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some risk and no value in continuing to rely on -a charge <br />schedule that you know is invalid. <br />1.1 What is needed to support the City's charges. <br />The 1985 memorandum from Mona Mellot provides a good base <br />point to consider all the factors which must go into <br />determining the. City's charges. It also provides most of <br />the figures necessary to justify the rate structure that <br />was adopted. What it fails to do, however, and what the <br />April 22, 1985 memorandum also fails to do is to establish <br />the process whereby the figure of $75 per hour was chosen. <br />As long as this omission continues there can be no <br />justification for the $75 per hour figure, let alone the <br />subsequent changes to a sliding scale of $75/$45 and the <br />additional changes of targeting developed lots and using <br />property liens to collect the charges. <br />1.2 Recovering the City's costs by an hourly surcharge. <br />The fact that contractor's charge is an hourly charge <br />may be responsible for the earlier decision to base all <br />other charges on this hourly rate. This connection should <br />be abandoned. The City's costs and administrative overhead <br />are not based on the same hourly rate. Therefore, the City <br />should either calculate its own separate hourly rate, or <br />merely add a fixed figure to the contractor's total charge. <br />Tying the apples of the contractor's charge and the oranges <br />of the City's charges together will require a great deal of <br />documentation and is probably not worth the time saved. <br />The effect of a $75 charge for the first hour and then a <br />$45 charge for the remaining hours is to prorate the City's <br />costs according to the size of the job performed by the <br />contractor. If there are any City costs which are related <br />to the size of the job, this scale above the contractor's <br />charge makes sense. If, however, the City's costs are not <br />related to the size of the job, then as long as the charges <br />are tied to the hourly rate and change over time, they are <br />likely to be found unreasonable. <br />1.3 Making the connection between costs and rates. <br />The largest failing of the 1985 memos is that there was no <br />connection made between the figures showing costs and the <br />determination of rates. The actual City costs for <br />personnel that you have provided will serve as the <br />justification for imposing these as charges. The necessary <br />next step is a simple statement that it is necessary to <br />impose these costs to recover them for the City. <br />2. Components of the City's cost. The figures that you <br />provided reflect a major component of the City's costs in <br />enforcement. The simple administrative finding that it is <br />necessary to impose these costs on each property owner <br />2-- MEMORANDUM <br />