Consideration and Possible Adoption of Ordinance No.  2012-13:  An ordinance of the Mayor and Council of the City of Flagstaff amending Flagstaff City Code, Title 3, Business Regulations; Chapter 3, User Fees; Section 3-10-001-0005, Recreation, revising Jay Lively Activity Center fees.

During the FY13 Council budget retreat, direction was given to staff by Council to proceed with the proposed fee changes with the goal of generating an additional $100,000 in revenue.

Subsidiary Decision Points:
At the July 3, 2012 and the September 4, 2012 City Council meetings, Council requested additional information for their review regarding fee increases. This additional information is included in a Council Communication Report (CCR) included with this staff summary.

The changes in Jay Lively user fees are intended to generate additional revenue so that the center will recover more of its direct costs of operation. Currently the Jay Lively Activity Center generates revenue which covers approximately 65% to 68% of its operational costs. The new fee structure will bring that number up to approximately 90% cost recovery. Based on historical use the new fees will generate approximately $100,000.

Livability through good neighborhoods, affordable housing and varied recreational activities.
Maintain and deliver quality, reliable infrastructure.

The City Council supported the proposed fee increases during the FY13 Council budget planning meetings.

 

1. The preferred option is to phase in at 1/3^rd the increase this fiscal year and next with the full rates as currently proposed implemented July 2014.  If this option is adopted by Council, the City would have to find $100,000 in one time money to replace the lost revenue over the next two years as shown on the following schedule:
    
        Implement 1/3 of proposed fee increase October 1, 2012:   Revenue impact ($70,000)
        Implement the 2^nd third of the proposed fee increase July 1, 2013:   Revenue impact ($30,000)
        Total two year revenue impact:    ($100,000)
    
   This option is preferred as it uses one-time funds to supplement the loss in revenue and the City budget stays structurally balanced.
2. Keep fees at their current levels. If fees were kept at current levels, $100,000 would need to be found elsewhere within the overall FY13 City budget. If fees remained unchanged, the public would not see an increase to the current fee structure.
3. Choose an alternative amount (lesser) of revenue to be generated. Any decision resulting in less than $100,000 in additional revenue would need to be found elsewhere within the overall FY13 City budget.
4. Additional recommendations provided by Council not mentioned above.

 

The Council requested additional information and discussed options for the proposed increase in Jay Lively user fees. 
 
As part of the FY2013 budget process, it was recommended to increase Jay Lively user fees by approximately $100,000 to fund other General Fund priorities. 

The Council requested additional information and discussed options for the proposed increase in Jay Lively user fees at the July 3, 2012 and September 4, 2012 Council meetings. Council also requested for staff to provide additional information  to be brought forward for their review and discussion. The Council Communication Report (CCR) attached to this staff summary goes into detail regarding the Council's questions and requests for additional information.

During the FY13 Council budget retreat, direction was given to staff by Council to proceed with the proposed fee changes.

There will be no service level impact to the public at the Jay Lively Activity Center except to hold it steady at current servicing levels or use more of the General Fund to fund future service level increases.

A phased approach to fee increases is supported by user groups as they would have adequate time to address the fee increases and plan strategically within their various organizations.

If the entire fee increases were to be implemented immediately, some of the smaller programs could see membership decreases as a result of higher fees. 

After the initial roof collapse at the Jay Lively Activity Center, organizations and individuals from the public spoke in support of fee increases at the center to ensure that a public ice skating rink would continue to operate within the City of Flagstaff. 

The fee increases were also discussed at all three FY13 public Council budget retreats. The proposed fees have been posted on the City's website for a total of 60 days (since July 1st, 2012). 

In an effort to engage and alert user Jay Lively user groups, Recreation staff conducted one-on-one meetings with user groups in February 2012. Attendance sheets and minutes were not taken at these meetings. The goals of these meetings were as follows:

• Alert groups that user fees at Jay Lively were being discussed during Council budget retreats and most likely fees would increase.

• Indicate that if fees do go up that they would be in the range of 20% to 70%
• Discuss potential impact to their programs
• Encourage user groups to remain engaged in the budget process as to be informed of Council’s direction
• Commit to meet again with user groups after Council's April budget retreat to share results.

We invited all user groups to meet with us one-on-one which included the following: Flagstaff Youth Hockey Association (FYHA), Flagstaff Figure Skating Club, NAU Hockey, FUSD High School Hockey, Train Wreck Adult Co-ed Hockey League, Adult Men’s Hockey League, and Just for Fun Adult Hockey League. Of these we met individually with our three largest user groups:

• FYHA on February 7, 2012
• NAU on February 8, 2012
• Flagstaff Figure Skating on February 8, 2012

In additional to the in-person meetings, Recreation staff spoke to the Men’s Adult Hockey League and Just for Fun Hockey League on the phone and shared the same information.  Other groups either did not respond to our invitation or did not feel it was necessary to meet.
 
In addition to the February meetings, we also met with user groups on May 23, 2012.  At this meeting we met with all groups in one setting rather than individually. The goals of this meeting included:

• Inform user groups of Council direction regarding user fees ($100,000)
• Share with them what their new fee would be, based on Council’s decision
• Provide them with Council meeting date of July 3, 2012, where they could voice their concerns during the public hearing portion of the agenda

The general consensus from the user groups was disappointment that such a significant increase in fees was the chosen option and that they would not have adequate time to adjust to such a fee increase. Groups represented at this meeting include: FYHA, NAU, Flagstaff Figure Skating, FUSD, Just for Fun, and Train Wreck.

Not approved - Tabled indefinately on 10/2/2012