sustainability study...3 acknowledgements city council mayor miguel pulido ward 1, vicente sarmiento...

PARKS, RECREATION, AND COMMUNITY SERVICES AGENCY

SERVICE AND F INANCIAL SUSTAINABIL ITY STUDY

SEPTEMBER 15, 2020

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ACKNOWLEDGEMENTSCity Council

Mayor Miguel PulidoWard 1, Vicente Sarmiento

Ward 2, David PenalozaWard 3, Jose SolorioWard 4, Phil Bacerra

Ward 5, Juan Villegas, Mayor Pro TemWard 6, Nelida Mendoza

Ofelia Velarde GarciaHumberto Sanchez

Angie GomezLuis AlemanCory Nelson

Sergio EscobarIrma Macias

Felipe Guerrero

Jeannie Jurado, ManagerEthan Fisher, Manager

Ron Ono, ManagerFrank Arroyo, Senior Management Analyst

Sonia Batres, SupervisorRudy Hernandez, Supervisor

Juan Lara, SupervisorEnrique Marban, SupervisorErendira Moreno, SupervisorAnthony Novella, SupervisorWilliam Sandoval, Supervisor

GreenPlay, LLC

At: 1021 E. South Boulder Road, Suite N, Louisville, Colorado 80027, Telephone: 303-439-8369 Email: [email protected] www.greenplayllc.com

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TABLE OF CONTENTS .......................................................................................................................7

The Urgency for Santa Ana .......................................................................................................................7What the Project Entailed ........................................................................................................................8The Power of Engagement .......................................................................................................................8How the Pyramid Model Works ...............................................................................................................8How the Services Assessment Methodology was Applied .......................................................................13What was Learned: Key Findings ..............................................................................................................13

....................................................................................................................................14Services and Financial Strategies for Sustainability ..................................................................................15

......................................................................................................................17 ..............................................................................................................................................17

What the PRCSA Provides to the Community ..........................................................................................18Purpose of this Project .............................................................................................................................18Project Approach ......................................................................................................................................18Community Engagement ..........................................................................................................................19

...................................................19 ..........................................................................................21

..................................................................23

.........................................................................................29 Pricing Strategy .........................................................................................................................................29

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.......................................................................31The Public Sector Services Assessment Matrix ........................................................................................31The Services Assessment Process .............................................................................................................32

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..................................................................................................................................35Cost Recovery ...........................................................................................................................................35Fees for Service ........................................................................................................................................35

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...................................................................................................................37Recommended Cost Recovery Policy Statement .....................................................................................37Services and Financial Strategies ..............................................................................................................38

APPENDIX A: PRCSA CATEGORIES OF SERVICE ....................................................................................45APPENDIX B: DEVELOPING A PRICING STRATEGY................................................................................49APPENDIX C: CRITERIA FOR ESTABLISHING FEES .................................................................................53APPENDIX D: COMPARATIVE ANALYSIS CRITERIA ................................................................................55APPENDIX E: SANTA ANA SERVICE PORTFOLIO MATRIX .....................................................................57

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TABLE OF FIGURES ........................................................................................................ 9

Figure 2: PRCSA Cost Recovery Pyramid Model ........................................................................................ 11Figure 3: Key Findings ................................................................................................................................ 13

............................................................................................ 15Figure 5: A Sustainable System .................................................................................................................. 20Figure 6: GreenPlay Pyramid Methodology ............................................................................................... 24Figure 7: Services Assessment Matrix ....................................................................................................... 32

......................................................................................................... 29Table 2: Categories of Service .................................................................................................................... 45

TABLE OF TABLES

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THIS PAGE IS INTENTIONALLY LEFT BLANK

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Community Services Agency (PRCSA or Agency) provides a basic level of services (such as social services)

recover costs are considered a responsible and necessary means to supplement tax revenue to meet

sustainable in the long run.

cost recovery goals that inform future pricing strategies. The transforming process also included a

THE URGENCY FOR SANTA ANA

deliver and manage programs. Various services have a fee associated that covers the cost of the service;

EXECUTIVE SUMMARY

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WHAT THE PROJECT ENTAILED

THE POWER OF ENGAGEMENT

Community Center and Southwest Senior Center to

four community members each contributed one and

programs and services provided by the PRCSA. This approach generated 111 hours of meaningful volunteer

HOW THE PYRAMID MODEL WORKSThe Cost Recovery Pyramid Model is intended as a framework for community and agency discussion. It is very dependent on community values to determine what programs and services belong on each level

Figure 1PRCSA Cost Recovery Pyramid Model is shown in Figure 2. The model promotes a pricing approach

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12


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HOW THE SERVICES ASSESSMENT METHODOLOGY WAS APPLIED

of Programs1

Public Sector Services Assessment tool; to understand each

WHAT WAS LEARNED: KEY FINDINGS

highlighted in Figure 3.

Figure 3: Key Findings

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RECOMMENDATIONS

and cost recovery philosophy to be used to apply fees and charges when desired or necessary. It does

the City.

In establishing fees and charges, the Agency will determine the direct costs of providing services and establish goals to recover those costs. The appropriate level of cost recovery will be based on an

natural areas.

The PRCSA shall also consider available resources, public need, public acceptance, and the community

services.

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SERVICES AND FINANCIAL STRATEGIES FOR SUSTAINABILITY

Figure 4.

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INTRODUCTION

and dividing it by the cost of providing a service. It is expressed as a subsidy level percentage. What is

percentage. This measurement is complementary to the measurement of subsidy level.

costs to provide them. It can be controversial if not understood. Cost recovery does not imply that

to be the primary cost of providing a service.

produce or operate a service. Looking at how those services are funded provides the opportunity to

• • •

service delivery.

I. THE STUDY CONTEXT

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WHAT THE PRCSA PROVIDES TO THE COMMUNITYPRCSA is responsible for delivering a variety of services to

incorporate the use the Cost Recovery and Services Assessment business tools will further support the

PURPOSE OF THIS PROJECT

PROJECT APPROACH

To deliver a wide-range of quality, community-responsive

programmed and self-disciplined

experiences in safe, clean, and well-maintained public spaces

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COMMUNITY ENGAGEMENT

PRCSA.

higher cost recovery.

RESOURCE ALLOCATION AND COST RECOVERY PHILOSOPHY, MODEL, AND POLICY

• •

• • •

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three basic elements of sustainability – Financial and

– making it challenging to come to any kind of consensus when others may be focusing on one of the other elements. In order to manage the system of

the environment that we love so dearly cannot be

appropriate use of the system to properly connect

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will be set to cover more than 100 percent of the direct cost. The fee will also recover some or all of the

COST RECOVERY IN PUBLIC PARKS AND RECREATION

beginning to bring the PRCSA closer to what is occurring in the industry.

used.

The Cost Recovery Model provides a framework for discussion with the community and guidance for

• A philosophy for how to determine and implement fees.•

Statement of Purpose. • •

recovery goals as determined through the process.

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II. THE COST RECOVERY PYRAMID METHODOLOGYThe GreenPlay Pyramid Methodology used in development of the Cost Recovery Model is built on a

costs for service should be paid.

The Cost Recovery Pyramid Model illustrates a pricing philosophy based on establishing fees

agency who applies this methodology.

•

•

police presence above and beyond the norm.• •

• Do community values support taxpayer investment for the cost of service for individuals with special

• • •

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STEP 1: BUILDING ON YOUR ORGANIZATION’S VALUES, VISION, AND MISSION

pay for services.

STEP 2: UNDERSTANDING THE PYRAMID METHODOLOGY, BENEFITS FILTER, AND SECONDARY FILTERS

and it encompasses those services including

as a whole. These services may

residents. The community generally pays for these basic services via tax support. These services are

support would fund this level of the Pyramid.

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park maintenance, or others.

demographics, goals, etc.

The second level of the Pyramid represents services

percentage of direct (and may also include

The third level of the Pyramid represents services

and provides an intermediate level of skill development. The level provides balanced and

The individual fee is set to recover a higher percentage of cost than those services falling within lower Pyramid levels.

direct expenses.

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STEP 3: DEVELOPING THE ORGANIZATION’S CATEGORIES OF SERVICE

Appendix A.

to

placement on the Cost Recovery Pyramid.

STEP 4: SORTING THE CATEGORIES OF SERVICE ONTO THE PYRAMID

PRCSA brought together Team Members from across the agency as well as members of the public to

and discover an appropriate philosophy for Santa Ana. The PRCSA Cost Recovery Pyramid Model(shown in Figure 2) shows how the categories of services were sorted onto the pyramid with input from the community.

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STEP 5: DEFINING COSTS

without the service and may be variable costs.

service.

STEP 6: DETERMINING (OR CONFIRMING) CURRENT TAX INVESTMENT/COST RECOVERY LEVELS

want to track these costs in the future.

The PRCSA Pyramid is shown in Figure 2.

no cost recovery percentages shown.

STEP 7: ESTABLISHING COST RECOVERY/TAX INVESTMENT TARGETS

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STEP 8: UNDERSTAND AND PREPARING FOR INFLUENTIAL FACTORS AND CONSIDERATIONS

STEP 9: IMPLEMENTATION

STEP 10: EVALUATION

minimums and category minimums should be evaluated annually.

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III. ESTABLISHING FEES AND CHARGESPRICING STRATEGY

Appendix Bprovided here and followed by Criteria for Establishing Fees and Charges that align with pyramid levels.

Cost associated with individual programs or

and Seniors Divisions and are not directly

: A fee recovering something

service or program including all costs determined

Fee based on demand for a service or facility. The market rate is determined

highest level that the market will bear.

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that applies to each level is found in Appendix C.

COMPARATIVE ANALYSIS CRITERIA

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IV. THE SERVICES ASSESSMENT METHODOLOGY

Appendix Eand the Public Sector Services Assessment tools.

THE PUBLIC SECTOR SERVICES ASSESSMENT MATRIX

oriented. Unlike private and commercial enterprises which compete for customers (and whose very

The public sector and market environments have changed; funders and customers alike are beginning to

leveraging all available resources where possible.

2 Public Sector Services Assessment

of provider; and the economic viability of the service.

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THE SERVICES ASSESSMENT PROCESS

The next step in the process was to gather data about each program and service provided and research

for each service.

IDENTIFYING CORE SERVICES AND PROVISION STRATEGIES

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• Services for complementary development.

• Services to divest.

deemed to be economically viable.

be an excess revenue generator by increasing volume.

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V. KEY FINDINGS

• considered indirect and a basic service.

•

COST RECOVERY

categories.

its business. This model will allow it to do so.

FEES FOR SERVICEFees for services should be reviewed annually and adjusted as necessary to meet cost recovery

should be noted that incremental annual increases appear to be more tolerable than larger increases

acknowledged for the role they play.

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DONATIONS, SPONSORSHIP, AND PARTNERSHIP POLICIES

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VI. RECOMMENDATIONS

services with associated target cost recovery minimums.

RECOMMENDED COST RECOVERY POLICY STATEMENT

pricing approach. Key elements include:a. b. Fees are a responsible and necessary supplementc. d. e. f. g.

In establishing fees and charges, the Agency will determine the direct costs of providing services and establish goals to recover those costs. The appropriate level of cost recovery will be based on an

natural areas.

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The PRCSA shall also consider available resources, public need, public acceptance, and the community

services.

SERVICES AND FINANCIAL STRATEGIES

Over the past year Team Members have completed a very comprehensive and intense process of

challenge Team Members in its proper use.

needed to develop the subsidy level target ranges for the pyramid based on actual expenses

tracking program cost and to determine the typical and measurable direct and indirect costs that will be tracked.

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• • • • • Methodology.•

programs and services.

•

•

serve subsets of the community. Each ascending Tier level increases focus on the individual or group receiving the service and subsidy level targets decrease with each level. Examples of

• Tier 5 houses services that are ancillary to the mission of the Department with services such

all services.

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use within the Agency. Working with an outside facilitator to challenge current thinking and make the

use of resources.

•

•

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•

•

• • • • • • • • •

•

•

•

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• • • • •

•

•

•

also

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Team Members to experience using the methodology.

•

•

•

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APPENDIX A: PRCSA CATEGORIES OF SERVICE

Private Lessons

Lessons arranged for one Tennis

Film Permits and implemented by outside

permit process

Student or commercial on public

Rentals for exclusive use of

Special Event Services and implemented by individuals run through City permit process

(Leagues)

Rental and scheduling for

for formal or informal usetennis courts

public

Snow Mobile

Adult Classes and Sports

Group or individual special

managed by the department

and body

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Senior Services Partnerships

Group or individual services

service providers or outside agencies

Youth Leagues

by the department through

Park and Facility Rentals (Public)

general public shelters

fee

Youth School Based Programs programs programs.

Senior Grant Funded Services managed by the department and excursions

Special Events (Program Related)

basis

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Youth Classes and Sports


managed by the department kayaking sports

Rentals for exclusive use of

etc.

Special Event Services and implemented by outside

the City permit process

Park and Facility Use (monitored)

Preschool Classes and Sports


department through contract or

Volunteer Program

Community service and youth development programs and

Corporate Volunteers

Internships

Work experience for students

for older adults operated

Special Events (Open to Public)

City produced events

Navidena

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monitored)not monitored by department

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APPENDIX B: DEVELOPING A PRICING STRATEGY

areas should be included and applied.

pricing decisions include: • Increased governmental accountability• • • •

process and how it is impacted by pricing.

• Direct costs Fixed costs Variable costs

• Indirect Costs

following:• Recover costs• Create new resources• Establish value• •

may wish to consider this pricing strategy including:• • •

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•• Grants• • Scholarships• Sponsorships••

pricing include:• •• Establishing a reference point (worth of service in comparison to others)• • • •

Establishing an actual price for a program can be based upon a variety of strategies including:• Arbitrary pricing: basing fees on a general provision such as raising all fees $.25 to meet budget goals

• Market pricing: a fee based on demand for a service or facility or what the target market is willing to

•

• Cost recovery pricing: a fee based on cost recovery goals within market pricing ranges.

pricing revision is important. Factors to consider in pricing revision include:• Customer tolerance: the degree to which small increases in price will not encounter client resistance.•

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•

•

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APPENDIX C: CRITERIA FOR ESTABLISHING FEESThese criteria apply to the Tier (1) of the pyramid. The following criteria are

have to meet every criterion:•• • • • • The service is primarily provided by the public sector

These criteria apply to the (2) and

desires to manage demand.•

economic hardship•

undesirable•

mind that a service does not have to meet every criterion: The service may be provided by the public sector but may also be provided by the private sector

These criteria apply to the • •

the need for those services•

mind that a service does not have to meet every criterion: The service is usually provided by the private sector but may also be provided by the public

sector

• provided to the community

• service does not have to meet every criterion:

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The service is provided at market price by the private sector

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APPENDIX D: COMPARATIVE ANALYSIS CRITERIA

market.

may also be limited.

may include:• • • • • • • Total acres of open space and developed park land• • Total miles of Department maintained trails• Number of indoor and outdoor pools• •

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be provided by the U.S. Census.

applicable:• Program contact hours• Program session length• • • • • • • • Programs included with admission or pass• • • • Packaging• • Service area demographics• Tax investment versus cost recovery goals•

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APPENDIX E: SANTA ANA SERVICE PORTFOLIO MATRIX

sustainability study...3 acknowledgements city council mayor miguel pulido ward 1, vicente sarmiento...

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