Agenda Item No. 16
CITY OF YUCAIPA
AGENDA REPORT
TO: Honorable Mayor and City Council
FROM: Megan Wolfe, Director of Community Services
FOR: City Council Meeting of April 25, 2022
SUBJECT: Community Services User Fees
RECOMMENDATION:
That City Council conduct a Study Session and:
1. Review the proposed User Fee update for the Community Services Department to be implemented May 1, 2022; and
2. Direct staff as appropriate.
BACKGROUND:
On August 28, 2017, City Council conducted a Public Hearing and adopted Resolution No. 2017-29, pertaining to various Community Services User Fees (CSUF). Resolution No. 2017-29 included a revised Exhibit A, which included:
• A standard increase of 7.8% on all Community Services programs and services. • An additional 10% increase to the non-resident fee, changing the fee from 20% to 30% more than the resident fee.
• Maintain the Council approved cost recovery rate goal of 54%.
On March 26, 2018, City Council conducted a Public Hearing and adopted Resolution No. 2018-09, rescinding Resolution No. 2017-29, and revised Exhibit A - User Fee Schedule, which addressed fee discrepancies and added new fees for various community services provided by the City. Fees were not increased by Consumer Price Index (CPI) at that time.
On March 25, 2019, City Council conducted a Public Hearing and adopted Resolution No. 2019-07 and revised Exhibits A and B, which amended the CSUF as follows:
• Added five user/groups to the Yucaipa Performing Arts Center (YPAC) fee structure o Resident Company: Yucaipa based, non-profit performing arts organizations o Resident Non -Profit and K-12 Schools: Yucaipa based, non-profit organizations and California State accredited public or private educational institutions, K-12, including elementary, middle, or junior -high, and high schools
o Resident Standard: Yucaipa based person or organization o Non -Resident, Non -Profit and K-12 Schools: Non-profit organizations and California State accredited public or private educational institutions, K-12, including elementary, middle, or junior -high, and high schools, not based in the City of Yucaipa -221-
City Council Agenda Report
Community Services User Fees
For the Meeting of April 25, 2022
o Non -Resident Standard: Non -Yucaipa based person or organization. • Added Rental Fees for the YPAC
Fees were not increased by CPI at that time.
On July 8, 2019, City Council conducted a Public Hearing and adopted Resolution No. 2019-33 Exhibit B adopting fees for the YPAC and 71h Street Theater; Exhibit A remained in place. Fees were still not increased by CPI.
On February 24, 2020, City Council conducted a Public Hearing and adopted Resolution No. 2020-07, rescinding Resolution Nos. 2019-33 and 2019-07, which maintained Exhibit A and B and amended the YPAC Not for Profit and K-12 Schools definition to add community colleges and read Not for Profit and K-14 Schools. Fees were not increased by CPI at the time.
The Community Services Department (CSD) intended to return to Council in March of 2020, to update the CSUF. However, due to COVID-19 and the closure of facilities, programs, and services, the item was never brought before Council. Since then, there has been a significant increase in the CPI.
DISCUSSION:
The CSD is committed to offering quality programs and services at competitive rates, while simultaneously meeting the needs of the community and maximizing participation. To achieve this goal, and address input received from customers, contract instructors, and staff, staff is recommending changing the CSUF methodology. A change in methodology will also provide the opportunity for CSUF to align with City Council's Adopted FY 21/22 budget CSD goals, which include:
1. Continuing to provide cost-effective Community Services programming and special events for the community.
2. Continuing the successful implementation of more cost-effective programming at the YPAC that is appealing to the community, with the goal of a minimum 50% cost recovery for Fiscal Year 21/22 and continual improvement in cost recovery going forward.
The current Fiscal Year 21/22 CSD budgeted expenses are $3,297,975, while the anticipated revenue is $1,675,162, producing an overall cost recovery of 51 %. The cost recovery will continue to improve assuming no additional shutdowns are required by the state. The shutdowns negatively affected the net costs as core staffing was maintained even though the normal community service programming was not allowed. In addition, staffing and program administration costs are incurred in advance of program revenues. Temporary staffing costs also had to increase dramatically in order for the City to be able to compete with other service sector and hospitality hourly rate increases for staff. Staff also helped to execute vaccination and testing centers in City facilities at no cost to the participants. In order to continue improving the cost recovery percentage and the level of customer service, staff is recommending the implementation of the following steps for Council consideration:
2 Step One — Use feedback received from customers, contract instructors, staff, and professionals in the field of parks and recreation to amend the CSUF. Staff has met with professionals in the parks and recreation field who are researching ways to determine the appropriate balance of tax and user fees to pay for services offered to the community. One of the organizations that shared -222-
City Council Agenda Report
Community Services User Fees
For the Meeting of April 25, 2022
3 information with staff was The Riverside County Regional Parks and Open Space District (RCRPOSD). RCRPOSD hired GreenPlay to complete a Comprehensive Parks, Resources and Recreation Service Plan (Plan). Staff used information in the Plan to make recommended changes to the current CSUF. The following is a list of recommended changes to the CSUF, and the comments received on a reoccurring basis:
Issue: Non-resident fee for Programs and Drop -In Activities o Concerns raised:
■ Non-resident participants of the S.T.A.R.S. Before and After School Program (STARS) do not understand, do not agree, and do not feel the non-resident fee is justifiable since Yucaipa and Calimesa residents belong to the same school district, Yucaipa-Calimesa Joint Unified School District (YCJUSD). In addition, YCJUSD allows STARS to operate on campus and covers the cost of maintenance and utilities. Non-residents who reside in Calimesa pay taxes to YCJUSD that are used to fund the maintenance of schools, among other things. • Since the non-resident fee of 30% was adopted in 2017, there has been a 10% decrease in the STARS non-resident enrollment numbers. ■ Contract Class instructors (classes taught by non -city employees) do not understand, agree, and/or support the non-resident fee. ■ The 30% non-resident fee resulted in a loss of four instructors and a 20% decrease in contract class enrollment.
o Recommendation: remove non-resident fee and implement a resident priority registration policy. This policy would give residents and Yucaipa based non-profit organizations the ability to register for programs before non-residents. In addition, removing the non-resident fee may result in an increase in participation, which in turn will result in an increase in revenue and a decrease in General Fund subsidy. This decrease in General Fund subsidy will be a direct benefit to residents.
II. Issue: Multiple user/groups and fees for rentals
o Currently the CSUF for rentals are broken into four categories:
■ Resident, non-profit organizations
■ Residents
■ Non-resident, non-profit
■ Non-resident
o Concerns raised:
■ Having multiple user/groups for rentals has caused confusion for staff and the customer. Customers change their address to secure resident rates. ■ The ACTIVE Net software system used for managing rentals and charging customers cannot distinguish the different user/group definitions; therefore, it cannot auto -populate the fees. This results in a longer reservation processing time. Rental clients have complained about the amount of time it takes staff to complete a reservation.
o Recommendation: Remove the rental fee user/groups and implement a resident discount policy. This discount would allow residents to receive 10% off the total cost of the rental for a net increase of 6.1 % for rentals if City Council approves the recommended 16.1 % increase due to the effective CPI between 2018 and 2022. -223-
City Council Agenda Report
Community Services User Fees
For the Meeting of April 25, 2022
Step Two — Divide all fees into three categories and determine their cost recovery percentage:
• Drop -In Activity
• Programs
• Rentals
Based on staff analysis, it is recommended that programs and rentals have a goal of 100% cost recovery since those services directly benefit individuals. It is recommended that drop -in activities have a cost recovery of at least 50% as they benefit more than one person. In addition to changing the methodology, staff is recommending that the CSUF be increased by the CPI. As detailed in the background the last CPI increase occurred in 2017. Fees can be adjusted by one of the following options:
Option 1 — A standard increase of 16.1%, which is the approximate total equivalent change in the CPI from 2018 to 2022. This increase will maintain the current CSD cost recovery rate of 51 %, not including indirect costs.
Option 2 — Increase fees to be in -line with the Fair Market Value. This increase in fees would range between 16% and 40%.
Staff will return to Council at a later date during a Public Hearing based on direction received.
FISCAL IMPACT:
There is no fiscal impact as a result of this City Council item. However, assuming the rate of program participation remains consistent with current levels, it is anticipated that the implementation of the proposed CSD User Fees would generate additional revenue to offset the increasing cost of the programs and services.
Approved by:
0 -224-