50 53 158 175.00 False Alarm-Alarm Response No Permit 3rd 50 53 158 200.00 False Alarm-Alarm Response No Permit 4th 50 53 158 225.00

False Alarm-Alarm Response No Permit 5th and subsequent 50 53 158 250.00 Removed - Fingerprints - 15.00

Local Criminal History Letter 35 34 25.00

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Findings and Results

Department/Divison Fund Total DirectTotal

Indirect Total CostUser Fee Revenue

Surplus / (Subsidy)

Cost Recovery Rate (%)

City Clerk 101 367,255$ 78,372$ 445,627$ 625,000$ 179,373$ 140%Community Services & Parks 101 2,795,750 493,368 3,289,117 50,000 (3,239,117) 2%

Building & Safety 101 3,367,528 899,610 4,267,138 3,435,000 (832,138) 80%Neighborhood Services 101 917,325 334,424 1,251,749 40,000 (1,211,749) 3%

Planning 101 2,950,135 934,597 3,884,732 1,187,000 (2,697,732) 31%Outreach & Education 101 459,207 75,391 534,598 130,000 (404,598) 24%

Engineering (Public Works) 101 2,223,808 667,590 2,891,398 175,000 (2,716,398) 6%Sub-total (General Fund) 13,081,008 3,483,351 16,564,358 5,642,000 (10,922,358) 34%

Recreation Fund 501 2,037,844 359,620 2,397,463 2,432,959 35,496 101%Fire - Hazardous Materials 510 1,531,932 511,772 2,043,704 1,598,000 (445,704) 78%

Fire - Paramedic Fund 511 14,135,555 2,197,840 16,333,394 11,791,406 (4,541,988) 72%Parking Fund 520 4,731,435 1,064,872 5,796,307 4,054,000 (1,742,307) 70%

Sub-total (Other) 22,436,765 4,134,103 26,570,869 19,876,365 (6,694,504) 75%

Total 35,517,773 7,617,454 43,135,227 25,518,365 (17,616,862) 59%

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Community Development - Planning

ExpendituresTotal - $3,884,732

Revenues

Planning

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

2950135.14242933

934596.6

1187000

2697731.74242933

Total Direct Total Indirect User Fee Revenue General Fund Subsidy

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Technology Surcharge

Long-Range Planning Surcharge

Purpose: Direct cost recovery of ISD related expenditures

Current surcharge: 6.7% Recommended full cost recovery

rate of 17.5% fee surcharge Impact: $520,000 of additional

cost recovery

Purpose: Cost recovery of Long-Range Planning services

No existing fee Targeted cost recovery of 10%

equals 3% fee surcharge Impact: $145,000 of new cost

recovery

New & Revised Surcharges

12

Community Development – Building & Safety


Revenues

Building & Safety

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

3367528

899610.2

3435000

832138.2


13

Neighborhood Services


Revenues

Neighborhood Services

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

917325

334423.75

40000

1211748.75


14

RENTAL HOUSING INSPECTION PROGRAM

MANDATORY POINT OF SALE INSPECTION

The State of California requires local cities to ensure that housing units meet minimum standards of habitability.

The City of Glendale has operated and subsidized the code enforcement program for many years.

The proposed $28 fee would be charged on the property tax bill, annually. Neighborhood services may recover up to an estimated $1.2 million annually.

The Division finds that such a program is needed so that residential and commercial properties are adequately inspected before ownership of such property is transferred.

The cost analysis, calculated the full cost to provide such a service at $400 per inspection.

Neighborhood Services – New Fees

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City Clerk

ExpendituresTotal - $445,627

Revenues

City Clerk

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

367255

78371.55

625000


16

Public Works - Engineering


Revenues

Public Works - Engineering

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2223807.89757067

667589.789757066

175000

2716397.68732773


17

Community Services – General Fund


Revenues

Community Services

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2795749.7645

493367.6055

50000

3239117.37


18

Community Services – Recreation Fund


Revenues

Recreation Fund

1,800,000

1,900,000

2,000,000

2,100,000

2,200,000

2,300,000

2,400,000

2,500,000

2037843.907

359619.513

2432959


19

Fire – Paramedic Fund


Revenues

Fire Paramedic Fund

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

14,135,555

2,197,840

11,791,406

4,541,988


20

Fire – Hazardous Materials


Revenues

Hazardous Materials

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

1531932

511771.84

1598000

445703.84


21

Public Works - Parking Fund


Revenues

Parking Fund

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

4731435

1064872.2

4054000

1742307.2


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General Fund Contribution

Department/Divison Fund Total DirectTotal

Indirect Total CostUser Fee Revenue

General Fund Contribution /

SubsidyCost Recovery

Rate (%)Library 101 4,441,961 1,199,329 5,641,290 125,000 5,516,290 2%

Police - Admin 101 6,939,448 6,286,958 13,226,406 1,010,000 12,216,406 8%Fire - Admin 101 2,020,598 569,365 2,589,963 485,000 2,104,963 19%

General Benefit Functions 13,402,007 8,055,653 21,457,660 1,620,000 19,837,660 8%

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Library


Revenues

Library

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

4441961

1199329.47

125000

5516290.47


24

Police - Administration


Revenues

Police Admin

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

6939448

6286958.44

1010000

12216406.44


25

Fire - Administration


Revenues

Fire Admin

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2020598.4

569364.888

485000

2104963.288


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Fee Setting Considerations

SubsidizationConsistency with Existing Policy and ObjectivesImpact on Demand (elasticity)Social Impact / AffordabilityLegal Compliance

27

Fee Comparisons Issues

Fees may be based upon historical or other subjective

factors unrelated to cost

Often no way to know whether cost

subsidies exist

Services included in fees may be

combined in some and separated in

others

The methodology used to determine the fees may be designed to recover less than

full cost

Different policy goals and considerations

that affect the desired level of cost recovery

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Macro Level Fee Benchmarking Analysis (in relation to the City of Glendale)

Burbank’s

fees are Long Beach’s

fees are Pasadena’s

fees are

Santa Monica’s fees are

Torrance’s fees are

City Clerk Higher Higher Higher Higher Higher

Community Planning Inline Inline Higher Higher Inline

Film Permits Higher Lower Higher Higher Higher

Finance Higher Higher Lower Inline Inline

Fire Lower Lower Lower Lower Higher

Library Higher Higher Higher Higher Inline

Parks Higher Higher Higher Higher Lower

Police Lower Higher Lower Higher Lower

Public Works Lower Higher Lower Lower Lower

Reproductions Higher Higher Higher Higher Higher

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Community Services Fee Benchmarking

Garden

a

Pasad

ena

Long Bea

ch

Santa

Monica

Redondo B

each

Burban

k

Anaheim

Glendale

Carso

n

Culver

City

Torra

nce

Huntingto

n Bea

ch$0.00

$20.00 $40.00 $60.00 $80.00

Adult Basketball Leagues

Garden

a

Santa

Monica

Huntingto

n Bea

ch

Long Bea

ch

Torra

nce

Carso

n

Burban

k

Pasad

ena

Redondo B

each

Glendale

Man

hattan

Bea

ch

Culver

City

Anaheim

$0.00 $10.00 $20.00 $30.00 $40.00

Adult Swim Lessons

Carso

n

Culver

City

Garden

a

Glendale

Redondo B

each

Torra

nce

Burban

k

Anaheim

Santa

Monica

Man

hattan

Bea

ch$0.00 $2.00 $4.00 $6.00 $8.00

Fun Camp

Torra

nce

Burban

k

Huntingto

n Bea

ch

Long Bea

ch

Glendale

Anaheim

Santa

Monica

Culver

City$0.00 $5.00

$10.00 $15.00 $20.00 $25.00

Introduction to Mixed Media

30

RecommendationsFor all private benefit services, Willdan recommends pursuing a full-cost recovery strategy.

For public benefit services, it is recommended the City develop a formal policy on desired subsidy levels.

100%

0%100%

PrivateBenefit

SomePublic

Benefit

SomePrivateBenefit

100%Public

Benefit

Sources of Service Funding

User Fees

General Fund

(Subsidy)General

Fund(Subsidy) General

Fund(Subsidy)

User Fees

User Fees

31

Next Steps

Discussion and determination of cost recovery goalsCity Staff to develop “Recommended” Fees for the

Council’s Consideration (based on determined goals)July Implementation of Recommended Fees

T H A N K YO U

Questions?

CITY OF GLENDALE MAY 10, 2011 CHRIS FISHER PIERCE ROSSUM GREGG TOBLER Comprehensive User Fee Study.

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