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Council-Parks Ad Hoc Meeting

Minutes
Monday, June 24, 2013

 

MINUTES OF THE CITY COUNCIL/PARKS AND RECREATION COMMISSION
AD HOC COMMITTEE MEETING
June 24, 2013 @ 3:00 P.M.
parks office à 340 S. Pioneer Street

 

 
Chair Councilor Marsh called the meeting to order at 3:05 p.m. in the Parks Office, 340 S. Pioneer Street.
 
Councilors Rosenthal and Voisin, Parks Commissioners Seffinger and Landt, City Attorney Dave Lohman were present. Staff included Don Robertson, Parks & Recreation Director; Dave Kanner, City Administrator.
 
The minutes of June 10, 2013, were approved as presented.
 
Review and Analysis of Funding Options
Committee members outlined their findings in each proposed funding category and identified information sources.
 
Fees for Parks and Recreation Programs and Services—Seffinger 
Source: Rachel Dials, Recreation Superintendent
 
  • How enacted: Payments generated from online sources and by phone; through mail-in registrations and in person.
  • Who pays: Customers using services
  • Who allocates: Parks Commission reviews fees annually and authorizes fee rates.
  • Amount generated: Recovery rates vary by category. Some programs self-sufficient; others heavily subsidized.
  • How collected: From individuals and groups using facilities, including for special events.
  • Collection costs: Parks staff wages and bank fees.
  • Restrictions / limitations: Limited to programs or services for which customers pay.
  • Growth in revenues: Commission working on updating customer fee rates. Fees set lower in previous years, with programs more heavily subsidized.
  • Sustainability: Adult programs and Calle space rentals are self-sustaining while other programs and services are subsidized either moderately or heavily. Nature Center environmental education programs previously supported by school district funding.
  • Competition for funds: Some from youth sports leagues.
  • Politically feasible? The commission subsidizes recreation programs for social, safety and educational reasons and the community supports those efforts.
  • Ideas for increasing fees:
    • Sponsorship of facilities; i.e, naming rights for pool, ice rink, ball fields, Nature Center, Senior Center, others
    • Increased rental fees, with possible elimination of non-profit rates
    • Elimination of special events
    • Increased fees for Nature Center school programs
    • Fundraising to support youth sports
    • Increased golf and ice rink fees
    • Transfer of Senior Center responsibility to the City (from Parks)
    • Increased community garden plot fees
 
Robertson said fees and charges were approximately 15% of the Parks budget and the funds were deposited into the City’s general fund. In terms of naming rights, Rosenthal said the ice rink previously had a name linked to a local business.
Ashland Park Foundation (APF)—Seffinger
Source: Don Robertson
 
  • How enacted: Established in 1995 as a 501(c)(3) under Oregon law.
  • Who pays? Gifts from donors
  • Who allocates?  Board of directors
  • Amount generated: Approximately $50,000 in growth per year. Current investments total $500,000.
  • How collected: With assistance from staff volunteers.
  • Restrictions / limitations: The board grants funds (up to 50% of revenue growth) to Ashland Parks and Recreation as well as community groups. 2012 grants included the Senior Center Food and Friends lunch program, community youth sports scholarships, AHS Football team “Pacific Rim Bowl” scholarship, Nature Center classroom scholarships, recreation program scholarships, and others.
  • Competition for funds: Other worthy causes donors choose to fund.
  • Politically feasible? Yes
Marsh said the APF had tremendous growth potential in terms of visibility in the community. Robertson said the Oregon Shakespeare Festival (OSF) provided semi-annual donations of one outdoor performance in profitable years only. APF was reported to be a separate entity from Parks with its own tax ID number. APF paid for its own audits and developed a policies and procedures manual. Rosenthal said the Medford Parks Foundation had the same structure and the Medford Parks Department received approximately $10,000 per year from its foundation. Seffinger asked if APF fell into the cultural trust category and suggested posting that information on the APF website.
 
Park or Special District—Voisin
Sources: Don Robertson and N. Clackamas County Parks and Recreation District
Similar to a school district, a park or special district is governed by an elected board and has separate taxing authority and control over its own budget. It requires a broad tax base; allows for non-City control; and creates another layer of governance.
Weakness: Ashland taxes are overwhelmingly sourced from residential property taxes, with few commercial and industrial property taxes. A special district could result in higher property taxes.
 
Service District
A service district borrows its legal governance from the county, including funding, approval of its budget, and shared resources and services. While the Ashland Parks and Recreation Commission is elected, a service district has a county-appointed commission. A model would be the North Clackamas Park and Recreation District which has no new overlay of government with taxing authority; instead, it has a county-appointed district advisory board.
Strength: Ashland currently has a service-district-like hybrid system.
Recommendation
Voisin stated that neither option fit Ashland. Rather than spending a lengthy period establishing a service district similar to what currently exists, the Parks Director and City Administrator could review the management chart and present their findings to the Ad Hoc Committee. The committee could then solicit input from each elected body at separate study sessions, with results directed back to the Ad Hoc Committee. A subsequent joint meeting of both elected bodies could be scheduled. From that meeting, a chart of management responsibilities could be set by both bodies and memorialized in a binding MOU or charter amendment.
 
Lohman said MOUs were binding documents as long as both parties agreed to them but they lacked perpetuity, as either party could back out and any future council or commission would not be bound to or by them. If allocations of job responsibilities were clearly spelled out, an MOU could last.
Councilor Voisin/Parks Commissioner Landt m/s that the Ad Hoc Committee direct the City Administrator and the Parks Director to work out a management plan clearly delineating Parks / City responsibilities.
Voice Vote: All YES. Motion passed.
 
Park or Public Safety Utility Fee—Rosenthal
Sources: Medford Parks and Recreation; City of Ashland Finance Director
 
  • How enacted: Ashland City Council approval
  • Who pays: Residents with City utility accounts (approximately 10,000 customers)
  • Amount generated: Billable units x 12 months
  • How collected: Finance Department working with subject business owners
  • Collection costs: None
  • Restrictions / limitations: Few
  • Increases: By City Council approval
  • Renewal: Ongoing unless modified or eliminated by City Council
  • Politically feasible? Plausible
Notes: Regressive. In 2005, the City of Medford was the first community in Oregon to enact a Park Utility Fee for the purpose of creating a dedicated fund to help offset the cost of maintenance and beautification of city parks and municipal rights-of-way. Each developed parcel within the city limits is assessed a monthly unit fee. A unit is defined as a residential dwelling unit, business unit or tenant space. Medford currently assesses a $2.87 monthly fee. West Linn adopted a $10.70 monthly park maintenance fee in 2007. Gresham adopted a 50-cent monthly parks, fire and police utility fee in December 2012.
 
Ticket Tax—Rosenthal
Sources: Former Ashland Mayor Cathy Shaw; Don Robertson
 
  • How enacted: Ashland City Council approved an ordinance creating a new tax / surcharge
  • Who pays: OSF and potentially other theatrical businesses operating within the City limits, including movie theaters.
  • Who allocates: City Council / Budget Committee
  • Amount generated: Depends on per-ticket tax. In 2011, OSF attendance was 391,542
  • How collected: Finance Department working with subject business owners
  • Collection costs: A percentage or fixed rate of gross receipts retained by the business.
  • Restrictions: The equal protection clause in the 14th Amendment of the Constitution requires uniformity of tax and regulatory laws. Consequently, the City would need to broaden the ticket tax scope to include all commercial theatrical performances in Ashland, greatly complicating the concept. The current long-term lease between OSF and the City would be difficult to terminate for the express purpose of assessing a tax on OSF theaters operating on City property (Elizabethan and Bowmer).
  • Increases: Determined and enacted by City Council action
  • Renewal: Determined and enacted by City Council action
  • Politically feasible? Questionable
Notes: Not a regressive tax; similar to the Meals Tax. According to former mayor Cathy Shaw, the concept was originally considered during Open Space funding discussions in the early 1990s. She indicated “some felt it made sense because so many OSF visitors enjoyed and used Ashland parks, especially Lithia Park, where studies showed that visitors outnumbered residents 5-to-1 during the festival season.”
 
Shaw indicated a ticket tax was only discussed “because there was a local minority in town who felt the festival did not appreciate the City enough.” Ultimately, OSF pledged a yearly contribution to the Ashland Parks Foundation; however, the contribution has become irregular in recent years.
 
Robertson reported meeting with the OSF board president and the current APF president about making regular annual donations, with funds directed toward Lithia Park improvement projects for the benefit of both entities. The OSF president stated that donations could only be issued in profitable years when the festival was “in the black.” In summer 2011, when the main Bowmer beam collapsed and a park lawn was used as a temporary “Bowmer in the Park” theater, OSF did not donate to the APF despite being charged only for direct costs.
 
Local Option Levy—Rosenthal
 
  • How enacted: By voters after referral by City Council or by citizen petition
  • Who pays: Property owners
  • Who allocates: City Council / Budget Committee
  • Amount generated: Approximately $20,000 per one cent of property tax assessment
  • How collected: Via the county, through property tax collections
  • Collection costs: None
  • Restrictions: Requires approval by voters. However, Council could choose not to assess the full amount of the levy request or opt to increase levy assessments within voter-approved limits.
  • Renewal: Subject to voter approval after referral of the levy by Council action.
  • Politically feasible? Plausible
Notes: A regressive tax. Current examples are the Ashland Library Levy and the Ashland Activities and Athletics Levy. This type of property tax could augment the City’s general fund for a variety of prospective purposes, including capital projects or operational costs.
General Fund—Marsh
 
  • How enacted: City’s general fund totals $45M for the biennium. Of this, $21M is from property tax and available for general purposes. The tax rate is set by the Budget Committee and affirmed by City Council. Other revenue sources included in the general fund are largely allocated or restricted to specific purposes.
  • Who pays: Property owners
  • Who allocates: General fund budgets are drafted by Department heads, revised by the Chief Budget Officer (City Administrator) and reviewed and then voted on by the Budget Committee and then City Council.
  • Amount generated: $21M from property taxes in the biennium; $45M in total general funds.
  • How collected: Through the county appraiser, then distributed to the City.
  • Collection costs: Unknown; however, the collection system serves multiple entities so should be relatively efficient.
  • Restrictions / limitations: None for property taxes that comprise about half of the general fund. These revenues can be used for any purpose for which the district may legally expend funds. Other revenues sources are largely allocated or restricted to specific purposes.
  • Renewal: Ongoing
  • Growth in revenues: Stable and steady increases. Assessed value increased from $1.4B in 2003 to $2.1B in 2012. However, a tax levy is limited by statute and constitution. As of 2013, Ashland’s tax rate is $4.20 per thousand. Its maximum levy of $4.29 could generate approximately $190,000 / year in additional revenue.
  • Sustainability: Excellent
  • Competition for funds: From other City departments or special projects.
  • Politically feasible? General fund approach raises two significant questions: first, how will the current and future needs of Parks be weighed against other City demands? Second, will the decision-making authority of the elected Parks and Recreation Commission be compromised by imposition of the City budget process?
  • Progressive / regressive? May be viewed as both progressive (people / corporations with more income own property) or regressive (ownership of property is not related to ability to pay taxes).
  • Notes: Possible strategies to ameliorate concerns could include development of an MOU delineating Parks authority and / or changes to the budget process (for example, incorporate Parks priorities with council funding goals).
 
Property Tax—Landt
 
  • How enacted: Controlled by state law
  • Who pays: All City real property owners (except government agencies)
  • Who allocates: Budget Committee
  • Amount generated: The current $4.20 / thousand generates $9.5M over course of year. The mandated limit is $4.29 / thousand. Increasing the tax to $4.29 would generate $189,000 / year.
  • How collected: By county
  • Collection costs: None
  • Restrictions / limitations: None
  • Renewal: Automatic
  • Growth in revenues: Limited to 3% / year
  • Sustainability: This tax is as sustainable as any
  • Competition for funds: Check out this City budget cycle
  • Politically feasible? Property tax increases are challenging
  • Progressive / regressive? Not as regressive as some, since renters only pay indirectly and when there is competition for renters, it is difficult for taxes to be added in. When rentals are scarce, the opposite is true. Very challenging for persons on fixed incomes.
 
Expanded Meals Tax—Landt
 
  • How enacted: Voted on by citizens but may be changeable by vote of Council.
  • Who pays: Anyone eating at a restaurant within the City limits.
  • Who allocates: As described, must be used for park land purchases or development.
  • Amount generated: 5% generates $2.2M / year. Parks gets 1 cent (20% of the tax): approximately $456,000 / year.
  • How collected: By restaurants, who keep 5%.
  • Collection costs: Minimal
  • Restrictions / limitations: Must be used for park land purchases or development.
  • Renewal: 2030
  • Growth in revenues: Grows with economy and tourism.
  • Competition for funds: Currently none
  • Politically feasible? Increasing the percent would attract opposition from restaurants. Reallocating from Sewer would likely have less opposition but could serve to increase utility rates.
  • Progressive / regressive? Sales taxes are normally considered regressive but since this one only affects restaurants, a mostly discretionary spending, it’s relatively progressive.
 
Transient Occupancy Tax—Landt
 
  • How enacted: City ordinance
  • Who pays: Mainly overnight tourists
  • Amount generated: Current 9% tax generates $2M / year. Increasing it by 3% would generate an additional $666,000 / year.
  • How collected: By lodging industry; 70% has to be tourism-related
  • Collection costs: Lodging industry keeps 5%
  • Restrictions / limitations: Any additional tax must be for tourism-related use. Lithia Park does not necessarily qualify but probably does.
  • Renewal: Not necessary
  • Growth in revenues: As long as the economy is strong, growth would be expected.
  • Competition for funds: Would need to check with Kanner but could possibly be diverted to other uses.
  • Politically feasible? Lodging industry would likely object; would have to make the case that Lithia Park is a tourist facility.
  • Progressive / regressive? Tax would only rarely be paid by Ashland residents. In that sense, progressive. But regressive for recipients.
Marsh summarized the discussion and highlighted options with the most potential. She said none of the options came close to what had already been in place for Parks.
 
Voisin said general fund priorities included Police and Fire over Parks. Since Parks was not considered essential in the eyes of council and the Budget Committee, harm would be done to Parks as property taxes leveled off and PERS costs continued to rise.
 
Marsh said competition for Parks funds would continue. She talked about building safeguards or protections into the budget process to provide assurance about sufficient Parks funding. She said the committee spent time identifying issues and could now continue fulfilling its mission to find creative funding solutions for Parks.
 
Seffinger said Parks was the first department to receive this type of scrutiny and other departments could receive similar close review in the future. Having real goals and a process for reviewing budgets in a transparent manner would show the public how taxpayer funds were used. It was also important to educate citizens about Parks’ efforts toward fire prevention and other city needs.
 
Rosenthal asked Kanner and Robertson to develop a process for the next biennial budget cycle to avoid some of the challenges from this budget cycle and ensure that future Parks budget processes and priorities were considered well in advance.
 
Marsh and Seffinger agreed to meet and begin drafting a communication structure between Parks and Council. Seffinger recommended forming a steering committee toward that goal.
 
Rosenthal departed at 4:43 PM.
 
Public Input
None
 
Meeting Schedule
The next meeting was set for Tuesday, July 23, at 3 PM – Parks office. Agenda:
 
  • Recommendations on management structure (based on Kanner /  Robertson meeting)
  • Recommendations regarding creative adjustments to budget process
  • Council / Commission communication structure issues (based on Marsh / Seffinger meeting)
 
Research Joint Council / Parks Commission Meeting
Marsh said she would talk with Seffinger and the mayor about scheduling a joint meeting by the end of August.
 
Adjournment
With no further business, Marsh adjourned the meeting at 4:47 p.m.
 
Respectfully submitted,
 
 
Susan Dyssegard
Ashland Parks and Recreation
 

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