TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Cathi Johnson, Community Services Director
DATE: February 28, 2025
SUBJECT: REAPPROPRIATION OF AQUATICS PROGRAM BUDGET
STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Efficient, Responsive, and Effective City Services
Fiscally Responsible and Transparent City Government
BACKGROUND
For several years, the City has operated a seasonal (9-week) aquatics program serving all ages at the school district’s high school pool. The variety of programming offered includes open swimming, group/private/semi-private swim lessons, lap swimming, water fitness, and others. Historically, the program has operated utilizing a sizeable subsidy from the General Fund, which has resulted in growing losses each year to operate the program. The discussion below provides a detailed cost recovery analysis and participation trends from the past three years. These findings bring to light the true costs and operational impacts of providing this program and the necessity to reevaluate the feasibility of its continuation.
Currently, all City departments are developing their Fiscal Year 2025-26 operating budget submissions with a need to focus on operational efficiencies and ensuring that core programs and services receive priority funding. As discussed during the current fiscal year’s budget preparation process, due to low revenues and rising operating costs city-wide, the General Fund is forecasting a shortfall of nearly $1.5 million if expense reductions aren’t made.
Every department is being asked to bring forward potential reductions to aid in the adoption of a balanced budget.
With that said, the Community Services/Recreation Division is recommending Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
that the City Council eliminate the seasonal aquatics programs due to 1) low participation, 2) high operating costs/high cost per participant; 3) Anticipated general fund subsidy for the upcoming fiscal year of approximately $117,000; 4) An average service ratio that is 57% residents and 43% non-residents; and 5) Significant impact on administrative overhead and internal support departments, including lead/planning times for Human Resources (7 months) and Finance (3 months).
DISCUSSION
The table below is a three-year cost recovery analysis that depicts revenue generated less direct and indirect costs associated with operating the aquatics program. The *net revenue/expense line depicts whether the program area generates enough revenue to cover its costs, or if a general fund subsidy is needed to support delivering this service. In this case, aquatics programming requires on average a $106K general fund subsidy annually.
Analyzing participation trends is also critical to program management and funding considerations. The table below provides three years of data related to the number and percentage of residents that participate in aquatics programs versus the number and percentage of non-residents (on average 57% residents to 43% non-residents). When averaged over the approximate number of operating days, 63, the program is utilized by approximately 28 participants a day, or approximately 4 participants per hour when averaged out over the number of operating hours in each day.
Alternatives
San Marino is also fortunate to be surrounded by several neighboring communities within a three-mile radius (table below) that also provide these services. In addition, approximately 1,644 (37%) of homes in San Marino have private swimming pools compared to the national average of approximately 8%. It should also be noted that the Rose Bowl Aquatic Center has a longstanding reputation for providing full-service, year-round aquatics programming to local cities and residents of the San Gabriel Valley, which many San Marino residents utilize. Elimination of the aquatics program would not leave a gap in service for our residents.
Lastly, while the program is only offered to the public for 9 weeks, the program requires 8 months of management by Community Services Department staff along with support from Human Resources and Finance (recruitments, hiring, onboarding, live-scanning, payroll, etc.). Should this program area be eliminated, additional benefits to the department, as well as other support departments, would be realized immediately. Foremost, staff would be able to focus on critical operational improvements in the areas of personnel and risk management and improving the quality and service delivery of core programs, such as special events, summer camps, contract classes, and Senior/Family/Intergenerational programming.
FISCAL IMPACT & PROCUREMENT REVIEW
Elimination of the seasonal aquatics program will result in the department’s operating expenditure budget decreasing by approximately $149,538, and the revenue budget decreasing by approximately $49,000, for a net impact of approximately $100,000 to the General Fund.
LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.
RECOMMENDATION
Staff recommends that the City Council reappropriate the aquatics program budget and discontinue the program. If the City Council concurs, an appropriate motion would be:
“I move to reappropriate the aquatics program budget and discontinue the program.”