The Foothills Park and Recreation District may not be out of the woods financially in every respect, but thanks to a relentless program of penny-pinching, belt-tightening and frill elimination, the district has managed to keep projected 2013 operating expenses almost even with 2009 outlays.
The down side is that the district is not keeping up with long-range maintenance needs and has been spending only $400,000 annually on capital equipment and capital repairs since 2009, compared with the estimated $4 million a year needed to keep pace with aging parks, trails, facilities and equipment.
By using some reserves and after paying off some debt, the district will be able to raise the amount spent on capital to $980,000 in 2013. It has not yet been decided which areas of need will be funded.
According to the proposed budget, expenses in 2013 will total $15,974,000, or an increase of $102,000 compared to 2009, executive director Ron Hopp told the audience at a board meeting Oct. 23.
If you take into account normal inflation of 3 percent per year, the expense number should have been about $18.5 million or $2.6 million higher after four years, Hopp said.
“The staff has done a fantastic job of streamlining. That’s what government has to do — hold the line on expenses,” Hopp said, recalling that when he joined the district in 2008, the budget told a different story. “We were wondering how we were going to keep the doors open,” he said.
To bolster his statement about the collective cost-cutting, after the meeting Hopp produced a list seven pages long and single spaced. It included cuts both substantial (like eliminating three management positions) and trivial (like not providing coffee and paper plates in the employee kitchen).
From 2008 to 2011, some district efficiencies included: changing banks to reduce fees; reducing the budget for conferences and meetings; eliminating board meeting dinners; reducing the size of the catalog by half the number of pages; and purchasing paper towels at a discounter instead of an office-supply store.
The district has asked for volunteers to “adopt” various parks and trails and recruited community members to help build playgrounds.
There is not much more room to cut, said Hopp, who pointed out that there isn’t enough money for all needed repairs. The district faces $45 million in needed improvements in the next 10 years, based on an internal analysis from two years ago.
“The district is in fair but worsening financial health going into the 2013 budget year, and there remain financial issues on the horizon … including funding of a meaningful capital repair program for aging facilities and a replacement program for capital equipment,” Hopp said in his remarks.
Projections indicate “growing operational deficits over the next five years and beyond due to inflationary pressures and increasing costs of deferred capital improvement.”
“Without the passage of a mill-levy increase or the identification of significant additional revenue sources, the district will be forced to implement significant reductions in the future,” Hopp said.
Operating revenue, expenses
The 2013 draft budget shows total operating revenue of $21.9 million, an increase of 4.4 percent, or $932,049, compared to $21,048,787 in 2012.
Total operating expenses (including debt repayment) will be $20,688,861 in 2013, an increase of 5.5 percent, or $1,084,328, compared to $19,604,533 in 2012.
Total debt payment in 2013 is $3,411,742, an increase of $374,303, compared to $3,037,438 in 2012.
Bond payoff in 2013
In 2013, the district will pay off the remaining 2005 lease debt of $419,355, saving $151,000 in interest and principal per year for three years. The money to pay off the lease debt comes from the reserve fund, which stands at more than $5.3 million.
Reserve fund status
Since the end of 2007, the district has grown the reserve fund to more than $5.3 million, an increase of $3.6 million from $1.7 million at the end of 2007. (An earlier article incorrectly stated that the reserve was $7.2 million currently.) The 2013 budget calls for using $419,000 of the reserve fund to pay to retire debt and $300,000 to help pay for capital improvement projects.
Employee head count
The district has 100 full-time employees, 356 year-round part-time workers, 144 seasonal employees and 60 subs for a total of 660 employees as of September 2012. In 2012, there were 100 full-time and 350 year-round part-time employees, 73 seasonal and 89 subs for a total of 612 employees. On Jan. 1 2009, the district had 97 full-time employees, 344 part-time year-round, 97 seasonal and 11 subs for a total of 649 employees.
As proposed in the 2013 budget, all employees who receive a “meet expectations” on their evaluations will receive a 2 percent increase; “above expectations” will receive a 3 percent increase; and “exceeds expectations” will receive 5 percent. The last wage increase was Jan. 1, 2011. Total wages have decreased by $189,000 since the 2008 budget, while the head count remained relatively flat.
The total for medical and dental insurance is $949,312 in the 2013 budget. The district pays $664,154, or 70 percent, and employees pay $285,167, or 30 percent. Medical increased 7.4 percent over 2012 and dental was up 6 percent, with the total cost split 50-50 between the district and full-time employees participating in the district’s insurance.
Capital equipment and capital improvement
The 2013 budget includes about $980,000 in capital equipment replacement and repairs, funded from reserves and operations. No major new facilities are planned.
Long-term debt yearly payments
Total amount is $4.75 million.