Tuesday, May 12, 2009 , 5:30 - 8:30 p.m.,
Bison Visitor Center , 1800 SCR 31, Loveland, CO
Barry Lewis, Vice Chair Tom Miller
Sue Sparling – OLAB representative
Gary Buffington, Natural Resources Director
Mark Caughlan, Resource Manager
Chris Fleming, Resource Manager
Debra Wykoff, Business Operations Manager
Lori Smith, Sr. Accountant
The May 12, 2009, meeting of the Parks Advisory Board was called to order by Chair Linda Knowlton, at 5:40 p.m. The minutes of the April 14, 2009, meeting were approved.
PUBLIC COMMENT: Items not on the agenda - NONE
Parks Fund Budget Projections 2008-2013 (See handouts.)
Debra Wykoff, Business Operations Manager, distributed and discussed several spreadsheets illustrating the urgent financial challenges facing the Parks program over the next three to five years.
The Natural Resources Department (DNR) is comprised of three major programs, each of which is separately funded and accounted for, as legally required: Parks, Open Lands (open space sales tax) and Land Stewardship (Weed District, forestry, trails, and natural resource management.)
The Parks Fund contains three sub-funds: Park Operations, Park Capital Improvements, and Lottery (Conservation Trust Fund, required by state statute to isolate lottery dollars from other funding sources.)
Lottery funding provides critical support to all major facets of the program. Over the next five years, Park Operations will require an average annual Lottery subsidy of over $300,000 per year. Capital Equipment acquisition and replacement, almost entirely funded by lottery, requires $73,000 - $120,000 per year on average. And through the year 2013, repayment of an internal County loan for park improvements will pull approximately $62,000 - $436,000, per year from the Parks Fund, proportionately increasing the lottery subsidy to Park Operations.
The loan of $1,245,500, from the County’s Solid Waste Fund has allowed DNR to match grant funding available from GOCO and from the Bureau of Reclamation (BOR / Reclamation) for Parks Master Plan top priority park improvements at the four reservoirs, and to complete all required ADA retrofits to existing facilities. These improvements include two new shower facilities and new full-service campsites at Horsetooth Reservoir which will generate new revenues estimated at $50,000 year. The new Carter Lake Marina as well as four other future Horsetooth projects, including two swim beaches, have or will also benefit from Reclamation and/or GOCO funding. For 2009, Reclamation has authorized an additional $400,000 in ADA matching funds for projects at Carter and Pinewood.
In less than five years, thanks to its funding partners, Larimer County will complete almost 100% of the Priority 1 projects identified in the new Parks Master Plan and Resource Management Plan, both adopted in 2007. This represents a remarkable achievement!
However, the outlook for Park Operations is far more challenging. Unlike most park and recreation agencies nationwide, which are largely or wholly subsided from tax revenues, Larimer County’s Parks Program receives less than 10% of its annual budget from the County General Fund. Those funds (approximately $280,000 annually) are allocated to park areas and programs which lack another source of funding, or which generate insufficient revenue to cover operating expenses. Examples in the 2009 budget include the Big Thompson Canyon properties and roadside parks, Horsetooth Mountain, Hermit Park, forest management and weed control.
The Parks Fund is 90% self-funded from user fees, other park generated revenues, grants and Lottery. DNR must absorb 100% of annual salary and benefit increases, capital equipment costs, facility construction and operating overhead – unlike General Fund departments which, lacking opportunity for independent revenue generation, are wholly funded by General Fund tax revenues. Personnel costs have historically risen 6% per year on average, due primarily to merit or market increases and to the dramatic escalation of benefit costs. Operating costs have held steady or even been reduced to partially offset the impact of personnel increases; but utility, fuel and other market increases pushed up O&M costs by 8% last year alone.
It is impossible to stay ahead of these relentless cost increases through park user fee increases. New sources of revenue, capable of generating significant revenue which exceeds the additional operating cost to provide new services, are rare. This is the ongoing challenge facing the department: Strict cost containment and/or increased revenue generation every year. At current levels, Park Operations will require an annual Lottery subsidy of $400-$500,000, beginning in 2011, in order to maintain a sufficient fund balance to meet expenses on a monthly basis.
In closing, however, Deb issued her standard “Pink Cloud Caveat”: Good things happen, too! For most of the past 20 years, long range projections have indicated that Parks Program finances faced an inevitable downward spiral. But, in fact, over the past decade, DNR has enjoyed consistent annual surpluses, as a result of serendipitous events which were unforeseeable and could not credibly have been included in financial projections.
DNR is primarily indebted to the Bureau of Reclamation, which has repeatedly supplied major grant funding: Approximately $2 million during the 3-year Safety of Dams project (which virtually shut down Horsetooth Reservoir), followed by another $2.75 million in Title 28 and ADA funding, plus additional funding for Homeland Security measures imposed after 9/11. Vic Grizzle, our contact here in the Eastern Colorado Area office at Flatiron Reservoir, has been a steadfast friend to this department, and deserves our gratitude for his spectacular success in procuring funding on our behalf.
These grant funds (both BOR and GOCO) require a 50/50 match from Larimer County. We have been able to match those dollars, thanks to the Colorado Lottery; and to the resourceful stewardship of DNR past and present directors in conserving Lottery funding for a future match when funding became available; and to Larimer County Solid Waste Fund’s cooperation, which enabled Gary to take advantage of one-time, windfall funding.
§ Russ Fruits: Has there been any discussion of an external trust to bolster funding?
§ Barry Lewis: How stable is lottery funding for the future? The lottery is the “plug” that makes Park Operations work.
§ Linda Knowlton: How stable is the General Fund allocation?
§ Mark DeGregorio: Will lottery go away? The percentages on the open space tax are set by the initiative. If we change that to 50% operations, it will be much harder to sell to the public. The public wants to fund acquisition of new open space, not operational expenses. Timing is everything – not crowding the ballot.
§ Tom Miller: Polls have consistently shown that the public wants parks and open spaces.
§ Frank Cada: Would Reclamation help fund operations and maintenance?
Mark DeGregorio: What about a different fee
structure for non-residents? What is County philosophy on that?
§ Gary: The take-home message from this presentation is that finding other sources of funding is imperative. This is food for thought for the future re partnerships, sales tax future, use of sales tax allocations, fee increases, etc. Even with the challenges facing us, we are in better shape than Colorado State parks – they are closing parks and laying off staff this year.
§ Gary: The Bureau of Reclamation historically does not provide funding for operations. Differential fees for County versus non-county residents may be acceptable on County-owned property like Hermit Park; but on Federal property, there is more pressure to allow equal access to all, regardless of residency. However, we do have higher annual permit fees for non-residents.
§ Chris Fleming: The logistics of differential fees are difficult for field staff to manage for day permits because of the impracticality of checking residency on every visitor entering the park.
Estes Valley Campgrounds – Management proposal
Gary Buffington observed that this subject has been discussed at prior meetings, the Board has toured the area; and revenue and budget projections have been sent out to the Board for review. Now staff is asking for a green light to go forward on a management contract with Estes Valley Recreation and Park District (EVRPD.)
Board comment :
§ Russ Fruits: What kind of action is Summit County taking on beetle kill pine? If we assume responsibility and then lose 90% of the trees, that will have a negative impact on tourism and on our business.
§ Frank Gillespie: What happens if the revenues or visitation significantly decline?
§ Russ: The current level of service being provided appears to be very low. So even if we operate on a shoe string, it will be an improvement.
§ Tom Miller: A 40% drop in vacations is predicted this year due to the economic slump. That would have a serious impact on these campgrounds, which attract primarily tourists visiting Rocky Mountain National Park.
§ Mark de Gregorio: Rock Mountain National Park visitation is down 6% so far this year. We may see a one-year bump in Hermit Park, because an area of the National Park will be closed. It will cost them hundreds of thousands of dollars to remove all the diseased trees.
§ Tom: Previously, we’ve managed recreation not otherwise available. But now we’re moving into the private sector – taking over a concession license that would normally go to a private concessionaire.
§ Linda Knowlton: The company managing those campgrounds now is not a Colorado company, and the current level of service has apparently been acceptable to this point. This suggests that the potential negative impacts may be less of an issue than anticipated.
§ Tom: We must be aware of increasing expectations when government takes it over – we will be expected to provide higher quality services than the private concessionaire has been doing. This is a problem.
§ Mark: It’s going to take a lot of money to open the door on these, and major capital improvements may be required by Larimer County Planning. Where will EVRPD come up with $3 million to bring these facilities up to code?
§ Russ: We – the County – will be held to a higher standard. We should not put our name on the facilities in the current condition.
§ Tom: There are water quality problems, which may require a whole new well. We need to be clear on the requirements and our obligations. If we can’t open and operate without bringing the facilities, including utilities, up to code, we will be in a difficult position, whether we own the facilities or not.
§ Barry: Who’s going to pay the costs involved in bringing these facilities up to standard? We need to know.
§ Linda: The estimated budget shows $50,000 in lottery funds going to Estes campgrounds for start-up. What if start-up costs are much higher, as happened at Hermit Park?
§ Frank Gillespie: Estes Park is a good place to invest – it will continue to grow. After looking at what is up there, it has great potential for the future, and would be a good investment for the County to make.
§ Gary Buffington: We won’t use department funding for these campgrounds. If visitation or revenues decline, we make less money – we still get the same percent of the total. The profit that goes to a private concessionaire does not go back into improvements. But our revenues generated there will.
§ Mark Caughlan: We should request the utility inspections to verify the condition of existing facilities.
§ Chris Fleming: Our position is that EVRPD must pay the costs of meeting ADA standards.
§ Gary: Reclamation has committed $240,000 for ADA improvements. These funds will require a 50/50 match. We’re in the position of a property manager – we don’t own it.
§ Gary: He is asking for authorization to talk to County planning, and have the necessary inspections done, etc., to get the information to answer the Board’s questions, and to come back with answers and a draft contract. EVRPD has already made a decision not to put the concession out to bid again. We don’t yet know whether start-up costs will be $50,000 or $500,000 – if the latter, we can’t afford that.
§ Dave Coulson: Does that give Gary what he needs to proceed?
§ Frank Cada: If it doesn’t look good, we don’t have to go forward.
§ Mark deGregorio: He will need much more information before he can support it.
STANDING AGENDA ITEMS:
Park District updates and Parks Master Plan Implementation Progress report – Chris Fleming and Mark Caughlan, Resource Managers
§ Inlet Bay shower house will open this weekend. South Bay is also completed. Mark would be happy to give a tour, if the Board is interested. The end result is very nice. We’ve had a lot of compliments.
§ Construction on the new campsites at South Bay started Monday. Earthwork came in at $120,000. These should be done by mid-July.
§ An EDAW hydrologist will be working with us on logistics of the swim beach area on the east side of Horsetooth. The challenge is keeping the sand there. When it comes to a lakefront beach area, it’s all about the sand. Without good sand, the area will not succeed, no matter how nice the facilities are. We’re looking at creative engineering options.
§ Adding a few campsites here and there is fine, but won’t fix the revenue issue. We need to provide unique recreation opportunities, which will bring in significant additional visitation and revenue.
§ Commissioner Steve Johnson: Is there a place to buy a permit there? (No, but there would be if the swim beach is developed.)
§ Health Department is requiring a metered waste water outflow at the shower facilities – that data can be used to plan the shower facility at Eagle. If we are under 2000 gal. per day, we won’t be required to put in such a large sewage treatment facility.
§ We will not be getting water for 2 weeks in July, when water is going out the fastest. This could be a problem in the future – we need to cultivate an effective working relationship with Northern Water managers so that recreation needs are also taken into account when scheduling water deliveries.
§ Six weekends of rain or snow has significantly affected revenue.
§ Dramatic increases in weekday visitation are happening at Hermit Park (HP) – local residents are discovering it. Group events continue to pour in. Hikes are very popular, with waiting lists.
§ HP campground 2 improvements are going well.
§ The move to the Marina offices by Visitor Center staff is complete. The new offices are a big improvement over the poorly equipped and crowded office at the Blue Mountain maintenance building.
§ Mussel inspection staffing is an ongoing challenge.
§ Camp hosts are all in place, and will be trained on Thursday. About 60% are returning.
Big Thompson Land Sales – Gary Buffington, Director
§ The Commissioners held a second public hearing last night. Nobody commented – most people had commented the previous week. The commissioners voted unanimously to accept the recommendation.
§ Commissioner Steve Johnson: Some people had comments afterward, very complimentary to the department and board, and how it was handled. There was applause after the vote. The residents in that neighborhood have a very positive impression of County government, as a result of this process and the genuine compromise. The Board of Commissioners was very pleased by that.
Schedule for future PAB meetings - cost saving option – Gary Buffington
Annual park permits for PAB members – Linda Knowlton, Chair
The meeting was adjourned at 8:15 p.m.
FUTURE AGENDA ITEMS:
Next regular meeting: July 14, 2009, Boyd Lake Room, Larimer County Courthouse Office Building
Linda Knowlton, Chair