Agenda 01/12/2016 Item #11A 1/12/2016 11 .A.
EXECUTIVE SUMMARY
Recommendation to accept and approve the proposed Parks and Recreation Division Fee Policy in
order to establish guidance for future fees for services.
OBJECTIVE: To provide a methodology in the determination and recommendation of fees
charged for services, an automatic price index provision applicable to existing fees and authority
for Division staff to on occasion set new fees for services outside of the budget process to be
responsive to trends in Parks and Recreational Services.
CONSIDERATIONS: On June 10, 2014, the Board directed staff to perform a comprehensive
analysis of user fees and operating costs for the Parks and Recreation Division. Staff secured the
services of Public Resources Management Group, Inc. (PRMG), a vendor under County contract,
to perform the study. On January 27, 2015, the Board approved recommendations of the study,
which included, among other things, a recommendation to develop a fee policy to establish a
methodology for use in determining and calculating fees for service. The County Parks and
Recreation Advisory Board supported the study recommendations, including the development of
a Fee Policy.
Cost recovery fee policies have been implemented by other local municipalities and counties
around the Country and have served to help guide staff in developing rates for service. A
common issue for most Parks and Recreation Divisions is that fees for service (often referred to
as "Direct Revenues") typically only fund a portion of the total cost of operations. The National
Parks and Recreation Association (NPRA), a leading non-profit organization dedicated to the
advancement of public parks, recreation and conservation, has indicated based on their national
database and surveyl1l that parks and recreation division services are approximately 30% funded
by direct revenues for operating expenses. For reference the County funds approximately 37%12
of operating expenses from direct revenues. The following represents a comparison reported in
the findings of the prior study performed by PRMG:
City of Cape Coral Collier County Palm Beach County Lee County
48%* 37% 27% 19%
*It should be noted that the City of Cape Coral does not include the cost of
maintenance and is typically a significant operating expense to a parks and
recreation division.
It can be concluded that a majority of the fees charged by parks and recreation divisions do not
fully recover the cost of service. The proposed fee policy provides guidance in establishing fees
below or at full cost based on the following methodology:
1) Identify the cost components and cost of service (e.g., personnel, maintenance, materials
and supplies, overhead, etc.);
111http://www.nrpa.org/uploadedFiles/PageBuilder_Proragis/Content/common_elelments/Field-Report.pdf
[2]Estimate based on Fiscal Year 2015 operating revenue and expense budget.
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2) Determine the percent(0-100%) of targeted cost recovery;
3) Assess the billing units (e.g., patrons, admissions, class size etc.) associated with a
service; and
4) Include considerations for market forces such as demand such that the County does not
under recover for high demand services, etc.
In addition to providing a formulated methodology for calculating fees for service the fee policy
also includes provisions for:
• Consideration for differentiating fees among customer groups (i.e., senior, youth,
etc.);
• Limiting changes to fees to no more than+/-10% a year unless otherwise approved by
the BCC;
• Annual price index to fees not formally evaluated intended to maintain existing cost
recovery margins accounting for the inflation in the cost of service not to exceed
2.5% a year; and
• Authority to Division staff to establish fees for new services outside the budget
process or formal rate setting process intended to be responsive to changing
demands/preferences for services by residents. Fees set in this manner are
subsequently evaluated and approved through the next upcoming Board meeting.
FISCAL IMPACT: There is no immediate fiscal impact associated with accepting this Fee
Policy. However, the Fee Policy will serve as guidance in establishing future fees for service.
Division staff annually provides estimates of revenues from fees through the budget process.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated
with this item.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, raises no
legal issue, and requires majority vote for approval. -JAK
RECOMMENDATION: That the Board of County Commissioners accepts and approves the
Parks and Recreation Division Fee Policy developed by Public Resources Management Group
Inc.
Prepared by: Natali Betancur, Operations Analyst, Parks and Recreation Division
Attachments: 1)Parks and Recreation Division Fee Policy
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COLLIER COUNTY
Board of County Commissioners
Item Number: 11.11.A.
Item Summary: Recommendation to accept and approve the proposed Parks and
Recreation Division Fee Policy in order to establish guidance for future fees for services.
Meeting Date: 1/12/2016
Prepared By
Name: BetancurNatali
Title: Operations Analyst,Public Services Department
9/16/2015 5:06:15 PM
Approved By
Name: WilliamsBarry
Title:Division Director-Parks&Recreation, Public Services Department
Date: 9/18/2015 4:15:16 PM
Name: Washburnllonka
Title: Manager-Park Operations,Public Services Department
Date: 9/21/2015 10:35:58 AM
Name: AlonsoHailey
Title: Operations Analyst,Public Services Department
Date: 9/28/2015 11:46:35 AM
Name: TownsendAmanda
Title:Division Director-Operations Support,Public Services Department
Date: 10/9/2015 1:40:10 PM
Name: CarnellSteve
Title:Department Head-Public Services,Public Services Department
Date: 10/15/2015 11:58:16 AM
Name: KlatzkowJeff
Title: County Attorney,
Date: 10/15/2015 3:42:23 PM
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Name: FinnEd
Title: Management/Budget Analyst, Senior,Office of Management&Budget
Date: 10/15/2015 6:58:41 PM
Name: CasalanguidaNick
Title: Deputy County Manager, County Managers Office
Date: 12/29/2015 4:43:19 PM
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Co County
COLLIER COUNTY
PARKS AND RECREATION DIVISION
r,
December fy
2015
PRPublic Resources Management Group, Inc.
MtM4: Utility, Rate, Financial, and Management Consultants
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PR Public Resources Management Group, Inc.
GUtility, Rate, Financial, and Management Consultants
December 29, 2015
Ms. Ilonka E. Washburn, CFE
Operations Manager
Ms. Natali Betancur
Operations Analyst
Collier County Parks and Recreation Division
15000 Livingston Road
Naples, FL 34109
Subject: Parks and Recreation Division Proposed Fee Policy
Dear Ms. Washburn and Betancur:
Public Resources Management Group, Inc. (PRMG) is pleased to submit this letter and report for
your review and consideration regarding the preparation of the Collier County (the "County")
Parks and Recreation Division (the "Division") Fee Policy (the "Fee Policy"). The Fee Policy
was prepared based on the recommendation of the prior cost of service study (the "Prior Fee
Study") presented at the January 27, 2015 Board of County Commissioners (the "Board")
meeting and included as Appendix A to this letter.
Recognizing that many parks and recreation fees under recover the cost of operation and
maintenance, the Fee Policy is intended to provide a methodology for assigning cost recovery in
development of the applicable fee. The methodology helps identify the cost of service, assign a
cost recovery target based on a scorecard ranking of the benefits of a service and provides
consideration of economic factors in design of the fee. The following provides a summary of the
specific objectives of the Fee Policy:
• A methodology/ formula for Division staff to use in identifying cost and in the calculation
of fees for service;
• Development of a methodology for assigning cost recovery targets in the calculation of
fees for service;
• Transparency and consistency in the method of calculating and establishing fees for
service; and
• An annual automatic price index to fees to provide for an allowance for the increase in the
cost of operations and maintenance.
341 NORTH MAITLAND AVENUE—SUITE 300—MAITLAND,FL 32751
Tel: 407-628-2600 • Fax: 407-628-2610 • Email: PRMG @>PRMGinc.com • Website: www.PRMGinc.com
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Collier County Government
Parks and Recreation Department
December 29, 2015
Page 2
We appreciate the opportunity to be of service to the County and would like to thank the
Division for their assistance and participation in development of the Fee Policy.
Very truly yours,
Public Resources Management Group,Inc.
& 4 ' (a‘:
Robert J. Ori
President
Thierry A. Boveri, CGFM
Supervising Consultant
RJO/dlc
Attachments
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COLLIER COUNTY PARKS AND RECREATION DIVISION
FEE POLICY
TABLE OF CONTENTS
Title Page No.
Letter of Transmittal
Table of Contents i
1.0 General 1
2.0 Fee Formula and Methodlogy 1
2.1 Cost of Service 1
2.2 Cost Recovery Target 3
2.3 Billing Units 5
2.4 Market Adjustment Factor 5
2.5 Fee Categories and Pricing Differentiation 6
2.6 Maximum Rate Change for Existing Fees 6
2.7 Existing Fees as a Proxy for Establishing New Fees 7
2.8 Rounding of Fees 7
3.0 General Provisions 7
3.1 Ultimate Authority in Establishing Fees 7
3.2 Effective and Applicable 7
3.3 Exception to Applicability of Fee Methodology in Determining Fees 7
3.4 Division Staff Authority in Setting Interim Fees for New Service 7
3.5 Periodic Review 7
3.6 Recording Fees 8
4.0 Automatic Price Index Provision 8
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Parks
Recreation
t n
PGry<((meet c-1k ,n er COLLIER COUNTY PARKS AND RECREATION FEE POLICY
1.0 GENERAL
The Parks and Recreation Division (the "Division") is responsible for the maintenance and
preservation of County parks and lands as well as providing a variety of recreational, education,
fitness and other services in support of the Division's mission and the County's strategic
initiatives. The following represents the mission of the Division:
"Our mission is to enrich the quality of life for the community and
visitors and protect the natural resources of Collier County."
In achieving the mission statement of the Division several key strategic initiatives, adapted from
the County's Strategic Plan, were identified and incorporated in the development of this policy:
❖ Address the Health, Recreational and Educational Needs of the Community's Youth,
Senior, and Persons with Disabilities;
❖ Address the Needs of Low Income and Indigent Populations; and
❖ Promote the Safety and Security of the Community.
The National Parks and Recreation Association (the "NPRA") in their 2015 Field Report and
National Database Analysis noted that the median cost recovery from direct revenues/ fees for
service was approximately 30% for approximately 517 surveyed agencies. For comparison, the
Division's cost recovery from direct revenues was approximately 37% based on estimates
contained in the 2015 budget. Recognizing that few or no parks and recreation fees fully recover
the cost of operation and maintenance, the objective of the Fee Policy is aimed at providing a
reasonable methodology to identify the cost of service, assign cost recovery targets and calculate
fees.
2.0 FEE FORMULA AND METHODLOGY
Fee=[(Cost of Service x Cost Recovery Target)/Billing Units]*Market Adjustment Factor
The fee for service is calculated by assigning the cost of service adjusted for the cost recovery
target and then calculated per billing unit to determine the corresponding fee and adjusted for
market or economic factors as shown above. The following section provides a discussion of the
elements that comprise the formula.
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2.1 Cost of Service
Fee=[(Cost of Service x Cost Recovery Target)/Billing Units]*Market Adjustment Factor
The cost of service means the total identified expenditures considered in that rate/fee evaluation
which shall be based on the estimated or budgeted costs and assumes a practical methodology for
assigning costs in calculation of a fee. This Fee Policy assumes the fee is intended to recover the
operating costs and excludes any capitalized facility infrastructure costs. The cost of service is
therefore comprised of direct costs plus an allowance for overhead expenses. Direct costs may
generally be classified as either Labor/Contracted Labor, Maintenance/Utility Costs, Supplies/
Materials and/ or Other Expenses. The following provides guidance as to the methodology for
calculating and assigning costs:
Cost of Service = Direct Costs [Labor/ Contracted Labor, Maintenance/ Utility Costs,
Materials/Supplies or Other Direct Costs] + Overhead Costs
A. Labor/Contracted Labor:
1. Labor (i.e., total personnel costs including benefits) and contracted labor costs directly
assigned or required to provide program.
2. Labor costs should be assigned or calculated based on the estimated time required to
provide service (e.g., 1 FTE x 1 Hour x $15 per hour) or if an employee supports
multiple services may be allocated based on a reasonable estimate of the individuals
time spent supporting a service (e.g., 50% of FTE time spent on program A, and 50%
of FTE time spent on program B).
3. Unless specifically allocated through the budget to a program or service, indirect labor
costs such as administration or customer service may be assumed to be recovered
through the overhead allowance.
B. Utility and Maintenance:
1. Identify the specific cost of electric, water, sewer, solid waste, stormwater and facility
maintenance expenses required to provide a service. Such costs may be assigned to a
particular fee based on the time of facility use and the allocable use of the facility
(e.g., square footage).
2. If it is impractical to identify the specific cost of utility and/ or maintenance pursuant
to the method described in item B 1, a proxy for such costs may be assumed as a mark-
up factor calculated as either:
i. The current or proposed total Division budgeted expenses for the utility and
maintenance expenses pursuant to the respective budgetary cost center from
which the service is funded as a percent of the total current or proposed Division
budgetary operating expenses for the respective cost center; or
ii. If the current or proposed budget does not allocate the cost of utilities or
maintenance to a respective cost center then the respective markup may be
determined based upon the total Division current or proposed budgeted expenses
for the respective costs (i.e., utility and/or maintenance expenses) as a percent of
the current or proposed total operating expense budget for the Division.
C. Materials and Supplies: Identify any specific materials and supplies financed by the
Division in support of a program or service.
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2.1 Cost of Service (cont'd.)
D. Other Expenses:
1. Costs which may be specifically identified to a specific program that is not categorized
as either labor, utility, maintenance, materials or supplies should be included in the
calculation of the cost of service. Such costs may include, but are not limited to
recurring or required training of staff to provide a service, licenses or permits, credit
card fees as a percent of the total fee, prizes and food provided as part of the program
not funded from other sources, etc.
E. Overhead expenses:
1. A markup of 10% of the direct costs is assumed in the calculation of the fee. This
markup represents an allowance to recover the overhead cost of administration and
management, operation(e.g., insurance), or other indirect costs.
2.2 Cost Recovery Target
Fee=[(Cost of Service x Cost Recovery Target)/Billing Units]*Market Adjustment Factor
The fees for parks and recreational services are not always designed to recover the full cost of
service and may require supplemental funding from other sources such as general fund
contributions, assessments, grants or other sources. Establishing a cost recovery methodology
provides the basis for the apportionment of funding from direct and other sources of revenue.
The methodology assigns a lower cost recovery from direct revenues/ fees if the service
promotes a community benefit and/ or promotes specific strategic initiatives. The methodology
assigns a higher cost recovery from direct revenues/ fees if the program does not promote a
community or strategic initiative. The following provides an illustration of this concept:
Cost Recovery Target (%) = 1 — (Score/10)
Fees/Direct Funding of Service Other/Indirect
Revenues Revenues
Individual/ Benefit of Service Community I
Non-Initiative Strategic
Initiative
As can be seen above, the graphic illustrates the cost recovery relationship among the sources of
funding (e.g., Recover Costs from Fees vs. Recover Costs from Contributions or Sources Other
Than Fees) relative to the benefit of a service (e.g., Benefits Individual vs. Benefits Community).
The cost recovery target methodology utilizes a scorecard system with an overall possible
scoring of ten (10) points based on five (5) benefits criteria. The higher the cost recovery target
score, the lower the cost recovery target from the representative fee.
Service Benefit Scoring Criteria
Community Youth& Disabled Low Income Community Max Score
(0-5) Senior(0-3) (0-5) (0-2) T Safety(0-1) ®' (0-10)
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2.2 Cost Recovery Target (coned.)
The total points for each criteria totals sixteen (16) points however the maximum score is ten
(10)points. This recognizes that the programs generally do not meet all the criteria requirements
for a particular program. The specific methodology for scoring is described below and a
summary of the scoring:
Criteria 1-Community Benefit(Possible Score=0-5)
A 111
Tr • IP •Criteria:A service which benefits the community rather than the individual.
��t Scoring A point is assigned based on the number of people the category of service may benefit
' w 4 throughout the year. 1 Point:- 50 1,000 People;2 Points 1,001. 2,500 People;3 Points=2,501
4,000 People,4 Points=>4,001 6000 People;and 5 Points=>6,000 People.
•Example:Snowfestattracts about 15,000 people and would score five(5)points.
Criteria 2-Needs of Youth&Seniors(Possible Score=0-3)
•Criteria:A service which provides a Health,Recreational and/or Educational Benefit to either the
Youth,Seniors or Disabled.
*Scoring:A point is assigned for each element(i.e.,Health,Recreation or Education)of need for
`' either the Youth,Senior,Disabled or Poor.
+Example:Youth summer camps provide recreation and education scoring1
two("-)points.
if 9'
Criteria 3-Needs of Persons with Disabilities(Possible Score=0/5)
419
f n & *Criteria':A service which provides a Health,Recreational and/or Educational Benefit to persons with
1,'+r — ' disabilities
Qtik .
it
Scoring Five(5)points may be assigned if a service is specifically designed to,provide a benefit to
persons with disabilities.
*Example:Adaptive Sailing would score five(5)points.
Criteria 4-Needs of Low Income(Possible Score=0/2)
�f/ :+ Criteria:A service which is offered in a low income neighborhood or targeted to the low income
x
'. - Iff residents for the benefit of the community.
;rr , t ! l r *Scoring:Two(2)points may be assigned if the service is offered in a low income neighborhood or
A'411. . targeting low income residents to promote and;preserve the local community.
* •Example:Classes offered in low income neighborhoods would score two(2)points.
Criteria 5-Community Safety and Education(Possible Score=0/1)
*Criteria.A service which educates the community about safety or makes the community safer
k
k, •Scoring:A point maybe assigned if a service promotes safety for the community.
ma ;
as` '`,", r ExampleBeginners swimming promotes public safetybyeducatingthe
public about how to swim
""'t' ' " ` ,
and scores one(1)point.Youth recreation which provides after hour activities and a venue for
sports,recreation oreducational activities may score one(1)point.
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2.3 Billing Units
Fee =[(Cost of Service x Cost Recovery Target)/Billing Units)*Market Adjustment Factor
Billing units represent the amount and unit of measurement for which a fee is denominated. It is
also considered the unit of cost apportionment.
Billing Units = Units Billed for Service
The unit of measurement for a billing unit is typically either a patron (i.e., adult, child, senior,
participant, etc.), per some period of time (i.e.,per hour, per day, per week, etc.) per class, per
league or some combination thereof. The existing basis or unit of measurement for an existing
fee can be used; however, this policy does not limit Division staff to a particular basis for
developing the billing units.
2.4 Market Adjustment Factor
Fee=[(Cost of Service x Cost Recovery Target)/Billing Units]*Market Adjustment Factor
In the development of a fee for service market factors such as demand and pricing were
considered in order to promote revenue generation of the rates. In some instances raising or
lowering a fee may generate increased revenues or demand for service; however, other factors
such as access and convenience of a service (e.g., distance/ travel time, when a service is
offered, etc.), weather, season, changing preferences, etc. may also affect participation. It may
not be feasible for staff to know the specific effects to demand from price changes and therefore
this Fee Policy advocates for an incremental approach to changes in existing fees (i.e., limit
changes to existing fees +/-5% for market adjustments). The following provides a general
methodology and criteria for determining the Market Adjustment Factor:
Market Adjustment Criteria:
A. Market Adjustment Criteria—Instances of Raising Fees:
1. High Participation and Low Cost Recovery per Participant
i. Qualifies if a service is roughly equal to or greater than 75% participation/
capacity and the cost recovery is estimated to be less than 15% of full cost
recovery;
ii. Market Adjustment=Calculated Fee x 0+(Existing Fee x 105%)
B. Market Adjustment Criteria—Instances of Lowering Fees:
1. Low Participation and High Cost Recovery
i. Qualifies if a service is roughly less than 30%participation/capacity and the cost
recovery is estimated to be greater than 75%of full cost recovery;
ii. Market Adjustment=Calculated Fee x 0+(Existing Fee x 95%)
C. Market Adjustment Criteria—Alternative Method:
1. An alternative methodology may be assumed in development of the market adjustment
factor provided that:
i. the basis provides a logical nexus to the recommendation; and
ii. the calculated fee is not more than a 5%change from the existing fee.
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2.5 Fee Categories and Pricing Differentiation
In some instances fees for a service or admission to a facility may vary depending upon the
season, patron age or other factor. This Fee Policy refers to differences in pricing based on the
characteristic of the patron or other factor of differentiation as "price differentiation." This
provision is intended to provide general guidance when considering pricing differentiation for
various types of services and facilities. In theory, providing a reduced fee for certain customer
groups or other differentiating factor may raise participation in a program. Moreover, increased
participation may also provide for an increase in overall revenue generation as well as promote
or move the program toward a"higher" community benefit basis.
Methodology for Price/Fee Differentiation:
A. Survey and assess patrons and services to identify specific characteristics.
1. Do all customers benefit from the service in the same way and/ or does the cost of
providing service vary among certain types of patrons;
2. What similarities or differences exist among current patrons participating in particular
program;
3. Determine why existing patrons use the service/facility; etc.
B. Identify a basis or specific factor of differentiation:
1. Patron Characteristic: Age, Height, Organization, etc.
2. Time of Demand: Peak season/Non-peak season, Peak Hour and Non-peak hour, etc.
3. Heavy User or Committed Patron: members/ non-member pricing, purchasing
multiple service,punch cards etc.
C. Provide a reasonable nexus among a desired outcome and price differentiation:
1. For example, Division staff believes they may increase net revenues (outcome) and
use of a facility by providing a separate admission charge (price differentiation) for
seniors or youth at a discounted rate.
2. For example, Division staff believes providing a reduced rate for booking multiple
classes or services by selling at a package price (price differentiation).
D. Calculate the new fee by following the fee methodology identified in this Fee Policy.
E. If possible, estimate the expected increase in participation, revenues and costs and identify
if the desired outcome may be achieved. Follow-up and possible fee re-calibration after a
reasonable period of time after implementation to assess if the differentiated fee achieved
the desired outcome.
2.6 Maximum Rate Change for Existing Fees
In determination of the calculated fees for service no fee shall be adjusted by more than ten
percent (10%) in a given year to minimize rate shock potentially affecting demand for service,
unless otherwise authorized by the Board.
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2.7 Existing Fees as a Proxy for Establishing New Fees
If staff cannot reasonably estimate the cost and billing units associated with a new service an
existing fee may be used as a proxy until the actual cost and billing units can be reasonably
determined. Provision 2.6 of this Fee Policy does not apply to the initial calculation of a fee if the
current fee for service was established by fee proxy.
2.8 Rounding of Fees
Fees may be rounded to simplify the cost of collection for cash transactions or for other
purposes. Any rounding should be noted in any calculated fee amounts.
3.0 GENERAL PROVISIONS
3.1 Ultimate Authority in Establishing Fees
The Board has the ultimate authority for the establishment of fees for parks and recreational
services provided by the County. This Fee Policy does not constitute a requirement that fees be
adopted by utilizing this methodology.
3.2 Effective and Applicable
This Fee Policy shall be effective upon formal approval by the Board and shall be applicable to
the determination of all new fees or to changes in existing fees.
3.3 Exception to Applicability of Fee Methodology in Determining Fees
An exception to applying the fee methodology is granted by this provision for:
A. Privately Contracted Services: A class or service managed or performed by a private
contractor where compensation to the private contractor is based on a percent of the total
fees received (e.g., a contractor receives 65% of the total fees received). The proportionate
percentage is assumed to be established by specific agreement and/or by Board approval.
B. Not-for-profit Organization Fees: The Board may adopt by resolution fees at a reduced or
discounted rate for non-profit organizations. This policy provides that Category I (non-
profit) user fees may be established either through the methodology of this fee policy or by
reduced rate as established by the Board.
3.4 Division Staff Authority in Setting Interim Fees for New Service
New fees may be introduced by the Division Director or the Collier County Public Services
Department Head on an interim basis outside of Board approval during times of Board absence;
however, the new fee will be brought forward to the Board at the next available meeting for
ratification. The new interim fee will be calculated in accordance with this policy.
3.5 Periodic Review
This Fee policy recommends that Division staff evaluate existing fees as needed and/or
subsequent to material changes in the cost of operation and maintenance.
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3.6 Recording Fees
Division staff should maintain a record for each park and recreational fee calculation performed
pursuant to this Fee Policy.
4.0 AUTOMATIC PRICE INDEX PROVISION
The on-going effects of inflation on the cost of providing service can erode the ability to recover
the identified cost of service identified or set for a particular fee over time. The calculated fees
for service shall include an annual automatic price index adjustment tied to the average annual
change in the South Urban Consumer Price Index (CUUR0300SA0) as reported by the Bureau of
Labor Statistics for the most recently completed fiscal year of the County relative to the
immediately preceding fiscal year. The automatic adjustment for any existing fee may be in lieu
of calculating the fee for service pursuant to Section 2 of this Fee Policy. The automatic price
index may be implemented annually (e.g., through the budgetary process) at the discretion of the
Board and may not be less than 0% and may not be greater than 2.5% in a given year. Fees may
be reasonably rounded to simplify customer service and the cost of collection for cash
transactions or for other purposes. The following provides a formulaic presentation of the
application of the price index:
Indexed Fee=Round [Existing Fee x (PI2/PI1)]
Where Index= (PI2/PI1) =Must be greater than 1.000 and less than or equal to 1.025;
Where Price Index 2 (PI2) = Average of monthly indices for the most recently completed Fiscal
Year; and
Where Price Index 1 (PI1) = Average of monthly indices for the immediately preceding Fiscal
Year for PI2.
The following provides an example of how to determine the price index:
1. PI2=229.876 as determined below:
South urban Consumer Price Index(CUUR0300SA0)-Price Index 2(PI2)-FY2014
Month Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Year 2013 2013 2013 2014 2014 2014 2014 2014 2014 2014 2014 2014 Avg.
Index 227.420 226.811 227.082 227.673 228.664 230.095 231.346 231.762 232.269 232.013 231.611 231.7621 229.8761
2. PI1 =225.863 as determined below:
South urban Consumer Price Index(CUUR0300SA0)-Price Index 1(PI1)-FY2013
Month Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Year 2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 Avg.
Index 224.504 223.404 223.109 223.933 225.874 226.628 226.202 226.289 227.148 227.548 227.837 227.8761 225.8631
3. Index=PI2 /PI1 = 1.0178 (note this falls within the range of 1.000 and 1.025)
4. Existing Fee= $10.00
5. Index Fee= $10.00 x 1.0178 =$10.18 =$10.20 (rounded).
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