Agenda Item AGENDA STAFF REPORT ASR Control 21-000034
MEETING DATE:	05/11/21
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	All Districts
SUBMITTING Agency/Department:	OC Public Works (Approved)
Department contact person(s):	Edward Frondoso (714) 245-4596
	Blaine Thomann (714) 667-4996

Subject: Approve OC Public Works Materials Laboratory Fee Schedule

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Agreement to Form

Public Hearing

3 Votes Board Majority

Budgeted: N/A

Current Year Cost: N/A

Annual Cost: N/A

Staffing Impact:

No

# of Positions:

Sole Source: N/A

Current Fiscal Year Revenue: N/A

Funding Source: See Financial Impact Section

County Audit in last 3 years: No

Prior Board Action: 10/31/2017 #36, 12/14/1993 #101, 6/20/1978 #63

RECOMMENDED ACTION(S):

1.	Find that the subject project is Statutorily Exempt from the provisions of CEQA pursuant to Section 21080(b)(8) of the Public Resources Code Section 15273 of the CEQA Guidelines as the establishment or modification, structuring, restructuring or approval of rates, tolls, fares and other charges by a public agency that are for the purpose of meeting operating expenses, including employee wage rates and fringe benefits, purchasing or leasing supplies, equipment or materials, as set forth herein.
2.	Conduct Public Hearing.
3.	Rescind Board of Supervisors Resolution No. 17-131 Materials Laboratory Testing Fee Program Resolution, effective July 1, 2021.
4.	Adopt Resolution updating the OC Public Works Materials Laboratory Fee Schedule for FY 2021-22 and FY 2022-23, find that the revenue resulting from the OC Public Works Materials Laboratory Fee Schedule will not exceed the estimated reasonable costs to provide the services and that the costs of providing these services are reasonably allocated among the fees established. Fees will be effective on July 1, 2021, for FY 2021-22 and on July 1, 2022, for FY 2022-23.

SUMMARY:

Adoption of the proposed OC Public Works Materials Laboratory Fee Schedule for multiple services will achieve full cost recovery per County of Orange accounting policy.

BACKGROUND INFORMATION:

The OC Public Works Materials Laboratory (Laboratory) is a full-service geotechnical engineering and construction materials testing facility that is certified for California Department of Transportation Testing Methods and has also received its accreditation with the American Association of State Highway Transportation Officials. The Laboratory performs quality assurance and acceptance testing of materials incorporated into roads, local drainage systems, parks and regional flood control capital improvement projects. It supports the County of Orange (County) Pavement Management Program for arterial highways, local streets and other agencies that seek the Laboratory’s assistance.

The request for approval of an updated fee schedule for Laboratory services is part of OC Public Works' ongoing effort to meet County full cost recovery requirements. Approving this updated fee schedule will ensure that OC Public Works is able to recover cost increases.

The Laboratory has become a regional center for materials testing sciences. Local agencies within the County seek technical advice. The Laboratory plays a significant role in development of regional standard specifications on materials and materials testing through its participation as a voting member of the Greenbook Committee. The Laboratory also serves as the Chair of the Surface Subcommittee and participates in several task forces.

Previous Board of Supervisors Policy Direction

Resolution No.	Date Adopted	Summary
Resolution 78-946	June 20, 1978	Directed County agencies and departments to achieve full cost recovery.
Resolution 93-1399	December 14, 1993	Established an hourly processing base rate of $69 per hour for all non-survey Environmental Management Agency Services (currently known as OC Public Works)
Resolution 17-131	October 31, 2017	Established updated fees based on 2017 operating expenses, with a flat fee per test for laboratory testing and an hourly rate for field inspection and testing.

Recommended Fee Adjustments

The current fees recover approximately 97.03 percent. The fee structure for Laboratory services will continue to be predominately flat fees, which are calculated based on employee hourly rates, overhead, burden and services and supplies cost applied to the actual time it takes to complete each test. The fee structure also offers the ability to charge for time and materials when non-standard work is requested.

OC Public Works has conducted a comparison of the recommended fees with other agencies and private laboratories that perform similar services in the Southern California region (Attachment C).

Additionally, a new fee has been added to the existing fee schedule to accommodate requests from cities for Engineering Report Services, which are charged at an hourly rate.

Compliance with Proposition 26

The proposed Laboratory fees are not a tax as defined by Article XIII C of the California Constitution. Article XIII C provides a specific exemption for "a charge imposed for a specific government service or product provided directly to the payer that is not provided to those not charged and which does not exceed the reasonable costs to the local government providing the service or product."

Compliance with CEQA: The subject activity is statutorily exempt from review under CEQA pursuant to Section 21080(b)(8) of the Public Resources Code and Section 15273 of the CEQA Guidelines as the establishment or modification of rates fees and charges, which are for the purpose of meeting operating expenses, including employee wage rates and fringe benefits, purchasing or leasing supplies, equipment or materials.

FINANCIAL IMPACT:

The proposed Laboratory fee schedule achieves full cost recovery, per County accounting policy R-3, for materials testing and geotechnical services delivered to cities and special districts through cooperative agreements. OC Public Works is currently working to renew contracts with cities and special districts. The volume of work is expected to reach FY 2013-14 levels. Based on this assumption, the projected program costs and revenue utilize FY 2013-14 test counts. Projected Costs are based on FY 2019-20 Salary and Benefits, Services and Supplies, Equipment and Overhead costs.

	Projected Program Cost	Projected Program Revenue	Cost Recovery Percentage
FY 2019-20 Current Rate	$71,185	$69,070	97.03%
FY 2021-22 Proposed Fees	$72,513	$72,494	99.97%
FY 2022-23 Proposed Fees	$74,416	$74,264	99.80%

STAFFING IMPACT:

N/A

ATTACHMENT(S):

Attachment A - Resolution
Attachment B - Materials Laboratory Testing Fee Program
Attachment C - Proposed Rates and Neighboring Comparisons
Attachment D - Fee Check List for Materials Laboratory Testing and Geotechnical Services
Attachment E - Fee Check List for Materials Laboratory Testing-Engineering Report Fee
Attachment F - Public Resources Code Section 20180(b)(8)
Attachment G - California Constitution Article XIII C