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Home My WebLink About3. Park and Recreation Fee Study Recommendations J, CITY OF SHAKOPEE Memorandum TO: Mayor and City Council Mark McNeill, City Administrator FROM: Jamie Polley, Director of Parks, Recreation & Natural Resources SUBJECT: Park and Recreation Fee Study DATE: August 12, 2008 Introduction City Council is asked to review the recommendation of the PRAB regarding nonresident rates and recommend that the changes be presented to the townships on August 18, 2008. Backaround Springsted completed a fee study for all City Recreation program activities in March 2008. The fee study determined the cost to provide each fee based activity. The cost was then compared to the revenue received from that program based on 2007 participant numbers illustrating a surplus or a subsidy for the program. The cost of providing each program included instructor costs, department overhead and supply costs. The fee study indicated that $1,115,718.41 was received from fee based activities. The 2007 Recreation Fund budget totaled $2,113,890.00. The subsidy from the general fund to the Recreation Fund was therefore 47% in 2007. The 47% of the Recreation Fund that is being subsidized includes non fee based activities that cannot be directly related to a specific program. These activities include facility maintenance, general customer service activities, general park maintenance and special events. Discussion General Fund SubsidY The 2006 subsidy percentage was 60%, the 2007 subsidy percentage was 47% and the anticipated 2008 subsidy is 52%. The subsidy from the general fund to the Recreation fund has been consistently around 50%. The 2009 proposed Recreation Fund budget totals $2,334,270. Revenue accounts for 47% of the budget or $1,100,600 and the general fund subsidy accounts for 53% of the budget or $1,233,670. The goal of the City Council as well as the Parks and Recreation Advisory Board is to increase program use, eliminate the subsidy of nonresidents and decrease the subsidy from the general fund. In order to decrease the subsidy, fees may have to be increased, services decreased or a combination of changes. The PRAB set a goal to reduce the general fund subsidy for 2009 by 7-10%. This includes receiving increased revenue from the following areas: 3-4% increase in program usage and 6-7% increase in revenue from increased fees. Program fees have not been evaluated since 2002 however individual program fees are changed each year to reflect the instructor and material costs only. The nonresident fees have not been evaluated or raised in at least the past twelve years. The PRAB is considering a 5% increase in all recreation fees based on the fee study results and inflation. A work session is scheduled for September 13, 2008 to discuss the fee based activities and evaluate the fee structure for 2009. Nonresident Rates 2007 indicated that approximately 10% of the recreation program users are nonresidents. The PRAB and staff evaluated the subsidy to nonresidents currently utilizing the City's recreation programs. The amount of taxes paid by residents of Shakopee for recreation programs is as follows: The amount the tax payers are paying to the subsidy is as follows: 2007 Population = 32,300 2007 Tax Levy = 11,521,697 Subsidy = 1,108,770 (9.6%) =$34.331/person/year 2008 Population = 33,960 2008 Tax Levy = 12,975,000 Subsidy = 1,145,010 (8.8%) =$33.72/person/year 2009 Anticipated Population = 34,467 2009 Anticipated Tax Levy = 13,487,685 Subsidy = 1,233,670 (9.1%) = $34.79/person/year Nonresident participants are currently charged an additional $21.00 per program. Louisville Township pays the $21 for all of their residents that utilize the recreation programs and Jackson Township pays the $21 for their residents under 15 years old that utilize our programs. Nonresidents living in Prior Lake or Savage that attend the Shakopee School District pay a $5 nonresident fee. In 2006 the City received $16,625 in nonresident fees, in 2007 the City received $16,219 in nonresident fees and it is anticipated that the City will receive $17,000 in nonresident fees in 2008. If a nonresident were to only take one recreation program class and pay the additional $21 nonresident fee they would pay less than the tax payer that pays a one-time yearly fee of approximately $35.00/person/year for recreation programs. PRAB Recommendation The PRAB recommends establishing a one-time nonresident fee of $36.00 for nonresidents utilizing the City's recreation programs. This would be a per participant charge and be charged at the time they register for their first recreation program of the year. The fee would be good from January to December. In addition the PRAB recommends continuing a resident/nonresident rate for each program. The nonresident rate would be set by increasing the resident rate by 15%. The 15% is the percentage established by the PRAB when taking into consideration the subsidies for building maintenance and operating costs that are not included in our current fee based activities. For example: Program 2008 5%lnc 2009 15% Non- 2009 Non Fees Resident Resident Resident Fees Surcharge Fees Swimming Classes $58.00 $2.90 $61.00 $9.15 $71.00 Micro Soccer Program $32.00 $1.60 $34.00 $5.10 $40.00 Therefore nonresidents would pay a one-time fee of $36.00 when they register for the first class of the year and pay the nonresident rate of the program. They would then only pay the nonresident rate when they register for the second and third classes. The PRAB feels that the $36.00 equals the rate the city residents currently pay on their taxes and they feel the additional 15% covers costs and activities that the city provides through City tax dollars that are made available for use by residents and nonresidents. It is the intention of the PRAB that a one-time larger fee will attract more users from the townships to participate in our programs versus the $21.00 per activity. They also want to keep the resident and nonresident rates at a rate that they feel the community can afford in the current economy. Summary The revenue growth goal is 10%. This is anticipated to be achieved through rate increases of 6.5% (including inflation increases and nonresident fee structure changes) and participation increases of 4%. The 2009 proposed budget allocations would then change to show revenue accounting for $1,210,660 or 52% and general fund subsidy accounting for $1,123,610 or 48%. Reauested Action City Council, if concur, recommend the proposed nonresident fee structure and rates to be presented to the townships on August 18, 2008. . ~. ON TA-l!JJ...-e . D.. ~ 2009 Budget Highlights c ~ . Total Park and Rec Budget 2009 Parks and Recr III . GeneralFundSubsidy .g' . Fee Revenue Fee St - .il Revenue ~ . Proposed budget lIIusbates a 3.7% In ease from 2008 Recomme'ndatl'o Cl . AddillonallncreasesareproJectedfor.,,09 . .5 . Fee restructure (September 13" Wllrfdng session) . j \ 1U . Increasing overall fees due tb!lri~atlon .. . ..' . ... . Revising non-resident fee ~ctul:e \ ", , 8. . Increased partlcipation89606 i . Jamir ~lIey 0 Expenses Ditector '. 0) . Expenses up 4.78% versus 2008 . \ Parks, Recreatiqh & Natural Res g : ~~;:~~nt ~~:z~:e la/l2/08 N : ~':;" ~~~~=:, . Wages followed CI~ gukfanf~ of 3% In~ . One Headcount u > .a.olll Recn ~ ~ ~ D.. D.. o 0 "tl Program Overview -g Budget Goals ; ~ ~ ~ ~ . Total number of participants ~ · Increase Revenue "tl . . . "tl . Greater program use ::l . Resident participants ::l . Eliminate subsidies for no a:I . Non-Resident participan a:I . Reduce the percentage of fYnding provlded m the ~ 7;' ~ General Fund ,,,' +:; ;i +: II\, . l!! '. i',. l!! . Reduce Controllable expef1~s III · 2008 Shakopee Popul~tion III . Maintain focus on strategidcity goals g . Projected 2009 Popuyrti?n, g . Current economic consldel'jltiorl~ . Slower growth due to economy.. .' . g ,. '. g . Provide greater focus in programmin o 0 population groups!' \ N N . Youth '. . Seniors ~ R:.;ru ~ D.. D.. ~ 2009 Revenue Direction ~ Current Program Funding ~ ~ ~ ~ ~ . Reduce the General Fund subsidy by lOOA ~ . Resident Subsidy -g . Program use needs to Increase 3 -g . Revenue provlded from tht!.$~ a:I . Fees must increase 6 - 7% a:I . $1,233,670 T' ~ .... ~ . 53% of the Park and R~reatiOn Budge ~ · ConSiderations i i \ ~ . Projected 2009 Shakopee.l?opulation l!! . Current economic burden M tamilles l!!. 34 467 ! i 8. . Maintain value for target~ groups 8. . Every ~esldent In shakd~ pays o . Seniors ; 0 . $35.79 ,"', . Youth ! ;' ... g g . $1,078,510 or 47% i~funded byprogra o 0 N N 1 . <I D.. D.. 0 0 "tl Current Fee Structure "tl Rationale for Proposed Fee Changes c c ~ ~ ~ l) III . Program Fees are the same for Reside . Fees have not been increased since Z Cl Cl "tl residents "tl . Other Industries have Inr ::l ::l a:I a:I . Food - ?Olo ) Cl However, Cl . Fuel - ?O/o if. C c ~ Ii ... ~ . Inflation is projected t<r' F()ntinue l!! . Non'Resident fee - adq1 ;$21 per prog l! . Operating expenses ire! under pressu III III Q. . Non-Resident prograni partiqpation Q. 0 . 718 participants o,i lQ% of.,the tota 0 0) 0) . PRAB is considering/increasing all ~ 0 . Non-Resident Z008program irl(:ome 0 (This will be dlscu~ at the Septem~ 13th 0 0 N N .' . . $16,000 << D.. D.. 0 0 "tl Non-Resident Fee Changes 'tI Impact on Current Fees c c ~ ~ ~ ~ III III C) Cl "tl "tl ::l ::l a:I a:I Cl C) ""NO ....,- lI"Im:): ~Aes c ii C ~ . PRAB Is proposing an annual rfti1kresident fee ~ l!! ~ . Shakopee Resident and Non-Resident subsidy eq .. --"-- ...'" si9c: Isf.M III . Incentive to greater progra~ participation III .~..J Q. Q. M~s.x:c.rPnl;Ta1\l ....., ...... 0 i . 0 I . PRAB also proposing a Non~resldent(ee stru 0) .!i-t.IS.'~ot~llzed " 0) . Takes Into consideration the subsidieS fOll>ar "Aft~' are ~unded up 0 currently not aceountecl.for in 'our feeS, 0 0 0 N . Approximate!\' 25% of our t!\rqgrams re~ on the N department for upkeep' of ~ parks an .facilities . PRAB is conSidering a;1S% fee difference,to ace maintenance costs (~ <:: ~ n,lIIldNlItll,.III:..ovrct ,~ ~_WorIt_..n. D.. D.. 0 0 "tl Non-Resident Fee Breakdown 'tI Fee Change Overview c c \'lI ~ ~ l) III . Non-resident user pays $36.00(person at time . Revenue Growth Goal = 10% or $110,00 Cl Cl "tl registration for each partidpant (]an "tl . Inflation increase ::l ::l a:I Plus, a:I . Resident ( Non-reSident fee Cl . Pays the non-resident dass ~ Cl . Fee Spread 15% C C . Non-Residents are 10% tif. total ~ ~ l!! 1'r " l!! . Non-Resident annual fee i~~i;t III Example: Joe lives in JackSQn Township a ~ III . OVerall Partidpation Incr1st Q. Q. 0 registering for swimming les5tlns in Jan . Joe i 0 0) would pay $71.00 forthe dass (non-r .1 ent rate) 0) 0 plus the one time fee for'the year of . WhE!n 0 0 0 N Joe registers for SWimming lessons in fall he N would only pay th~'non-resident~ate 0 71.0 . " -h xed ~ \{\:)"/o b ~()cnYCSid.m:\S 'llB X .;1.\;: I~Ol~ C}(~\JJ (\(Y\~~Lc.oJ..--tD ~ ~~I LUq u~r.s r:.tlU ~\eh>UtL+V \'f'?ef;'Cl.(Yl~ -to peat.-e-\rC.f1 ~ lJ.L~ V\J)..Qf\ -tD loo'SQ . ~ 6f5 cy (; 'bW 'l\0" ~~ ~- 2 _ \C: u.e:. ~ +'a\ -to~?:Jo pro~n~ (YY::L\{ \r\D t I V\MS,\t-1"o....w..o _ . . D.. 0 Fee Change Impact on the General "tl c Fund Subsidy ~ ~ III Current 2009 Budget Cl "tl . Total Park and Rec Budget ::l a:I . General Fund Subsidy Cl . Fee Revenue c ~ ~ .. Proposed Changes III c.. . Total Park and Rec Budget 0 . General Fund Subsidy 0) 0 . Fee Revenue 0 N !:ll - yYl {n- \I\j rt ~ (,)c p.ef) . Recreation Fund 0 2009 Recreation Fund Budget "Cl c . Services ~ . Recreation Fund (Special Revenue Natural Resources ~ III Fund) en . Recreation Programs "tl . AquaUcs Parks Capital ::l . Ice Arena a:I . Community Center Improvement Program en . Park: SeMces C . Teen center ~ . Park Development l!! . Development Review III . Recreation Management ~ c.. . Staff I 0 . Approximately 95 Part-11me ! 0) . Recreation Supervfsor (4) / : 0 . Park and landscape Design~t (eliminated) , 0 SHAKOPEE N . Offke Service Worker . Secretary . Director . Park Maintenance funded th ,!:Ill !:ll D.. 0 2009 Recreation Fund Budget 0 2009 Recreation Fund Budget "Cl "Cl C . Continued Level of Service Request c ~ ~ . Primary Changes ~ . Reduction of one full time staff ~ . RevenUe III III Cl . Accommodates partidpation growth In p Cl . 4152: Memberships: Increase projected due to (1) addltl "Cl significant initiatives "Cl Center membetsttips resultfng from health care fl Q ::l ::l 0l1<I (2) anddpated Increased sa.:;::" watersIlde enhancements. \! a:I a:I . 4D3S DesIgn Fees: Oeaease ng (rom the teducU , ,i\ Cl 20116 Cl Actu.1 Architect and a Jrmired number- of pi;pJeds. C C . 4nSlce Rental-Exempt: lnae#.projected due to I ~ ~ and 8 high demand for Ice time. ! i .., l!! l!! . Expenditures / i III Revenue 980,528 III . 6002 Full-Time Wages: ~ the, full time wages c.. c.. 0 Expenditures 2,116,434 0 Landscape Architect position. Wages Ind~e 3% cQSt of II . &102 Operating SUpplies: .Decrease attiibuted to ellm! 0) General Fund 1,287,110 0) purchase new fitness equlprryenttc; 2009, ":. 0 0 . 5315 Bundlng Malnt:enarlce: Decrease based 0C1 0 Transfer 0 . 6350 utilities: Increase ~butEid to hfgher\~9'ergy c~ N N . 5430 Building Rent: lrirease attriixJted to a"41ust1ng the End of Year ISI,204 building to catrh up to bliJkBng value. (33%' cC,,& Arena, Fund Balance . 133& Printing: ~ attribUted to condenslng the brodmres a year vemp n 3 . I D.. D.. 0 2009 Recreation Fund Budget 0 2009 Recreation Fund Budget "tl "tl c Budget Improvement Options c Budget Improvement Options ~ ~ ~ -For Council consideration as budget process progresses ~ . Additional Cameras and Memory Upgrade III Ice Arena Ughting Enhancements III Cl . Cl . Increase security of the Community Cen "tl . Energy savings of Approximately $3,0 "tl . Assist Police Department durin ::l ::l . pro= to be funded USing a:I . $10,000 (one time) _ a:I for 008 or Building Fund. . Memory upgrade necessary \\0 maintain Qua Cl . Community Center Water :,ighting Enha Cl c c Teen Center Carpet /! ~ . ~~~~ savings of Approxlma~p,OOO-$S,OOOI ~ . l!! l!! . Repla~e original ca~t in t~n,center ~revi III . Pro= to be funded usingiti1e Green Initiative III wrestimg room, meeting ~pace;nbrary . Ca Q. for 008 or Building Fund. !: ' Q. stained. ' ; 0 . Point of Sale Software!! \. 0 . $20,000 (one time) 0) . Integrate admissions, pro ,~hoP, conc'esslons, regi ~o~al 0) . Aquatic Park Concrete Curb ~ 0 membershi~ Into one syStem. Provides imp 0 gin some 0 accountabi ity (system gl!nerated repor!S). 0 . The concrete curbing ,around the pOol Is cra N . $20,400 (one time),I, ., N areas and poses some safety concerns . Could request funding assistance from T~ecomm cation ' . $5,000 (one time) .nNstu'UR..oure'. !:Ill .,,,,, ~IIoInlWodl_"'iL , D.. 0 2009 Recreation Fund Budget 0 "tl "tl 2009 Recreation Fund Budget c c ~ Budget Improvement Options ~ ~ Increased Community Center Desk Coverage ~ III . III Questions/Direction? Cl . Allow full time staff to concentrate on the Cl " "tl ::l . Assist with the programming a. Of ::l a:I . Increase customer service leve~ to coindde with a:I Cl Cl C usage. f:, c ~ $lS,OOO additional ongoing c~. ~ l!! 1 III III i Q. Q. 0 0 \ 0) 0) 0 0 0 0 N N !:Ill !:Ill D.. D.. (3 2009 Natural Resources Budget 0 2009 Natural Resources Budget " "tl C . Services C Continued Level of Service Request ~ ~ 'S . Natural Resource Activities ~ . Natural resource planning III . 6002 Wages: Increase due to cost of IMng increas . Cl Cl "tl . Woodland management " revised allocation of Director's wage perce =' Diseased tree control ::l a:I Noxious weeds a:I . 6015 Part Time Wages: Deer . sed due to elimin Cl . Park and open space boun Cl y. C mar1<ing ;,. C ~ . Planning and Building revi# \ ~ l!! . Support of the Environmental l!! III Advisory Committee ! III Q. Q. 0 . Education 0 . Funding for the business unIt ~bustvlmoved \, 0) the business unit to the General ~nd I~ 2007 . 0) 0 Staff ~YtQ, 0 0 0 N . Natural Resource . ' . ! N . Summer Seasonal Intern (eliminated) ,..,': 4 . . . D.. D.. 0 0 2009-2012 CIP Overview "tl 2009 Natural Resources Budget "Cl c C . establishes tlmelines and funding ~ ~ ~~r park improvement ~ ~ III Cl Cl "tl "Cl . Cost estimates based on best ::l ::l available Infonnatlon at the time lXl lXl Cl Cl . All projects Indude S%-2S% Q C C ~~~~xrrri1~i~tlOn Factor/i.... ~ :; l!! j i .. . Actual ~roject costs are determinbJi III III a. a. throug detailed design process' i 0 0 with commun~ involVement;, , 0) 0) (feasibility stu ). 0 0 . Abil~ to implement projects/ 0 0 N N Identified In the OP Will be contingent on cash flow from developments. i ~ " D.. D.. 0 2009 - 2012 CIP Overview 0 2009 - 2012 CIP "tl "Cl C . Factors affecting 2009-2012 OP C 2008 Committed Projects ~ . Repayment of Interfund loan ~ ~ ~ . Huber Park'project complete and final payments received III . ~n~~'("pa~ ~":J:''!1::1.:..''rcts Cl Cl 17th Avenue Sports Complex Building -com eti "tl . =groJects deferred until 2012 or "Cl . ::l ::l and final payments a:I . Change tn development could lXl . Glader Neighborhood Park -con~ction unde accelerate or delay some projects Cl Cl developer y c . 2009-2012 OP Focus C ~ . Repay lnterfund loam / 1 " ~ . Westminster Park (Providence llolntejWestchest l!! . completing those project In high~t l!! Completion of project and fin'!! Payment III demand: .... i ClI . Park Signage a. . Westminster Park ./ i a. 0 (WestchesterjProvIdence Polnti!) 0 . Archery Range Relocation -project c6!l1plete & g 0) . _e F1e1d/Bluffs PIa'fiirouild reimbursement received '. . . GreenfieldjPark MeadowS 0) 0 DesIgn ' 0 . Interfund loan Payback 0 . Park Slgnage ~ N . Quany lake (per grani contract) . Proposed p'lan Is a more rkasona~e work load for existing staff .' !:Ill !;;II D.. 2009 - 2012 CIP 0 2009 - 2012 CIP "tl c 2010 and Beyond ~ ~ . 2010: III . Off Leash Dog Area Cl "Cl . Uons Park 2"" Ice Sheet ::l . Greenfield East/Park a:I Meadows-phase I Cl construction C . Westminster building ~ . RiversIde FieldsjBluffs- l!! phase II construction III . 2011'2012: All other a. projects 0 . Review and update CIP 0) year 0 . chan~es made based on 0 deve opment or other N funding opportunities , n' 5