HomeMy WebLinkAboutFee AnalysisCity of Oshkosh
Finance Department
215 Church Ave., PO Box 1130
Oshkosh, WI 54903 -1130
O.IHKO.IH (920) 236 -5005 (920) 236 -5039 FAX
ON THE WATER
MEMORANDUM
DATE: December 10, 2010
TO: Council Members
FROM: Harold Buchholz, Chair
Long Range Finance Committee
RE: City Wide Analysis of Fees
As you know, at your direction, the Long Range Finance Committee has been reviewing
the fees that are charged by the City of Oshkosh. The Committee's approach was
macro in nature, not focusing on any particular fees, and included analyzing the nature
of the fees, the policy issues surrounding the creation, costing, rationale, comparability
of the fees, and the ongoing maintenance of the fees. This was done in an effort to
provide the City Manager and the Common Council with a process to logically and
systematically evaluate fees charged by the City on an ongoing basis. In completing
this analysis, the committee developed a series of recommendations, as attached,
including a breakdown of fees into logical categories, for the Council to consider in
implementing an open, systematic review process. This process will answer questions
such as: "What is the fee for ? ", "Why does the fee exist ? ", "Is the correct amount being
charged for specific fees and fees in general ? ", "What is the financial impact of adding
or deleting a particular fee ? ", and "How does the City of Oshkosh compare to other
municipalities in the area of fees ?"
In reviewing the comparability of the fees and charges for the City of Oshkosh, on a
broad scale, with other Wisconsin Cities, we have utilized the attached table that was
completed by the Wisconsin Taxpayers Alliance in February of 2010. Even though this
data contained within this table is a few years old, it is the most recent compilation that
we found to be available. This data shows that the City of Oshkosh, as the 8 th largest
City, is the 16 highest in per capita fees. We feel that this is an appropriate overall
indicator as to the reasonableness of the amount of overall fees charged by the City.
Regarding fees in the City of Oshkosh, the Committee feels that fees are a very
important part of the current City budget (including Utilities), making up over 30%
($30,598,500 / $92,097,465) of current revenues. For clarification purposes, the
$92,092,465 is made up of General Fund Revenues ($65,806,965), Water Utility
Revenues ($12,335,400), Sanitary Sewer Revenues ($9,785,700), and Storm Water
Revenues ($4,169,400). It is also important to note that the non - utility fees which are
locally controlled amount to $4,025,900 of the $30,598,500 in total fees as illustrated in
the attached breakdown of fee categories.
Due to the impact of the fees on the City budget, the committee feels that it is
imperative that the City implement a systematic process to consistently evaluate and
review the fees. It is our opinion that this process should include utilizing best practices
and benchmarking to review fees and charges and evaluate the amount of each fee
based on the services provided. In addition, the City should use the same process for
newly proposed new fees and existing fees proposed for deletion, as all of these items
impact the budget and City operations.
The key steps we believe are critical in this type of process are:
• Review the fees on a regular basis,
• Complete the analyses systematically with all fees, including full
costing,
• Select five to seven Cities of like size and budget as a standard set of
comparables to use within the process,
• Every fee should be assigned to a department so that there isn't a
breakdown in the process, and
• Be able to explain the basis and reasoning for each fee.
It is our hope that a new process to evaluate existing fees as well as consider potential
fees in the City of Oshkosh will be implemented in the near future. In addition, we urge
the Council to communicate this process clearly to the citizens and find ways to educate
the public on the process. We understand that this is a large undertaking, but believe
that the implementation of such a process in the near future will be extremely beneficial
to the Council, staff, and the citizens as we move into the future.
Recommendation: Policy Issues — City Wide Fees Analysis
BACKGROUND: The Long Range Finance Committee began reviewing and analyzing
the policy issues regarding City wide fees in September of 2010. As part of this analysis,
the Committee has reviewed the following:
• all information presented to Council on this topic,
• a best practices report created by the state legislature,
• other literature regarding setting and monitoring fees,
• state wide summary information comparing Oshkosh to all other communities in
regard to fees, and
• City staff's progress to date on the detailed fees analysis project.
After reviewing all of the above information, and having detailed discussions on it, as
well as discussing the policy issues, the Committee is prepared to share its ideas with the
Council on ways to proceed with a formal fee policy, and the ongoing issue of fee
analysis and review.
ANALYSIS: Throughout the discussions on fees, some main policy issues arose, and
the Committee analyzed the following:
• The impact of fees on the city budget.
• Establishing a starting point to align fees.
• Summary comparison of the City of Oshkosh's fees to those of other
communities.
• Costing methods used to determine the cost to provide the services that the
fees are being charged for.
• Reasonableness of current fees.
• Rising costs and how to account for them in the fee amounts.
• Which fees does the City have control over (to adjust if deemed necessary).
• How often different types of fees should be reviewed.
• Should there be different review schedules /processes for different types of
fees.
• Who is involved in the review of fees.
• Sampling of fees to illustrate recommendation points.
RECOMMENDATION: The following are recommendations the Committee believes
the Council should consider implementing in conjunction with setting a formal policy
regarding fees:
• Acknowledge that fees are a major source of revenue for the City /
Preserve the current level of fees - Since fees are a major piece of the
current City Budget, there will be budget issues if fees are deleted without
replacement fees, or substitute revenues to keep the budget balanced.
3
Communications — Communicate the details of this project and the
ramifications to the citizens. This can be done through discussions at Council
meetings, OCMS, bill inserts, and other means.
• Break the Overall Fee List Into Logical, Manageable Categories:
Utilities: Water, Sewer, and Storm. These fees would be reviewed on a
regular basis, in conjunction with annual budgets, borrowings, etc.
Statutory: These are the fees that are either set, or limited, by state statute.
Even though there isn't as much discretion on these fees, it would be
preferred to monitor these fees, and the cost to provide. This will be
helpful for understanding how much is being recovered (and how much
isn't) and for informational purposes for local and state officials.
Local Control: These are the fees that the Council has the most control
over, as they are typically set by local resolution or ordinance. This
category should be broken down further by high impact (on the budget),
low- impact, and revenue generators (no service provided for the fee
received).
• Regular Review Schedule
Utilities — Annually
Statutory — At least every 3` year, or whenever the law changes, on a
rotating schedule. This is to verify that statutory language hasn't changed,
analyze costs to provide services, and check for efficiencies in delivery of
services.
T.ocal Control
Complete an initial review of all high impact and revenue generators
within one (1) year of implementation. Complete an initial review of all
low impact fees within (2) years of implementation.
Regular, ongoing reviews of high impact will be at least every other year,
and low impact will be at least once every three years.
Cost of Services — Complete a full costing on the services provided whenever
reviewed. This includes staff time, materials, and direct /indirect overhead
involved in providing the service. Even though there may be a need to set the
fees at a lower level, it is prudent to know all costs that go into a service being
provided.
4
• Covering Cost of Services — It is recommended that, when possible, fees are
priced so that they cover the cost of providing the service, without a need for
subsidy from the tax base. Or, the Council may wish to identify services that
do justify a subsidy.
• Replacement Revenues — If the Council chooses to delete certain fees, it is
recommended that replacement revenue is in place so that the city budget does
not get shorted due to any deletions.
• Inflation Adjustments — This is an acceptable method to use in the case of
standard fees, and it ensures that rates do not get too far behind, thereby
needing large increases all at once.
• Comparable Numbers — It is recommended that comparables are used to
evaluate reasonableness and `market rate' of fees. When using comparisons
to complete this evaluation, there should be a group of five to seven similar
cities selected to use as standard comparables no matter what the fee. The
make up of the comparables should be a mix of geographic (regional)
comparables as well as like size comparables. If additional comparables are
needed for specific reasons, they should be added to the standard list, not used
in place of them.
• Fee Reviewers —Fee reviews should be completed jointly by the departments
affected by the fees and the Finance Department to ensure the same standards
are being used across the entire organization.
• Process to Consider Adding or Deleting Fees — There needs to be a
systematic process to review all new fees, and fees that are being proposed for
deletion. This analysis should be completed by the requesting /affected
department, and should include the following:
■ What services are being proposed / deleted,
■ Reason the service is needed / not needed,
■ Full costing to provide service,
■ Comparable cities information, and
■ Revenue gained / lost.
This above analysis should be reviewed by Finance, forwarded to the city
Manager, and presented to the Council for action.
The table below includes 2007 fee collections for the state's 75 largest cities and villages. A total of 27 commonly assessed fees
were selected for comparison and grouped into 13 categories. Fee groups include: business and occupation, building and
inspection, general government, law enforcement, fire and ambulance/EMS, highway maintenance and construction, storm
sewers, parking, mass transit fares, garbage/recycling, libraries, parks, and culture and recreation. For further information
regarding municipal fee collections and comparisons, see the January 2010 issue of The Wisconsin Taxpayer titled, "Municipal
Fees and Charges."
2007
Collections
Per Capita
Municipality
Population
2000 !
2007
% Change 11
2000 j
2007
%Change
Milwaukee
590.1901
$51,615,000.00
$135,885,000.00
163.3% 1
$85.23 1
$230.2411
170.1%
,Madison
224,810 i
$25,381,300.00
$49.696,075.00 ,
95.8%
$122.47
S221.061
80.5%
Green By
104,020
$7,589,313.00
$13,935,096.00
83.6%
$73.23
$133.971
82.9%
Kenosha
95,530
$2,936,956.00
$12,170,880.00
314.4%
$33.40,
$I27.40i
281.4%
Racine
80,060
$6,151,312.00,
$10,660,776.00
73.3%
$71.96
85.0%
A ]eton
72,158
$7,764,365.00
$12,458,951.00
60.5 %;
$110.66 ;
$172.66
56.0%
Waukesha
67,880
$4,775,998.00 ;
$7,438,700.00;
55,8 %';
$74.59
1 $109.59
46.9%
Oshkosh
65,810
$3,836,850.00 1
$8,964,342.001
133.6%
'; $60.72
$136.22
124.3%
;Eau
Claire
65,202 ;
$4,586,422.00 1
$7,568,280-001 i
65.0%
1 $74.35
$116.07
56.1%
Janesville
62,720 1
$5,388,466.00;
$11,908,867.00
121.0%
$90.12
$189.87:
110.7%
West Allis
60,410
$3,867,145.00
$6,895,617.00
78.3 %.
$61.07
$114.15
86.9%
LaCrosse
51,580
$1892,127.00
$4,224,050.00; 1
46.1 %
$55.13
$81.89 ,
48.5%
, Sheboygan
50,600
$2,129,592.00
$4,231,924.00'
98.7%1.,
$41.61
$83.63 ;
101.0%
'Wauwatosa
45,930
$2,175,347.00
$5,520,178.00 ;
153.8%
': $44.62
$120.19
169.4%
Fond du Lac
43,270.
S2,657,499.00; :
$4,273,986.001
60.8%
1 $63.85
$98.77
54.7%
Wausau
40,080
! $2,330,267.00'
S4,555,398.0011
95.5 %I
$59.85!
$213.66
89.9%
Brookfield
39,780
$2,662,036.00
$3,395,282.00
27.5
$70.99;
$85.35
20.2%
New Berlin
39,460
$1,798,328.00
$4,508,754.00
150.7 %
$46.76
$114.26
144.4%
; Beloit
37,110
$2,506,499.00
$2,786,793.00;
11.2 %'
1 $69.21
'i $75.10 '
8.5%
(Greenfield
36,140
$3,026,780.00
$3,487,621.00
15.2%
! $83.48
$96.50
15.6%
Manitowoc
34,620
$1,700,997.00
$4,041,305.00 "
137.6%1
i $49.19
$116.73
137.3%
Menomonee Falls
34,450
$3,285,524.00!
$5,943.524.00 '
80.9%
$107.231
$172.53
60.9%
Franklin
33,380
i $2,343,750.00),
$3,306,2I0.00 1
41.1%11
S81.37
$99.05'
21.7%
Oak Creek
32,410
$1,402,103.00
$2,936,052.00 1
109.4 %;
$51.02.
$90.59
77.5%
West Bend
30,220
$1,806,999.00
i $2,384,644.00;
32.0%
$62.431
' $78.91
26.4%
Superior
27,160
$1,026,312.00
$4,721,728.00'
360.1%
$37.64
$173.85
361.9%
Sun Prairie
25,730
$1,507,600.00
$3,922,333.001
153.5%
$75.43
$148.561
96.9%
;Neenah
2
)01 '
141.0%
1 $40.97'
$95.96
Stevens Point
25,370 1
SI,027278.00'
$1,129318.00
9.9 %:
$41.9511
$44.51:
6.1%
Mequon
23,565
$1,238,676.00
! $1,879,748.00,1
51.7%11
$57.221
$79.731
39.3%
Fitchburg
21240
$959,275.00
i $2,285,033.00'
138.2%
; $50.691
$98.321
94.0%
Watertown
1
23,166
! $1,386,120.00
$3,166,076.00
; 128.4%
$64.71,
$136,67,
111.2%
MuskeS2
(
22,980
$4,082,617.00;
S4,200,104.001
2.9%
$193.77
-5.7%
De Pere
22,670
$1,841,475.00
$2
53.8
$90.78
' $124.96
37.7%
South Milwaukee
21,285
1 S992,136.001
' $1,848,772.00'
86.3%1
$46.5911
586.86
' 1 86.4%
Germantown
19,750
; $777,632.00
$1,400,042.00
80.0%
$".7911
$70.89
' 58.3%
Pleasant Prairie
19,465
1 $1,515,425.00;
$3,735,899.00
! 146.5%1
$103.68
1 85.1%
Marshfield
19,346
$1,152,672.00
$1,510,966.00
31.1%
$57.9211 $78. 101
34.8%
Cudahy
8,530
$941,047.00
52,175,883.00!
131.2%
i $48.90 i $117,4211
140.1%
Wisconsin Rapids
18,500
; $863,214.00
$2,164,043.00
150.7%
$45.57 $116.98
156.7%
Ashwaubenon
17,785
$752,416.00
$1,394,077.00
` 95.3%11
$42.73 $78.3811
83.4%
Menasha
17,354
'' $715,171.001
$945,267.00
32.2%1
$44.01 $54.47
23.8%
Middleton
16,960
$2,479,902.001,
$1,890,647.00
-23.8%1
$153.751 $111.48'
-27.5%
Onalaska
16,425
$578,927.001
$672,592.00 i
16.2
$37.51 $40,951:
9.2%
Menomonie
15,940
; $1,495,031.00
$2,110,208.001
41.1%
$101.601 $132.3811
30.3%
Howard
15,830
$496,420.00
$1,111,759.00
; 124.0%
' $38.17, $70.23
1 84.0%
Beaver Dam
15,565
$422,455.00'
$1,254,044.00
196.8%
$27.96 $
188.1%
Allouez
15,450
$431,596.00
$1,051,653.001
143.7%
$28.771 S68.07ij
136.6%
Kaukauna
14,730
S654,244.001
` $1,213,379.00
1 $50.6311 $82.371;
62.7%
:Oconomowoc
14,155
$1,566,739.00
$2,637,796.00
. 68.4%
i S129.7111 $186.351
43.7%
Greendale
I4,025
'' $511,952.00
$1,303,799.00
I 154.7%
$33.15 1 $92.961
180.4%
River Falls
14,015
$1,411,314.00
$2,020,837.00
43.2%
$119.99 1 144.19'
20.
Whitewater
13,967
' $339,751.00
$760,671 .00
123.9 %!
$25.14 ? $54.46
116.6%
Whitefish Bay
13,830
$333,648.00
; $666,286.00'
99.7
$23.94 $48.18
101.3%
Weston
13,805
$787,641.00
1 $L598,020.00 j,
101.6%
$66.47 $115.03
73.1%
Hartford
13,550
$1,024,917.00
$1,707,106.00
' 66.6%
$101.30,1 $125.99;
1 24.4%
i Chippewa Falls
13,515
i $623,909.00'`
$1,638,994.00
162.7%
$46,7411 $121.271
159.5%
Shorewood
13,440 ''' $505,778.00
$778,140.00!
53.9 %'
$36.39 ' $57.90
59 .1%
Glendale
12,970 $976,680.00
$1,624,700.00
66.3%1!
$69.56 $125.27
80.1%
Stoughton
12,800
$685,654.00
$1,421,041.001
107.3%11
$61.57 $111.02
80.3%
Pewaukee
12,650
1 $1,343,661.00
$2,163,707.001
61.0 %11
$99.921 $171.04'
71.2%
Two Rivers
12,575
1 $887,225.00
$1,278,802.00'
44.1 %11
$65.91 i $101.69
54.3%
;:Fort Atkinson
12,125
; $398,583.00
$562,053.00
41.0%
, $34.781 $46.35
i 33.3%
Brown Deer
11,715
$281,539.00
$1,502,859.00
433.8%
$22.85 $128.2
461.5%
Baraboo
11,710
'; $396,663.00.
$1,074,171,00
1 170.8%
$37.64; $91.73
143.7%
Plover
11,580
$165,165.00
$217,346.00
31.6%
$15.30 $18.77
22.7%
11,440
$775,629.00
$960,866.00
23.9%
$71.30 $83.99!
17.8%
_Cedarbur
!Grafton
11,420
$542,734.00
! $932,047.00;
71.7 %I!
$51.49 $91.621
58.5%
Marinette
I1,405
% $307,632.00
$507,513.00
65.0%11
$25.52 1 $44.501
1 74.3%
Port Washington
11,120
' $1,249,469.00
$2,037,680.00
63.1%
' $120.01 $183.241
52,7%
Wau un
i 10,974
I $198,330.00,,
$275,512.00
', 38.9%
1 $18.05 $25.11
39.1%
Little Chute
10,965
$309,047.0
. $1,084,053.00
250.8%
$29.20; $98.861
238.6%
Monroe
10,920
$631,832.00
$1,763.257.00
179.1%
$58.85'
$161.47'
174.4%
Platteville
10,480
$444,091.00
! $836,114.00
88.3 %;
$43.88!;
$79.78
_81.8%
Merrill
10,135
$345,012.00
$488,472.00;
41.6 %11
$33.32
$48.20
'. 44.6%
Wisconsin Tax ayers Alliance
February 11, 201011
i�
DRAFT
APPROXIMATE FEES BY CATEGORY
UTILITIES
Water Utility
Sanitary Sewer Utility
Storm Water Utility
TOTAL UTILITIES
Approximate Revenues
$12,335,400
$9,785,700
$4,169,400
$26,290,500
STATUTORY Approximate Revenues
Liquor Licenses $130,000
Weights & Measures (based on costs) $123,700
Cigarette Licenses $8,000
Misc. -Clerk (Pawnbroker /Second Hand /Salvage
Dealers /Taxi Cab, etc.) $20,400
TOTAL STATUTORY $282,100
7
Higrh Impact Approximate Revenues
Ambulance Fees $2,170,000
Transit Fees $760,400
Building Permits $258,000
Hotel & Restaurant Fees (partially set by Statutes) $220,000
Electric Permits $91,5001
Parking Permits / Overnight / Pay Stations / Lot
Rentals / Etc.
$88,800
Heating Permits
$82,000
Plumbing Permits
$81,000
Engineering Fees
$60,000
Boat Launch
$50,000
Zoning Ordinance Permits
$43,000
Retail Food Fees
$25,700
Total High Impact
$3,930,400
Low Impact
Approximate Revenues
Special Sanitation Fees
$23,500
Property Search Fees
$20,000
Lab Fees
$12,100
Clerk - Advertising /Photo Fees
$6,500
Park Rentals
$6,500
Housing Fees
$3,600
Cable Access Fees
$2,500
Code Seals /Plan Fees
$700
Flammable Tank Fees
$500
Total Low Impact $75,9001
Revenue Generators
Amusement Devices
Dance /Entertainment Fee
Bowling Alley Fee
Total Revenue Generators
TOTAL LO
Approximate Revenues
$13,000
$6,000
$600
$19,600
025,900
Total Accounted for w / Fees $30,598,500
Total Without Water & Sanitary Sewer $8,477,400 *
* Approximate Revenues are 2011 Proposed Revenues. The difference between
this amount and the amount listed in the attached table from the Wisconsin
Taxpayers Alliance is due to: (1) the difference between 2007 revenues and 2011
proposed revenues, and (2) the extraordinary costs that the city charges on a time
and materials basis for specialized services that are not included in fees and
9
CITY OF OSHKOSH
FEES ANALYSIS
2010 REVIEW
Department(s):
Fee /Charge /Permit:
Type:
Authority:
Can Beneficiary of
Services be Identified?
Description /Basis for
Fee:
Fee ID:
Date Enacted.
Last Review Date:
Next Review Date:
Review Cycle:
Reason Charge is Needed/ Purpose
Served:
Current/Proposed Fee Amount:
Number Current Annual
Issued /Executed Revenue
Cost Basis Full: or Partial:
Departments Involved:
COST TO PROVIDE
SERVICE:
Direct Costs:
Labor (including
benefits), Materials
Supplies, Vehicle/
Equipment, Etc.
Indirect Costs:
Admin. Time, Insurance,
Building, Depreciation,
Etc.
TOTAL COST TO PROVIDE SERVICE:
Cost Recovery Percentage:
Per Fee Charged
Current Amount Subsidized by Taxpayers:
Budgetary Impact:
External Comparables:
9.
2.
3.
4.
5.
MUNICIPALITY
FEE/CHARGE/
PERMIT AMOUNT
Annual
Review Completed By: Date:
10