AGENDA #3e
TO: W. Calvin Horton, Town Manager
FROM: Kay Johnson, Finance Director
SUBJECT: Discussion of Fee Study Proposal
DATE: April 27, 2005
The purpose of this Budget Working Paper is to discuss the possibility of contracting with MAXIMUS for a study of the Town’s land use fees.
BACKGROUND AND DISCUSSION
At the March 23, 2005 meeting of the Budget Review Advisory Committee, MAXIMUS consultants presented their draft report which included a statement that certain Town fees were not based on the actual costs of delivering services. As the result of this report, the Council discussed the possibility of a fee study and requested MAXIMUS to submit a fee study proposal. This proposal was submitted on March 28, 2005, and was included on the agenda for discussion at the April 5, 2005 Council meeting.
On April 5, 2005, the Council authorized MAXIMUS to prepare a portion of the original proposal, an indirect cost allocation plan in accordance with Office of Management and Budget Circular A-87, at a cost of $6,000. The total cost of the full project, including the indirect cost allocation plan was $38,155. The proposal was prepared under the assumption that the entire contract would be completed by mid-June 2005 if the Town contracted with MAXIMUS. If the Council desires to have MAXIMUS complete the work for the full proposal, we anticipate that the remaining cost for the study would be approximately $33,000. The cost to complete the study might vary because of the extended time involved and the need to update the data to complete the task.
We will have additional information on overhead costs once MAXIMUS completes the current indirect cost contract by June 1, 2005. We recommend that the Council postpone a decision on contracting with MAXIMUS for the full fee study until the Council has examined the results of the indirect cost study and staff proposals for increasing revenues.
RECOMMENDATION
That the Council take no action at this time. If the Council would like to proceed at this time with a land use fee study, the Council could adopt the attached resolution authorizing MAXIMUS to conduct a study of revenue enhancement and fees.
RESOLUTION AUTHORIZING THE TOWN MANAGER TO ENTER INTO AN AGREEMENT WITH MAXIMUS FOR A STUDY OF REVENUE ENHANCEMENT AND FEES (2005-04-27/R-1.1)
WHEREAS, the Council desires to have appropriate fees for services; and
WHEREAS, it has been determined that Town fees do not capture the full cost of services;
NOW, THEREFORE, BE IT RESOLVED that the Council of the Town of Chapel Hill that the Council hereby authorizes the Town Manager to enter into a contract with MAXIMUS for a study of revenue enhancement and fees up to $33,000.
This the 27th day of April, 2005.