07-1: Park Funding Alternatives Presentation — original pdf

Backup

Austin Parks and Recreation Presentation Alternative Park Funding Preliminary Analysis May 19, 2025 Alyssa Tharrett, RA, NCARB, Project Management Supervisor Lauren Gaetano, Project Assistant Liana Kallivoka, PhD, PE, LEED Fellow, Assistant Director OUR CONSULTANTS Trust for Public Land (TPL) • Sam Savin, Associate Director • National nonprofit that works to connect everyone to the benefits and joys of the outdoors • Conservation Finance program that serves as a trusted advisor to design, pass, and implement ballot and legislative measures to fund parks PFM Group Consulting (PFM) • Danielle Scott Parker, Director • Public Finance consultants that support local government leaders and staff in analysis of budget, finances, and operations • Existing City consultant for Financial Services Department • Specialize in consulting for alternative funding to achieve a public benefit COUNCIL RESOLUTION Resolution No. 20241121-072 Directs the City Manager to assemble a team from key City departments (PARD, Financial Services, Law, and others) with assistance of external consultants to explore additional funding sources for parks management, land acquisition, amenities, facilities, and maintenance. Timeline Resolution Launched Progress Report to Council November 21 2024 March 31 2025 Report to Council w/ Recommendation May 31 2025 Previous Studies Project Phases Phase 1: Benchmarking of comparable Park and Recreation Departments Phase 2: Revenue, economic benefit, and landscape analysis Phase 3: Recommendations • PARD internal study in 2019 • Former Parks Board Vice Chair Rich DePalma presented research on Park Districts to the Parks Board Financial Committee in 2021 • Parks Board drafted Recommendation Number: 20211130-B4: Hotel Occupancy Tax (HOT) Use Recommendations in November 2021 COMMUNITY ENGAGEMENT Survey open from March 11 to April 11 Shared via website, with City Council Offices, through partnership newsletters, flyers posted at recreation centers, tabling at programming events, neighborhood newsletters … Full Survey Results 3,559 VIEWS 682 PARTICPANTS 17,303 RESPONSES 821 COMMENTS Two Small Group Discussions, April 22 and 24 15 total attendees https://publicinput.com/Report/ekt551dmm5i Survey Results: Do you support more funding for Austin parks, pools, and facilities? 3% 6% Yes No Unsure 91% Should Austin Parks and Recreation get more money? Are parks a good investment? https://publicinput.com/Report/ekt551dmm5i Economic Benefits of Parks Enhanced Property Values Boosts Tourism Reduces Healthcare Costs Property values can decrease for every foot further from parkland it’s located. Town Lake Metro Park and Zilker Metro Park are two of the Top 10 Most Visited Locations in Austin. Residents who use parks and trails for physical activity save $1,545 for adults aged 18 to 64, and $3,100 for adults over 65 on healthcare annually. Nicholls, S., and Crompton, J. L. (2005). Impacts of regional parks on property values in Texas. J. Park Recreat. Adm. 23 (2), 87–108. Zartico, Mobile Geolocation Data (January–December 2024), based on visitor-to-resident ratios TPL estimates Economic Benefits of Parks (Contd.) Reduces Air Pollution Reduces Stormwater Runoff Supports Economic Development Town Lake Metro Park and Zilker Metro Park are two of the Top 10 Most Visited Locations in Austin ACL netted $550M to the city in economic benefits. The reduction of air toxins by Austin’s green space is worth $6.2M in reduced healthcare costs each year The tree canopy across Austin reduces stormwater runoff by 628 million gallons per year, and intercepts 3.1 million gallons of rainfall across the city Residents spend $168M each year on sports, recreation and exercise equipment which supports 1,319 retail jobs i-Tree. “OurTrees Benefits: Austin, TX. https://ourtrees.itreetools.org/#/report?longitude=- 97.7430608&latitude=30.267153&tab=benefits i-Tree. “OurTrees Benefits: Austin, TX.” https://ourtrees.itreetools.org/#/report?longitude=- 97.7430608&latitude=30.267153&tab=benefits Esri Business Analyst. “Sport and Leisure Market Potential: Austin, TX” 2024 Data. General Fund Allocation All City Fund Allocation PARD Other Dept. 9.5% PARD Other Dept. 2.4% 90.5% 97.6% PARD FY24 Operating Budget: $137M $1.4B City General Fund Total $5.9B All City Funds How much money does Austin Parks and Recreation spend? Where does it come from? Austin’s Trust for Public Land Park Score ParkScore is an annual ranking of the park systems in the 100 most populous U.S. cities. Austin is ranked 44 out of 100 in 2024. 2025 results will be out May 21st Lower ranking is considered a better ParkScore ACREAGE 20% ACCESS 20% AMENITIES 20% INVESTMENT 20% 57 59 31 76 EQUITY 20% 45 Out of 100 points Out of 100 points Out of 100 points Out of 100 points Out of 100 points Higher numbers reflect a better total ParkScore If Investment is our highest metric, where is the money going? FY2023 Total Park Expenditures Per Capita Operating & Capital Expenses $800.00 $700.00 $666.86 $600.00 $500.00 $400.00 $300.00 $200.00 $100.00 $0.00 $442.75 $324.14 $259.83 $207.12 $200.82 $170.28 Atypical expenses that may inflate Austin’s number: • Forestry services • Cemetery services • Internal transfers • Graffiti abatement • Homeless response • Emergency Sheltering • Museums and Cultural Programs $148.79 $129.36 $108.21 San Francisco, CA Seattle, WA Minneapolis, MN Atlanta, GA Austin, TX San Diego, CA Boston, MA Dallas, TX San Antonio, TX Fort Worth, TX National Comparators Best Practice Cities Texas Comparators Operational Funding Diversification Funding Diversification for Maintenance and Administration: Austin vs. Benchmarks and the 100 Largest Cities 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Austin is well below peers in the number of funding sources for operational programs and services Average, Comparator Group Austin Average, 100 Largest Cities Primary City Agency Other Public Agencies Special Purpose Public District Private Source: Trust for Public Land City Park Facts, 2024 Survey Results: How would you prioritize spending additional money raised? 200 180 160 140 120 100 80 60 40 20 0 Add Amenities New Facilities Park Maintenance More Programming Other Purchase Land Renovate Facilities First Choice Second Choice Third Choice How does Austin Parks and Recreation spend money? https://publicinput.com/Report/ekt551dmm5i Austin Parks and Recreation FY23 Operating Budget Internal Transfers: Payments to other City Departments like CTM, HRD, FSD, CDS, Fleet, etc. Support Services: HR, Finance, IT, Marketing, Community Engagement, Planning, Development Maintenance: Aquatic Maintenance, Grounds Maintenance, Land Management, Facility Maintenance, Forestry, Homeless Response Community Services: Programming, Lifeguards, Athletics, Environmental Centers, Museums and Cultural Centers, Recreation Center Staff, Outreach Programs, etc. Cemetery Operations, 3.1% Internal Transfers, 11.4% Support Services, 12.5% Community Services (Programming), 42.3% What spending category is the highest percentage of the budget? PARD spent $96.7 million of the $137 million budget on personnel costs in FY2024, the largest and fastest growing expenditure category Maintenance, 30.7% How do we compare to other cities? FY23 Total Spending by Category Source: Trust for Public Land City Park Facts, 2024 Capital & Land Acquisition Programming Maintenance / Administration 19.2% 16.1% 64.7% 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 31.8% 31.1% 21.9% 34.2% 28.9% 9.2% 12.2% 25.9% 18.2% 24.1% 18.7% 35.2% 46.4% 8.6% 59.0% 56.7% 52.2% 47.6% 47.0% 46.1% 45.0% 22.7% 42.3% 30.7% 39.6% 37.5% 22.9% Survey Results: Which funding source do you think the Department should focus on? Please rank in order of most preferred to least. 300 250 200 150 100 50 0 Adding New Fees Increasing Current Fees Increasing Taxes New Dedicated Funding First Choice Second Choice Third Choice How can Austin Parks and Recreation get more money? https://publicinput.com/Report/ekt551dmm5i Funds with restricted uses Data source: Trust for Public Land City Park Facts Survey, 2024 and LandVote Database How do other cities fund their parks? City Special Purpose Public Districts Partnerships Bonds Dedicated Funding Sources Atlanta X – Atlanta Beltline Incorporated; Atlanta Downtown Improvement District Boston X – Massachusetts Port Authority Dallas X – Klyde Warren Park District Fort Worth Minneapolis San Antonio X – Hemisfair Park Area Redevelopment Corporation San Diego X - San Diego Unified Port District San Francisco Seattle X – Presidio Trust X – Port of Seattle Austin X – Onion Creek Metro Park District X X X X X X X X X X X X X X X X X X X X Sales Tax for Belt Line Dedicated % of Property Tax Tree Fund 1% Property Surcharge Tax (Community Preservation Act) Council Resolution for Dedicated Minimum Parks Funding via Property Tax and Discretionary Funds Sales Tax for Linear Creekways Parks Development Environmental Services Fee - $1.50 Parks and Open Space Fund Codified in Municipal Code Seattle Park District (primary city agency) Real Estate Excise Taxes Survey Results: Rank options for new fees in order of which you would prefer 140 120 100 80 60 40 20 0 Utility Fee Non-Resident Rec Center Admission More Pools More Parks Perk Memberships More Paid Parking First Choice Second Choice Third Choice https://publicinput.com/Report/ekt551dmm5i Fees Enterprise vs. General Fund Enterprise Fund Department or service that is financially self-sustaining. Revenue stays with the Department or service. Enterprise Departments • Austin Energy • Austin Water • Austin Resource Recovery • Austin Convention Center • Austin-Bergstrom International Airport • • Watershed Protection Transportation and Public Works PARD Enterprise Services • Golf General Fund Department or service that receives most of their funding through the City’s General Fund. General Funds come from non-dedicated taxes and fees. Revenue collected usually goes back to the General Fund. Some fees may be kept via a “Special Revenue Fund” as approved by Council. General Fund Departments • Austin Parks and Recreation • Austin Public Library • Austin Public Health • Austin Animal Center • • Municipal Court • Housing • Planning Fire, Emergency Medical Services, Police Neither Enterprise nor General Fund accounts can charge more than 100% Cost of Service for any fee. Fee Examples Fees make up 11.5% of PARD’s General Fund budget. e r o M t c a p m I s s e L • Parks Maintenance Fee (Utility Bill Fee for all residents) • Drainage Fee (Property owner fee based on impervious cover) • Golf Fees** • Cemetery Fees* • Park Entry / Gate Fees ** • Licenses/Use Permit Fees • Site Plan Review Fees • Special Event Fees / Application Fees* • Non-resident Fees* • Perk Fees* • Recreational Use/Program Fees (cost basis recovery limited)* *Fees go back to the General Fund. **Fees are restricted for use only at site / program collected Survey Results: Rank options for taxes in order of which option you would prefer most Ad Valorem Tax District Tax Bonds Parks/Rec Tax 200 180 160 140 120 100 80 60 40 20 0 First Choice Second Choice Third Choice Taxes Tax Examples • Sales tax on goods and services (Soda, Lottery, Plastic Bags, etc.) • It is not possible for entities within the City of Austin to add additional sales and use taxes, since the City is already at its legal limit. • Current State laws make several of these taxes illegal. Require legislative changes. • Hotel Occupancy Tax • General park maintenance is not an eligible use of HOT revenues. • Can be used for park-related expenses at historical sites (PARD is already utilizing this). • Income Tax • Texas Constitution does not allow. • Tax Increment Financing (TIF) Tax • Specific reinvestment zone that must meet several requirements such as substantial deterioration, and is created to finance improvements and stimulate development. Tax Examples (Cont.) • Ad Valorem Property Tax • Voter approval needed to increase property tax over 3.5%, the current level. • State law SB2 caps on revenue growth hinders the City’s ability to dedicate property taxes to specific uses. • Public Improvement Districts (property taxes for a set specific land area) • 50% property owner approval. • Not common for them to focus exclusively on funding parks. • Park Districts (local property taxing authority) • Dedicated revenue stream to parks maintenance, improvements, and other costs. • In Texas, county governments can establish after a public hearing, but Cities are not explicitly authorized to do the same. Establishment of a quasi-parks district structure to create a Local Government Corporation would be needed to create park districts in Austin. Survey Results: Rank options for Preferred Dedicated Funding in order of which you would prefer most to least 200 180 160 140 120 100 80 60 40 20 0 More Donation Paths Non-Profit Partners Sponsorships Other First Choice Second Choice Third Choice Dedicated Funding Dedicated Funding Examples • Partnerships for Public Purpose (nonprofit) • Foundations: Program or project-based. Raise funds for approved park improvements and activities, including city-wide priorities utilizing grants and donations. • Conservancies: Long-term, site-specific partners supporting operations, maintenance, and programming through dedicated fundraising. • Neighborhood Groups: Focused on stewardship and small-scale improvements in local parks. • Sponsorships • Historically not allowed, but City Law confirmed there is now a possible path forward. • Donations • Allowable, but with challenges related to City procedures that impact community trust. • Volunteers • Human resource that could measurably reduce financial resources. Strong community interest. All require considerable overhead to manage effectively and through the proper channels. Limitations exist in staff availability for oversight. Next Steps • June: Executive summary memo to City Council with report • Council Budget Approval Process – July thru August QUESTIONS