Loading...
HomeMy WebLinkAboutPRC Fee Study Memo-5.12.21 Memorandum City of San Luis Obispo Parks and Recreation Department MAY 12, 2021 FROM: Greg Avakian, Parks and Recreation Director Prepared By: Devin Hyfield, Recreation Manager Aleah Bergam, Administrative Analyst Meghan Burger, Recreation Supervisor SUBJECT: ADOPT A RESOLUTION UPDATING THE CITY’S COMPREHENSIVE FEE SCHEDULE TO INCLUDE NEW AND UPDATED YOUTH SERVICES, AQUATICS, AND GOLF USER FEES RECOMMENDATION Adopt a Resolution (Attachment A) updating the City’s Comprehensive Fee Schedule to reflect new and updated youth services, aquatics, and golf user fees. REPORT IN BRIEF This report covers fee updates and proposes new fees associated with Parks and Recreation program expansion including new and alternative facility uses at Laguna Lake Golf Course, as well as needed changes to several programmatic fees associated with Youth Services and the SLO Swim Center. Fee Increases Based on Analysis Completed on Private Sector Rates and Increased Operating Costs Fee Decreases to Support Families and Stimulate Local Economy New Programs to Increase Diversity of Users City of San Luis Obispo, Title, Subtitle DISCUSSION Background – Parks and Recreation Fees Parks and Recreation fees and their rate of recovery are set by adopted Council policy guided by type of user and similarity to services provided in the private sector. Each group of fees is set within a range of adopted cost recovery goals ranging from high-range (60%-100%) to mid-range (30%-60%), and low-range (0%-30%). By policy, cost recovery for activities directed to adults should be relatively high and activities directed to youth and seniors should be relatively low. Cost recovery should be higher in those circumstances where services are similar to those provided in the private sector. Typically, a fee study is completed once every five years to conduct a deep analysis on all City fees to establish the appropriate fee level to cover the co st of service within adopted cost recovery goals. Between fee studies, the Parks and Recreation fees should be increased based on CPI. Historically, the Department does not increase all fees by CPI every year, due to the relatively small increments or odd number adjustment as well as market conditions. The fee increases are therefore tracked, and an increase recommended when it meets a level that can be administered appropriately. The cost recovery goals are therefore defined within a range to accommodate the mechanics of fee collection. The most recent fee study was completed in 2017 and updated fees adopted for FY 2017-18. A fee study was originally anticipated in FY 2021-22 for proposed adoption in FY 2022-23. Due to a variety of factors, including COVID-19 impacts and the economic recovery efforts, this work was postponed to the next Financial Plan with CPI increases applying in the interim. Since the 2017 fee study, the Parks and Recreation Department has experienced increased staffing costs due to significant minimum wage increases along with the replacement of aging infrastructure that necessitate an increase above the CPI levels. In addition, Parks and Recreation programs and fees compete with other agencies and private-sector businesses, unlike other City and government services. Many of the fee increases brought forward result from analysis on competitor rates and the need to remain competitive while continuing to recover costs in alignment with the cost recovery policies adopted by Council. Recommended Focused Adjustment and Addition of Fees The Department is not recommending a wholesale adjustment to all Parks and Recreation fees at this time. Certain fees impact families and children more and the Department remains mindful of COVID-19 impacts on family users as well as Council adopted policies for low fee recovery for this user group. Most of the fee increases presented in this report are still set below competitor rates, ensuring affordable City programming. Staff is proposing a few fee decreases, including the addition of a new childcare package program hourly rate that is lower than the current school year hourly rate. Consistent with adopted Council’s goals, this would continue to provide childcare at a lower cost to help the community’s economic recovery and enable parents to return to work. Lastly, staff is recommending new user fees for alternative programming at the Laguna Lake Golf Course. These programs are necessary to remain competitive, attract new users, and implement new activities. City of San Luis Obispo, Title, Subtitle 1. Proposed Changes to Youth Services Fees Sun-N-Fun School Year Hourly Rate – from $5.25 to $5.20 Last year, when CPI was calculated for Youth Services fee increases, staff rounded to the nearest 25 cents, but having a $5.25 per hour rate proves challenging when calculating .5 hours of care ($2.625). Staff is recommending Council approve the change of the $5.25 hourly rate to $5.20 for an even number when calculating .5 hours of care ($2.60). As before and after school programming is developed around the school district’s schedule, many participants’ hourly use is a multiple of .5 hours, which is also in alignment with subsidy partner CAPSLO’s process of reimbursing for childcare usage. New Fee: Sun-N-Fun Package Programming Hourly Rate - $4.44 Due to the COVID-19 pandemic and a modified School District schedule, Youth Services school year programming switched from an hourly drop-in program to a package program. A package program differs from an hourly “drop-in” only program in that participants register for a monthly package childcare session. Participants commit and pay in advance for a selected schedule. When registering for a session, participants pay for the full session whether or not the child consistently attends (absences due to illness, vacation and/or just not needing care on a given day). For families who regularly reserve and pay for care but do not use it, policies are in place to ensure families who may be on a waitlist needing care Fee Updates Minimum Wage Compaction Impacts Increased Capital Costs Next Fee Study Planned for FY 24-25 CPI Increase Challenges Private Sector Rate Analysis COVID-19 Pandemic New Programming City of San Luis Obispo, Title, Subtitle will have access to those spots. In a typical school year, Youth Services programming is only drop-in and the hourly rate currently in the comprehensive fee schedule is calculated based on this “drop-in” format ($5.25 per hour of care). Staff is proposing to utilize the Childcare State of Health Emergency hourly rate of $4.44 approved by Council in August 2020 in developing package programs for school year programming. The package programming enables staff to effectively manage program registration and ensure maximum childcare offerings to the community. In addition, the discounted hourly rate supports families as the community emerges from the pandemic. In re -calculating the estimated revenue for FY 2021-22 based on the proposed new fee, staff does not anticipate a decrease from original revenue forecasts due to the nature of the package deals and participants paying for the full session regardless of if the child attends every day. This also provides consistency and stability to those families needing regular care due to a standard work schedule. 2. Proposed Changes to Aquatics Fees Warm Water Exercise Fee Administrative Change: At the SLO Swim Center, Warm Water Exercise has been in high demand and public feedback has shown an interest in a 10 -use pass rather than the current 20-use pass. Staff is recommending modifying the current fee to a 10-use pass, which would subsequently modify the fee to 50% of the cost of the current Warm Water Exercise at $50.00. Staff does not foresee an impact in revenue forecasts due to this change but will review revenue actuals over the next fiscal year to see how the new pass will impact revenue. Aquatics Fee Increases: The cost recovery policy for Aquatics programming is in the low- cost recovery tier at 0-30%, and the last fee study included upcoming minimum wage impacts but did not factor in increased staffing costs due to compaction from minimum wage. Since FY 2018, minimum wage has increased by $1.00 per year and will continue to do so until minimum wage is $15.00 in FY 2022. As minimum wage increases, the City’s supplemental salary range as a whole is adjusted as minimum wage positions such as a Rec Cashier should not be paid the same as a Lifeguard, Head Guard, Swim Instructor or Aquatics Specialist due to certifications and training demands. Additionally, the last fee study did not include costs associated with the ongoing maintenance of the facility. In the proposed FY 2021-23 Financial Plan, staff is requesting $220,000 in both minor and major capital projects for the swim center to address the aging infrastructure. This includes $60,000 total in the two-year budget cycle for minor capital City of San Luis Obispo, Title, Subtitle maintenance for items such as stanchion posts, lane line reels, and lane lines. $160,000 is being proposed for SLO Swim Center Major CIP maintenance projects such as replacement of the Therapy Pool boiler, maintenance of a pool water chemical regulator, furnace replacement and old bath house roof repair. Based on the increased operating cost not known during the 2017 fee study in addition to an analysis on fees set by other municipal pools in San Luis Obispo County (see Table 2), staff is recommending increasing all aquatics fees with the exception of swim lessons and special classes at this time since those fees were increased by more than just CPI in FY 2018-19. Based on the fee comparisons, the proposed fee increases remain below other municipal pools in the region (see Table 2). See Table 1 below for proposed aquatics fee increases. Table 1: Proposed Aquatics Fee Increases Fee Number Fee Description FY 20-21 Rate FY 21-22 Proposed Updated Rate % Change Aquatics Lap Swim 16 Adult per use $3.25 $4.00 23.08% 17 Adult Monthly $49.00 $60.00 22.45% 18 Youth/Senior per $2.75 $3.50 27.27% 19 Youth/Senior monthly $39.00 $52.50 34.62% Recreational Swim 20 Adult per use $4.25 $4.50 5.88% 21 Youth/Senior per $3.75 $4.00 6.67% Swim Script 22 Adult per use $29.25 $36.00 23.08% 23 Youth/Senior per $24.75 $31.50 27.27% Recreational Swim Script 24 Adult per use $39.00 $40.50 3.85% 25 Youth/Senior per $33.00 $36.00 9.09% Lessons 26 Lessons $106.00 $106.00 0.00% 27 Private Lessons $183.00 $183.00 0.00% Special Classes 28 Lifeguard $223.00 $223.00 0.00% 29 Warm Water Exercise $100.00 $50.00 -50% 30 Facility Use $54/day + $21/LG $60/day + 22/LG 11% 31 Junior Lifeguard Program $223.00 $225.00 1% Staff has conducted a rate comparison of SLO Swim Center rates to other regional municipal aquatics facilities. As shown in Table 2 below, SLO Swim Center rates remain very cost-effective compared to surrounding swim center options. City of San Luis Obispo, Title, Subtitle Table 2: Comparison to Regional Municipal Aquatics Fee Rates Other Municipal Pools Fee Type Rate Current SLO Swim Center Rates Above/Below Competitor Rate Cuesta College Lap Swim $5.00 $2.75-$3.25 -$2.25 to -$1.75 Paso Robles Pools Public Swim $5.00 $2.75-$4.25 -$2.25 to -$0.75 Morro Bay Pool Lap Swim and Recreation Swim $5.00 $2.75-$4.25 -$2.25 to -$0.75 Santa Maria Paul Nelson Aquatics Center Daily Entry $5.00 $2.75-$3.25 -$2.25 to -$1.75 Monterey Daily Entry: Adult $10.00 $3.25 -$6.75 Daily Entry: Child/Senior $6.00 $2.75 -$3.25 Ventura Daily Entry: Adult $5.00 $3.25 -$1.75 Daily Entry: Child/Senior $3.00 $2.75 -$0.25 3. Proposed Changes to Golf Fees New Fees: At the Laguna Lake Golf Course, staff is focused on developing alternative uses for the Course to develop programming that appeals to a wider audience and maximize potential uses. The alternative programming would take place either during regularly scheduled business hours or afterhours events. As both Foot and Disc golf utilize other portions of the course, staff does not anticipate a substantial impact to course maintenance. Fees for alternative programs such as Disc and Foot Golf are comparable to other courses within the County which provide similar programming. The addition of alternative programming at the course will provide opportunities for non-golfers to enjoy the facility for a variety of activities not related to standard golf play. Staff proposes the below new fees: City of San Luis Obispo, Title, Subtitle Table 3: New Laguna Lake Golf Course Fees Fee Name Fee Description Alternative Programming Uses $10 Fee for any applicable activity other than rounds to be played at a Golf Course. Examples: Disc Golf and/or Foot Golf Spectator Fee $5 Fee for spectator not playing golf but riding in cart with paid golfer. This fee will also provide compensation and liability waiver forms signed for spectators who wish to walk the course alongside golfers, since it contributes to course wear and tear. The spectator fees are standard practices for golf courses that allow non-golfers access to the course. Tournament Use Fee for tournament use of the course Shotgun Fee $250 Daily Use for 39 or Under $12 Daily Use for 40 or Over $10 Golf Fee Increases: The cost recovery policy for Golf programming is in the medium cost recovery tier at 30-60%. Operating costs due to irrigation leaks and increased maintenance costs have increased at a far greater percentage than CPI. Since the last fee stud y in 2017, the Golf Course has added an on-going Golf Course Maintenance CIP. The division received $10,000 in FY 2020 and $20,000 in FY 2021 for irrigation repairs. In the proposed 2021-23 Financial Plan, staff is recommending the continuance of the $20,000 as an annual maintenance CIP. In the last fee study, this CIP cost was not considered. The fees for golf carts and pull carts are suggested to increase due to increased wear and tear which justify increasing the cost to rent in order to support additional required maintenance costs. Staff also did an analysis on current Laguna Lake Golf Course rates and other regional and municipal 9-hole courses. See Table 4 below for comparison rates. The LLGC rates are below market competitors. Table 4: Comparison to SLO County Golf Fee Rates Other SLO County 9-Hole Golf Courses Fee Type Rates Current LLGC Rates Above/Below Competitor Rate Black Lake Cart Rental $16 $8.25 -$5.75 Pull Cart Rental $3 $4 $1.00 Twilight $40 (walking) $52 (riding) $9.25 -$30.75 (walking) -$42.75 (riding) Super Twilight $30 (walking) $42 (riding) $5.50 -$24.50 (walking) -$36.50 (riding) Replay $20 (walking) $35 (riding) $7.50 -$12.50 (walking) -$27.50 (riding) Dairy Creek Cart Rental $10 $8.25 -$1.75 Pull Cart Rental $5.00 $4.00 -$1.00 Twilight $15.00- $20.00 $9.25 -$5.75 to -$10.75 City of San Luis Obispo, Title, Subtitle Super Twilight $15.00- $20.00 $5.50 -$9.50 to -$14.50 Replay $10.00 $7.50 -$2.50 Sea Pines Cart Rental $20 (for 2 riders) $8.25 (for 1 rider) -$1.75 Pull Carts $6 $4.00 -$2.00 Twilight $12 (weekdays) $14 (weekends) $9.25 -$2.75 (weekdays) -$4.75 (weekends) Super Twilight $12 (weekdays) $14 (weekends) $5.50 - $6.50(weekdays) - $8.50(weekends) Replay $12 $7.50 -$4.50 Based on the increased operating cost and an analysis of fees set by other regional and municipal golf courses in San Luis Obispo County, staff is recommending increasing select Golf fees (Cart Rentals, Replay, Off Peak, Twilight and Super Twilight) at this time. The round rates being increased are the most impacted times of play - Twilight and Super Twilight rounds (3:00 PM – Close). On average, Twilight and Super Twilight rounds see between 40-60 persons during a 3-hour period whereas other periods during the day see between 20-40 persons over an 8-hour period. With high demand for golf rentals, including golf carts and push carts, the increase will supplement the budget to address the wear and tear on all City owned and maintained equipment. While fee increases are proposed at this time, staff does not anticipate the increases to over-burden users as rates remain affordable and competitive. See Table 5 below for proposed golf fee changes. Table 5: Proposed Golf Fee Changes Parks and Recreation Fees Fee Number Fee Description FY 21-22 Rate FY 21-22 Proposed Updated Rate % Change Golf Course Laguna Lake Golf Course 104 Cart Rental 8.25/Person $10.00/Person 21% 105 Pull Carts 4/Cart $5/Cart 25% Golf Club Rentals (Regular) $6.00 $6.00 0% Golf Club Rentals (Snr/Yth/Stu/Mil) $4.00 $4.00 0% Rounds 106 Monday-Thursday (Regular) $14.00 $14.00 0% 107 Monday-Thursday (Snr/Yth/Stu/Mil) $11.00 $11.00 0% 108 Friday-Sunday (Regular) $15.00 $15.00 0% 109 Friday-Sunday (Snr/Yth/Stu/Mil) $12.00 $12.00 0% 110 Replay $7.50 $8.00 7% 111 Off Peak (M-Th 12-3 PM) (Regular) $12.00 $12.00 0% 112 Off Peak (M-Th 12-3 PM) (Snr/Yth/Stu/Mil) $10.75 $11.00 2% 113 Twilight (after 3 PM) $9.25 $10.00 8% 114 Family Rate $27.00 $27.00 0% 115 Super Twilight $5.50 $7.00 27% 116 10-Play Cards (Regular) $123.00 $123.00 0% 117 10-Play Cards (Snr/Yth/Stu/Mil) $93.75 $93.75 0% City of San Luis Obispo, Title, Subtitle NEW Alternative Programming Uses $10 New Fee NEW Spectator Fee $5 New Fee NEW Tournament Use Shotgun Fee $250 New Fee Daily Use for 39 or Under $12 New Fee Daily Use for 40 or Over $10 New Fee Previous Council or Advisory Body Action On June 2, 2020, City Council previously reviewed and adopted the current comprehensive fee schedule. On August 18, 2020 Council reviewed and adopted a Childcare State of Health Emergency fee. Policy Context The budget policy for cost recovery is located in the 2019-21 Financial Plan (page 474), and reads as follows: Recreation Programs The following cost recovery policies apply to the City's recreation programs: 1. Cost recovery for activities directed to adults should be relatively high. 2. Cost recovery for activities directed to youth and seniors should be relatively low. In those circumstances where services are similar to those provided in the private sector, cost recovery levels should be higher. Although ability to pay may not be a concern for all youth and senior participants, these are desired program activities, and the cost of determining need may be greater than the cost of providing a uniform service fee structure to all participants. Further, there is a community-wide benefit in encouraging high-levels of participation in youth and senior recreation activities regardless of financial status. 3. Cost recovery goals for recreation activities are set as follows: High-Range Cost Recovery Activities - (60% to 100%) a. Adult athletics b. Banner permit applications c. Child care services d. Facility rentals (indoor and outdoor; excludes use of facilities for internal City uses) Mid-Range Cost Recovery Activities - (30% to 60%) e. Triathlon f. Golf g. Summer and Spring Break Camps h. Classes i. Major commercial film permit applications Low-Range Cost Recovery Activities- (0 to 30%) j. Aquatics k. Community gardens l. Junior Ranger camp m. Minor commercial film permit applications n. Skate park City of San Luis Obispo, Title, Subtitle o. Parks and Recreation sponsored events (except for Triathlon) p. Youth sports q. Teen services r. Senior/boomer services On page 472 of the Fiscal Policies included in the adopted FY 19-21 Financial Plan, Section 2.A outlines that, “Fees will be reviewed and updated on an ongoing basis to ensure that they keep pace with changes in the cost-of-living as well as changes in methods or levels of service delivery. In implementing this goal, a comprehensive analysis of City costs and fees should be made at least every five years. In the interim, fees will be adjusted by annual changes in the Consumer Price Index. Fees may be adjusted during this interim period based on supplemental analysis whenever there have been significant changes in the method, level or cost of service delivery.” As allowed by our fiscal policy, the department has conducted the supplemental analysis to determine that current fees should be increased to the proposed rates to recover costs at the appropriate levels. Public Engagement The Parks and Recreation Commission received a presentation on the proposed fee updates at the May 12, 2021 Parks and Recreation Commission meeting. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: N/A Budget Year: 2021-22 Funding Identified: N/A Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund N/A State Federal Fees Other: Total The fees listed in the Comprehensive Fee Schedule allow for cost recovery for services provided at the level of cost recovery set by the City Council and reflected in the City’s financial policies. As such, all actions outlined in this report ensure that programs stay within their adopted cost recovery policy goals. Proposed Changes to Youth Services Fees The addition of a package program fee will not decrease revenues even though the hourly rate behind calculating the packages is lower at $4.44 compared to the $5.25 hourly drop-in rate. Package programs require participants to pay for the full package whether or not the child routinely City of San Luis Obispo, Title, Subtitle attends. Most childcare programming is organized as such with a drop-in hourly rate higher than the hourly rate calculated within the package program. Staff re-calculated revenue forecasts for FY 2021-22 and does not anticipate a change in revenue forecasts due to the new package programming fee, thus staying within the high range cost recovery policy goal of 60%-100%. Adjusting the hourly drop-in rate to $5.20 instead of $5.25 poses a minor fiscal impact, but saves administrative time in calculating a fraction of the hour. Proposed Changes to Aquatics Fees Specific fee increases range from 1% to 34%, and forecasted revenue budgets for FY 2021-22 have factored in additional revenue from the fee increases. Utilizing proposed operating budgets for FY 2021-22 and projected revenue, the Aquatics program will stay within the low range recovery policy goal of 0-30%. Staff anticipates the fee increases to help off-set operating cost of the increased maintenance needs at the SLO Swim Center. Staff anticipate approximately a $16,000 increase in projected Aquatics revenues attributed to the proposed fee changes. Proposed Changes to Golf Fees Specific fee increases range from 2% to 27%, and forecasted revenue budgets for FY 2021-22 have factored in additional revenue from the fee increases. Utilizing proposed operating budgets for FY 2021-22 and projected revenue to include the proposed alternative programing fees, the Golf program will stay within the mid-range recovery policy goal of 30-60%. The new fees surrounding new Golf programming will commence during standard business hours and materials and supplies for the new programming will be accommodated within the division’s current operating budget. Staff is therefore not requesting additional funding to run new programming. Staff anticipates the fee increases to help off-set operating cost of the additional wear and tear on the course and equipment rentals. Staff anticipate approximately a $18,000 increase in projected Golf revenues attributed to the proposed fee changes. ALTERNATIVES 1. Council could deny the request to update the Comprehensive Fee Schedule . Staff does not recommend this action as operating costs have increased since the last fee study and programming should recover costs as is consistent with City cost recovery policy. 2. Council could approve certain updates to the Comprehensive Fee Schedule a nd ask for additional information on others or all proposed fee updates. If the Council pursues this alternative, staff request direction regarding the information needed to make a decision.