HomeMy WebLinkAboutReg 2010-07-06 Item 5D - Budget - Parks and Recreation Cost of Services PresentationCAS NUMBER: 10-078
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Meeting Date Prepared by
07/06/10 RS
Discussion Motion
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Council Mayor n Adm Svcs
COUNCIL AGENDA SYNOPSIS
Resolution
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Inztzals
Mayprzezv
ITEM INFORMATION
ORIGINAL AGENDA DATE. JULY 6, 2010
U Ordinance
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4j rnc revzew
RECORD OF COUNCIL ACTION
ATTACHMENTS
Informational Memorandum dated 6/30/10
Summary of Parks and Recreation Budget Reduction Proposals
Staff Study of Recreation Programs and Services (spreadsheet)
FCS 2009 Costs and Revenues by Program (spreadsheet)
FCS Presentation /Conclusions
Recreation Fee Resolution #1536 approved in 2003
ITEMNO.
AGENDA ITEM TITLE Administration presentation of Full Cost of Recreation Programs and Services
Bic Award I I Public Hearing Other
Mtg Date Mtg Date
H Finance n Fire Legal P&R n Police PW
Parks and Recreation Administration will provide a summary of the total cost of providing
Recreation programs and services including direct, indirect and facility costs based on
information provided by staff and external consultant.
The Council is being asked for policy direction so staff can review and, if appropriate,
revise its prior budget reduction proposals.
REVIEWED BY COW Mtg. CA &P Cmte
F &S Cmte
n Utilities Cmte n Arts Comm. Parks Comm.
DA IS.
RECOMMENDATIONS:
SPONSOR /ADMIN. Parks and Recreation Department
CoMMII IEE Information Only; Agenda item taken directly to Regular Meeting
COST IMPACT FUND SOURCE
EXPENDITURE REQUIRED AMOUNT BUDGETED
U Transportation Cmte
n Planning Comm.
APPROPRIATION REQUIRED
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City of Tukwila
TO: Mayor Haggerton
Committee of the Whole
DATE: June 28, 2010
INFORMATIONAL MEMORANDUM
FROM: Rick Still, Director of Parks and Recreation
BY: Dave Johnson, Acting Deputy Director
SUBJECT: Full Cost of Recreation Programs
ISSUE
Following its initial review of recommended Parks and Recreation Department program
reductions, City Council requested additional information on the full costs of providing such
services.
Table 1
Summary of Direct and Indirect Cost Recovery Recreation Programs
Overhead Direct Total
Admin Direct Total Cost Cost
Costs Costs Total Costs Revenues Recovery Recovery
Senior Programs 191,623 430,045 1 621,668 54,020 13% 9%
Youth/Teen Programs 311,910 681,351 1 993,262 232,944 34% 23%
General Programs 209,461 503,051 I 712,513 197,890 39% 28%
Rentals and Operations 163,312 318,647 481,959 275,079 86% 57%
Volunteers and Events 105,413 228,565 333,978 0% 0%
Total 981,720 2,161,660 1 3,143,380 759,933 35% 24%
Jim Haggerton, Mayor
BACKGROUND
At the May 24 Committee of the Whole meeting, staff presented proposals for reducing the
Parks and Recreation Department budget by $448,000 (approximately 12 A summary of the
ten (10) proposed service reductions is included as Attachment A.
The City Council requested that staff prepare additional information regarding the total cost of
providing recreation programs, to include Direct, Indirect and Facility costs. At the suggestion of
Council President Robertson, staff sought the assistance of an external accounting consultant.
Staff selected the FCS Group of Bellevue, WA to assist in the cost analysis. FCS has
successfully performed similar work for Tukwila in the past. Staff provided FCS with
a spreadsheet detailing facility utilization, Direct and Indirect program costs, program
revenue and participation rates (Attachment B)
relevant Eden Systems financial reports, and
CLASS program registration reports.
Staff worked closely with FCS to gather data and prepare the financial analysis spreadsheet
that is included as Attachment C. Attachment D provides the FCS Group's conclusions. Table
1 provides a high -level summary of the conclusions of this analysis.
Information on the allocation of Direct and Indirect costs is provided by Attachment D, under
"Assumptions and Methodology."
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INFORMATIONAL MEMO
Page 2
"Direct costs" are generally those costs directly attributable to a specific program, including cost
of compensation for program staff, supplies and contracted services specifically needed to
provide the program. Resolution No. 1536 (Attachment E), which established policies for setting
recreation and aquatic program and class fees, defines "Direct costs" as "those costs directly
related to the specific operation of the activity, such as balls, field or building rental, umpires or
trophies for sports leagues, or instructor wages and supplied materials." Eliminating a specific
program will result in immediate cost savings equivalent to "Direct costs."
"Indirect costs" generally include the cost of maintaining and operating facilities, overhead
related to citywide staff support (finance, human resources, administration, etc), and overhead
related to recreation staff management and oversight. As defined by Resolution No. 1536,
"Indirect costs" "are costs included as part of the general operating expenses of all recreation
programs, such as brochure printing, Tukwila Community Center rooms and utilities
maintenance, and City staff wages and salaries." Eliminating a specific program will not
automatically result in immediate savings in Indirect costs. For example, eliminating an
individual recreation class held at the Tukwila Community Center may not result in a
measurable reduction in TCC maintenance and operating costs, or in citywide overhead costs.
Resolution No. 1536 further states: "When fees are set for programs and activities, they shall
include the direct costs for operating the program, and may also include indirect costs as
determined by the Parks and Recreation Director or his /her designee" (Section 2.B).
There are several possible methodologies for distributing Indirect costs to recreation programs
and services (each have associated pros and cons). For this analysis, the method of distributing
Indirect facilities costs is based upon the hours used per room for TCC.
Some additional items to consider when determining how to account for facility costs include:
Over 17,000 square feet of 'common' space custodial rooms, bathrooms, hallways and
offices, which do not generate revenue. This space was distributed on a square foot
percent of the facilities total square foot basis.
Approximately $25,000 in 2009 revenue was not collected due to other City
Departments' use of the facility.
Approximately $11,500 in 2009 was not collected due to Resident Non profits' use of the
facility.
Some programs and services are not held at TCC, therefore no overhead costs are
allocated.
DISCUSSION
Tukwila Parks and Recreation programs and services have long been recognized for excellence
and affordability. More importantly, Parks and Recreation services in Tukwila provide countless
direct and indirect benefits that make Tukwila a vibrant, healthy community. Staff is eager to
receive guidance from City Council in order to maximize resources to ensure that standards for
planning and implementing Parks and Recreation programs and services continue. Parks and
Recreation opportunities sustain the healthy, green, and positive atmosphere that makes
Tukwila a special place to live, work, and play.
After working with FCS on the Recreation Program and Services cost analysis, staff believes
there are several policy issues that should be addressed before final decisions regarding
recreation program reductions can be made:
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INFORMATIONAL MEMO
Page 3
1. Should fees be revised to increase the percentage of Direct and Indirect cost recovery?
This would allow us to meet current budget targets with fewer program reductions,
unless fee increases result in "pricing out" significant numbers of participants.
2. Should the percentage of cost recovery (and therefore the level of general fund subsidy)
vary by type of program (i.e., Senior, Youth and Teen, General Programs, Rentals, and
Volunteers Events)?
3 Should non residents pay more than residents for recreation programs or services? If so,
what percentage?
4. Should the City continue to provide free room usage at TCC for Resident Non profits?
Examples, Tukwila Children's Foundation, youth sports association, Girt Scouts, and
Garden Club.
Council guidance on these policy issues will help staff to refine its proposal regarding the most
beneficial way to meet our $448,000 cost reduction target.
RECOMMENDATION
The City Council is being asked for policy direction so staff can review and, if appropriate, revise
its prior budget reduction proposals.
ATTACHMENTS
A. Summary of Parks and Recreation Budget Reduction Proposals (5/24/2010)
B. Staff Study of Recreation Programs and Services (spreadsheet)
C. FCS 2009 Costs and revenues by Program (spreadsheet)
D. FCS Presentation /Conclusions
E. Recreation Fee Resolution #1536
W:\2010InfoMemoslBudgetRec Program Full Cost analysis_2 (revised).docx 7/1/2010 2:43:54 PM
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Proposal
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Revenue Loss
Net Budget Reduction
Attachment A
Summary of Parks and Recreation Budget Reduction Proposals
Presented to COW on 5/24/2010
Brief Description
Reduce Administrative capabilities for the Parks and Recreation Department
Eliminate Tukwila Days
Eliminate the Employee Recognition Banquet
Reduce Recreation Programs and Services for Youth and Teens
Reduce Recreation Programs and Services for Seniors
Reduce General Recreation Programs and Services
Reduce Services for Facility Rentals and Operations
Reduce various Recreation Administration expenses
Transfer 0.50 FTE from Parks Maintenance to Golf budget
Reduce overall level of Park Maintenance Services
Reduction
103,000
25,000
12,000
102,000
51,000
42,000
11,000
17,000
28,000
77,000
468,000
(20,000)
448,000
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ATTACHMENT B
STAFF STUDY OF RECREATION PROGRAMS AND SERVICES
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ATTACHMENT B
STAFF STUDY OF RECREATION PROGRAMS AND SERVICES
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ATTACHMENT B
STAFF STUDY OF RECREATION PROGRAMS AND SERVICES
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ATTACHMENT B
STAFF STUDY OF RECREATION PROGRAMS AND SERVICES
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ATTACHMENT C
FCS 2009 COSTS AND REVENUE BY PROGRAM
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ATTACHMENT C
FCS 2009 COSTS AND REVENUE BY PROGRAM
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ATTACHMENT C
FCS 2009 COSTS AND REVENUE BY PROGRAM
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ATTACHMENT C
FCS 2009 COSTS AND REVENUE BY PROGRAM
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Attachment D
FCS Presentation /Conclusions
Background
The City's Parks Recreation Department, with assistance from FCS GROUP, analyzed the
cost of service and cost recovery for the following sections in the Recreation Division
Senior Programs
Youth Teen Programs
General Programs
Rentals Operations
Volunteers Events
Data Used for Analysis
Expenditure data used for this analysis included
Citywide Overhead: The City's 2010 Indirect Cost Allocation Plan
Parks Department Overhead: 2009 Actual Expenditures for the Administrative
Division
Full -Time and Part-Time Staff: 2009 Actual Expenditures and 2009 Payroll data
Supplies and Services: 2009 Actual Expenditures
Facilities: 2009 Facility Costs Report
Vehicles: 2009 Fleet Costs by Unit Report
Parks Maintenance: Cost estimates by program prepared by City staff
Revenue and other data used for this analysis included
Revenues: 2009 CLASS revenue data
Program Hours: Total hours for each program by facility
Assumptions Methodology
Citywide and Parks Department overhead costs were allocated across the Parks
Department (including the 301 and 411 Funds) using 2009 actual expenditures.
The Recreation Division's share was then allocated to the sections using
section costs.
Full -time staff costs were assigned to the sections based on Payroll data
Recreation Division administration costs were allocated to the sections using total
salaries benefits (including part-time staff), except for the costs of front desk staff,
which were allocated to the sections using time estimates provided by City staff.
Revenues were allocated to sections by City staff using CLASS account data.
$13,017.60 belonged to both the Youth Teen and General programs, and was split
between them 50/50.
The costs of part -time staff, supplies, and services were allocated directly to programs
by City staff.
All remaining costs were allocated to programs using total program activity hours.
Revenues were not allocated to programs because that information is unavailable at
this time.
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We were able to identify all but $15,175 (0.65 of the Recreation Division's actual
expenditures for 2009. This unidentified amount was included as part of the
Recreation Division administration costs and allocated to all sections.
The 2009 CLASS revenue data included $29,162 of revenues collected in 2007 for
2008 events. These have been removed.
$95,897 was identified by City staff as not belonging to a particular program. These
costs were included as part of the Recreation Division administration costs and
allocated to all programs.
$130,000 for the Tukwila Community Schools Collaboration was removed, because
the contract is not administered by Recreation Division staff.
Cost of Service and Cost Recovery Analyses
For 2009, the Recreation Division recovered 35% of its direct costs and 24% of its total costs.
Indirect costs include Citywide overhead, Parks Department overhead, and
Recreation Division administration costs.
Direct Costs include all Recreation Division personnel, supplies, services costs,
facilities, vehicles, and Parks Maintenance costs, except those included as part
of Recreation Division administration.
%Direct %Total
Overhead Total Cost Cost
Admin Costs Direct Costs Total Costs Revenues Recovery Recovery
Senior Programs 191,623 430,045 621,668 54,020 13% 9%
Youth Teen Programs 311,910 681,351 993,262 232,944 34% 23%
General Programs 209,461 503,051 712,513 197,890 39% 28%
Rentals Operations 163,312 318,647 481,959 275,079 86% 57%
Volunteers Events 105,413 228,565 333,978 0% 0%
!Total I 981,720 $2,161,660 $3,143,380 I $759,933 1 35% 1 24%
Recreation Division Cost Recovery Analysis
2009 Costs $3,143,380
Recreation Divsion
2009 Revenues $759,933
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Senior Programs Cost Recovery Analysis
Senior Programs
2009 Costs $621,668
Youth Teen Programs Cost Recovery Analysis
Youth Teen Programs
2009 Costs $993,262
2009 Revenues $54,020
2009 Revenues $232,944
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General Programs Cost Recovery Analysis
General Programs
2009 Costs $712,513 2009 Revenues $197,890
drywide'phi
Rentals Operations Cost Recovery Analysis
Rentals Operations
2009 Costs $481,959
2009 Revenues $275,079
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6/30/20105.05 PM
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Volunteers Events Cost Recovery Analysis
Volunteers Events
2009 Costs $333,978 2009 Revenues $0
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Potential Fee Adjustments
Average fee increases needed to fully recover total costs
Total Avg Fee
Total Costs Revenues Increase
Senior Programs 621,668 54,020 1051%
Youth Teen Programs 993,262 232,944 326%
General Programs 712,513 197,890 260%
Rentals Operations 481,959 275,079 75%
Volunteers Events 333,978 n/a
Total $3,143,380 759,933 314%
Average fee increases needed to fully recover direct costs
Direct Total Avg Fee
Costs* Revenues Increase
Senior Programs 430,045 54,020 696%
Youth Teen Programs 681,351 232,944 192%
General Programs 503,051 197,890 154%
Rentals Operations 318,647 275,079 16%
Volunteers Events 228,565 n/a
Total $2,161,660 759,933 184%
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Cost Recovery Highlights by Program
For each section, identifies the top five programs with the greatest differences
between costs and revenues.
Program revenues are estimates provided by City staff.
The Volunteer Events Section had no estimated revenues, and was not included
Top Five Cost/Revenue Differences
SENIOR PROGRAMS
Difference between Costs Revenues: Top 5 Programs
Program
Senior Trips Tours
Duwamish Curve Cafe
Drop In
Free Fitness Room
Open Gym Volleyball
YOUTH TEEN PROGRAMS
Cost Revenue Difference
150,351 14,793 (135, 558)
135,977 17,399 (118, 578)
105,161 (105,161)
37,050 (37, 050)
35,539 307 (35, 232)
Difference between Costs Revenues: Top 5 Programs
AfterSchool Program
Camp Tukwilly
Teen Summer Camp
Early Birds
Adventure Camp
Program Cost
214,044 39,223
213,175 92,095
127,857 21,038
90,160 7,265
121,284 38,502
Revenue Difference
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(174, 821)
(121, 080)
(106,819)
(82, 895)
(82, 782)
6/30/20105 02 54 PM
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Top Five Cost/Revenue Differences (cont.)
GENERAL PROGRAMS
Difference between Costs Revenues: Top 5 Programs
Program
Fitness Room Supervision
YT BB League
Adult Open Gym basketball
Playground Program
Preschool 4 Year Olds
Program
Rentals Ball Field
Rentals Facility
Rentals Shelter
City No Charge
Non Profit No Charge
330,947
63,103
21,549
18,742
27,287
RENTALS OPERATIONS*
*Rentals Operations has only 5 programs
Cost Revenue Difference
75,535
26,350
10,079
Difference between Costs Revenues: Top 5 Programs
Cost Revenue
72,258 3,780
334,448 277,964
43,124 5,640
24,853
7,276
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(255,412)
(36, 753)
(21, 549)
(18, 742)
(17,208)
Difference
(68,478)
(56, 484)
(37, 484)
(24, 853)
(7,276)
6/30/2010502 54 PM
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Section 1. Definitions.
City of Tukwila
Washington
Resolution No. /53G0
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, ADOPTING POLICIES FOR SETTING FEES FOR THE
CITY'S RECREATION AND AQUATICS PROGRAMS, CLASSES,
SERVICES AND FACILITIES, AND REPEALING RESOLUTION 1414.
WHEREAS, the City Council desires to adopt recreation fees that are both fair to
participants and fiscally responsible from the City's viewpoint; and
WHEREAS, recreation and aquatic programs, classes, services and facilities are
important to the health and well being of the community; and
WHEREAS, Tukwila has a full range of programs, classes, services and facilities,
and those should all be equitable on their own and with one another,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
A. Age groups.
1 "Youth" means persons under the age of 18
2. "Adult" means persons aged 18 -54.
3 "Senior Adult" means persons age 55 and over
B Costs:
1 "Direct costs" are those costs directly related to the specific operation of the
activity, such as balls, field or building rental, umpires or trophies for sports leagues, or
instructor wages and supplied materials.
2. "Indirect costs" are costs included as part of the general operating
expenses of all recreation programs, such as brochure printing, Tukwila Comrnuruty
Center rooms and utilities maintenance, and City staff wages and salaries.
Section 2. General Policies.
A. Specific program fees within each age group can vary according to program
needs, participants' ability to pay, market rates for similar programs, and the
availabihty of City funding
B When fees are set for programs and activities, they shall include the direct costs
for operating the program, and may also include indirect costs as determined by the
Parks and Recreation Director or his /her designee
C When additional funding through grants, donations or sponsorships is
acquired for a program or activity, the fee for the program may be adjusted with
approval from the Parks and Recreation Director or his /her designee
Recreation Fees 11/18/03 1
Attachment E
Recreation Fee Resolution #1536
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D Fees and charges are set by the Parks and Recreation Director and are subject to
periodic review at least annually by the Parks Commission and the City Council's
Community and Parks Committee.
E The Parks and Recreation Director or his /her designee may waive part or all of
a fee in case of financial hardship
F Other fees and charges, such as deposits, late fees, and admilustrative
processing fees, may be assessed for programs, activities and services as deemed
necessary by the Parks and Recreation Director or his /her designee.
G A fee may be charged in addition to the program or activity fee for
participants who reside outside of the Tukwila City limits.
Section 3. Resolution 1414 is hereby repealed.
PASSED BY THE CITY COUNCIL C]F THE 1C'�JF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this /7' day of 2=7 4 2003
ATTEST /AUTHENTICATED
APPROVE p:i�6� �IY
E. Cantu, CMC, City Clerk
7�
dificetiEhe CityAttornty
Recreation Fees 11/13/03 2
Pam Carter, Council President
Filed with the City Clerk. -X5-0J 3
Passed by the City Council. i 7 3
Resolution Number /5