1. Maximizing Fees ASSOCIATION OF INDIANA COUNTIES 2008 ANNUAL CONFERNCE Vevay, IN September 24, 2008

2. WHAT ARE OTHER STATES DOING? County budget issues being felt all around the country. County budget issues being felt all around the country. In California, service fees are used to offset the limitations in Property Tax, initiated by Proposition 13. In California, service fees are used to offset the limitations in Property Tax, initiated by Proposition 13. Cost Studies must be conducted in order to establish service fees, as state legislation restricts a user fee to “actual cost” Cost Studies must be conducted in order to establish service fees, as state legislation restricts a user fee to “actual cost” Other States have been forced to increase or establish user fees in order to reduce the General Fund subsidy no longer afforded by budget constraints Other States have been forced to increase or establish user fees in order to reduce the General Fund subsidy no longer afforded by budget constraints Elected Officials and Administrations across the Country are faced with a difficult decision of how to maintain current service levels in view of tax limitations and local economic conditions. Four alternatives that local governments are using across the country are as follows: Elected Officials and Administrations across the Country are faced with a difficult decision of how to maintain current service levels in view of tax limitations and local economic conditions. Four alternatives that local governments are using across the country are as follows: 1. Increase General Tax Levels 2. Adjust Staffing Levels 3. Reduce or Eliminate Service 4. Increase or Establish User Fees

3. What Are User Fees? Service Fees Service Fees IC 36-1-3-8 : Allows a county to pass a service fee, as long as it does not exceed the cost of providing the service. IC 36-1-3-8 : Allows a county to pass a service fee, as long as it does not exceed the cost of providing the service. Building Permit Fees Building Permit Fees Health Inspection Fees Health Inspection Fees GIS / Mapping GIS / Mapping Electronic copy charges specific to department Electronic copy charges specific to department Impact Fees Impact Fees IC 36-7-4: Allows a county to pass an impact fee to directly pay the cost of infrastructure or debt service for same. IC 36-7-4: Allows a county to pass an impact fee to directly pay the cost of infrastructure or debt service for same. Cover cost of new development in County Cover cost of new development in County

4. Benefits Of User Fees Recover costs directly from beneficiaries of service Recover costs directly from beneficiaries of service Provide for improvement and continuation of services Provide for improvement and continuation of services User charges paid by all users – including non- residents User charges paid by all users – including non- residents Reduced burden on local taxpayers-shift to users Reduced burden on local taxpayers-shift to users Can regulate the use of certain services Can regulate the use of certain services May allow a service to be provided that cannot be justified through the use of tax revenues May allow a service to be provided that cannot be justified through the use of tax revenues

5. Costing Techniques Typical Typical County personnel review of direct budget costs County personnel review of direct budget costs Survey similar sized counties Survey similar sized counties What’s Missing? What’s Missing? Indirect costs Indirect costs Capitol costs Capitol costs Labor costs – Taxes / Benefits Labor costs – Taxes / Benefits Time it takes to perform service Time it takes to perform service Other personnel effected Other personnel effected

6. Costing Techniques Cont’ A Quality Study A Quality Study Study creates a sound operational review of unit Study creates a sound operational review of unit Make sure you know the true cost of labor to the County. (salary, health insurance, taxes, etc.) Make sure you know the true cost of labor to the County. (salary, health insurance, taxes, etc.) Cost for fixed assets need to be allocated per person per hour (computer, vehicle, building, etc.) Cost for fixed assets need to be allocated per person per hour (computer, vehicle, building, etc.) Cost for maintaining building must be factored in (liability insurance, heat, electricity, etc.) Cost for maintaining building must be factored in (liability insurance, heat, electricity, etc.) Cost of supplies used to perform service Cost of supplies used to perform service

7. Costing Techniques Cont’ What is the average time to perform service What is the average time to perform service What other county personnel outside of immediate department is impacted and what are their cost. What other county personnel outside of immediate department is impacted and what are their cost. Are there other services being performed that benefit individuals and not society as a whole Are there other services being performed that benefit individuals and not society as a whole All costs and analysis must be documented for review All costs and analysis must be documented for review

8. HOW TO GO ABOUT IT Utilize County Personnel Utilize County Personnel Do they have financial expertise to allocate direct and indirect costs Do they have financial expertise to allocate direct and indirect costs Are they progressive enough to look at all possible scenarios Are they progressive enough to look at all possible scenarios Could they be seen as biased by constituents Could they be seen as biased by constituents Do they have the time to prepare study Do they have the time to prepare study Hire Independent consultant Hire Independent consultant Has no dog in fight Has no dog in fight Looks outside the box Looks outside the box Brings new ideas for missed revenue Brings new ideas for missed revenue Has credibility with constituents Has credibility with constituents Withstand legal and SBA challenge Withstand legal and SBA challenge Provides documented evidence Provides documented evidence

9. CONTACT INFORMATION For further information on user fee studies please contact: For further information on user fee studies please contact: Jeff Dossett, State Director MAXIMUS, Inc. 800-618-7364jeffdossett@maximus.com