CC 02-06-2024 Item No. 12. Cost Allocation Plan, User Fee Study, and Cost Recovery Policy_Consultant PresentationCUPERTINO, CA
AGENDA
Cost Allocation and Fee Study Results
Project Goals and Objectives
Fee Study Background / Objectives
Fee Study Methodology
4 Fee Study Results
5. Fee Considerations
A Fee Study Key Outcomes
Comparative Survey Results
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Overall Project Goals and Objectives
• Identify indirect costs associated with programs — incorporation
into User Fee Study
• Calculation of administrative overhead rate.
• Compliance with GAAP and OMB Principles
• Justify transfers from non -general fund sources
• Review and identify potential fees for service
• Streamline fee structure for cost recovery
• Ensure compliance with Props 218 and 26
• Determine the Full Cost (direct and indirect) of fee -related activities.
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Fee Study Objectives
Streamline Fee Structures
Consolidate and expand fees where appropriate to
better reflect existing services.
Average Time Assumptions
Identify the average level of effort associated with
different permits and applications.
Fully Burdened Hourly Rates
Determine direct and indirect costs associated with
staff time.
M
Comparative Survey
Benchmark against other jurisdictions.
Compliance with Prop 218 and 26
Ensure that the direct and indirect costs do not exceed
current fees.
Updated Fee Schedule
Provide an updated fee schedule reflective of current
costs.
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Fee Study Background
City last conducted a fee study in 2015.
It is best practice to conduct a comprehensive update every 3-5 years.
Current study reviewed all citywide fees for service.
Comparative Survey was conducted of surrounding jurisdictions for sample of
fees from each Department.
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Fee Calculation Methodology
Avg staff time by Fully Burdened
Position Title per Hourly Rate per
Permit / Application Position Title
Represents the
reasonable amount
of time necessary to
provide the services
based upon City of
Cupertino staff.
Includes salaries,
benefits, productive
working hours, services
& supplies, departmental
overhead, and citywide
overhead based on City
of Cupertino expenses.
Maximum
Justifiable fee that
can be assessed to
projects and
applications.
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consulting group
Fee Study Results
Planning $716,696 $886,158 ($169,462) 81 %
PW Engineering $1,122,328 $1,182,734 ($60,407) 95%
Building $3,800,581 $4,337,761 ($537,180) 88%
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Fee Considerations (1)
Zoning & Site Approvals
Building Permits and Review
Eng. Development Review
Code Enforcement
Recreation
Police
Fire Suppression
Streets
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Fee Considerations (2)
No fee can be set at more than 100% cost recovery. Any fees showing over -
recovery will need to be reduced.
Any state or local / ordinance -based fees would remain unchanged.
Setting fees at less than 100% cost recovery, means fees are subsidized through
other funding sources AND funding is unavailablefor other activities (i.e., public
safety, streets, parks, etc.)
Typical considerations for lower cost recovery is given to fees that:
Encourage compliance (i.e., water heaters, tree removals, etc.)
Don't serve as barrier to entry (i.e., appeals, etc.)
I
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consulting group
Fee Study Key Outcomes
Consolidated of Building fees from three (3) construction types and IBC classes to
one (1) - the most common construction type and IBC Class.
Added and eliminated flat fees to better represent current and future city services.
Building - Miscellaneous and Mechanical / Electrical / Plumbing permit fees
were added to better capture new services. Eliminated outdated fees in those
categories as well.
Planning - New fees for sign permit, preliminary application reviews, etc.
PW Eng - New fees for Environmental Reviews and Traffic Reviews.
Created surcharges for Credit Card and Technology. Reviewed and updated
General Plan Maintenance Fee.
HI
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Comparative Survey Results
Surrounding jurisdictions have recently updated their fees.
Current fees are generally lower, but full cost is more in alignment with other
jurisdictions.
Technology Fee, General Plan Fee, and Credit Card Surcharges are consistent
fees charged by other jurisdictions.
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Questions / Discussion
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