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August 30, 1989 To: Bob Hammitt, Maintenance Director From: J.R. Medlin, Maintenance Support Manager Subject: Costs for Vegetation Abatement The City Hearings Official (James Spickerman) recently returned a ruling on the first ever appeal to an abatement of vegetation performed upon a developed property. (ATTACHED) While the ruling did not go totally against us, it did point out some problem with our method of calculating charges and thus resulted in the abatement charges being lowered from $455 to $229. In his findings Mr. Spickerman could not understand or follow the logic of our practice of charging $75 for the first manhour and $40 for each additional manhour used. I must admit that I'm not surprised, we have suspected from the time the program transferred into Maintenance this past practice would not stand up to a formal challenge. Since we are using this formula on both our developed and our undeveloped parcel abatement programs, this ruling is of substantial concern to US. Originally back in 1985 -86, this charge structure was derived by Finance from statistical information upon a summer season of mowing upon undeveloped proper- ties. An estimate of the total program cost was made and the subsequent $75 an hour figure was computed to attain program recovery. Our average cost for a contractor was approximately $22 hour, leaving $53 as recovery for internal city costs. While this $53 was probably a fair estimate of our internal costs for a common abatement upon an undeveloped lot, it did not take into account that our overhead costs do not raise significantly for additional hours of cutting by the contractor. This was the reason it was arbitrarily decided to lower the charge for additional hours to $40 per hour. However, there has been no detailed analysis of actual abatement costs performed to substantiate this lowering of cost. When we took the Vegetation Management Program into Maintenance we started performing abatements on developed properties. This was a practice strictly avoided prior to the program's move. Since the abatement on a developed parcel is considerable more city time intensive than for an undeveloped parcel, and due to lack of information to determine a better one, we decided it safe to use the same billing formula used for undeveloped parcels. This policy has been in place uncontested for 18 months. While I feel Mr. Spickerman's ruling casts doubt on both program's billing structure, I do not feel it mandatory or beneficial to change the policy on the undeveloped parcel program in the middle of the mowing season. Especially since the undeveloped parcel program was not specifically challenged. This would be better handled by a joint review conducted by ourselves and Finance this winter. The developed program on the other hand was specifically chal- lenged and needs to be changed now.