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City addresses community center costs

COVID a drag on recreation revenue

Not a bright future

SOLON The city is committed to its recreation programing.
But deficit spending due to utility costs for the Solon Community Center cannot be allowed to eat holes in whats expected to be a tight upcoming budget.
Solons City Council sat down for a special work session Sept. 30 at the request of Mayor Steve Stange to discuss the future of the community center, and how to rein in costs over the next two years.
We are in a situation financially that we need to make some decisions, Stange told council members. Over the last year and a half, he said, utility bills for the facility have cost $70-75,000 a year.
Stange said usage at the community center did not justify the expenditure.
When you divide that out by $70,000, thats a lot of money, he said of the daily visitor count.
With road use and sales tax funding expected to dip, he said the city needs to consider its options for operating the center.
To think that were not going to have some kind of budget concerns would just be bad planning on our side of things, he observed.
By the end of the 90-minute meeting, there was general consensus to maintain the recreation directors position and current programing.
But there was also support for investigating more ways to reduce costs, exploring alternate lease options with the Solon Community School District (SCSD) or even stepping away from the building entirely.
The city has operated the districts former middle school on South Iowa Street as a community center since the middle of 2018, City Administrator Cami Rasmussen explained, but a full-time recreation director wasnt in place until January of 2019. After 11 months, the position was open again, with current recreation director Tom Harder hired in December of 2019.
From a management standpoint there have been some challenges, Rasmussen observed. From a use and interest standpoint there have been some challenges.
By Harders arrival, she said, the city was already seeing the full cost of utilities and renegotiated the lease to rent less space from the district.
Usage began increasing, she said, but then COVID-19 hit.
The reality is the deficits from the last two years have been large, she continued. And with no ability to make revenue to even help close the gap, there really is not a bright future at this point, unless the building can be open and functioning and generating some kind of programs.
The Recreation Department itself continues to provide programs with safe practices but given the current conditions, she could see no reason to ride out another year with the center and suggested asking for a month-to-month lease.
Council members were provided with a packet of information outlining the situation, including revenues and expenses for the department over the last five years.
Before that (COVID), November-December, our numbers were looking pretty good, Harder reported. Our youth programs were steady from the previous four years, if not increasing a little bit.
Harder implemented improved tracking at the center and the more accurate numbers showed higher usage, but those numbers plummeted when the facility shut down.
While the center was closed, a number of improvements were made, he said, including new adjustable basketball hoops through a grant from Fore Solon, new nets for the batting cage and a revamped weight room. The gymnasium floor was also refinished by the school district.
The updates increase the potential to create more revenue without added expense, stated Finance Officer Roman Meyers, possibly drawing money from outside the community.
Much of the deficit in the recreation budget the last two years can be attributed to the cost of operating the community center, Meyers said, including utilities and staff.
Our expenses are staying fairly the same from last year to this year. Theyve gone up a little bit but are starting to plateau, he told council members. Our revenues, on the other hand, are starting to increase.
Without the COVID shut down, he said, those numbers would have been better.
Stange questioned the usage of the batting cage and the weight room in an attempt to identify the minimum square footage needed to continue community center programs.
The community had a need for indoor baseball and softball space, council member Steve Duncan observed, and any out-of-town usage should take a back seat to locals.
There are a lot of teams using private barns that are better than this room, and this is a pretty good room, he said,
Stange also wondered aloud whether the district would find it feasible to maintain only portions of the building in a lease agreement.
SCSD Board President Tim Brown, present in the crowd as an individual, indicated the district has no future plans for anything other than the gymnasium.
We need the gym space until the third grade wing gets built, he commented, adding the districts facilities committee was reviewing the situation.
Solon school board members want to see the community center concept succeed, he added, but are also anticipating no state funding increase, making for a tight budget year.
If theres ways we can help support that, were happy to, he noted. But it cant be at the expense of the educational program of the district.
Rasmussen outlined the three options included in the report packet:
1) Maintaining the community center lease, but scaling back hours to reduce staffing;
2) Moving away from a lease for the facility, renting the gym and any other space as needed from the district, with seasonal staffing reduced or redirected; or
3) Moving away from the lease and eliminating youth clinics and adult programs requiring gym space.
All of the scenarios include a level of subsidy to support the department, she noted. The third option, the most severe, brought expenses and revenue closest together.
Stange added a third option to consider, pointing out the need for indoor space is greatest in fall and winter. He suggested leasing the space for only those months.
Council member Lauren Whitehead thanked the staff for the compiled information and suggested the council should have separate approaches to the short term and long term fixes.
Stange said the focus of the current meeting should be the direction for the next two years.
Some services provided by the community center prior to the pandemic would be unavailable with no leased building, Ramussen pointed out.
When were not in COVID, this building serves such a need for the school-aged children, she said. They are there after school, they are there on early outs.
A Wednesday morning Coffee Club would also be displaced, council member Dan ONeil said, as would several other groups using the cafeteria area.
The Avacentre and the Solon United Methodist Church Family Life Center were mentioned as potential alternative sites for classes or programs.
Since no action was taken during the meeting, Stange asked council members to also prepare for a financial reckoning over the continued costs.
The Recreation Department operated with a $98,000 deficit in the 2019-2020 budget cycle.
Although estimates for upcoming road use and sales tax revenue have not been dire, communities are still expecting significant cuts.
If a similar deficit were to continue, Stange suggested about half could be covered with sales tax revenue. But where would the rest come from?
Ramussen was hopeful the city would not be in that position, noting additional funding would come from the general fund or trust and agency user fees.
Stange was not excited about those options and made clear he would not support cuts to essential services to finance recreation programs.
Thats your challenge, he told council members.
If programs are shut down again due to the pandemic, he said, Harder could be temporarily reallocated to another role within the city.
The Recreation Department came close to covering its expenses before the community center, but has not been able to generate enough revenue since, he added.
Hard decisions will have to be made about the ongoing costs, he said.
ONeil said it would be helpful to examine the numbers further. He requested a report showing expenses by activity.
As much as the council wants to provide a community center, Duncan observed, the public needs to understand it comes down to a financial decision.
The immediate thing in front of us is how do we manage this for the next year two years, and its very bleak, he concluded. I wouldnt want to put it any other way to our public and our users.
Stange thanked the council members and staff for a productive meeting.
I think this is exactly what we needed, he said.