June 21, 2005

SUBJECT:  Evaluate Options for Administration of Fee Waiver Program (05-198)

REPORT IN BRIEF

In August, 2004, City Council approved an agreement between the City of Sunnyvale and the local non-profit, Sunnyvale Community Services. The purpose of the agreement was to provide for the continued administration of the City’s Recreation Fee Waiver Program from July 1, 2004, through June 30, 2005. The report to Council that accompanied the agreement stated that the process for administering the fee waiver program was being studied to determine if there may be a more cost effective way for the program to be operated and that a report would be brought back to City Council before the end of FY 2004/05. Please refer to Attachment A, Report to Council 04-275, Agreement Between City and Sunnyvale Community Services for Support in the Delivery of Recreation Services.

The purpose of this report is to provide City Council with an update on City staff’s review of the administrative tasks required to support the Recreation Fee Waiver Program and to request Council direction on whether to extend the existing agreement with Sunnyvale Community Services.

Depending on the alternative ultimately selected by City Council, the fiscal impact may range from approximately $10,000 - $45,575.

Staff recommends that City Council amend the existing agreement with Sunnyvale Community Services to provide the option for a 30-day notice for termination and pay Sunnyvale Community Services on a monthly basis and up to a maximum of $10,000 to administer the Recreation Fee Waiver Program for FY 2005/06 and continue to evaluate the program and provide recommendations on an annual basis via the City manager’s recommended budget. Payments to be made in equal monthly installments of $833.33.

On June 8, 2005, the Parks and Recreation Commission reviewed a draft of this report and recommended Alternative No. 1, City Council approve the amended agreement with Sunnyvale Community Services per Attachment D., pay Sunnyvale Community Services on a monthly basis and up to a maximum of $10,000 to administer the Recreation Fee Waiver Program for FY 2005/06 and continue to evaluate the program and provide recommendations on an annual basis via the City manager’s recommended budget.

On June 15, 2005, the Arts Commission reviewed a draft of this report and recommended Alternative No. 1 as well.

BACKGROUND

The City’s Recreation Fee Waiver Program was created in 1981 to provide economically disadvantaged families with access to City recreation programs and services. With the establishment of the Community Recreation Fund in fiscal year 1991/1992, and development of a marketing based pricing strategy for recreation programs and services, the value of the fee waiver program as a safety net for low-income families was made more important.

Since the establishment of the City’s Recreation Fee Waiver Program, Sunnyvale Community Services has provided administrative support for the program; however, up until August 2004, there had not been a written agreement between the two agencies formalizing this arrangement. On August 10, 2004, City Council approved an agreement with Sunnyvale Community Services to formalize this arrangement, capture the relationship between the City and Sunnyvale Community Services and our roles in the administration of the City’s Recreation Fee Waiver Program. The agreement calls for Sunnyvale Community Services to provide administrative support to the City’s Recreation Fee Waiver Program from July 1, 2004 to June 30, 2005, in exchange for a payment of $10,000.

The payment for administrative services covers the portion of Sunnyvale Community Services staff and volunteer time that is required to explain the Fee Waiver Program to qualified applicants, and monitor and track the applicants’ use of the fee waivers for various recreational programs in which they choose to participate. Sunnyvale Community Services estimates that up to 1,000 families apply for fee waivers each year, and the administration of this program can require two individuals at different times to meet with the applicants and explain the programs using multiple languages. A significant number of these applicants are referred to Sunnyvale Community Services by the youth sports leagues in each year.

The $10,000 payment for fiscal year 2004/2005 was approved to provide for administrative services until other options for administering the Recreation Fee Waiver Program could be fully examined. These options include various ways of using City staff to perform those services that Sunnyvale Community Services has previously provided, and evaluating the agreement with Sunnyvale Community Services for these services in future years.  A cursory review of options has revealed that some adjacent communities provide similar programs to waive participant fees for the children of low income families.  Often these programs are administered by staff and take advantage of low-income qualifications completed by school districts.  That is, districts tend to examine income documents and provide each family with written proof of children(s) right to participate in either free or reduced cost lunch programs.  These lunch program letters may be used to qualify school-age participants for Recreational Fee Waivers.  Further review of these options, as well as a thorough discussion of criteria for those that are allowed to use Recreational Fee Waivers (youth, seniors, low-income, very low-income, etc.) is anticipated with a proposed 2006 Study Issue. Please see Attachment B, Proposed Council Study Issue PRD – 03.

EXISTING POLICY

DISCUSSION

Current Practice

Sunnyvale residents may apply for a full or partial fee waiver for Parks and Recreation Department programs by visiting Sunnyvale Community Services offices at 725 Kifer Road in Sunnyvale. Applicants are screened by Sunnyvale Community Services staff and volunteers for eligibility in the Recreation Fee Waiver Program and eligibility is determined by verification of household income and the number of family members residing in the home. Sunnyvale Community Services staff explain the Recreation Fee Waiver Program to eligible Sunnyvale residents, issue fee waiver authorization forms and track the applicants’ use of fee waivers for various recreation programs in which they choose to participate. Once the maximum fee waiver amount of $250 per person has been reached in a fiscal year, no additional fee waivers are issued until the beginning of the next fiscal year. Fee waiver applicants must go through the eligibility screening process once each fiscal year. There are no limitations currently placed on the number of individuals that Sunnyvale Community Services may qualify for the Recreation Fee Waiver Program each year.

Once eligibility has been determined, fee waivers may be used for a wide variety of Sunnyvale recreation programs. The list includes but is not limited to Recreation classes, trips and excursions, one-time fee programs (theatre performance, specials events, etc.) and activities sponsored by officially recognized Community Partners under the Relationships with Outside Groups Legislative Policy, including youth sports programs.

Proposed 2006 Study Issue

This Report to Council is provided to present options for administration of the Fee Waiver Program for FY 2005/06.  Additional elements and criteria should be examined in greater detail.  Attachment B. reflects a Study Issue proposed to evaluate the effectiveness and efficiency of the Recreation Fee Waiver Program and discusses possible changes to criteria for the program. Specifically the study should include: the types of activities and programs eligible for fee waivers, total amount available for each participant per year, age groups criteria (seniors, youth, teens and/or adults), consideration for disabled persons, and whether the budgeted amount for waivers should be adjusted as the general economy moves in positive or negative directions.

Study Issue papers will be considered by Council during the yearly workshop and hearing in fall 2005.  If selected by Council, the outcome of this study could potentially affect the demand for and use of the Recreation Fee Waiver Program either reducing or increasing the demand for administrative support.

Future Administration of Recreation Fee Waiver Program Options

1.     Continued Support from Sunnyvale Community Services

Recreation staff has spoken with the Executive Director of Sunnyvale Community Services to determine whether or not the agency would consider returning to terms similar to the previous (unwritten) agreement and continue to screen fee waiver applicants for eligibility at no cost to the City. Sunnyvale Community Services has responded that they estimate the cost to their agency for screening fee waiver applicants and providing administrative support for the Recreation Fee Waiver Program will be approximately $45,000 this year. The Sunnyvale Community Services Board of Directors has voted to continue their role in the City’s Recreation Fee Waiver Program with a minimum contribution from the City of $10,000 to offset a portion of their costs. (Please refer to Attachment C, Letter from Sunnyvale Community Services dated March 28, 2005.)

Staff has updated the current year Agreement with Sunnyvale Community Services to reflect administrative services for July 1, 2005 through June 30, 2006. Please see Attachment D, Agreement between City and Sunnyvale Community Services. Additionally, this Agreement notes equal monthly payments with a maximum of $10,000 to be paid for this time period. Termination with thirty-days notice may be accomplished if it is determined, after further study, that alternate means of administration is desirable.

2.     City Staff Perform Administrative Tasks Previously Handled by Sunnyvale Community Services

Based on Sunnyvale Community Service’s estimate of the time spent with each client and the issuance of fee waiver authorization forms, staff projects that the Recreation Division would require 1,180 hours to assume the tasks currently required to support the Recreation Fee Waiver Program in its current form. The most significant challenge would be working with applicants who do not speak English or speak English as a second language. There is currently a contract established for the Department of Public Safety with a company that provides interpreting assistance at a cost of $1.65 per minute. The account may be expanded to include service to the Parks and Recreation Department if necessary. Please see Fiscal Impact section for cost estimates.

3.     Future Opportunities

As a part of the City’s infrastructure replacement program, Recreation staff members have worked closely with staff in the Information Technology and Finance Departments to research and select a new registration and reservation software program for the Parks and Recreation Department. Council will address the purchase of this system separately as an award of contract for purchase of related replacement equipment and software.  Staff researched several software programs and benchmarked with other municipal agencies to determine the software package that would best meet the needs of the City of Sunnyvale. As part of the required specifications the approved software will have components that would also allow City staff to administer the Recreation Fee Waiver Program. 

Should Council approve the replacement systems as researched by staff, the software would allow City staff to efficiently assume the majority of administrative tasks that are presently completed by Sunnyvale Community Services caseworkers as early as spring/summer 2006.

These tasks include:

• Maintaining records of each eligible Sunnyvale resident’s fee waiver account by fiscal year and the amount(s) spent during the year.
• Monitoring and tracking eligible residents’ use of fee waivers for various recreational programs in which they chose to participate. This will be done by issuing an identification card once eligibility has been confirmed.
• Registering clients directly at the Community Center speeding processing as clients will no longer have to go to Sunnyvale Community Services for a fee waiver authorization form.

Unfortunately, the new registration and reservations system would not assist City staff in screening the eligibility of fee waiver applicants and this can be a time-intensive process particularly if the applicant does not speak English or if English is their second language. As mentioned previously there is a service contract that has been established for the Department of Public Safety that provides interpreting assistance. The account may be expanded to include service to the Parks and Recreation Department if necessary. The cost is approximately $1.65 per minute.

Other local Parks and Recreation agencies that handle the eligibility screening for their fee waiver or scholarship programs in-house have reported that often times, individuals will bring their own interpreters with them. Additionally, the Volunteer Office may be able to assist in recruiting on-call interpreters to supplement the staff interpreters in various departments throughout the City who also may be called upon for assistance.

Additional Considerations

The Recreation Fee Waiver Program is funded in Program 642, Recreation Services for Children, Teens, Seniors, Disabled, and Economically Disadvantaged - within the Community Recreation Fund (Fund 525).  As Council is aware, there is a structural imbalance between revenue and expenditures in the Community Recreation fund.  This imbalance stated as Fiscal Strategies, was budgeted at $331,000 for FY 2004/05 and may grow to $650,000 for FY2005/06 as golf and other recreational revenues have declined in this fiscal year.

The overall status of the Community Recreation Fund and the existing structural imbalance between revenues and expenditures is being analyzed and staff has committed to returning to Council with strategies to address the imbalance during the coming fiscal year.  Among other recreational services, administration of the Recreation Fee Waiver Program, the amount of funding for the Program and distribution of the interest from the Dorolou Swirsky Trust Fund will be considered in the context of developing the fiscal strategies to address the structural imbalance in the Community Recreation Fund.

FISCAL IMPACT

1.     Continued Support from Sunnyvale Community Services

Should City Council decide to extend the agreement with Sunnyvale Community Services for an additional fiscal year, the cost to the City would be a maximum of $10,000 to cover the period July 1, 2005 through June 30, 2006.  These funds could be appropriated from those currently budgeted for the Recreation Fee Waiver Program in Program 642 (as in FY 2004/05).  The amount of dollars available for actual fee waivers would be reduced by an equal amount and services to the economically challenged reduced accordingly.

2.     City Staff Perform Administrative Tasks Previously Handled by Sunnyvale Community Services

As mentioned in the Discussion Section of this report, 1,180 additional staff hours would be required to provide administrative services as currently provided by Sunnyvale Community Services.  The cost of the additional staff hours would be approximately $33,200

Interpreting services would likely be required. It is difficult to estimate what the actual costs would be for these services.  In FY 2003/2004, 1,837 fee waivers were actually processed by City staff. If an interpreter was required for even 50% of the fee waivers the cost for these services would be approximately $22,700 based on an estimate of fifteen minutes per waiver. It may be however, that there are ways to reduce this potential cost including the use of volunteer interpreters secured through the City’s Volunteer Services Office. In addition to possible volunteer assistance there are bi-lingual staffs in departments throughout the City who may be called upon to provide periodic assistance when necessary.  For planning purposes, if 500 fee waiver applicants required an interpreter for a transaction lasting fifteen minutes each, the cost would be $12,375. 

Estimated total cost is $45,575

This amount, less the $10,000 currently provided to SCS, would result in a program increase for administrative services of $35,575.  Given that this increased cost is directly associated with administration of the Recreation Fee Waiver Program, these costs could be appropriated from the existing fee waiver budget.  The amount of dollars available for actual fee waivers would be reduced by an equal amount and services to the economically challenged reduced accordingly.

3.     Future Opportunities

As City Council approves the infrastructure replacement of the recreation registration and reservation system and software, staff could assume the administrative functions associated with the Recreation Fee Waiver Program.  Once this system is installed and training is received, the administrative tasks would be automated and there would be limited additional costs to absorb the administration of the Fee Waiver Program.  That is, staff projects that there will be work hours savings with future on-line registrations, thereby making staff available for to perform the eligibility qualifications and other administrative functions

Translation services remain important. As noted above costs for just 500 applicants that require interpretive services are estimated at $12,375. As with item 2 above, the cost for this alternative would depend on the extent to which interpreting services would be required.  Costs for this option would be a minimum of $12,375.

Conclusion

• Currently Sunnyvale Community Services (SCS) provides administrative services, including interpretive services for the Recreation Fee Waiver program at a cost to the City of $10,000 per year.
• Estimated costs for the City to provide services as currently provided by SCS, using City staff is $45,575.
• Infrastructure replacement of the recreation registration and reservation systems in the coming year may allow the opportunity to provide administrative services with City staff at a cost similar to that of SCS in the future.
• The proposed Agreement between the City and SCS for support in the delivery of recreational services (administration of the Recreational Fee Waiver Program) in the coming fiscal year, would allow the City to end the agreement and provide these services by alternate means with thirty days notice to SCS.
• Council will have the opportunity to direct staff to further study additional elements and criteria of the Recreation Fee Waiver program as calendar year 2006 Study Issues are considered in Fall of 2005 (please see Attachment B, Proposed Council Study Issue PRD – 03).

PUBLIC CONTACT

Public contact was made through posting of the Council agenda and report on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the City Clerk’s office, Library, Parks and Recreation Administration office, Corporation Yard, Community Center and Senior Center.

Notice of Commission and City Council meetings regarding this report was also distributed to the “Friends of the Parks and Recreation” mailing list (a list of organizations and individuals who have expressed an interest in parks and recreation issues).

A copy of the report was provided to Nancy Tivol, Executive Director of Sunnyvale Community Services.

On June 8, 2005, the Parks and Recreation Commission conducted a public hearing on this report.

On June 15, 2005, the Arts Commission conducted a public hearing on this report.

ALTERNATIVES

1. Approve the amended agreement with Sunnyvale Community Services per Attachment D., pay Sunnyvale Community Services on a monthly basis and up to a maximum of $10,000 to administer the Recreation Fee Waiver Program for FY 2005/06 and continue to evaluate the program and provide recommendations on an annual basis via the City manager’s recommended budget.

2. Direct staff to provide administrative services for the Recreation Fee Waiver Program with City staff effective July 1, 2005 at a cost of $45,575 to be provided within the existing fee waiver program budget and reduce the amount of dollars available for actual fee waivers by an equal amount.  And, continue to evaluate the program and provide recommendations on an annual basis via the City manager’s recommended budget.

3. City Council take some other course of action not included in this report.

RECOMMENDATION

Staff recommends Alternative No. 1, Approve the amended agreement with Sunnyvale Community Services per Attachment D., pay Sunnyvale Community Services on a monthly basis and up to a maximum of $10,000 to administer the Recreation Fee Waiver Program for FY 2005/06 and continue to evaluate the program and provide recommendations on an annual basis via the City manager’s recommended budget.

On June 8, 2005, the Parks and Recreation Commission reviewed a draft of this report and recommended Alternative No. 1, City Council approve the amended agreement with Sunnyvale Community Services per Attachment D., pay Sunnyvale Community Services on a monthly basis and up to a maximum of $10,000 to administer the Recreation Fee Waiver Program for FY 2005/06 and continue to evaluate the program and provide recommendations on an annual basis via the City manager’s recommended budget.

On June 15, 2005, the Arts Commission reviewed a draft of this report and recommended Alternative No. 1 as well.

Reviewed by:

Curtis Black, Interim Director of Parks and Recreation
Prepared by: Nancy Bolgard Steward, Superintendent of Arts and Recreation

Reviewed by:
Mary Bradley, Director, Department of Finance

Approved by:
Amy Chan, City Manager

Attachments

A. Report to Council 04-275, dated August 10, 2004, Agreement between City and Sunnyvale Community Services for Support in the Delivery of Recreation Services

B. Proposed Council Study Issue PRD – 03, Consider the Effectiveness and Efficiency of the Recreation Fee Waiver Program (.pdf)

C. Letter from Sunnyvale Community Services dated March 28, 2005 (.pdf)

D. Agreement between City and Sunnyvale Community Services for Support in the Delivery of Recreational Services (.pdf)