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HomeMy WebLinkAboutHumane Society - Dog boarding costs Deschutes Count y, HUMANE SOCIETY – DOG BOARDING COSTS Presented to the Deschutes County Audit Committee and Board of County Commissioners by the Internal Audit Program David Givans, CPA – County Internal Auditor Report# 2003-1 Dated March 11, 2003 Deschutes Count y, Oregon HUMANE SOCIETY – DOG BOARDING COSTS Report #2003-1 (Dated March 11, 2003) TABLE OF CONTENTS: EXECUTIVE SUMMARY……………………………………………………………………….....1-2 INTRODUCTION & BACKGROUND……………………………………………………………..2-3 OBJECTIVES, SCOPE, AND METHODOLOGY …………………………………………………3-4 ANALYSES of DOG BOARDING COSTS ………………………………………………………..4-5 SURVEY RESULTS ………………………………………………………………………………..5-6 AUDIT FINDINGS ………………………………………………………………………………..6-10 RESPONSES TO REPORT Humane Societ y of Central Oregon ….…………….……………………………………..10-13 Humane Societ y of Redmo nd …….….…………….……………………………………..13-14 Deschutes County …………………….…………….…………………………………….14-15 Page 1 Report# 2003-1 (Dated March 11, 2003) EXECUTIVE SUMMARY Purpose As requested by the Board of County Co mmissioners (and as approved by Deschutes County’s Audit Committee), an evaluat ion was conducted of the cost to board a dog at the Humane Societ y of Central Oregon (HSCO) and the Humane Societ y of Redmo nd (HSR). The County received a proposal fro m the Humane Societ y of Central Oregon requesting addit ional boarding fee monies. The Board desired to have informat ion on the Humane Societ ies’ actual cost to board dogs. A survey to gather similar boarding cost information fro m other counties was also done. Results in Brief Analysis of Dog Boarding Costs · The County dog boarding fee rate paid to the Humane Societ y of Central Oregon adequately covers the shelter for their costs. In addit ion, the shelter retains fees paid by owners o f County stray dogs of about $6 per dog per day. · The County dog boarding fees paid to the Humane Society o f Redmond are not direct ly sufficient to compensate for their costs. This is partly due to the fewer number of dogs handled by the shelter. This shortfall has been made up by the monies, the shelter retains fro m County stray dog owners, for boarding and impound fees of about $6 per dog per day. The contract calls for these mo nies to be paid to the County. · The flat fee paid to the Humane Societ y of Redmo nd is nearly equivalent to the rate paid to the Humane Societ y of Central Oregon when considering all Count y strays brought in to the shelter. · In addit ion to the boarding fees, the shelters receive significant support from dog licensing fees. The Bend and Redmo nd shelters received $30,584 and $12,802, respectively. This is almo st as much as the boarding fees received from the County. These funds are to be used for educational programs. Survey · The County has seen a decline in it s dog license rate (no. of licenses/population) of so me 21% in the last five years. It is curious that the County licensing rate is 25% higher than other Oregon counties that responded to the survey. Audit Findings · The contract with the Bend shelter is unclear on the handling of certain fees and duties which results in impound and boarding fees taken from County stray dog owners being kept by the shelter. Page 2 Report# 2003-1 (Dated March 11, 2003) · The Redmo nd shelter retains impound and boarding fees received from Count y stray dog owners when the contract indicates those monies should be paid to the County. · The County dog licensing fee for unaltered dogs needs to be raised by $1. · Oregon has a statutory requirement to license stray dogs prior to release. The contracts with the shelters are silent on the matter. · The number of Count y dog licenses has remained virtually unchanged after significant growth in County populat ion of 22%. Responses to report Humane Societ y of Central Oregon They have indicated the presentation is a fair and accurate assessment of their costs. Responses to the specific findings are as fo llows: o They support rewrit ing and clarificat ion of the contract with regards to impounds and boarding costs. o They have also provided clarificat ion of how they came up with their original request for a rate increase and have made a new request. Humane Societ y of Redmo nd They have indicated the presentation is a fair and accurate assessment of their costs. Responses to the specific findings are as fo llows: o They support a unified contract. o They are willing to work on license program compliance. Deschutes County Finance The County’s finance office handles dog licensing and provided a written response. Responses to the specific findings are as fo llows: o The unaltered dog licensing fee will be increased to comply wit h Oregon statute. o They highlighted the County’s recent efforts to improve dog licensing. Introduction & Background Audit Authorit y: The audit was conducted pursuant to the direct ion of County management. The audit was approved by the Deschutes County Audit Committee in its approval of the County’s internal audit workplan for the fiscal year 2002/2003. Introduction: The County received a proposal from the Humane Societ y of Central Oregon (HSCO) requesting addit ional boarding fee monies. The County desired to have independent informat ion on the actual cost to board dogs for HSCO and Humane Societ y of Redmo nd (HSR), hereinafter referred to as the Bend shelter and Redmo nd shelter, respectively. This was especially important since contracts are routinely negotiated with the Humane Societies over fees for services and both are doing capital Page 3 Report# 2003-1 (Dated March 11, 2003) campaigns for building construction. A survey to gather similar boarding cost informat ion fro m other counties was also done. Deschutes County has contracted with the two local Humane Societ ies to provide boarding services for stray dogs. County law enforcement officers and authorized representatives are able to utilize the Humane Societ ies to take care of stray dogs. Owners may pick up stray dogs at the shelters. Under separate contracts, the Humane Societ ies receive ownership of the dogs after the contracted five days of boarding (unless the dog is held for special purposes). During the FYE June 30, 2002, the County paid the Bend shelter (HSCO) $14.50 per dog per day. During the year ending June 30, 2002, the County paid the Redmo nd shelter (HSR) $1,360 per mo nth. In addit ion, the County pays for crematory costs for un-adopted County dogs. In addit ion to the fees paid by the County, the Humane Societ ies request fro m stray dog owners’ payment of boarding costs and impound fees. Licensing of strays picked up by owners rarely occurs unless an officer cites the dogs. Owners unable to pay often sign a promissory note with the shelter. The Humane Societ ies provide numerous addit ional services to the public. These include Shelter and adoption services for cats and other animals Elect ive shelter and adoption services on owner released animals Adoptive services for strays that have not been picked up Spay and neutering programs Vaccinat ion and medical treatment for sheltered animals Euthanasia and crematory services for un-adopted animals Communit y service opportunit ies for court mandated offenders The societ ies have separate contracts with cit ies for the strays picked up by cit y residents and cit y law enforcement officers. The Humane Societies fundraise through solicitat ion and operation of thrift stores. OBJECTIVES, SCOPE AND METHODOLOGY Audit objectives: The object ives of the audit were: 1. Determine the Humane Societ ies’ cost to board a dog. 2. Review account ing informat ion by the organization to assess any issues related to the costs to board and compliance wit h the contracts. 3. Obtain co mparative informat ion on boarding costs. The opportunit y to survey for license fee informat ion was also taken. Scope: Informat ion included the most recently co mpleted fiscal year ending June 30, 2002, unless otherwise stated. Crematory costs were not reviewed, which are paid for separately, nor were the costs to shelter cats addressed. Page 4 Report# 2003-1 (Dated March 11, 2003) Methodology: The audit included: · Interviews with the execut ive directors and staff · Meet ings with HSCO Board members · Discussions with Deschutes County emplo yees on Humane Societ y issues · Walkthroughs of the facilit ies · Analysis of financial and statist ical informat ion provided by the shelters · Meet ings with bookkeeping and professio nal staff, as applicable · Surveyed other counties and cit ies that share informat ion in the National Associat ion of Local Government Auditors (NALGA) as well as counties around the state of Oregon. · Discussions with Count y legal counsel on interpretation of contracts and County and Oregon statutes The audit was conducted in accordance with Government Auditing Standards issued by the Comptroller General of the United States as considered necessary in the circumstances. ANALYSES of DOG BOARDING COSTS The Humane Societ y of Central Oregon (HSCO) submitted informat ion to the Board of Commissio ners that indicated the County had underpaid the cost of handling Count y stray dogs. The informat ion provided indicated the cost to board dogs was around $24 per day per dog. The analysis however, did not properly limit costs only to those related to dog boarding and their associated administration. The Board desired the dog boarding cost informat ion for both shelters (Bend and Redmo nd). The analysis started with the shelters’ financial information for administration and shelter act ivit y. Management’s est imates were utilized to develop the costs for only dog boarding. Costs that did not relate to dog boarding were removed. Shelter management provided us with statist ics that included the number of total dog boarding days provided at the shelter. With this informat ion the shelters’ cost to board a dog per day (average) was calculated. The fo llowing numbers present an opinio n of the cost to each Humane Societ y to board a dog per day. The analysis o f dog boarding costs resulted from a significant number of estimates. Therefore, the results of analyses are shown with an est imated level o f precisio n. Average cost to the Humane Societ y to board a dog per day (for the fiscal year ending June 30, 2002) HSCO (Bend Shelter) HSR (Redmond Shelter) Average boarding cost - per dog per day $13±1 $ 25±2 The Bend shelter’s (HSCO) cost to board a dog per day came significant ly under the amount provided init ially by HSCO management (~$24). The $14.50 paid per dog per day by the Count y is in excess of the Bend shelter’s estimated costs. Page 5 Report# 2003-1 (Dated March 11, 2003) The Redmo nd shelter’s (HSR) cost to board a dog per day is nearly twice that of Bend’s due primarily to the fewer number of dogs boarded at the facilit y. The Redmond shelter provides services to nearly a third o f the dogs. As one might expect, many o f the costs of maintaining a shelter are fixed and, therefore, the number of dogs handled through the shelter drives the cost per dog. Average amount paid by the Count y to the Humane Societ y to board a dog per day (for the fiscal year ending June 30, 2002) HSCO (Bend Shelter) HSR (Redmond Shelter) County Rate $14.50 per dog per day $1,360 per month Total boarding fees- per County records $33,597 $16,320 Equivalent rate paid - per dog per day: Officer strays $14.50 per dog per day $22 per dog per day All Count y strays $14.50 per dog per day $14 per dog per day Since the County pays the Redmo nd shelter a monthly fixed amount, the number of dogs boarded was utilized to calculate an approximate daily rate for County stray dogs. The County is effect ively paying $22 a day per dog for those brought in only by o fficers. Using all Count y stray dogs, the County is effect ively paying $14 a day per dog. This would include strays brought in by the public as is done under the Bend shelter contract. Current fees paid to Redmond appear to be below actual shelter cost levels. This might change as the Redmo nd shelter moves to a new facilit y where more dogs can be boarded. The fo llowing is other County support to the Humane Societ ies (FYE June 30, 2002): HSCO (Bend Shelter) HSR (Redmond Shelter) Share of license fees - for education $ 30,584 $ 12,802 Cremat ion costs $ 4,169 $ 3,721 Fair value of land lease (estimated) * $ 21,000 $ 16,000 Fair value of land contributed (estimated) $ 348,000 $ 272,000 * Estimated annual value. Land has been contributed to shelter and est imated lease reflects an est imated 6% return on the value (provided by Count y Property Management). SURVEY RESULTS The survey developed went to most Oregon counties and the listserve membership in the National Associat ion of Local Government Auditors (NALGA). The survey’s focus was to determine other counties’ cost to obtain dog boarding and informatio n on their dog-licensing program. The returned surveys o ften did not include all information desired. Attempts were made to fo llow up on inco mplete responses. Only those responses with sufficient informat ion were utilized in the averages. Page 6 Report# 2003-1 (Dated March 11, 2003) Response to the survey was light. The fo llowing are the results of the survey with the number of responses in parenthesis: Deschutes County (internal info) Oregon responses (#) All responses (#) Average boarding cost per day per dog $14.50 (Bend) ~$14 (Redmond) $11 (8) $11.60 (11) Licensing fees- altered/unaltered $10/$24 $11/$24 (15) $10/$25 (19) Dogs licensed as % of populat ion 9.5% 7.6% (8) 7.8% (10) % with so me type of enforcement Yes 70% (10) 77% (13) The survey averages are used as an indicat ion of expected norms. Efforts were made to obtain as much informat ion from Oregon counties as possible. AUDIT FINDINGS Humane Societ y staff, management and supporting service providers are to be complimented for their efforts to provide qualit y services to the cit izens of Central Oregon. Humane Societ ies’ management were very professio nal and supported efforts to collect and analyze their data. These findings are provided so that County management can better evaluate issues related to dog boarding costs, licensing fees and contract language. The findings are by their nature subjective. The fo llowing findings are presented for management’s considerat ion. Contract with Bend shelter is unclear on handling of certain fees and duties The Bend shelter (HSCO) for the fiscal year ending June 30, 2002 was paid for strays brought in fro m the public. The County’s contract for the fiscal year ending June 30, 2002 did not explicit ly indicate any considerat ion for strays brought in by the public. In addit io n, the Bend shelter collects an impound fee (usually $20) and a boarding fee ($12.50 per day). The shelter collects many o f these fees under the init ial five days for which the County is also being billed for services. The shelter has not remitted to the County any of these fees collected fro m stray dog owners. The contract does not specify the handling o f this issue. More than half of stray dogs are picked up by their owner and this usually occurs within the first five days. The Oregon State Statute (ORS 609.090) indicates that owners of stray dogs should be responsible for reimbursing the costs of keeping their dog, impound fees, and in licensing their dog. The contract with the shelter gives ownership of the dog to the Humane Societ y after five days. Unt il that time, any fees assessed to the owners should be remitted to the County as a partial reimbursement of the costs incurred by the Count y. Page 7 Report# 2003-1 (Dated March 11, 2003) Under Count y ordinance (DCC 6.16.030), all impound fees are due to the County as determined by the County Board of Commissio ners. The contract with the Bend shelter indicates the collect ion of impound monies under “related responsibilit ies” separate and distinct from the considerat ion for its services. The fo llowing informat ion relates to the estimated financial impact for the fiscal year ending June 30, 2002: HSCO (Bend Shelter) Estimated impound fees paid by cit izens for dogs held five days or less ($15 x no. of dogs) $ 4,600 Estimated boarding fees paid by cit izens for dogs held five days or less ($12.5 x no. of days) $ 9,200 TOTAL - Addit ional considerat ion received by Humane Societ y $13,800 Addit io nal considerat ion per day per dog $ 6 per dog per day Additional information: County payments for strays brought in by the public $ 10,643 Per discussions with Count y legal counsel, the contract is not sufficient ly clear on these issues to allow for any co llect ion of these amounts. It is reco mmended the County clarify the language in the current contracts to make sure it is clear on the handling of impounds and boarding fees co llected from stray dog owners and what amounts are to be remitted to the County. It should also be clear how these should be handled if the shelter co llects less than expected or if stray dogs are held more than five days. Modificat ions to the 2003 contract have clarified to allow payment for strays brought in by the public. Redmond shelter is not in compliance with terms of contract The Redmo nd shelter (HSR) collects from owners of County stray dogs an impound fee (usually $20) and a boarding fee ($12.50 per day). The County’s contract with the shelter requires the billings to the County for boarding strays to be reduced by any payments by owners. The contract further explicit ly states that the impound fees collected should be remitted monthly to the County. The shelter has not been adjusting or remitting mo nies to the County in accordance with these terms. The Oregon State Statute (ORS 609.090) indicates that owners of stray dogs should be responsible for reimbursing the costs of keeping their dog, impound fees, and in licensing their dog. The contract with the shelter gives ownership of the dog to the Humane Societ y after five days. Unt il that time, any fees assessed to the owners should be remitted to the County as a reimbursement of the costs incurred by the County. Page 8 Report# 2003-1 (Dated March 11, 2003) The fo llowing informat ion relates to the estimated financial impact for failure to remit fees as indicated in the contract for the fiscal year ending June 30, 2002. HSR (Redmond Shelter) Estimated impound fees paid by cit izens for dogs held five days or less ($15 x no. of dogs)(officer strays only) $ 1,000 Estimated boarding fees paid by cit izens for dogs held five days or less ($12.5 x no. of days)(officer strays only) $ 2,400 TOTAL - Addit ional considerat ion received by Humane Societ y $ 3,400 Addit io nal considerat ion per day per dog (officer strays only) $ 6 per dog per day This would bring the est imated fee paid per dog per day to $28 per day, which is reasonably clo se to the shelter’s cost per day (officer strays only). Per discussions with Count y legal counsel, the contract is sufficient ly clear on these issues to allow for collect ion of these amounts for the above t ime period. It is reco mmended the County consider enforcing the 2002 agreement as stated and collect the boarding and impounds fees paid by stray dog owners. The County may want to consider the higher internal costs for boarding dogs at the Redmond shelter and credit these payments towards the higher costs incurred by the shelter. The County should clarify the language in the current contracts to ensure clarit y on the handling of impounds and boarding fees co llected fro m stray dog owners and what amounts are to be remitted to the County. It should also be clear how these should be handled if the shelter collects less than expected or if stray dogs are held more than five days. It would be advisable for the shelters to fo llow the contract and the County improve its monitoring o f their compliance with the terms of the contract. It is reco mmended the County consider utilizing the same contract language and terms for each Humane Societ y. Currently, the contracts differ in a number of areas. Most notably they differ in payment terms (fixed monthly amount versus per day per dog), inclusio n of public strays not brought in by o fficers, remittance o f stray dog owner boarding and impounds fees, and cremat ion costs per pound. The County licensing fee for unaltered dogs is out of compliance with Oregon Statute Deschutes County current ly charges license fees of $10 and $24, for altered and unaltered dogs, respectively. By Oregon statute (ORS 609.100), the minimum required fee for unaltered dogs is $25. The state changed its minimum fee in 1999. The impact of the lower fee is minor since less than 10% of dog licenses are for unaltered dogs in the County. Page 9 Report# 2003-1 (Dated March 11, 2003) Per discussions with Count y legal counsel, the Count y’s ordinance should be adjusted to reflect the change in Oregon statute. It is reco mmended the County revise its fee for unaltered dogs to $25. The County should monitor state legislat ion that changes this rate to make sure they stay in co mpliance with Oregon law. The contracts with the two Humane Societies do not include Oregon’s statutory requirement to license dogs prior to release The current contracts with the Humane Societ ies do not require the shelters to assist in compliance with licensing requirements for any dogs. The Bend and Redmo nd shelters cannot currently vaccinate for rabies, so they are unable to sell licenses for dogs that do not have proof of the vaccination. The shelters do collect fees and issue licenses for dogs that have proof of rabies vaccination or are renewing their licenses. The fees collected are then remitted (in full) to the County each month. The Oregon State Statute (ORS 609.090) indicates that prior to release, owners of stray dogs without licenses shall license their dogs and pay any applicable penalt ies. Wit hout the contract language for licensing in the contracts with the shelter, the County cannot meet Oregon statutory requirements. Having unlicensed strays licensed on pickup would help improve compliance wit h the County licensing ordinance. Per discussions with Count y legal counsel, the contract does not sufficiently address Oregon’s statutory requirements on this matter. The County should consider adding language to the shelter contracts to comply wit h Oregon statute. The County should work with the shelters to comply wit h the law. It is advisable that the County consider adding to the shelters contract a notificat ion requirement (for licensing purposes) of the names and addresses of owners who adopt dogs. This information could be used to ensure better licensing co mpliance. Number of County dog licenses virtually unchanged after significant growth in County population Based on County informat ion on dog licensing, the numbers of dog licenses over the last five years has remained virtually flat. County populat ion during the same time period has grown by nearly 22%. The County’s licensing rate (dog licenses/populat ion) has decreased fro m 12% in 1997 to 9.5% in 2002. This is a 21% decline in the dog license rate. As the population rose in the last five years it would be expected that dog licensing would fo llow suit. The reduction in the licensing rate might suggest that new residents are not aware of the dog licensing requirement or are choosing not to get their dogs licensed. Page 10 Report# 2003-1 (Dated March 11, 2003) It is curious that the County licensing rate is st ill 25% higher than other Oregon counties that responded to the survey. It might be advisable for the County to consider some options to improve dog licensing participat ion. In addit ion to the previous recommendat ions, the County might consider: · Routine discussio ns with Humane Societ ies on processes to improve participat ion · Senior discounts · Mult i-year discounts · Mult iple animal discounts · Other forms of enforcement RESPONSES TO REPORT FROM HUMANE SOCIETY OF CENTRAL OREGON To: Deschutes Count y Board of County Co mmissioners 3-05-03 From: Jim Schell, President, Humane Societ y of Central Oregon Gent lemen: We believe that Mr. Givans has presented a fair and accurate assessment of HSCO’s costs. We should also ment ion that the audit was conducted professio nally and in a spirit of cooperation by Mr. Givans. Our organizat ion benefited from the process. We would point out however that: A. Mr. Givans’ figures were taken fro m our June 30, 2002 financials. Our 2003 costs have increased. B. We are, in essence, providing cat and other small animals services at no charge. C. There is no profit in Mr. Givan’s figures. (If the count y were contracting with a private firm, a profit add-on would be routinely expected.) The Commissio ners will recall that this audit was occasioned by our asking for the County’s assistance in financing a new shelter. We st ill are asking for that assistance, the cho ices, as we currently view them, are: Option #1: A $300 K capital contribut ion – lump sum. We would not require the cash unt il the summer of 2004. Option #2: A $300 K capital contribut ion – spread out over 4, 5 or 6 years. Option #3: A “surcharge” to our present daily boarding rate, in effect amortizing the $300 K capital contribut ion over a number of years. In order to cover the construction costs in the interim, we would assume a $600 K mortgage. ($300 K = City, $300 K = County) Page 11 Report# 2003-1 (Dated March 11, 2003) I have attached an addendum to this letter. This addendum 1) responds to several key questions raised by Mr. Givans, 2) presents addit ional informat ion in support of the services we provide to the county and of the prices we charge and 3) suggests a revised figure for the surcharge should the county select Option #3. Finally, we wish to thank the Commissio ners for their considerat ion of our funding request. We also would like to thank Mr. Givans for providing a professio nal assessment of our organizat ion. We look forward to continuing our mutually beneficial partnership with Deschutes County. On behalf o f the Board of Directors: President Addendum to Letter to the Board of Commissioners dated March 5, 2003. I: Response to several key questions raised by Mr. Givans. A. Unclear on handling of certain fees and duties: (the Double Dipping issue). This is the scenario where dogs are picked up by the count y, delivered to the shelter, the HSCO bills the count y, and then the dog owner picks up his animal and supposedly pays the shelter. Hence the shelter, in effect, is paid twice for the same dog. However, many dog owners cannot or will not pay the impound and boarding fees when recovering their pets. In such cases our staff exercises its judgement in having the owner sign a Promissory Note for the unpaid amount of the impound fee. In actualit y only a small portion of those notes are ever paid, the unpaid amounts are then written off at the end of the year, as a result of HSCO’s belief that the cost of recovering the notes would far exceed the value of the notes themselves. It should be noted that in addit ion to the costs written off, there is a significant amount of administration invo lved in the ent ire process. HSCO’s stance is thus that while there is an element of “double dipping” inherent in this process, the dollars are not as large as the Count y suspects and they are offset by the write- offs and by the administration invo lved. The alternat ive to the Promissory Note process incidentally, i.e. to refuse to return the dog to the owner, is unacceptable to the HSCO and hopefully would be to the county as well. The result of such refusal would be either continuing to board the animal at HSCO’s expense or to perform an unwarranted euthanasia on an otherwise healt hy animal. HSCO supports the rewrit ing and clarificat ion of the contract. B. Licensing. Page 12 Report# 2003-1 (Dated March 11, 2003) HSCO agrees that the current dog licensing rate appears to be low, however it is comparable to national averages. HSCO and the County have discussed this issue on several occasions, the upshot of those discussio ns usually turns out that the problem is a law enforcement issue related to the cost of enforcing the exist ing licensing statutes. To date those discussio ns have not resulted in any definable actions. C. Unified Contract. HSCO fully supports working wit h the Redmond Humane Societ y with the goal of present ing a unified contract to the county. Once the issues outlined in Mr. Givan’s letter, the attached letter and this addendum are agreed to in principle, the two Humane Societ ies will meet, discuss and present one unified contract to the County. II. Additional information in support of the services HSCO provides and of the prices charged. Recognizing that it was outside of Mr. Givans’ assignment to determine what the costs to the County would be if they were to provide animal control services themselves, HSCO wants the record to show that should the County elect to operate its own facilit y the cost to taxpayers would be significant ly larger than what it is now. The HSCO conducted a telephone survey o f several Count ies who manage their own animal control facilit y. Included in HSCO’s findings were: Washington County: Handled 5317 animals (2751 dogs and 2566 cats). Budget = $1.3 millio n. $245 per animal. Linn Count y: Handled 1381 animals (1245 dogs and 136 cats). Budget = $450,000. $325 per animal. Jackson County: Handled 6500 animals (3200 dogs and 3300 cats). Budget = $800,000. $123 per animal. Humane Societ y of Central Oregon. Handled 4500 animals (3100 dogs and 1400 cats). Budget - $702,000. $156 per animal Note: These figures are presented only to suggest that 1) the services that the HSCO provides represent a significant savings over what the county might expect if they were to provide animal control services themselves and 2) the HSCO operates efficiently co mpared to other shelters. III. 3. Revised figure for the surcharge should the county select Option #3. It should be noted that on page 5 of Mr. Givan’s report the statement was made that “The Bend shelter’s costs to board a dog per day came significant ly under the amount provided init ially by HSCO management ($24).” HSCO management would like the Co mmissio ners to understand that this $24 figure was never presented as the cost, but rather as a figure which would include both the cost and Page 13 Report# 2003-1 (Dated March 11, 2003) the “surcharge”, i.e. an add-on intended to amortize the County’s capital contribution. HSCO management regrets this misunderstanding. Since the time this $24 figure was suggested, the HSCO has made a number of discoveries and/or changes that have impacted our original cost estimates. Those discoveries and or changes include: 1. More closely ident ifying building size and costs. 2. Lowering of architectural and engineering fees. 3. Lowering of SDC est imates 4. Ident ification of in-kind contribut ion opportunit ies. 5. Lower “mortgage costs”. (We believe we can qualify for Industrial Development Bond financing.) 6. Continued cash flow improvement from Thrift Store operations. HSCO thus believes that the original $24 per dog day figure could be revised to $20 per day. The $20 per day figure would thus include: Cost per Mr. Givans $13.50 Reasonable Mark-Up 3.00 Surcharge to cover Capital contribution 3.50 Total $20.00 HUMANE SOCIETY OF REDMOND To: David Givans, Deschutes County Auditor and Deschutes County Board of Commissio ners From: Jamie Scanlo n-Kanski, Execut ive Director, Humane Societ y of Redmo nd (March 10, 2003) I have had the opportunit y to review the final draft of the audit report as submitted by Mr. Givans. The Humane Societ y of Redmo nd and I appreciate the time and effort that went into this report and for the valuable information that was presented to us as a result of this report. I will be forwarding copies of the report to our board of directors. The report was fair and co mplete. I would just like to submit the fo llowing co mments for your consideration and informat ion: 1) the daily expense amount for the Redmond Humane Societ y was high in co mparison to those of Bend. This was not due to high overhead on our part, but rather a matter of coverage by Deschutes Count y Sheriff's Depart ment Field Technicians and the low numbers o f County animals brought to our facilit y. I spoke recently with their co mmanding officer, Mike Johnston, who verified that we had been left with litt le animal control coverage for the North Deschutes County for months due to several factors including; vacancies in those positions, re-hiring time and process, and finally the horse abuse case which left no field techs on in this area. He stated that we could expect business as usual when the horses had all been placed. 2) The Humane Societ y of Redmo nd is in support of a unified contract with the Humane Societ y of Central Oregon and will be meeting wit h them to develop that proposal. Page 14 Report# 2003-1 (Dated March 11, 2003) 3) The Humane Societ y of Redmo nd is co mpleting the final phase of their campaign to complete the new shelter construction. We are in need of addit ional co mmit ments and support to complete this final phase and to make the move into the new building. There are several components to this final phase which include fundraising events, grants, sale of our old thrift store building, and some large pending donat ions. I have reviewed the proposals as submitted by the Bend Shelter in regards to grant proposal options to the County. The Redmo nd Humane Societ y would also like to request your support in the amount of $180,000 over several years to assist in the complet ion of our project. This co mmit ment would complete our business plan to obtain a low interest mortgage and finish the shelter now. 4) Redmond Humane Societ y agrees that the licensing program compliance needs to be improved and is willing to assist in any way to increase that compliance. 5) The situation at Redmond Humane Societ y is similar to that in Bend with impound fees. Alt hough so me are collected for County animals, many are allowed to be returned to owners with a promissory note which are seldo m collected and are listed as a bad debt not collected. We look forward to our continued work with Deschutes County, Humane Societ y of Central Oregon and our other partnering agencies. Our sincere thanks for your considerat ion of our requests and for assist ing us in carrying out our shelter programs and goals. DESCHUTES COUNTY FINANCE Responses to Humane Society Dog Boarding Cost report (March 7, 2003) Audit Findings #3 The licensing fee for unaltered dogs has been addressed with Legal Counsel and with their recommendat ion this will be incorporated effect ive July 2003. This will allo w time for the update of the ordinance, print ing of new application forms, and the disbursement of the forms to all the veterinaries and Humane Societies in the County. #4 Per state statute, dog licenses cannot be issued without a current rabies vaccinat ion certificate. A licensed Veterinarian or a Certified Veterinary Technician under the supervisio n of a licensed Veterinarian can only administer the rabies vaccinat ion. Consequent ly on dogs released to owners, who do not have proof of the rabies vaccinat ion, the Humane Societ ies are unable to sell a dog license. #5 During 2002 the County and the Humane Society of Central Oregon held discussio ns for increasing licensing co mpliance. As a result the following actions were taken: 1. A segment of Inside Deschutes Count y was produced highlight ing the Humane Societ y and the benefits of licensing your dog. 2. A Count y emplo yee appeared on a segment of “Good Neighbor” discussing the benefits of licensing your pet. How licensing is a great ident ificat ion for your Page 15 Report# 2003-1 (Dated March 11, 2003) pet and helps reunite lost pets with their owners. Discussed the monetary benefit to your local Humane Societ y and where and how to procure a license. 3. County coordinated distribut ion to all Veterinarian Offices and Pet Supply stores dog licensing display boards and applicat ions. Asking them to distribute the informat ion to their customers. AUDIT BRIEFING HUMANE SOCIETY- DOG BOARDING COSTS (Report#2003-1) EXECUTIVE SUMMARY Purpose As requested by the Board of County Co mmissioners (and as approved by Deschutes County’s Audit Committee), an evaluat ion was conducted of the cost to board a dog at the Humane Societ y of Central Oregon (HSCO) and the Humane Societ y of Redmond (HSR). The County received a proposal fro m the Humane Societ y o f Central Oregon requesting addit ional boarding fee monies. The Board desired to have information on the Humane Societ ies’ actual cost to board dogs. A survey to gather similar boarding cost informat ion fro m other counties was also done. Results in brief Analysis of Dog Boarding Costs Average cost to the Humane Societ y to board a dog per day (for the fiscal year ending June 30, 2002) HSCO (Bend Shelter) HSR (Redmond Shelter) Average cost per dog per day $13±1 $ 25±2 The fo llowing dog boarding fees were paid to the Humane Societ ies (for the fiscal year ending June 30, 2002) HSCO (Bend Shelter) HSR (Redmond Shelter) County Rate $14.50 per dog per day $1,360 per month Total boarding fees paid - per County records $33,597 $16,320 Equivalent rate paid - per dog per day: County officer strays $14.50 per dog per day $22 per dog per day All Count y strays $14.50 per dog per day $14 per dog per day The fo llowing is other County support to the Humane Societ ies: HSCO (Bend Shelter) HSR (Redmond Shelter) Share of license fees - for education $ 30,584 $ 12,802 Cremat ion costs $ 4,169 $ 3,721 Fair value of land lease (estimated)* $ 21,000 $ 16,000 Deschutes Count y, Oregon Internal Audit Program David Givans County Internal Auditor Deschutes County-Administration building 1130 NW Harriman Bend, OR 97701 Phone: 541-330-4674 Fax: 541-388-4752 davidg@co.deschutes.or.us Fair value of land contributed (estimated) $ 348,000 $ 272,000 * Estimated annual value. Land has been contributed to shelter and est imated lease reflects an est imated 6% return on the value (provided by County Property Management). Audit Findings The fo llowing are the findings provided to management: · The contract with the Bend shelter is unclear on the handling of certain fees and duties · The Redmo nd shelter is not in co mpliance with terms of contract · The County licensing fee for unaltered dogs is out of compliance with Oregon Statute · The contracts with the two Humane Societies do not include the Oregon’s statutory requirement to license dogs prior to release · Number of Count y dog licenses virtually unchanged after significant growth in Count y populat ion Responses Humane Societ y of Central Oregon They have indicated the presentation is a fair and accurate assessment of their costs. Responses to the specific findings are as fo llows: o They support rewrit ing and clarificat ion of the contract with regards to impounds and boarding costs. o They indicate that licensing issue is primarily one of law enforcement. o They have also provided clarificat ion of how they came up with their original request for a rate increase and have made a new request. Humane Societ y of Redmo nd They have indicated the presentation is a fair and accurate assessment of their costs. Responses to the specific findings are as fo llows: o They support a unified contract. o Willing to work on license program co mpliance. o Ident ified co llect ion issues on impounds and boarding fees for strays. Deschutes County Finance The County’s finance office handles dog licensing and provided a written response. Responses to the specific findings are as fo llows: o The unaltered dog licensing fee will be increased to comply wit h Oregon statute. o Dog licensing requires rabies vaccination cert ificates which the Humane Societ ies are not able to do at the current time. o The County’s recent efforts to improve dog licensing were highlighted. To: Audit Co mmittee and Board of Count y Commissio ners From: David Givans, Count y Internal Auditor Subject: Overview of dog boarding costs at the Humane Societ ies Date: March 11, 2003 The attached audit report provides informat ion concerning the Dog boarding costs at the Bend and Redmond shelters. This report was requested by the Board of Count y Commissio ners in light of requests of money fro m the Bend shelter as well as renewing contracts. Informat ion contained in this report is fro m interviews, observat ions and analysis. Audit results have been discussed with both of the Humane Societ ies, Count y legal counsel and County finance. They are in general agreement with the findings and their responses are included at the end of this report. The findings that were focused specifically on applicable law and contractual terms have been addressed by Count y legal (Mark Amberg). Our findings were also discussed with Count y finance office (Cheryl Circle and Mart y Wynne) since they administrate much of this act ivit y. I did not specifically co mment on responses to the findings. The Humane Societies offered addit ional informat ion that has not been reviewed for accuracy. I appreciate the cooperation and assistance I received fro m the Humane Societ ies in conducting and preparing this report as well as input fro m Count y personnel including - Mike Maier, Marty Wynne, Cheryl Circle and Mark Amberg. Internal Audit Program David Givans, CPA County Internal Auditor Deschutes County-Administration building 1130 NW Harriman Bend, OR 97701 Phone: 541-330-4674 Fax: 541-388-4752 davidg@co.deschutes.or.us Deschutes Count y, Oregon