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HomeMy WebLinkAbout1998-06-22 City Council (15)~BULGET ’98- ’99 City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: POLICE DATE:JUNE 22, 1998 CMR:278:98 SUBJECT:ANIMAL SERVICES SPAY AND NEUTER FEE INFORMATION REPORT IN BRIEF This report provides the information that Council members requested at the Finance Committee meeting of May 21, 1998, regarding the history ofspay and neuter fees, how fees have affected the number of surgeries, and a comparison of the proposed fees to other non- profit organizations who provide similar services. CMR:278:98 Page 1 of 10 BACKGROUND In 1971, the City Council approved the concept of a municipally funded spay and neuter clinic. The purpose of the clinic was to provide high quality, low cost sterilization in order to reduce the number of unwanted dogs and cats that otherwise would have to be destroyed. The Spay and Neuter Clinic opened in 1973. During the approval process for the FY 1988-89 budget, Council requested a review of the Animal Services spay and neuter fees. The Council also directed staff to develop a formula for the fees that would result in 100 percent cost recovery to be achieved by the end of the first quarter of FY 1989-90. At that time, direct cost recovery was defined to include the expenses of the entire Spay and Neuter Clinic including the costs necessary to perform surgeries, to provide vaccinations and to conduct euthanasia. Direct costs did not include any interdepartmental or overhead charges. In .August 1988, Council directed staff to use revenues derived for the first three months of FY 1989-90, adjusted for seasonal variations, to project the total revenues for the entire year and to compare the information to FY 1988-89 actual expenses inflated by 4 percent. Staff has attempted to maintain 100 percent cost recovery over the years by recommending increased fees, commensurate with increased costs; increasing the number of spay and neuter surgeries, and instituting several new revenue-generating services such as weekly vaccination clinics, heartworm testing for dogs, leukemia testing for cats, prescription flea product sales, and tattooing. Since 1988-89 Council has approved fee increases in spay and neuter surgeries three times, most recently in 1996-97. Attachment 1 provides the actual fees for spay and neuter surgeries for the past eight years. DISCUSSION Surgery. Information Over the years, staff has monitored the impact of increased fees on the total number of surgeries performed to ensure that surgeries did not decrease significantly. Attachment 2 provides an eight-year history of the number of surgeries. While there was a significant reduction in the number of surgeries performed during 1995-96, it was not related to fees, but due to an extended vacation taken by the veterinarian. The reduction in the number of surgeries in 1996-97 was not associated with the fee increase, but was due to the retirement of the City’s long-time veterinarian. For a period of approximately five weeks, the Clinic was only open about half of the time. Using the monthly average of surgeries for the other 11 months of that year, if the Clinic had been open full time, the number of surgeries would have totaled approximately 3,900. Based upon this information, it does not appear that the CMR:278:98 Page 2 of 10 fee increases have adversely impacted the number of surgeries. In fact, during 1993-94, after two years of increased fees, the Clinic performed the highest number of surgeries to date. Since 1991-92, the Clinic has averaged 4,200 surgeries a year. It should be noted that in the last several years few if any of,the local non-profit spay and neuter clinics have been performing surgery at their capacity levels. For at least ten years, use by non-residents of the Spay and Neuter Clinic for surgeries has significantly exceeded the use by residents. Attachment 3 provides specific information for the last five years. Palo Alto’s experience coincides with this trend. Staff believes that this is due to many factors. Palo Alto residents tend to be well-educated and more animal-oriented, while non-residents tend to be more complacent and perceive the control of animal populations as a low priority. Additionally, staff has learned that some religious and cultural beliefs preclude the neutering of male animals. Staff does anticipate that, due to the demographic trend associated with people having children later in life, as those children near school age, an increase in the number of pets can be expected. Other surgical procedures are performed at the Clinic on an occasional basis. Either the veterinarian diagnoses a problem or the owner requests that a specific problem be taken care of at the time of spay and neuter surgery. These are usually minor surgical procedures that should be done for the health of the animal. It is safer for the animal and more cost-effective for the owner to perform these procedures-at the time of an altering procedure so that additional anesthesia and surgery at a later date is not needed. A high percentage of these procedures are at the request of the owner and all procedures have been conducted with prior owner approval. These services are routinely offered in other low-cost spay and neuter clinics for minimal fees. The fees for the additional procedures have been charged according to the Council approved fee of $100 per hour for miscellaneous veterinarian services. Comparison of fees to Other Agencies and Private Veterinarians The proposed fees for 1998-1999 represents a restructured schedule that staff believes is consistent with other non-profits, will maintain the low-cost attraction, will continue to encourage pet owners to alter their pets to prevent the birth of unwanted dogs and cats, and will comply with the Council’s direction of cost recovery. In some cases, the proposed fees are less than other spay and neuter clinics in this vicinity. (See Attachment 4) It is important to note that the spay and neuter clinics operated by Peninsula Humane Society, Marin Humane Society and Humane Society of Santa Clara Valley all are subsidized to a significant level by their general membership. As an example, every year the Peninsula Humane Society Clinic operates its program based upon 80 percent of its revenue source coming from fees and 20 percent being subsidized. CMR:278:98 Page 3 of 10 The Humane Society of Santa Clara Valley operates a low-cost spay and neuter clinic and at this time it is running at a small deficit. The Board of Directors has given the clinic a goal of making a profit but it is not mandatory. The Humane Society’s general fund normally subsidizes the clinic’s small deficit. Staff’has also obtained information on fees charged by private veterinarians in the area for spay and neuter surgeries. In every case (Attachment 5), private veterinarians charge considerably more. Other Cities’ Voucher Pro~ams The Cities of San Jose and Milpitas offer a voucher program to their residents. The residents request a voucher from the cities and pay participating veterinarians $5 to have their animal altered. The cities reimburse the veterinarians a pre-approved price for each surgery. The veterinarians are reimbursed for the surgery, as well as for any extra procedures such as operations on pregnant animals, for umbilical hernias and cryptorchids. The cities cover ’ these extra fees and the cost is not passed on to the pet owner. The City of San Jose offers vouchers for cat spay and neuters only. Their program has been in existence since 1994. The program is run by volunteers. The program is currently operated under the City’s Code Enforcement and Planning Department. The annual budget for this program was $31,000. At this time, new vouchers are not being issued as the monies budgeted are almost gone. The City Council has been asked to subsidize next year’s program for up to $65,000. The City of Milpitas’ voucher program has been in effect for one year. It was modeled after the program in San Jose. The program is funded through the City’s general fund. Residents can request vouchers for dogs or cats. Two veterinary hospitals in Milpitas have agreed to participate in the program. The citizen pays $5 for the surgery and then the veterinarian charges the City for the balance. For example, surgery for a female cat costs $25; the owner pays $5 and the City pays the remaining $20. The fee schedule for dogs depends on sex and weight. A female dog over 100 pounds costs $75. Complications or additional procedures cost extra. As an example, veterinarians charge an additional $10-$30 for surgeries conducted on pregnant animals and $5-$10 more if the animal is in heat. Proposed Restructured Fees There are several elements that staff has proposed to change for the 1998-1999 fees. It is important to note that staffhas not proposed any changes (with the exception of the discount program) to the cat surgery fees. As indicated in Attachment 3, the number of cat surgeries far exceeds the number of dog surgeries performed. The proposed restructured fees include a reduction in rabies vaccination fees; surgery charges for dogs based upon weight; a CMR:278:98 Page 4 of 10 discount for pet owners who have their animals altered before they become sexually mature; and specific fees for additional procedures. Rabies Vaccination Fees - The City’s current fee for rabies vaccination is $15. Staff is proposing to lower the fee to $10. Most,other agencies charge $6-$10 for this vaccination that is required prior to issuance of a dog license. There has been an increase in the number of bites reported to Animal Services staff: 1995-1996 =259 1996-1997 =234 July-April1997-1998=273 Many of the dogs that have bitten people are unlicensed and have not received rabies shots. Fortunately, none of the dogs have tested positive for rabies, but the State Department of Health continues to declare Santa Clara County as a rabies endemic area. Wild animals that are frequently seen in the area, such as bats and skunks, are common carriers of rabies. It is not uncommon for the animals to come in contact with household pets, thus becoming a human health issue. It is therefore critical to ensure they are vaccinated against this disease. Charge by Weight for Dog Surgeries - Most low-cost spay and neuter clinics and private veterinarians determine the price of their surgeries for dogs based upon the dog’s weight. Larger animals require more of the veterinarian’s time, the veterinary technician’s time, surgical drugs, materials and anesthesia. Consistent with other agencies, weight breakdowns would divide dogs into four basic categories: small (0-30 pounds), medium (31-50 pounds), large (51- 75 pounds), and extra large (76+ pounds). Under the current structure, those people with smaller dogs pay fees that actually subsidize the costs for surgeries on larger dogs. Under this proposed structure, the fees would reflect the costs for the actual time, materials and anesthesia per surgery. Discount Incentive Program - In an effort to encourage pet owners to have their animals spayed and neutered before they become sexually mature, staff has recommended a $5 discount to pet owners who bring their animals to the clinic for alteration before they are 5 months old. Overpopulation, especially of cats, continues to be of concern. The number of dogs and cats that are euthanized at the shelter has not significantly decreased over the last few years. As an example, in 1995-96, 384 cats and 96 dogs were euthanized; in 1996-97, 316 cats and 178 dogs; and for the first 11 months of this fiscal year, 272 cats and 124 dogs. Staff believes that the .discount program for early altering is the first of its kind and will provide additional incentives for people to alter their dogs and cats. Customers who take advantage of this new CMR:278:98 Page 5 of 10 program would not only benefit from the $5 reduction in fees, but would also realize a reduced fee, given that younger animals weigh less than mature animals. Staff plans to utilize the program’s uniqueness to further market the Palo Alto Spay and Neuter clinic, increase awareness of the program and ultimately increase the number of spay and neuter surgeries performed at the Clinic. Specific Charges for Additional Procedures - To prevent any confusion that customers may have, and consistent with other clinics in the area, staff has proposed specific fees for additional procedures instead of using increments of the existing $100 per hour fee. The proposed fees are the equivalent to the increments of the $100 per hour fee. Based upon staff experience and feedback received from customers, it is easier for people to understand the proposed fees. The most commonly requested procedures are as follows: 1)Cryptorchid Surgery - Cryptorchid surgery is necessary when a testicle does not migrate down into the scrotum. Occasionally one or both testicles are retained in the abdomen and surgery similar to an exploratory is required to find the testicle(s) and remove it (them). If a retained testicle is not removed, there is an increased risk oftesticular and prostate cancers. Additionally, the dog or cat could potentially still impregnate a female. Of all the surgeries performed, an abdominal cryptorchid is the most difficult and can take anywhere from 30-60 minutes longer than a routine neuter operation. The recommended fee of $15-$60 is based upon the time it takes for the veterinarian to find the testicle in the body, as well as additional materials needed to perform the surgery. Staff contacted some local veterinary hospitals and determined that private veterinarians charge anywhere from $75 to $360 for this procedure. 2)Surgery on Pregnant Animals - The additional time and materials required for surgeries on pregnant dogs and cats are the result of the enlarged incision site needed to remove the fetuses. The size of the incision depends upon how far along in the pregnancy the animal is. Vessels are engorged with blood and it takes additional care and time to tie them off. Additionally, fees for surgery on pregnant animals has not been routinely charged, but only used in more complicated procedures. The recommended fee is $15-$40 del~ending upon how far along in the pregnancy the animal is. CMR:278:98 Page 6 of 10 3) 4) 5) Umbilical Hemias- Umbilical hemias are defects in the muscle layer at the belly button that did not completely close embryologically. This situation can occur in both males and females. For females, repair may be quicker as the incision for the spay surgery can sometimes be extended to take care of both areas. Forjnales, two separate surgeries are required and both the abdominal area and the scrotal area must be prepared. The proposed fees are $15 for females and $35 for males. Deciduous Teeth - Deciduous teeth are baby teeth that do not fall out on their own as the animal’s adult teeth come in. If these teeth are not removed, they can cause future problems with increased tooth decay as food becomes trapped between the baby and adult tooth, and by shifting teeth as they all jockey for position. The proposed fee is $15 per tooth. Dewclaws - Dewclaws are extra toes that grow on the back feetof some dogs. There are two kinds of dewclaws: disarticulated (no bony attachment to the leg), and articulated (a bony joint attached to the toe to the leg). Disarticulated dewclaws can tear as the dog catches them on things, causing painful injury that often results in amputation. Staff has proposed a $15 fee. 6)Nail Clips - Nail clips are requested by pet owners at the time of surgery because they know the animal will be sedated and the nails can easily be clipped. Staff has recommended a $5 fee. Marketing Plans for the Clinic In order to maintain the Council direction for 100 percent cost recovery while at the same time keeping fees as low as possible, staff recognizes that an increased volume of surgeries is needed. As a result, staff plans on increased marketing endeavors with specific outreaches to Redwood City, Sunnyvale, Mountain View, Los Altos and Menlo Park. The use of advertising mediums, such as cable television community boards and web pages will be increased. Staff also expects considerable media attention on the discount incentive program due to its uniqueness. Per Diem Veterinarians Another method to assist in the cost recovery of the Spay and Neuter Clinic was recently initiated and consists of using "per diem" veterinarians. Interested, qualified veterinarians are hired on an hourly basis to perform spay and neuter surgeries when the .City’s veterinarian is on vacation or away for training. The coverage provided by the "per diem" veterinarians results in continuous Clinic operation and assists in maintaining the number of surgeries. CMR:278:98 Page 7 of 10 Pending Legislation It should be noted that there is pending legislation, Assembly Bill 1856, that would make it mandatory for all animal shelters to spay and neuter all dogs and cats prior to putting the animals up for adoption. This part of the legislation would not have any effect on Palo Alto as this practice was instituted some years ago. However, the bill also requires that owners of stray dogs be fined for first and second impounds and that, upon a third violation, a person who claims their stray dog must pay to ha*ce their dog spay or neutered. If, at the time the dog is claimed, the dog is too sick or injured for the surgery to be completed at that time, the owner would be required to pay a deposit for a future operation. Funds associated with unclaimed deposits must be applied to spay and neuter program costs. ALTERNATIVES There are several altematives that are presented for Council consideration. They include the following: 1)The previous Council direction of 100 percent direct cost recovery could be amended to a different level. 2)Another alternative would be to maintain the current rates. However, as mentioned previously, if the 100 percent cost recovery level is to be maintained, the rabies vaccination fee would need to stay at $15 and the discount incentive program could not be offered. Staff feels strongly that these two recommendations are of utmost importance and as a result, do not recommend this alternative. 3)An increase in fees associated with cat surgeries has not been proposed because cat overpopulation is a more significant problem than dog overpopulation, and staff wants to continue to encourage cat owners to sterilize their pets. The alternative does exist, however, to increase these fees by $5 to maintain the 100 percent direct cost recovery, staff does not recommend this alternative because staff wants to provide encouragement for cat owners to have their cats sterilized. 4)Staff is proposing a range of fees for performing surgeries on pregnant animals. The range for pregnant animals represents the amount of time and complexity of the procedures. Because staff believes that most of these surgeries would require an average amount of time that would be equivalent to a $20 fee. This fiat fee could be adopted instead of the range. Staff does not recommend this alternative because those owners of pregnant animals that CMR:278:98 Page 8 of 10 have less complicated procedures would subsidize those procedures for animals where more complications occur. 5)Another altemative is the removal of the pregnancy fee in total. Staff believes that the proposed pregnancy fee would have little effect on the cost recovery level due to the associated estimated $500 in revenue. If the Council desires, this proposed fee could be removed from the proposed fee schedule. Staff does not recommend this alternative because owners of non-pregnant animals would subsidize procedures for pregnant animals. RESOURCE IMPACT Staff anticipates performing 4,000 spay and neuter surgeries during FY 1998-99. Direct costs are anticipated to be approximately $224,000. Approximately 50 percent of surgeries would qualify for the discount program. -. Staff has recommended three elements to the proposed fees; the restructured surgery fees, the discount program, and the reduced rabies vaccination fees. The net impact on revenues is shown in the table below. If the Council was to only adopt the discount program and reduced rabies fee without the restructured surgery fees, an additional seven percent loss in revenue would occur resulting in a direct cost recovery level of 93 percent. Table 1 Net Revenue Impact With Proposed Fees Surgeries Rabies Other Fees Current Proposed Proposed Net Revenue Changes Revenue ($18,000t $141,000 ~,<10,000>2 $149,000 27,000 <5,000>3 22,000 53,000 53,000 $221,000 $ 3,000 $224,000 Direct Costs $224,000 $224,000 G/F Subsidy $ 3,000 0 Direct Cost Recovery (%)99%100% CMR:278:98 Page 9 of 10 Proposed Spay and Neuter Fee Schedule Changes Discount Program for early altering Proposed rabies Fee Schedule changes Total operating costs for FY 1998-99 for the clinic are projected to be about $310,000. remaining $86,000 or (28 percent) is subsidized by the City’s General Fund. The ENVIRONMENTAL REVIEW This is not a project under the Califomia Environmental Quality Act. ATTACHMENTS Attachment 1 - Spay and Neuter Fee History Attachment 2 - Surgery History Attachment 3 - Non-resident/Resident Comparison Attachment 4 - Comparison of Other Agency Fees Attachment 5 - Comparison to Private Veterinarian Fees PREPARED BY:Sandra Stadler, Animal Services Superintendent Pete Hazarian, Police Administrator Lynne Johnson, Assistant DEPARTMENT HEAD REVIEW: CI-]K Police Chief CITY MANAGER APPROVAL: ~ H~.~~z ’L’Y nATp, s ON Assistant City Manager CC Agnes Kiraby Carol Hyde Kay Bushnell CMR:278:98 Page 10 of 10 ATTACHMENT 2 Spay / Neuter Surgery History 1990-91 through 1997-98 FISCAL YEAR 1990-91 1991-92’ 1992-93’ 1993-94 1994-95 1995-96 1996-97’ 1997-98 through 3rd Quarter 1997-98 Projected NUMBER OF SURGERIES 4,422 4,424 4,155 4,712 4,406 3,861 3,666 2,948 3,650 * Spay / neuter fees increased during these fiscal years. ATTACHMENT 4 Comparison of Other Agency Fees Male Female Cat Dog Cat Dog Peninsula Humane $25 $45 - $80 $35 $35 - $90 Society Humane Society of Santa $25 $40 - $75 $40 $50 - $85 Clara Valley Marin Humane Society $25 $55 - $75 $35 $55 - $85 Palo Alto (Current)$26 - $29 $40 - $43 $33 - $35 $44 - $49 (resident - non/resident) Palo Alto (Proposed)$21" - $29 $37* - $75 $28* - $35 $47* - $85 (resident - non/resident) Palo Alto (Alternative)$55 - $58 $59 - $64 * Includes $5.00 discount to all dogs and cats five months or younger..