TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Bruce Moe, Finance Director
Henry Mitzner, Controller
Steve S. Charelian, Revenue Services Manager
SUBJECT:Title
Review of Proposed FY 2017-2019 Cost Recovery Fees (Finance Director Moe).
DISCUSS AND PROVIDE DIRECTION
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Recommended Action
RECOMMENDATION:
Staff recommends that City Council review the proposed FY 2017-2019 cost recovery (user) fees.
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FISCAL IMPLICATIONS:
Under current City cost recovery policies, staff estimates the updated rates will result in approximately $60,000-$550,000 of additional revenue. The amount of increased revenue is over a three year period: fiscal years 2016-17 through 2018-19. It is important to note that the proposed fees represent the cost for services that are discretionary on the part of the user. To the extent the City does not fully recover its costs for these services, General Fund taxes will subsidize the activity. Tax subsidies for services will reduce General Fund surpluses and correspondingly the Fund's ability to support activities such as long term capital improvements and pension stabilization efforts, as well as continued subsidies of the Storm Water and Street Lighting activities.
BACKGROUND:
Note: This item was originally scheduled as a public hearing for the June 21, 2016 City Council meeting. At that time, Council requested that the item come back for further study prior to conducting the public hearing. The public hearing has been rescheduled and will be noticed for July 19, 2016.
The City conducted its last comprehensive cost allocation plan (CAP) and user fee study in 2015, which identified the costs associated with providing each non-tax supported service, and assigned the fully-burdened rate (i.e. direct labor costs, as well as indirect costs) of each City position involved in delivery of those services.
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