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TO: Standing Committee on City Services and Budgets
Director of Permits and Licenses
THAT Council receive this report for information, noting that dog license and impoundment fees will not be increased in 1998 to allow for a full review of Pound operations and recommendations for Council’s consideration on how the Pound can improve cost recovery in 1999.
The General Manager of Community Services is of the opinion that full cost recovery at the Pound cannot be achieved through fee increases. It would be necessary to impose a 30 percent increase across the board to reach cost recovery excluding any provision for city overhead, assuming that dog license sales remained constant, to reach cost recovery. However, such an increase would likely be seen by some of the dog-owning public as a prohibitive cost to pet ownership and may result in a reduced number of license sales. It is proposed that fees not be changed for 1998 and that a full review of Pound operations be undertaken in time for the 1999 fee review.
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.
The purpose of this report is to summarize key financial and operational data for the Pound, proposing that fees under the License and Pound By-laws not be increased for 1998 pending a full review of Pound operations.
While it is Council policy that the Pound operation be self-supporting, the Pound has failed to reach break-even in recent years. Table 1 summarizes revenues and expenditures since 1991.
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Revenues Expenditures Recovery
1997 (budget) 575,000 746,800 77
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The current deficit would require that fees be increased on average 30 percent, with no reduction in dog license sales, to achieve cost recovery. This increase does not require that the Pound contribute toward city support services and overhead costs. However, since 1994 the Director of Finance and the Director of Permits & Licenses have recommended that there be no change in dog license fees to ensure that fees would:
·not be so high as to be a deterrent for dog owners to license their pets, and
•be similar to other municipalities (see Appendix I).
A review of operating data of the Pound (see Appendix II) would indicate that stabilizing dog license fees has had a positive effect on the sale of dog licenses. Moreover, in 1995 and 1996 there have been significant increases (10 - 20 percent) in impoundment fees in an attempt to shift 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 continued operating shortfall it is unlikely that the Pound will reach cost recovery through increases in dog license and impoundment fees. However, the General Manager of Community Services does not support expenditure reduction as this would mean staffing cuts and a consequent deterioration of enforcement services.
LOWER MAINLAND POUND OPERATIONS
Dog license fees within the Lower Mainland have increased nominally in recent years, and range from $10 to $59. The City has some of the highest fees in the region with dog licenses costing between $24 - $54 per license. There are two classifications under which dog licenses are sold, open or altered (spayed/neutered) dogs. Dog license fees for altered dogs are substantially lower than for open dogs in an effort to encourage the control of the dog population. Most municipalities keep increases to dog license fees to the rate of inflation or at a rate that does not discourage licensing.
Discussions with various municipal representatives indicates that the number of dog licenses sold relates closely to enforcement and communication initiatives such as sending out notices to individuals that had a dog licensed in the previous year.
It is expected that the deficit in Pound operations for 1997 will be approximately $171,800, up from $161,000 in 1996. While costs have outpaced revenues there has been a steady increase in the number of dog licenses sold. The sale of dog licenses has increased by over 900 licenses in the last two years and now accounts for 80% of revenues at the Pound. Overall, revenues have increased modestly, up by 14% since 1993.
Maintaining the fee schedule at the 1997 rates could erode the Pound’s cost recovery from 77 percent in 1997 to 76 percent in 1998, assuming dog license sales remained constant. However, by looking at the issue of cost recovery in the context of both the Pound’s operations and mandate, including consultation with initiatives such as the Domestic Animals Task Force, staff will be in a better position to recommend appropriate fee levels to Council for the 1999 review.
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Table 3: 1998 Pound Operations
Impact of Proposed Fee Increases
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* Excludes any provision for Department or City overhead costs.
In order to review Pound operations, and in consideration of the regional market price for dog licenses and impoundment fees, it is proposed that the current fees not be increased in 1998.
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