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<br /> ORANGE COUNTY GOVERNMENT | NOVEMBER 22, 2024 <br />RFP #367-OC 5439 | COMPREHENSIVE USER FEE STUDIES PAGE 21 <br /> <br />Technical Approach <br />Adherence to a detailed work plan and schedule specifically <br />designed for providing quality user fee services. <br />Project Understanding <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. Additionally, many states prohibit any intentional profit on <br />fees, as well as cross-subsidization. We do not assume everyone understands the real cost of <br />user fees. <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 Situation in Orange County Government <br />We understand the County seeks to evaluate its current user fee structure comprehensively to <br />ensure fees reflect the true cost of services, promote equity in fee impacts, simplify and clarify <br />fee schedules, and enhance the efficiency of fee collection processes. County goals include <br />developing a defensible cost analysis process that follows best practices and allows for <br />informed decision-making by management staff and the Board of County Commissioners. MGT <br />recognizes that determining the best approach to this study is critical to achieving these goals. <br />Conducting a user fee study involves more than conducting an internal cost analysis and then <br />comparing fee schedules on a one-to-one basis with neighboring or similar counties. The <br />process requires identifying the most meaningful and actionable data, which may vary <br />depending on the type of fee and the service provided. For example, obtaining comparable <br />information from private firms, such as recreational facilities, can be resource-intensive and <br />may not always yield accurate or actionable results. <br />MGT will collaborate closely with County staff to identify the most impactful methods for <br />analyzing fees, focusing on approaches that provide the greatest value while avoiding <br />inefficiencies. By leveraging our expertise and understanding of best practices, we will help the <br />County develop a methodology tailored to its unique needs and ensure the results support <br />informed decision-making. <br />Docusign Envelope ID: B9D098A3-ADE5-4D27-B060-F08A595B7E7D