ADMINISTRATIVE REPORT Date: October 13, 1995 TO: Vancouver City Council FROM: Director of Finance and the Director of Permits and Licenses SUBJECT: 1996 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. B. THAT the Director of Legal Services be instructed to amend the Licences and Pound By-Laws accordingly, to be effective January 1, 1996. GENERAL MANAGERS COMMENTS The General Managers of Corporate and Community Services RECOMMEND approval of A and B above. COUNCIL POLICY Council, on January 17, 1991, resolved: "THAT every department/Board review services for which fees are now charged to ensure that fees are recovering the full cost of the services to the City, or are equivalent to competitive charges where the fee is of a market nature, rather than for cost recovery." PURPOSE This report details recommendations for the 1996 Pound fees. It is proposed to increase Pound fees so that anticipated overall revenues at the Pound will rise by approximately 2% in 1996. At the recommendation of the Director of Permits and Licenses and the Director of Finance, dog licence fees will not be increased in 1996. Impoundment and other fees will be increased to levels proposed by the Pound to more appropriately allocate costs to those dog owners that create the need for enforcement. DISCUSSION It is Council policy that the Pound operation be self-supporting. Despite increased licence and impoundment fees, the Pound has failed to reach break-even in recent years, as Table 1 illustrates. From a high of 96% cost recovery in 1985, the level of cost recovery declined to 69% in 1991. Recently, in light of stable revenues and expenditures, Pound revenues provide for approximately 76% cost recovery. Table 1: Pound Operations Revenues and Expenditures Revenues Expenditures Recovery 1987 $ 516,762 $ 550,718 94% 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% % change 1987-1994 3% 20% -- 1995 (budget) 535,000 699,100 76% In response to a steady 2% annual decline in the number of dog licences sold in recent years, a number of initiatives have been investigated to encourage dog owners to license pets and to generate higher revenues and thus enhance cost recovery at the Pound. Until 1992, dog licence fees had been increased in line with expenditure inflation at the Pound, however, a steady decline in the number of licences sold has more than offset the impact of these fee increases. In 1992, licence fees were held at 1991 levels. In 1994, Council made additional changes, introducing a pre-payment discount incentive of $10 to those dog owners who purchase licences before March 1. Council held licence and impoundment fees steady in 1995 and it is expected that licence sales will exceed 1994 levels by a small amount. Currently, a committee chaired by the City Clerk and comprised of City Councillors, Parks Board Commissioners, and Pound and Permits and Licenses staff have been meeting to address enforcement issues related to the Pound. This group has been reviewing dog licence fees, pound staffing, doggie parks and other related issues. The goal is to develop ideas that will make the Pound enforcement more effective and to minimize the negative impacts some dogs are creating in the City parks and on the beaches. It is anticipated that some recommendations for change will be made in 1996 which may include future directions for setting the dog licence fees. Pending the outcome of this process, it is recommended that licence fees not be increased in 1996, with the aim of encouraging more dog owners to purchase dog licences. Cost recovery will be enhanced through fee increases to impoundment and other enforcement related fees. LOWER MAINLAND POUND OPERATIONS Outside the City of Vancouver, licence and impoundment fees within the Lower Mainland have increased only minimally in recent years, and range from $10 to $20. All municipalities have favoured a system of high impoundment fees to shift the cost to those who create the need for enforcement. It should be noted that 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. A 1995 comparison of Lower Mainland operations is included in Appendix II. Some municipalities have taken the position that an increase in dog licence fees will result in a decrease of dog licences sold. However, West Vancouver, Surrey, New Westminster, and Richmond have not increased fees over the last three years with little change in dog licences sold, as Table 2 illustrates. Discussions with various municipal representatives indicates that the number of dog licences sold relates closely to various enforcement and licensing initiatives such as sending out notices to individuals that had a dog licensed in the previous year. Table 2: Change in Dog Licences Sold Where Municipality Did Not Increase Licence Fee 1992 / 1994 Dog Licences Sold 1992 1994 New Westminster 1,800 1,912 (+6%) Richmond 3,517 3,708 (+5%) Surrey 9,000 8,020 (-11%) West Vancouver 2,473 2,222 (-11%) 1996 POUND FEES At present, the deficit in Pound operation is about $165,000, equal to 25% of total expenditures. Reducing this shortfall closer to Council policy of cost recovery would require either significant fee increases or a reduction in Pound operating costs. The Director of Permits and Licenses does not support expenditure reduction as this would mean staffing cuts and a consequent deterioration of enforcement services. Table 3 illustrates the distribution of revenues among the various sources related to Pound operations in 1994. It is clear that revenue from licence fees is the most significant revenue source. Approximately 62% of dog licence sales in 1994 were sold before March 1st, at a $10 discount. Table 3: 1994 Pound Operations Sources of Revenue Dog Licences 79 % Impoundment Fees 17 % Other (i.e., cremations) 4 % Total 100% Based on the distribution of revenue sources, it is apparent that only significant increases in licence fees may generate sufficient additional revenues to reduce the current shortfall position. The Directors of Finance and Permits and Licences recognize that licence fees should not be perceived by dog owners as a deterrant to purchasing a licence. It is recommended that the 1996 dog licence fees not be increased in 1996, pending the findings and recommendations of the review committee mentioned earlier. At the recommendation of the Pound, impoundment and other service related fees will be increased, recognizing that the fees were last adjusted in 1994. The applicable licence and impoundment fees are outlined in Table 4 and detailed in Appendix I. Table 4: Pound Operations Current and 1996 Proposed Fees Current 1996 Proposed Licence Fees: Male/Female $44 $44 After March 1st $54 $54 Spayed/Neutered $24 $24 After March 1st $34 $34 Replacement Tag $5 $5 Impoundment Fees: Unlicenced dog $119 $126 (plus licence fee) Licenced dog: First $57 $65 Second $80 $90 Additional $119 $125 Vicious dog: $237 $250 The fees proposed in this report will increase revenues by approximately 2%. The overall impact of the proposed fee increases on Pound operations is presented in Table 5. Table 5 does not take into consideration the possibility that more dog licences may be sold in 1996, as a result of not increasing dog licence fees. Table 5: 1996 Pound Operations Impact of Proposed Fee Increases 1995 1996 Current Proposed Revenues $ 535,000 $ 545,000 Expenditures* 699,100 703,784 Deficit (164,100) (158,784) Cost Recovery 76% 77% * Excludes any provision for Department or City overhead costs. CONCLUSION Based on anticipated increases in Pound operating costs in 1996, impoundment and other fees should be increased to raise an additional 2% in revenue at the Pound. The schedule for 1996 Pound fees are detailed in Appendix I. * * * * *