HomeMy WebLinkAbout10-19-09 Finance Com. MinutesDUBLIN CITY COUNCIL
FINANCE COMMITTEE MEETING
Monday, October 19, 2009
5:30 p.m. -Council Chambers
Minutes of Meeting
Chairperson Keenan called the meeting to order at 5:30 p.m.
Council members present: Vice Mayor Boring; Mr. Keenan; Mr. Gerber.
Staff members present: Ms. Grigsby, Ms. Kennedy, Ms. Hoyle, Mr. Thurman, Mr.
Earman, Mr. Tyler; Mr. Gunderman; Mr. Edwards; Ms. Leroy; Ms. Husak.
Mr. Keenan stated that the purpose of this meeting is to review proposed Ordinance
49-09 revising the schedule of fees and service charges for the City's services to be
effective January 1, 2010.
Ms. Grigsby introduced Eric Johnson, Revenue and Cost Specialists, the consultant
who conducted the study for the proposed changes. This firm did the initial cost
study in 1993-1994. This is the first time since the initial review that the City has
engaged the consultant for a full review of the City's costs/fees.
Eric Johnson. Revenue and Cost Specialists. presented a brief overview. He
commended the City for choosing to complete a cost study and update its fee
schedule on an annual basis. They evaluated the City as if it were a business, and
determined the City's cost for providing services to its customers --the full cost,
including all the support costs. Businesses must match their revenues with their
costs. They met with the department heads to do this for the City. They looked at
the community-supported services and the personal choice services; the tax
supported services and the fee services. There are also some fees that Council has
chosen to subsidize. He asked Council members to refer to the Fee Study Update
that was provided to them via the meeting packet, and look at the worksheet for
PLO-1 - PUD/Concept Plan Review. As an example, provision of this service
involves several departments and totals approximately 32 hours of staff time.
Additionally, the fully allocated cost of the service provided by the Director of
Engineering is $164/hour. Of course, the Director does not earn that amount per
hour. The community-supported services are the items for which the citizens pay
taxes, such as park and street maintenance. If fees are not recovering the cost of
providing City services, taxpayers are paying the cost. The question then is how the
City wants to spend its tax dollars.
Mr. Keenan indicated he had some philosophical questions regarding the ordinance.
He referred to the Code Section 35.80, "Full Cost Defined" -with allocation of all
applicable direct costs, including, but not limited to salaries, wages and overtime,
and indirect costs, including but not restricted to building, maintenance, operations,
equipment maintenance, and fixed asset recovery expenses. Are the citizens being
asked to pay for fixed costs twice? Tax revenue is used to buy a building,
equipment, plant materials, bricks, etc. and then the City directly charges a fee for
the service. Are fixed asset costs being included in the fees?
Mr. Johnson responded that it provides for future replacement.
Mr. Keenan inquired if that is essentially a sinking fund.
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Ms. Grigsby responded that it is, and it is based upon what percentages of the
services are attributed to the cost of the facilities. For instance, 50% of the cost of
the services is used for General Tax Services; the other 50% is assigned
proportionately to Services.
Mr. Keenan indicated the review would begin with Appendix 1. He inquired when
costs/fees were last adjusted.
Ms. Grigsby responded that last year, adjustments were made based on the
Consumer Price Index. The last full review of the cost study report was in 2007,
based on 2006 numbers. Other than last year, the full review has been conducted
annually since the first study was completed.
Mr. Keenan stated that it appears that in many cases, the proposed increase seems
to be significant -- 10-20%. For instance, BL29, "Building Re-inspection Service" will
increase from $100 to $135 - a 35% increase.
Mr. Johnson responded that part of that percentage is due to the fact that the
Building Standards division is experiencing a downturn inactivity, and there has not
been an equal decrease in staffing to correspond with decreased volumes.
Vice Mayor Boring stated that her understanding is that the cost is evaluated against
a staff to building applications ratio. If there are more applications than a certain
ratio, the cost per application would be less and vice versa. In the meantime, how
are internal operations adjusted? If that level of staffing is needed, who bears the
brunt of the cost?
Mr. Gerber responded that is a good point. If a business has fewer customers one
year than the preceding year, they do not necessarily raise their prices to cover the
overhead. The City will soon be facing a period of inflation. Will the City be
contributing to that situation by raising these fees?
Mr. Johnson stated that their points are correct. Building Standards staff has been
reduced, but a minimum level of staffing is necessary. Defining that appropriate
level is currently in process. It is necessary to consider the expectations for volume
next year to avoid reducing staff this year and then in two years needing to hire
additional staff.
Mr. Gerber inquired if 2011 is a great economic year, does that also mean Dublin will
lower its fees?
Mr. Johnson responded that is possible.
Ms. Grigsby stated that staff has discussed the 2010 operating budget in terms of
identifying efficiencies that should be achieved. The staffing level may need to be
reduced in some areas but increased in another area. Between now and next fall,
considerable review of staffing levels and workloads is needed.
Mr. Gerber stated that Dublin is in a much more competitive environment in central
Ohio. How does the City's fee structure compare with New Albany, Worthington and
other municipalities?
Ms. Grigsby responded that Mr. Tyler will provide specific information regarding the
Building Standards division. Typically, Dublin's fees are higher because they are
based on the cost of providing the services. Other entities base their fees upon a
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survey of other communities. Staff does have the option of recommending waivers
of fees to Council due to commercial development issues, economic development
purposes and financial hardship.
Mr. Gerber concern is that Dublin's fees must remain competitive with those of other
communities.
Mr. Keenan stated that there has been previous discussion regarding a review of
staff levels. During that process, it may be decided that the fees for these services
should be reduced. It appears that the City is penalizing the taxpayers. In his view,
increasing these fees is similar to imposing an additional tax. His final question
regarding the costs pertains to how they are allocated. In some categories, there is
some differential between resident and non-resident fees; in others, there is not.
There is often a difference in the fees charged to a corporate residents and non
residents. He feels more affinity with an existing resident business than a business
relocating to Dublin.
Ms. Grigsby stated that the goal of the report is to provide information regarding the
actual costs to provide the City's services. If Council chooses to leave the fees as
they are, that is fine. Because the City has been in a growth mode for several years,
the cost study has been used to justify an increase in staff. The report can also
provide indicators to support decreasing staff.
Vice Mayor Boring stated that in regard to the proposed increase for PL35, what is
the difference in number of units? If the number of units has decreased minimally,
she would not support raising the fee; however, if the difference is significant, a
change might be justified.
Mr. Keenan stated that PL35 reflects a 50% increase, which is a concern.
Mr. Johnson responded that the report provides current information on the cost of
providing the services. It does not provide a comparison between the last cost study
report and this report. Some of the cost difference is due to the fact that the
employee now providing the service makes a different salary than the previous
employee.
Mr. Keenan inquired what trend he has observed with other entities in regard to
updates of their fees.
Mr. Johnson responded that, typically, agencies prefer to have 100% cost recovery
with most of their development-related services. There are always some services
that are significant to different communities that those councils want to subsidize.
Fees for recreation services can vary greatly from community to community.
Vice Mayor Boring referred to CR06, Miscellaneous City Events/Programs. The
public regularly complains about the City's current fees for events. The proposal
reflects a 100% increase in almost every category.
Ms. Grigsby responded that in the past, a significant amount of service was
performed by part-time employees at far less costs. Police officer costs were
subsidized due to some concerns about the fees. The study provides the
information about the costs of providing these services, but Council may choose to
reduce or modify the proposed fee.
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Vice Mayor Boring stated that in looking at the City's fee history, these proposed
fees are exorbitant.
Mr. Johnson responded that, philosophically, Council can either maintain the current
fees and subsidize everyone or Council can choose where it wishes to provide
subsidies and where it does not.
Mr. Keenan stated that he prefers not to engage in the process of sorting out those
types of details.
Ms. Leroy stated that the events that pay the most and for which the fees are not
either waived or covered by bed tax are the distance runs. However, these events
sometimes are a burden to the residents. The costs for these events relate to
Streets and Police division staffing. Special duty rate for the Police is $37.00 (if the
police officer signed up for the duty) or $70.00 (if they are called into work). Staff is
reviewing the entire event policy. One item they will recommend is that staff be
permitted to make a decision to split event costs, asking Council for a waiver of
anything over $1,000. It should be possible to separate the signature events,
subsidizing those events with a community appeal. That report will be provided to
Council within the next month or so.
Mr. Keenan inquired if the new fees reflect a 100% recovery.
Mr. Johnson responded that approximately 75% of the fees do. A few for which
Council previously has taken particular action to subsidize remain subsidized.
Ms. Grigsby stated that there are other options. In view of the current economic
trends, Council may be concerned about the percentage of increase and want to
stipulate a certain percent as the increase limit.
Vice Mayor Boring stated that, frequently, Council has said that a proposed fee
increase would impact a certain segment of the community too much and has
revised that fee.
Mr. Keenan stated that with Community Development Services, the percent of the
proposed increases is the same.
Vice Mayor Boring stated that she has no objection to the proposed increases in
Court Services. She inquired what other communities charge for interment services
in their cemeteries.
Mr. Keenan noted that this information reflects the Central Ohio Cemetery Cost
Study that was completed in 2009. The rates reflect resident vs. non resident.
Mr. Keenan reviewed the comparison costs of other central Ohio communities.
Mr. Johnson noted that this is amarket-driven fee, so the proposed rate is placed at
mid-range to be competitive.
Vice Mayor stated that she has a problem with the proposed increase for PL10,
Informal Plan Review. This would be move from a policy of 0% recovery to 100%
recovery. She doesn't believe Council has changed their policy, which was to
encourage people to submit a plan for review at no charge to give the City an
opportunity for an early view of the plan.
Mr. Gerber agreed, noting that there is an issue of fairness to the applicant to be
considered.
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Mr. Johnson noted that there is a separate pre-application site plan review, PL05,
which continues to have no fee.
Mr. Gerber stated that is a different process. The informal plan review gives the
applicant a chance to go before the Planning Commission to receive their input
before investing a lot of money in engineering, etc.
Mr. Keenan suggested that this item be identified for further discussion at Council.
Ms. Grigsby stated that for the PL10, staff had the same debate. Originally, there
was a desire to encourage applicants to use the informal review process and
therefore there was not a charge for this, hoping a better plan would result when the
applicant was ready to do so. The Planning staff had some concerns, however with
the 0 percent recovery.
Mr. Gunderman stated that when informal plan reviews were initiated, the intent was
that the review didn't involve much staff time, and it did not. As time has transpired,
however, the process has altered. The Planning Commission has requested more
background, more questions answered, more feedback. From staff's standpoint, this
review has moved from a simple process to one that is similar to the other plan
reviews.
Mr. Gerber asked if this process was established on an experimental basis as a
result of the workshops that took place last year.
Mr. Gunderman responded that it is not. It came up because there is no alternative.
The informal plan review now involves a staff report, graphics and other items for the
meeting packet. That said, Council may still prefer not to charge a fee.
Mr. Keenan inquired the value of an informal plan review.
Mr. Gunderman responded that it has proven to be useful, and the number of
informal plan reviews has increased.
Vice Mayor Boring inquired the number of units that were evaluated.
Mr. Johnson responded that there were 10 applications. This fee is based upon
what is expected the next fiscal year. The proposed fee represents a 50% cost
recovery -the taxpayers would pay for half the fee; the applicant would pay the
other half.
Mr. Keenan inquired if the proposed $975 fee would recover half the cost.
Mr. Johnson responded affirmatively.
Mr. Gerber inquired if the Informal Review Process has changed in some way.
Mr. Gunderman responded that it has not changed from the aspect that it is a simple
addition to the agenda. Previously, there was no application form; today there is an
application to be completed.
Mr. Gerber stated that when he served on the Commission, there was a half hour
time limit on the Commission's review with the understanding that the less the
applicant spoke, the more input he would be able to receive from the Commission.
Mr. Gunderman stated that remains the same.
Vice Mayor Boring stated that she wouldn't be opposed to an application fee to
ensure the applicant was serious, but not at this percent. This process is valuable
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for Council to encourage. Many times, the applicant is surprised with the
Commission's feedback. At this point in time, she would recommend one flat fee or
no fee at all.
Mr. Gunderman stated that if there is no application fee for this, there is no threshold
for the developer. The Code does not provide guidance. Planning staff believe that
establishing a fee will cause the developer to consider if it is worth taking up
everyone's time for the review. Staff does have some persuasive power regarding
whether an applicant pursues this process, but the fact that there has been no fee
attached did mean there were less restraints. He believes some application fee
would be of value.
Mr. Gerber stated that he would like to see a community comparison chart on this
fee, and those on the following pages. He is concerned about Dublin's fees in
comparison with those of others.
Mr. Gunderman stated that Grove City conducted this type of review a couple of
years ago, and the past year, Dublin conducted a review. The results indicate that
Dublin does charge a greater fee in most cases. Dublin's fees for comprehensive
plan reviews are over $1,000. In recent years, however, Hilliard and Westerville's
fees for plan reviews have increased significantly and are in this same range. The
other communities continue to have minimal fees.
Mr. Keenan stated that Dublin's main competition around the outerbelt is New
Albany, and Dublin wants to remain competitive.
Vice Mayor Boring stated that she doesn't believe having some fee would
discourage a potential business. She would like to recommend some level of fee.
Mr. Keenan inquired Mr. Gunderman's suggestion re. fee amount -- $250 or $500?
Mr. Gunderman recommended $500.
Mr. Keenan stated that the Committee's recommendation is a $500 flat fee for the
Informal Plan Review.
Ms. Grigsby stated that previously there was also no fee related to Zoning
Compliance Inspection -- PL42.
Mr. Gunderman stated that in many cases, zoning compliance inspections are
included with the initial applications. However, staff was concerned about those
cases in which the application does not have a smooth review process and an
additional inspection is necessary. For the present, however, this proposal can be
set aside as there is no Code authority to establish a fee.
Mr. Keenan stated that the proposed PL42 fee should be deleted from this
document.
Mr. Gunderman stated a few years ago, Council added an architectural standard,
and an inspector was added to Planning staff to review projects for those
architectural details. However, the inspector is not included in the City's cost
structure. The fee for these inspections (PL44) could also be deleted, if the cost of
the City's inspector could be incorporated into the Building Permit fee. However, the
City's Building Permit fees do not allow for a zoning inspection to be included in the
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process. The cost of the inspection is, therefore, not covered. Unfortunately, there
is also no Code authority to establish a fee for this service.
Vice Mayor Boring inquired if no fee is established at this time but Council believes a
fee would be appropriate, how could that be returned to Council for consideration?
Mr. Gunderman responded that it cannot be added to the Building Permit even
though, in terms of the process, that is where it should be.
Ms. Grigsby inquired if it could be included within the Zoning Code update.
Mr. Gunderman responded that staff does not have the ability to change the Zoning
Code to permit it to be collected with the Building Permit fee.
Ms. Grigsby noted that staff would study that issue further.
Mr. Keenan stated that the proposed PL44 fee would also be removed.
Vice Mayor Boring referred to PL32, "Tree Removal Permit."
Mr. Keenan stated that the explanation included states that the associated cost is for
tree replacement - a per inch caliper charge.
Vice Mayor Boring responded that it doesn't indicate that the tree must be replaced.
Permission to remove a tree is required, so why is there also a tree removal permit?
Mr. Gunderman stated a tree removal permit is necessary to remove any of the
protected trees. This is an attempt to get out in the field and collect a fee before an
attempt is made to remove trees.
Vice Mayor Boring stated that a tree removal permit means staff would visit the site
and tell the applicant how many trees they would be required to replace. If no permit
is applied for and the owner mows the trees down, they wouldn't be required to
replace them.
Mr. Gunderman stated that is a good argument. What is in the best interest of the
City then? Staff has provided the costs associated with the permit, but Council may
not believe it is appropriate.
Vice Mayor Boring stated that she would not want to charge a fee for this because
the advantage of having no charge for the permit is that they would be more likely to
make the City aware of their tree removal plans.
Mr. Gunderman responded that has been the policy.
Mr. Keenan inquired if these are commercial properties.
Mr. Gunderman confirmed that they are.
Mr. Keenan inquired if the City has a similar authority for residential properties.
Mr. Gunderman confirmed that the City does, if it is a protected tree. A protected
tree is a tree six inches or greater in caliper. This is often overlooked, however.
Recreation Services
Vice Mayor Boring referred to DCRC Field Usage/Rental, RC-18. The proposed
cost for non-resident participant is $18.00/spring or $36/year. Is this the cost per
participant?
Mr. Earman responded that these fees relate to club soccer organizations, which are
currently using the Dublin fields and not being charged a field maintenance fee. The
fees are based upon the total number of soccer participants in all the soccer
organizations, broken down to the total maintenance cost of all the soccer fields,
resulting in a cost per player.
Mr. Keenan inquired how that fee is charged.
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Mr. Earman responded that it is charged at the beginning of the season as their
rosters are determined. The clubs are required to provide a copy of their rosters to
the City, so it is easy for the City to assess the charge per player. This would be
complementary with the pending agreements with DSL.
Vice Mayor Boring thanked Mr. Earman for addressing the field fee issue, which had
been one of Council's charges to staff.
Vice Mayor Boring stated that the DCRC 21 -Rental Rate for Leisure Pool was
eliminated, leaving only Saturday after hours. When that was eliminated, was it
covered somewhere else?
Mr. Earman stated that the Saturday after hours rental was the only option. The pool
has never been rented out on a week night.
Vice Mayor Boring inquired if the rate covers locker room clean up.
Mr. Earman responded that it does.
Mr. Keenan referred to DCRC 19 -Annual Passes, noting it seems satisfactory.
Mr. Earman responded that a market study was conducted, which indicated that
Dublin's resident rate is lower than the average rate. The non-resident rate is
significantly higher than the average rate.
Mr. Keenan inquired what the percentage of recovery from the annual passes was to
be.
Mr. Earman responded that for the non-resident rate, recovery is around 117%. For
the resident passes, it is probably around 50%.
Mr. Johnson stated that the City has long had a policy of 50% cost recovery on
recreation fees, not including the DCRC. The proposal is to include the DCRC under
that 50% cost recovery policy, which is where the City currently is today. The
recreation program as a whole is recovering about 50% of its direct costs -staffing
and expenses as well as a fair share of the maintenance for the facilities and fields.
Council's direction on this is requested.
Vice Mayor Boring stated that there are some programs at the DCRC that have a
100% recovery, so how is the 50% recovery obtained?
Mr. Johnson stated that is the aggregate percentage of recovery.
Mr. Gerber stated that seems appropriate, as the recovery rate for programs range
from .7% to 110%.
Vice Mayor Boring stated that some programs deliberately have a lower cost
recovery rate to encourage participation. She does not want to begin tampering with
those programs.
Mr. Keenan stated he also prefers not to tamper with that many line items,
particularly when there appear to be no problems.
Mr. Johnson stated that staff simply needed to confirm Council's policy on this.
Mr. Gerber stated that he concurs with a 50% recovery policy, but not to the extent
of going line by line.
Mr. Keenan stated that, in general, he agrees, but there should be more flexibility,
not strictly imposing 50% recovery.
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Ms. Grigsby responded that, as the notes with the fee ordinance indicate, generally,
a 50% cost recovery target is sought. However, that varies some years depending
upon the demand.
Mr. Keenan noted that the cost recovery for recreational swimming lessons is very
high, probably because the demand is high.
Ms. Grigsby responded that is correct.
Brief discussion continued regarding direct costs.
PL34 -Garage Sale Permits
Vice Mayor Boring stated that the proposal is to increase garage sale permits from
$5.00 to $7.00. The reason Council had established a low cost for this permit was to
encourage people to obtain a permit and signs. Therefore, she would not support an
increase in the price. A $5.00 fee encourages participation.
Mr. Keenan and Mr. Gerber concurred with retaining a $5.00 fee.
Mr. Gerber inquired about the DCRC room rentals. The summary notes indicate that
rental groups may be asked to obtain appropriate insurance.
Ms. Grigsby responded that the only time that is required is if their intent is to serve
alcohol.
General Committee Discussion
Mr. Keenan stated that a suggestion has been made to put a cap on the percentage
of increases. Is that a recommendation the Committee would like to make to
Council?
Vice Mayor Boring inquired if there would be a cap on decreases in fees, also.
Ms. Grigsby stated that Mr. Tyler can provide the Committee information about the
Building Standards fees.
Mr. Tyler stated that they compared Dublin's rates with several other entities. The
department structures are different across the spectrum. For the City of Dublin,
there are plan reviewers, inspectors, building officials, and technical staff. In
Westerville, plan review is contracted out. So Westerville's fees do not reflect the
contracted fee, making the numbers lower. Westerville actually charges the contract
fees out separately to the customer, and it is not reflected in the plan review fee for
the City. Fora 50,000 square foot building, currently, Dublin's building permit fee is
$9,830; the State of Ohio's fee is $11, 250; Columbus's fee is $16,060; City of
Westerville is at $8,650 and New Albany's fee is $2,750. Some appear lower, but
there are pass-through fees to customers not reflected in their fee schedule.
Dublin's fees includes all of the costs, and some others do not. For a new single-
family home at 6,000 square feet, currently, Dublin charges $800 for the building
permit; the proposed fee is slightly over $1,000 for that same permit fee. Columbus
is at $1,365; Westerville is at $975; New Albany is at $725. For Upper Arlington,
they are at $1,116. He noted that for a large building of 120,000 square feet in
Dublin, the total building permit fees are $31,502.55. The total fees, including water
and sewer, Columbus water, certificate of occupancy, results in a total of
$233,639.35. Dublin's fees are a small percentage of the other development-related
fees.
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Mr. Keenan stated that it appears the Committee is recommending very few changes
to the proposed fees. With the adoption of this update, the City will be in line with
cost recovery for the coming years.
Ms. Grigsby responded that is correct. No increases are expected in staffing. The
goal is to reduce operating costs. Staffing levels are being evaluated in the various
departments and divisions.
Mr. Keenan moved to recommend to City Council approval of Ordinance 49-09 with
the following revisions:
PL10, "Informal Plan Review" -- $500 flat fee for applications;
PL42 and PL 44 -deleted until they can be revisited, as Council does not have the
authority to charge for the service;
PL34, "Garage Sale Permit" - to remain at $5.00.
Mr. Gerber seconded the motion.
Vote on the motion: Mr. Keenan, yes; Mr. Gerber, yes; Vice Mayor Boring, yes.
The meeting was adjourned at 6:20 p.m.
Clerk of Council