To: County of Sonoma Board of Supervisors
Department or Agency Name(s): Department of Health Services
Staff Name and Phone Number: Tina Rivera, 707-565-4774
Vote Requirement: 4/5th
Supervisorial District(s): Countywide
Title:
Title
9:35 A.M. Health Services Fees
End
Recommended Action:
Recommended action
A) Adopt a resolution reading the title and waiving further reading of a proposed ordinance titled “An Ordinance of the Board of Supervisors of the County of Sonoma, State of California, Adopting New Fees and Adjusting Fees Effective October 1, 2023 for Department of Health Services, Sonoma County Animal Services.”
B) Adopt a resolution establishing new and amended fees to recover the reasonable cost of providing services associated with Environmental Health and Safety for the Department of Health Services, pursuant to Health and Safety Code Section 101325, effective August 1, 2023.
C) Adopt a personnel resolution adding 2.50 full-time equivalent Environmental Health Specialist II position allocations needed to accommodate Environmental Health and Safety service level requirements to meet professional standards and provide a benefit to the community, effective August 1, 2023, and delete a 0.50 full-time equivalent Dairy Inspector position allocation, effective October 17, 2023.
D) Authorize contingency set aside to the fiscal year 2023-2024 adopted budget, programming a total of $173,862 in General Fund Contingencies including $54,071 to support Sonoma County Animal Services, $72,908 to support a reduction in dairy industry permitting fees, and $46,883 to support a reduction in local food industry permitting fees. (4/5th Vote Required)
E) Authorize the Department of Health Services, in coordination with and oversight by the Human Resources Department, to administer layoff proceedings and to mitigate layoffs, to the extent possible, in accordance with Civil Service Rule 11: Layoffs.
(4/5th Vote Required)
end
Executive Summary:
The Department of Health Services (“DHS” or “the Department”) is proposing new and amended fees for services associated with Sonoma County Animal Services and Environmental Health and Safety. The Board of Supervisors is authorized to establish fees to recover the reasonable cost of providing certain services. Fees are imposed for a specific benefit conferred or service provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable cost to provide the benefit or service. Fees are also imposed for reasonable regulatory costs including enforcement inspections, investigations, and audits.
The Department is requesting an effective date of October 1, 2023 for new and amended fees associated with Sonoma County Animal Services and an effective date of August 1, 2023 for new and amended fees associated with Environmental Health and Safety. Adding or revising Sonoma County Animal Services fees requires Board adoption of an ordinance. The Department will return to the Board on August 15, 2023 for the second reading to request adoption of the ordinance for Sonoma County Animal Services fees. Fees associated with Environmental Health and Safety may be approved by the Board via adoption of fee resolution (Attachment 4).
The Department has determined that an additional 2.50 full-time equivalent (FTE) Environmental Health Specialist II position allocations are needed to adequately perform required services associated with Environmental Health and Safety at a level that meets the professional standards and provides benefit to the community. In addition, the Department has determined that a 0.50 FTE Dairy Inspector allocation can be deleted, as workload does not require continued use of the position. This item requests approval of these position allocation changes. The 0.50 Dairy Inspector position is currently filled, and as such this item also requests authorization to begin layoff proceedings and to mitigate layoffs.
This item also requests approval of a contingency set aside and budgetary adjustments to the fiscal year 2023-2024 adopted budget to program a total of $173,862 in Contingency funding including $54,071 to support Sonoma County Animal Services, $72,908 to support a reduction in dairy industry permitting fees, and $46,883 to support a reduction in local food industry permitting fees.
Discussion:
Sonoma County Animal Services Fees
Sonoma County Animal Services (SCAS) provides sheltering and field services to areas within their jurisdiction, including unincorporated areas of the County and the City of Santa Rosa. SCAS is also responsible for rabies control for the entire County. SCAS’s service area is comprised of approximately 1,575 square miles with nearly 500,000 residents and includes an animal shelter that serves nearly 2,500 animals annually. The Department is proposing fee revisions for all fees. The Department performs a mix of fee-funded work related to services provided to individuals and public benefit work, such as rabies control, that is not recoverable by fees.
The proposed SCAS fees for fiscal year (FY) 2023-2024 are based on estimated costs and a fee study completed in 2023 by Wohlford Consulting (Attachment 9). The study reviewed annual volumes of each fee, the amount of time spent by staff on each fee activity, the annual cost of each staff member, and the unit’s overhead costs. Hourly rates were developed from this information and used to calculate actual costs and recommended fees. The previous fee study was conducted in the FY 2019-20 and presented to the Board during the consolidated Fee Hearing on March 22, 2022 with the authorization of an additional subsidy in the amount of $233,830, above the portion already funded out of General Fund revenues. The 2023 Fee Study was conducted as a result of when the fees were presented last year some costs and units of service were outdated.
Changes in fees range from 71% to 981% and generally reflect what it costs Sonoma County Animal Services to deliver each service. Research from neighboring and similar-sized jurisdictions also helped inform the fee rates. While full cost recovery is the goal, it is currently not achievable with community affordability considerations. Fees will be reviewed each year and adjusted accordingly as business costs increase. Labor agreements recently approved by the Board with County staff were taken into consideration in the develop of the fee rates. The following fees have been reduced - dog licensing fees, through our partnership with DocuPet; and vaccination fees, due to contractual cost saving and capturing accurate costs. Fees for potentially dangerous and vicious dog designations have substantially increased to reflect a more accurate consideration of animal control officer time for these cases. The proposed fee schedule (Attachment 2) includes estimated revenue based upon the proposed fees to be $1,134,837 which is $54,071 less than would be received under the current schedule. Projected revenue from dog license fees for altered/unaltered decreased by $282,716 due to the proposed fee reduction from $28.42 to $16 based upon the efficiencies built with contracting with DocuPet collecting license fees, which is only partially offset by increases to other fee revenues.
Fees were set to optimize revenue collection while also advancing Board goals with respect to equity and maintaining the incentives for residents to use animal services and pay fees such as licensing or adoption.
Based on the information from the 2023 fee study, cost recovery is weighed against affordability and what SCAS partners are charging. Maintaining market affordability and encouraging animal owner compliance with applicable laws will supersede full-cost recovery in setting some of the fees proposed. In addition, some costs are nonrecoverable, such as the time spent by Animal Control Officers in patrolling the County and checking on compliance with code in public spaces. This necessitates an adjustment to the subsidy for Animal Services allocated by the Board.
SCAS fees are broken down into five categories Adoptions, Board/Impound, Licensing, Spay/Neuter and Rabies Control. To ensure animals move through the system quickly and reach a positive outcome such as adoption or transfer, roadblocks must be removed and lesser fee amounts must be considered. If fees are not seen as reasonable and affordable, people will not adopt, reclaim their lost pets, or get them spayed/neutered, which would lead to SCAS warehousing animals for extended periods, which would increase costs and decrease positive outcomes for animals and the community. By subsidizing these fees, more animals will be reunited with their owners, find new homes, and SCAS will be able to continue its life-saving work for the community.
For these reasons, the Department recommends that the Board adopts fees that charge less than 100% cost recovery in some areas of work. Lowering fees to encourage adoption, neuter/spaying, and licensing would positively increase public participation in these programs and support SCAS’s goal of shortening stays and getting animals into supportive homes more quickly. SCAS fees request therefore involves a request for ongoing support to subsidize fees in these areas to limit potential harm to the community and maintain the program’s adoption and pet recovery appeal.
While the estimated revenue needed for full-cost recovery is $2,429,536, the proposed fees will not recover all the costs incurred by SCAS. The General Fund and the City of Santa Rosa contract will cover the gap between the estimated revenue collected from fees and the full cost recovery amount for the services provided. The Animal Services program is set to utilize $2.8 million from the General Fund in the FY 2023-24 Adopted Budget including the direct subsidy of $233,830 allocated during the FY 2022-23 Fee Hearings. Santa Rosa is projected to be billed $3.1 million in FY 2023-24 for services provided within city limits. The City of Santa Rosa revenues are projected to increase by $318,740 for FY 2023-2024, based on the proposed charges and their share of service calls. This subsidy helps to offset unrecoverable costs, such as:
• Animal Control Officer patrol, investigation, report-writing, and travel times
• Animal Control Officer assistance to other agencies, such as the Sherriff’s Office and Regional Parks during arrests and clearing the Joe Rodota Trail
• The vaccination and boarding of unclaimed animals
• Veterinary care for unclaimed animals
• Providing care to animals owned by people that are
o experiencing homelessness
o behavioral health clients
o hospitalized
• Losses from uncollected fees
The total subsidy proposed for FY 2023-24 is $287,901 of which $54,071 is a new request for FY 2023-24 Contingencies. The Department and CAO’s office will monitor the units of services being processed and an ongoing allocation will be requested during the FY 2024-25 Budget Process. Fees included in the subsidy are adoptions, impound, spay/neuter programs, and rabies control. Fees that are not included in the subsidy includes board, which varies annually and is difficult to determine the number of units annually, some new fees, and fees where there is no current customer base. For the new fees introduced by this package, SCAS will track and monitor new services and actual costs to provide the service, along with community demand. All fee changes comply with Proposition 26 requirements.
Environmental Health and Safety Fees
Environmental Health and Safety programs promote health and quality of life by preventing or controlling those diseases that result from interactions between people and the places they live, work, and play. Environmental Health programs employ several strategies to prevent health hazards including education, trend surveillance and analysis, routine inspections, response to citizen tips, sampling and posting, and enforcement where necessary. Environmental Health charges fees to recover its costs to provide services to members of the public who receive permits and benefit from Environmental Health’s services. By implementing reasonable fees, Environmental Health ensures the sustainability of programs, supports staff and resources, and creates healthier living environments.
For Environmental Health services, the fee schedule (Attachment 5) recommends fee adjustments intend to recover increased operational costs, which are expected to increase by 8.0 percent from FY 2022-2023. Therefore, most of this section’s fees are increasing approximately by 8.0 percent with other fees reducing, some being restructured, and others being deleted. Fiscal Year 2023-2024 budgeted fees for licenses/permits is $6,360,330, estimated revenues based upon proposed fee change and proposed units of service is $7,506,361 this is an estimated revenue increase of $1,001,428. Actual revenues in excess of budgeted revenues received during the fiscal year will offset budgeted use of fund balance.
Fee Methodology
In 2023, the Department of Health Services engaged Wohlford Consulting to conduct a comprehensive analysis of user fees. The study utilized a unit cost build-up methodology to establish the full cost of fee activities, considering factors like staff time and associated costs. By projecting annual service volume and revenue at full cost levels, the study ensured accuracy in fee determination. Labor agreements recently approved by the Board with County staff were taken into consideration in the develop of the fee rates.
The hourly rate is the primary factor in calculating Environmental Health service costs; which differs from the annual or monthly billing rate for the fee on the schedule. For FY 2023-2024, the full cost recovery hourly rate increased by 8.26 percent to $236 from the previous fiscal year's rate of $218. These adjustments, along with the fee study results and proposed unit changes, are estimated to generate approximately 17 percent ($1,001,428) more revenue compared to FY 2022-2023.
The proposed adjustments in hourly rates and revenue will support the Department's financial sustainability while ensuring the continued delivery of high-quality Environmental Health services.
Milk and Dairy Program
Sonoma County Environmental Health serves as the Approved Milk Inspection Service (AMIS) for both Sonoma and Marin Counties under the California Department of Food and Agriculture (CDFA). The dairy industry has faced economic challenges, resulting in a decline from 144 dairies in 2000 to the current 77 operational dairies, with 55 located in Sonoma County (71.4%) and 22 (28.6%) in Marin County.
Effective July 1, 2023, the CDFA increased the maximum allowable limit to $249 per month ($2,988 per year), marking a 24 percent rise from the existing fee. Additionally, the State mandates a 15 percent remittance fee amounting to $37.35 per month, previously included in the monthly rates. Separating this fee would lead to an overall dairy rate increase of 43 percent to $286.35 per month.
Based on the recent fee study, the full cost recovery for the dairy program is calculated at $408.66 per month, a substantial increase from the current rate of $200.70 per month. (a 204% increase) and substantially higher than the state allowed rate. For FY 2023-2024, the dairy program is projected to face a funding gap of $177,093 with the proposed fee amount located on the attached schedule. Currently, the dairy program in EHS receives a general fund contribution from Sonoma and Marin Counties totaling $66,503 reducing the gap to $110,590. Due to the closure of several dairies, the current general fund contribution no longer accurately reflects the current situation, with Sonoma County contributing $53,587 (or 81% of revenues when it has 71% of the dairies) and Marin County contributing $12,916 (19% of revenues when it has almost 29% of the dairies covered by the program).
Recognizing the value of supporting the local dairy industry, DHS proposes to appropriately allocate the general fund contribution between Sonoma and Marin Counties. Additionally, DHS recommends an 8 percent increase in dairy fees to $217.00 per month ($2,604 per year). To bridge the resulting funding gap from this reduced fee, DHS seeks an additional subsidy of $72,908 from Sonoma County, bringing the total subsidy to $126,495. DHS will request that Marin County proportionately match this subsidy with an additional $37,682, resulting in a total subsidy from Marin County of $50,598.
Food Operator Permit Cost Recovery
The current full-cost recovery model poses challenges for emerging entrepreneurs venturing into the food industry for the first time. The substantial fees associated with full cost recovery can be prohibitive, potentially discouraging these operators from pursuing their new businesses. Consequently, some may choose to operate without the necessary permits, thereby exposing themselves to the risk of larger fines, penalties, and enforcement consequences and potentially jeopardizing public health.
In the upcoming FY 2023-2024, several proposed full cost recovery fees for smaller operations are anticipated to impose significant burdens, with substantial increases of up to 240 percent. This may create barriers for operators entering the market, detracting from opportunities, and hindering efforts to foster economic inclusion. Recognizing the limitations of the full cost recovery model, the Department is taking a measured approach by proposing increases short of full cost recovery for many fees and seeking a subsidy of $46,883 to mitigate the impact on small local operators by providing a waiver or reduced permit fees.
Permit fees subject to potential reduced fees or waivers can be found on Attachment 5 on the Fee Waiver Eligible tab. The proposed adjustments aim to strike a balance, ensuring fair fees while supporting the growth of small, locally owned businesses. The reduced fee structure would specifically benefit enterprises with gross revenues less than $100,000 per year that are locally owned, providing them with opportunities for flexible payment plans. Staff recommend a subsidy funded with contingencies in FY 2023-24 and with ongoing General Fund allocation in the FY 2024-25 Budget Development process. By adopting this approach, DHS seeks to cultivate an environment that encourages the success and vitality of our local small businesses, while acknowledging the importance of balancing cost recovery considerations.
Environmental Health Staffing
In 2023, the Department of Health Services engaged Wohlford Consulting to conduct an objective analysis of the full costs incurred by the Environmental Health Section for various permitting and service activities for which the County charges user fees. In order to ensure accuracy and establish a clear nexus between the cost of those services and the fees, the study utilized a unit cost build-up methodology to identify the full cost for individual fee activities, based upon staff time and associated direct and indirect costs. By projecting an estimated average annual volume for each fee activity, the study also identified the staffing hours required to deliver those services.
The staff utilization analysis from the fee study showed an overutilization of staff in the Environmental Health Specialist Trainee/I/II classifications by 2.64 FTE, and an underutilization of .30 FTE in the Dairy Inspector classification beyond what would be required to provide services at a level that meets professional standards and provides a benefit to the community. Based on this analysis, Health Services is proposing that staffing better reflect current needs and is requesting the addition of 2.5 FTE Environmental Health Specialist II positions be added to the FY 2023-2024 budget and a layoff of a 0.50 FTE Dairy inspector position. These staffing changes in the Environmental Health budget are necessary to carry out the mandated professional services in a manner that is efficient and effective. The additional FTEs were included in the fee study and are include in the updated hourly rate.
Authorization to Administer Layoff Proceedings
As a result of a lack of work due to the declining number of local dairies, the Department of Health Services and Human Resources are requesting authorization to begin layoff proceedings for one 0.50 FTE Dairy Inspector employee, as well as requesting approval to reduce the Department of Health Services’ position allocations by 0.50 FTE Dairy Inspector position. The reduction of the 0.50 FTE Dairy Inspector position reduces the Dairy Inspector position allocation to 1.0 FTE, effective October 17, 2023.
If approved, the Board’s authorization will result in the Department, in coordination with the Human Resources Department, developing a timeline, creating and auditing a seniority list and issuing a layoff notice, and engaging ESC in the meet and confer process.
Strategic Plan:
N/A
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
No
Prior Board Actions:
On April 19, 2022 the Board adopted an ordinance titled “An Ordinance of the Board of Supervisors of the County of Sonoma, State of California, Adopting New Fees and Adjusting Fees Effective July 1, 2022 for the Sonoma County Department of Health Services Public Health Laboratory and Animal Services.”
On March 22, 2022 the Board A) adopted a resolution reading the title and waiving further reading of a proposed ordinance titled “An Ordinance of the Board of Supervisors of the County of Sonoma, State of California, Adopting New Fees and Adjusting Fees Effective July 1, 2022 for the Sonoma County Department of Health Services Public Health Laboratory and Animal Services” and B) increased the ongoing contribution by $233,830 for Animal Services in Fiscal Year 2022-23 to fees for certain client and animal services determined to have a negative impact to residents and/or the program if fees are increased significantly.
On March 24, 2020, the Board adopted a resolution establishing new and amended fees to recover the reasonable cost of providing services including fees associated with Environmental Health, Public Health Laboratory, and Tobacco Retailer Licensing for the Department of Health Services effective July 1, 2020.
On May 14, 2019, the Board adopted a resolution establishing new and amended fees to recover the reasonable cost of providing services including fees associated with Environmental Health, Public Health Laboratory, and Sonoma County Animal Services for the Department of Health Services effective July 1, 2019.
Fiscal Summary
|
Expenditures |
FY 23-24 Adopted |
FY 24-25 Projected |
FY 25-26 Projected |
|
Budgeted Expenses |
$14,534,179 |
|
|
|
Additional Appropriation Requested |
$173,862 |
|
|
|
Total Expenditures |
$14,708,041 |
0 |
0 |
|
Funding Sources |
|
|
|
|
General Fund/WA GF |
$3,031,268 |
|
|
|
State/Federal |
$25,996 |
|
|
|
Fees/Other |
$10,857,674 |
|
|
|
Use of Fund Balance |
$619,241 |
|
|
|
Contingencies |
$173,862 |
|
|
|
Total Sources |
$14,708,041 |
0 |
0 |
Narrative Explanation of Fiscal Impacts:
Sonoma County Animal Services
$7,175,349 is the total expenditures for Animal Services in FY 2023-2024 funded with $1.1 million in fees, $3.1 million from the City of Santa Rosa, $2.8 million from the General Fund, and $270,00 in miscellaneous revenue. Fee Increases and any contingency adjustments will be effective FY 2023-2024 on October 1, 2023. The Department is requesting the use of FY 2023-2024 Contingencies of $54,071 for a subsidy to Animal Services as outlined in Attachment 2. Animal Services will provide a report to the CAO in May 2023 supporting the need of contingencies.
Environmental Health and Safety
Environmental Health projects expenditures of $7,358,830 for services related to the fees in FY 2023-2024 and covered with $620,00 of fund balance, $6,360,330 in fees/permit revenue, and $380,000 in other revenue. Fee increases and any contingency adjustments will be effective FY 2023-2024 on August 1, 2023. The baseline net effect of fee changes to Environmental Health is estimated to be approximately $1,051,593. The Department is requesting the use of FY 2023-2024 Contingencies for a subsidy for EH Dairy Fees in the amount of $72,908 in addition to Food Safety permits as outlined in Attachment 5 of $46,883. Total FY 2023-2024 contingency requested for EH is $119,791.
The Board set aside $5 million of contingencies during the FY 2023-2024 Budget Hearings with none of it being allocated yet to date. Appropriations to transfer the contingencies to the department will be included in first quarter Consolidated Budget Adjustments.
|
Staffing Impacts: |
|
|
|
|
Position Title (Payroll Classification) |
Monthly Salary Range (A-I Step) |
Additions (Number) |
Deletions (Number) |
|
Environmental Health Specialist II |
$7,774.52-$9,449.44 |
2.5 |
0.0 |
|
Dairy Inspector |
$7,920.62-$9,628.58 |
0.0 |
0.5 |
Narrative Explanation of Staffing Impacts (If Required):
Environmental Health Specialist II - If approved, the Department will work with the Human Resources Department to fill the new positions.
Dairy Inspector - If approved, the Department will work with the Human Resources Department to develop a timeline, create and audit a seniority list, issue a layoff notice, and engage ESC in the meet and confer process.
Attachments:
Attachment 1 - Resolution (SCAS Fees)
Attachment 2 - SCAS Fee Chart
Attachment 3 - Ordinance (SCAS Fees)
Attachment 4 - Resolution (Environmental Health Fees)
Attachment 5 - Environmental Health Fee Chart
Attachment 6 - Resolution (Personnel)
Attachment 7 - Pre-Adoption Ordinance Summary and Public Hearing Notice
Attachment 8 - Animal Services Fee Study Report
Attachment 9 - Environmental Health Fee Study Report
Related Items “On File” with the Clerk of the Board:
None