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.~pW N O,c <br />:iy'(.41U <br />:~ <br />SOS.. G A~QS <br />DATE: <br />TO: <br />FROM: <br />COUNCIL AGENDA REPORT <br />APRIL 13, 2010 <br />MAYOR AND TOWN COUNCIL <br />MEETING DATE: 4/19/10 <br />ITEM NO: <br />GREG CARSON, TOWN MANAGER ~j~^~~ <br />i~7 " <br />SUBJECT: ADOPTION OF A RESOLUTION CONTINUING CERTAIN DEPARTMENT <br />FEES, RATES, AND CHARGES, AND AMENDING CERTAIN FEES, RATES, <br />AND CHARGES FOR FY 2010/11 <br />DISCUSSION: <br />On Apri15, 2010, a public hearing was held to discuss proposed FY 2010/11 departmental user fees, <br />rates and charges. The proposed fees were based on a recent cost of services study and indirect cost <br />allocation plan, conducted by the Financial Consultant Solutions (FCS) Group, an independent <br />financial consultant that specializes in public sector fees analyses. <br />As noted in the Apri15, 2010 staff report, the study reflected an estimated cost recovery average of <br />56% for Town-wide services. When compared with the results of the FY 2004/05 cost of services <br />study (an 82% Town-wide recovery average), the Town's current recovery level is significantly <br />lower. Council requested additional information explaining this change. Staff concluded that the <br />following factors contributed to the recovery level: <br />Governmental Accounting Standards Board (GASH) 45 Requirements Effective FY 2008/09,. the <br />Town implemented Government Accounting Standards Board (GASB) 45, a new accounting rule, <br />requiring public employers to account for and report the annual cost of other post-retirement benefits <br />(OPEB) for current and future retirees rather than on apay-as-you-go basis. As a result of GASB <br />45, the Town established a trust to pre-fund its Annual Required Contribution (ARC), which is $1.8 <br />million. Since FY 2008/09, the Town has contributed nearly $1 million to the ARC. The proposed <br />FY 2010/11 Operating Budget recommends pre-funding the ARC in the amount of $820,000. <br />Public Employees Retirement System (PERS) Rate Increases. Historically, investment earnings <br />have served as the primary source of revenue for PERS. From 1970 through 2008, PERS was <br />funded 67% by investments, 25% by employer contributions, and 8% by member contributions. <br />Due to the stock market free-fall and global recession in 2008, PERS has had to increase employer <br />PREPARED BY: JENNY IIARUYAMA, FINANCE/BUDGET MANAGER <br />N:\MGR\AdminWorkFiles\2010 Council Reports\FY 2010-11 User Fee Report Addenduin:doc <br />Reviewed by: Assistant Town Manager own Attorney <br />Clerk Administrator Finance Community Development <br />