At tomorrow’s meeting, an rdinanceo will be introduced to amend certain fees as described in Chapter 110-1 of the City Code. The proposed changes include: (1) Increase the administrative cost of Business License fees for the businesses in the Downtown CP Management Authority, from 2% to 10% (2) Increase 1st/2nd & subsequent Impound Redemption fee of dogs / animals from $ 25 / $50 to $50 / $100. (3) Increase Microchip placement fee from $30 to $50. (4) Increase the reinstatement fee of Garbage, Rubbish fees from $50 to $75 (5) Increase Immobilization fee of vehicles from $35 to $100. The public hearing on the ordinance will be scheduled for March 12, 2019. 

According to our staff, most of those recommendations relate to increasing fees just to cover the direct cost of services and not overhead costs. All the current fees charged for services have cost recovery rates less than 100%, meaning that the cost of providing the service exceeds that fees charged. It also means that the General Fund subsidizes every service to some extent. Of the fee-based services analyzed, most services (30) have very low-cost recovery rates, from 0% (no fee charged) to 41%. The remaining services (11) had cost recovery rates from 50% to 94%.

Another factor Staff reviewed was what surrounding cities are charging for the same service.

Staff has also noted a few other issues for consideration in setting an appropriate fee or cost recovery level including:

– Legal restrictions – state/federal law may mandate specific fees to be charged or prohibit fees entirely for certain services.

– Economic barriers – it may be desirable to establish fees at a level that allows access to services for lower income persons that they might not otherwise be able to afford.

– Community benefit – if a fee-based service benefits the community as a whole it may be appropriate to subsidize a portion of that fee. Many public health programs have low-cost recovery levels.

– Service driver – related to community service, the issue of who is the recipient of the service versus the service driver should be considered. As an example, code enforcement activities benefit the entire community, but the service is driven by a business owner or individual that violates city code.

– Managing demand – elasticity of demand in setting fees for certain services where increasing the price results in a reduction of demands, and vice versa.