From recent budget discussions, Steamboat Springs City Council would be better suited to managing, say, a cemetery than a city. City Council’s focus on “managing assets” could be compared to the job of the cemetery manager whose sole job is to efficiently collect fees, cut the grass and position the headstones. Of course, in the case of the cemetery, the “residents” are rather passive users of services unless, by chance, City Council is visited by the walking dead.
City Council should revise its approach to managing the activities of the Parks, Open Space and Recreational Services Department:
The Parks and Recreation Department oversees the provision of certain recreational services to residents and visitors. By definition, these services are nonessential and are provided for the enjoyment, education and development of the participants, particularly our youths. It is difficult to quantify this benefit to the community but it is significant.
City Council appears to consider recreational services more as liabilities because they are “subsidized.” Instead, these functions should be considered for their total revenue creation ability. Most of them attract visitors who spend money here, which generates sales tax revenue. They may not earn a profit on a standalone basis but, collectively, the sales tax base of the city is much richer.
City Council should adopt a preventative maintenance program for each facility because, in the long run, this is the least expensive way to maintain them. Currently, the city defers expenditures and waits for the proverbial crisis.
City Council should request that city management stop arbitrarily allocating indirect departmental overhead to each of the city’s functions. Finance textbooks will tell you that such accounting allocations are misleading and lead to inappropriate conclusions.
City Council should ensure there is proper governance for each facility that includes critical input from the users. Each recreational function should be evaluated by the city on the same level playing field.
In respect of the Tennis Center at Steamboat Springs, where I am a member of the Steamboat Tennis Committee, I note:
The city does not subsidize the Tennis Center by $170,000 as indicated by one City Council member. This figure incorrectly includes utility expenses paid by the concessionaire, inappropriate overhead allocations and non-operational expenses. The city’s subsidy more accurately is estimated at $30,000 to $50,000. Deferred maintenance will increase the city’s subsidy in the future.
There is no ongoing governance of the Tennis Center by the city. A Tennis Committee was formed by players last year to provide feedback as to the effectiveness of operations. As yet, the city does not recognize this committee or require that this committee exist.
Contrary to the impression left at a recent City Council meeting, an increase in fees will not help reduce the city subsidy as the concessionaire retains any increased revenue from fees. In return, the concessionaire agreed last year to pay for all utility costs, saving the city about $50,000 to $100,000 annually.
Recently, the Tennis Center ramped up its marketing efforts: a very active junior program; a competitive adult league play; summer and winter tournaments; and an older group focused on pickleball. Player activity and revenues are up this year.
In a recent survey conducted by the Tennis Committee, more than 90 percent of users rated their experience at the center as good to excellent.
While City Council has challenges balancing its budget, users of the Tennis Center, like other residents and visitors to Steamboat, don’t want to reside in a cemetery. Evaluate recreational services fairly.