Bellaire City Council approved in a 5-1 vote on Nov. 2 to approve the study and plan, with Council Member Jim Hotze voting against. The fee study will focus on ensuring fees are set at the proper levels, while the cost allocation plan will focus on ensuring the annual overhead transfer from the city’s enterprise fund to the general fund is set at the proper level.
The council discussed and approved the idea in December 2019 about having the city undergo such a study, and on March 11, former City Manager Paul Hofmann signed a contract with Matrix Consulting Group after a request for proposals. The council next saw a proposal for the study Aug. 31 during a fiscal year 2020-21 budget workshop, when it requested the item return for discussion at a later date.
The total cost for the four-month study will be about $35,000—already included in the FY 2020-21 budget after it was carried over from FY 2019-20—and will come as a multipage report when completed.
The user fee study covers several areas, including a catalog of existing and potential fees for service, time estimates for each service provided, calculations of fully burdened hourly rates, and fee recommendations and implementation options.
Council Member Nathan Wesely expressed initial resistance against the city paying an outside firm for a study and cost allocation plan.
“We have a finance and accounting department that should be able to do 90% of this analysis, if not all of it,” he said.
The city’s finance director, Terrence Beaman, disagreed.
“A fee study is a very labor-intensive project,” Beaman said. “Even using a consultant it would take four months to complete such a study, and that’s with subject matter experts that would devote most of their time to this project. The Finance Department just doesn’t have the resources to maintain the day-to-day operations to work as efficiently as we prefer to and then to also create and document such a study.”
Wesley subsequently put forward a motion to approve the study and allocation plan despite having reservations.
Mayor Andrew Friedberg, who was part of the council in December 2019 that approved moving forward with the idea of a study, expressed support for the study, touting “a number of internal benefits” for the city.
“The reason most compelling to me of all is that it’s inherent in any municipal fee structure that anytime a service is not being completely paid for by user fees, that necessarily means the taxpayer—or the ratepayer as the case may be on the enterprise fund side—is subsidizing the rest,” Friedberg said.