City of Goodyear Parks & Recreation Fee & Cost Recovery Model

BACKGROUND AND PREVIOUS ACTIONS

In May 2010, City Council approved the City’s municipal user fee schedule (Resolution 10-1357).  This resolution contained the user fee and cost recovery rates for all municipal services including the Parks and Recreation Department.

 In July 2014, City Council approved the Parks, Recreation, Trails and Open Space Master Plan.  The purpose of this plan is to offer strategies and operational policies that provide guidance in order to meet the needs of current and future City of Goodyear residents.  The plan included short-term goal 1b.4 which directed staff to “Establish a cost recovery requirement for different levels and types of programs” and 1c.1 which recommended the establishment of “Fee setting and cost recovery goals”.

In April 2016, Arizona State University’s Marvin Andrews Fellowship presented findings to City management related to the “Goodyear Cost Recovery Research Project." This student-led study analyzed local, regional, and national fee and cost recovery best practices within the field of parks and recreation.  The study recommended that rather than establishing a set range of fees for programs and services offered by the Parks and Recreation Department, a cost recovery model be used to determine the fees that should be charged for such services when the services are being offered.  

On May 3, 2017 the Parks and Recreation Advisory Commission unanimously voted to advance the proposed fee and cost recovery model to City Council for further discussion and consideration.

On September 18, 2017 City Council reviewed and provided feedback to the Parks and Recreation Department’s Fee and Cost Recovery Model recommendation.

STAFF ANALYSIS

The 2010 Municipal User Fee Schedule (Resolution 10-1357) set defined fee ranges and program cost recovery percentages.  This Resolution has successfully guided program fee setting for the department for the past seven years. A limitation to this policy however, is that in addition to program cost recovery percentages, there is also a defined fee range which caps program pricing.  As program expenses increase over time, this policy restricts cost recovery achievement due to the pre-defined program fee range. Staff are recommending a new fee and cost recovery model to guide current and future fee setting policies.

Elements of the fee and cost recovery model include:

1. Pyramid model for program category classification and cost recovery
2. Standard pricing formula
3. Discounts and surcharges

Pyramid model for program category classification and cost recovery

This approach resembles a traditional pyramid in that at the base of the pyramid lies programs which provide the most community-wide benefit and typically the least cost to participants.  As programs move up the pyramid, the individual benefit to the participant increases along with the cost to participate.  The pyramid is comprised of 5 distinct categories which help guide community benefit. 

Program categories and related cost recovery were then assigned to each level of the pyramid to establish fee and cost setting for the department.  The following program categories and cost recovery are a result of community input, staff analysis, Parks and Recreation Commission and City Council feedback obtained at a work session on September 18, 2017:

• Community (0-15% cost recovery): Services that benefit the community as a whole. Enhances the quality of life of residents, and has almost no restrictions on participation.
  • Community Activities
  • Open Swim
  • Signature Special Events

     

• Community/Individual (15-40% cost recovery): Services which promote individual physical and mental well-being. Traditionally expected services and/or beginner instructional levels.Contains a considerable measure of community benefit.
  • Active Adult Socials
  • Swim Lessons
    
    
• Individual/Community (40-70% cost recovery): Services that promote individual physical and mental well-being and provide an intermediate level of basic skill development. Has a positive impact on the individual and some residual value for the community.
  • Specialty Programs
  • Summer Recreation
  • Team Swimming
  • Youth Special Interest Classes
  • Youth Sports
    
    
• Highly Individual (70-100% cost recovery): Specialized services generally for specifics groups, and those which may have a competitive focus. Has almost no benefit for the community.
  • Active Adult Trips
  • Adult Team Sports
  • Adult Special Interest

     

• Exclusively Individual (100%+ cost recovery): No community benefit. Intended to benefit an individual and have no residual value for the community at large.

Standard pricing formula

Staff are recommending a standard fee formula to consistently establish program fees for the Parks and Recreation Department.  This formula was recommended by the Marvin Andrews Fellowship and is an integral part of achieving cost recovery goals as outlined on the pyramid. Program expenses include direct program costs and Recreation Division indirect overhead.   

Fee formula

• Fee= (% cost recovery x program expenses) / number of participants

Discounts and surcharges 

This new fee and cost recovery model establishes a clear, consistent and sustainable fee and cost recovery policy. Staff will review and provide regular updates to council related to the department’s fee and cost recovery performance.

Examples include:

Multi-Child Discount - Residents with multiple children will now have the opportunity to receive an additional discount when registering multiple children for the same program.  This discount is designed alleviate some of the financial burden of enrolling multiple children in a single program, allowing the whole family to enjoy the Parks & Recreation programs.

20% Non-Resident Surcharge - The City recognizes the need for high quality, affordable programs for the community; designed and implemented to provide value to Goodyear residents.