Traffic fines The City receives traffic fine revenue in partial support for regulation of traffic laws.

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1 Overview The City receives revenues from a large variety of fees and charges. Individual rates are set depending on the type of service provided, the intent of the fee or charge, and city and state code. The primary fees that the City charges include: License and Permit Fees These fees are typically mandatory payments for a benefit or opportunity provided by the City and are intended to cover the costs of regulating the benefit as well as those associated with issuing the license or permit. Animal licenses The City oversees the ownership of pets within the city limits. The primary activity stemming from this benefit is animal control. This revenue source has historically covered the related costs and should be sufficiently budgeted to cover all cost increases related to administering the service, including animal control, to the extent possible. Development license and permit revenue The City regulates development within the city limits to ensure life safety, building and design standards, and compatibility. This revenue is used to cover the cost of administering the licenses and permits as well as the cost of developing and implementing necessary code requirements. Other licenses These include cab licenses, health and alcohol licenses, professional licenses and special event permits. These benefits have impacts on a range of city services but are centered primarily in the City Clerk s Office. This revenue source has historically covered the related costs and should be sufficiently budgeted to cover all cost increases related to City administration and regulation of such services. User Fees These are charges by the City to users of a service or product. Generally, user fees should cover the full cost of providing the service or product, unless a compelling reason otherwise is approved by the Mayor and City Council. Development fees The City receives development fee revenue, such as building application fees, in partial support for planning services. General recreational user fees The City charges the users of its recreation programs a fee. A portion of the cost is subsidized by Intergovernmental revenue to achieve strategic goals such as youth outreach. Other user specific fees The City charges fees to users of specific services such as special event coverage, contract services, and parking meter fees. For these services, the revenue should cover the cost of the service per approved policy. Fines and Forfeitures By their nature, fines and forfeitures are corrective, intended primarily to modify conduct that has negative consequences for citizens. The revenue from fines and forfeitures should cover the full cost of regulating the related service to the extent possible and provide an adequate disincentive for the conduct. Since fines are proposed to modify behavior and not primarily for cost recovery they have been excluded from this report. Traffic fines The City receives traffic fine revenue in partial support for regulation of traffic laws. Parking fines The City enforces parking regulations in the downtown core and at the Airport. The cost of this regulatory service is fully supported by the fine revenue received. Parking fines are primarily used to inhibit parking abuse for high demand on-street parking in the downtown core. Animal fines The City receives animal fine revenue in partial support for animal control. s A cost recovery rate is the percentage of program cost covered by user fee/and or license revenue. The formula is standard program revenue (excluding grants or other/miscellaneous revenues) divided by standard program costs. Program costs include only those costs directly related to and accounted for in the financial system for the program this does not necessarily mean that this cost is the full cost of offering the program. Programs include a portion of department administration but do not include citywide indirect costs. Appendix January 22, 2009

2 Recovery rates were examined for FY 2004 FY 2008 Actual Revenues and Expenditures and FY 2009 Approved Budget. Assumptions and Projections Financial data directly from the City s centralized financial system (PeopleSoft) was analyzed using ProClarity, an analytical software tool. Increased costs or decreased revenues will result in a decreased cost recovery rate. If expenditures were not specifically coded to a Service Unit, they were not included. For example, if department administration costs are tracked in a different service unit, then they are not part of this analysis. Only expenditures for Parking Services and Building (not Planning or Code Enforcement) include all citywide indirect and administrative costs. Additional studies of other programs, inclusive of administrative and indirect costs, may be added in future cost recovery reports. The FY 2009 Approved Budget program expenditures do not include increases for compensation and heath costs. Proposed compensation and health costs are budgeted as a lump sum amount in Intergovernmental and will be allocated to programs once approved by City Council and calculated for each program. Therefore, had these expenditure amounts been included in the program expenditures for The FY 2009 Approved Budget, cost recovery rates would be less than presented. Observations and Summary Aquatics Aquatics 62% 58% 56% 54% 52% 48% 46% 44% 58% 58% 58% 52% 53% 51% 51% 49% 48% 48% 47% Adopted/Proposed Budget *Parks predicted decreased revenues for FY 2004 and also submitted a service alternative. The revised budget was corrected and the service alternative was removed. For the purpose of this report, the necessary correction was made to the adopted budget figures. *Parks originally did not have revenues budgeted for concessions in FY 2008, however after the vendor did not renew the contract, budget was added to the revised budget and the necessary adjustments have been made for the purpose of the report. FY 2008 Aquatic revenues were up 7.6% or $29,797 and expenditures were also up 6.1% or $45,940 in comparison to FY The increase in revenues was primarily due to addition of concession revenue. Parks did not budget concession revenue in FY Parks contracted with a vendor to provide the service instead. The increase in expenditures consisted of average personnel cost increases and the addition of food item costs for the concessions. Swim team continues to experience cost recovery rates of or greater. South Pool ended the year on budget, however, managed a cost recovery rate of only 14.6%. This is consistent with prior years; the collected revenues at this location are proportionately smaller than other locations. Lowell Pool total expenditures increased 13.8% or $8,515, all of which was in personnel. The increase in expenditures resulted in a cost recovery rate of 19.3%, a 15% decrease compared to FY Natatorium and Ivywild Pools experienced a strong year in comparison with the other pools, with cost recovery rates of 76% and 54% respectively. Appendix January 22, 2009

3 Dance and Drop-In Dance and Drop-in 1 140% 130% 120% 110% 90% 80% 70% 143% 112% 113% 114% 114% 78% 77% 72% 74% 64% 63% Acutal Outcome AdoptedBudget FY 2008 actual outcome was 114% while FY 2008 budgeted cost recovery rate was 72%. The actual outcome and budgeted cost recovery rates have been far different dating back to FY There are two significant increases to the actual cost recovery rate over the past 5 fiscal years. The first occurred in FY 2004, when registration revenue increased 83% or $20,647 over FY 2003 due to increased popularity of the programs. The other spike in the cost recovery rate occurred in FY 2007: Revenue growth was normal, however expenditures fell 11.2% or $6,332 compared to FY When combining average revenue growth and unexpected expenditure contraction, the result was an increased cost recovery rate. The Dance program continues to under budget revenues and over budget expenditures. The margin between the actual cost recovery rate and the budgeted cost recovery rate improved in FY 2008, 42%, compared to the margin in FY 2007, 66%. Idaho IceWorld Idaho IceWorld 125% 120% 115% 110% 105% 95% 90% 85% 80% 119% 115% 108% 99% 94% 95% FY-05 FY-06 FY-07 FY-08 FY-09 Idaho IceWorld (IIW) had experienced increasing cost recovery rates since the City purchased the facility in 2004; however the cost recovery rate in FY 2008 fell to 108%. The decrease was due to a 9.7% or $154,274 increase in total expenditures. The expenditure increase was split between personnel and M&O. Personnel increased 8.9% or $65,983 while M&O increased 10.4% or $88,291 compared to FY Nearly half of the total expenditure increase was realized in the power, pro shop supplies, and building repair and maintenance budgets in comparison to FY Overall, total revenues were flat compared to FY The market conditions throughout FY 2008 seemed to Appendix January 22, 2009

4 affect registration revenue which was down a total of $86,645 or 14%. The decrease in registration revenue was centralized in the Ice Hockey program. Other notable changes include a 116% or $27,488 increase in arcade revenue, a 67% or $38,674 decline in vending machine revenue, and a 27% or $48,980 increase in facility rental revenue. Youth Activities Youth Activities 110% 90% 80% 70% 75% 105% 58% 58% 93% 78% 99% 71% 86% 84% 91% 40% Youth Activities cost recovery rates have historically been above the expected budget. Youth program cost recovery rates are intended to encourage youth participation. In FY 2005 the cost recovery rate increased significantly due to a 17.9% or $31,703 increase in registration revenue (primarily from Youth Camp and Play Camp) coupled with $40,000 in expenditures being reallocated to recreation administration. The $40,000 was a contract with the Boise School District to support after school programs. The cost recovery rate fell in FY 2008 due to an 8% or $19,242 increase in expenditures and an 8.7% or $20,774 decrease in collected revenues. The programs ended the year with actuals nearly equal to budget. Warm Springs Golf Course Warm Springs Golf Course 120% 115% 110% 105% 95% 106% 99% 108% 108% 101% 103% 117% 99% 112% 102% 90% *FY 2004 actual expenditures were adjusted by the amount of Net Operating Profit earned that year which was booked as an expenditure. Warm Springs Golf Course actual cost recovery rate for FY 2008 was 112% while the budgeted cost recovery rate was 102%. FY 2008 was another strong year for the golf course; however revenues were down 3.3% or $50,764 compared to FY 2007 primarily due to reduced sales Appendix January 22, 2009

5 in the Pro Shop and season passes. Although revenues were down in comparison to FY 2007, WSGC exceeded their revenue budget by nearly $40,000. Revenues in excess of expenditures are re-invested into capital infrastructure and improvements for the golf course. Softball Softball 108% 106% 106% 104% 102% 98% 96% 94% 101% 97% 97% 97% 98% 97% 94% 99% Adopted 92% Softball programs have collectively recovered nearly of expenditures in recent years. The cost recovery rate experienced a decline in FY 2005 due to a 23% or $19,913 increase in Gold League contract labor compared to FY 2004, which was a base increase that affected FY 2005 going forward. However, the Gold League maintained a cost recovery rate of 104%, a 5% decline compared to FY 2004 due to a $10,029 net decline in total operations. The overall decrease in the cost recovery rate during FY 2007 was caused by a loss of corporate sponsorship and an Amateur Softball Association classification issue, causing teams to withdraw from several tournaments. The Softball programs continue to perform well with a cost recovery rate of for FY Registration revenue was up 6.6% or $22,457 compared to FY 2008 while total expenditures were up a modest 3.9% or $15,082, all of which was in personnel. Athletics Athletics 108% 106% 104% 102% 98% 96% 94% 92% 90% 106% 106% 106% 105% 104% 102% 101% 101% 101% 99% 96% Adopted Athletics consists of adult sports. A cost recovery rate of is the goal according to the Fee and Charges Recommendations by the Department. Athletics has consistently met this goal in the past; however the cost recovery rate for FY 2008 was 96%. Actual expenditures in comparison to FY 2007 were flat; however the decrease in the cost recovery rate is a result of a 9% or $13,712 decrease in registration Appendix January 22, 2009

6 revenue. Volleyball had a strong year and Football experienced a small decline in revenue. On the other hand, Basketball registration revenues were down 20.3% or $14,716 compared to FY AdVenture AdVenture 35% 30% 25% 20% 15% 32% 30% 30% 30% 19% 19% 17% 17% 31% 24% 26% 10% AdVenture offers recreation opportunities to adults and children with developmental disabilities. The cost recovery rate has been consistently around 30% since FY In FY 2003 the program received additional grant revenue, hence the higher cost recovery rate. The FY 2008 actual cost recovery rate was much closer to the adopted budget cost recovery rate than in years past. The FY 2009 Budget, if the current trend continues, will further narrow the gap between the actual and budgeted cost recovery rate. The actual cost recovery rate is improving compared to the budget; however revenues and expenditures have been under budgeted the previous two years. Parking Services Parking Services 90% 80% 70% 40% 30% 20% 10% 102% 61% 64% 54% 55% 22% 17% 11% 11% *Enforcement related costs and revenues are excluded from this report. Parking Services is limited to Parking Administration and does not include enforcement services, since parking fines are proposed to mitigate parking abuse and are not intended to cover the cost of a service. In FY 2006 the cost recovery rate spiked due to a change in the payment processing system for parking fine credit card payments. This resulted in inadvertently posting revenues to parking administration rather than enforcement as in other years. The sharp decreases in the cost recovery rate reflected in FY 2007 Actual and FY 2008 are Appendix January 22, 2009

7 due to moving fine summons revenue from parking administration to enforcement. The continued decline in the cost recovery rate for FY 2008 is also partially related to the summons revenue. Total revenues were down 25.2% or $33,807 because there was $14,404 in summons revenue that was not experienced in FY 2008 and parking fine revenue was down 25.7% or $17,013 in comparison to FY Although total revenues were down from FY 2007, parking services exceeded their adopted budget by $34,080. City Clerk (License. & Fees) City Clerk (Bus. Lic.) 2 240% 230% 220% 210% 200% 190% 180% 170% % 238% 229% 209% 217% 205% 212% 175% 168% 162% 153% *Due to a change in payroll processing, labor was inadvertently charged to a different service unit within the Clerk s Office in FY 2007 and FY The error has been adjusted for the purpose of this report. Also, animal fines have been excluded from this report because their primary purpose is to modify behavior not recover costs. City Clerk cost recovery rates reflect a significant increase in FY 2006 due to animal licensing revenue being reallocated from Contracts to the City Clerk s Office for the administration of the animal control contract. However, animal control costs are not reflected as they are in a different service unit. During FY 2008, the cost recovery rate fell 21% due to an increase in personnel costs. Actual cost recovery rates continue to track closely with budgeted cost recovery rates. Building Cost Building Cost 195% 175% 155% 135% 115% 95% 130% 145% 105% 177% 175% 120% 117% 132% 129% 127% 75% Building cost recovery rates realized significant peaks in FY 2006 (177%) and FY 2007 (175%) when permitting activity was high and maintaining adequate staffing to address the workload was difficult. The costs do not include any planning expenditure nor code enforcement Appendix January 22, 2009

8 costs. The cost recovery rate, as expected, fell in FY 2008 due to the increased cost for personnel services and a slower development environment. Personnel costs increased, however, were well within budget. The slower development environment resulted in a 19.7% or $1,585,212 decline in total revenues. Licenses and permits were down 20.39% or $1,192,722 compared to FY 2007, however were only $493,386 short of budget, thus the slow down was anticipated. Charges for services revenue was also down 17.8% or $390,614 in comparison to FY Grove Street Parking Grove Street Parking 115% 110% 105% 95% 90% 103% 101% 98% 111% 95% 108% 102% 104% 85% Grove Street Parking cost recovery rate continues to track well with year to year adopted budgets with the exception of FY During FY 2006, parking fees increased 6.2% or $25,241 and interest income increased 76.6% or $9,556 in comparison to FY Zoo Operations Zoo Operations 65% 55% 45% 40% 35% 52% 41% 55% 48% 52% 44% 57% 47% 53% 30% Zoo Operations experienced actual cost recovery rates between 52% and 57% over the past 6 years. FY 2008 actual cost recovery rate fell due to marginal increases in total expenditures, primarily in maintenance and operations, coupled with a 5.2% or $33,910 decrease in Zoo Gate revenue. Zoo Boise surpassed its revenue budget; however, the decline in Zoo Gate revenue was due to 18,000 fewer visitors during spring break due to poor weather. The addition of the new African Plains Exhibit is expected to draw larger crowds throughout FY Appendix January 22, 2009

9 Cemetery Cemetery 70% 40% 30% 20% 10% 52% 52% 39% 23% 58% 56% 51% 49% 41% 43% 47% 0% Cemetery has experienced an improved cost recovery rate from 23% in FY 2004 to 56% in FY Perpetual Care Fund transfers were the primary reason for the improved cost recovery rate. Historically, the Perpetual Care Fund transfers investment earnings, based on a formula (involving lot sales and interest earnings), to cover cemetery maintenance costs. In FY 2004, due to stalled interest earnings, there were no transfers from the Perpetual Care Fund account; however, these transfers equaled $49,617, $92,630, $123,688 and $102,169 in FY 2005, FY 2006, FY 2007 and FY 2008 respectively. Interest earnings increased significantly from FY 2005 through FY 2007; however, they fell in FY Boise Depot Boise Depot 1 140% 120% 80% 40% 20% 116% 119% 88% 87% 138% 120% 119% 111% 101% 99% 0% *FY 2006 and FY 2007 revenues were adjusted because a service alternative was rescinded which is reflected in the revised budget. The adjustment was $14,000 in revenue, equal to the anticipated preferred vendor fees. Boise Depot experienced a sharp decline in reservation revenue compared to FY Reservation revenue was down 33% or $28,349 due to two closures of Boise Depot and the economic downturn. Parks noted that many clients chose lower cost alternatives for facility rentals. Appendix January 22, 2009

10 Fort Boise Fort Boise 75% 70% 65% 55% 71% 71% 67% 66% 61% 59% 59% 57% 58% 55% 55% 45% *FY 2005 expenditure budget loaded incorrectly. An adjustment has been made to the original proposed expenditure budget for FY FY 2008 cost recovery rate for Fort Boise is approximately equal to the budgeted cost recovery rate. Revenues in comparison to FY 2007 were flat and expenditures experienced an 8.3% or $13,591 increase, with the increase split between personnel and M&O. The increase in expenditures caused the cost recovery rate to fall slightly. Collective Summary Youth program actual cost recovery rates are strong, however, experiencing a declining trend. In FY 2007, the Aquatics, Dance and Drop-in, Idaho IceWorld and Youth Activities actual cost recovery rates had an average variance of nearly 30% compared to the adopted budget. The average variance for FY 2008 has fallen to 11.25%. Aquatics and Youth Activities have fallen below the budgeted cost recovery rate. Dance and Idaho IceWorld both had strong cost recovery rates, above the budgeted target, however experienced sharp declines during FY 2008 in comparison to FY The Adult programs, Softball and Athletics, have had strong cost recovery rates in years past. The goal according to Parks Fee & Charges Recommendations for FY 2008 is to achieve a cost recovery rate of for adult programs. FY 2008 presented a large challenge, the economic downturn, which affected participation numbers. The cost recovery rate for Softball remained strong in FY 2008,, while the cost recovery rate for Athletics fell 10% primarily due to a decrease in Basketball registration revenue. AdVenture is another adult program, operating at a cost recovery rate of 31%, which was above the budgeted cost recovery rate of 24%. The city administration and development programs include Parking Services, City Clerk, Building Cost, and Grove St. Parking. City Clerk (Lic & Fees) continues to track closely with its respective budget. Parking Services trend experienced a significant change in FY 2007 and performed well in FY Building actual cost recovery rates have been well above the budgeted cost recovery rates in past years, however the cost recovery rate fell 56% in FY 2008 due to a sluggish development environment. Other programs include Zoo Operations, Cemetery, Boise Depot and Fort Boise. Zoo Operations has experienced an actual cost recovery rate above the budgeted cost recovery rate consistently. Cemetery actual cost recovery rates have flattened out, registering 56% in FY 2008, greatly improved since FY Boise Depot and Fort Boise actual cost recovery rates have fluctuated both below and above the budgeted cost recovery rates, however follow the trend line closely. Appendix January 22, 2009

11 Summary of s 225% 200% 175% 1 125% 75% 25% 0% Aquatics Dance and Drop-in Idaho IceWorld Youth Activities Warm Springs Golf Course Softball Athletics AdVenture Parking Services City Clerk (Lic & Fees) Building Cost Grove Street Parking Zoo Operations Cemetery Boise Depot Fort Boise FY 2008 FY 2008 FY 2009 Appendix January 22, 2009

12 Combined Expenditure Analysis Thousands 14,000 13,500 13,000 12,500 12,000 11,500 12,102 11,859 11,944 11,674 12,640 12,307 13,988 13,476 11,000 10,500 10,000 9,500 9,000 10,420 9,653 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 Actual Expenditures Budgeted Expenditures Appendix January 22, 2009

13 Combined Revenue Analysis Thousands 16,000 15,000 14,000 15,225 15,507 14,296 13,789 13,000 12,000 11,000 12,621 10,883 11,750 11,893 10,000 9,000 8,000 9,800 9,168 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 Actual Revenues Budgeted Revenues Appendix January 22, 2009

14 Combined Revenue Analysis w/o Building Thousands 7,500 7,000 6,500 6,000 6,204 6,017 7,242 6,422 7,467 6,565 7,335 6,979 5,500 5,000 4,500 4,000 4,663 4,516 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 Actual Revenues Budgeted Revenues Recommendations A full cost accounting project is underway and will assist in including costs, such as indirect fees and administrative costs, which are not currently included. Full cost accounting will allow departments to update fees and charges on a citywide basis to ensure proper cost recovery because it will incorporate all associated costs; without doing so, a true cost recovery is difficult to obtain. During FY 2008 revenues were down as a whole due to the several factors, one of which is the economic downturn. Considering the financial state of the economy it is strongly recommended that departments focus on budgeting user fee revenue. It is very important the revenue projections are accurate and attainable entering FY 2009 and preparing for FY 2010/2011 budget development. Departments can utilize Finance and Administration for assistance. Cost recovery rate goals are dependent on several factors. The type of service provided and the intended audience are two key factors when considering recreation programs. It is recommended for future comparisons that individual departments established cost recovery rates at a level closely related to the full cost of providing the services, taking into consideration similar charges/fees being levied by other public, private and regulatory organizations, unless a City interest is identified and approved by the City Council to adjust a specific fee (User Fee Policy B10.10). It is important for departments to identify a City interest to adjust a specific fee when applicable. Appendix January 22, 2009