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Item 2.
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| City Council Work Session | |
| Date: | 10/17/2022 |
| Title: | Park Operations and Development Tools |
| Presented by: | Mike Whitaker, Parks, Recreation & Public Lands Director |
| Department: | Parks/Rec/Public Lands |
| Presentation: | Yes |
| Legal Review | Not Applicable |
RECOMMENDATION
N/A
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
One of the 2022/2023 City Council strategies and priorities is to increase parks, trails, recreation, and cultural investments.
The 1st of 3 funding problems Billing Parks and Recreation faces in increasing parks, trails, recreation, and cultural amenities and programs is that current funding levels are below a typical park and recreation agency in the United States.
The 2nd of 3 problems is that there is no adequate funding mechanism for new parkland, trail, and recreation facility development. Until the completion of the first phase of Centennial Park in 2021 the last community park that was built was Castle Rock Park in the early 1980s when the population of Billings was approximately 68,000 and it has never been completed. Six community parks have not been completed or developed. Areas of potential new development include a community recreation center, trails, a west-end reservoir, and parkland acquisition.
The 3rd of 3 problems is that Park District #1 (PD#1) is set to expire at the end of the calendar year 2024 and will result in a $3,275,400 (FY2023) reduction to the department’s annual budget representing approximately 29% (FY2023) of the total budget.
Billings Parks and Recreation's current funding comes from 5 different sources. These sources include General Fund, 37 Individual PMDs, Park District #1, Parks Special Funds, and Fees and Charges. As everyone knows we will lose 29% of our budget when PD#1 sunsets in December of 2024. PD#1 is currently being used for operations and lifecycle replacement.
There are 11 primary ways to fund park operations and development. The funding mechanisms are divided up into 2 groups one-time funding and ongoing funding. One-time funding is generally used for capital improvement and ongoing funding is generally used for operations and maintenance. There are 6 one-time funding tools that can be used for park development and lifecycle replacement and 5 ongoing funding tools that can be used for operations and maintenance. One-time funding tools include bonding, donations, cash-in-lieu, special improvement districts, general fund reserves, and grants. On-going funding tools include special districts, general fund, dedicated parks and recreation operating levies, donations, user fees and charges for services.
General obligation and revenue bonds can be used for capital improvement. General obligation bonds must be approved by the voters and it’s the cheapest way to borrow money. Revenue bonds do not need to be approved by voters, only the governing body. A funding source will need to be identified for revenue bonds.
It is possible to obtain one-time funding through donations, but we may not be able to address the identified needs in the order that the City sees as a priority. Many donors will want to contribute for a specific purpose or project and it may not align with the goals and priorities of the City Council or the public. Completing capital projects with donations is also challenging because the City is still required to follow our purchasing and procurement procedures, which can be upsetting for donors who may want to donate in kind. While this isn’t an impossibility there are challenges when using this as a funding mechanism. Cash-in Lieu is usually not the primary funding source for projects. It also can take decades to build up enough funds to assist with park development.
Special Improvement Districts are usually used to develop small neighborhood parks in newer subdivisions that have waivers of protests. Most older subdivisions don’t have waivers of protests. Yellowstone Family Park is an example of a neighborhood park that was developed with a Special Improvement District.
General Fund Reserves can be used to develop parks, but projects would have to compete with other City Departments’ projects. Most grants require matching funds, limited in availability, and require staff time to write and administer. For example, the Land Water Conservation Fund grant program requires a 50% match.
On-going funding tools include special districts, general fund, dedicated parks and recreation operating levies, donations, user fees and charges for services. The City could continue using the General Fund or pass a dedicated Parks Levy to fund the Parks and Recreation Department. Currently, approximately 43% of the Department’s budget comes from the General Fund. A vote of the people would be needed to provide a specific mill levy for funding parks and recreation. We currently charge for use of parks and participation in rec programs and entrance into our community pools. Continued review and analysis are always needing to be done to ensure we are not falling so far behind on our fees that dramatic increases are needed. The City’s Special Assessment District Parks District #1 provides 29% of the Department’s funding and will sunset December 2024. Reauthorization of the district must be voter-approved. Eleven percent of the Parks and Recreation Department comes from PMDs. Forty percent of the Department’s funding comes from Special Assessment Districts.
A PowerPoint presentation has been attached.
ALTERNATIVES
N/A
FISCAL EFFECTS
N/A