Report Prepared by: Christopher Jensen, Director of Parks and Community Services
Title
SUBJECT: Public Hearing to Consider Parks and Community Services Proposed Updated Fee Schedule
REPORT IN BRIEF
Hold a public hearing to consider the proposed Parks and Community Services fee schedule.
RECOMMENDATION
City Council - Adopt a motion adopting Resolution 2025-75, a Resolution of the City Council of the City of Merced, California, approving Parks and Community Services program and service fees.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to conditions other than recommended by staff; or,
3. Deny; or,
4. Refer to the City Manager for reconsideration of specific items (specific items to be addressed in the motion); or,
5. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Charter of the City of Merced, Section 200.
DISCUSSION
Mission and Cost Recovery
Parks and Community Services is called to plan, facilitate, promote, maintain, and develop activities and facilities that enhance the quality of life in the City of Merced. The Department serves through two capacities: direct services such as programs and events and indirect services such as field and facility rentals. In order to provide these services at a level that meets community demand the department employs a cost recovery method through the adoption of fees set by City Council.
Increased Expenses
A significant segment of staffing in the department is made up of part time staff whose positions are funded at or around minimum wage. Increases in these wages have a major impact on expenses of the Department. Since the most recent fee schedule was adopted in 2023, California minimum wage has increased about 10%. Likewise, operational costs for equipment, materials, and supplies have also increased at approximately 10%. Increased resource allocation due to vandalism have also increased costs for field and facility maintenance.
Raising wages coupled with increasing cost to provide public recreation services makes it necessary for the Parks and Community Services Department to increase several fees for programs and services to reduce an increased need from the City’s General Fund.
Direct Services- Program Fees
While the department does its best to recruit volunteers for special events, youth sports and other services, staff are required for nearly all programs and activities to ensure efficient standards of practice, safety, and quality of service. Full-time staff oversee regular and after-hour activities, but at least two part-time staff are needed at various functions to assist with our growing number of participants and attendees. As such the current rate of $80.00 per person, per season is no longer covering the cost of operations for direct services. In example, the program model employed by Parks & Community Services is a 10-week model; two weeks of preseason practices followed by 8 weeks of practices and games (one game, one practice per week at 1 hour each). Divided by the minimum 20 hours of direct service per student per season the $80.00 fee comes out to $4.00 per hour for our services. For comparison, other local recreational youth sports programs are charging an average of $130.00 per season or $6.50 per hour for participation.
The Department has been hard at work to secure additional resources to help cover costs for participation and has contracted with school districts to cover the cost of registration for families. In addition, families outside of Merced City Schools have access to an additional scholarship based on income and family size to ensure equitable access to each family. If Council approves the proposed fee schedule, the department would still be able to scholarship up to 80 families per year or 20 families per seasonal sport. The amended direct services fees would allow the Department to increase it’s cost recovery potential through outside contracts, helping to keep the program affordable while simultaneously covering the current expenses.
It is the recommendation of staff that the new rate schedule include a $100 registration fee for direct service programs. Dividing this new rate by the Departments program model of a minimum of 20 hours of direct service equates to a $5.00 per hour cost for service which is still below the cost of participation in other local recreational leagues. Because our mission is to serve the residents of Merced the Department hopes to maintain a Non- Resident Fee of a 20% surcharge ($120 per season) for serving those outside of the City of Merced.
Indirect Services- Field and Facility Rentals
Contracted services have also increased in cost, widening the gap between revenue and expense over the last two years. The current fees associated with field and facility use cannot support internal nor contracted services to manage recreational facilities. Increasing rental fees for field and gym use allows the City to manage its facilities more effectively to ensure equitable use by renters and the community. Currently, facilities are opened and closed but not regularly staffed due to having to limit the expenses not afforded by fees. This often leads to misused or damaged venues that the City is asked to eventually repair.
Compounding the insufficient rental rates is the model for field and facility rentals which includes a Base rental fee, a non- profit rental fee (50% reduced fee), and a co-sponsored rental fee reduction or waiver. Of specific concern is the non-profit rate reduction of 50% for facility rentals. While well intended, the waived or reduced fees do not result in reduced expenses and due to the administrative costs associated with processing non-profit rate applications, the ultimate cost increases compared to processing base rate facility rentals.
In comparison, while a non-profit rate requires any non-profit organization be given a 50% reduction in fees, a co-sponsored application provides an opportunity to control losses in revenue through budget projections by instituting a cap to co-sponsored events/rentals. This however may produce unintended consequences of perceived favoritism and valuations between requesting entities.
For a simple reference, co-sponsored sport league field rentals include:
• Recreational Soccer Leagues (1 season per Club, 2 total per year) at McNamara and Nannini Soccer Fields
• Recreational Baseball (1 season per year) at Nannini Sports Complex and Hoover Middle School
• Recreational Football (1 season per year) at Joe Herb Complex
In sum, while these activities result in the same expenses as supporting competitive/private programs which pay the actual cost, co-sponsored activities represent a loss of over $20,000 in revenue per year (roughly $5,000 per co-sponsored sport league)
Staff have prepared a more comprehensive report using field and facility use actuals for Fiscal Year 2024/2025 and compared them to what Department revenues would have been without Non-Profit and/or Co-Sponsored rates.
The Addition of Bob Hart Square (Plaza)
Bob Hart Square recently underwent a significant transformation. The area was expanded to include a new event venue (Plaza) with a performance stage to serve as an anchor for downtown activities, celebrations, and performances. While Bob Hart Square in totality is the larger area between Main Street and 16th Street, the Plaza resides in the specific area between the alley and 16th Street. Like the MOAT at Applegate Park, this area will be added to the catalogue of rentable spaces for public and private events through Parks & Community Services. As is the case with any other rental, if the type or scale of the event would ever require space beyond the defined Plaza area, including the use of the greater Bob Hart Square or a street closure, the Department would work with Planning, Public Works, and Police Departments to process that application for Council’s consideration as a request for use of City Real Property.
The City has invested significant resources to plan and build Bob Hart Square with a reservable event space to help mitigate the ongoing request for the use of streets and parking lots for large scale events Downtown. The addition of the Bob Hart Plaza can serve as a great venue to formalize the event location while simultaneously avoiding non intended uses of parking lots and streets downtown. The use of Bob Hart Square Plaza as a routine reservable event space through Parks & Community Services will help accomplish this. Considering other outdoor venues that offer electricity, a stage, and refuse for events, the suggested hourly fee for this Plaza is $125.
While not in this fee schedule but still of significant interest to City Council, the consideration of costs associated with Street Closures should be considered at another juncture as those spaces are not managed by Parks & Community Services.
Summary
In consideration of the details provided, Staff recommend adopting a resolution to institute the proposed Fee Schedule for Parks & Community Services Direct and Indirect Services. The Schedule addresses the gap between expense and revenue currently experienced by the department and adds Bob Hart Square Plaza as a reservable community facility, allowing for more equitable use of community space, effective management of indirect services, and sustainable operation of direct programs and services.
IMPACT ON CITY RESOURCES
No additional appropriation is needed. Adopting the revised fees will increase revenue in the Parks and Community Services operating fund, which will help to fund operations and require less General Fund supplement in the future. This is part of the Fiscal Sustainability plan which was prioritized by the City Council during the adoption of Goals and Priorities for Fiscal Year 2025-26.
ATTACHMENTS
1. Resolution 2025-75
2. Exhibit A- Proposed Fee Schedule
3. P&CS- Public Hearing to Adopt Fee Schedule