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8.1.B. PRSR 10-14-2009Item: S.I.B. ver MEMORANDUM TO: Mayor and City Council FROM: Bill Maertz, Parks and Recreation Director DATE: October 14, 2009 SUBJECT: Non-Resident Recreation Fees Background At the August 10, 2009 budget workshop the Mayor requested a review of non-resident use of recreation programs. Staff pulled usage numbers for recreation programs and fee-based community events. A review of the 2008 registration numbers indicates the non-resident percentages of fee-based programs are approximately 32%. This is an estimate, based on available data. Ana i Assuming 2009 non-resident participation in fee based programs at 32%: - The program budget subsidizes non residents by $11,539 Staff estimates that total participation in fee based programs, free community events and warming houses for 2009 will tota128,789. Assuming 32% non-resident participation: - The program budget subsidizes non residents by $1.25 per participant - The recreation administration budget and recreation budget combined subsidizes non-residents by $15.35 per person. O-Rom - Charge non-resident fees for all recreation programs and fee based special events. - Seek sponsorships from businesses in neighboring communities For special events in order to reduce budget impact of these programs. - Pursue agreements with surrounding communities to offset the subsidy to their residents. Other Information to Consider - Charging anon-resident rate is consistent with how other cities are addressing this issue. - In some cases substantial fee increases could actually reduce revenue or cause program cancellations which would impact Elk River residents. - Other externalities should be taken into consideration. Over 9,000 non-resident participants in programs and community events generate customers for Elk River business. - Current registration policy reserves the first week of registration exclusively for Elk River residents. - Local businesses that sponsor events and partner with Parks and Recreation do not want to be associated with anon-resident fee that may alienate customers. - The City Council addressed this issue in 2004 and voted unanimously to eliminate non-resident fees. Action Requested Staff is looking for the Park Commission to make a recommendation regarding non-resident fees. If the Park Commission supports non-resident fee increases, staff recommends an across the board, $5.00 per program non resident fee. A higher rate may have a negative impact on enrollment and cause classes to close which could impact the number of offerings available to Elk River residents. Attachments Minutes of City Council Meeting 2009 Minutes of City Council Meeting 2004 Staff memo from January 20, 2004 City Council Minutes September 8, 2009 Page 3 • 6. Other Business Councdmember Morin updated the council on the upcoming Northstar Couidor events. He stated a stakeholders ceremony will be held Friday, Nov. 13 and a public launch with opportuaities to be the first to ride the line available to the public on Sat., Nov. 14. The start of service will begin Monday, Nov. 16 from Big Lake to the Twin Cities. The bus service will stop service after November 13, and will begirt in Big Lake on Nov. 16 with a route to St. Cloud. ~,puncil Updates There were no Council Updates. 8. Staff Updates Ms. Johnson updated the council on the receipt of the RFP for the Veterans Administration building. She stated the boundaries are smaller than originally thought, and they are looking for a leased building or would consider new construction around 20,000 square feet in size. The deadline is September I5. Staff will work with the County as well as developers to come up with proposals before the deadline. 9. Recess to Upper Town Confete_nce Roorn for 2~J10 Tax L~-v and Bu vet Discussion Mayor Klinzing recessed the meeting at 7:00 p.m. in order to go into Worksession. She reconvened the meeting at 7:05 p.m. 9.1. Administrative Citation Ordinance Chief Beahen presented the staff report • Counct~ discussed the benefits of impletenting an administrative dtadon ordinance and the steps that needed to be taken by the City if Council decided to implement this ordinance. Currently, there are very few violations in which an officer can use an administrative citation during traffic enforcement, but there is a possibility of more being added after the nezt legislative session, which would allow for more revenue and be a bigger benefit to the dty. There was also discussion about appointing an impartial hearing officer as well as the potential loss of revenue the State would experience. It was suggested that the City hold off for the time being of implementing this procedure until after the 2010 Legislative session is completed, which will allow time for a review of other does aad their experience with the administrative dtadon process. MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER GUMPHREY TO REVIEW THE ADMINISTRATIVE CITATION ORDINANCE AFTER THE 2010 LEGISLATIVE SESSION. MOTION PASSED 4-i. Zerwas opposed. Non-Resident Fee Discussion Mr. Maertz presented the staff report. There was discussion on options of to go about charging non-residents a higher fee for all recreation programs and fee based spedal events. It was decided to bring this item to the Parks and Recreation Commission meeting for discussion and commrnts. The item will be brought back next month to the council • 2010 Bu gst and Tax Levu Discussions 1) R~,,olLtion AuthotY?ing ti Prouo~ed Pro~ole~ty Tax for CoLection in 2010 City Couna:il Minutes January 20, ?U04 Page 3 Ms. Bergh discussed the non-resident fee poGry for progrnmming. She stated that the total amount of non-resident fees is a small portion of the total revenue received. She stated that if the fee were eliminated it would help cut down on administrative work, allow for larger class sizes, and help fosrcr more partnemhips. Councilmember I~uester stated that she would like the policy co remain the same regarding giving Elk River residents pceferential treatment to sign up for program offerings first. The Council agreed. Councihnembtr Dietz seated that ac lust he was opposed to elimnating this fee because he didn't want Elk River residents subsidizing programs for other cities' residtnts; but he felt that the benefits created by eliminating the fee will outweigh the challenges of enforcing the non-resident fee policy and be more beneficial to Elk River residents. Councilmember Moan concurred. MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER TVEITE TO ELIMINATE THE NON-RESIDENT FEES EFFECTIVE FOR ALL PROGRAMS BEGINNING ON MARCH 1, 2004. MOTION CARRIED 5-0. 4.5. UFdate on City Hall Remodeling Project Pat Klaers provided an update of the City Hall remodeling project. He stated that it had been the goal of the construction manager to accelerate the completion date of the project, but this is not going to happen. He stated that the move in date for staff to the remodeled Facility will be at the end of March. He stated that the project is on schedule and that the late March timefcame is whin the project was originally scheduled co be finished and the move to cake place. 4.6. Consider City Ad_m~nistrator Ind itv of Elk Rver 1!G'ork Propr-m, rimey~ Recommends tion;~ Mayor Klinzing stated the Council has been meeting to establish a work program For organizational management, Council/staff relations, and governance. She stated that this program is not ready for approval and that Council will be continuing its work and is holding a special meeting on February 17, 2004. 5. J~ No one appeared for Open Mike. 6.1. Reouest by D.R. Horton. Inc- fem. F~n,1 Ph. approval Tmtt Brook F1rm • g~h Additior~~ Case No. P 03-17 Senior Planner Scott Harlicker submitted the staff report. Mr. Harlicker stated that D.R. Horton is requesting final plat approval of Trott Brook Farms 9~h Addition. He provided an ovtrview of the Trott Brook Farms project and discussed lot and street layout and the Park and Recreation Commission action. MOVED BY CO[,tNCILMEMBER KUESTER AND SECONDED BY COUNCILMEMBER MOTIN TO ADOPT RESOLUTION 04-OS GRANTING ~~=~. ver MEMORANDUM TO: Mayor and City Council FROM: Michele Bergh, Recreation Manager DATE: January 20, 2004 SUBJECT: Non-Resident Fee Policy Revenue totals Eor programming as of October 31, 2003 are ;100,930. Of this, approximately ;5,00 has come from non-resident fees (the difference between the resident and non-resident rate). As you can see this is a relatively small portion of the total revenue. Administratively, this policy has always taken a great deal of time to enforce and explain. We believe that if we eliminated the non-resident fee, our numbers would grow significantly once the word was our, therefore, our revenues would also increase to cover the non- resident fees we had been collecting. This would allow us to spend more administrative time on programming, customer service and marketing. While many cities charge non-resident rates for facility use or access to community centers, they don't chazge non-resident rates for programming. Charging anon-resident fee makes many of our programs unaffordable for non-residents, residents will choose to not sign up because they want to participate with a friend who is anon-resident, and it gives the impression that eve don't really want them to participate. Many of our programs are geared to serve large numbers of people. Leagues are better when you have more teams, fitness classes are mote motivating when there are a lot of people attending, and it's hard to play team sports with very small teams. [n many cases, fees do not go up significantly when you have more participants. The average home in Elk River is valued at;159,000. The Recreation Department budget is approximately 5% of the overall City budget, which is approximately ;37/year for the average homeowner. In addition to the fee-based programming offered where a non- resident fee is charged, eve are also responsible for: • Administering programs at the arena which totals 44% of our registrations • Managing concession stands • Reserving outside city facilities and Lions Park Center • Coordinating MSF Tournaments • Staffing ice rinks • Administering free Entertainment in the Park ^ Partidpating in various community festivals and activities • Assisting the youth associations • Assisting the Library and Setuot Center with their ~narkerin8 Some other factors to consider for non-residents are: • Lions Den Summer Camp would cost an additional ;45/week in non-resident fees or ;495/summer • Pee Wee programs for the year would cost an additional;90 in non-resident fees • U Pass Wellness Program for the year would cost an additional;150 in non-resident fees The ability to partner is also affected because we are the only ones who charge a non- resident fee. Local businesses and organizations that may partner with us on pmgtams where a fee is charged, don't like the non-resident fee. They are not concerned about where people are coming from; they just want people to participate. We believe there would be more partnership opportunities for prograrruning if we were not charging anon-resident fee. Some partnerships that no longer exist due to non-resident fees are: • Cheerleading Clinics with the Elk River Booster Club ^ Summer Strength and Conditioning with the Varsity coaches • Youth Baseball Clinic with Varsity Baseball and Youth Baseball • Golf Lessons at the Elk River Country Club • Youth Football Camp with Varsity Football The opportunities for recreation are growing u~ this community as well as the communities around us. This increases our need to be competitive so that we can continue to serve our residents with programs offered here within the city. We understand the original intention of having anon-resident fee so the Ellt River residents are not subsidizing recreation for other communities; however, based on our experience over the past hvo years, we have found it to be counterproductive and eve believe that we would be able to serve our residents better if this polity were changed. Staff Recommendation Staff, along with the Park and Recreation Commission, recommends eliminating the non- resident fees effective for all programs beginning on or after March 1", 2004.