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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
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.........................................................................................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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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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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.
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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.
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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
Group or individual special
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
Group or individual special
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
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• 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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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
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