Orange County NC Website
Browse       Search
6 <br /> 1 2. Presentation of Fee Study for Emergency Services, Planning & Inspections, and <br /> 2 Environment, Agriculture, Parks and Recreation (DEAPR) <br /> 3 The Board received a presentation reviewing the fees and cost recovery for the programs in <br /> 4 Emergency Services, Planning & Inspections, and Environment, Agriculture, Parks and <br /> 5 Recreation (DEAPR) by MGT Consulting. <br /> 6 <br /> 7 BACKGROUND: In recent years, the strain of inflation has had a significant impact on the <br /> 8 County's annual operating budget. For many fee-based activities particularly, the County had two <br /> 9 (2) options through the budget. First, the budget could either absorb those cost increases and <br /> 10 increase the tax impact of providing these services. Alternatively, the County could pass on fee <br /> 11 increases to the users of these programs through fee increases. As a result, the County Manager <br /> 12 authorized the Budget Office to conduct a fee study of major fee generating departments. The <br /> 13 Budget Office conducted a request for proposals (RFP) and selected MGT Consulting to provide <br /> 14 a detailed model of the cost drivers for three (3) County departments. <br /> 15 <br /> 16 The consultant worked closely with staff in Planning & Inspections, DEAPR, and Emergency <br /> 17 Services. MGT collected data around the costs of operating programs, the fee level and volume <br /> 18 of collections, the organization of the departments and the indirect costs of supporting each <br /> 19 department. The costs were then aligned to different fees to determine the total cost of each fee <br /> 20 activity and each fee division overall. In the attached MGT report, the total cost to the County of <br /> 21 operating fee based programs in these three departments is $21.7 million dollars. The County <br /> 22 generates fees in these programs of$7.6 million or 35% of the cost of the programs. This leaves <br /> 23 $14.1 million in County subsidy to operate these programs. This unique methodology of analyzing <br /> 24 the total cost of the fee is different than the typical County or departmental review of fee <br /> 25 operations. Typically, the budget document reviews cost recovery at the division or cost center <br /> 26 level. Which totals all costs and revenues in the division. This review does not include any costs <br /> 27 outside of the division, including indirect support costs or supervisory costs of department <br /> 28 administration. Due to this difference of calculation, the percentages in this report will be different <br /> 29 and lower than are normally detailed in the annual budget document. The MGT report also puts <br /> 30 the County fee schedule in context of selected peer comparisons. <br /> 31 <br /> 32 While the MGT report provides a financial picture of the fee-based programs, there are qualitative <br /> 33 factors that play a role in setting fee schedules. The County should assess aligning fee programs <br /> 34 with the priorities of the strategic plan and consider the impact of fee costs on demand and <br /> 35 accessibility of fee based programs on the users of those programs. The attached PowerPoint <br /> 36 presentation provides a framework of the various qualitative features that go into setting fees and <br /> 37 cost recovery targets. Staff requests feedback from the Board on the importance of different <br /> 38 factors in setting rates. Following this presentation and Board discussion, the County Manager <br /> 39 will use the priorities expressed to recommend fee changes for the FY 2026-27 Budget. <br /> 40 <br /> 41 Kirk Vaughn, Budget Director, introduced the item and made the following presentation: <br /> 42 <br /> 43 <br />