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6A - Update on the Parks & Recreation Department 2008 Operating BudgetTb: Parks and Recreation Advisory Board FROM: Jan Geden, CPRP, Director of Parks and Recreation Abbie Novak, Business and Finance Manager SUBJECT: Update on the Parks & Recreation Department 2008 Operating Budget DATE: May 16, 2007 Overview As communicated in the Budget 101 presentation (Attachment A) at the PRAB April business meeting, the Pazks and Recreation DepartmenYs budget is complex. The budget is accounted for in six funds,: General Fund, .25 Cent Sales Tax Fund, Recreation Activity Fund, Permanent Parks and Recreation Fund, Lottery Fund, and .15 Cent Sales Tax Fund. The department is designated as the fund manager for the .25 Cent Sales Tas Fund, Recreation Activity Fund, Permanent Parks and Recreation Fund and Lottery Fund. The operating budget is allocated for the departmenYs divisions and administrative work units: Parks and Planning division, Recreation division, Business and Financial Management work unit and Policy and Information Services work unit. The department is in the process of establishing the 2008 operating budget based on guidelines and projections provided by the city's Finance department. Additional infortnation regazding the 2008 budget submission will be available at the June business meeting. Budeetarv ~hallen~es The major challenges identified that the department must consider while establishing its 2008 operating budget include the followang items: Blue Ribbon Commission Findings The ciry's Blue Ribbon Commission is developing a strategy to ensure economic sustainability with the upcoming sunsets of various sales tax initiatives including: • General Fund (38 portion) will expire 12/31/2011 •.15 Cent Sales Taac (designated) will expire 12/31/2012 •.25 Cent Sales Tax (P&R) will expire 12/31/2015 • 33 Cent Sales Tax (Open Space) will expire 12/31/2018 •.15 Cent Sales Tax (Open Space) will expire 12/31/2019 • General Fund (.15 portion) will expire 12/31/2024 It is anticipated that budget decisions in the neaz-term will be considerate of factors facing all Colorado communities including the shift from goods-based economies to service-based economies. The ciry is faced with "must do" budget strategies or priorities that must be funded per the city business plan, to maintain adequate reserves and fund liabilities. Furthermore, AGENOA ITEM #~i- R, PAGE 1 Boulder's economic volatility is compounded by structural factors that undermine the productivity of sales taai including an aging population and the failure of the sales tax base to inflate with costs of doing business. As a result, retail sales taac as a major revenue source will fund proportionally less of the base budget. Utility and Fuel Expenditures Staff recommended that funds for utility and fuel budgets be prioritized to receive any available city funding. A significant growth in utility expenses occurred in 2005 after the submission of the 2006-2007 budget, resulting in a substantial unfunded liability citywide. Fuel cost projections will remain volatile and it is anticipated that they will continue to rise at a rate higher than the Consumer Price Index (CPI). The Recreation Activity Fund Volatility To ensure the solvency of the Recreation Activity Fund (RAF), revenue generation must grow at the same rate as expenditures. Although recreation revenues grew 10.25 percent in 2006, RAF expenses are projected to increase in 2007 and beyond based on higher costs related to day-to- day business, including increased staffing, utilities and other operational requirements. Staff assumes personnel expenses will continue to grow annually at approximately four percent. Additional seasonal staff will be required to support the departmenY s more populaz seasonal program and service offerings requiring a higher staff=to-participant ratio. Staff also assumes the majority of non-personnel expenditures wiil generally rise at the rate of the Denver/Boulder CPI of approximately three percent. However, utilities and fuel expenses are projected to remain volatile and it is anticipated that they will continue to rise at a rate higher than the CPI. As a result, the gap between revenues and expenditures will continue to grow. The gap between revenues and expenditures must be closed to prevent additional budget reductions. The department will focus on identifying a long-term solution to increase the sustainability of its recreation programs and services Per best practice, the department strives to maintain a ten percent fund balance reserv2 in the RAF. This balance would be available to sustain programs and services in the event of decreased financial performance due to weather-related incidence and/or program and facility attendance. The sustainability of the fund is questionable under the current cost recovery model. To maintain solvency, revenue generation must grow at the same rate as expenditures. Even though the fund is currently balanced, it is critical that the department continue to focus on improving long-term sustainability. Budaet Policv and Revenue Issues The budget process provides an opportunity for the department to submit policy and revenue issues to the City Manager. The City Manager evaluates the requests and may recommend that City Council review and approve departmental requests. The department's budget submission included the following policy and revenue issues: 1. Does Council support Parks staff providing ougoing landscaping services for city AGENDA ITEM # V I-A PAGE 2 facilities? Throughout the past several yeazs, the Pazks staff has gradually acquired the responsibilities of maintaining the grounds and snow removal for city facilities not under the departmenYs purview. The Pazks staff provides landscaping services at the Municipal Compiex including the Municipal Building, Main Library, West Senior Center, Pazk Central and New Britain buildings, as well as at the Public Safety Building, Atrium Building, Youth Services Building, Hazbeck House, Dairy Center, and East Senior Center. Services include lawn, flower, and shrub maintenance such as mowing, pruning, mulching, and weed control. Snow removal is also provided at these facilities. The significance of this support was realized by the Pazks staff during this past winter due to the volume and frequency of snow received. Per the Citywide Financial and Management Policies, stafF believes that its landscaping services can be categorized as administratave or general governance charges whereby the cost allocation practices can be instituted. This will ensure that the department is able to recover its costs incurred by the .25 Sales Taat Fund and the General Fund in providing landscaping services to other city departments. 2. Does Council support the explorafion of changes to the City Charter for the purposes of extending the current 20 year laad lease provision and broadening the parameters of usage for the Permanent Parks and Recreation Fund? Land Lease Provision The city charter limits the term of franchise agreements to 20 yeazs in Article VIII, Section 111. Article XI, Section 1641imits terms of leases, permits or licenses granted on pazk lands to five yeazs, ("The term of any license or permit granted hereunder shall not exceed five yeazs, and any such license or permit so granted shall be revocable by the council at its pleasure at any time, whether such right to revoke be expressly reserved in such permit or license."). Some business owners interested in partnering with the city for facility development have spoken to the Parks and Recreation Advisory Boazd and city staff, asking if the 20 year lease provision could be modified or made more flexible. If lease or franchise agreement terms were extended, it is more likely that private investors would commit to providing capital funding for recreational or concession facility development. A change to this provision could also impact leases that the city has with other organizations such as Chautauqua. Staff is seeking City Council support to explore a process for a charter change to ailow for a longer term lease period under specific conditions. Permanent Parks and Recreation Fund In the past, staff has recommended identifying and appropriating funding for ongoing park operations and maintenance prior to new pazk development or construction. Pazk maintenance is funded by either the General Fund or the .25 Cent Sales Tax Fund. Park development is funded through the Permanent Parks and Recreation Fund or the .25 Cent Sales Tax Fund. The .25 Cent Sales TaY Fund was designed to provide pazk maintenance funding for the pazks specifically constructed with .25 Cent Sales TaY funds or from the proceeds of the .25 Cent Bond Fund. The General Fund is designated to provide park maintenance funding for the pazk system developed before the .25 Cent Sa1es Taac Fund's existence and for any pazks constructed with Permanent Pazks and Recreation Funds. AGENDA ITEM # V I-A PAGE 3 The Permanent Parks and Recreation Fund is defined in city charter Article XI, Section 161, stating the "Said fund sha11 not be used for any purpose other than the acquisition of pazk land or the permanent improvement of park and recreation facilities." The fund lacks an identified funding source for ongoing operations and maintenance of park sites acquired or constructed with its funds. Staff believes that funding for ongoing pazk maintenance needs to be identified prior to park development. Staff is seeking City Council support to explore a process for a charter change to broaden the pazameters of usage of funds in the Permanent Parks and Recreation Fund and to develop criteria for an acceptable level of operations and maintenance funding for pazk sites developed with its funds. 3. Does Council support the continuing implementation of the CSBM? The department incorporated the Core Services Business Model (CSBM) in its master plan to institute a method for establishing cost recovery expectations for its programs and services. The CSBM aligns with the city's business plan categories of essential, desirable and discretionary, as well as the user fee guidelines included in the Citywide Financial and Management Policies. The city's fee guidelines are based on full, partial, and no-cost recovery expectations. In 2004, a framework to standardize fees for recreation programs and services that included a pricing methodology and cost recovery levels (the CSBM) was instituted by the department. The cost recovery levels range from basic, or services provided as the foundation of municipally- funded pazks and recreation systems for the widespread enjoyment of the communiTy, to enterprise-like, services that can compete in the free mazket and are tazgeted towards niche users based on an expressed demand and willingness to pay. The model was established to align with the city's business plan goals, as well as to support the department's master plan goais including: • Maintain and protect our pazks and recreation facilities and programs; . Become economically sustainable; . Engage a broader range of the communiry, especially underrepresented populations; and • Enhance our quality of life. The CSBM provides a framework to sustain the broad range of recreation programs and services currently provided to the Boulder community. The tiers in the CSBM reflect cost recovery goals that aze representative of Boulder and aze based on the existing levels of support from the General Fund, high community demand and the departmenYs desire to meet this demand. While not perfect, it provides a reasonable approach to decision-making related to cost recovery and subsidy for the deparhnent's programs. If current fees and charges remain the same and the CSBM is not implemented, the department would have to develop a new methodology for pricing programs and applying subsidy and consider actions as raising fees, eliminating programs, seeking additional revenues or subsidy, or a combination of the aforementioned actions. The department's master plan, including the CSBM, was presented for acceptance to City Council on December 19, 2006. At that time, staff recommended the following elements relative to the adoption of the CSBM: • The model is intended to be flexible to respond to changing community and AGENDA ITEM # V I-A PAGE 4 department needs. The CSBM attempts to provide fair and equitable fees and chazges to the community. Full implementation of the CSBM will occur in the action plan of the department's master plan. The model will be reviewed every two yeazs. Staff is seeking direction regazding the continuation of implementing the CSBM that is a strategy in the master plan goal to become more economically sustainable. The CSBM assisted in determining the departmenYs action and vision plan funding projections for the master plan and is a component of the plan's financial sustainability program. 4. Does Council support returning excess revenues in the Recreation Activity Fund (RAF) to the fund balance? The financial position of the RAF improved in 2006 as a result of greater than anticipated revenue generation. To increase revenue streams, recruit new business and retain current business, new practices have been implemented by Pazks and Recreation since 2004 to provide improved customer service and outreach. These practices include: • Implementation of a pricing methodology for programs, activities and services; • Implementation of the annual pass Monthly Payment Option intended to give payment flexibility to users and to make purchasing an annual pass more affordable; • Implementation of a discount program for the purchase of annua] passes aimed at employees of businesses that belong to the Boulder Chamber of Commerce; • Implementation of special promotional programs that target existing and potential customers; and • Hiring a Mazketing Manager to centralize and evaluate mazketing efforts with an interest in effectiveness and increased return on investment. In 2006, the RAF fund balance increased by $292,000 due to a ten percent increase in revenues from the previous yeaz. However, the long-term sustainability of the fixnd is uncertain and being monitored. The departrnent projects the performance of each individual fund for a period of six yeazs. ProjecUons currently indicate the RAF fund balance will be insufficient to wver required reserves by 2011. Staff is seeking direction regazding the use of excess revenues in the RAF. Returning excess revenues to the RAF fund balance contributes to the departmenYs master plan goal of becoming economically sustainable by improving the fund reserve. T`he volatility of the fund does not ensure that excess revenues wouid be obtained each yeaz. Excess revenues could be made available in the short term to subsidize some programs and services and could provide one-time subsidy as part of an interim strategy to implement and evaluate the CSBM. If excess revenues in the RAF' aze used in this manner, staff would develop criterion to ensure that the use of these funds align with City Council and master plan goals. 5. Does Councii support the standardization of the recreation center annual pass discount structure? Staff evaluated its current pricing structure for annual pass offerings to ensure a consistent discount is applied to all annual pass products. The analysis of the annual pass pricing structure indicated that discrepancies exist for the discount applied to each annual pass category. AGENDA ITEM # V I-A PAGE 5 T'he department used the same methodology for its 2007 rates to arrive at its proposed rates for 2008, increasing the daily drop-in by .25 cents for all categories including adult, senior, teen, and child. ~;>J~ ,• bY ,~~7'~1~.P.,~ :: `~~Ml. - ~ ` ~ 4.x.'T~b4i5:•JwU"h- .. ' ~~.C'~.'SP.~+~O~ e.~mAir_ Adult $6.25 $6.50 4.0% Senior $4.25 $4.50 5.9% Teen $3.75 $4.00 6.7% Child $3.25 $3.50 7.6% The current discount structure vazies significantly by category. The annual pass prices were established by multiplying the daily drop-in rate by 105 visits per yeaz (assuming holders visit twice a week) and applying a discount. For adults, the daily drop-in rate of $6.25 multiplied by 105 visits equals $656.25. A discount of 27.9% reduces the price to $473.00. The discounts for. the four categories of adult, senior, teen and child range from 27.9 percent to 54.5 percent. ;Ca'~e~. ` 2007 ~i~i~~'assw': <, _<,.. .. ,~iscount Adult $473.00 27.9% Senior $279.00 46.9% Teen $207.00 54.9% Child $179.00 54.5% To ensure consistency, staff recommends that the discount structure be standazdized across all age categories. Staff believes the base drop-in rate should be the determining factor utilized to provide the pricing differential between the age categories. Thus, the discount applied to calculate annual passes should be identical for all age categories. To resolve this discrepancy, staff recommends urilizing a standard 30 percent discount for all categories of annual passes. The implementation of this proposal will result in considerable percentage increases for senior, teen and child pass holders. However, the fees chazged to these groups are discounted and priced significantly less than adults, who are the majority of pass holders. ^LsvII'W.~ +~ " #T'41[~.~~5~ S ~VA~1~' ^~iµ'~ ~ ' ~ ~, y p ~ ~ . m~~rv'~- b ~* ~R~i~ ~~. ~. 5 ` ~r _ . ~~ F (~~y+~,_. ~ ~l.W'l{.'tl~H~'f e # ~~t -fs~ '~' {~' ,. F~ ~ t ~, k 'i' rr s~,- it°'y ~ v0 e : ~ ~ _ #~ -}~ ~~yp +~ f S.~ ~ C $YF ' ` E Tt , : . , A. '~r, -'_.".~#'~.?., ` ~FP, . wx"N'.*"~ ~~~ _„~,~ y _ ,YOJ., LL t : tYXr ~~ , y , , . _ , Adult 356 $473.00 $682.50 30% $477.75 1.0% Seniar 100 $279.00 $472.50 30% $330.75 18.5% Teen 11 $207.00 $420.00 30% $294.00 42.0% Child 3 $179.00 $367.50 30% $257.25 43.7% Staff recognizes that it is unreasonable for these fees to be effective immediately on January 1, 2008. Although the intent is to develop a consistent discount structure, staff is cognizant of the impacts including the potential lack of community receptiveness to the recommended changes. AGENDA ITEM # V I-A PAGE 6 Staff recommends a gradual increase spanning three yeazs to implement the new discount structure. The changes are not intended to generate revenue for the department. Minimal increased revenues aze projected since the majority of annual passes are held by the adult category, which is proposed to increase by one percent. As with the intent of the CSBM, the department strives to improve its operations and believes this recommendation will create consistent and equitable pricing policies for the Boulder community. 2008 Budget Timeline The following activities are key components of the citywide budget process: ul 11 eeting with City Mana er to discuss Pazks and Recreation's 2008 budget submission ul 19 lanning Boazd meets to review 2008 - 2013 CIP ugust 14 008 recommended budget is submitted to the City Council ugust 24 epartments submit u dated fees ugust 28 ity Council study session on the 2008 budget Se tember 11 ity Council stud session on the 2008 budget October 2 City Council - First readin of the 2008 budget October 16 City Council - Second readin of the 2008 bud et Next Steas Additional information regazding the 2008 budget submission will be available at the 3une business meeting. The department welcomes input and questions regazding the 2008 operating budget from the PRAB. As always, PRAB members ate encouraged to attend the communiTy discussions over the next six months. Please contact Abbie Novak at 303-413-7253 with any questions or comments. Attachments A: Budget 101 AGENDA ITEM # V I-A PAGE 7 Attachment A Parks and Recreation Budget 101 Parks and Recreation Advisory Board Business Meeting - 23 April 2007 Overview ~ pF eoV~ ~~~ /','Z1._~9 ~~~,T? v..`. s var ~ Citywide Financial Overview ^ Citywide Budget Process ^ Parks and Recreation Department Budget AGENDA ITEM # v ! - ~ , PAGE ~ Citywide Financial Overview ~ly ~F ~t,~ V~ ~~ Local Economy ~~~~ RrV \ Ibeallw 0 General Fund Revenue is the primary source for city services and programs ^ Taxes (sales and use ta~c, properry taac) ^ User Fees (recreation progcam fees, planning, and development fees) ^ Intergovernmental Revenues (e.g., gcants) AGENDA ITEM #~ V l-/-} , PA(3E 9 ~~~~ BpV~O • t~` Ci+ y'de Revenue Sources G~'~'~~9 `~1 v..4. a nK.e,~w~. (hhrr Plunnin~ A ~,~. Dccelup~nrn~ -`~ SalcsTvc ~~ .i8% i l:~iliry~ Rai~~.. 20'% Parks & Rccrc.~w~n ~. Prupcrtc 7'ax 4%u 10'Yo I In[ergovcrnmcntal J 9°io y ~F B~U< G~~ O~p Ci 'de Sales and Use Tax P;?i~~~ ~ ^ Several Funds receive a portion of the city's 3.41% sales and use tax and are very dependent on this as a source of funding: ~ General Fund (45% of the 3.41°/~) ~ Transportation (18% of the 3.41°/~) E Open Space (26% of the 3.41%) ~.15 Cent Sales Tar: (4% of the 3.41%) E.25 Cent Sales Tax for Parks & Recreation (7% of the 3.41%) AGENDA ITEM #~ V 1- ~, PAGE f~'~ pF BO~~t G~~~ O9 Economic Reality -'~'~~~ v..~. a w.,..~~ ^ City sales tax collections decreased bv 17% between 2001 and 2004 ~ September llth e Crossroads Mall 4 Retail sales tax leakage to other communities ^ The General Fund is highly dependent on sales/use tax (45%) ^ Impact of General Fund reductions on Parks and Recreation: a Parks Division is funded primarily by the General Fund ~ Recreation Acriviri~ Fund (RAF) is funded primarilv bv fees; it is subsidized ($1.7M in 2007) from the General Fund to providc services pF BOU< y ~ ~ ~ F ~ 9 Sales and Use Tax . ~ .._,. "'~~~~ ~ ~..w ~~.,~ ,~x: _- - -- - - :.~~ l~fkty."~Y~50, 4- : K_ 1J ~.~l~~Y~`.". I ' 59': ~~ . ~ . . .. . . ' .. . . ___" _ _. _ _ " , 581.51f 5&'1 ~97 ~°= x= r -- - - - - ma- --- _ ~ I s~e ~u « 3 5 3<0 ~ 5--, ~" ' ._ _ . . "-. __.' ' _ ' ' _"._ .. _ _ .. i I E ¢ 5~1.32' S71.47' . S,-C i'__ : . _ ___" "' "._ "-_' --_._.. _ _ -- --~ I ssv,eae ses ooc S600Q'~ .- _ .._ - _ _._-_. _-"-._'__-___.~--_... -_- _. . ~ 2000 7001 2~D2 7003 2DOa 2005 2006 .^007 I~GENDA ITEM # ~' ~- F, PAGE~ y ~~ ~~~~~0 ~~ ~'P Blue Ribbon Commission ~~''~'~~ P~r4. 6 R~cre~~+on 0 The city's Blue Ribbon Comrnission is developing a strategy to ensure economic sustainability with the upcoming sunsets of various sales tax initiatives ~ General Fund (.38 portion) will expire 12/31/2011 ~.15 Cent Sales Tax (designated) will expire 12/31/2012 ~.25 Cent Sales Taa~ (P&R) will expire 12/31/2015 ^.33 Cent Sales Tax (Open Space} will expire 12/31/2018 ^.15 Cent Sales Tax (Open Space) will expire 12/31/2019 ~ General Fund (.15 portion) will expire 12/31/2024 ~`~~ ~F BOU~O~~ Ci ide Financial Summary P~L~~~ ~ ^ Factors facing all Colorado communities E Goods-based versus Service-based ^ Volatility is compounded by structural factors that undermine the productivity of sales taa ~ Aging population ~ Failure of sales tax base to inflate with costs of doing business ^ Retail sales tax as a major revenue source will fund proportionally less of the base budget AGENDA ITEM # v1- A, PAGE ~°~ Citywide Budget Process City Business Plan y°F eO~` i`~ ~~~ and Policies ~ ~"'`~'~~ r.n. a a.~«~ Budgets are established per the ciry business plan and financial policies ^ Business Plan service categories include: A Essential ~ Desirahle ~ Discretionary ^ User Fee Guidelines outline service cost recovery expectations of: The depamnent's Core Services ~ Full CoSt CeCOVety Business Model aligns writh the ciry's ~ Partial cost recovery business plan categories and the user fee guidelines included in the Citywide E No cost recovery Financial and Management Policies. pGENbA iTEM # ~ W~-' ~ ~ ~ , ~AGE ; Fiscal and Operational ~-~°F B°`'`~ ~` /~`~9 Guidelines ~~`'~'~ P~r4~ & Ile~crullon ^ Financial policy ~ Guidelines for inflation increases ^ Consistent submission format ^ Funding sources and cost impact projections ^ Ongoing or one-time costs E Ongoing: revenues that can be forecast and distributed annually ~ One-time: revenues that only occur once and cannot be used to pay ongoing costs ^ Personnel ~: Projected salary and benefit costs ~ Worksheets for positions or increases y ~F B~V< ,~ O ~ / ~9 Budget Cycle: Jan 3- Dec 4 p~'~~~ Action Responsibility Issuc instructions ~ti~th Ciscul, operational and pnlicv ~;uidciincs I3udkct Officc Develop and submit Departments Compile and analyze requests Budget Office Review and identify in accordance with city Business Plan City Manager Approval, refusal, or modification based on revenue projections City Manager Distribute recommended budget to City Cauncil - June 15th Budget Officc Community study sessions Budget Officc Adjustments Departments Approval - October 16th Ciry Council Administer, manage, and analyze Budget Office & Departments AGENDA ITEM # i- , PAGE ~' Parks and Recreation Department Budget y ~F B~~C 0~ ' ~~ ,~~ ,_ . Department Funding ~~`~~~~~ r..w a x«~.n.. ^ The Parks and Recreation Department is funded with a combination of six funds ~ General Fund ~ Recreation Activity Fund ~ Permanent Parks and Recreation Fund ~ .25 Cent Sales Tax Fund ~ .15 Cent Sales Tau~ Fund ~ Lottery Fund ~1DA ITEM # ~ /~ i - R, , PAGE /_~ ~y pF 80U~O G~ ~ ~9 ~ J General Fund 010) ~'~~'~~~~ Par4.l. R.rrui~on ^ Funds the departmenf's operational and management support E Park maintenance E Urban forestry ^ Administrative services O Beginning in 2001, the department has experienced cumulative budget reductions of $1.1M 2007 Budget = $3,845,000 • v~~y oF Bo(`CO~9 tY Recreation Activi Fund (130) p;~;~ ~~ ^ Funds recreation programs, services and operations including: E North, South, East Recreation Centers r Scott Carpenter & Spruce Pools ~ Flatirons Golf ~ Boulder Reservoir c Potterv Lab 6 Ballfields (maintenance and operarions) r Recrearion Programs and Services (e.g., Gymnastics, Yoga, Dance, EXPAND, YSI, Aquatics, Health/Wellness) ~ Includes $1.7M from General Fund AGENDA ITEM # ~~f - ~ , PAGE ~~ y ~F sov< ~ 0~,9 ~ ~F H1St01'y '~~'~ ~ v..4. a A«.~~r. ^ Established in 2001 as a special revenue fund ^ The primary purpose was to provide flexibility when revenues were impacted by weather or changes in program and facility attendance ^ Fle~cibility is provided bv: c Use of fund balance when revenues are less than expenditures (2004-05) ~ Incrcase in fund balance when revenues are greater than expenditures (2001-03) ~ Overall intent was to provide stability to recreation programs and to minimize disruption of services during periods of revenue volatility y oF eo~~ c?~ ' ~ °~ ~ RAF Subsidy "`'~ ~ V~.W k Xr~o.~bw ^ General Fund support occurs via an annual transfer or subsidy to the RAF ~ Calculation of subsidy is based on the differential betvveen revenues and expenses in 2000 c Cost of doing business and availability of funds escalates annually 5 Subsidy is adjusted annually based on a factor for personnel (69% of the subsidy) and for non-personnel (31% of the subsidy) € There is a goal to maintain a 10% minimum reserve ^ General Fund subsidy has not kept pace with increasing costs of doing business ~DA ITEM # ~ V~~ ~ ~ , PAGE,~_ ~~ ~F BOU~O ~ /~~9 RAF Trends ~~~`~~~ P~r4sl~ Racreatbn ^ Declining fund balance ^ As a percentage if the RAF budget, subsidy has decreased ^ Increased operating expenses (e.g., utilities, fuel, personnel, pool chemicals) ^ Increased competition from neighboring communities and local private businesses ^ Limited ability to raise fees pF BOVI y ~F ~ ~ ~ ~ V RAF Balance ~ ~'~'~~~ Par{u A Rea+wlon ~~ .~ ~J _ .. . .. ~ ~ "-~- _- ~ ---------~ _ ~os,oep- - -ar ~~ ~~ . . __. - - ~"~" ~ 57.0T3.000 , ~~~' :,.on,ooo s,.aa~,ooo sesa,ooa fae2.ooo -- - ~oo - ---- -- - ., eeee~ - - C 7 fs~i.ooo aso.ooo . . - --- -~- __------- - - --~--- - _ - --- a I ~~~ ~ - -- -- _ - - I . ~,~..~ 1 - .s~.. ~ ~008 3W, 1068 :WG 2~,0 p„ Z~,Z [-: Year Projected Fund Balance -•-10%Reserve A~~ ITEM # ~ V;' - ~' , PAGE /~' ~y pf BOV~ G~ ~~~? R.AF Cost Recovery ~~'~~ Pnb ! Rene~Hw+ o The RAF cost recovery- expectation is approximately 83% ^ The Core Services Business Model (CSBM) has been approved as the department's cost recovery methodology ^ Costs can be lowered to reduce the gap between expenditures and revenues by: r Adhering to the CSBM framevvotk that determines costs, establishes fees and maintains the quality and quantity of services and programs provided to the community g Increasing General Fund support ~ Reducing the amount of subsid~ to programs and services (e.g., "narro~v and deep" or "across the board" Permanent Parks ~~°F B°°`~ ~` /~`~~+ and Recreation Fund (230) ~~~`'~'~ ~..~. ~,~..~ ^ City Charter created the fund for capital improvements ^ Funding provided by property tax and Developmcnt Excise Taxes (DET) O Funds land acquisition, capital and permanent improvements ^ Annual expenditures arc approved by the Parks and Recreation Board (PRA.B) ^ Considerations for fund use include: F Fund cannot be used for operations ~ Capital funds are available for patk and facility development E New development requires increased maintenance funding AGENDA ITEM # ~ V ~~ ~ ~ , PAGE /y ypF BOpC G~~ O~9 .25 Cent Sales Tax Fund (118) „~'g;~'~ ^ Approved by voters in 1995 o Sales tax expires l2/31/2015 ~ Ballot language specifications e Bond foi Iand acquisition ^ Development of pack sites acquired with bond proceeds ^ Maintenance of pack sites developed with sales tax funds ^ Capital impcovement of recrearion facilities and pools ^ Renovation and refurbishment of exisring parks ^ Civic Center Complex, Historic and Cultural FaciGties funding r-•--~-~--~~ 4~~ ~.~'~i~~~~.. ~ ~: ~, ypF BOp( 15 Cent Sales Tax Fund (117) `,~'%~~~ ...~.~,.. ^ Approved by voters in 1992 ^ Sales taJC expires in 12/31/2012 ~ Ballot language specifications ^ Dedicated sales ta~c foc multiple purposes, primarily HHS, Environmental Affairs and Debt Setvice ^ Department's distribution is restricted to maintenance of Stazio and Pleasant View Athletic Complexes 2007 Budget = :$27b,Q@0 AGENDA ITEM # ~V l - ~i , PAGE ~ ~i ~F ~V< v~ ~~ Lottery Fund (111) ~%~~ Re4 L 4a~4w '^ Distributed by State of Colorado to eligible entities on a per capita basis ^ Funds are shared with Open Space/Mountain Parks and Tributary Greenways ~ Curcent fund sharing agieemeni expires in 2008 ^ Funds are restricted to conservation-related expenditures ~ Stable annual revenue stream generates $900,000 per year .~7'~ri~get = $~,~0;(~~0 ,~ °F a°"~ Next Steps ~~%~~~ ^ The department's master plan outlines ways to achieve economic sustainability including: ^ Leveraging resources ^ Increasing department efficiencies Use the CSBM Restructure the RAF r Evaluating alternative management or disposition of land and facilities ^ Seeking additional cevenue streams ~A~A ITEM # ~ ~d - A , PAGE ~/