2025-01-16 January 16, 2025 Committee of the Whole Meeting Minutes - FINAL
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January 16, 2025 6:00 PM City of Smyrna Mayor and Council Meeting 2800 King Street SE Human Resources Training Room Page 6 of 9 B. COW2025-002 Review of the Parks and Rec Financial Sustainability Report – Richard Garland Richard Garland, Community Services Administrator, discussed the Parks & Recreation Financial Sustainability Report. Purpose Smyrna Parks and Recreation’s Cost Recovery Policy intends to create organizational resilience by way of logical, intentional, and thoughtful guidelines for investment and spending decisions. The strategy encourages tax investment and revenue generation strategies and practices that are fair, equitable, and responsible. This policy is necessary to ensure the department’s financial stability in both the near and long term. The Cost Recovery Policy will guide investment and spending choices as the department responds to economic realities, growth expectations, competing priorities, demographic shifts, evolving community needs and interests, and climate impacts. Policy Statement Smyrna Parks and Recreation’s Cost Recovery Policy grounds cost recovery expectations and the spending of taxpayer dollars in a philosophical underpinning that affirms a commitment to equitable investment, financial discipline, and long-term fiscal health. The department’s annual budget ultimately determines the amount of taxpayer support that can be made available for park and recreation services which results in understanding the degree to which subsidy investment can be made and to which services, and the degree to which user fees will be assessed and to which services. Cost Recovery/Subsidy Cost recovery refers to offsetting the costs (expenses) of delivering services by way of revenues generated from fees and charges, sponsorships, donations, grants, and other alternative revenue streams. Alternatively, subsidy represent a tax source. It is granted by a governmental entity; typically to remove some type of burden, and often considered to be in the overall interest of the public. It is also given to promote a social good or an economic policy. For example, a cost recovery level of 75% simply means that for each dollar spent on a service, 75-cents are generated from a revenue source (i.e., fees) with the remaining 25- cents covered by subsidies (i.e., taxes). Service Categories The development of categories which include like services are important when it comes to justifiable and equitable allocation of subsidy, cost recovery levels, and assignment of budget and general ledger lines to account for a category’s fiscal performance. The benefits of this type of approach are two-fold. First, it is inefficient for the department to determine cost recovery expectations by each individual service including facility, activity, or event. Secondly, categorizing by “type of service” or “likeness of service” discourages attempts to determine fees and charges (and therefore cost recovery decisions) based upon special interests, age-based services, or individual values. Smyrna Parks and Recreation provides many services annually to the community. The following Service Categories represent the department’s service menu and include Service Category definitions as well as example services.