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HomeMy WebLinkAbout12-01-03 Finance Com MinutesDublin City Council Finance Committee Monday, December 1, 2003 Attending: Ms. Chinnici-Zuercher, Chair Mr. Kranstuber Mr. Lecklider Ms. Grigsby Ms. Heal Ms. Kennedy Ms. Chinnici-Zuercher called the meeting to order at 6:15 p.m., noting that tonighYs meeting has been scheduled to discuss a cost of services update. Ms. Grigsby stated that at the last Council meeting, Ordinance 126-03 was introduced, which relates to the annual update to the cost of services study. Questions were raised by Council Members at the meeting, and a response to those concerns is hereby provided. Ten fee increases are proposed in order to recover the percentage of cost of services as set in previous years. The majority of the questions are related to the Community Recreation Center. Staff has suggested an amendment to the age range for the youth pass from age 12 to age 17 in order to encourage participation by the teen population group. The other modification is not part of the ordinance but an administrative action, which would modify the Recreation Center corporate pass access. During outreach visits with businesses, concerns were expressed about the time limitations for use of the Recreation Center by corporate pass holders. The current time frame is 6 a.m. to 6 p.m. Monday through Friday, but staff is recommending weekend usage for this group. Staff reviewed the current level of usage and capacity issues to be considered. This information was attached to the ordinance. It indicates that extending weekend use to the corporate pass holders would not impact the facility capacity. Ms. Chinnici-Zuercher inquired which local company recently built a $1/4 million fitness center. Ms. Grigsby responded that it was Verizon. Ms. Chinnici-Zuercher inquired if the City had no prior knowledge that the fitness center was to be built. Ms. Grigsby responded that the City did not. They were unaware of the fact until a site visit was scheduled by the City to discuss Verizon's increasing income tax revenue. Staff anticipated that the revenue growth could indicate an economic development project in the near future. During the visit, Verizon mentioned the construction of the fitness center. The City also learned that in order to achieve the necessary space, Verizon had located some of their employees to a Hilliard site. Consequently, the City is attempting to locate additional space so that Verizon can move those employees back to Dublin. Ms. Grigsby stated that another issue is the non-resident senior pass fees. Resident and non-resident school district rates for seniors are structured similarly to the structure for non-seniors. There is a considerable discount for seniors. The number ofnon-resident seniors using the Recreation Center Finance Committee December 1, 2003 Page 2 is minimal. The majority of senior usage is in the morning hours, at which time there is no capacity issue. Ms. Chinnici-Zuercher expressed surprise that 27% of the seniors using the Recreation Center are non-residents. From what area(s) does the majority ofthat percent come? Ms. Heal stated that Worthington now has its own fitness center, and many other communities are also developing fitness centers. Twenty-seven percent is a little higher than the total average of non-resident users. Ms. Grigsby stated that a number of seniors travel from Plain City and Marysville to use the Recreation Center. Ms. Chinnici-Zuercher inquired what the City does to outreach to seniors - 748 seniors using the Recreation Center is not a high number. Ms. Heal stated that there are two groups of active seniors in the community. Seniors actually holding membership to the Recreation Center is the smaller group. A second group which participates in group activities is a closer parallel to the senior groups in other communities. Ms. Grigsby stated that the City also charges a $1.00/month ACH fee for monthly account debits for DCRC annual pass holders. A question was raised regarding the validity of the fee; consequently, staff conducted a survey of other facilities' practices, both public and private. It was discovered that neither Westerville, Worthington nor Kettering has a monthly debit plan; the debit fees are paid up front. On the private side, most pay up front, with a discount for paying the fees up front. World Gym has an extra service fee. The fact that the City offers this convenience, which many other communities do not, is a benefit to the users, and the City is in line with its ACH debit fees. Ms. Chinnici-Zuercher referred to a reference on page 7 of the memo regarding a charge for Police false alarm response. Ms. Grigsby stated that, normally, if there are multiple charges, it involves a business with many employees entering/exiting. The majority of the charges, however, are for one incident, at a charge of $50.00. Ms. Chinnici-Zuercher inquired about the impounded/abandoned vehicle charge. Ms. Grigsby stated this does not apply to victims of crimes. It is for individuals who leave their vehicles for other reasons along the road. A 24-hour notice is given; after that timeframe, the vehicle is impounded. This amounts to approximately 200 vehicles a year. Mr. Kranstuber inquired if the 6 p.m. limitation for corporate pass holders is strictly enforced. Ms. Heal indicated that it is strictly enforced. The pass cards are bar coded, which facilitates the ability to identify a corporate card with that limitation. Finance Committee December 1, 2003 Page 3 Mr. Kranstuber inquired if the proposal is to allow them weekend usage, and if so, for what hours. Ms. Heal confirmed that the proposal is for weekend usage, all hours that the Recreation Center is opened. It should not be a problem, as the level of usage during the weekend is consistent, but not heavy. Mr. Kranstuber inquired if the corporate pass is limited to the individual only, or could they also bring family members. Ms. Grigsby responded that the pass is limited to the individual. If they bring a family member, they would be required to pay the daily rate. Mr. Kranstuber stated that, although staff has assured that the Recreation Center could accommodate the additional evening and weekend use, he does not support the proposal. Many of the corporate users are not Dublin residents, and giving them use of the Recreation Center during the evening and weekend would impact Dublin users to some degree. Council's original intent was to heavily subsidize the rates for Dublin residents; Dublin school district residents would pay a slightly increased rate, and those from outside the community would pay their fair share -the full price. He does not support the proposal to raise the rate for Dublin residents, while, at the same time, significantly lowering the rate for those corporate users who live outside the community. Mr. Kranstuber stated the income tax that is paid to the City is essentially "owned" by the residents - it's their revenue. Many communities limit their recreation center membership to residents only, with no exceptions -- for instance, the City of Brecksville. They also subsidize the cost for residents to a greater extent than Dublin, even though they do not have the tax base Dublin has. Ms. Heal stated that there is variation in how communities structure their membership guidelines. Dublin's corporate membership is less expensive than Westerville and Worthington's. Mr. Kranstuber stated that his position has always been that Dublin's primary goal should be to accommodate its own citizens. A Community Recreation Center is one of the amenities that Dublin residents receive for tolerating the traffic from the large corporations that bring the tax revenue to the City -Dublin has the financial ability to do some things other cities cannot. He is not necessarily interested in a comparison of Dublin's fees with the private athletic clubs. The intent has always been that the Recreation Center is for the residents, and, even in Dublin, there are many residents who could not afford the Recreation Center membership if it were not heavily subsidized. Mr. Keenan inquired if the Community Recreation Center was one of the goals of economic development. Mr. Kranstuber stated that he never heard the Community Recreation Center discussed as a goal of economic development. Mr. Keenan stated that the memo in the packet indicates addressing economic development needs as the justification for the proposed change in Recreation Center corporate pass holders. Finance Committee December 1, 2003 Page 4 Ms. Chinnici-Zuercher clarified that is the justification for the proposed change, not the original concept for the Recreation Center membership. Mr. Lecklider inquired what the feedback was from the corporate community in relation to the Recreation Center. Did they indicate their employees had expressed a desire to use the Recreation Center on weekends? Ms. Grigsby stated that one company has 45-50 employees who work 12-hour shifts, 8:00 am to 8:00 pm, and those employees did not want to come earlier to use the Recreation Center. They inquired if the evening hours could be extended or weekend hours made available. When the economic development team investigated the possibility of extending corporate pass holder access, it was determined that extending the evening hours would not be possible, as the Recreation Center is near capacity on week nights. However, weekend hours would be possible. Mr. Lecklider stated that the survey indicated that there are 140 corporate residents. Ina 30-day sampling, it was discovered that only 350 used the Recreation Center regularly. How likely, then, will they be to drive to Dublin on the weekends to use the Recreation Center? Ms. Grigsby stated that interest was expressed in the open gym on Saturday mornings, for the purpose of playing basketball. Ms. Chinnici-Zuercher suggested that it would primarily be a marketing tool. Mr. Lecklider inquired how staff had arrived at the recommended five percent increase in the resident rate. Ms. Grigsby stated that staff considered the inflation rate. This increase is proposed for July 1 2004, which would be two years from the last increase. This will retain the current percent of cost recovery at the Recreation Center. If the City waits a longer period of time to raise the rates, it will require a larger increase. Incremental increases are easier to accept. Mr. Lecklider stated that his understanding was that the Recreation Center was for the residents. Based on that premise, when the Recreation Center first opened, he called Mr. Kranstuber to comment that the rates were too high -- and they wouldn't go anywhere but up. He inquired if the targeted amount of recovery is 50%. Ms. Grigsby responded that recovery is for recreational programming. For the operating costs of the Recreation Center, the recovery was 100%; now it is about 60%. The resident rates are subsidized by 40%, school district by a little less, and the non-resident rate is set at 100% recovery. Mr. Lecklider inquired about the philosophy. Is there a point of subsidy that the City shouldn't exceed? Mr. Kranstuber responded that the philosophy is that there is no reason to subsidize any of the non- residentcosts. The school district subsidy was included for political reasons, and the recognition Finance Committee December 1, 2003 Page 5 that there is a "community" embodied within the school district. The purpose of economic development is to bring in more companies and, therefore, more revenue to the City. There is a burden to that development -traffic, for instance, but there is also the advantage of more resources to do things for the community. The Recreation Center is a nice way to compensate the residents for their accommodation of the development burden. Ms. Grigsby stated that the economic development has brought in the income tax to construct that facility. The fees do not take into account the capital costs, only the operating costs. Mr. Kranstuber stated Dublin desires the economic development now because of the current income tax structure -revenues go to the City in which the taxpayer works. If it should ever change, Cardinal Health would be a liability to Dublin. There is nothing intrinsic that says corporate development is good. It is, if it brings income tax revenue to the City. Ms. Grigsby stated that when the Recreation Center fees were raised two years ago, there was little objection. Ms. Chinnici-Zuercher stated that even compared to the Y's, Dublin's rate is very reasonable. Mr. Kranstuber stated that Dublin is not that unique. Disregarding Y's and private athletic clubs - looking only at city recreation centers across the nation -- most of them are setup exactly as Dublin's. They are set up as heavily subsidized for the residents and are not intended to be profitable. Ms. Heal stated that the last time the fees were raised, staff conducted a phone survey regarding rates. Dublin was still slightly less expensive than Worthington or Westerville. Mr. Keenan inquired about the current level of capacity. Ms. Heal stated that the Recreation Center is busy; there are a couple of times in the day, however, when the volume diminishes. Ms. Chinnici-Zuercher stated that she noticed in the PRAC minutes that citizens are asking for classes at certain points of the day, but they cannot be offered because of capacity factors. Ms. Heal agreed. Most members want to begin their leisure activities when they get off work, and that is a very busy time at the Recreation Center. Mr. Lecklider suggested that the City offer daytime-only memberships to residents -good only to 6:00 pm. That would suit some --perhaps those who work second shift. Ms. Heal agreed. Senior residents use the Recreation Center in that manner now. Garage Sale Permit Mr. Kranstuber stated that the City does want to recover its cost when a developer takes out a permit for a PUD -- there is no reason for the City to subsidize a developer, Mayor's Court or a Finance Committee December 1, 2003 Page 6 wide range of similar activities. However, the City has always been less eager to charge for that which its own residents use. In that case, the City should not try to recover costs. Mr. Lecklider inquired if the cost of garage sale permits has been increased. Ms. Grigsby stated that the cost has been $2.00/permit since the late 80's. The proposal is to increase the cost from $2.00 to $5.00 for the permit, with a $1.00/sign charge. Ms. Chinnici-Zuercher stated that companies could place signs whenever they want; however, a resident cannot set out a small sign without a permit and a fee. Ms. Grigsby stated that is true. For the most part, the corporate community's signs are illegal, and are often removed. Much of the reason for the garage sale permit and sign charge is a safety issue. The information is shared with the police department, so that they can be aware of any traffic and parking issues. Mrs. Boring stated that there was also a desire to regulate the number of garage sales that were occurring each year, sometimes several by one person. A limitation of two garage sales per person per year was imposed. There was no further discussion. The meeting was adjourned at 6:50 p.m. Clerk of Council