A4 ADMINISTRATIVE REPORT Date: October 8, 1996 TO: Vancouver City Council FROM: Director of Finance and Director of Permits & Licenses SUBJECT: 1997 Pound Fee Review RECOMMENDATION A. THAT Council approve adjustments to the licence, impoundment and other fees in the Licence and Pound By-laws as outlined in this report and detailed in Appendix I, including maintaining licence fees at the 1993 level. B. THAT the Director of Legal Services be instructed to amend the Licences and Pound By-laws accordingly, to be effective January 1, 1997. GENERAL MANAGERS' COMMENTS The General Managers of Community Services and Corporate Services RECOMMEND approval of A and B. COUNCIL POLICY Council, on January 17, 1991, resolved: THAT every department/board review services for which fees are now charged to ensure full cost recovery, or that fees are equivalent to competitive charges where the fee is of a market nature. PURPOSE The purpose of this report is to recommend changes to fees under the Licence and Pound By-laws which will have the effect of increasing Pound revenues by approximately 2% in 1997. DISCUSSION It is Council policy that the Pound operation be self-supporting. As described in Table 1, the Pound has failed to reach break-even in recent years. Table 1: Pound Operations Revenues and Expenditures Revenues Expenditures Recovery ($) ($) (%) 1988 520,295 551,243 94 1989 510,214 560,612 91 1990 498,884 585,275 85 1991 477,086 692,655 69 1992 500,589 647,249 77 1993 505,253 712,966 71 1994 532,339 658,217 81 1995 563,272 711,340 79 % change 1988-95 8% 29% 1996 (budget) 560,000 696,600 80 The Director of Finance and the Director of Permits & Licenses recommended in 1994 and 1995 that there be no change in dog licence fees to ensure that fees would: - not be so high as to be a deterrent for dog owners to licence their pets, and - be similar to other municipalities (see Appendix II). A review of operating data of the Pound (see Appendix III) would indicate that stabilizing dog licence fees has had a positive effect on the sale of dog licences. Moreover, increases in impoundment fees had shifted the burden of costs to those who fail to comply with the By-law. The overall effect has been higher revenue at the Pound. Given the long term deficit in operations it is unlikely that the Pound will reach cost recovery through increases in dog licence fees. However, the Director of Permits & Licences does not support expenditure reduction as this would mean staffing cuts and a consequent deterioration of enforcement services. LOWER MAINLAND POUND OPERATIONS Dog licence fees within the Lower Mainland have increased nominally in recent years, and range from $10 to $59. There are two classifications under which dog licences are sold, open or altered (spayed/neutered) dogs. Dog licence fees for altered dogs are substantially lower than for open dogs in an effort to encourage the control of the dog population (see Appendix II). Most municipalities keep increases to dog licence fees to the rate of inflation or lower. Pound operations throughout the Lower Mainland have dog licence fees that vary considerably. Typically the fee is set to try to recover the costs of operating the Pound, while not becoming prohibitive to dog owners. Labour is the most substantial operating cost. The total number of staff at each Pound ranges between 4 - 19 full and part time staff. Currently Vancouver employs 11 full-time and 8 part-time staff. Discussions with various municipal representatives indicates that the number of dog licences sold relates closely to enforcement and communication initiatives such as sending out notices to individuals that had a dog licensed in the previous year. 1997 POUND FEES It is expected that the deficit in Pound operations for 1996 will be approximately $136,000, down from $148,000 in 1995. A large reason for this has been a steady increase in the number of dog licences sold. The sale of dog licences has increased by over 900 licences in the last two years and now accounts for 80% of revenues at the Pound. Overall, revenues have increased significantly, up by 14% since 1993. The applicable licence and impoundment fees proposed for 1997 are outlined in Table 2 and detailed in Appendix I. They are similar to last year's fee increases, and impoundment fees will increase by $5 - $10 depending on whether it is a first offence or vicious dog. The fee schedule outlined in Table 2 will not bring the Pound operation to a position of cost recovery, as any attempt to raise fees to cost recovery levels will require a 25% increase on all fees. This will result in fees that are considered too high when compared to other municipalities and people's willingness or ability to pay. The negative consequence could be lower revenues. Through public education, effective notification and other efforts revenues at the Pound can be enhanced on an incremental basis with changes to impoundment fees. Table 2: Pound Operations Current and 1997 Proposed Fees License Fees Current 1997 Proposed Male/Female $44 $44 After March 1st $54 $54 Spayed/Neutered $24 $24 After March 1st $34 $34 Replacement Tag $5 $5 Table 2 (Cont'd): Pound Operations Current and 1997 Proposed Fees Impoundment Fees Current 1997 Proposed Unlicensed Dog $126 $131 (plus license fee) Licensed Dog: First $65 $70 Second $90 $100 Additional $125 $135 Vicious Dog $250 $260 The proposed fee increases will generate an additional 2% in revenues at the Pound, as shown in Table 3. Table 3: 1997 Pound Operations Impact of Proposed Fee Increases 1996 1997 Current Proposed Revenues 560,000 575,000 *Expenditures 696,600 711,000 Deficit 136,600 136,000 Cost Recovery 80% 81% * Excludes any provision for Department or City overhead costs. CONCLUSION Based on anticipated increases in Pound operating costs in 1997, impoundment and other fees should be increased to raise an additional 2% in revenue at the Pound and avoid an increase in the overall deficit for Pound operations. The schedule for 1997 Pound fees is provided for in Appendix I. * * * * *