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HomeMy WebLinkAbout6.j. User Fee StudyAGENDA ITEM: User Fee Study AGENDA SECTION: CONSENT PREPARED BY: Thomas D. Burt, City Administrator AGENDA NQ. 'iir ATTACHMENTS: Work Plan APPROVE CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: April 2, 2002 At the March 13, 2002 Committee of the Whole work session city staff discussed a proposal from Springsted, the city's financial advisor, to do a comprehensive analysis of City user fees. Council supported the idea but requested that staff contact another firm for a comparison fees for this service. Staff contacted Ehlers Associates who gave a verbal quote of 535,000. Staff recommends Springsted to conduct the study for a fee not to exceed $34,600. RECOMMENDED ACTION: Motion to hire Springsted to conduct a user fee analysis as outlined in their February 2002 work plan. COUNCIL ACTION: AGENDA ITEM: User Fee Analysis Study AGENDA SECTION: PREPARED BY: Jeff May, Finance Director AGENDA NO. 8 ATTACHMENTS: Draft Proposal from Springsted, Copy of the February 22n Weekly Update APPROVED BY: CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION COMMITTEE OF THE WHOLE MEETING DATE: March 13, 2002 Attached for your review and discussion is a draft proposal from Springsted, our financial advisors, to do an analysis of all the City's user fees. As was reported in the February 22°° weekly update, Tom and I met with representatives from Springsted to discuss our user fees. We have heard from the Builder's Association and from individual developers who have questioned how we and other communities charge fees to the developers and builders. We also know that we could be dealing with budget cuts from the State as they deal with their deficit and we will also be required to provide detailed reporting to the State for 2002 and beyond on how we use the building permit fees that we collect. With this is mind, we felt it appropriate to try to get a handle on how to accomplish justifying, and possibly updating, all of the fees that we currently collect. ,Springsted has done this type of study for other communities and staff feels that by having an outside organization look at our fees that it would give more credibility to the fees that we come up with after the study is done. Springsted's proposal calls for a total fee not to exceed $34,600 (excluding out —of pocket expenses) to complete this analysis. I feel that it would be appropriate to use a combination of General Fund reserves and some of the old encumbrance balances that have gone unspent. Staff feels that this study would allow us to have up to date fees that we will be able to justify to the public. As part of the proposal, we would also receive software that would allow us to easily update our fees from year to year by plugging in more current budget and actual figures. If Council is in agreement with staff on this, we would ask Springsted to final the proposal and we would bring this back to you at a Council meeting in the next 2 to 4 weeks. RECOMMENDED ACTION: COUNCIL ACTION: 03/07/02 13:37 FAX 8512233002 SPRINCSTED INC. draft r(A User Fee Analysis Study City of Rosemount, Minnesota Work Plan February 2002 Objective(s) The purpose of this study is: To undertake a systematic review of the City's current user fee system, excluding fees for Parks and Recreation programs, to determine if current user fee amounts are sufficient to recapture the actual cost of providing the related service; To identify other services currently being performed that might generate new fees; To recommend a user fee system that establishes a direct relationship between the payments made for services and the services delivered. Task I Background Information and Assumptions Meet with City staff to review background information and study assumptions for the Study Review the user fee system and charges for services currently in use in the City; Review any policies related to the establishment and adjustment of user fees and charges; Review historical information related to the City's user fee system and charges for services; Review current allocation of overhead and other indirect costs to user fees and charges; Review the City's current fiscal year budget and past year's actual expenditures as they relate to user fees and charges for services; Review the City's current policy related to the payment and or reimbursement for training and continuing education for staff that provide services for which a charge has been established; Discuss the schedule for the study and its completion. SPRINGSTED Advi;on to the Public Sector Z002 03/07/02 13:37 FAX 8512233002 SPRINGSTED INC. City of Rosemount, Minnesota User Fee Analysis Study February 2002 Task 11 Collect Data Y Meet with City department heads and staff Interview department heads and appropriate City staff to determine the time and the resources allocated in providing services. Review current list of services being provided for which a user fee or charge has been established; Identify specific services to which their department contributes time or resources; Estimate the average time and resources needed to provide each service; Identify any training and/or continuing educational requirements for providing the service; Identify overhead and indirect cost associated with providing each service: Identify any additional services currently being performed that might generate new fees. Review preliminary findings. Task III Analyze Data Develop a schedule of costs for each service to include: Amount of time each employee devotes; Direct salary cost for each employee; Related personnel costs for each employee (i.e. fringe benefits, vacation, sick leave costs, etc.); Related supplies consumed in the provision of the service; Related training and/or continuing education costs; Related indirect administrative and overhead costs including: Supervision and management; Planning; Accounting; Reporting; Payroll and investment services; Management information systems; Buildings; Vehicles; Equipment Property maintenance; Insurances; Any other indirect costs. The total cost for each service. Task IV Develop User Fee and Charges Model Using the data collected and the analysis from the previous tasks we would develop a model based in Excel that would enable the City to maintain their user fee and charges system on a current basis 2003 2 SPRINGSTED Page 2 03/07/02 13:38 FAX 8512233002 City of Rosemount, Minnesota User Fee Analysis Study February 2002 Outcomes Expectations In order to conduct this study, the City will need to identify someone on staff to serve as a contact person between Springsted Incorporated and the City. This person will be responsible for the gathering of accurate and timely information necessary to complete the project. At a minimum the following information will be needed to complete the study: User Fee Analysis Study Required Information SPRINGSTED INC. 004 A copy of the City's current user fees and charges; Copies of any City policies related to user fees and charges; Historical information related to the City's user fee system and charges for services; The current method of allocating overhead and other indirect costs to user fees and charges; The City's current fiscal year budget and past year's actual expenditures; The City's current policy related to the payment and or reimbursement for training and continuing education for staff that provide services for which a charge has been established; Other relevant information as needed. Springsted will develop a draft report that includes a proposed schedule of user fees and charges that will identify the total cost of providing each service, excluding Parks and Recreation programs. Following a discussion and review of the draft document, Springsted will modify or change the document incorporating the City's comments into the final study as requested. Springsted will develop an interactive computer model in Excel that will enable the City to maintain the user fee and charge system into the future. Springsted would then present the final report to the City Council and staff. The final products delivered would be a User Fee Analysis Study and the interactive computer model. Gf SPRINGSTED Page 3 2002.S•tandard "Hou rly: Fee:SChedvle 1 i:; Title Rate Principal Senior Officer $180 Officer Project Manager $150 Senior Associate $125 Associate $110 Support Staff 50 03/07/02 13:38 FAX 6512233002 SPRINGSTED INC. City of Rosemount, Minnesota User Fee Analysis Study February 2002 Compensation We propose to complete this study, in accordance with the scope of services detailed above, on an hourly basis with a total fee not to exceed $34,600 exclusive of any out -of- pocket expenses such as travel and copying. This amount would include up to three on- site meetings. The estimated time to complete the work is 10 12 weeks from the date we receive the information identified in the Expectations portion of this proposal. Our standard hourly fee schedule is shown below. Should the City request and authorize additional work outside the scope of services described in this proposal or additional revisions beyond those agreed upon at the discussion of the draft document, we would invoice the City at our standard hourly fees. SACLIENT AND PROJECT RILESwCRKINS FILESAINNESCTARNRCSEMCUNT CITY OF R070MPAELIMINARY PROMO FILESMAANAGEMENT SEfNICESAOSEMOUNT USER FEE PROPCSALDOC ZOOS a SPRINGSTED Page 4 DATE: TO: FROM: SUBJECT: Weekl U.date MEMORANDUM February 22, 2002 Mayor City Council Thomas D. Burt, City Administrator Springsted Meeting on Fees Staff met with representatives from Springsted to discuss City fees. In light of the State's possible budget cuts and cuts to our building fees and also concerns from the Builder's Association on all of our fees related to development, staff feels that it is appropriate to look at our current fees and evaluate all City fees. Springsted has done studies like this in the past and we feel that it would be very applicable for us to update all of our fees. Staff feels that most of our fees are "fair;" but to have documentation to validate these fees would be helpful when dealing with customers. Springsted will be giving us a proposal for these services in the next week or two and we will he bringing this forward to the Council at a meeting in March for action. U of M Storm Water Staff meet with University staff to discuss the possibility of directing storm water on to the University. The outcome of the meeting was less than promising; however, we are still negotiating. Residential Home Construction With the warm weather the past week, there has been an increase of activity for residential construction within the residential developments. The Engineering Department has been working to review these sites for compliance with the City's erosion control ordinance and applicable building permit requirements. A stop work order was issued for constriction in the Carrousel Plaza Townhouse development after a 24 -hour notification was given for non- compliance with the erosion control requirements. With the exception of the Carrousel Plaza Townhouse development, the majority of the builders are working cooperatively with the Engineering and Building Department to install and maintain erosion control measures on construction sites. Tuesday Extended Hours At the last work session additional information was requested on the number of people being served by the extended hours. Attached is information from the. Deputy Re=gistrar. Over the last two years they have had only SO customers and the revenue we have brought in was 52S6. The Building department has averaged one customer a month. We have found most people get their questions answered over the phone or at the time of inspection with and inspector on site residents will ask questions. The Parks department (information attached) has had few residents and have not found the extended hour adding significant service to our customers. Staff will bring this to the March work session for direction fonn the Council.