HomeMy WebLinkAboutAGENDA REPORT 2012 0118 CC REG ITEM 09DITEM 9.D.
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MOORPARK CITY COUNCIL
AGENDA REPORT
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TO: Honorable City Council
FROM: Hugh R. Riley, Assistant City Mana
PREPARED BY: Stephanie Shaw, Recreation Superintendent
DATE: November 10, 2011 (CC Meeting of January 18, 2012)
SUBJECT: Consider Adopting the Recreation Programs and Services
Cost Recovery Policy
BACKGROUND
The Recreation Division offers a wide variety of recreational programs to the
community. Fees and other revenue sources are currently established by staff based on
historical data and current market rates. At this time, there is no formal policy regarding
how program fees and other revenue sources are established, or to what extent
recreation programs will be subsidized by the General Fund. The Parks and Recreation
Commission was presented with a proposal for a Recreation Programs and Services
Cost Recovery Policy (Policy) at their November 7, 2011 meeting. The Commission has
recommended adoption of the Policy by the Council.
DISCUSSION
The purpose of this Policy is to provide direction to staff in calculating and establishing
fees and charges for recreation programs; to establish a process to recover the
appropriate portion of cost based on the recovery goals of the program; to provide a
framework to modify or eliminate programs that do not meet the minimum cost recovery
goals; and to determine the extent to which the General Fund above the amount of fees
collected will support recreation programs and services. Division staff will establish, and
the Department Director will approve, appropriate strategies based on maintaining
quality programs while meeting required cost recovery goals.
The Policy categorizes and defines program costs, revenue sources, program
categories, and recovery levels. Program costs are categorized as direct costs, which
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Honorable City Council
January 18, 2012
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include all costs charged to the program budget and part-time staff costs; division
indirect costs, which include division overhead costs, facility use costs, and full -time
staff costs associated with the planning and administration of the program; and other
indirect costs, which include department and City overhead costs. Revenue sources
include user fees, sponsorships and donations, vendor fees, grants, and advertising and
promotional fees.
Each program or service offered through the Arroyo Vista Recreation will be placed in a
program category, according to the type, purpose, and structure of the program.
Program categories include community event, special event, other event, day camp,
recreation classes and specialty camps, adult sports program, youth sports program,
tournaments and competitions, vital services, and special interest groups. Staff is
evaluating whether a similar policy should be considered for Active Adult Center
programs.
These program categories are then placed into a recovery level. The recovery levels
establish the required minimum and target cost recovery goals for each program cost
category. Programs must meet the minimum recovery goal in order to continue
operating without modification. Staff will attempt to reach the target recovery goal for
each program. There are five recovery levels, ranging from level 1 (high subsidy) to
level 5 (minimal subsidy). The cost recovery matrix defines which program categories
are included in each recovery level.
The policy also includes a right of exclusion for certain programs. The right of exclusion
allows the City Council to exclude a program from the Policy, allowing that program to
operate below recovery goals or without revenue sources.
STAFF RECOMMENDATION
Approve the Recreation Programs and Services Cost Recovery Policy and direct that
the Policy be incorporated into the City Council Policies Resolution on the next
amendment.
Attachment 1 — Draft Cost Recovery Policy
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Policy 6. : RECREATION PROGRAMS AND SERVICES COST
RECOVERY POLICY
Purpose
The purpose and intent of the City Council in adopting the Recreation Programs
and Services Cost Recovery Policy is to provide direction to staff in calculating
and establishing fees and charges for recreation programs, to establish a
process to recover the appropriate portion of cost based on the recovery goals of
the program, to provide a framework to modify or eliminate programs that do not
meet the minimum cost recovery goals, and to determine the extent to which the
General Fund will fund above the amount collected in fees recreation programs
and services.
Program Costs
Costs for each program shall be divided into three categories: 1. direct costs; 2.
division indirect costs; and 3. other indirect costs. Each cost category shall have
established minimum and target cost recovery percentages. Costs for programs
shall be defined as follows:
"Direct Costs" shall mean all costs directly associated with a program and
charged to the program's budget, and all part-time staff costs associated with
direct staffing of a program.
"Division Indirect Costs" shall mean all division costs associated with the program
and charged to the division budget, facility costs, and staff costs associated with
planning and administration of the program.
"Other Indirect Costs" shall mean department overhead costs for the department
director and his /her administrative staff and city -wide overhead costs associated
with the operation of the division.
Revenue Sources
A variety of revenue sources may be used to meet a program's designated cost
recovery goal. The City Manager or his /her designee shall determine the most
appropriate revenue sources to assign to a program. Revenue sources include
the following:
User Fees: Fees charged to the individual or team participating in a program,
including admission fees and registration fees.
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Sponsorships and Donations: Contributions in support of a specific program or
service given to the City by private businesses or organizations.
Vendor Fees: Fees charged to vendors (such as food booths and arts and crafts
booths) to participate in recreation programs.
Grants: Funding received by the City from a public, private, or non - profit grant or
subvention program.
Advertising and Promotional Fees: Fees charged for advertisements placed in
recreation publications, temporary program or facility naming rights, providing
program or service equipment or supplies baring the promoter's name or logo,
and providing ancillary items or printed materials baring the promoter's name or
logo.
4. Program Categories
Each recreation program and service offered by the Recreation Division shall be
placed in a Program Category. A program shall be placed in the category that
best defines the type, purpose, and structure of the program. Program
Categories shall be defined as follows:
A. "Community Event" shall mean a community -wide event that meets all of the
following criteria: 1) benefits the community as a whole; 2) appeals to broad
segments of the community; 3) is traditionally offered by a pubic agency; 4) does
not require advance registration to attend. Examples: Fireworks Extravaganza,
Moorpark Arts Festival.
B. "Special Event" shall mean an event that meets the following criteria: 1)
benefits a large segment of the community; 2) appeals to a specific demographic
or population; 3) is typically offered by a pubic agency. Examples: Easter Egg
Hunt, Trick or Treat Village, Teen events.
C. "Other Event" shall mean all other events that do not fall into Community or
Special event categories. Example: Visits from Santa.
D. "Day Camp" shall mean a general camp program for youth that does not focus
on a specific activity type or topic. Examples: Camp Moorpark, Adventure Camp.
E. "Recreation Classes and Specialty Camps" shall mean any class, workshop,
or specialty camp that focuses on a specific activity type or topic and is
instructional or developmental in nature. Examples: Beginning Ballet, Lego
Engineering Camp, Tot Sports classes, Yoga.
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F. "Adult Sports Program" shall mean an intra- community sports program which
is offered for individuals ages 18 and older, is recreational in nature, and is open
to a variety of playing abilities. Examples: Adult softball league, soccer league.
G. "Youth Sports Program" shall mean an intra- community sports program which
is offered for individuals ages 17 and younger, is recreational in nature, and is
open to all playing abilities. Example: Youth Basketball League.
H. "Tournaments and Competitions" shall mean an activity that offers a higher
level of competition than typical recreation level programs. Sports tournaments,
extreme challenge events, and timed bicycle or running events are included
under this definition. Example. Softball tournament sponsored by the City.
I. "Vital Services" shall be defined as services or activities that are essential to
the health and well -being of the individual or community, are typically offered by
a public agency, and are not generally available to the public through other
sources. Example: Women's assault prevention clinic.
J. "Special Interest Groups" shall be defined as social gatherings that do not
have a paid instructor or supervisor at which the group will: 1. Discuss topics of
interest; 2. Provide emotional or social support to group members; or 3. Work
together on or participate in a common activity. Example: Book club.
5. Definition of Recovery Levels
Program Categories will be placed into recovery levels establishing the
percentage of required minimum and target cost recovery the program. Levels
are defined as follows:
Level One: Programs that are of a benefit to the whole community or are
essential to the health and well -being of a target segment of the community, are
typically provided by public agencies and not typically available through other
providers, and require minimal commitment from participants (minimal time or
financial investment is required, performance of program would not be altered by
the absence of a single participant, and /or advance registration is not required.)
Level Two: Programs that provide a benefit to a targeted segment of the
community, are often offered by public agencies, are limited in availability from
other providers, and require minimal commitment from participants.
Level Three: Programs that provide both a community and individual benefit, are
often offered by public agencies and may be available through other providers,
and require some level of commitment from participants.
Level Four: Programs that have a greater individual than community benefit, may
be offered by public agencies or private businesses or other providers, are
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instructional or recreational in nature, and require a strong commitment from the
participant (substantial time or financial investment is required, performance of
program may be altered by the absence of a participant, and /or advance
registration is required.)
Level Five: Programs that provide primarily an individual benefit and are
specialized or competitive in nature.
6. Cost Recovery Matrix
In accordance with the Cost Recovery Levels, the following matrix has been
developed. The minimum recovery indicates the percentage of costs that must
be recovered in order to continue offering the program without modification. The
target recovery indicates the percentage of costs that staff will attempt to recover
through program fees and other revenue sources.
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Direct Costs
Division Indirect Costs
Other Indirect Costs
MTinimum Target
Minimum Target
Minimum Target
Programs and Levels
Recovery Recovery
Recovery Recovery
Recovery Recovery
Level One: Includes:
Community Events (A)
25%
100%
0%
25%
0%
0%
Vital Services (I)
Level Two: Includes:
Special Events (B)
50%
100%
0%
50%
0%
0%
Special Interest Groups (J)
Level Three: Includes:
Day Camps (D)
100%
100%
50%
75%
0%
0%
Youth Sports Programs (G) ^�
Level Four: Includes:
Recreation Classes and Specialty Camps (E)
100%
100%
75%
100%
0%
25%
Adult Sports Programs (F)
Level Five: Includes:
Other Events (C)
100%
100%
100%
100%
50%
100%
Tournaments and Competitions (H)
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7. Cost Recovery Implementation and Management
Division staff will establish, and the Department Director will approve, strategies
for achieving cost recovery goals. Strategies will be implemented based on the
best interests of maintaining a strong program and reaching the designated
recovery goals within a period not to exceed one year. The process for cost
recovery shall be as follows:
a. Each recreation program or service will be assigned to the appropriate
Program Category, establishing the recovery level for the program.
b. Staff will determine appropriate revenue source(s) for the program and
establish user fees, sponsorships /donations, vendor fees, and /or grant
amounts necessary to meet minimum cost recovery.
c. Programs will be reviewed annually to determine if they are meeting the
minimum cost recovery percentage.
d. Programs that are unable to meet the minimum cost recovery will be
reviewed by the Department Director for consideration of appropriate
action, including restructuring or eliminating the program.
e. Programs that meet minimum cost recovery and do not exceed target
recovery will not require action.
f. Programs that exceed target cost recovery will be reviewed to determine
whether or not fees should be decreased, the program should be placed in
a different Program Category or Recovery Level, or other action is
needed.
g. An annual report will be presented to the Parks and Recreation
Commission by October 31 and to the City Council by December 31 each
year summarizing the programs offered during the prior fiscal year and
whether cost recovery goals for each program were met.
8. Right of Exclusion
The City Manager is authorized to exclude individual programs from the Cost
Recovery Policy. Said programs shall be budgeted as approved by the City
Council. Said programs shall not be required to meet Cost Recovery
requirements and may operate below recovery levels for the program category,
or without revenue sources.
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