Report to: E3 Council Steering Committee Report Date: January 12, 2009

SUBJECT: Recreation User Fees Update

PREPARED BY: Colin Service, Manager Planning & Policy Development

RECOMMENDATIONS:

That the report entitled User Fees Update be received;

And that additional fee increases be considered for recreation services as presented in the report; such that all fees for services within the Town of Markham rest within at least the 50^th to 60^th percentile of municipalities within the Greater Toronto Area with the projected increase of approximately $88,947;

And that the above noted fee increases be completed in 2009 as an initial step in development of a full and comprehensive pricing strategy that will explore pricing methodologies; pricing elasticity; program service delivery standards; subsidy and accessibility programs; and development of thorough cost recovery strategies; such that the full pricing strategy be developed and completed as part of the Integrated Leisure Services Master Plan;

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 be 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 examine existing User Fees for Recreation Services and raise fees where applicable when comparing with other Municipalities and the private sector. The User Fee Report is the first step in a two step process

The second step will be to develop a full and comprehensive pricing strategy through development of the Integrated Leisure Services Master Plan. A pricing strategy will examine program and service development methodology, pricing elasticity, cost recovery ratios, service levels, accessibility (both physical and financial). It is anticipated through development of the pricing strategy that certain programs and services will emerge as premiere services in which it will be appropriate to charge premium fees while other programs or services will emerge as core services supported by the tax base as well as user fees, i.e. youth and seniors programming.)

Prior to completion of the formal pricing strategy there is still opportunity to examine existing services and raise some fees without compromising the work that will be accomplished in the development of the pricing strategy. This report serves to explore these opportunities and put forward recommendations that can be implemented with financial benefit in the 2009 fiscal year.

BACKGROUND:

For the last three years the only user fee increases sustained in Recreation Services reflect the consumer price index. This moderate price increase is done annually and implemented in the fall of each year to reflect the timing necessary to communicate fee increases.

In 2007 and 2008, a comprehensive fee analysis was completed comparing all user fee opportunities with other Municipalities in the GTA. For the purposes of this report, this analysis was updated to also include private sector comparisons where applicable. (Fee Survey has been compiled and can be available upon request)

It is suggested that all fees again be increased to reflect consumer price index. This increase represents approximately $55,000 in increased revenue realized in 2009.

However, through this analysis, there are a variety of other opportunities identified that can be considered for fee increase above and beyond the consumer price index.

OPTIONS/ DISCUSSION:Given that a full and comprehensive pricing strategy will be developed as part of the Master Plan process, it is important to ensure that any changes in fees prior to the development of the pricing strategy in no way impede a strategy from being successful. As such, each recreation service delivery area was examined for opportunity for fee increase.

While all services were considered for fee increase, it is recommended that only services in which Markham fees are below the 60^th percentile in the GTA be raised. These areas are identified in the financial considerations section.

It is recommended that services that are currently in the 60^th percentile or higher will only be increased by the consumer price index for 2009.

There is currently a work group that is examining the pool allocation policy and processes. It is anticipated that this work group (which is comprised of Council, Staff and User Groups) will provide fee recommendations as part of the work. As such, pool rental fees were not considered.

As well, a report was completed recommending a similar approach with the outdoor field allocation development. As such, fees associated with outdoor field allocations are also not considered.

Notice of fee increases will be provided on Town Website and Town page of local Markham Newspapers.

FINANCIAL CONSIDERATIONS AND TEMPLATE:

Overall, Markham recreation programs and facility rentals are generally priced around the 50^th to 60^th percentile of Municipalities in the GTA. There are cases where this is not the case. It is recommended that all programs and services falling below the 60^th be increased as per the tables below. As per the request of the E3 Steering Committee of Council, programs affecting children exclusively are not being considered at this time. Each program or service area should be viewed independently such that one fee area could be increased while another area may not be increased if it involves a perceived vulnerable group. Specifically this could impact revenue in the following manner:

Programs and services raised to the 50^th percentile

Public Skating Admissions		Family Swim Admissions
Markham Average fee per hour	$3.00	Markham average fee per hour	$6.00
Markham Average Current Fee	$3.00	Markham average Current Fee	$6.00
GTA Average fee per hour	$3.25	GTA average fee per hour	$11.00
Markham Percentile Placement	43^rd	Markham Percentile Placement	12^th
Proposed average new fee per hour	$3.25	Proposed average new fee per hour	$8.50
Proposed average new fee	$3.25	Proposed average new fee	$8.50
Percentage Increase to Average Current Fee	8.3%	Percentage Increase to Average Current Fee	31.25%
Total Financial Impact of increase in 2009	$3,842	Total Financial Impact of increase in 2009	$11,007

Programs and services raised to the 60^th percentile

Adult Aerobics		Aquatic Low Ratio Lessons
Markham Average fee per hour	$5.47	Markham average fee per hour	$21.44
Markham Average Current Fee	$82.00	Markham average Current Fee	$96.50
GTA Average fee per hour	$6.12	GTA average fee per hour	$25.97
Markham Percentile Placement	43^rd	Markham Percentile Placement	23^rd
Proposed average new fee per hour	$6.87	Proposed average new fee per hour	$28.00
Proposed average new fee	$103.50	Proposed average new fee	$126.00
Percentage Increase to Average Current Fee	20.7%	Percentage Increase to Average Current Fee	23.4%
Total Financial Impact of increase in 2009	$4,417	Total Financial Impact of increase in 2009	$22,124

Adult Swim Admissions		Ice Rentals – Adult Prime Time
Markham Average fee per hour	$3.00	Markham average fee per hour	$179.00
Markham Average Current Fee	$3.00	Markham average Current Fee	NA
GTA Average fee per day	$3.40	GTA average fee per hour	$192.74
Markham Percentile Placement	14^th	Markham Percentile Placement	31^st
Proposed average new fee per day	$3.50	Proposed average new fee per hour	$190.00
Proposed average new fee	$3.50	Proposed average new fee	NA
Percentage Increase to Average Current Fee	14.3%	Percentage Increase to Average Current Fee	5.8%
Total Financial Impact of increase in 2009	$12,107	Total Financial Impact of increase in 2009	$35,450

TOTAL REVENUE in 2009 FROM ALL PROPOSED FEE INCREASES: $88,947

Notes explaining calculations:

· It is anticipated that approximately 5% of participants may choose to no longer participate due to fee increases. This is reflected in the revenue projections.

· Fee increases can be independent of one another with only specific areas increased.

· It is felt that fee increases any greater than those recommended will push the fees to the breaking point where participation would be adversely affected.

ENVIRONMENTAL CONSIDERATIONS:

No environmental impacts are anticipated.

RECOMMENDED

BY: ________________________ ________________________

Glen Taylor Brenda Librecz

Acting Director Recreation Commissioner,

Services Community & Fire Services

ATTACHMENTS: Appendix 1 - Fee Survey

Q:\Recreation\FEES\FEE001\2009\user fee report E3 Steering Committee.doc