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HomeMy WebLinkAbout12.A. Springsted Parks and Recreation Fee Analysis Presentation 1:Z. A, CITY OF SHAKOPEE Memorandum TO: Mayor and City Council Mark McNeill, City Administrator FROM: Jamie Polley, Director of Parks, Recreation & Natural Resources SUBJECT: Springsted Parks and Recreation Fee Analysis Presentation DATE: October 21, 2008 Introduction An analyst from Springsted will present the Parks and Recreation fee study that was recently completed. Backaround The City hired Springsted to complete an evaluation of the Parks and Recreation Fees. The study was completed in March of 2008 and Springsted presented the information to the PRAB. The PRAB utilized the information when evaluating the 2009 budget and 2009 fee schedule recommendations. The final item in the Springsted contract is for a presentation to be made to the City Council. This presentation was postponed until all of the information from the fee study was analyzed and evaluated to ensure understanding and use by staff. Attached is a summary report from Springsted and a copy of their power point presentation for your review. Following the presentation Council members will be able to ask questions of Springsted. City Goal: E. Financially Strong Reauested Action There is no requested action at this time. Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101-2887 Springsted Tel: 651-223-3000 Fax: 651-223-3002 www.springsted.com October 17, 2008 Ms. Jamie Polley City of Shakopee 1255 Fuller Street Shakopee,~ 55379 Re: Park and Recreation Fee Cost Study Dear Ms. Polley, The City of Shakopee hired Springsted Incorporated to evaluate the total costs incurred by the Parks and Recreation Department in providing services supported by the various activity fees it charges. Springsted is pleased to present the results of our analysis and review in the report which accompanies this letter. In evaluating the Parks and Recreation costs, we followed a process very similar to that used in our study ofthe City's development fees. We began with the budget and payroll data which is updated and maintained by the City's Finance department in the model Springsted created for the development fee model. Mr. Gregg V oxland was of great assistance in working with the project team to assure that the budget and payroll information used for this project was current and consistent with the numbers used by the City. With the City's budget and payroll information as a foundation, we moved to the next phase of our study, which involved a survey of Parks and Recreation personnel to determine the amount of time each staff member spends on the various tasks required to provide services to the department's customers. This survey consisted of two main parts. The first part of the survey asked for a general breakdown of each employee's time, divided into four major categories: regular activities, fee-based activities, citywide overhead, and department administration. Staff members were asked to estimate the proportion of their time spent in each activity category over the course of a year. An example of one employee's activity detail report is shown in Figure 1, on the next page. The first two categories cover activities which have a direct effect on citizens or customers. Regular activities represent any of the duties or functions that would be expected of city residents as services covered by the taxes they pay. Fee-based activities represent the time spent by employees on activities that are supported by a specific fee, as opposed to general levy funds. Overhead and department administration represent the activities performed by staff in order to manage and support the functions of other staff members. In the case of citywide overhead, these activities generally include such things as policy making, citywide budgeting and finance, human resources services such as payroll and benefits administration, and legal counsel. These activities support the city government as a whole, and their costs are used to calculate a citywide overhead percentage which is added to the costs of any services performed by any department. Public Sector Advisors Shakopee Parks and Recreation Cost of Services Study Page 2 Figure 1: Activity Detail Dvorak, Sherry - Recreation Supervisor SalarylBenefit $81,848.15 Hours Worked: 1728.00 Dept Admin Percent of Time: 45.00% Cost: $36,831.67 Meetings, training, brochure design, scheduling, timesheets, etc. Fee Based Activities - Recreation Percent of Time: 52.00% Cost: $42,561.04 Summer programs 20% School-year programs 6% Preschool programs 5% City-affiliated sports associations 10% Adult sports 10% Softball tournaments 1 % Parks and Recreation Percent of Time: 3.00% Cost: $2,455.44 Special events 100.00% $81,848.15 Department administration is similar to citywide overhead in that it represents activities that support and direct other staff, as opposed to front-line activities which affect residents directly. These generally include such things as management and supervisory tasks, staff meetings, training, timekeeping, and administrative support services. Much like citywide overhead, these costs are converted into a percentage-based surcharge; the primary difference is that this surcharge is applied to all activities of the specific department, and not the city as a whole. Figure 2 shows an example of the department administration calculation for a specific department. Figure 2: Department Administration RECREATION FUND - Park and Recreation - Recreation Programs (7750 & 7751) Total SalarylBenefits: $426,994.43 Total Employee Admin Cost: $93,295.45 Allocated Out: ($81,750.29) Allocated In: $0.00 Allocated Admin Salary In: $2,834.98 Allocated Admin Salary: $2,834.98 Adjusted SalarylBenefits: $348,079.12 Direct DeptJDiv Admin Cost: $96,130.43 DepartmentJDivision Admin %: 27.62% Activity data was reviewed by supervisors for accuracy. In those cases where staffwere not available to complete the survey (such as seasonal staff), supervisors completed the survey on behalf of those staff members. This survey data was input into the model, from which an activity profile was generated for each department, showing the proportionate amounts of effort spent by department staff in each category. The second part of the survey was much more specific than the fIrSt. In this survey, employees were asked to estimate the amount of time required to perform a single instance of a given fee. For instance, a class instructor was asked for the amount oftime required to plan, prepare, and teach a class. For each fee type used by Parks and Recreation, we compiled a list of all staff members involved in providing the fee-based service, from those who assist customers with signups, to those who process payments, to those scheduling times and spaces, to those teaching the class. For each Shakopee Parks and Recreation Cost of Services Study Page 3 recreation fee type, employees were asked to estimate the number of minutes they spent on each task related to providing services. An example of the fee task details for a specific recreation service is listed in Figure 3 below. Figure 3: Fee Task Detail Report Recreation - Adventure Daycamp Total Hour(s): 2.78 Hour(s) RECREATION FUND Park and Recreation Recreation Programs (7750 & 7751) Dvorak, Sherry - Recreation Supervisor Approx 30 minutes for the program 1 Minutes Dvorak, Sherry - Recreation Supervisor Total: 0.02 Hour(s) RECREATION, ASSISTANTS - Recreation Assistants 58 Minutes RECREATION, ASSISTANTS - Recreation Assistants Total: 0.97 Hour(s) RECREATION, INTERN - Recreation Intern Approx 30 hours per year 50 Minutes RECREATION, INTERN - Recreation Intern Total: 0.83 Hour(s) RECREATION, LEADERS - Recreation Leaders 58 Minutes RECREATION, LEADERS - Recreation Leaders Total: 0.97 Hour(s) RECREATION FUND - Recreation Programs (7750 & 7751) Total: 2.78 Hour(s) Using an employee cost per hour value calculated from the city's payroll data, we used the sum of all employee costs to determine the total personnel cost of providing a given fee-based service. This cost was compared to the total personnel budget ofthe department, and the resulting proportion was used to assign non-personnel costs (materials, supplies, contracted services, etc.) to the fee type. Finally, the department administration and citywide overhead surcharges were applied to the direct and indirect costs, the result of which represents the city's total cost of providing each fee-based service. On the following page, Figure 4 shows the full cost calculations for one fee. Shakopee Parks and Recreation Cost of Services Study Page 4 Figure 4: Fee Task Cost Report Recreation - Adventure Daycamp RECREATION FUND - Park and Recreation - Recreation Programs (7750 & 7751) Employee/Average Group Cost/Hour SalarylBenefits Annual Hours Dvorak, Sherry -Recreation Supervisor $47.37 $81,848.15 1728.00 Employee Time 0.02 Employee CostlUnit $0.79 RECREATION, ASSISTANTS -Recreation Assistants $9.60 $13,963.81 1454.75 Employee Time 0.97 Employee CostlUnit $9.28 RECREATION, LEADERS -Recreation Leaders $11.08 $27,003.47 2436.25 Employee Time 0.97 Employee CostlUnit $10.71 RECREATION, INTERN -Recreation Intern $11.53 $6,177.81 536.00 Employee Time 0.83 Employee CostlUnit $9.60 Total SalarylBenefits: $426,994.43 Total Dept/Div Fee Cost: $26.72 Allocated Out: ($81,750.29) Allocated In: $0.00 Allocated Admin Salary In: $2,834.98 Adjusted SalarylBenefits: $348,079.12 Cost as % of Adjusted SallBen: 0.0077% Direct Fee Cost: $26.72 Indirect Labor Costs: $24,210.35 $1.86 Supplies and Services: $120,435.58 $9.24 Miscellaneous: $5,813.08 $0.45 Capital Outlay: $2,321.63 $0.18 Depreciation: $0.00 $0.00 Other: $0.00 $0.00 Total DeptlDiv Cost: $500,859.76 Dept/Div Fee Cost per Unit: $38.44 Total Dept/Div Admin $138,324.48 Dept Admin/OH Cost per Unit: $10.62 Dept Admin/OH 27.62% DeptlDiv Overhead Cost: $66,968.03 Fee Overhead Cost per Unit: $6.56 Overhead Percentage: 13 .37% Total Dept/Div and OH $567,827.79 Total Dept/Div Fee Cost per Unit: $55.62 As a fInal product, Springsted prepared a summary report showing the total cost of each recreation fee type, along with the fees charged. The difference between the fee amount and the total cost was reported as a surplus or subsidy. This fee summary report was provided to the recreation department management staff and the Parks and Recreation Advisory Committee to be used in their efforts at updating the parks and recreation fees to be charged in the coming year. The information gathered for this study has been added to the model used by the City of Shakopee for calculation of its development fees, such that updates made to the budget and payroll information in the merged model will allow Parks and Recreation fee costs to be updated at the same time as the development fee costs. Shakopee Parks and Recreation Cost of Services Study Page 5 Springsted would like to thank you and your staff for the considerable assistance they provided in gathering and reviewing the time and cost data used in this project. It has been our pleasure to complete this project for the City of Shakopee, and we hope that we may be of service again in the future. Respectfully submitted, ~7S~ Matthew T. Stark Senior Analyst, Springsted Incorporated 10/17/2008 . Calculates true cost of providing services . The SRringsled . Includes all expenses incurred, including: ~~:t of Services Model - Direct employee expenses. - Indirect expenses (supplies, contracted services, etc.) - Dept administration & support - Citywide overhead costs ;'utl;i(Ssd~fA():.::Wr~ ,..,."", -. """'""'" ........ ""..... Senka Mlxcllaaeouo ToO> GencralFtmd_Clcrk'aOffice S 180,000 S lS,lXXl S 31,000 S 13,000 S "',000 A!loI:atiomln: InfoTccbnology , <000 S '-"'" , ""'" S "" S '''''''' BklgMoinlcm:Ee .000 ''''' ''''' """ A1IocatiOrl!lOl:l: . , N~ . S AdJI1ItedBa1ance S '00,000 S .... $ "'000 S l5,OOO $ "0,000 Begin with approved budget or actual expenditures - Subtract expenses that are allocated to other budgets - Add expenses allocated from other budgets Adjusted balance will be used in calculations Payroll Calculations .....,. ........ . Estimate of employee time $ 37,000 $ categories of activity: Start with annual salary - Regular Activities: general duties covered by tax levy - Fee-Based Activities: specific services provided to a Add benefits specific customer for a fee (not tax-based) - Based on bargaining unit and length of service Divide by hours worked per year - Depl. Admin: activities required to keep a department - T olal hours minus holidays, vacation, sick time, etc. running smoothly (e.g. supervision & support) . Result is direct cost per hour for each employee - Overhead: activities performed to benefit the whole organization (e.g. policy, HR, legal) p"i) $,'ct(-,.a.d\l;$()i'S , 1 10/17/2008 Activity Profile (cont.) ........ -. .,........ T.... ....... .......... ....... ............. Gm~ral FUnd - Cierlr.'somce . ,",,""" . ">.""" . 35,000 $ 15,000 $ ",""" """""'- ".. 10,000 $ 1,000 S 1,750 $ ,,. . ".>00 o..bod N~A~ ""'. "'" . """' ~Adminiotrotion Re&u!m"Activi!ies 2l,ooo S 9,000 S ',,"""" J.1-&s<dActivilico ''''''' . 3.000 S '<""" T.... 35,000 $ 15,000 $ ",""" _1ty.........CIoorlL'aOllloe . Employee data is aggregated to ~- OVerhead activities ,~ calculate department-level -- are rolled up and ~ percentages for general activity charged to the organization as a whole categories Rcv-W. -f...eioON ~----,------~. . Department administration is charged to regular and fee- based activities in the department ;'(I~;i( Si,~!lr MV':;"fS , $prlnq!>ted .'atli,cSHt()[t,(J"".:'rs $ 50,000 ~ $ $ 67,500 15% ~ $ 200,000 ,.% $ 77.62S $ 20,000 13.50% ~ $ 35,000 . 88,.04 $ 15,000 $ 270.000 . Multiply adjusted cost per hour by Dept Admin percentage - Covers employee's share of supelVision & support . Multiply by OVerhead percentage - Covers employee's share of back-office and mgmt functions Result is Total Cost Per Hour for the employee , P\ltHi, $~~t<!( ;\<!V'Wl'S , ?\m",$,'cI'<JrA'lV'SCI'$ Em...... "'- FleGuencY """'" eo """......... . 5.04 John Doc:-Clm: Gc1len1Fund-C1crk.'sOffioe IS miD T....coot . 402.00 Prclcc:sSapp1icatiOD811.dtablpaym.em 17 """......... , '.n Total Cost: , 115.17 AnacSu>ith_lDIpcctor GenenI Fund - BIdg In.pcctiOllS 4Smio n CostPerUnft $ &00 Trwel to .itc laid pc:d"orm m.~ "..1<,_ , 576.19 Total Cod for Adhfty; '" """......... $ 21.55 T....coot , 969.05 ,... """......... , 63.20 Compile list of all employees and tasks involved Tc:1blCost: $ 121.474.63 '''' Coot......... $ 3&24 r...coot , 46.415.04 . Estimate average time involved for each employee to complete one iteration (Le. one class, one season, etc.) Total cost of service is the sum of each employee's contribution. P'Ib!,,; Si1Ctoc A(,...l~()n; 2 10/17/2008 3