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

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Determining the Cost of a Program or Service Dollars spent will be accounted for specifically by programs and services offered. "Direct" costs include expenses such as the cost of an instructor, including benefits, supplies needed, equipment rented, etc. "Overhead" costs within each department are shared among several programs or services within a division. Indirect Cost includes the cost of leadership and other shared costs that are allocated among applicable programs and services. Staff and Stakeholder Engagement A team of staff members formed to develop and implement Fee Policy with the goal to gather input from staff and stakeholder groups for the development of a cost recovery philosophy. This model, based on the Cost Recovery Pyramid Methodology, defined below, will be a component of ongoing planning and budgeting processes. At the workshops, participants were asked to identify where programs and other inter -related core services fit within the pyramid model based on the benefit the user received for a program or service. By using feedback from the stakeholders to look at programs and services in this way, staff can set a O program's cost -recovery goal relative to the amount of community benefit a category of service provides. Programs and services considered to have higher individual benefits will be recommended to have a higher cost recovery ratio. The Cost Recovery Pyramid Methodology The pyramid methodology used in development of the Cost Recovery Model is built on a foundation of understanding who is benefiting from programs and services to determine how the costs for service should be paid. The Cost Recovery Pyramid Model illustrates a pricing philosophy based on establishing fees commensurate with the benefit received. Descriptions regarding each level of the pyramid are provided; however, the model is intended as a discussion point and is very dependent on each department to determine what programs and services belong on each level. Cultural, regional, geographical, and resource differences play a large role in this determination. The resulting pyramid is unique to each department that applies this methodology. Application of the pyramid methodology begins with the mission of the organization, but must also address other considerations: • Who benefits from the service, the community in general or only the individual or group receiving the service? • Does the individual or group receiving the service generate the need (and therefore the cost) of providing the service? O • Will imposing the full cost fee pose a hardship on specific users? (The ability to pay is 14