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MOORPARK CITY COUNCIL _ 4
AGENDA REPORT
BY:
TO: Honorable City Council
FROM: Jeremy Laurentowski, Parks & Recreation Director
PREPARED BY: Angel Sierra, Active Adult Center Supervisor
Stephanie Anderson, Senior Management Analyst
DATE: June 3, 2016 (CC Meeting of July 20, 2016)
SUBJECT: Consider Revisions and Title Change to the Recreation
Programs and Services Cost Recovery Policy in Order to
Incorporate Active Adult Center Programs
BACKGROUND
The Parks, Recreation and Community Services ,Department offers a wide variety of
recreation programs to the community. On January 18, 2012, the City Council
approved the Recreation Programs and Services Cost Recovery Policy (Policy). The
Policy established cost recovery goals for recreation programs offered through the
Arroyo Vista Recreation Center (AVRC) and provided staff direction in establishing
revenue sources for programs in order to meet 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
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 is 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
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Honorable City Council
July 20, 2016
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sports program, youth sports program, tournaments and competitions, vital services,
and special interest groups.
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 for both direct and indirect
costs 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.
At the time the Policy was instituted, staff was evaluating whether a similar policy should
be considered for Active Adult Center (AAC) programs, but no such policy has since
been established, and recreation programs offered at the Active Adult Center are
currently not included in the Policy.
DISCUSSION
Historically, recreational programming at the Active Adult Center has been
predominantly subsidized by the General Fund, with donations and volunteers offsetting
a portion of program expenses. Staff recommends revising the Policy to include Active
Adult Center programs in order to maintain consistency in cost recovery procedures and
policies for recreation programs offered by both the AAC and AVRC. The Policy will
. also provide AAC staff direction in calculating and establishing fees and charges for
recreation programs offered at the MC.
A new program category, Active Adult Center Classes, has been added to the list of
program categories. This new program category is necessary because the classes
offered at the Active Adult Center are often not only recreational or educational in
nature, but also provide services that contribute positively to the mental and physical
health of program participants. In addition, program participants at the MC may be on a
low fixed income and would not be able to afford similar programs through a private
organization. Because of these factors, the program category has been placed in a
recovery level with a higher subsidy than the recreation classes offered through AVRC.
Staff recommends that programs offered at the MC should be at a recovery Level Two.
This recovery level includes a minimum recovery of 50%, and target recovery of 100%,
of direct costs. The minimum recovery for indirect costs is 0% and the target is 50%.
The program would need to meet only the minimum recovery requirement in order to
continue to operate.
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It should be noted that three programs currently offered at the AAC would fall into the
Active Adult Center Class category. Gourd Art and Container Gardening are offered at
a cost of $5.00 per class to cover class materials. Both of these classes typically
recover 100% of their direct costs due to the fact that the majority of the materials
required for the class have been donated by various organizations over the last several
years. The City currently does not require a fee for the Strength Training and Balance
Class. The direct cost to the City for this program is approximately $7,000 annually due
to class instructor costs. Upon the City Council's approval of the Policy, staff intends to
initiate a fee of $1.00 per class for each program participant. Based on current
enrollment, this would generate approximately $4,100 annually and a cost recovery of
approximately 65% of direct costs, which would fall below the target requirement but
would meet the minimum requirement.
The title of the Policy is being changed to include Active Adult Center programs and will
read "Recreation and Active Adult Center Programs and Services Cost Recovery
Policy".
Language has also been added to the Policy to more clearly state that the City Manager
or his/her designee has the authority to establish the fee(s) associated with each
program's revenue source(s).
FISCAL IMPACT:
Potential increase in revenue from the establishment of new revenue sources for Active
Adult Center programs.
STAFF RECOMMENDATION
Approve the revisions and title change to the Recreation Programs and Services Cost
Recovery Policy to include Active Adult Center programs, and direct that the Policy be
incorporated into the City Council Policies Resolution on the next amendment.
Attachment 1 — Draft revised Recreation and Active Adult Programs and Services Cost
Recovery Policy
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Attachment 1
RECREATION AND ACTIVE ADULT PROGRAMS AND SERVICES COST
RECOVERY POLICY
1. Purpose
The purpose and intent of the City Council in adopting the Recreation and Active
Adult 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-subsidize programs. Bove-t„e
2. 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.
3. 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. The City Manager or his/her
designee shall have the authority to establish any fee(s), rates, or other charges
associated with each program's revenue source(s). 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, Bingo Bash, 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.
F. "Active Adult PsClasses" shall mean any class or workshop offered at
the Active Adult Center that focuses on a specific activity type or topic, is
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instructional or developmental in nature, provides a benefit to the participant's
mental or physical well-being, and requires a paid instructor or has a specific
program materials requirement. Examples: Strength Training, Yoga, Art.
G . "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.
HG. "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.
IN. "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.
J1. "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.
KJ. "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.
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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
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.
Direct Costs Division Indirect Costs Other Indirect Costs
Mnimum Target Mnimum Target Mnimum Target
Programs and Levels Recovery Recovery Recovery Recovery Recovery Recovery
Level One: Includes:
Community Events (A) 25% 100% 0% 25% 0% 0%
Vital Services (J)
Level Two: Includes:
Special Events (B)
50% 100% 0% 50% 0% 0%
Active Adult Classes (F)
Special Interest Groups (K)
Level Three: Includes:
Day Camps (D) 100% 100% 50% 75% 0% 0%
Youth Sports Programs (H)
Level Four: Includes:
Recreation Classes and Specialty Camps (E) 100% 100% 75% 100% 0% 25%
Adult Sports Programs (G)
Level Five: Includes:
Other Events (C ) 100% 100% 100% 100% 50% 100%
Tournaments and Competitions (I)
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7. Cost Recovery Implementation and Management
Division Department 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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