HomeMy WebLinkAboutSupplemental Information Received after Posting of Agenda - Item F (2)Robin Roberts
From: Jill Ingram
Sent: Monday, April 09, 2018 1:43 PM
Cc: Executive Team; Craig A. Steele
Subject: FW: Questions for 4/9/18 Councill meeting
Attachments: FD - Staff Report - I - User Fee - CPI annual increase (final Cost Study).pdf
BCC: CITY COUNCIL
Please see questions from Council Member Sustarsic and staff's responses below. Please call if you have any additional
questions.
Thank you,
Jill
Jill R. Ingram, City Manager
City of Seal Beach - 211 Eighth Street, Seal Beach, CA 90740
(562) 431-2527, Ext. 1300
For Information about Seal Beach, please see our city website: htto: / /www.sealbeachca.gov
NOTICE: This communication may contain privileged or other confidential information. If you are not the intended
recipient of this communication, or an employee or agent responsible for delivering this communication to the intended
recipient, please advise the sender by reply email and immediately delete the message and any attachments without
copying or disclosing the contents. Thank you.
- - - -- Original Message---- -
From: Schelly Sustarsic
Sent: Monday, April 09, 2018 10:32 AM
To: Jill Ingram
Subject: Questions for 4/9/18 Councill meeting
Hi Jill,
Is Matrix Consulting Group in Item F the same consultant that performed the Cost of Services Study that we are ask to
repeal in Item C?
Coincidentally, yes they are the same.
I would like to see a copy of this 2012 study (see attached). First, to see exactly what we are being asked to repeal, and
to see the work that this consultant performed.
For clarification purposes, nothing from the study is being repealed. Staff is only requesting that the resolution that
established that fee increases be adjusted by the change in the December CPI be repealed.
Warrant questions:
Check # 5578 Everest International Consulta What kind of services is this for? Support for appealing the revised
FEMA map.
Check # 5611 Pacific Lighting & Standard Co What are these charges for? These payments are for the replacement of
two light standards in the 1st Street beach lot.
Thank you.
Schelly
Robin Roberts
From: Jill Ingram
Sent: Monday, April 09, 2018 1:37 PM
Cc: Executive Team; Craig A. Steele
Subject: RE: questions for council meeting
Attachments: FD - Staff Report - I - User Fee - CPI annual increase (final Cost Study).pdf;
QuestionsforCM- 04- 09- 2018.pdf
BCC: CITY COUNCIL
Please see questions from Council Member Moore and staff's attached responses. Please call if you have any additional
questions.
Thank you,
Jill
Jill R. Ingram, City Manager
City of Seal Beach - 211 Eighth Street, Seal Beach, CA 90740
(562) 431 -2527, Ext. 1300
For Information about Seal Beach, please see our city website: htto: / /www.sealbeachca.gov
NOTICE: This communication may contain privileged or other confidential information. If you are not the intended
recipient of this communication, or an employee or agent responsible for delivering this communication to the intended
recipient, please advise the sender by reply email and immediately delete the message and any attachments without
copying or disclosing the contents. Thank you.
- - - -- Original Message---- -
From: Thomas Moore
Sent: Sunday, April 08, 2018 9:43 PM
To: Jill Ingram
Subject: questions for council meeting
Here are my questions for tomorrow.
Thank you!
Sincerely,
Tom
Thomas Moore
Council Member, District 2 — Leisure World, College Park West and Rossmoor Center City of Seal Beach - 211 Eighth
Street, Seal Beach, CA 90740
(562) 431 -2527 x1502
For Information about Seal Beach, please see our city website: http: / /www.sealbeachca.gov
Questions for 04 -09 -2018
Item B
Page 1
Check No 5488 Beach Fitness $1,106
What was this for? As indicated in the warrant register, this payment is for the instructor's
pay for classes held (Recreation classes).
Check No 5490 Bank of New York Mellon $4,000
Can you please explain what services this was for? As indicated in the warrant register, this
payment is for the annual administrative costs for maintaining accounts at the Bank of New York. The
Bank of New York acts as Trustee for some of the City's debt.
Page 5
Check No 5529 Richards Watson & Gershon $38,090.87
Please provide break -down of services: Other Costs $244.94
Police Department Matters $545.31
CalTrans Widening $33,545.31
Rivers' End lease $3,755.31
ITEM C:
Can you provide attachment A mentioned in section 8 of the resolution 6249 to review? See
attached.
H
As part of this analysis, can we also get feedback on what technology improvements could
benefit the Police Department? Maybe there are some improvements to increase efficiency that we
could look into. We can request the Police Services Study include a component involving any
additional technology that could assist the PD in their efficiency if that is the direction from Council.
Final Report on the Cost of Services Study
CITY OF SEAL BEACH, CALIFORNIA
matrix
consulting group
721 Colorado Avenue, Suite 101
Palo Alto, CA 94303
v.650.858.0507 (.650.858.0509
March 21, 2012
TABLE OF CONTENTS
March 21, 2012
Page
1. EXECUTIVE SUMMARY 1
2. LEGAL FRAMEWORK AND POLICY CONSIDERATIONS 6
3. USER FEE METHODOLOGY 10
4. RESULTS BY DEPARTMENT/ DIVISION STUDIED 14
Finance 15
City Clerk 16
Community Development 16
Public Works 17
Police 18
Community Services 18
5. CONCLUSION 20
ATTACHMENTS: COST RECOVERY REPORT TABLES
A: Finance
B: City Clerk
C: Community Development
E: Police
F. Community Services - Recreation
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
1. EXECUTIVE SUMMARY
The report, which follows, presents the results of the Cost of Services (User Fee)
Study conducted by the Matrix Consulting Group for the City of Seal Beach.
1. PROJECT BACKGROUND AND SCOPE OF WORK
The Matrix Consulting Group analyzed the cost of service relationships that exist
between fees for service activities in the following departments: Finance, City Clerk,
Community Development, Public Works, Police, and Community Services. The results
of this Study provide a tool for understanding current service levels, the cost and
demand for those services, and what fees for service can and should be charged.
2. GENERAL PROJECT APPROACH AND METHODOLOGY
The methodology employed by the Matrix Consulting Group is a widely known
and accepted "bottom up" approach to cost analysis, where time spent per unit of fee
activity is determined for each position within a department. Once time spent for a fee
activity is determined, all applicable City costs are then considered in the calculation of
the "full' cost of providing each service. The table on the following page provides an
overview of types of costs applied in establishing the "full" cost of services provided by
each Department included in this Study:
Matrix Consulting Group Page 1
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
Cost Component
Description
Direct
Fiscal Year 2011/12 budgeted salaries, benefits and allowable
expenditures.
Departmental Overhead
Division and departmental administration I management and clerical
support
Citywide Overhead
City costs associated with central service costs such as payroll, human
resources, budgeting, City management, etc. These costs are established
through the Cost Allocation Plan performed by the Matrix Consulting
Group (provided under separate cover).
Supporting (Cross)
Where applicable, direct and indirect costs associated with external
Department Review
departmental assistance
Together, the cost components in the table above comprise the calculation of the
total "full" cost of providing any particular service, whether a fee for that service is
charged or not.
The work accomplished by the Matrix Consulting Group in the analysis of the
proposed fees for service involved the following steps:
• Departmental Staff Interviews: The project team interviewed staff in each
department regarding their needs for clarification to the structure of existing fee
items, or for addition of new fee items.
• Data Collection: Data was collected for each item, including, time estimates and
volume of activity. In addition, all budgeted costs and staffing levels for the FY
2011/12 fiscal year were entered into the Matrix Consulting Group's analytical
software model.
• Cost Analysis: The full cost of providing each service included in the analysis
was established. Cross - checks such as revenue reports and allocation of not
more than 100% of staff resources to both fee and non -fee related activities
assured the validity of the data used in the Study.
• Review and Approval of Results with City Staff: Departments and City
Management have reviewed and approved these documented results.
A more detailed description of user fee methodology, as well as legal and policy
considerations are provided in subsequent chapters of this report.
Matrix Consulting Group Page 2
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
3. SUMMARY OF RESULTS
Overall, this Cost of Services Study concluded that the City under - recovers its
costs by approximately $886,000 per year for its fee - related services. While the detailed
documentation of the Study will show an over - collection in some departments or certain
fees (on a per unit basis), and an undercharge for others, overall, the City is providing
an annual subsidy to fee payers for all services included in the analysis. The table
below presents a summary of results by Department for the City of Seal Beach:
Department
Revenue at
Current Fee
Annual $
Total Cost -
Annual $
Surplus I
(Deficit) -
Annual ($)
Current
Cost
Recovery
Percents e
Finance
95
125
30
76%
Clerk
214
1,978
1,764
11 %
Community Development
74,375
141,026
83,151
53%
Public Works
28,611
25,624
2,987
112%
Police
713
4,872
4,159
15%
Community Services
710,475
1,682,621
972,146
42%
TOTAL
814,483
1,856,246
886,029
44%
The display of the cost recovery figures shown in this report are meant to provide
a basis for policy development discussions among City staff and Council members, and
do not represent a recommendation for where or how the Council should take action.
The setting of the "rate" or "price' for services, whether at 100 percent full cost recovery
or lower, is a decision to be made only by the Council, often with input from City staff
and the community.
4. CONSIDERATIONS FOR COST RECOVERY POLICY AND UPDATES
The Matrix Consulting Group strongly recommends that the City use the
information contained in this report to discuss, adopt, and implement a formal Cost
Recovery Policy for the City, and also to implement a mechanism for the annual update
of fees for service.
Matrix Consulting Group Page 3
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
(1) Adopt a Formal Cost Recovery Policy
The Matrix Consulting Group strongly recommends that the Council adopt a
formalized, individual cost recovery policy for each department included in this Study.
Whenever a cost recovery policy is established at less than 100% of the full cost of
providing services, a known gap in funding is recognized and may then potentially be
recovered through other revenue sources. The following table presents typical cost
recovery policies set among other jurisdictions:
Department
Typical Cost Recovery Policy
Administration Finance and City Clerk
50-100%
Building
80-100%
Community Development
Land Development —80 -100%
Public Works /Engineering
Land Development— 80 -100 %,
Encroachment Permits 80 -100%
Police
20-40%
Recreation
25-50%
Information presented in the table above is based on the Matrix Consulting
Group's experience in analyzing local government's operations across the United States
and in California, and reflects the typical cost recovery policy observed by local adopting
authorities. In recent years, more local jurisdictions have adopted formal cost recovery
policies at the department / service level. The Matrix Consulting Group considers a
formalized cost recovery policy for various fees for service an industry Best
Management Practice.
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CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
(2) Adopt an Annual Fee Update / Increase Mechanism
The Matrix Consulting Group recommends the City perform a complete update of
its User Fee Study on a periodic basis. In general, 3 to 5 years for fee and rate studies
is considered a best management practice. The purpose of a comprehensive update is
to completely revisit the analytical structure, service level estimates and assumptions
applied in the previous study, and to account for any major shifts in cost components or
organizational structures.
In between comprehensive updates, the City could utilize published industry
economic factors such as CPI or other regional factors to update the cost calculations
established in the Study on an annual basis. Alternatively, the City could also consider
the use of its own anticipated labor cost increases such as step increases, benefit
enhancements, or cost of living raises. The latter example provides a more realistic
reflection than a CPI, given the fact that labor costs generally comprise the majority of
cost calculations for a jurisdiction. Use of an automatic increase mechanism based on
the City's own labor costs also provides a factor that is specific to it and its operations,
rather than one that is specific to a region or industry as a whole. Utilizing an annual
increase mechanism would ensure that the City receives appropriate fee and revenue
increases that reflect growth in costs.
Matrix Consulting Group Page 5
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
2. LEGAL FRAMEWORK AND POLICY
CONSIDERATIONS
A "user fee' is a charge for services provided by a governmental agency to a
public citizen or group. In California, several constitutional laws such as Propositions 13,
4, and 218, State Government Codes 66014 and 66016, and more recently Prop 26 and
the Attorney General's Opinion 92 -506 set the parameters under which the user fees
typically administered by local government are established and administered.
Specifically, California State Law, Government Code 66014(a), stipulates that user fees
charged by local agencies "...may not exceed the estimated reasonable cost of
providing the service for which the fee is charged ".
1. GENERAL PRINCIPLES AND PHILOSOPHIES REGARDING USER FEES
Local governments are providers of many types of general services to their
communities. While all services provided by local government are beneficial to
constituents, some services can be classified as globally beneficial to all citizens, while
others provide more of a direct benefit to a specific group or individual. The following
table provides examples of services provided by local government within a continuum of
the degree of community benefit received:
Matrix Consulting Group Page 6
Services that Provide Both
Services that Provide a
"Global" Benefit and also a
Primary Benefit to an
Services that Provide General
Specific Group or Individual
Individual or Group, with less
"Global" Community Benefit
Benefit
"Global" Community Benefit
Police
• Recreation /Community
• Building Permits
Park Maintenance
Services
• Planning and Zoning
• Fire Suppression / Prevention
Approval
• Site Plan Review
• Engineering Development
Review
• Facility Rentals
Matrix Consulting Group Page 6
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
Funding for local government is obtained from a myriad of revenue sources such
as taxes, fines, grants, special charges, user fees, etc. In recent years, alternative tax
revenues, which typically offset subsidies for services provided to the community, have
become increasingly limited. These limitations have caused increased attention on user
fee activities as a revenue source that can offset costs otherwise subsidized (usually) by
the general fund. In the table on the previous page, services in the "global benefit"
section tend to be funded primarily through voter approved tax revenues. In the middle
of the table, one typically finds a mixture of taxes, user fee, and other funding sources.
Finally, in the "individual / group benefit' section of the table, lie the services provided by
local government that are typically funded almost entirely by user fee revenue.
The following are two central concepts regarding the establishment of user fees:
• Fees should be assessed according to the degree of individual or private
benefit gained from services. For example, the processing and approval of a
land use or building permit will generally result in monetary gain to the applicant,
whereas Police services and Fire Suppression are examples of services that are
essential to the safety of the community at large.
• A profit making objective for the governmental agency should not be
included in the assessment of user fees. In fact, California laws require that
the charges for service be in direct proportion to the costs associated with
providing those services. Once a charge for service is assessed at a level higher
than the actual cost of providing a service, the term "user fee" no longer applies.
The charge then becomes a tax subject to voter approval.
Therefore, it is commonly accepted that user fees are established at a level that
will recover up to, and not more than, the cost of providing a particular service.
2. GENERAL POLICY CONSIDERATIONS REGARDING USER FEES
Undoubtedly, there are programs, circumstances, and services that justify a
subsidy from a tax based or alternative revenue source. However, it is essential that
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CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
jurisdictions prioritize the use of revenue sources for the provision of services based on
the continuum of benefit received.
Within the services that are typically funded by user fees, the Matrix Consulting
Group recognizes several reasons why City staff or the Council may not advocate the
full cost recovery of services. The following factors are key policy considerations in
setting fees at less than 100 percent of cost recovery:
• Limitations posed by an external agency. The State or other agency will
occasionally set a maximum, minimum, or limit the jurisdiction's ability to charge
a fee at all. Examples include Transportation Permits commonly issued by Public
Works departments, many types of Police records and processing fees, as well
as charging for time spent copying and retrieving public documents in the City
Clerk's office.
• Encouragement of desired behaviors. Keeping fees for certain services below
full cost recovery may provide better compliance from the community. For
example, if the cost of a permit for changing a water heater in a residential home
is higher than the cost of the water heater itself, many citizens will avoid pulling
the permit.
• Affect on demand for a particular service. Sometimes raising the "price'
charged for services might reduce the number of participants in a program. This
is largely the case in Recreation programs such as camps or enrichment classes,
where participants often compare the City's fees to surrounding jurisdictions or
other options for leisure activities.
• Participation for individuals or groups that typically cannot afford services.
Policy makers may decide to fully subsidize or set fees at a level that will allow
participation for certain segments of the community, such as Senior programs.
• Benefit received by user of the service and the community at large is
mutual. Many services that directly benefit a group or individual equally benefit
the community as a whole. Examples include Recreation programs, Planning
Design Review, historical dedications and certain types of special events, to
name a few.
The Matrix Consulting Group recognizes the need for policy that intentionally
subsidizes certain activities. The primary goals of a User Fee Study are to provide a fair
Matrix Consulting Group Page 8
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
and equitable basis for determining the costs of providing services, and assure that the
City is in compliance with State law.
Once the full cost of providing services is known, the next step is to determine
the 'rate" or "price' for services at a level which is up to, and not more than the full cost
amount. The Council is responsible for this decision, which often becomes a question of
balancing service levels and funding sources. The placement of a service or activity
within the continuum of benefit received may require extensive discussion and at times
fall into a "grey area ". However, with the resulting cost of services information from a
User Fee Study, the Council can be assured that the adopted fee for service is
reasonable, fair, and legal.
Matrix Consulting Group Page 9
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
3. USER FEE STUDY METHODOLOGY
The Matrix Consulting Group utilizes a cost allocation methodology, commonly
known and accepted as the "bottom -up" approach to establishing User Fees. The term
means that several cost components are calculated for each fee or service. These
components then build upon each other to comprise the total cost for providing the
service. The components of a full cost calculation are typically as follows:
Cost Component
Description
Direct
Salaries, benefits and allowable departmental expenditures.
Departmental Overhead
Division, Program, or Departmental administration / management
and clerical support.
Citywide Overhead
City costs associated with central service costs such as payroll,
human resources, budgeting, City management, etc. Established
for this Study through a separate Cost Allocation Plan analysis
performed by the Matrix Consulting Group.
Cross - Departmental Support
Costs associated with review or assistance in providing specific
services. For example, costs established via study of the Public
Works Department for review of Planning applications and
Building permits are either included as an applicable cost toward
the Planning and /or Building fees for service, or are listed as
separate fee items chargeable by Public Works.
Plan, Policy, and Systems
Examples often include: General Plan Update, code enforcement,
Update and Maintenance
and technology costs.
The general steps utilized by the project team to determine allocations of cost
components to a particular fee or service are:
Develop time - estimates for each service included in the study;
• Calculate the direct cost attributed to each time estimate;
• Utilize the comprehensive allocation of staff time to establish an allocation basis
for the other cost components; and,
• Distribute the appropriate amount of the other cost components to each fee or
service based on the staff time allocation basis, or other reasonable basis.
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CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
The result of these allocations provides detailed documentation for the
reasonable estimate of the actual cost of providing each service. The following are
critical points about the use of time estimates and the validity of cost allocation models.
1. TIME ESTIMATES ARE A MEASURE OF SERVICE LEVELS REQUIRED TO
PERFORM A PARTICULAR SERVICE
One of the key study assumptions utilized in the "bottom up" approach is the use
of time estimates for the provision of each fee related service. Utilization of time
estimates is a reasonable and defensible approach, especially since these estimates
were developed by experienced staff members who understand service levels and
processes unique to the City of Seal Beach.
The project team worked closely with each Department's staff in developing time
estimates with the following criteria:
• Estimates are representative of average times for providing service. Extremely
difficult or abnormally simple projects are excluded from the analysis;
• Estimates provided by staff are reviewed and approved by the department, and
often involve multiple iterations before a Study is finalized;
• Estimates are reviewed by the project team for "reasonableness" against their
experience with other agencies.
• Time in motion studies are not used, as they are not practical for the scope of
services and time frame for this project.
The Matrix Consulting Group agrees that while the use of time estimates is not
perfect, it is the best alternative available for setting a standard level of service for which
to base a jurisdiction's fees for service, and it meets the requirements of California law.
The alternative to time estimating is actual time tracking, often referred to billing
on a "time and materials" basis. Except for in the case of anomalous or sometimes very
large and complex projects, the Matrix Consulting Group believes this approach not to
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CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
be cost effective or reasonable for the following reasons:
• Accuracy in time tracking is compromised by the additional administrative burden
required to track, bill, and collect for services in this manner;
• Additional costs are associated with administrative staffs billing, refunding, and
monitoring deposit accounts;
• Customers often prefer to know the fees for services in advance of applying for
permits or participating in programs;
• Applicants may begin to request assignment of faster or less expensive
personnel to their project;
• Departments can better predict revenue streams and staff needs using
standardized time estimates and anticipated permit volumes.
Situations arise where the size and complexity of a given project warrants time
tracking and billing on a "time and materials" basis. Matrix Consulting Group has
recommended charging a deposit and charging Actual Costs (AC) for such fees as
appropriate and itemized in each department.
2. CROSS CHECKS ENSURE THE VALIDITY OF OUR ANALYTICAL MODEL
In addition to the collection of time estimate data for each fee or service included
in the User Fee Study, annual volume of activity data assumptions are also a critical
component. By collecting data on the estimated volume of activity for each fee or
service, a number of analyses are performed which not only provide useful information
to departments regarding allocation of staff resources, but also provide valuable cross
checks that ensure the validity of each cost allocation model. This includes assurance
that 100% of staff resources are accounted for and allocated to a fee for service, or
"other non fee" related category. Since there are no objectives to make a profit in
establishing user fees, it is very important to ensure that services are not estimated at a
level that exceeds budgeted resource capacity. If at least and not significantly more
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CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
than 100% of staff resources are accounted for, then no more than 100% of costs
associated with providing services will be allocated to individual services in the Study.
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CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
4. RESULTS
The motivation behind a cost of services (User Fee) analysis is for the City
Council and City Staff to maintain services at a level that is both accepted and effective
for the community, and also to maintain control over the policy and management of
these services.
Discussion of each department's results in this chapter is intended as a summary
of extensive and voluminous cost allocation documentation produced during the Study.
The full analytical results were provided to City staff under separate cover from this
summary report. In addition, appendices A through F to this report also include more
detailed cost calculation results for each Department from two perspectives:
• First, on a "Per Unit" Basis: comparing the full cost of providing each unit of
service to the current fee for each unit of service (where applicable).
• Second, on an annualized basis: the project team utilized volume of activity
estimates to project annual subsidies and revenue impacts associated with the
implementation of each fee for service at full cost recovery levels.
It should be noted that the results presented in this report are not a precise
measurement. In general, a cost of service analysis takes a "snapshot in time "; where
the most current fiscal year of adopted budgeted cost information is compared to the
most current complete fiscal year of revenue and workload data available. Workload
data may then be adjusted to reflect "reasonable and defensible" estimates for purposes
of analysis.
Changes to the structure of fee names, along with the use of time estimates
allow only for a reasonable projection of subsidies and revenue. Consequently, the
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CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
Council and City staff should rely conservatively upon these estimates to gauge the
impact of implementation going forward.
1. FINANCE
The Matrix Consulting Group analyzed the costs associated with water use /
billing services provided by the Finance department, including Water Turn On for New
Customers and Non - Payments. The analysis of current fees shows that the City is
currently recovering 76% of its cost. Attachment A shows the results of the detailed cost
analysis on a unit and annual basis.
Water Use / Billing Fees
A summary of the Water Use / Billing fees for service analyzed in this report is
shown in the table below. While the Finance Department does charge for other Water
Billing Services, they are fine and penalty related, and therefore not included in the
recovery calculations below. The following table presents a summary calculation of the
total costs for these two services:
Matrix Consulting Group Page 15
Total
Total Estimated Cost
Estimated
Percent
Annual
of Providing
Annual
of
Surplus I
Fee Name
Services — Annual $
Revenue ($)
Recovery
(Subsidy) $
Water Turn On — New Customer
48
20
42 %
28
Water Turn On — Non-Payment
77
75
98 %
2
TOTAL
125
95
76 %
30
Matrix Consulting Group Page 15
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
2. CITY CLERK
The Matrix Consulting Group analyzed the costs associated with fees that are
processed in the City Clerk's department. Six fees were analyzed: Copy Charge; CD
Copy; Candidate Filing Fee; Certified Copy; Facsimile Copy; and Residency
Verification. Per the Public Records Act, a $ .10 per page charge for making copies is
recommended. A summary of the unit costs for each fee is shown below:
Fee Name
Estimated Unit Cost ($)
Copy Charge
.10
CD Copy
8
Candidate Filing Fee
288
Certified Copy
8
Facsimile Co
.10
Resident Verification
8
3. COMMUNITY DEVELOPMENT
The Community Development Department implements public policy and provides
project review for new development in Seal Beach. Residential, industrial, commercial,
public improvements, whether large or small, all require careful consideration for
compatibility with the City's land use /planning goals and objectives.
The results of this cost of service analysis conclude that the City is currently
recovering 53% of the costs to provide fee services for Community Development
activities. The City of Seal Beach has the potential to recover an additional $83,000 in
fee revenue for this division at 100% of recovery.
The detailed analysis can be found in Attachment C. Most of the fees currently
charged on a flat fee basis are showing an under - recovery. Those fees that vary
considerably based on the project size and complexity are currently charged on a
deposit basis with actual cost recovery. There is no change recommended for those
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Final Report on the Cost of Services (User Fee) Study
areas where the City has set a policy for actual costs recovery, except a recommended
increase in the deposit amount.
Matrix Consulting Group recommends the use of the newly calculated Fully
Burdened Hourly rates included in the detailed analysis shown in Appendix C, as well
as diligent time tracking for all project activity being charged against deposits.
4. PUBLIC WORKS
The Engineering Department ensures quality assurance and conformance of
specifications and standards as well as enforces City and agency regulations of all
development and infrastructure projects through the plan check and inspection of
development projects.
The detailed cost analysis is shown in Attachment D. The results of this cost of
service analysis conclude that the City is currently over recovering its costs by about
12% for Public Works fees. The number of fees that require a deposit, and are then
charged for time and materials can explain this over recovery, as all unused monies are
refunded to the payee.
Most of the fees currently charged on a flat fee basis are showing an under-
recovery. As with the Planning department, those fees that vary considerably based on
the project size and complexity are currently charged on a deposit basis with actual cost
recovery. There is no change recommended for those areas where the City has set a
policy for actual costs recovery, except a recommended increase in the deposit amount.
Matrix Consulting Group Page 17
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
The current policy of the Public Works department is for full cost recovery, Matrix
Consulting Group recommends the use of the newly calculated Fully Burdened Hourly
rates included in the detailed analysis shown in Appendix D, in order for the department
to ensure continued full cost recovery.
5. POLICE
The Matrix Consulting Group analyzed the costs associated with the following
Police Service categories: Alarm System Applications; Parking Stickers; Traffic Collision
Reports, Vehicle Storage; and miscellaneous business and transportation permits. If the
City were to implement fees for service at 100 percent of their cost, an additional $4,159
in revenue could be achieved.
As shown in attachment E, at current fee levels, the Police Department is
recovering approximately 15% of the total City costs associated with providing their fee
related services.
6. COMMUNITY SERVICES
The Community Services Department provides a variety of recreation programs
for youth and adults including day camps, swimming, senior programs, and a variety of
recreational classes. This Department also oversees the reservations for meeting rooms
and park pavilions; in addition to providing community special events to resident and
non - resident attendees and athletic fields to organized non - profit youth sports teams
and their participants.
Unlike other departmental analyses included in this report, the focus of the
Recreation Cost of Services analysis was performed largely at the "program" level,
rather than the individual fee - per -unit level for a number of reasons:
Matrix Consulting Group Page 18
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
• Recreation programs rarely recover the full cost of providing services and are
considered largely as a "community benefit' rather than "private benefit' service,
as discussed previously in Chapter 2 of this report. Recreation programs tend to
be highly subsidized and funded more via general fund and other sources than
user fees for service.
• Although it is useful to obtain information on the total citywide cost of recreation
services, the setting of actual "prices' for services for recreation programs is
typically "market' driven, rather than "cost of service" driven. This means that
recreation programs often compete with others in their surrounding areas on
price and largely determine their fees with this fact in mind.
The results shown in Attachment F of this report present the cost calculation
results on a "per program" basis, where the annual cost of providing services is
compared to the annual revenue received.
The results identified an overall annual subsidy of approximately $886,029
provided to the community for these services. At current fee levels, the Community
Services Department is recovering approximately 42% of the total City costs associated
with providing the services studied in this report.
Matrix Consulting Group Page 19
CITY OF SEAL BEACH, CALIFORNIA
Final Report on the Cost of Services (User Fee) Study
6. CONCLUSION
The City of Seal Beach engaged the Matrix Consulting Group to determine the
total cost of services provided to its citizens and businesses for all City functions. To
calculate the total cost of each Department or Divisions' services, Matrix Consulting
Group employed both a widely accepted and defensible methodology, as well as the
experience and input of City staff to complete the necessary data collection and
discussion to complete the analysis. City leaders can now use this information to make
informed decisions and set its fees to meet the fiscal and policy goal objectives of the
City.
Overall, this Cost of Services Study concluded that the City under - recovers its
costs by approximately $886,000 per year for its fee - related services. While the detailed
documentation of the Study will show an over - collection in some departments or certain
fees (on a per unit basis), and an undercharge for others, overall, the City is providing
an annual subsidy to fee payers for all services included in the analysis.
The project team recommends the City try to recover as much of the service
costs as is feasible. For most fee related services, the Matrix Consulting Group
recommends setting fees at 100% cost recovery. However, as discussed in Chapters 1
and 2 of this report, several policy factors often warrant adoption of fee levels at less
than 100 %.
Matrix Consulting Group Page 20
Attachment A: Finance
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