In Case Study, Cost Allocation Plans

Seaside is a wonderful and diverse community, just across the bay from Monterey. It faced tremendous fiscal challenges over the past years and had to make drastic service and staffing cuts to remain solvent.

The drastic cuts had taken a toll on the community. For many years, the City felt obligated to ignore their out-of-date fee structure and cost recovery mechanisms, to its substantial detriment.

When it was time to address the issue, our project team completed a robust Cost Allocation Plan and User Fee Study for the City. The process first began with an in-depth policy discussion of the City’s fees and its overall cost recovery process. We uncovered that the City was essentially losing over $4MM a year, just by not addressing their fees. The fees included in the analysis included: administration/ governmental, building and safety, engineering, fire prevention, land development, planning and land use, and police. The key consulting tasks included development of a deliverable cost of service model justifying fully-burdened hourly rates and activity/service unit costs, a master fee schedule identifying the maximum fee amount justified, documentation of cost recovery and pricing objectives, and market comparison of all fees. In addition, we provided the City with proactive recommendations for a number of new revenue options.

After a lot of discussion and community outreach, the City Council unanimously adopted a new master fee schedule which resulted in millions of dollars of revenue recapture.


For more information, please contact: Nicole Kissam, Financial Consulting Group – Cost Allocation Group Director, nkissam@nbsgov.com.

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