Res 2019-103/approving a Fee Policy that incorporates a cost recovery methodology

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Executive Summary Introduction The City of San Marcos is dedicated to providing quality services, fostering healthy lifestyles and helping the community thrive. Our Goal is to enhance lives and the community by providing exceptional experiences. As the City continues to grow and facilities age, we must be prepared to maintain high levels of service and develop a financial system to continue this community investment. Fees for services and programs were held flat for many years. Throughout those years cost continued to increase resulting in more demand on tax payer dollars to fund City programs and services. In 2016 City Council adopted fee increases to recover cost and insure continuous services and program offerings to the community. In order to properly align costs and plan for the future a structured financial system was necessary and a Fee Policy has been developed. Setting a fee policy serves as a tool for evaluating services and establishing appropriate fees. Standardizing how we set prices ensures that the resulting fee meets Department goals and provides the framework to ensure consistency for all San Marcos residents for the value received. A fee policy creates transparency and consistency in fees for programs and services. A fee policy helps administrators continually set fees that support the goals and priorities of the community. Fee Polity takes into consideration the public benefit, users' ability to pay, level of benefit and exclusivity O the user receives above what a general taxpayer receives. Pricing ensures that users pay appropriate fees and available taxpayer funds are used to achieve the optimal return on investment and ensure access to programs and services. City of San Marcos' Fee Policy has been established on the basis of Cost Recovery methodology as it relates to Cost of Service. Cost of Service is an identification and calculation of what is required financially to produce or operate a service. Cost Recovery is a complex subject. Essentially, it represents a decision to generate revenues by charging fees, or other types of revenue, for some, or all, programs and services, relative to the total operational costs to provide them. Cost recovery does not imply that the target is total recovery of the cost; however, a target is established according to a variety of considerations and may range from 0% to more than 100% of costs. As cost recovery is defined differently in nearly every organization, this document discusses Cost Recovery as R relates to the City of San Marcos. Purpose and Goals This formal fee policy establishes a comprehensive long-term strategy to address current and future needs of the San Marcos community. This comprehensive effort and approach to providing services is undertaken to introduce and implement strong "best practice" business tools to all City Departments. The overall goal of this plan is to initiate and sustain practices and examine policy and rules affecting overall desired outcomes of a healthy and vibrant community. Goals are to: • Analyze current service levels and the resources to meet workload demand. C • Develop a sustainable and justifiable philosophy, supporting policy, and cost model for calculating fees. 11