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City
Commissioning Cost Allocation, Utility Fees Study
By
Allison Jean Eaton
Bulletin
Staff Writer
The
city is shelling out just over $72,000 to a contractor for a cost
allocation plan and utility rates study.
At its meeting last Tuesday, the City Council approved the city’s
entering into an agreement with MuniFinancial to complete the comprehensive
analysis.
“A cost allocation plan is an analysis of how the city incurs costs
to perform the services that it offers,” said City Manager Barbara
Kilroy. She explained that the city wants to ensure that citizens
receiving services are bearing the cost, but that they are not bearing
an “unreasonable
cost.”
According to a staff report, the City Controller’s Office sent out
a request for proposals last November, and MuniFinancial, which turned
in the second highest quote, was selected out of a pool of four applicant
firms.
In addition to the cost factor, city staff selected the company based
on four items: it is a highly specialized public sector financial consulting
firm; it has an experienced project team with an extensive background in
municipal government; its technical approach and project schedule relative
to the work plan for completion; and a user-friendly end product that staff
will have the ability to amend in the future.
The overall objective is to ensure that the city is utilizing appropriate
fees for services and accurate overhead rates. Additionally, it will illustrate
whether or not the city is accurately accounting for and recovering the
true cost of providing various services relative to operations, according
to the report.
Water and trash fees will also be studied to ensure the cost to residents
is evenly and equitably distributed, Kilroy said.
“A major goal of the study is to re-establish basic fairness and
equity between users of city services and those who pay for them, and controlling
those costs on a continuing basis,” according to the staff report.
It notes that a direct fee/service and tax equity relationship is
nonexistent when taxpayer dollars are used to subsidize services that only
a small
sector of the community receives.
Basically, the study will weigh in on how much people pay in contrast
to the amount of services they receive.
MuniFinancial, said Kilroy, will come in and evaluate how the city
provides its services, what it costs the city to provide its services,
and how those costs should be spread across the taxpayer base and other
funding sources such as federal grants and, in Compton’s case, an
Enterprise Zone.
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