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CITY OF SAN LEA1~'DRO MEMORANDLTl~%I Date: March 28, 2006 To: City of San Leandro Finance Committee Via: Jesse Baloca, Finance Directo From: -Carla Rodriguez, Deputy Finance Director ~`-~ Snbject: 911 FEE ANN-UAL REPORTING RECOD'IlIIENDATION Staffreconunends that the City increase the Emergency Comniunieation System Access Fee (911 Fee) by the rate of CPI, which is 2.9% or six cents per single access line. Effective July 1, 2006, the slight increase ~~ill reconcile the difference betv~~een eligible operating costs and projected revenue at the current rate. The proposal to increase the 911 fee v~~ill result in a $2.06 single access 1i11e fee from $2.00, a $14.41 ti-ui~k line fee from $14.00, and aS50.44 supertrunli lizle fee from $49.00. Staff also proposes that the City amend its current agreement for ITCJT audit services with MBIA Muniseivices Company (MMC), to include audit services of the City's 911 fee revenues. BACKGROUND ~,ND AI~rALYSIS hnplementation of the 911 Fee was approved by the City Council in order to address budget shortfall issues in FY 2004-05. The 911 Fee was implemented on Deceiuber 1, 2004 and generated $1.182 million in FY 2004-05. Currently, the 911 Fee is projected to generate $2.175 million and $2.41 million in FY's 2005-06 and 2006-07, respectively. Eligible Operating Costs Eligible costs are the portion of operating expenses attributed to the emergency communication system operations, and which "telephone subscribers" (subscribers) are required to pay the fee imposed, Ineligible costs are the portion of expenses for availing 911 services to subscribers that have exempt status. Subscribers that pay the 911 fee cannot be over burdened by the additional expense of providing ser~-ices to those ~~ith exempt lines. As a result, a cost recovery ratio is determined ~~-hen developing the fee assessments. Based on January 2006 information, the estimated total phone lilies in the City is approximately 108,953. Of the total phone lines, it is estimated that 97,937, or 90°io, are considered eligible for the. 911 fee. Tlus is an increase of 0.5% from prior year estimate of 94,000 eligible phone lines. The Attachment shoves a breakdown of the line count by phone line type.