2022-06-07 CC Agenda Packet - PRESENTATION - ITEM C9 - Fee StudyCost of Services Study
City of El Segundo
Presented By:
Eric Johnson, President
Revenue & Cost Specialists, L.L.C.
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➢Revenue & Cost Specialists founded in 1980
Pioneered Matching Fee Revenues with Cost of the Services
Studied over 250 agencies in S states
Eric Johnson, President
➢ 32 years with RCS. Served over 100 agencies
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User Fees
➢ Identifiable user and cost for service
➢Development &construction services
➢Public Safety services
➢Utility &Maintenance services
➢Recreation &Library services
➢Finance and Administrative services
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Finance Department
city Manager
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Public Safety
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CityBudget Comm. Development Department
Communit S
S Y ervices
Department
Business Orientation
Payroll Services Carson Circuit Recreation Facility Rental
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Conditional Use Permit Building Permit Lot Line Adjustment
(2) Identified Cost of Services to Customers
(3) Matched Revenues to Costs
Establish servic&
& time spent
METHODOLOGY
Review budget
� and calculate
overhead
RCS
Cost recovery &
Recommendations
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Proposition 4 (1979)
• Defined service fees as being limited to the full costs of providing the service.
• Rents and fines are exempted from cost recovery limitations.
Proposition 218 (1996)
• Placed limits on the creation and updates of property -related fees.
Proposition 26 (2010)
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• Codified existing fee -setting practices as Article XIIIC
of the State Constitution.
• Fees must be for a service directly benefitting the
fee payor.
Community Support
(Tax) Services
• Typically benefits community
as a whole
• 100% supported by tax dollars
✓E.g. Police Patrol, Fire
Suppression, Street
Maintenance, and Park
Maintenance
• The Customer is identifiable
and the Service is measurable
• Benefits an individual or group
• Subsidy levels may be based on
social, safety or welfare reasons
• E.g. Development Services &
Recreation Services
• The customer is required to use
the service due to the choice of
developing property.
• Fees are often determined by
the full cost of the service.
• E.g. Planning, Building & Safety,
and Engineering fees
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• The Customer is not required to
use the service
• Fees are often determined by
market forces and may need to
be subsidized.
• E.g. Recreation fees
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Revenues ( GRAN S I ( FEES
PERSONALCOMMUNITY
COSiS ( SUPPORTED
CHOICE
SC/
S
\ SERVICES
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0
Revenues ( GRAN S I ( FEES
PERSONALCOMMUNITY
UPPORTED
COSiS ( S
CHOICE
S/
\ SERVICES
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TOTAL TOTAL
FEE SERVICE PROFIT/
PCT. RECOVERY
FROM FEES
POSSIBLE
NEW
SERVICE
REVENUE
COST
(SUBSIDY)
ACTUAL
SUGGEST
REVENUE
ADMINISTRATIVE SERVICES
$76,467
$242,179
($165,712)
31.6%
VAR.
$13,500
BUILDING & SAFETY SERVICES
$2,852,547
$3,210,008
($357,461)
88.9%
VAR.
$357,400
ENGINEERING SERVICES
$340,722
$403,178
($62,456)
84.5%
VAR.
$50,200
FIRE SERVICES
$1,159,798
$2,421,450
($1,261,652)
47.9%
VAR.
$1,052,300
LIBRARY SERVICES
$12,561
$114,097
($101,536)
11.0%
VAR.
$0
PLANNING SERVICES
$586,811
$881,448
($294,637)
66.6%
VAR.
$86,125
POLICE SERVICES
$351,589
$811,282
($459,693)
43.3%
VAR.
$24,200
PUBLIC WORKS SERVICES
$150,467
$354,938
($204,471)
42.4%
VAR.
$80,400
RECREATION SERVICES
$2,178,493
$6,155,407
($3,976,914)
35.4%
VAR.
$0
$7, 709, 455
$14, 593, 987
($6, 884, 532)
52.8%
$1, 664,125
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FINAL TAX SUBSIDY DECISION
RCS and City Staff have made fee
recommendations for every service
City Council decides which services should
be charged the full costs and which services
are subsidized with tax dollars
RCS
J"Astif
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Specialists in Municipal Revenues and Costs
Celebrating 40 Year in Business
RCSwas fountletl by two former City Managers (Doug Ayres 8 Lee Weber) and a former Finance Director (Rick
Kerner). to addmas the fiscalchallenges from the adoption of Propositions 13&4 Ourfoundingparinersknew
that reduced tax revenues would reduce or eliminate tax subsidies to fee services. Therefom the financial health
of cities required that they know the cost of their services. Forty years later. Revenue & Cost Specialists contlnue
to focus on cost allocallon and seance cost cakulalions
OUR SERVICES
It is near impossible to make credible decisions about
an agency's financial future without credible
information. We can help you balance your budget by
I -qd r, gil
www.revenuecost.com
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