June 27, 2006
SUBJECT: Confirm City Council’s Intent related to Use Fees for Plaza Del Sol
REPORT IN BRIEF
The purpose of this report is to confirm Council’s intent related to the Use Fees for the Plaza del Sol.
Staff recommends Alternative #1: Confirm Council’s intent to consider the Study Issue “Review Rental Fees for Plaza del Sol” this fall for possible study in 2007.
The Parks and Recreation Commissioners were notified of this agenda request on June 23, 2006 but due to short notice, did not have the opportunity to make a recommendation to Council on this report.
BACKGROUND
In December 2005, City Council considered RTC #05-358: Develop Exclusive Use Permit Policies for Sunnyvale Parks and Open Space – Study Issue. A part of that report addressed whether or not Council wanted to designate Plaza del Sol as a site that would be available for Exclusive Use Permits and to determine whether to establish specific uses, capacities and/or time limits for the Plaza. Ultimately, Council took action to approve the Plaza as an area available for Exclusive Use Permits as detailed in Municipal Code 9.62.120. Fees were established administratively by City staff in accordance with Council Policy.
In setting the fee, staff conducted a market survey to determine what was being charged for comparable facilities and found that there were no facilities comparable to the Plaza. Therefore, staff established an hourly rental rate based on the size of the plaza open space and ‘in line’ with charges for the exclusive use of other recreation facilities such as the skate park. Since both the skate park and plaza are easily accessible public amenities, the goal was to establish a fee that would allow for use of these sites for Community-wide events, while at the same time, discourage small rentals that could potentially impact public access on a regular basis. Based on this, the fee was established at $200 per hour or $800 per day.
During the City Budget Workshop on May 23, 2006, staff was asked to prepare a Study Issue paper that would evaluate the current rental fee of $200 per hour for the Plaza del Sol. This study issue would be considered by the Council in the fall of this year, along with all the other potential issues, for possible study in 2007.
On June 13, 2006, the City Council held a public hearing on the Recommended Fiscal Year 2006/2007 Budget and Resource Allocation Plan which includes the recommended FY 2006/2007 Fee Schedule. During the public hearing, Council did not direct any changes to the Fee Schedule related to the Plaza del Sol. (See Attachment A: Excerpt from Unapproved Minutes of June 13, 2006 City Council Meeting.)
On June 20, 2006, during its annual budget adoption, Sunnyvale City Council unanimously approved the Recommended Fiscal Year 2006/2007 Fee Schedule. No new fees were established by Council for the Plaza del Sol so fees for the use of the Plaza continue to be set administratively (as are all other recreation program and facility use fees, excluding golf fees.)
On June 22, 2006, Mayor Swegles requested that Use Fees for the Plaza Del Sol again be agendized for consideration by City Council during its public meeting on June 27, 2006.
EXISTING POLICY
Open Space and Recreation Sub-Element Policies:
B: Programming:
3. Develop such fiscal practices as pricing, fee structures and cost recovery targets for open space and recreation programs and services consistent with the City’s Fiscal Management Sub-Element policies.
Fiscal Sub-Element Policies:
GOAL 7.1A: REVENUE: MAINTAIN AND ENHANCE THE CITY'S REVENUE BASE.
Policy 7.1A.1. Revenue base: Maintain a diversified and stable revenue base for the City
7.1A.1i. Establish user charges and fees at a level closely related to the cost of providing those services.
7.1A.1j. Adjust user fees annually so as to avoid major changes in them.
7.1A.1k. For each enterprise fund, review user fees annually and set them at a level that will support the total direct and indirect costs of the activity.
DISCUSSION
The purpose of this report is to confirm Council’s intent related to the Use Fees for the Plaza del Sol. The Plaza is an area approved by City Council for Exclusive Use Permits and it is treated similar to the other park and recreation facilities that receive special use permits from the Recreation Division, for a set user fee.
The Fee Schedule approved as part of the Recommended Fiscal Year 2006/2007 Budget and Resource Allocation Plan states in Section 6.02 under Activity and Facility Use Fees, "The Director of Parks and Recreation is authorized to administratively establish Activity and Facility Use Fee Schedules for recreation activities and services not otherwise specified in the (fee schedule) document." Schedules are established based on market conditions and City Council adopted policies to ensure fairness and accessibility while attaining fiscal self-sufficiency. The only fees directly established by City Council relate to Golf.
Typically, Council considers changes to its policies through the Study Issue process so that the impact of a policy change can be discussed and all related issues can be thoroughly reviewed. This would include impacts to the Community Recreation Fund, revenues to support programs and special events, and other impacts should services need to be increased or decreased to accommodate a change in fees. The study issue process would provide an in-depth opportunity to solicit public input and Commission recommendations, depending on the desire of Council. A copy of the pending Study Issue is attached. (Attachment B: Proposed New Council Study Issue, PRD-04 Review Rental Fees for Plaza del Sol)
FISCAL IMPACT
Any fiscal impact to the Community Recreation Fund would be dependent on Council’s action in response to this report. There is no fiscal impact should the study issue be approved for 2007. Should Council decide to set a use fee for the Plaza del Sol, the ramifications of that decision and its fiscal implications would not be known until the new fees are determined by Council. Since the current fees for the Plaza del Sol, of $200 per hour or $800 per day, were first set in December 2005, staff has had little time to review the impact of those fees or consider adjusting them. This, too, would be included in the analysis of any future study issue on this subject.
PUBLIC CONTACT
Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, publication of the Council agenda in the San Jose Mercury News, 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.
ALTERNATIVES
1. Confirm Council’s intent to consider the Study Issue “Review Rental Fees for Plaza del Sol” this fall for possible study in 2007.
2. Establish new fees for the Plaza Del Sol as determined by Council.
3. Other action as determined by Council.
RECOMMENDATION
Staff recommends Alternative #1 above.
Staff recommends that Council follow the established Study Issue process and consider the review of rental fees for the Plaza del Sol as a possible study issue for 2007. Attempts to set the fees in absence of this process could have an unintended impact on the Community Recreation Fund without the benefit of additional information provided by an appropriate review and evaluation.
The Parks and Recreation Commissioners were notified of this agenda request on June 23, 2006 but due to short notice, did not have the opportunity to make a recommendation to Council on this report.
Reviewed by:
David A. Lewis, Director, Parks and Recreation
Prepared by: Cathy E. Merrill, Assistant to the Director
Approved by:
Amy Chan
City Manager
Attachments (pdf)
A: Unapproved City Council minutes of June 20, 2006
B: Proposed New Council Study Issue, PRD-04 Review Rental Fees for Plaza del Sol