HomeMy WebLinkAbout10/20/2009, C6 - COUNTY ANIMAL SERVICES CONTRACT EXTENSION FOR FY 2009-10 council Mcung Dam
October 20 2009
agenda RepoRt �mN .
C ITY O F SAN L U I S O B I S P O
FROM: Deborah Linden, Chief of Policep®
SUBJECT: COUNTY ANIMAL SERVICES CONTRACT EXTENSION FOR FY 2009-10
RECOMMENDATION
Approve an amendment to the agreement with the County of San Luis Obispo for the continued
provision of Animal Control Services from July 1, 2009 to June 30, 2010 in the amount of
$200,256 and authorize the Mayor to execute the contract.
DISCUSSION
Background
For many years, the City has contracted with the County of San Luis Obispo for the provision of
animal control services. The contract includes: emergency and non-emergency response of
Animal Services Officers for injured and stray animals; investigative services for animal bites,
abuse, and neglect; sheltering and quarantine services; dog licensing; animal adoption and other
services as required either by state law or City Municipal Code. The most recent three-year
contract with the County expired on June 30, 2009.
In preparation for a new three-year contract, the City was notified by the County that contract
costs would be substantially increasing. Contract costs had already increased since 2006 largely
because the County had not been achieving full cost recovery from the cities utilizing their
services. However the cost increases being proposed for 2009 through 2012 caused concern for
all of the cities involved.
Staff representing all seven contract cities worked with the County to form a committee to
conduct an in-depth study and analysis of the animal services being provided to the cities and the
associated costs. The study team, comprised of representatives from County Administration and
the County Health Agency, the County Animal Services Manager, the Police Chiefs from the
Cities of San Luis Obispo and Arroyo Grande, and the City of San Luis Obispo Finance Director,
has made excellent progress.
On June 16, 2009, the Council authorized a contract extension for the County to provide animal
control services through September 30, 2009 in order to allow the team to complete the study.
Similar contract extensions were executed by the other contract cities. Since then, the study has
been substantially completed; however, additional time is needed to implement the recommended
actions from the study in order to impact service costs. In addition, due to an oversight, the
County did not submit the contract extensions to the Board of Supervisors so they were not
formally executed by the County. However, the County has continued to provide services and the
City has continued to pay the County. The one-year contract extension being presented would
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County Animal Services Contract Extension for FY 2009-10 Page 2
replace the previously executed contract approved by the Council on June 16, 2009, and will
continue services through June 30, 2010.
Study Findings
1. Program costs are reasonable: The County provides a wide variety of animal services,
many of which are driven by legal requirements and community expectations. The total
budget for the Animal Services Division is about $2.7 million. Costs would be significantly
higher were it not for the use of county jail inmates and volunteers who work in the kennel.
Costs are allocated into three main service areas (cost centers):
Service Area Budget % of Total Bud et
Field Services $1.4 million 52%
Kennel Operations $1.2 million 45%
Education $83,000 3%
Revenue generated through animal licensing and service fees off-set approximately 27% of
the costs of the program. The net costs are divided among the County and the seven contract
cities according to population and a "service factor" based on each city's usage rates. The
study committee reviewed the animal services budget in detail and is satisfied that costs are
reasonable and appropriate for the services being provided.
2. Data collection is accurate: Services provided are allocated to each City or to the County
(unincorporated areas) based on the location of service calls and/or the address of animal
owners using the various services. The County utilizes specialized computer software to track
services, animals and owners in order to allocate costs and monitor activity trends. Address
information, including the City, is pulled from the U.S. Postal Service zip code database.
Audits of calls for service in several cities indicated a high rate of accuracy of data collection
and address coding.
3. A new cost allocation method should be implemented: The committee compared the
following three methods used by various counties to allocate costs of animal control services
to contract cities:
a) Per Capita Method: With this method, costs and revenue are allocated to contract cities
and the County based solely on the percentage of County population in each jurisdiction.
This method is very straight-forward and each to administer. However, it assumes each
city and the County are using about the same level of service proportional to their
population (i.e. each resident is using about the same amount of services and generating
about the same amount of revenue). An analysis of actual usage of animal control
services by each city and the County revealed this was not the case. Some cities tend to
use services at a much higher frequently than others, and some cities generated
significantly greater revenue than others. Allocating costs and revenue based on a per-
capita model would result in cities that use fewer services and/or generate more revenue
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County Animal Services Contract Extension for FY 2009-10 Page 3
having to effectively subsidize those cities that use a disproportionately higher share of
services. In fact, the analysis determined that San Luis Obispo utilizes a relatively lower
proportion of services than several other cities.
b) Service Factor Method: This is the method currently in use by the County. Costs and
revenue are allocated to the cities and County based on the assignment of a Service Factor
to each city, which measures certain services to determine if each city is using more or
fewer services in proportion to the city's population. Analysis of this method revealed
that it is deficient in accurately allocating costs and revenue based on the services used,
and the revenue generated, by each contract city. In addition, this method has proved to be
complex and confusing to users.
c) Service-based Method: This model allocates costs and revenues to the cities and the
County based on each jurisdiction's actual use of services and revenue generated. Usage
is measured by allocating actual field calls, animal impounds, and licenses issued
(allocated by address of animal owner).
After considering all three cost allocation methods, staff from each contract city and the
County agree that the Service-based Method is the most fair and accurate way to allocate
costs and revenue.
4. Higher cost recovery is desirable to offset animal services costs and can be achieved
through modest fee increases: Fees for various services are set annually by the Board of
Supervisors. Certain fees are set by State law and cannot be adjusted at the local level. Other
fees are purposely set below full cost recovery in order to encourage use of the service, such
as animal adoptions and licensing. Current fee revenue off-sets only about 27% of the costs
of providing animal control services countywide, even though the costs are almost solely
driven by users of the services(animal owners).
A comparison of fees with other counties indicated that some County fees are on the lower
end of the scale and could support modest increases without discouraging use of desired
services, such as adoptions and licensing. In addition, higher fees in some areas are
appropriate in order to discourage undesirable behavior, such as owners who fail to properly
confine their dogs resulting in multiple impounds, or owners who fail to obtain the required
dog license. As such, the study team recommended modest increases to 29 fees (out of 73
different fees that are assessed for various services). On November 3rd, the proposed fee
increases will be introduced to the Board of Supervisors and the public, along with the fee
ordinance and the setting of a hearing date. The hearing date is set for November 24th, at
which time the Board will consider and approve any fees. These fee increases, if adopted,
will generate approximately $173,000 in additional revenue, bringing overall cost recovery to
41% (from the current 27% level). The additional revenue will be apportioned to the contract
cities and the County, and will help reduce animal services contract costs. Unless the Council
directs otherwise, the Chief of Police intends to send a letter supporting these fee increases to
the Board of Supervisors in advance of their November 3 meeting..
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County Animal Services Contract Extension for FY 2009-10 Page 4
Over the next several months, the study team will work to transition from the current "Service
Factor" cost recovery method to a more accurate "Service-based Method" which will take effect
in July 2010. The team will continue to work together to ensure services and associated costs are
reasonable and that cost recovery goals are being achieved. Staff anticipates returning to the
Council in Spring 2010 with a new multi-year contract for continued animal services provided
by the County.
CONCURRENCES
The Director of Finance and Information Technology concurs with the staff recommendation.
The suggested transition to a Service-based cost allocation model and the concept of fee
increases to achieve greater cost recovery were presented to staff representatives from the
contract cities; all were supportive of both recommendations.
FISCAL IMPACT
The cost for the one-year contract extension for FY 2009-10 ($200,256) is included in the Police
Department's 2009-10 budget, as are the contract costs being proposed by the County through
2012. Conceivably, the City's costs could be reduced in future years using the new allocation
method.
ALTERNATIVES
Council could choose not to extend the animal services contract with the County. This would
leave the City without the ability to provide such services and without a viable in-house or
contract alternative. Many of the services are required by law. Therefore, staff does not
recommend this alternative.
ATTACHMENT
First Amendment to Contract for Animal Services from July 1, 2009 through June 30, 2010.
T:\Council Agenda Reports\Police CAR\2009\Animal Services Contract Extension No. 2- 10-20-09.DOC
ATTACHMENT
FIRST AMENDMENT TO
CONTRACT FOR ANIMAL SERVICES
This FIRST AMENDMENT is entered into between the County of San Luis Obispo, a public entity in the State
of California (hereafter referred to as "County") and the City of San Luis Obispo, (hereafter referred to as
"City").
WHEREAS, on July 1, 2006, the County executed a contract with the City to provide animal services within its
boundaries by the County's Division of Animal Services; and
WHEREAS,the contract expi;es on June 30, 2009; and
WHEREAS, Health Agency and Administrative staff, working with a contingent of City representatives,are currently
performing an Animal Services study which includes identifying specific animal services provided to the City,data
collection elements, allocation and fee setting methodology,with the intent that the Cities will gain a clearer
understanding of the rate setting process; and
WHEREAS, County and City wish to extend the contract for an additional twelve months beyond the expiration date and
desire to amend the contract to reflect the extended term.
NOW THEREFORE:
1. The following line shall be added to the original Attachment A to include the twelve month extension:
July 1,2009 to June 30,2010 $200,256
2. The following paragraph shall be added to the Section labeled TERM AND RENEWAL and the Contact is hereby
amended with the following language added:
The term of this Contract is hereby extended to June 30,2010, unless terminated earlier by mutual agreement of the
parties. The Health Agency Director shall have authority to act pursuant to this paragraph.
All other terms and conditions of the Contract shall remain in full force and effect.
IN WITNESS WHEREOF,the parties have caused their duly authorized representative to execute this Renewal of
Contract.
Executed as of the date set forth herein.
CONTRACTOR:
City of San Luis Obispo
By:
Mayor of the City of San Luis Obispo Date
ATTEST:
By:
Clerk for the City of San Luis Obispo Date
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ATTACHMENT
APPROVED AS TO FORM AND LEGAL EFFECT:
Warren Jensen
County Counsel
By:
Deputy County Counsel Date
COUNTY:
Bruce Gibson
Board of Supervisors
By:
Chairperson of the Board of Supervisors Date
ATTEST:
Julie Rodewald
Clerk-Recorder
By:
Clerk and Ex.Officio Clerk of the Board Date
of Supervisors
APPROVED AS TO FORM:
JO P. LOWELL
ity Attorney