Parks and Recreation Commission Meeting Agenda Packet - 11142024

Attachment 1 Field Rental Fee Recommendations from NBS Peer Review of Miscellaneous Fees for Services presenting fees for Co-Sponsored Group Use of City Fields NBS is a local government financial services consulting company staffed with professionals who have decades of experience analyzing and advising on fee programs and cost recovery in California. NBS has completed a peer review of selected fees for services, including fees for Co-Sponsored Group Use of City Fields. Introduction California cities, counties, and special districts impose fees for services and activities they provide through provisions of the State Constitution. Local government agencies may establish fees for service through the framework defined in Article XIIIC, Section 1(e). Under this framework, a fee may not exceed the estimated reasonable cost of providing the service or performing the activity. The fees considered in this Memorandum fall outside requirements for imposition of taxes, special taxes, or fees imposed as incidences of property ownership. These types of fees may be adopted by City Council via a noticed public hearing. The primary purpose in conducting this fee analysis is to ensure that fees charged by the City do not exceed the costs of providing services. Understanding the total estimated and reasonable costs of providing services also presents the City Council with the information needed to adopt fee amounts either at or below full cost recovery depending on local policy objectives. Methods of Analysis For this engagement, City staff performed an internal cost analysis for each fee under review. NBS provided a peer review of the cost analysis, as well as some basic benchmarking and comparison to other agencies to assist with implementation efforts. To align with industry standards and best practices in cost analysis when it comes to fees, two primary types of costs should be considered in determining the maximum eligible fee amount for recovery: direct and indirect costs. Direct costs are those that specifically relate to an activity or service, including the real-time provision of the service. An example of direct costs in a fee calculation is the labor costs for City personnel directly involved in the provision of the service for which the fee is charged. Indirect costs are those that support the provision of services in general but cannot be directly or easily assigned to a singular activity or service. An example of indirect costs would be a reasonable share of general administrative services and support costs provided by the City Manager, Finance, Information Technology departments, etc. Nearly all the fees under review in this analysis require specific actions on the part of City staff to provide the service, maintain the facility, or conduct the activity for which the fee is charged. Because labor is the primary underlying factor in these activities, most fee calculations proposed by staff involve application of a fully burdened hourly rate. That rate is then multiplied by the estimated time required to perform each service to establish the total cost of providing each service. For certain fees such as for use of the City’s fields for sports play, additional cost components and data metrics were applied in establishing the proposed fee calculations. Further information on each fee calculation is described below. Page 22 of 56