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9 <br /> Slide #5 <br /> Fee Study Background <br /> Qualitative Factors for Subsidizing Fees <br /> MGT Model has provided the required cost to achieve 100% cost recovery in program areas, but <br /> the County needs to consider other factors to set policy. Presentation will include staff <br /> considerations on the following factors that could recommend subsidizing fees: <br /> Community Benefit—Some types of fee activity are broadly expected to have significant county subsidy, <br /> like classes for youth and seniors. <br /> Demand Impact—A high fee may diminish demand for a county service, resulting in lower utilization and <br /> lower fee recovery for staff time. <br /> User Impact—A high fee may cause an unwanted hardship for the fee user, that could lead to decisions <br /> that are unwanted by the county. <br /> Peer Comparison —The MGT report includes peer comparisons to five other similar county or municipal <br /> governments. <br /> Strategic Alignment—A fee activity that is prioritized through the Board of County Commissioner's <br /> Strategic Plan could be subsidized to encourage usage. <br /> Targeted Subsidy—In addition to subsidizing the fee for all users, the county can further subsidize some <br /> specific users for fees to ensure program is available to those with the highest need. <br /> �1 <br /> 5 ORoRrH GE COUNTY <br /> Slide #6 <br /> Fee Study Background <br /> Qualitative Factors for Increasing Fees and Reducing Subsidy <br /> While there are policy reasons to subsidize county fee programs, there are policy reasons why it <br /> is harmful to overly subsidize county programming: <br /> Cost to Taxpayer—All costs that are subsidized by county are ultimately charged back to county <br /> residents through Property and Sales Tax, regardless of whether they could use the service. <br /> Opportunity Cost of Subsidy—Any funding that is used to subsidize a program could instead be used to <br /> improve that program or fund a different county program that is of higher strategic priority. <br /> Unanticipated Uses—Any fee that is set too low could have unanticipated uses or users. Out-of-County <br /> users could use county services if we are priced below our peers. Users of subsidized programs may not <br /> necessarily be highest need county residents. <br /> Discourage Use—Fees can be set to actively discourage or limit types of use. Most frequently this is <br /> used to discourage multiple submissions or re-inspections. <br /> ORANGE COUNTY <br /> 6 NORTH CAROLINA <br />