Report to: General Committee Report Date: May 10, 2007

SUBJECT: Proposed Restructuring of Recreation Hall Rates

PREPARED BY: Dave Merriman, 905 944-3777 x3787

RECOMMENDATION:

That the report titled Proposed Restructuring of Recreation Hall Rates be received;

And that the proposed Restructuring of Recreation Hall Rates be approved and implemented September 1, 2007;

And that Council approved and authorized the Director of Recreation Services to increase fees annually based on the change in the Consumer Price Index (CPI) with such increases effective September 1 and rounded to the nearest ½ dollar (see Appendix D);

And that By-law 2002-276, a by-law to impose fees and charges for services or activities provided or done by the Town of Markham, be amended to reflect the new rates;

And further that notice to the public is provided in accordance with By-law 2002-275, a by-law to prescribe the form and manner and times for the provision of reasonable notice;

And that Staff be authorized and directed to do all things necessary to give effect to this resolution.

PURPOSE:

The purpose of this report is to receive Council approval to streamline the overall number of existing rates and categories, harmonize all rates, and improve consistency of facility bookings.

BACKGROUND:

Staff were asked to review the existing Hall Rates used for Recreation facilities including Community centres, Older Adult Centres, and Aquatics. A Project Team from Recreation Services consisting of the Customer Service Representatives, Facility Coordinators and the Class Registration Systems Support Coordinator have reviewed the rates. The purpose was to identify opportunities to streamline, harmonize, and improve consistency. A new rate card (Appendix A) is proposed at this time with implementation to occur September 1, 2007.

There are more than 150 hall/meeting room rates in the existing Recreation Policy. This can be reduced to 67 rates. The reduction can be accomplished by the elimination of rates that are not consistent, redundant, without purpose or generally not required or used. This will streamline facility booking without a negative impact on revenue. Fewer rates in the system simplify the process of renting facilities for both the customer and staff.

Presently, 38 rate categories exist that can be effectively reduced to 4 rate categories including Meeting Rooms and Multi-Purpose Rooms which represent the majority of rentals, gymnasium and dance studio. Reducing the number of categories will streamline and improve consistency across the Town and reduce confusion for customers.

Rental areas in the community centres were organized into categories based on criteria including but not limited to size (square footage/dimensions), capacities (fire/occupancy), furnishings, amenities (audio visual equipment), etc. The existing rates for each of the categories were averaged. This average rate rounded to the nearest half dollar, is being proposed as the new rate for all similar areas in each category. Averaging provided the best option to streamline, harmonize and improve consistency across the Town.

The process for rental activities in the Recreation facilities is administered with the Class Facility Booking system and the system has proven very effective. The rate structure currently in place has two types of rates. The two include:

• Resident Rate
• Community Service Group

The Resident Rate is applied to most rentals and provides a reasonable rental rate for residents of the town. Based on 2006 rental activity, the Resident Rate was used to generate approximately 81% of all rental revenue.

The Community Service Group rate commonly referred to as the CSG rate, is the Resident Rate reduced by approximately 30% (rounded to the ½ dollar). A Community Service Group (CSG) is defined as “any Markham based, non profit community organization consisting of 75% residents of the Town of Markham.” The prime purpose of the group must be to “provide recreation or community service to the Town of Markham.” This rate is only applied to groups that have met the Town criteria for recognized service groups that have been through the application process. In 2006 the CSG rate generated approximately 19% of all rental revenue. Refer to Chart II which outlines the impact of the rate changes. Refer to Chart I for the proposed new rate structure (page 3).

FINANCIAL CONSIDERATIONS:

A year-to-year comparison has been completed to determine the potential impact the proposed changes would have on revenue. The proposed new rates were used with the 2006 actual rental hours to determine the revenue that would have been generated if the new rates were applied. The revenue would increase by approximately $8,700. The exercise was completed on all of the rate categories to determine the impact on each individual category (see Appendix B).

Consideration was also given to how the new rates would impact future growth in rental activities; maintain the Town’s strategic position in the municipal marketplace and to continue to meet the expectations of residents using these facilities. There are 67 rates in the proposed new rate card, of those 35 (52%) rates have decreased, 19 (29%) have increased, 7 (10%) remain the same and 6 (9%) are new rates for new areas.

Chart I summarizes the proposed new rates.

Rate Category	Capacity	New Resident Rate	New CSG Rate
Meeting Rooms	1 - 35	15.00 / hour	11.00 / hour
	36 - 70	25.00 / hour	18.00 / hour
Multi-purpose Room	20 – 36	20.00 / hour	14.00 / hour
	37 – 60	36.00 / hour	25.00 / hour
	61 – 100	55.00 / hour	39.00 / hour
	101 – 180	64.00 / hour	45.00 / hour
	181 – 200	85.00 / hour	60.00 / hour
	201 – 300	134.00 / hour	94.00 / hour
	301 – 500	196.00 / hour	137.00 / hour
Dance Studio	1 – 30	24.00 / hour	17.00 / hour
Gymnasium	Single	41.00 / hour	29.00 / hour
	Double	78.00 / hour	55.00 / hour
Speciality -Pingle House		45.00 / hour	N/A

Chart II summarizes the impact of the two rates on the five categories.

Chart II – Financial Summary

Resident Rate

Rate Category	Capacity	2006 Revenue	Proposed Revenue	Variance
Meeting Room	1 - 35	29,684	34,650	+4966
Meeting Room	36 - 70	10,245	10,275	+30
Multi-Purpose Room	20 - 36	6,010	5,920	-90
Multi-Purpose Room	37 - 60	38,491	37,656	-835
Multi-Purpose Room	61 – 100	19,136	17,600	-1,536
Multi-Purpose Room	101 – 180	84,340	82,880	-1,460
Multi-Purpose Room	181 – 200	62,781	64,600	+1,819
Multi-Purpose Room	201 – 300	37,158	38,860	+1,702
Multi-Purpose Room	301 – 500	61,740	61,740	0
Gymnasium	Single	83,968	83,968	0
Gymnasium	Double	63,414	63,414	0
Dance Studio	Studio	10,164	7,392	-2,772
	Totals	507,131	508,955	+1,824

Community Service Group (CSG) Rate Summary

Rate Category	Capacity	2006 Revenue	Proposed Revenue	Variance
Meeting Room	1 - 36	6330	6,028	-302
Meeting Room	36 - 70	3,306	2,466	-840
Multi-Purpose Room	20 - 36	597	602	+6
Multi-Purpose Room	37 - 60	16,174	14,625	-1549
Multi-Purpose Room	61 – 100	36,579	41,535	+4956
Multi-Purpose Room	101 – 180	33,435	32,850	-585
Multi-Purpose Room	181 – 200	7,002	7,965	+963
Multi-Purpose Room	201 – 300	6,214	7,614	+1400
Multi-Purpose Room	301 – 500	7,839	10,686	+2847
Gymnasium	Single	-	-	-
Gymnasium	Double	-	-	-
Dance Studio	Studio	-	-	-
	Totals	117,475	124,371	+6,896

Totals

Rate Category	Capacity	2006 Revenue	Proposed Revenue	Variance
Resident	All	507,131	508,955	+1,824
Customer Service Group	All	117,475	124,371	+6,896
		624,606	633,326	+8,720

Currently, rates are available hourly and in blocks of three hours or seven hours. This approach serves only to confuse patrons and frustrate staff since there is very little and in some cases no economy of savings if a customer rents using multiple hour rates vs. hourly. A simple hourly rate not only serves the purpose but simplifies the process for the customers and staff.

The proposed new rates position the Town strategically in the municipal marketplace. Hall rates are dealt with in a variety of different ways in other municipalities. Finding common ground from which to draw a credible comparison of rates across municipalities is very difficult. Each municipality has its own policies and procedures for facility rentals which differ greatly from one municipality to the next. Staff has completed to the best of their abilities a survey of other municipalities rates (see Appendix C).

OPTIONS/ DISCUSSION:

The present hall/meeting room rates have not been reviewed or revised in a number of years. It was determined that rates exist that are no longer required or being used. Others are inconsistent compared to similar areas across the Town and some rates are low for the value they provide while others are high and are difficult to justify. The proposed changes correct the deficiencies and streamline, harmonize and improve the consistency.

RECOMMENDED

BY: ________________________ ________________________

Barbara M. Roth Jim Sales

Director of Recreation Services Commissioner of Community

and Fire Services

Q:\Recreation\FEES\FEE001\2007\Hall Rates Report.doc

ATTACHMENTS:

Appendix A - 2007 Rate Card

Appendix B – Financial Summary

Appendix C – Marketplace Survey

Appendix D – Council Extract, November 15, 2005