Council Begins Study of Higher Service Fees : Finances: Consultants say $12.8 million could be raised by making city programs such as library videos self-supporting.

You can rent a movie on videotape at the Pomona library for 94 cents a day, but it costs the city $2.90 to provide the service.

So, should the city raise the rate to $2.90, continue to subsidize rentals with tax monies or drop the service and send patrons to video stores?

Those are the kind of options the City Council will be weighing as it begins evaluating more than $12 million worth of fee hikes suggested by consultants who have computed the cost of every service offered by Pomona from answering false burglar alarms to replacing lost library cards.

Rick Kermer, president of Management Services Institute Inc., which conducted the study and is doing a similar report for Pasadena, said many cities--unlike private businesses--have no idea what it costs to provide services. So they often undercharge, with taxpayers subsidizing programs that benefit only a few individuals. In some cases, Kermer said, the subsidy makes sense. A city may well want to let children swim in a municipal pool for free, or at a reduced cost, for the social good. But, he said, it is much harder to justify undercharging a home builder for inspection costs.

In the study, which took about a year and cost $195,000, Kermer’s company identified $12.8 million in new revenue that could be raised by making city services self-supporting.

The council began reviewing the report this week but has set no timetable for adopting or rejecting the proposed fee increases.

Kermer, whose firm has made similar studies for 90 California cities over the past 12 years, said governments usually adopt 20% to 30% of the recommended fees without question, reject a similar percentage with little discussion and agonize over the rest.

The timing of the Pomona study, Kermer said, “is probably perfect,” because the Legislature is threatening to take revenue from cities to help balance the state budget.

City Administrator Julio Fuentes said the report gives Pomona “many options to explore. It’s a good financial tool. It will help in financial planning.”

Councilwoman Paula Lantz said that, faced with funding constraints, “all cities are going to have to evaluate the services they provide.”

Pomona not only needs to look at its costs but also should compare its costs with what other cities pay and find out whether contracting with private industry for some services might be cheaper, Lantz said. In deciding whether to raise fees, she said, the council must not only consider a service’s costs, but also what payments residents can afford.

The consultants found the largest discrepancy in the Water Department, where revenue from water sales last year totaled $10.9 million but costs, including funds for capital improvements, exceeded $15 million. The proposed solution: a phased-in rate increase.

The consultants proposed that the city charge the Los Angeles County Fair Assn. more for traffic control and other services. Last year, the city collected more than $500,000 from the fair, but that was $132,000 below the city’s costs, the report said.

The study noted that some costs cannot be recovered entirely because fees are set by the state or determined by courts. For example, the city received $210,000 in parking fine revenue last year and needed an additional $90,000 to fully cover its costs of enforcing parking regulations, the report said. The problem is that fines depend on judicial decisions beyond city control.

In some cases, levying the full cost of a service might backfire, the consultants said. For example, it costs Pomona $100 per yard sale to patrol and enforce regulations, but levying a fee that high would deter people from applying for permits for the popular weekend events. So the consultants recommended a modest fee increase, from $5 to $6.50.

Without specifying an amount, the report recommended that a research fee be levied for those who “seek special assistance beyond the usual five to 10 minutes or so of questioning and aid expected of a public servant and government office.”

The report said people seeking information about a pet project or technical advice on building matters take more than their share of staff time. The study suggested offering 15 minutes of free research each month and billing those requiring more.

Key documents should be accessible to the public at the clerk’s office or the library, the report said. But copies should be charged at $8 per set or more, depending on the cost of the document.

And how much should Pomona charge for copies of the hefty report containing all these recommendations? At least $35, the consultant suggests.