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<br /> ORANGE COUNTY GOVERNMENT | NOVEMBER 22, 2024 <br />RFP #367-OC 5439 | COMPREHENSIVE USER FEE STUDIES PAGE 1 <br /> <br />Cover Letter <br />November 22, 2024 <br />Jovana Amaro, Purchasing Agent <br />Orange County Government <br />300 West Tryon Street <br />P.O. Box 8181 <br />Hillsborough, NC 27278 <br />SUBJECT: RESPONSE TO RFP #367-OC 5439 COMPREHENSIVE USER FEE STUDIES <br />Dear Mr. Amaro & Mr. Vaughn: <br />MGT Impact Solutions, LLC (MGT) is pleased to present this proposal in response to RFP #367- <br />OC 5439 to provide a Comprehensive User Fee Studies for Orange County Government <br />(“County”). We understand the County is seeking proposals from qualified and experienced <br />individuals and firms to review and evaluate user fees for services and allocate costs <br />accordingly. A fundamental philosophy of MGT is that we work with, not for, our clients. The <br />majority of our proposed project team has previously worked in the public sector, and we will <br />keep the goals of the County at the forefront of any study. <br />THE CHALLENGE: THE REAL COST OF USER FEES <br />When a government charges a fee, one might assume that this is a purchase of service. The <br />actual question is whether the price recovers the cost. It helps to think that cost is a fact and <br />price is a policy choice. While you can set prices at various levels, you want to know the cost of <br />an activity before deciding its price. Many states prohibit any intentional profit on fees, but we <br />do not assume that everyone understands the real cost of user fees. <br />There are many ways to analyze and compare fees, and choosing the right approach is crucial. <br />With this being the County’s first comprehensive user fee study, MGT will work collaboratively <br />with County leadership to determine the most effective framework for analysis. Our experience <br />will ensure that the County’s time and resources are directed toward impactful solutions, <br />avoiding unnecessary detours and inefficiencies. <br />The cost of a fee service includes not only the direct labor, but also benefits, other appropriated <br />expenses, indirect cost, and direct support from other offices. Our job in this project is to <br />analyze the information to report how the cost compares to price. This requires not only <br />templates designed to support this analysis, but also knowledge of the underlying services so <br />the model will reflect how they are provided. Our staff’s job is to understand how you deliver <br />services, to determine their costs, and to support your policy review. We will also help the <br />County to understand regional best practices for charging various types of fees, as well as <br />demand elasticities that should be considered. <br />THE SOLUTION: USER FEE STUDY FROM MGT <br />A user fee study from MGT will successfully identify the real cost of user fee service delivery for <br />the County. This will enable the County to set accurate user fees with the transparency required <br />to justify rates to constituents and other entities. <br />Docusign Envelope ID: B9D098A3-ADE5-4D27-B060-F08A595B7E7D