April 3, 2007 - Board of Supervisors Agenda Item · Board of Supervisors that fire prevention services be provided by Stanislaus County through the Fire Warden's Office. ... fees

THE BOARD OF SUPERVISORS OF THE COUNTY OF STANISLAUS ACTION AEEN A SUMMARY 9

DEPT: CEO - OESlFire Warden r.. - /A 4 ,hj/j' P-- BOARD AGENDA # *B-1

Urgent Q Routine p$ AGENDA DATE A p r l l 3 , 2007

CEO Concurs with Recommendation YES 9 NO 415 Vote Required YES NO (Info ation Attached)

SUBJECT:

Approval to Set a Public Hearing on May 8, 2007 at 9:20 a.m. to Introduce and Waive the First Reading of an Ordinance to Amend Existing Fees of the Stanislaus County Fire Prevention Bureau

STAFF RECOMMENDATIONS:

Set a Public Hearing on May 8, 2007 at 9:20 a.m. to introduce and waive the first reading of an ordinance to amend existing fees of the Stanislaus County Fire Prevention Bureau.

FISCAL IMPACT:

Existing fire prevention service fees, set in 1992, generate approximately $100,000 per year. The cost of providing fire prevention services at the current level is $525,000 annually. The program is funded through a combination of fees, an annual County General Fund contribution of $300,000 and Less Than Countywide Fire Taxes. Currently, the fees recovered for new development activities such as plan checks and inspections are only about 20% of the cost of providing the service. The proposed fee increase is

(Continued on Page 2)

BOARD ACTION AS FOLLOWS: No. 2007-229

On motion of ~ u ~ ~ N ~ s o ~ ~ ~ ~ ~ ~ ~ ~ ~ o _ v _ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ , Seconded by Supervisor . ~ ~ ~ M . a ~ f ~ d d ~ ~ ~ ~ ~ ~ ~ C C C C C C C C C C and approved by the following vote. . . Ayes: Supe~ isors :~~M_ay i~e !d~_Gro~er~M~~~t~ i~h~D_e .~a~~~~an_dCha i~mn~Q'~~~Et r? r?__.-______.__..___.__._.___-______

Noes: Supervisors: -___-_--------- CIC1qnne e_e_.e_e_..---.---...---.-.-------------.-----.--.--...--..-..------------

Excused or Absent: Supervisors:..N!?!_e ---------.--..---...---.-..-.-----------------.-.-.-.-.----.-...------

Abstaining: S u p e ~ i s o c _._._____-- N_clnft ftftftftftftftftftftftftftftftftftftftft.ftftft.ft...ftftftftftft.ftft...ftftftftftftftftftftftftftftftft.ft...ft.ft.ftft... 1) X Approved as recommended 2) Denied 3) Approved as amended 4) Other: MOTION:

ATTEST: CHRISTINE FERRARO TALLMAN, Clerk File NO. ORD-55-B-11

Approval to Set a Public Hearing on May 8, 2007 at 9:20 a.m. to Introduce and Waive the First Reading of an Ordinance to Amend Existing Fees of the Stanislaus County Fire Prevention Bureau Page 2

Fiscal Impact (Continued) estimated to generate an additional $150,000 in fees. The additional fee revenue will provide the resources necessary for the Fire Prevention Bureau to begin addressing the program deficiencies with respect to new development. Additional service needs that have not been met in the past, such as state mandated inspections, and the weed abatement program, may then be addressed through the existing General Fund contribution.

Discussion:

The Board of Supervisors established the Stanislaus County Fire Authority on October 11, 2005 to oversee the regional fire services provided using the Less than Countywide Fire Tax. On June 11, 2006, the Stanislaus County Fire Authority recommended to the Board of Supervisors that fire prevention services be provided by Stanislaus County through the Fire Warden's Office. On June 13,2006, the Board of Supervisors adopted that recommendation and on July 1,2006 the Chief Executive Office - Office of Emergency ServiceslFire Warden assumed responsibility for providing specified fire prevention services to the districts and cities that contribute to the Less than Countywide Fire Tax.

The $525,000 budget for FY2006 - 2007 is derived from three sources. The Less than Countywide Fire Tax contributes $125,000, Stanislaus County contributes $300,000 of General Funds, and existing fees are expected to contribute $100,000. The fee schedule has not been updated since 1992 and the Fire Authority, recognizing that fees were not covering the cost of services, provided an additional $20,000 to fund a fee study.

Maximus Inc., a private consultant specializing in establishing the true costs for providing government services, was hired to conduct a cost of service study and recommend an a~uropriate fee schedule. The Final Re~or t of this User Fee Studv is the foundation and p;imab source for the fee schedule that is being proposed. ~ o s i o f the fees being recommended are directly from the Maximus report; however, there are several differences between the Maximus report and the fee schedule that is being recommended. The modifications presented herein make the fee schedule easier to understand and implement. In addition, there were some cases where Maximus recommended a higher fee for certain uses that staff was unable to justify or explain. In these cases a reduction was made from the fee recommended in the study to the "standard" fee for that occupancy class. The modifications have a negligible impact on

the revenue projections made by Maximus.


The fee schedule proposed by Maximus recommends updating existing fees and adding an array of new fees primarily related to fire code permits and fire safety inspections for existing businesses. Staff recommends updating only existing fees and those directly related to new construction, with two exceptions. The first exception is for Fireworks Public Displays. The current fee of $173 was adopted by Stanislaus Consolidated Fire District for their district only (not Stanislaus County); it is recommended that it be increased to $660 at this time because of the extraordinary cost for providing this service. Additionally, weed abatement was not considered during the Maximus Study. Staff applied the Maximus methodology to complete a time on task analysis and applied that to the fully weighted hourly rate for a Fire Prevention Specialist to determine the administration and collection fee that should be added to properties that require forced abatement.

All other new fees will be brought forward at a later time. This course of action is recommended as follows:

The increases being proposed now are to cover the increased cost for providing services that has occurred since 1992. No new fees are being proposed. Staff intends to obtain input from the general public and the cities served by the Fire Prevention Bureau before finalizing the recommendation for any new fees. Business practices and technology are not currently in place to implement the new fees being recommended by Maximus.

As stated earlier, the County has not updated fire prevention service fees since 1992, and as a result some of the increases are quite substantial. The following table is a side-by-side comparison for the current and proposed fees:

Inspection, drinking & dining with > 50 occupants

$35

Weed Abatement (AdrninlCollections) 1 $114

$122

$214 1 $100

$87


For most new construction projects the methodology used to establish fees now is different than was used in 1992. For example, many new construction fees today are determined using a combination of factors including square footage and construction type, instead of using the facility valuation or simply setting a flat rate. As a result, it is difficult to compare current and proposed rates on a fee-by-fee basis. Instead, staff has projected the total fees for several hypothetical projects and compared the total fees for each project. Most of these projects, as in real life, involve multiple plan submittals, plan checks, and field inspections.

In total, the recommended fees are expected to generate nearly $250,000 on an annual basis, an increase of nearly $150,000 over the current projected revenue.

ctory, 500,000 sqlfl including multiple

The 2006-2007 Business Plan adopted by the Stanislaus County Fire Authority on May 25, 2006 identified completing all state mandated fire safety inspections and weed abatement as two additional services beginning in Fiscal Year 2007-2008. Together, these two new services were estimated to cost $125,000 annually. Staff recommends

House, 6,000 sqlfl with fire sprinklers

Retail store, 50.000 sqlfl with fire sprinklers and a fire alarm system

Assisted Living Facility, 50.000 sqlfl with fire sprinklers and a fire alarm system

Tenant Improvement for 3,000 sqlfl retail use

Tenant improvement for a 2,500 sqlft restaurant including a fire suppression system in the exhaust hood

$120

$768

$966

$66

$204.00

$373

$2,314

$2,605

$203

$606

$253

$1,546

$1,639

$137

$402


that any resulting revenue increases be used to initiate these programs and develop the systems needed to implement Fire Code Permitting and Fire Inspection programs.

Policy Issues:

An ordinance of the Board of Supervisors is required to increase or establish fees. The Board must decide the potential impacts on the community and whether the request will assist the Stanislaus County Fire Prevention Bureau in meeting the Board's priority of ensuring a safe community and efficient government operations.

Staffing Impact:

There is no staffing impact associated with this item.

ORDINANCE NO. C.S.

AN ORDINANCE TO ADOPT A REVISED FEE SCHEDULE FOR SERVICES BY THE FlRE WARDEN'S OFFICE, FlRE PREVENTION BUREAU

THE BOARD OF SUPERVISORS OF THE COUNTY OF STANISLAUS, STATE OF CALIFORNIA. ORDAINS AS FOLLOWS:

Section 1: The Board of Supervisors hereby adopts the Stanislaus County Fire Warden's Office, Fire Prevention Bureau 2007-2008 Fee Schedule, attached as Exhibit A and incorporated by reference, a copy of which is on file with the Clerk of the Board of Supervisors and is available for public inspection and copying in that office in accordance with the California Public Records Act.

Section 2. This ordinance shall take effect thirty (30) days from and after the date of its passage and before the expiration of fifteen (15) days after its passage it shall be published once, with the names of the members voting for and against the same, in the Modesto Bee, a newspaper published in the County of Stanislaus, State of California.

Upon motion of Supervisor , seconded by Supervisor , the foregoing resolution was passed and adopted at a

regular meeting of the Board of Supervisors of the County of Stanislaus, State of California, the day of , 2007, by the following called vote:

AYES: Supervisors:

NOES: Supervisors:

ABSENT: Supervisors:

William O'Brien, Chairman of the Board of Supervisors of the County of Stanislaus, State of California

ATTEST:

CHRISTINE FERRARO TALLMAN CLERK OF THE BOARD OF SUPERVISORS OF THE

COUNTY OF STANISLAUS, STATE OF CALIFORNIA

BY Deputy

APPROVED AS TO FORM: MICHAEL H. KRAUSNICK COUNTY COUNSEL

Assistant county Counsel

V:\CO\jpd\Docurnents\ORDINANC\PLANING\F~ Prevention 2007wpd

Stanislaus County Fire Prevention 2007-2008 Fee Schedule - Plan Checks,Special Systems,lnspections and Permits

........ .........

... -...

... -. . -

...

- ............

..............

Blasting ......-.. Agent Permit . . ......... - . --

-- .......... -

........

..............

.......

EXHIBIT A -- Page I

Stanislaus County Fire Prevention 2007-2008 Fee Schedule - New Construction Inspections

UBC Classification

. . . . . - - -.

..........

-- - ............ .. *. ....... -

........... -.

........

............

....... ..

.......... '

. -

- -- ............

............

. - - .. - . . , A- -

...

-- -. . , .

EXHIBIT A - Page 2


I UBC Classification 1 Each 1 ~ro iect Size / Additional 1

EXHIBIT A -Page 3

E All Applicable Uses ....................... 500 $175.00 -- $2.14 -~

-- $21 8.00 $1.79 2,500 ............ 5,000 $263.00 $1.32

---- ~-~ ~ 10,000 ........ $329.00 ..... $0.44 ... 25,000 $395.00 $0.52

. - - -

. -~ ....... 50,000 .......... $525.00 $0.52


UBC Classification

..

- .....

.................

. -

......... . . . .

EXHIBIT A - Page 4


UBC Classification

... .

EXHIBIT A - Page 5

Stanislaus County

Fire Protection Authority

User Fee Study

F M L REPORT

Prepared by:

IMUS HELPING C O V W A 4 E m SERVE TRE PEOPLE'

November 2006

Daniel Edds, MBA, Senior Manager

4320 Auburn BIvd, Suite 2000

Sacramento, CA 95841

916.485.8102

Slanivlnus Counf#, California FEE STUDY Final Report

TABLE OF CONTENTS ........................................................................................................................... I

FEE STUDY FOR STANISLAUS COUNTY - RESULTS ..................................................................... 1

2. EXECUTIVE SUMMARY ............................................................................................................... I

2.1 BACKGROUND AND APPROACE 2.2 COSTING METHODOLOGIES ...........................................................................................................

2.2.1 Productive Hourly Rates 2.2.2 2.2.3

2.3 OPPORTUNITIES FOR REVENUE IMPROVEMT 2.4 REVENUE PROJECTIONS FOR BUDGEXNG 2.5 SLIMMARY OF RESULTS

3. INTRODUCTION AND BACKGROUND .................................................................................... 5

3.1 BACKGROUND AND PURPOS 5 3.2 A B O ~ M A X I M U 5

4. FACTORS LIMITING THE FULL RECOVERY OF COSTS .................................................... 6

4.1 INACCURATE LABOR RATES 4.2 RELIANCE ON TLME & MA 4.3 INCOMPLETE EST 4.4 INCOMPLETE FEE 4.5 PAST PRACTICES TO SUBSIDIZE USERFEE

5. SPECIFIC FINDINGS & RESULTS ............................................................................................. 9

5.1 ANNUAL INSPECTION & PERMITS ................................................................................................. 9 5.1.1 Summary Description 5.1.2 Calculation SpecSfic 5.1.3 Find.

5.2 NEW CON . . 5.2.1 Summary Descrzptzon .......................................................................................................... 1 I

5.2.2 Calculation Spec@c I1 5.2.3 Finding I1

5.3 CONCLUSIO 11 5.3.1 FireMarshal 1 I

6. USER FEE CONCEPTS AND PHILOSOPHY .......................................................................... 13

6.1 GENERAL FEE PRINCIPLES .13

7. MAINTAINING FEE SCHEDULES AND RELATED REVENUES ......................................... 15

7.1 BENEFlTS OF REGULARALY UPDATE FEE 7.2 h'iETHODS OF UPDATING FEES

72.1 Multi-Year Fees (Updates 7.2.2 Alternative I: Update the Fee Model Annually .............................................................. 16 7.2.3 Alternative 2: Counly Labor Costs (Recommended Alternative) ....................................... 16

8. COSTING METHODOLOGIES ................................................................................................... 17

MAXIMUS. INC

Stamislaus Coung. Califarnia FEE STUDY FinaI Report

................................................................................... 8.1 GENERAL COST ANALYSIS & APPROACH 17 ......................................................................................................... 8.2 COSTING METHODOLOGIES I 8

............................................................................................ 8.2.1 De$nitions of Common Terms 18 8.2.2 Summary of the M F E E Approach .................................................................................. 19

................................................................................. 8.2.3 Nexus - Building Safeeiy & Inspection 19

9 . APPENDIX . DETAILED FEE SCHEDULES .............. .................. .............................................. 1

. . I1

MAXIMUS. INC

Stanislaus COUH@, California FEE STUDY Final Report

Fee Study for Stanislaus - County - Results

2. EXECUTIVE SUMMARY

2.1 BACKGROUND AND APPROACH

Stanislaus County engaged MAXIMUS, Inc. to conduct a detailed cost of services study.for the Regional Fire Authority. MAXIMUS employed proven and objective methodolog~es to calculate the full actual cost of the seniices, and used our experience to guide the County regarding the appropriate costs to be included in the development of full cost fees. County leaders can use this information to make mare informed decisions and set fees to meet the fiscal and policy goals and objectives of the County.

Through this study, we determined the full cost of services offered by the specific areas for which user fees are currently being charged or could be charged. This "full cost," includes all legitimate direct and indirect costs associated with providing each service, including direct support costs from other divisions plus department and Countywide overhead.

Detailed descriptions of each methodology are available in the appendix. However, in summary the following methodologies were utilized to arrive at the cost.

2.2.d Praducfive Hourly Rates

For all positions, Productive Hourly Rates were calculated. These rates take into consideration the full cost of providing support to staff. These costs include salary, benefits, vacation time, sick leave, holiday time, training time, routine meetings, administrative support, etc.

I MAXIMUS. INC

Stanislaas County, Calqorornia FEE STUDY Final Report

2.2.2 Process Analytics

Annual Inspections and Permitting - This method is a unit cost "build-up" approach that calculates each cost component for individual feeslservices-with the assistance of specially designed software.

Initially, MAXIMUS worked with County personnel to develop time estimates for each fee-based service. Based upon these estimates, we calculated the direct cost (salaries and benefits) attributed to each fee. With this information we allocated the cost of services and supplies, as well as other related expenses. We also distributed the appropriate amount of Countywide and departmental overhead. As a crosscheck, we ensured that 100% of each employee's time is accounted for in the model.

The end result of this analysis is a list of full actual costs for individual services. By multiplying the actual cost for each service by the annual volume of the service, we were able to identify potential annual revenue. By multiplying the same volume by the current fees, we were able to calculate comparable revenue under the current fees. The difference between the two annual revenues represents the "gap" or existing surplus/subsidy caused by under or overcharges within individual fees.

2.2.3 NEXUS

New Construction: NEXUS is a specific costing methodology designed for Building Safety & Inspection operations. The objective is to move these operations away form the historically accepted method of establishing fees based on the valuation of the project. While accepted and used by the majority of jurisdictions throughout the country, this method is coming under increasing legal scrutiny. Many states, including California, have legal code that limits the cost recovery of user fees up to a "reasonable estimate of cost". The intent of this language is to limit cost recovery up to cost but no more than cost.

Using valuation based models to set user fees is coming under criticism because it is difficult to create the connection or nexus between the actual cost of a service and the price charged for that same service.

This is especially true when County labor rates remain flat to stable yet construction costs (valuations) rise due to increases in material

MAXIMUS. INC

Stanklms County, Cal~ornia FEE STUDY Final Report

expenses. In theory, this results in increases in building fees without a quantifiable increase in costs.

2.3 OPPORTUNITIES FOR REVENUE IMPROVEMENT

The results of this study revealed significant opportunities to increase revenues through fees. Specifically, opportunities come from a variety of factors, which are cammanly found within these studies:

I. Increasing Productive Hourly Rates to full cost.

2. Acknowledging the total time to provide a service from the Countywide system of service delivery.

3. Adding new fees, (while eliminating others).

2.4 REVENUE PROJECT IONS FOR BUDGETING PURPOSES

As part of this study, the County and MAXIMUS significantly restructured the fee schedule. Due to these many structural changes to the fees, it is imprecise to compare the calculated costs with current fees to determine exact existing subsidies or surpluses. For some fees, the fee categoriesltypes are different, the existing activity volume statistics no longer apply, and the current fee levels are no longer comparable. This limitation affects the individual fee comparisons, as well as the total revenue that results from all fees over time or during a fiscal year.

As a result of these issues, there are some limitations to the utility of the "potential revenue" figures indicated in our summary worksheets. However, every effort has been made to make a reasonabie and conservative projection of new revenues if the County adopts fees at full cost recovery.

2.5 SUMMARY OF RESULTS

MAXIMUS identified an overall current subsidy provided by the County to the fee-payers as a whole, whereby the County was charging less than the full actual cost of providing the services. The

3 MAXIMUS, INC

StanisL~ucs County, CaI~ornia FEE STUDY Final Report

results of the MAXIMUS cost analysis demonstrate the full actual cost of providing each of the fee-related services included in the study. By annualizing and combining the results for each fee, we identified the estimated revenue from the current fees, the potential revenue if the fees were set at the full (100%) cost and the resulting subsidy. The following table details this information:

4 MAXIMUS, INC

Fee or Service Name l Description :UEVE@~E;@~@@CTB - , y" - - : : : 4;-- a ?

Annual Revenue at Current Fee

New Construction Annual Permits Actual Revenue

Calculated Annual Cost I

Potential Revenue

$ 283,425 $ 183,077 $466,501.31 $ 125,000.00

Annual Potential

Additional Revenue

$ 283,425 $ 183,077 $ 341,501 -311

Stanislaus County, Cal~ornia FEE STUDY Final Report

3. INTRODUCTION AND BACKGROUND

3.d BACKGROUND AND PURPOSE

In recent months, The Stanislaus County absorbed the role of providing Fire Protection services for the County. Because of this, the fee schedule needed a thorough review of fees relative to costs. In addition, since it had been several years from the last fee review, virtually a new schedule of fees was required.

The principal goal of this study was to calculate the full cost of providing the services, including all direct, indirect, and support costs associated with individual services. Secondary objectives of the study included:

r Structure the fees to accurately reflect the processes and organization of the divisions.

r Simplify the fee schedules to make them easier to implement and understand.

r Ensure a connection between fees and the ~ o s t of services provided.

r Ensure the fees are logical and defensible. m Provide a revenue projection based on the full recovery of

County costs.

3.2 ABOUT MAXIMUS

The Cost Services Division of MAXIMUS is part of a nationwide consulting firm specializing in cost analysis and revenue enhancement studies for state and local government. The Western Region Office is headquartered in Sacramento, California, with other offices in Oakland, lrvine, Denver, and Seattle. Our Western Region has provided sewices to hundreds of cities and counties in the West. In addition to being the industry's volume leader in cost analysis studies, we have pioneered approaches to fee analysis.

Stanislaus County, Califorfiia FEE STUDY Final Report

4. FACTORS LlMITING THE FULL RECOVERY OF COSTS

Several factors were found that limited the full recovery of costs. All of these factors are commonly found in similar studies and comparable jurisdictions.

4.11 !NACCURATE LABOR RATES

One of the primary reasons limiting the full recovery of costs are labor rates that do not capture 100% of costs. The following is a list of costs that are generally not fully accounted for in rate calculations:

I. Annual accrual of sick leave.

2. Annual holiday leave.

3. Time associated with management leave.

4. Time associated with routine management 8 staff meetings.

5. Expenses associated with Countywide overhead.

6. Expenses associated with divisional andlor departmental overhead.

7. Expenses associated with administrative staff support.

4.2 RELIANCE ON TIME & MATERIAL (HOURLY) FEES

Theory would suggest that the most equitable way ta charge a client for a service would be to track the total time and charge an hourly rate based upon the personnel cost of the person(s) providing the service. The reality is that this system is seriously flawed. Several factors make this system unreliable.

1. Times assigned to projects are nearly always underestimated without a prec~se time tracking and automated tool that monitors ?00% of staff time.

2. Hourly rates are habitually too low and fail to capture:

6 MAXIMUS, INC

Stanislaus County, Ca11jiwnia FEE STUDY Final Report

a. Overhead expenses, vacation, sick leave, holiday and other "non-productive" time.

b. Time spent on support activities such as counter duty, database maintenance, general administration, training and meetings.

Divisions are typically not asked to set measurable objectives on billable hours that one might see in the private sector with similar professional disciplines.

While not all of the factors have been observed with all divisions of the Stanislaus County, in general, these are all contributing factors to the under recovery of costs.

4.3 INCOMPLETE ESTIMATES OF LABQR UTILIZATION

There are two primary reasons why estimates of labor utilization for any given service are inaccurate.

.I. They fail to identify the work processes, activities and tasks associated with the service. Therefore, estimates of time are typically under estimated by a significant margin. Because of this MAXIMUS takes an extra step to first identify and define the work processes that actually produce County services.

2. They fail to capture cross-departmental support or system wide labor utilization. This was an important factor in reviewing County services and every effort was made to identify and capture these additional costs.

4.4 INCOMPLETE FEE SCHEDULES

Outdated or incomplete fee schedule are often a primary reason why a County does not fully recover its costs. Because of this, MAXIMUS spends additional time with each department to identify those services that should be added, those that should be deleted and spliiting those large fees into sub categories that more accurately reflect the County services.

7 MAXIMUS, INC

Stanislaus County, CaEvornia FEE STUDY Final Report

4.5 PAST PRACTfCES TO SUBSIDIZE USER FEES

Many jurisdictions establish unwritten policies or encourage a practice of subsidizing user fees. Often the objective is keep user fees low to encourage economic development. While there is little evidence that user fees on the whole have any impact on economic development the resurt of these policies or practices is often the inability for staff to keep up with workloads. As economic development occurs, the ability for the County to finance these services is severely constrained.

8 MAXIMUS, INC

Sfanislaus Couniy, Cal~umia FEE STUDY Final Report

5. SPEClFtC FINDINGS & RESULTS

5.4 ANNUAL INSPECTION & PERMITS

5.1 .A Summary Description

The Stanislaus County Fire Author~ty conducts plan checks and inspections related to the construct~on of new occupancies, as well as for fire-related systems, hazardous activit~es and materials, and public facilities. Because of this, Fire Prevention provides a critical public safety service. The logic to charging for at least a portion of these services is two fold:

1. Fire hazards from these structures and businesses provide a level of risk to the general public that is high relative to the general population.

2. These structures and businesses consume a disproportionate share of fire prevention services relative to individuals within the general population.

Budget constraints throughout California have severally restrained the ability of local fire agencies to keep up with the demand for fire inspections. The purpose of this project is to increase the level of revenue and thereby reinitiate these critical inspection services.

5.1 .2 Calculation Specifics

As previously described, the methodology used to calculate the cost of services is called MAXFEE. Specifically, the project involved five steps:

1. Time estimates. Planning staff was asked to estimate the time required to complete each activity relative to each service. This resulted in a comprehensive study of time utilization for the entire division. For quality purposes, a check was made to verify that estimated activity time was relatively equal to actual time available for productive work.

2. Input tabor and budget data. Computerized financial models created in MS Excel assisted this project. Into this

Stanislaus County, Cahyfarnia FEE STUDY Final Report

model, time estimates were uploaded along with all direct and indirect financial expenses.

3. Review of existing fees, adding new fees and eliminating fees. This step was actually a subset of each and every part of the project. Throughout the project, services were evaluated for current applicability to the County.

4. Calculate Productive Hourly Rates. For those services that cannot be calculated with a flat fee, an hourly rate was established. This rate calculates the cost of departmental time, less vacation time, sick leave time etc., and then removes additional hours for activities that cannot be cost recovered such as administration and public information. This becomes the fully loaded hourly rate that will be charged to users of Planning services when a flat fee is not possible.

5. Revenue projection. Once the cost of individual fees were calculated a revenue estimate was prepared to compare the revenue at the current fee level with the potential revenue if fees were set at full cost.

5.1.3 Findings

The analysis of annual inspection & perrn~tting services that are cost recoverable indicate an excellent opportunity to recover additional costs. The annual full actual cost of these services is approximately $1 83,077.

The actual summary and fee schedule can be found in the appendix.

Stanislaus COUH~Y, Cawrnia FEE STUDY Final Report

5.2.2 Calculation Specifics

5.2 NEW CONSTRUCTllOM - lNSPECTfON

5.2.A Summary Description

New Construction operations is responsible for plan checking all building plans and inspecting all phases of construction to ensure the life, safety and health of residents, employees and others in the County, as well as to ensure compliance with all fire codes.

Our NEXUS methodology builds a cost structure based upon establishing time estimates for each phase of project plan check and inspection and for each building's type and size.

We believe this methodology meets the imperatives of a building fee structure. The resulting fees will be fair to both the applicant and the jurisdiction, definitive, practical, and legal.

5.2.3 Findings

The fee tables and cost analysis of the Building Division's fee- related services displayed in this report indicate that average current fee levels are significantly lower than cost.

A detailed cost summary and fee schedule can be found in the appendix. The detailed analysis was provided to the County under separate cover.

5.3 CONCLUSIONS AND OBSERVATIONS

This study reviewed costs associated with current operations and expenses. It then projected forward, operational expenses as of January 1, 2007. Operational staffing, processes and procedures might well be different in the coming new year.

5.3.A Fire Marshat

One of the significant differences in operations might be the role and responsibilities of the Fire Marshal. Currently, the Fire Marshall, Doug Hannink, has a primary role of building the Fire Protection

1 I MAXIMUS, INC

Stanislaus Couniy, Caiiyornia FEE STUDY Final Report

organization. As such, we estimated that 75% of his time is currently involved with administration and operations and 25% is involved with fieldwork. The new Fire Marshal will not have the requirement of building the organization. For the purposes of the study, we projected that the ratio will change to 50% administration and operations and 50% field work.

If this assumption proves to be true, then a significant portion of the work that is currently going to the outside plan checker/inspectar (approximately 1000 hours per year) can come back into the County for processing.

Specifically, with the staffing workload projections for the new year there is an anticipated under utilization of County staff of 900 hours per year. However, there is also a utilization of the contract plan checkerlinspector of 1050 hours. With the new Fire Marshal providing significant fieldwork, these 1050 hours can be provided by himlher.

12 MAXIMUS, INC

Sfanislaus County, CuIifornia FEE STUDY FinaI Report

6. USER FEE CONCEPTS AND PHILOSOPHY

6.1 GENERAL FEE PRINCIPLES

Local governments are funded from a variety of sources, with the primary sources being taxes, subventions, fees, special charges, fines, and grants. As the traditional provider of basic services, cities and counties are constantly struggling with securing sufficient funding to pay for the services expected/dernanded/desired by the citizenry. Many local government services are "global" in nature (e.g., police and fire protection, library, recreation, open space, etc.). Other services benefit a particular segment of the population, most often providing a direct monetary or personal benefit to the recipient. It is in this latter group that subsidy and recovery issues are brought to the fore. Given the nature of government financing, if specialized services are not cost recovered sometimes there must be a decrease in funding for other public good activities.

User fee services are those services provided by a governmental agency on behalf of a private citizen or group. The assumption underlying most fee recommendations is that costs of services benefiting individuals, and not society as a whole, should be borne by the individual receiving the benefit. Setting user fees, therefore, is equivalent to establishing prices for services. Making a profit is not an objective for local government in providing services to the general public. It is commonly felt that fees should be established at a level that will recover the cost of providing each service, no more, and no less.

It is generally accepted that recovery of costs shoutd be in direct proportion to the individual/specific gain for services. This means that if a developer wants to rezone farm land for a housing development, the County may not want to charge that business a fee less than full cost, since to do otherwise would require a subs~dy paid by the general citizenry who do not share in the particular benefit. Where new development causes an increase in infrastructure requirements, that increase should iogically be shared pro rata with the existing area proportionate to the degree that the

I3 MAXIMUS, INC

Stnnhlaus County, California FEE STUDY Final Report

new development benefits from the infrastructure. Conversely, a recreation program could logically be subsidized from the general tax base in order to promote the overall well being of the general public, or to achieve specific socio-economic objectives.

If there were alternative tax alternatives available to fund government services subsidy issues would not be stressed.

However, this has not been the case in recent years. MAXIMUS recognizes, however, that there are circumstances and programs, which probably justify a subsidy (e.g., youth, senior, and disadvantaged recreation programs, certain classifications of code enforcement, library services, etc.)

14 MAXIMUS, INC

Sfanislaus County, California FEE STUDY Final Report

cost of providing the services. This 'NEXUS" is a requirement in California and other states and a desired policy goal in many others.

Our NEXUS methodology is designed to establish a strong connection between project cost and fee levels (revenues). Furthermore, we believe the methodology meets the following imperatives of a building fee structure:

= Fair to both the applicant and the jurisdiction,

Definitive,

Practical, and

Legal.

The NEXUS is remarkably simple in concept. For building fees we create a list of building occupancy types, identify the standard time to complete the plan check and inspection process for each occupancy, and apply these time requirements to the department's average productive hourly rate. Then we adjust the resultant cost per square foot based on the type of construction. The result is a fee per square foot for each occupancy class and type of construction. We recommend a square footage mechanism for charging building fees, because:

1. This approach establishes a strong nexus between the fee charged and the cost of the service. Square footage remains relatively constant over time, thus providing a more stable base. Valuation, on the other hand, is relatively arbitrary and subject to supply and demand effects, which can cause values to double or halve within several years.

2. A square foot based fee schedule is easier to administer than valuation or timecard methods.

3. Square footage based fees withstand scrutiny better than other methods, due to the strong NEXUS to cost. Assuming categories are adequately specific, we believe a properly prepared square footage fee structure satisfies the spirit and intent of governing law.

Stanislaus County, California FEE STUDY Final Report

4. The fee is easy to calculate and builders can accurately budget for permitting costs.

5. It is noted that fluctuations in construction activity may influence the overall cost recovery rate of the Building department. Potential impacts include:

W Construction Activity Slowdown: If construction activity decreases significantly without a propol-tionai staff reduction, overall cost recovery will decrease, resulting in a subsidy.

H Construction Activity Upturn: If construction activity increases significantly without a proportional stafing increase, short-term cost recovery will increase because fees are collected before work efforts are expended. However, mid-term cost recovery should remain at full cost levels, assuming the County can add appropriate staff and "work-down" the project inventory.

W For miscellaneous permits and sub-trade items (MP&E's), we identify the standard inspection and plan check process times and multiply this by the department's average productive hourly rate. The end result is three sets of cost (fee) schedules-one for new construction, one for miscellaneous items, and one for MP&E's.

Our presentation of the NEXUS methodology in this report is far more detailed and descriptive than any other methodologies. A more involved description of the NEXUS approach is warranted, because this method is totally new to Stanislaus County, and it is a significant departure from the traditional (since 1927) approach used by building departments throughout the state. We felt it was important to make sure that the County and its citizens (and other readers of this report) clearly understand the new method and its results.

MAXIMUS, INC

Stanislaus County, Califonia FEE STUDY Final Report

NEXUS Steps

The following section summarizes the major tasks of the NEXUS approach and the related steps necessary to complete each task:

Task I : Determine the Average Productive Hourly Rate

Task 2: Determine the Actual Costs for New Construction and Tenant Improvements

Task 3: Determine the Actual Costs for Miscellaneous Items

Task 4: Determine the Actual Costs for Miscellaneous Sub-trade Inspections (Mechanical/Plumbing/GasLElectrical - MP&E's)

Task 5: Cross-Check and Validate Results

Task 6: Identify Revenue Impacts

22 MAXIMUS, 1NC

Slanislnus County, California FEE STUDY Final Report

9. APPENDIX - DETAILED FEE SCHEDULES

9.1 ANNUAL INSPECTIONS & PERMITS

9.2 NEW CONSTRUCTION

USER FEE STUDY

ACTUAL COST RESULTS

1 . Stanislaus County Fire Prevention Bureau 11

Page 1 of 25 Revenue Summary

Stanislaus County Fire Prevention USERFEESTUDY

ACTUAL COST RESULTS

MAXIMUS Page 2 of 25 Permits

ion System - Hood (hourly - o n e hour

ZECOMMENDED FEES

MAXIMUS Page 3 of 25

iquids, more than 5 gallons Inside a

Class i Liquids, more than 10 gallons Outside a

REVENUE IMPACTS I -

Annual Revenue

nlvals,& Spec~al Events 121 $ -1 $ 1221 $ (122)l 15 - 16 1,460 1 $ (1,460)l Car -- Candles & Open Flame O $ - 5 Hydrants (flow test per hydrant) 3 5 $ - $ - Lumber Yards 1 5 9 0 5

Wrecking Yards 1 $ - $

Circus I $ 4 8 s

Total Recoverable / ( $ 59,4281 $ 183,0771 $ (123,362)

TotalNon-Recoverable I 1 $ - 1 $ 128,633 1 S (128,633) Total Costs all Sources 1 1 $ 59,428 1 $ 311,710 1 8 (251,995L

Permits

Revenue 1 RBC. Fee I (Subsidy) 1 Fee #

Page 6 of 25 Permits

Fee or Service Name / Description Fee #

Fee or Service Name / Description Annual Quantity Actual Unit Cost / Potential Fee Current Fee

Annual

Qty

Per Unit Surplus I (Subsidy) ' ~o ta l Actual Annual Cost / Potential Revenue

Annual Revenue at Current Fee

Total Annual Revenue Surplus I (Subsidy)

* Non-User Fee Activities

'A reference number to facilitate discussion The services and/or fees included in the MAXIMUS study The annual number of each service provided, as reported by the County The actual cast of each service, as calculated by MAXlMUS

Current Fee

The difference between the Actual Unit Cost and the Current Fee for each service The potential revenue if the County charged the Actual Unit Cost for each service at the Annual Quantity for that service (Unit Cost x Annual Quantity) 7 he potential revenue if the County charged the Current Fee for each service at the Annu; Quantity for that service (Current Fee x Annual Quantity) at Current Fee. This figure represents the annual subsidy (based on actual cost), the

-These costs have been excluded from the estimated potential revenue totals. This is a projection of the average fee and potential revenue from subsequent inspections

Unit Cost I Potential

Fee

Per Unlt Surpfus I (SLI bs tdy)

Revenue at Current

Fee

Annuai Cost I Potential Revenue

Revenue Surplus I (Deficit)

Stanislaus County Fire Prevention New Construction Fee Analysis New Construction

FEE AND REVENUE COMPARISONS

MAXIMUS Page 7 of 25 New Construciton Revenue

Potential Fee

SF Standard Class

A-3

Current Fee Occupancy Type

Average Cost per SF

Small Assembly Buildings

Current Surplus '

(Subsidy) - Each Fee

5 0.019 $ 0.013

$ 3.508 $ 0.873

Volume of

50,000 100,000

100 500

Revenue at Potential Fee

$ 950 $ 1,270 $ 351 $ 437

Revenue at Current Fee

5 - $ - $ - $ -

Current Revenue Surplus I (Subsidy)

Subtotal

-

5 (950) 5 (1,270) $ (351) $ (437)

$ - 5 - 5 - 5 -

$ - $ - $ - $ -

5 - 5 - $ -

, $ -

5 5 - $

, $

- $

-




Occupancy Type

1-2 Nursing Home / Assisted Living

$ 0.020 $ 0.010 $ 0.006

$ 0.175 $ 0.044

$ - $ - $ - $ - $ -

20,000 50,000

100.000

1,000

5.000

$ (396) $ (475) $ (630) $ (175)

$ (218))

$ 396 $ 475 $ 630 $ 175

$ 218

$ - $ - $ - $ - $ -

$ - $ - $ - $ . $ -

$ - $ - $ - $ - $ -

$

$

$ - $

$

1

$

Occupancy Type

e a1 enan mprovemen s


Occupancy Type

iilngs - Production Phase


Occupancy Type



Average Cost per SF

$ 0.048 $ 0.030 $ 0.014

Class SF Standard

10,000 20,000 - 50,000

Occupancy Type

A-3

Current Fee

$ - $ - $ -

Potential Fee

$ 475 $ 594 $ 715

Library1 Museum

Current Surplus I

1Subsidy) - Each Fee

$ (475) $ (594) $ (715)

$ 0.008 $ 0.263 $ 0.066 $ 0.039 $ 0.025

Annual Volume of

Activity

$ - $ - - $ -

100,000 1,000 5,000

10,000 20.000

Revenue at Potential Fee

$ - $ - $ -

$ - $

$

$

8

Revenue at Current Fee

$ - $ - $ -

Current Revenue Surplus I (Subsidy)

$

$

$

$ $ 790 $ 263 $ 328 $ 394]$ $ 494

Suhtotal

$ - $ - $ -

- $ -

$ (790) $ (263) $ (328) $ ( 3 9 4 ) $ $ 1494)

$ - $ - $ -

- $ -

$ - $ - $ - $ - $ -

$ - $ . $ - $ - $ -

Occupancy Type

$ 0.010 ( 20,000 ( 8 196 I$ ((198)J $ - 1 $ - I $ - I $ I $ 0.005 1 50,000 1 $ 240 1 $ - 1 $ (240)( $ - I $ - I $ - I $ $ 0.003 1 100,000 I $ 320 ( $ ( $ (320)( $ - ( $ - ) $ - I $ - I $


Occupancy Type

I $ 0.007 1 100,000 1 $ 660 I $ - 1 $ (660)l 5 - I S - I $ - I $ - I $ (116,46611

I Total Revenues:( $ 283,425 ( $ - ( $(283,425)( $ (283,42511

New Construciton Revenue

Stanislaus County Fire Prevention New Construction Fee Analysis

Consolidated Schedule of Fire Inspection Fees (All Construction Types)

I Construction Types: Construction Types: Construction Types: I FR, II FR II 1-HR, Ill 1-HR, V 1-HR II N, Ill N, IV, V N

MAXIMUS Page 17 of 25 New Construction

290'19 'e'u 'E'U 'e'u 'e'u 000'01

9Z'S$ 6E'PO

.'J's ooc I~UOI+IPPV w e 3 108 is03

6BL$

LS9$

821s P I ~ Y S ~ ~ L

@ lso3 aseg

N A 'A1 'N Ill 'N 11 : s a d 4 u o ~ a o n r p u o ~

'e'u

'e'u

'l's DOC I~UO!$IPPV

q3e3 r o j is03

YH-C A 'YH-I Ill 'YH-C II :sad& uo!aanr~sua3

Yd II 'Yd I :sad61 uo1a3nrasuo3

'e'u

'e'u

ez!S p~oqsarq i

@ $so3 aseg

'e'u 'e'u

r '1'9 001 leuo!ztppv

qaea 108 qso3

'e'u

'e'u

azls p l o q s a ~ q l

@ is00 aseg

000'5

000'2

ploqsalql ezls 13a!ord

adAl6auiednaao 3an sse13 3an




Each additional 100 square feet, or porllon thereof, up lo the next highest project size threshold.

Page 25 of 25 New Construction

NOTICE OF PUBLIC HEARINGS

NOTICE IS HEREBY GIVEN that on May 8, 2007, at 9:20 a.m., or as soon thereafter as the matter may be heard, the Stanislaus County Board of Supervisors will meet in the Basement Chambers, Lower Level, 1010 10th St., Modesto, CA, to consider the introduction and waiving the first reading of an Ordinance amending existing fees of the Stanislaus County Fire Prevention Bureau.

ADDITIONAL NOTICE IS GIVEN that the proposed ordinance and fee schedule will be available for review on April 27, 2007, in the Clerk of the Board Office, 1010 10th Street, Suite 6700, Modesto, CA. For further information, contact the Stanislaus County Fire Prevention Bureau at (209) 552-3700.

NOTICE IS FURTHER GIVEN that at the said time and place, interested persons will be given the opportunity to be heard. Material submitted to the Board for consideration (i.e. photos, petitions, etc.) will be retained by the County. If a challenge to one or more of the above items is made in court, persons may be limited to raising only those issues they or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the Board of Supervisors.

BY ORDER OF THE BOARD OF SUPERVISORS

DATED: April 3,2007

ATTEST: CHRISTINE FERRARO TALLMAN, Clerk of the Board of Supervisors of the County of Stanislaus, State of California.

BY:

COUNTY OF STANISLAUS STATE OF CALIFORNIA

1 am a citizen of the United States and a resident Of the County aforesaid, 1 am over the age of Eighteen years, and nut a party to or interested In the above entirle matter. 1 am a printer and Principal clerk of the publisher of THE MODESTO BEE, printed in the City of MODESTO, County of STANISLAUS, State of California, daiiy, fur which said newspaper has been adjudged a newspaper of general circulation by the Superior Court of the County of STANZSLAUS, Statc of Califbmia, Under the date of February 25, 1951, Action No. 46453; that the notice of which the annexed is a printed copy, has been published in each issue tl~erc of on the folkowing dates- to wit.

APRlL 27, M A Y 3,20417

I cedi6 (or declare) under penalty of perjury Thai the fbregoing is true and correct and that This declaration was executed at MODESTO. C:aliftlraia on

^ ---.-____. NOTICE OF PURL.IC HEARINGS

NOTICE I S I.IF:R~~YY GIVFN ftjrrj bn Mov &?Mi, ut 'i:l0 u.ln , r:r .IS \orrn ihcr:?oi!i-r 11s :I?i

rriultci muv be2 (lelrrd, iki' Sinn~slc;us Coontv f i ~ r d O r S~IPervli~rc wi!/ me:?. in l P 8 i > L i ~ ! $ c ~ i t y ~ l I.h~n)~,Cr;, Lowc: Level, 1010 !Oil> S t , ,lil6ilr\io, CA, t0 cons;dcr Iri.; ilitr;~d~fciion ond wii,i~iri $ l ie f ir i t rPot!irr!l of nii Or6inantt; amcndi* rsxisfinr, Ices of llie Sicl.islau., :ounly f:irt> P r ~ g c n t i c r l liureoo.

P l I D ! lli)h!hL NUTICE IS (; l i lE N thot : i~c oropos~d :;r.!i~rrncr. ir!)d i!!r: ~.cIl'clult: w i l l bc ovutluciC icr i i -virw on Aa?.:i ?:, ?OD/, i f , Ihc Cleck of Ihe RGiird Oiiice, 1010 10th btrec.1, Suilt 6700, Ma:Ca'o, Ci i . Fo: ;urthcr iflfornloI,on, ci:n trltl the Sionisl(~us i.;~~nlr circ I'rcvr.nfinn f i u rcie ll 17091 i5?.31(111.

EIOTKI i 5 T-\>RTti:.K b i V i N Ihoi the sulci linlr. clrlcl vlace, inien'ct~ci Pel.ronr w i l l kc siveri the OPoortUnitv IU bl! I>e(~rd Muicriai ;uip rnillrri lo Ihc Rourtl for coniiirctrotion ;i.c. pho lo$, pct:;ions, :;lc I ill t x~ it:lciini.d by (.our,- l v li o challcngli !o :me r,r rnori! of rh,: ohovc items is ~ o d i . in court, prrsons nlilv kip I>milf,:f Lo rai.;ilN Onlv l h h ~ iisl~es tluv or ilJn*ctnjc cis,: r3isc.d 01 the p:iblic lienring d f v r i b c r l in this noticc, or if! wri1r.r cort::$pi,ridcn(~ dciive~pd t(! Ihe Board of irrpi.rvisors. B Y ORDER Of' T i l t UOARD O F StIPEPVISI!KS

Documents

April 3, 2007 - Board of Supervisors Agenda Item · Board of Supervisors that fire prevention services be provided by Stanislaus County through the Fire Warden's Office. ... fees