COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Alex Posada, Director of Recreation and Parks
DATE: June 3, 2025
SUBJECT: Adoption of a Resolution Adopting a Cost-of-Service Study
Description:
The City Council will consider a recommendation by the Recreation and Parks Commission to adopt a Cost -of-Service Study prepared by Revenue & Cost Specialists. The study evaluates the direct and indirect costs of providing recreation and parks services in Santa Maria and establishes a framework for future fee adjustments and cost recovery strategies.
RECOMMENDATION:
Adopt a Resolution approving a new Cost Recovery Structure for Recreation and Parks Programs and Services based on the 2025 Cost-of-Service Study prepared by Revenue & Cost Specialist.
BACKGROUND:
The City of Santa Maria Recreation and Parks Department contracted with Revenue & Cost Specialists (RCS) of Fullerton, CA, to conduct a Cost -of-Service Study. This study was designed to assess the actual costs associated with providing various department services, including recreation programs, special events, and facility rentals. The findings will help guide future decisions regarding fee structures and cost recovery strategies . The Recreation and Parks Commission on February 25, 2025 , approved the Cost of Service Study.
DISCUSSION:
The Cost -of-Service Study categorizes programs based on the level of public versus individual benefit and identifies cost recovery rates for different services. Key findings indicate t hat many programs operate at a significant subsidy, with cost recovery percentages varying widely. The study provides recommendations to align fee structures with cost recovery goals established by the City Council while maintaining accessibility for residents.
Adopting the study will enable the City to make data -driven decisions regarding fee adjustments, ensuring financial sustainability and equitable pricing for users.
The chart below was prepared using the detailed information contained in the fee study in Exhibit A. The purpose of this chart is to show potential levels of cost recovery vs. the 2 actual cost of providing the services to our residents. The Commission rev iewed each category of program fees and felt that those programs/services that can be defined as benefiting the individual should have a higher -cost recovery formula, and those with a community-wide or youth-oriented focus should have a lower-cost recovery formula. The Commission also considered the argument that City residents are already entitled to some basic recreational services by virtue of their payment of local taxes. Commissioners agreed that there was a need to begin to increase some recreation fees and felt that using the cost recovery pyramid and the individual benefit as the criterion was a good place to start the process. The Commissioners also felt, that in their roles as your representatives to the community on all leisure and parks matters, that the City Council could consider delegating the responsibility of hearing new fees and program proposals, vetting these fees and programs with the community by holding public hearings and making recommendations to the City Council on future fees, charges and program offerings.
Proposed recovery target
percentages:
Program
Current
Recovery Rate
(in percentage)
Increase To
(in percentage) Comments
Adult Sports
Program 24.01 percent 40 percent
Youth Sports
Program 6.4 percent 19 percent
Recreation
Classes 7.63 percent 30 percent
Youth Rec
Programs 0.43 percent 1 percent Keep costs low
Teen Rec
Programs 0.02 percent 1 percent Same considered as youth Adaptive Rec
Programs 0 percent 0 percent
Gen. Rec
Programs-
Special Events
0 percent 0 percent
3 Senior
Programs 0 percent 0 – 100 percent Based on Cost Recovery Pyramid
Recreation Lap
Swim
2.8 percent
4.72 percent
Swim Lessons 10.75 percent
13.44 percent
Private Pool
Rental
2.92 percent
3.92 percent
Recreation Pool $149/hour to
$200/hour
Rec. Facility
Rental 20.83 percent 35 percent
Parks 20.80 percent 25.83 percent
Ballfield Rental 20.83 percent 25.83 percent
Sports Lighting $18-
$40/hour/field
100 percent of
PG&E cost and
extended
maintenance
Prices vary on field conditions
and availability
Alternative(s)
The City Council may choose not to adopt the study ; doing so would leave the current methodology in place.
The City Council may request modifications to the recommendations. The Recreation and Parks Commission can be directed to do more study on the issue and return the item to the Council in the future.
Fiscal Considerations
The goal of the Cost-of-Service Study is to establish a process by which recreation programs and services can begin to offset more of the cost of offering these important 4 community services and providing some relief to the General Fund. Over the past several years, the City Council has adopted other measures to reduce the impacts of recreation programs on the General Fund, most recently the adoption of the Sports Field Use policy, which set a tiered process for local sports organizations to increase their contribution to the cost of field use and maintenance. This has proven to be quite successful, and groups now are accustomed to paying a larger part of the cost to offer services.
Impact to the Community
The study ensures that recreation programs remain financially viable while considering affordability for residents. Establishing cost recovery goals will help maintain and enhance services, facilities, and programming in a fiscally responsible manner.
Attachments:
A: Resolution
Exhibit A: Cost of Services Study