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8 <br /> Slide #3 <br /> Fee Study Background <br /> Full Cost of User Fees Services <br /> • MGT Model is based on determining the full cost of user fees, a distinct way of estimating cost <br /> that has not been used by county departments or by county budget office. <br /> • Collects the following information from departments: <br /> - Schedule of all fees and annual volumes for each fee <br /> - FY 2025 Revenue and Expenditure data <br /> - Personnel costs and organizational chart of the department <br /> - Cost Allocation Plan—value of the support provided by other departments such as HR, IT,and Finance. <br /> Allocates all costs to each fee (or to non-fee activity) by time allocation provided by <br /> departments. <br /> • Compares the total cost to provide the activity to the current revenue generated by the fee, <br /> which generates a cost recovery percentage. <br /> • The total cost recovery percentage of all studied fees is 35%, which means general fund <br /> revenue is subsidizing 65% of the cost to run these programs, or$14.1 M. <br /> ORANGE COUNTY <br /> 3 NORTH CAROLINA <br /> Slide #4 <br /> Fee Study Background <br /> Different Cost Recovery Models <br /> Full Cost of User Fees Budget Cost Recovery Direct Cost Recovery <br /> • Shows all costs associated • Cost recovery figures as • Cost recovery estimate <br /> with fee activity, allocated by communicated in the budget sometimes considered by fee <br /> each fee. process, summarized at the generating departments. <br /> • Includes department division level. • Considers only the supplies, <br /> expenditures, staff salaries • Includes all costs in that seasonal staff,and contract <br /> who directly work on the fee, division, including direct staff, personnel costs to operating a <br /> indirect costs of supervisors division leadership, and class or collect a fee. <br /> and costs in other operational costs. • Does not consider the cost of <br /> departments. • Will not include costs of staff time, administration, or <br /> • Removes costs for staff time department leadership in any indirect costs. <br /> that are not associated with a other divisions, or support <br /> fee. costs of other departments. <br /> Full Cost is not the typical way the county has considered cost recovery for fee programs, and so the cost <br /> recovery percentage will be different, and often much lower than reported otherwise. <br /> To set a policy target for each unit, county will need to translate back into Budget Cost Recover <br /> ORANGE COUNTY <br /> 4 NORTH CAROLINA <br />