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To:  Sunrise Recreation and Park District Community - UPDATE
Via:  Advisory Board of Directors

From:  Lisa Rudloff, District Administrator

Date:  February 23, 2009

Subject: UPDATE from the February 19, 2009 Budget Workshop and Board of Directors Meeting regarding Budget Shortfall Impacts – Proposed Reductions in Preliminary Budget

Unfortunately like many businesses and families, the Sunrise Recreation and Park District has been negatively affected by the downturn in the economy.  Declines in property tax revenues, State bond grant funding, program registrations, and building rentals have required a series of recommended cuts to balance our budget.  The preliminary budget for fiscal year 2009/2010 is balanced at $10,101,809; however, there are serious revenue reductions and some program and facility closures that are being recommended in order to accomplish this. 

Current Constraints

• Grant Monies
• The District applied for state grant funding for two projects Antelope Community Park and Robert Frost Park to pay for construction.  At this time these funds have been suspended and it is unclear if the District will receive the remaining grant money of over $465,000 from the State of California (State Parks Office of Grants and Local Services – OGALS)

Property Tax Revenue is Down
The District is anticipating a 5% or over $214,000 property tax reduction over the prior year due to the decline of property values and the current housing crises.

• Revenue Reductions
• Registrations
• Facility Rentals
• The District has also experienced a decline in recreation registrations that has resulted in reduced revenue as well as a decline in building rentals and long term lease revenue all totaling over $509,000.

Budget Gap

The District has a budget gap.  The current projected contingency for 09-10 cannot sustain the District in future years. The contingency is funds are available for emergency or unanticipated expenditures.  Our strategy this year is to make tough decisions now to help us get through what the future holds.

• The 09-10 preliminary budget anticipates a contingency over $855,000.
• The 10-11 budget (making same assumptions as 09-10 budget) would anticipate a negative contingency of over $92,000.
• The 11-12 budget (making the same assumptions as 09-10 budget) would anticipate a negative contingency of over 1 million.

Information Analyzed

Due to the budget gaps District staff analyzed a number of things in the all divisions that would help close the gap.  As an example, in the Recreation Division, staff analyzed all classes and programs.  The information we looked at was:

• Cost vs. Revenue
• Direct Costs  (i.e. employee payments, materials, supplies, contracted services) 
• Indirect Costs  (i.e. facilities, marketing, administrative)
• Total cost per experience
• Participants
• Waiting Lists
• Number of Classes offered & cancelled

Core Service Analysis

After staff analyzed the programs we developed criteria to sort the classes and programs into categories that include:

• Cost Neutral -- Program is financially self-sustaining
• High Enrollment -- Program is offered regularly through the year; and fills 80% of capacity
• Wide appeal – Program has wide age segment and demographic appeal
• Public Safety and Public Policy Implication
• Growth Opportunities – Tiered level of skill development
• Facility Investment– Facilities designed especially for certain programs
• Market Leader – District has built a market advantage in providing this service

Policy Management Considerations

After staff developed program analysis we discussed policy and management considerations that included:

• What are the priorities for the community?
• What are the District’s core services?
• How do we maintain the delicate balance between revenues and expenditures over the next several years?
• What are the recreation program standards?
• How can we make cuts that minimize impacts to the community?
• How do we make tough decisions now and keep the communities interests foremost in mind?

Budget Recommendations

From that staff created an initial set of budget recommendations that include in the area of staffing:

• Freezing  positions (Not Filling/Funding)
• Customer Service Representative (PT)
• 2 Construction Specialists (PT)
• PT Aquatic Staff associated with Tempo Pool
• PT and Contracted staff associated with Adult Softball Leagues
• Cost of Living Adjustment – No COLA for FY 09/10.

In the Recreation Division staff recommended:

• Retain cost neutral and highly subscribed programs
• Focus on youth , teen and senior – vulnerable populations
• Review programs where there is General Fund subsidy and identify if fees can be increased, reduce number of classes, adjust instructor percentage, or if the program needed to be eliminated.
• Adult programs will need to be 100% full cost recovery (direct + facilities + marketing + admin costs)

Recommended Reduced or Modified Adult Programs

These are the adult programs that staff feel can continue to be offered and be 100% self sustaining:

• Belly Dancing
• Dog Obedience
• Boot Camp for Dogs
• Volleyball Leagues
• Open Gym Volleyball
• Basketball Leagues
• Beginning Exercise
• Co-Ed Body Conditioning
• Tennis group & private lessons
• Aqua Cise
• Ballroom Dance
• Yoga
• Line Dance Workshop
• Cardio Kickboxing
• Tap & Jazz Dance
• Jazzercise

Program Elimination Adult Softball

Unfortunately the adult softball leagues are recommended to be eliminated due to general fund subsidy of over $40,000.  In order to make adult softball leagues 100% self sustaining the fee would have to be increased. 

• $420 -  Current Fee
• $655 – Full cost (2 umpires)
• $570 – Full cost (1 umpire)
• $475 – Highest in Sacramento Market (Roseville)

District staff has send an email out to the softball managers to inquire if they would continue to play with the fee increases.  We hope to have more responses from the mangers and players and we will present that feed back with our final recommendation at the March 5 board meeting.

Recommendations – Facilities and Parks

In the Parks & Facilities Division staff has recommended:

• Facilities (Buildings, Pools)
• Review rental revenue and expenditures
• Review contracts and lease agreements for cost recovery
• Parks
• Maintenance –Frequency and level of maintenance will be reduced/modified. 
• Reduce major costs – water, fuel and electricity.

Facility Elimination Tempo Pool

• Enrollment has declined over 30% the past three years (i.e. swim lessons, public swim, classes)
• Infrastructure Issues  - repairs over $60,000
• District staff is recommending closing one facility – Tempo Pool due in part to general fund
• subsidy of over $40,000.  We feel that with Rusch Pool and the Antelope Aquatic Complex we
• can accommodate aquatic programming for the sunrise community.

Strategic Budget Adjustments Need for the Future

• District staff recommended the Advisory Board of Directors not approve the 2009-10 preliminary
• budget until March 5, 2009 as options need to determined up to 10% or $1,005,489 to keep our
• contingency positive in future years.

Budget Process

As a dependent district of Sacramento County, Sunrise must prepare our budget in time to be reviewed and considered by the Board of Supervisors.  Below is the budget timeline and process.

• February 19, 2009
• Advisory Board of Directors conducts budget workshop, public hearing and approves 2009-10 Preliminary Budget.  Budget Workshop 5:30 pm and Board meeting at 7:30 pm Rusch Community Park.
• March 5, 2009
• The Advisory Board of Directors conducts a special board meeting to approve the 2009-10 preliminary budget.
• March 11, 2009
• This is the deadline for the District to submit the 2009-10 Preliminary Budget to the County of Sacramento.
• June 9, 10, 17 and 18 2009
• The Board of Supervisors conducts public hearings on the 2009-10 Preliminary Budget and will vote on the budget before July 1, 2009.
• July 2009
• The Advisory Board of Directors conducts a special board meeting to make final adjustments to the 2009-10 preliminary budget.
• September 2009
• The final budget is submitted to the County of Sacramento and County.  The Board of Supervisors takes a final vote on the budget to make adjustments based on projected state and federal allocations.

Conclusion

We sincerely encourage the Sunrise Community residents to enjoy our 41 parks, community centers, and swimming pools.  We appreciate your understanding and patience during these difficult financial times.

If you have concerns or suggestions, please do not hesitate to contact us at (916) 725-0140 and lhollingsworth@sunriseparks.com.  You are also welcome you to attend Advisory Board meetings held on the third Thursday of each month or review our agenda and minutes on-line at sunriseparks.com