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Home My WebLink About02-24-1998 Saratoga City Council Adjourned MeetingCity of Saratoga Saratoga City Council Adjourned Meeting February 24, 1998 Recreation Cost Recovery Task Force City of Saratoga Saratoga City Council Adjourned Meeting February 24, 1998 Recreation Cost Recovery Task Force Table of Contents Exhibits A Objectives and Approach B Recreation Services Program Budget and Teen Services Program Budget Spreadsheet C Graphs -1997 to 1998 Projected Revenue - Excess Revenue Over Direct Program Costs D Graphs - Revenue Over (Under) Direct Cost - Revenue Over (Under) All Cost E Recreation Department Services Program Registration Participants F Recreation Department Cost Per Participant, Per Cost Center G Recreation Department School Facility Usage Detail H Cost Recovery Options I Other Local Cities Recreation Department Programs City of Saratoga Exhibit A Saratoga City Council Adjourned Meeting February 24, 1998 Recreation Cost Recovery Task Force Objectives The Saratoga City Council charged the Finance Commission, in their Dec. 09, 1997 meeting, to prepare a report on the Recreation Departments Cost Recovery Plan. James Ousley, Chairmen of the Finance Commission created a joint task force with two Commissioners from the Parks & Recreation Commission, Sheila Ioannou and Barbara Olsen, two Commissioners from the Finance Commission, Allen Roten and Nick Streit, and Joan Pisani, Recreation Director. Approach The joint task force concluded that before they could attempt to even consider cost recovery, we needed to know the components of the Recreation Dept. With the help of Joan Pisani and the Finance Department we broke the Recreation Dept. into seven (7) cost centers; - Classes /Theater -Trips -Youth Sports -Adult Sports - Camps- Contract (Sports) -Camps -All Others (Nature) - Redwood School Sports With the components now determined, we developed Exhibit B to determine which cost centers were profitable and which were unprofitable. We determined it was imperative to know the profitability of each cost center in the following categories; - Excess Revenues over Direct Program Costs - Direct Program Costs includes All Program Costs except City Permanent Staff and Indirect Costs - Revenues Over (Under) Direct Costs - Direct Costs includes All Program Costs except Indirect Costs - Revenues Over (Under) All Costs -All Costs include All Costs As Requested by The City Council we also included Teen Services in Exhibit B, as a separate cost center using the same criteria. Exhibit B CITY OF SARATOGA RECREATION SERVICES PROGRAM BUDGET 1997 -1998 TEENS SERVICES PROGRAM BUDGET 1997-1998 Excess Revenue Eac� eg Revenue 9696 =97 96_97 97_98 97_98 Part -time Total Total Over Direct Over Direct Full-time Professional Revenue Revenue Indirect Revenue Revenue Projected Actual Projected Pro ected Salaries & Ouarterl Direct Ouarterl Direct Program Program Salaries + Full -time Over Over (Under) Cost over Over (Under) Brochure Revenue Revenue Revenue Suoolies Contracts Program Cost Cost Benefits Equivalent flsiir Allocation (Under) Beets Brochure Direct Cost All Cost $27,106 ............................... $9.6400 ..........................C„ Classes/ 28976 'ercenta e) ................................... $32228 o,,,,,st. .. ............................(PE n?.w. )...... l« ................... 2 ........11..................�.� Direct ost ........(..... ercen e .....!�3.)....................� 3 d........................., All cod . t... .........5�'........_?a&e?..... arcen Theater $250,000 $281,614 52% $15,000 $1,250 $85,000 $18,100 $119 ,350 $162,264 73% $94,396 J.28K.65B.05 $67,868 229% $72,403 ($4.535) -3% Trips $76,000 $77,000 14% $1,500 $750 $57,000 $2,000 $61,250 $15,750 7% $20,652 J.06 K. 18 $4. Q' -17% $27,582 (11-32.484 ) -23% Youth Sports $18,000 $25,000 5% $3,500 $3,700 $6,600 $1,000 $14,800 $10,200 5% $15,678 J.06 B. 14 ($5.478) -19% $10,343 (1115.821 ) -11% AdultSports $28,900 $28,000 5% $3,500 $3,250 $10,700 $1,000 $18,450 $9,550 4% $20,986 J.06B.24 'S1 1.4;6) -39% $13,792 1625,228 -18% Camps - Contract (Sports) $42,000 S54,0001 10% $1,000 $44,000 $750 $45,750 $8,250 4% $11,9761 J.03 K.12 !$3.726) -13% $19,826 (6237?S' ) -17% Camps -All Others (Nature) $35,000 $46,200 9% $26,000 $8,900 $0 $750 $35650 $10,550 5% $21,922 J.06B.27 ;511.372) -38% $19,824 (631, 9r' -22% Redwood School Sport $26,600 $25,000 5% $0 $0 $20,500 sol S20,5001 $4,500 2% $5,786 J.05 $L2�6) -4%1 $8,619 $?.SH S 1 -7% Total $476,5001 $536,814 100%1 $50,5001 $17,8501 $223,8001 $23,6001 S315,7501 $221,064 100% $191,396 J.60 K.95 B.701 $29,668 1 100% $172,3891 100•h TEENS SERVICES PROGRAM BUDGET 1997-1998 (1) Includes salaries and benefits for professional and clerical staff FTE Professional: 2.25 FTE Clerical: 1.28 (2) Professional staff: J = Joan; K = Kim; B = Beverly (3) Indirect Cost Allocation based on pro-ram of Total Direct Cost and Salaries and Benefits Excess Revenue 9696 =97 97_98 Part -time Total Over Full -time Professional Revenue Indirect Revenue Actual Projected Salaries & Supplies Conh2cts Ouarterl Direct Direct Salaries + Full -time Over (Under) Cost Over (Under) . ne ts..... ............... .................. Brochure Direct Coat All Cost ................ Reveres..... Revenue.... .................... P ram Cost........... Program Cost Benefits 1 uivalent ........................ .Allocation 3 Teens $24,374 $11000 $27,106 $1,170 $9.6400 $39.976 28976 $32228 J.15 B.25 6 1. $54 529 s 115 :13 (1) Includes salaries and benefits for professional and clerical staff FTE Professional: 2.25 FTE Clerical: 1.28 (2) Professional staff: J = Joan; K = Kim; B = Beverly (3) Indirect Cost Allocation based on pro-ram of Total Direct Cost and Salaries and Benefits 52% City of Saratoga 1997 - 1998 Projected Revenue Classes / Trips Youth Sports Adult Sports Camps - Camps - All Redwood Theater Contract Others (Nature) School Sports (sports) 80%- 70%-,� 60%-`�' 50%-Z 40%-X 30%-'-" 20%-` io%-,, 0%LL Classes / Theater City of Saratoga Excess Revenue Over Direct Program Costs 7% Exhibit C 5% 4% 4% 5% 2% Trips Youth Sports Adult Sports Camps - Camps - All Redwood Contract Others (Nature) School Sports (Sports) Exhibit C Exhibit D 0% -5% -10% -15% -20% -25% City of Saratoga Revenue Over (Under) All Cost 18% Classes / Trips Youth Sports Adult Sports Camps - Camps - All Redwood Theater Contract Others School Sports (Sports) (Nature) City of Saratoga Revenue Over (Under) Direct Cost 250% 200% 150% 100% -17% -18% ° -13% -380Z, -4% 50% 0% _ x g ............. o -50 /o Classes / Trips Youth Adult Sports Camps - Camps - All Redwood Theater Sports Contract Others School (Sports) (Nature) Sports 0% -5% -10% -15% -20% -25% City of Saratoga Revenue Over (Under) All Cost 18% Classes / Trips Youth Sports Adult Sports Camps - Camps - All Redwood Theater Contract Others School Sports (Sports) (Nature) Exhibit E 2/20/98 RECREATION SERVICES PROGRAM REGISTRATION 1997 -1998 (8 months actual, 4 months estimated) Classes/Theater 720 classes 6460 participants Adult Sports Basketball 42 teams 342 participants Drop -in Basketball Program 15 participants Softball 16 teams 260 participants Youth Basketball 30 teams 263 participant 39 volunteers Coaches Trips 27 trips I200 participants Contract Sports Camps (Soccer, Basketball, Hockey, ,Baseball, etc.) 10 camps 561 participants Nature and Holiday Camps — (Camp Caterpillar, Backyard Scientist, Beach Adventure etc.) 33 camps 565 participants 12 -14 part-time recreation leaders Redwood Sports Program 22 teams 350 participants 1997 -98 Total Registered participants: 10,016 TEEN SERVICES Warner Hutton House 65 average daily attendance Middle School Dances 5 held 300 average attendance Other Activities 300 participants Youth Commissioners: 13 City of Saratoga Exhibit F Cost per Participant, Per Cost Center 1997 -1998 Number of Participants Revenue Over Under Direct Cost Revenue Over Under Per Revenue Over Revenue Over (Under) All (Under) All Cost Cost per Participant Participant Classes / Theater 6,460.00 $ 67,868.00 $ 10.51 $ (4,535.00) $ (0.70) Trips 1,200.00 (4,902.00) 4.09) (32,484.00) (27.07) Youth Sports 263.00 (5,478.00) (20.83) (15,821.00) (60.16) Adult Sports 617.00 (11,436.00) (18.53) (25,228.00) (40.89) Camps - Contract (Sports) 561.00 (3,726.00) (6.64) (23,552.00) (41.98) Camps - All Others (Nature) 565.00 (11,372.00) (20.13) (31,196.00) (55.21) Redwood School Sports 350.00 (1,266.00) 3.62) (9,905.00) (28.30) Total 10,016.00 $ 29,688.00 1 $ (142,721.00) TO: Recreation Services Cost Recovery Task Force Exhibit G FROM: Joan Pisani SUBJECT: Recreation Department School Facility Usage DATE: January 21, 1998 The Saratoga Recreation Department uses space at three schools in Saratoga for such as adult and youth basketball Li Prof leagues, tennis classes end golf lessons. Listed below is the information you requested in regads to the OnTent usage Saratoga High School 1997 -98 usap: $3700 Balance in account: 56300 Redwood Mddle School 1997 -98 usage: $4000 Balance in account: $16,600 West Valley College 1997. -98 usage: $2000 Balance in account: 56000 Cost Recovery Options Options Description City of Saratoga Saratoga City Council Adjourned Meeting February 24, 1998 Recreation Cost Recovery Task Force Exhibit H Estimated Anticipated Revenue A Retain Recreation Dept. as is $ ? B Increase Recreation Fees 10% over 97 -98 $ 53,681 (Market resistance may drop overall revenue) C Increase Recreation Fees 15% over 97 -98 $ 80,522 (Market resistance may drop overall revenue) D Eliminate Unprofitable Programs $ ? (Savings depends on program and other City staff cuts) E Eliminate Recreation Dept. completely $ ? (If no other City staff are eliminated then the $172,389 in indirect cost allocated to the Rec. Dept would be re- allocated to other City depts. Could decrease burden on City Manager and City Council) F Consider transferring some or all Programs to the $ ? Saratoga/ Los Gatos Recreation District (Sar /Lg fees are less, cost savings will depend on other City staff cuts and indirect costs would be re- allocated to other depts.) G Consider establishing Saratoga Recreation District as $ ? a separate Entity. (Again savings depends on other City staff cuts, indirect costs would be re- allocated to other depts.) 2123(88 LOCAL CITIES RECREATION DEPARTMENT PROGRAMS NOTE: The City of Saratoga's definition of direct and Indirect costs are different from Cities surveyed above. These Cities consider direct costs to be expenses actually incurred for programs — Re: for classes, the instructor's salary S materials would be a direct expense — Indirect costs would be all other Recreation Department expenses such as staff salaries, brochure costs, clerical support, etc. M X s J. Q J. C't �1 CITY OF CITY OF CITY OF CITY OF QUESTIONS CAMPBELL CUPERTINO FOSTER CITY LOS ALTOS 1. DO THEY HAVE RECREATION DEPARTMENTS OR DIVISIONS Recreation Department Recreation Department uses Enterprise Funds Rec, one of funds Recreation Department has four divisions Recreation Department 2. HOW ARE THEY FUNDED Direct Cost +26% and eneral fund Fee based recovery +32 % indirect Fees and Enterprise Fund Fees and General Fund 3. DO THEIR PROGRAMS COST RECOVER Cost recovery 82% No, offer free programs in summer, youth etc 60% to 70% recovery the rest covered by enterprise fund 86% to 90% 4. DO THEY COVER INDIRECT COSTS AND IF SO -- HOW Expected to be cost recov.in future do It gradually No, charge 32% but General fund suports the rest Fees and general fund 19% overhead rest General Fund 6. DOES CITY GENERAL FUND SUBSIDIZE PARKS AND EC Yes Yes Yes Yes 6. HOW LONG HAS CITY HAS A PARKS AND REC PROGRAM 1962 Since becoming a City 1973 1962 NOTE: The City of Saratoga's definition of direct and Indirect costs are different from Cities surveyed above. These Cities consider direct costs to be expenses actually incurred for programs — Re: for classes, the instructor's salary S materials would be a direct expense — Indirect costs would be all other Recreation Department expenses such as staff salaries, brochure costs, clerical support, etc. M X s J. Q J. C't �1 l Memo To: Mayor and City Council From: Joan Pisani, Director of Recreation Date: October 15, 1997 Re: Recreation Department Fee Increases & Multi -Year Cost Recovery Plan During the budget process the City Council requested that I return in October with a plan to achieve full cost recovery, first by recovering all of the indirect costs allocated to Recreation Services which would disappear if the Recreation Department were eliminated, and then by recovering all of the remaining indirect costs allocated to Recreation Services over a period of time. In the area of Teen Services, the City Council directed staff to establish a non - profit organization to work towards providing funding for teen programs in Saraoga. RECREATION SERVICES: The Recreation Services program area includes 800 -1000 classes per year, 45 summer camps, 24 -30 senior citizen and family trips, a summer coed and men's softball program, a winter coed youth basketball league, a preschool program, an adult women, men over 35 years and men over 45 years basketball leagues, special holiday programs and the Shakespeare in Wildwood Park program. In the area of Recreation Services the City Council directed staff to increase fees to recover 100% of the direct costs and to also recover the indirect expenses that would go away (Avoidable Indirect Costs) if the Recreation Department was eliminated. The revenue and expenditures approved in the budget for Recreation Services were based on this directive and are listed below. 0 Page 1 Recreation Services Budget Revenues Expenditures Direct Costs Indirect Costs Total Expenditures Actual 1996 -97 $476,639 Approved 1997 -98 $537,817 Approved1998 -99 $553,951 n /a* n /a* 518,879 172,389 523,910 147,464 I n /a* 1 $691,2681 $671,374 *Actual expenditures for 1996 -97 include costs associated with Facility Operations Services. Amounts not comparable. Current Year Fee Increases For the Recreation Department to achieve the budget goals during this fiscal year, revenue will need to be increased by $61,178, or approximately 12.5°/x. During the fourth quarter last fiscal year, the recreation staff evaluated all services provided and reviewed all programs and activities. Fee increases have been instituted in all areas. To get an idea of some of these fee changes, a few examples are listed below. Youth Basketball from $75 to $94 per person Sports Cams from $81 to $94 per person Nature/Day Cams from $79 to $94 per person Redwood Afterschool Sports our share of fees collected from 10% to 16% Non - resident Rate from 10% to 20% more Based on registration and revenue figures during this first quarter, I am optimistic the Recreation Department will meet the budget goals this year. Additional Fee Increases to Recover Indirect Costs In the approved 1998 -99 budget, it is estimated that the Recreation Department will be recovering 100% of the direct expense of the Recreation Services budget and 19% of the indirect cost allocation. If the department had to recover 100% of the indirect cost allocation an additional $117,423 would need to be generated and fees would need to be increased an additional 20 %. Spread over 4 years this would be • Page 2 an additional 5% per year above the revenues increases already factored in the budget.. The schedule below shows the proforma effect of the revenue increase on the program over the next four years: Four Year Cost Recovery Proforma Projected Projected Projected Projected 1998 -99 1999 -00 2000 -01 2001 -02 Revenues $581,649 $629,053 $680,321 $733,629 Expenditures Direct Costs 523,910 539,627 555,816 572,491 Indirect Costs 147,464 151,888 156,445 161,138 Targeted Net Difference $89,725 $62,462 $31,940 $0 Another option which could be explored is to reduce the indirect costs allocated to Recreation. This can be studied by reviewing all indirect expenses to see if there is a less expensive way to achieve the same results. For example, can the Recreation Department operate without support from other departments in the City? Can the services currently needed be contracted out and paid for directly by the Recreation Department? TEEN SERVICES This program includes staffing the Youth Commission, providing a comprehensive afterschool teen program at the Warner Hutton House, all city middle school dances and a summer teen program. Teen programs cut from the 1997 -98 budget were the Music Fest during Celebrate Saratoga, Togapooloza band concerts, the Saturday night Boneyard at the Warner Hutton House, and the open gym activity. The remaining teen programs will never likely recover their costs. This is true in other cities and our teen program history of nine years here in Saratoga reflects this. Listed below is the approved Teen Services budget for 1997 -99 and the revenue projections: • Page 3 .w *This reflects Youth Commission fundraising efforts and donations which are currently being collected by the new non - profit board. The Friends of the Warner Hutton House non - profit was established in July, 1997, and the Board of Directors have been working hard since. This very ambitious group is working towards ensuring a stable financial base for new and existing teen programs as well as improved facilities. They hope to meet with the City Council soon to share their plans for the future which includes funding teen programs in Saratoga. If you have any questions, please feel free to contact me at 868 -1250. • Page 4 Teen Services Budget Actual 1996 -97 Approved 1997 -98 Approved 1998 -99 Revenues $35,028* $22,598 $23,276 Expenditures Direct Costs 81,073 74,686 73,951 Indirect Costs 54,753 54,529 47,543 Total Expenditures $135,826 $129,215 $121,494 *This reflects Youth Commission fundraising efforts and donations which are currently being collected by the new non - profit board. The Friends of the Warner Hutton House non - profit was established in July, 1997, and the Board of Directors have been working hard since. This very ambitious group is working towards ensuring a stable financial base for new and existing teen programs as well as improved facilities. They hope to meet with the City Council soon to share their plans for the future which includes funding teen programs in Saratoga. If you have any questions, please feel free to contact me at 868 -1250. • Page 4