City Commission - Regular Meeting

Thank you so much, Mandy.

Can everybody hear me and see the presentation? Was that a yes? I couldn't quite hear that.

Okay, great.

Thank you so much. Always want to check. I know I've, I heard you all have been having some technical difficulties, so want to make sure you can hear me. And if you have any issues hearing me, I am more than happy to repeat. So please I can't see, so feel free to speak up and interrupt me at any time to ask any questions as I'm going through the presentation, especially if you can't hear me. So for tonight, I'm gonna just do a really brief overview of our study, what we were hired to and brought on to do for the city, talk a little bit about benchmarking, um some cost recovery calculations analysis that we did and then obviously what we are recommending moving forward and the revenue projections from that and then there will also be another time for questions if you have them at the end so we obviously were engaged by the city to complete a comprehensive operating fee study reviewing all of your municipal operating Those fees align with the true cost of public services and with the users of those services. Adjust those fees to reflect true cost of service. Review them against your neighboring communities to maintain competitiveness. And then create a plan for adjusting the fees as necessary with the consideration of the benchmarking and the cost recovery analysis. So we followed a six-step approach. We had a kickoff meeting with city staff at that time to categorize fees as high priority or low priority. Parks and Rec at that time was identified as a high priority fee to be evaluated along with community development fees. Obviously, we're not presenting on community development tonight. Unfortunately, the Florida state legislator decided to throw sort of a wrench in our work about community development fees. So that study is kind of ongoing. So you'll hear from us on that study probably within the next couple months as we try to align those fees with the legislative updates that have happened. And then the low priority fees that were identified were sort of what we call miscellaneous fees. So that's a sort of whole other scope of fees within Appendix A that are just miscellaneous fees and not necessarily associated with one department. But obviously tonight, So we evaluated all of those fees. We identified places where we maybe could consolidate some of those fees and looked for places where we could maybe remove some fees and also new fee opportunities if needed. We collected a whole lot of usage data, conducted interviews with Mandy and some of the finance staff. One of the really important things we did was do the benchmarking that I've mentioned that we were making against 10 identified peer Florida communities plus Suncoast YMCA. The YMCA was selected specifically as a summer camp fee comparison, but the remaining peer communities were chosen based on proximity to St. Pete Beach, coastal communities similarly sized, and or places that have recently So that was really important as well. We didn't wanna compare against a community that really hadn't updated their operating fees in the last 20 years. That's not gonna give us any good data. So we had a lot of things that went into our selection of benchmarking communities. And then the next step was that cost recovery analysis. So we needed to first determine current cost recovery, which I'm gonna talk about in a minute, by fee category. And then we used some industry standard percentages and then we did we developed fee recommendations for each of those fees so again this is the communities plus the YMCA that were selected for benchmarking so this is an important part of this process in order to keep your fees competitive you know we want people to say it's a great price we're going to go there instead of going to treasure island as an example right so we wanted to make sure that the fees remained competitive within the market so currently parks and recreation fees are really split up into two types so there are a set of parks and recreation fees that are within appendix a which is sort of your rating fees. And then there's another set of fees that are set by contractors. You know, you're talking about fitness classes where there is, you know, a contractor that's leading the class and then the fee is then split on like a 70-30 basis between the city and the contractor. So those are outside of Appendix A. And so that's important We can adjust the appendix A fees, but when the contractor is setting the fees, we can offer recommendations, but we can't necessarily by resolution set those fees. The fee structure right now does have a distinction, which is really important between residents and non-residents. And we really wanted to maintain that fee structure through this process. Obviously, the residents of St. Pete to the parks and recreation revenue. And so we wanted to acknowledge that as we were setting these fees, that they would receive the benefit of paying taxes here as opposed to non-residents who do not. And additionally, in addition to prioritizing those benefits, we also wanted to apply inflationary increases. So we were looking at a three-year forecast period for this study. And we, so you'll see we've period as well. And that's to maintain cost recovery that we set for fiscal year 27 into the future as staff salary increases and benefits increase over time. So you can maintain that cost recovery. So there are a large set of fees, even in the Parks and Recreation Department, and analyzing cost recovery really isn't feasible. So we categorized them and grouped them into one of seven service areas in order to connect in the budget revenue and expenses to calculate cost recovery. So here are the seven service areas. There's pool fees, recreation programs, camp, gym, facility rentals, special events, and then beach weddings. So those are sort of the seven groups that we really analyzed. closely with Mandy and Kathleen and other staff to bridge those budget expenditures to revenues. And we assigned a percentage of department expenses to each category to establish the cost to provide and then we were able to calculate current cost recovery by dividing total revenue by total expenses that we allocated into those groups. So each group has a each of those seven. And then we wanted after that, after we established current cost recovery, we wanted to develop target cost recovery. Parks and recreation fees are a little bit unique in that they're sort of tiered based upon who benefits from them. So for tier one, which are parks and recreation amenities that have the most a lot of fees associated with those um or cost recovery they need to be primarily tax funded and those are parks trails open space as i heard sort of at the beginning of the meeting talking about you know parks that need to be rehabilitated following a hurricane you know you're not going to charge families and kids that use playgrounds and parks to go use those so those have maximum community benefit and you really have a zero cost Then you move into tier two, which is a mixed benefit, considered a mixed benefit. So those are things like view sports, classes, camps. And for those by industry standard, you're targeting about a 70 percent recovery. So there's some tax funding and then some individual funding. And then the last year is tier three, which is individual benefit. Things that, you know, don't benefit the entire community. choice to use and pay for, which is like facility rentals, adult leagues, private lessons. So in those cases, we wanted to look at targeting a higher cost recovery at 100%. So here you can see each of those categories I mentioned. And then obviously we calculated cost recovery. And then this is the percent increase. that it would need to meet that cost recovery. So as an example for pools, you know, for things like private lessons in pools, right, private swim lessons, we would need to, in order to meet 100% cost recovery, they would need a 590% increase. And I know that's a large number, but that's it. Stay tuned. We're not going to sticker shock anybody, I promise. And then some things like beach weddings, you know, they don't, It's variable by type and by tier, the amount that was needed to reach cost recovery. So again, once we had those numbers, we wanted to look at a variety of options of how to adjust those fees. So in some cases, we recommended to get to full cost recovery in a single year. 29% in fiscal year 27 and reach that full cost recovery. Phased-in cost recovery is to address some of those larger percent increases that you saw on the previous page to avoid sort of that sticker shock. We wanted to give an option to spread that increase over a three-year period. Benchmark max. Again, we've talked about benchmarking. That's sort of saying this is what our peer community is doing. We really don't want to set it, you know, is doing because that removes our ability to be competitive four we wanted to allow you all to have an override option in case any of the three above still seemed uh outlandish and could not be you know were not feasible um so it allowed us to enter a specific increase in some cases for option five we just wanted to keep the current rate in six again we're gonna we were gonna recommend some to be removed or consolidated and we'll talk about that by that inflationary factor of 3.1%. So these were sort of all the options that we went over with city staff for each fee on an individual fee by fee basis. Okay, so on top of that, we wanted to look at this resident versus non-resident structure. So what we decided with input from the budget review for what they are now but with an inflationary index added because they do pay taxes to support these expenses already so you'll see that the resident rates are going to stay the same but just have a small 3.1 increase applied annually for the non-resident rates they really fell into one of these two options we either wanted to get to full cost recovery or we we did an override where it would have So have that inflationary index applied annually. So I just wanted to give you some examples. Again, Appendix A is a really lengthy thing, but I just wanted to give you from each category sort of an example of what I'm talking about. So for Jim, as an example, your current resident fee is $1 for the day pass, and it's $2 for the non-resident. 20, 28, and 29. So for residential, we're just sort of doing that 3.1% increase, but the non-residential is getting a larger bump up across the board. Same thing with facility rentals where the resident fee is staying relatively low and similar to what it is now, but the non-resident fee is going up. So you can also see there's an example here from summer camp, the daily pool admission, silver sneakers, Typically breakfast with Santa is a special event. And then the beach weddings, the beach weddings were already meeting cost recovery. So they're really just getting a inflationary increase. So again, some of the classes have been set by outside contractors. So we have those in a sort of a separate appendix and at the direction of those types of fees, those contractor fees. So they were increased for a dollar for non-residents and then an inflationary increase years after that. But again, this is just recommendation. And then we recommend they only be adjusted by inflationary increase for residents afterwards. We did introduce a new fee for largely attended special events. High, medium, low. We consolidated the swim team lane rentals. There was a very long list of various swim team lane rentals. So we really consolidated that down into one half an hour and one hour rental there. And then underneath that is all the removals, the fees that were removed. And that's just basically because those programs are no longer being offered. Current, so from fiscal year 25, which is the most recent data that we have, you know, you're sitting at a 29% cost recovery. Whoops, sorry. So revenue versus expense for fiscal year 27. This is sort of what it looked like. So for revenue projections, so we knew what we had in 2020, what it would be, what the revenue may look like for 2027, 28 and 29. But we had to use 2020 to 25 data. That was the available data that we had and that the city had to give us. So we used that to project what revenue could be like into the next three years. It is important to note that this is not all the revenue associated with resident services. Actually, we did end up averaging 2022 to 2025 in some cases, in some of the fees. We did have data from 2022 to 2025. Aquatics, you'll see on the next slide, expense of $0. That is because aquatics were not pulled out as a separate line item on the budget until this year. products expenses for 2025. And then some of the recreation programs have no attendance data for us to project and do. And we have really, there's in some cases, you know, you offer sibling discounts for summer camp and we don't have that broken out either for our usage data. So with these fee increases that we're recommending, this is the projected revenue and expenses. resident services, but across the fees that we're looking at. So we're going from about a 29% into about a 47%. Okay, any questions?

Yep.

It's inflationary.

We took

Yeah, I can go in and take a look at that and let you know that. I don't know that off the top of my head. Current costs, current budget, we escalated those to account for inflation, but it was probably based off of 2026 budget numbers that we inflated those into 2027, 28 and 29. So I can model.

Yeah.

Yeah, yeah, I'm pretty sure it's escalated.

I'm going to book.

so i'm got the model up so yes we projected off the 2026 budget we escalated off the 2026 budget 2025 budget number is here and the 2026 and 2027 budget are quite a bit larger than those um Yeah, so it goes up quite considerably across as it