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10 <br /> o Each direct or operational position is listed,together with the average annual salary <br /> and benefits or actual salary and benefits. <br /> o The hourly salary and benefit rate is calculated by adding the annual salary and <br /> benefits for an employee and dividing by available hours. The model assumes a <br /> standard work year of 2,080 available hours, although this might not apply to all <br /> employees, depending on paid time off accrual rates. <br /> o The overhead rate is derived by multiplying the internal and external indirect cost <br /> rates by the salary and benefit hourly rates. <br /> The total hourly rate combines the hourly salary and benefit rate and overhead rate. This is the <br /> fully burdened hourly rate for each staff member or position. MGT prepared indirect overhead <br /> rates and corresponding hourly rate calculations using FY 2025 actual expenditures. <br /> Time Spent <br /> The next step in the process required identifying staff time spent directly on each user fee activity. <br /> Each staff person involved in user fee services estimated the time necessary to complete tasks <br /> associated with those services. Annual volume statistics were also gathered to develop total <br /> annual workload information. <br /> Fee Calculations and Revenue Projections <br /> Given this information, MGT calculated the cost of providing each service, both on a per-unit and <br /> annual basis (per-unit cost multiplied by annual volume equals total annual cost). As mentioned <br /> above, costs were calculated by multiplying per-unit time estimates by the hourly labor rates; <br /> additional operating expenses directly associated with certain services were also included. <br /> Finally, if other departments or divisions provided support for certain user fee activities,this time <br /> was accounted for and added into the analysis as a crossover support activity. Full costs are then <br /> compared to current revenues collected, and subsidies (or over-recoveries) identified. <br /> User fee summaries by department can be seen in the next section of this report. <br /> Legal, Economic, and Policy Considerations <br /> Calculating the true cost of providing services is a critical step in the process of establishing user <br /> fees and corresponding cost recovery levels.Although it is an important factor,other factors must <br /> also be given consideration. County decision makers must also consider the effects that <br /> establishing fees for services will have on the individuals purchasing those services, as well as <br /> the community. <br /> The following legal, economic, and policy issues help illustrate these considerations. <br /> ♦ Community benefit - The County might wish to subsidize some user fees to reflect policy <br /> considerations which supersede cost recovery. For example, many Community Services <br /> fees have very moderate cost recovery levels. Some programs are provided free of charge <br /> or for a minimal fee regardless of cost.Youth and senior programs tend to have the lowest <br /> cost recovery levels. Miscellaneous classes tend to have a moderate cost recovery level <br /> and adult sports programs typically have a higher cost recovery level. <br /> The chart below provides a classification method for determining the community benefit <br /> versus individual benefit of each program. Generally, as the classification moves up the <br /> pyramid,the greater the cost recovery through user fees. <br /> MCIT PAGE 6 <br />