Cost Recovery Schedule
The City updates it’s cost recovery model every 3-5 years. The basic costs of operating any business are direct labor and employee benefits, direct materials, allied indirect costs, overhead costs, and fixed asset or “depreciation” charges.
After the passage of Proposition 13, the California Taxpayers Association, the California Chamber of Commerce, the National Tax Limitation Committee and the California Association of Realtors put Proposition 4 before the voters. It was adopted by 74.3% of the voters of California on November 6, 1979, and became effective on July 1, 1980, retroactive to Fiscal Year 1978-79.
This proposition, which became Article XIIIB of the State Constitution, addressed all city revenues and established a limit on the growth of tax revenues. Also, because of Proposition 4, fee services cannot exceed the “costs reasonably borne” by the City in providing the service. If the fee exceeds the cost, the excess fee is defined to be a special tax, which Proposition 13 requires be approved by two-thirds of the voters.
The most recent cost recovery schedule presents a full accounting of the many services provided by the Westminster employees and recommends rates that would achieve 100% cost recovery. Any service provided that is not fully recouping 100% of the cost to provide that service is necessarily subsidized by the General Fund. This schedule has been approved by the City Council.