TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Trang Nguyen, Finance Director
1. SUBJECT
title
Results of the Cost Allocation and Draft Fee Study.
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2. SUMMARY
A Cost Allocation and Fee Study has been conducted by Matrix Consulting Group for the city. The draft results will be presented for City Council review and input.
3. RECOMMENDED ACTION
recommendation
1. Receive and file the Cost Allocation Plan and Draft User Fee Study.
2. Provide staff with direction on the Draft User Fee Study.
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4. FISCAL IMPACT
None at this time.
5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability
2.6 Reduce subsidy from general tax revenues
6. DISCUSSION AND BACKGROUND
Background and Purpose
In September 2024, City Council approved a contract with Matrix Consulting to prepare a Cost Allocation Plan and User Fee Study.
The purpose of the cost allocation plan is to identify and distribute central service and other administrative support costs to the users of those services. These kinds of costs include finance, facility maintenance, personnel, and certain departmental administrative functions. Cost Allocation plans help a city determine the full costs by identifying the indirect/overhead allocations to be added to a program's direct cost. Once developed, the full program costs can help set internal city charges and be used as a basis to establish user fees, permits and applications, billing rates, hourly rates, and costs of special services. Furthermore, a cost allocation plan can be used to charge indirect overhead to federal and state grants and charge external agencies and funds their fair share of support costs.
A user fee study determines the full cost of services offered by a government agency for which user fees are currently charged or could be charged. According to State law, city fees for services cannot exceed the cost of providing the service. The purpos...
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