Title
AN ORDINANCE REPEALING PREVIOUS ORDINANCES RELATED TO THE SCHEDULE OF FEES AND CHARGES FOR THE CITY OF LEE'S SUMMIT AND ESTABLISHING THE CITY OF LEE'S SUMMIT SCHEDULE OF FEES AND CHARGES. (F&BC 3-5-18)
Body
Issue/Request:
AN ORDINANCE REPEALING PREVIOUS ORDINANCES RELATED TO THE SCHEDULE OF FEES AND CHARGES FOR THE CITY OF LEE'S SUMMIT AND ESTABLISHING THE CITY OF LEE'S SUMMIT SCHEDULE OF FEES AND CHARGES
Key Issues:
As part of the FY19 budget process, staff has analyzed the current schedule of fees and charges. The Airport, Fire Department, Development Center, Police Department, Public Works, and Water Utiltiies have identified changes as part of their respective operations and processes. The proposed changes would take effect July 1, 2017.
Proposed City Council Motion:
FIRST MOTION: I move for a second reading of AN ORDINANCE REPEALING PREVIOUS ORDINANCES RELATED TO THE SCHEDULE OF FEES AND CHARGES FOR THE CITY OF LEE'S SUMMIT AND ESTABLISHING THE CITY OF LEE'S SUMMIT SCHEDULE OF FEES AND CHARGES.
SECOND MOTION: I move for adoption of AN ORDINANCE REPEALING PREVIOUS ORDINANCES RELATED TO THE SCHEDULE OF FEES AND CHARGES FOR THE CITY OF LEE'S SUMMIT AND ESTABLISHING THE CITY OF LEE'S SUMMIT SCHEDULE OF FEES AND CHARGES.
Background:
Airport
Office Space and Enclosed Hangars:
Increase Hangar, Office and Tie-down Rates by 2.2% in Accordance with the CPI-U Index
Hangar rates are reviewed annually to assess the current local market and cost of operations. As an Enterprise Fund, the Airport is expected to recuperate its operational expenses through fees and services. Whereas CPI-U increases are typically done at the beginning of the fiscal year, an increase of 2.0% was implemented half-way through the fiscal year in FY 18 which took effect on January 1, 2018. This was due to the runway construction which took place in the first half of the fiscal year and the impact it had on users. This year’s Consumer Price Index (CPI) for FY 19 is 2.2% based on data as of December 31, 2017. The Airport Business Plan completed by Clough Harbour & Associates, LLP states in the Rates and Charges section on page 72 that: “Hangar prices should be increased to reflect the Consumer Price Index (CPI) if within service area competitive market rates.” The current projected CPI rate is felt to be within the competitive market rates of other surrounding airports.
The Charles Wheeler-Kansas City Downtown Airport increased their rates on January 1st by 2.2%. No other Airport in the metropolitan area is reporting any plans to increase their rates at this time.
These increases will generate an additional $850 in hangar rental revenues based on a 95% occupancy.
Hangar 1 Office Rental Rates
New Rate Structures
Overnight Hangar Storage Fees:
Historically, the tie down fee charged was based on the number of engines and weight of the aircraft. These fees are being combined into three categories: Piston, Jet Aircraft and Helicopters. Piston Aircraft will be charged $15/night, Jet Aircraft will be charge $60/night, and helicopters are charged $15/night. It is estimated approximately $2,000 of revenue will be generated annually by these fees; however, these changes will not net any new revenues.
New Hangar Rates and Discounted Rates for Displaced Tenants
Construction of twenty-eight new enclosed T-hangars began in early February 2018. Twenty-one of these units are slated to be ready for occupancy by July 1st, with the remainder being completed in the first quarter of the new fiscal year. Immediate occupancy of these units will be by customers who were displaced as part of the construction project to relocate taxiway Alpha. There are three different rental rates for the customers who were displaced that will span a three-year period. These rates were developed based on the type of rental units the customers were in previously; tenants in the Open-T hangars whose rate was $112.00 with go to $152.00, tenants in the S-hangar units whose rate was $222.00 with go to $262.00, and tenants in the L-hangar units whose rate was $277.00 with go to $317.00 for the first year. Any units that become vacant and are filled with tenants who were not impacted by the hangar removal will be rented at the full rate of $391.00 per month.
Overnight, Day and Inclement Weather Fees for Storage in Hangar 1:
These fees will be charged to customers who request a heated hangar during the months when the heaters are running in Hangar 1. These fees are meant to cover the labor cost for moving the aircraft in/out of the hangar and cost of re-heating the hangar after the doors are opened. Overnight storage fees for temporary storage due to inclement weather and overnight fees during non-winter periods are being increased: $75 for inclement weather, $50 single engine piston/turbo-prop and helicopters overnight and $75.00 for twin-piston engine aircraft. No changes are being proposed to the rates for multi-engine turbo prop or jet aircraft /turbo props. We estimate these rates will generate an additional $1,200 annually.
Overnight Tie-Down Fees for ME Turbo Props and Jets
After Hours Fee:
Currently, a fee of $65.00 is charged for after-hours call out. Employees who respond are paid four hours for this service. The increase to $85.00 is to cover employee cost to respond to after-hour call outs. With the new improved runway, the number of after-hour call outs has increased as a result of the increase in corporate and business traffic. We estimate the fee will generate approximately $1,000 of additional revenue.
New Fees
De-Ice Service:
This is a new service that in response to the frequent request from customers requesting de-ice service during winter months. This fee will cover the labor, de-ice material and maintenance cost. We estimate a conservative number of 30 for the first year which will generate a minimum of $4,500 of additional revenue.
Development Services
The fees for building permits and related activities, both residential and commercial, have been simplified. The proposed changes will be more user friendly for staff as well as the development community. Had the proposed changes been in effect for calendar year 2017, an approximate 9% increase in revenue from building permits may have been realized. The fees are aligned with previous Council direction to recover 50% of development costs, and helps to offset costs associated with additional services that have been added as a result of the reorganization process
Fire Department
Ordinance 7815 mandates staff annually calculate the fee required to recover 50% costs associated with providing EMS/ambulance services. The formula prescribes a 21.46% increase in Ambulance fees for the FY19 fiscal year. It should be noted the majority of this increase will in turn become an insurance adjustment expense in the budget due to the lower rates of federal and private insurer reimbursement for applicable patients.
Police
Police have two proposed changes to the Schedule of Fees: The first is a new $5 replacement fee for lost permits and/or licenses issued by police records. The second is a firing range use fee. This fee will be charged to other law enforcement agencies who use the firing range. This service is not available to the public. The fee is intended to cover partial costs incurred by renting the facility: The rangemaster must be on site while the range is in use, as well as additional operational costs such as air handlers, cleaning and lead mining associated with use.
Public Works
A right-of-way permit for Lee’s Summit is calculated on a per unit basis where a unit is based on a per City block basis, but not to exceed continuous linear work of more than six hundred sixty (660) feet in length. Public Works Engineering proposes increasing the right-of-way (ROW) permit fee by $5 per unit, raising the fee from $75 per unit to $80 per unit. The increase is recommended after a review of the administrative and inspection costs associated with the permits and management of the City’s ROW. The $5 increase will result in an increase in revenue of approximately $7,500 based on the number of permit units approved in FY17. The last increase in the ROW permit fee occurred in FY15, at which time the fee was raised from $60 per unit to $75 per unit.
Several permits remain listed under Public Works on the Schedule of Fees even though those permits are now managed by Development Services due to reorganization. Permits which have been moved include after hours inspections; engineering plan review and inspection fee; grading (land disturbance) permit; and water test fee.
Water Utilities
Water Tap Fees:
The Water Utilities Advisory Board reviewed the statements related to water tap fee performance and the projections within the tap fee model on November 29, 2017. The Board unanimously recommended the following:
• Add System Improvements
o SE Quadrant Improvements - Ranson/Hamblen/M291 (FY2024 & 25) $2,010,000
• Water Tap Fee Project List Update to a total of $77,776,645
• Utilize 606 residential equivalent units for growth for (FY2018‐19).
• Increase Water Tap fee residential equivalent unit to $3,409 effective July 1, 2018 for next fiscal year (FY2018‐19).
Water & Sewer Rates:
The Financial Model (Cost of Service Model) that is utilized to establish the 5 year rate schedule was updated and presented to the Water Utilities Advisory Board on November 29, 2017. The Board reviewed the financial plan and determined that the plan was consistent with the financial objectives identified in the Water Utilities Strategic Plan below:
• Revenue to Expense Ratio - equal to or greater than 1:1 to ensure that system revenues are recovering expenses. (Operating Revenues divided by Operating Expenses)
• Coverage Ratio - minimum of 1.50:1 to assure that adequate revenues are maintained to satisfy debt obligations. (Net Revenues Available for Debt Service divided by Annual Debt Service Payments)
• Working Capital - working capital equal to 90 days of annual operating expenses
• Plan effectively for rate and revenue stability.
o Incremental rate adjustments (annual review)
o Rates are cost-based, equitable, and understandable
o Promote water conservation
o Adequately fund reinvestment in water and sewer infrastructure
The Board unanimously recommended to the City Council that Water and Sewer rates to append the rate schedule with a 2% increase to water and sewer rates effective January 1, 2022 as set forth by the cost of service model.
Presenter
Presenter: Jack Feldman, Management Analyst
Recommendation
Recommendation: Staff recommends approval
Committee Recommendation
Committee Recommendation: Motion by Councilmember Faith, seconded by Chairman Binney, this Ordinance was recommended for approval to the City Council - Regular Session due back on 3/15/2018. The vote was two Ayes, one Nay.
Committee Recommendations for Airport Fees: (Discussion packet 2018-1792)
The Board of Aeronautical Commissioners Meeting 1-23-18: Action: BOAC voted unanimously 5-0 to recommend to City Council approval of THE PROPOSED HANGAR RATES FOR THE NEW REPLACEMENT HANGARS FOR THOSE CUSTOMERS IN HANGAR UNITS L, S & OPEN-T’S WHO MUST PARK THEIR AIRCRAFT OUTSIDE UNTIL NEW REPLACEMENT HANGAR UNITS ARE AVAILABLE A DISCOUNTED RATE FOR A PERIOD OF TWO YEARS BEGINNING IN FISCAL YEAR 2019.
F&BC Meeting 2-5-18: ACTION: A motion was made by Councilmember Faith, seconded by Vice Chair Edson, that this Discussion Item be recommended for approval to the City Council - Regular Session, due back on 2/15/2018. The vote was unanimous.