AgdaPkt 2017-06-26 Closed and Joint SA PFA

Browse Search

CITY OF REDWOOD CITY, CALIFORNIA Cost of Services (User Fee) Study Matrix Consulting Group Page 3 Department / Division FY16 Fee-Related Revenue1 FY17 Annual Fee- Related Cost2 Surplus / (Deficit) Current Cost Recovery Percentage Parks & Recreation $288,467 $252,143 $36,324 114% Public Works $185,344 $186,344 $(1,000) 99% TOTAL $511,719 $688,081 $(176,362) 74% The City is currently at a 74% cost recovery level, or under-recovers its fee- related costs by approximately $176,000 for the four service areas examined, with the largest deficit associated with Library Rentals. While the detailed documentation of the Study will show an over-collection in some divisions and / 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 fee study. The display of the cost recovery figures shown in this report is meant to provide a basis for policy development discussions among Council members and City staff, 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 policy decision to be made only by the Council, often with input from City staff and the community. 5. CONSIDERATIONS FOR COST RECOVERY POLICY AND UPDATES The Matrix Consulting Group recommends that the City use the information contained in this report to discuss, adopt, and implement a formal Cost Recovery Policy, and also to implement a mechanism for the annual update of fees for service. (1) Adopt a Formal Cost Recovery Policy The Matrix Consulting Group strongly recommends that the Council adopt a formal cost recovery policy for each individual department or division included in this Study. Whenever a cost recovery policy is established at less than 100% of the full cost 7.A. - Page 15