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Page 2 of 5 <br />DISCUSSION <br />Cost Recovery Model Update <br />Given the City’s current financial challenges, it is essential that the Library and Recreation <br />Department adjust its cost recovery targets. Despite limited resources, these adjustments will <br />help ensure the continued delivery of high-quality programs and services. By updating the <br />recreation categories and more carefully balancing service fees with General Fund subsidies, <br />the department can continue to serve the community in a responsible and equitable manner. <br /> <br />As part of ongoing efforts to ensure fiscal sustainability and high-quality service delivery, staff <br />re-evaluated the existing cost recovery model to account for new operational realities. <br />Changes to program-related costs, including electricity usage and facility maintenance, along <br />with a growing need to identify new revenue streams to help keep programs available to the <br />community, necessitate updates to the MFS. The proposed MFS updates balance General <br />Fund subsidies for programs and services with significant community impact, with higher fees <br />for those programs that bring more benefit to the individual participant. <br /> <br />The proposed updates to the MFS (Attachment 2) maintain the foundational principles of <br />equity and community benefit while incorporating greater flexibility and clarity around how <br />services are funded and supported. This updated framework will continue to serve as a key <br />tool for program planning, budgeting, and resource allocation, helping ensure that the <br />department remains responsive to community expectations and is fiscally resilient. <br /> <br />As the first step in updating the cost recovery model, staff established a new set of service <br />categories (Attachment 3) to better categorize the full range of recreation offerings. These <br />categories group programs based solely on their purpose rather than participant demographics <br />or delivery method. For example, the creation of a “Beginner/Recreational Program” category <br />allows all programs designed for introductory-level participation to share a common max <br />subsidy percentage, regardless of the participants' age or individual values. <br /> <br />This purpose-driven approach eliminates arbitrary or inconsistent goal setting, such as <br />determining subsidy levels based on participant age, gender, or other non-programmatic <br />factors. It also helps guard against subjective decision-making influenced by special interests <br />or perceived social value, promoting a more equitable and objective fee-setting process. <br /> <br />Field Rental Fees <br />Field rentals have been assessed using the same cost recovery methodology applied across <br />all programs and services. One category, co-sponsor groups, currently receives the highest <br />level of subsidy for any rental group. Historically, co-sponsor sports groups were not charged <br />for field use, resulting in a fully subsidized service. <br /> <br />On February 4, 2025, City Council approved a new hourly rate for natural and synthetic turf <br />fields for co-sponsor groups. While still highly subsidized, this rate represents an initial step <br />toward cost recovery. The intent is to introduce the cost gradually without placing financial <br />strain on the user groups. <br /> <br />Staff consider the current rate transitional and will evaluate the potential for a lower subsidy in <br />the future, aligning this category more closely with long-term cost recovery goals while <br />continuing to support accessible community sports programming. <br /> <br />Page 14 of 29