CB council discusses recreation revenues

Going with tiered pyramid model

By Mark Reaman 

The Crested Butte town council continues to discuss development of an ongoing Parks, Recreation, Open Space and Trails (PROST) master plan. They recently discussed the philosophy of “recreation cost recovery” in the department during a winter work session. Councilmembers generally felt town fees brought in adequate revenue but agreed to perhaps tweak some of the fee structure based on a so-called “cost recovery pyramid strategy.” Council will address the ongoing PROST plan at its Monday meeting focusing on decision making in the department.

Since about 2024 the town’s recreation fund has achieved an overall cost recovery of about 28% when accounting for both direct and administrative indirect costs. The remaining 72% of the expenses comes from a general fund subsidy averaging about $196,000 annually. The town also has a half percent in sales tax directly tied to parks and recreation.

According to PROST director Janna Hansen and consultant Scott Robson who is working on the PROST master plan update, the pyramid model is the industry standard for parks and recreation services nationwide. The model uses five tiers based on degrees of community benefit and individual benefit to determine cost recovery.

The base of the pyramid, or tier one, is for “core/public good community benefit” and suggests no need for cost recovery. That would include access to parks and something like the town picnic. Tier two is for “broad access” that includes both community and individual benefit. It suggests a target to recover up to 20% of costs. An example in tier two would be beginner youth recreation programs or adult drop-in pickleball. The third tier is an individual and community mix. It would include something like youth sports programs such as baseball or indoor rock-climbing facilities and a target recovery of 20-50%. Tier four is a mostly individual benefit and would encompass something like adult tennis lessons or the Challenger Sports Soccer Camp. That recovery percentage was between 50-90%. The tip of the pyramid or tier five is for highly individual benefit. That would include things like facility rentals to private groups such as weddings and the expectation was to recover 90-120% of costs.

Hansen explained that generally, the way the pyramid worked was that the more public good involved, the cheaper the cost. Robson said even without adopting the formal pyramid, Crested Butte was generally in the ballpark with its peer communities in terms of cost recovery percentages. He said individual communities determined their cost recovery percentages based on their unique values and community priorities.

Mayor Ian Billick asked if adopting the pyramid solved a problem that needed fixing. Robson said it would increase transparency with the community in terms of what to expect when looking at fees. Town manager Dara MacDonald said it could help her understand the council’s desire for how much money to expect to come from the general fund as a subsidy for recreation. “Is council comfortable with that 72% subsidy level from the general fund,” she asked. “What’s the right amount?”

Billick said his goal would be to increase access for people to tiers one and two. “I know there are often waitlists for programs in that area,” he said.

MacDonald said those waitlists came primarily from lack of space as opposed to cost.

Councilmember Kate Guibert said she wouldn’t want to see finances be a factor in reducing access for people in the community to use town recreation programs.

“I’d like to get on a sustainable funding path and not increase that general fund subsidy even as programs expand,” said councilmember John O’Neal.

“I’m a fan of subsidizing this,” said councilmember Gabi Prochaska. “It’s a good thing to subsidize and the general fund is made up of sales tax that everyone contributes to. I’m comfortable with that 28% cost recovery.”

“Me too,” agreed Guibert. “I like the pyramid model for transparency purposes. It shows the what and why of costs. I’m not sure what the right percentage amount is.”

“I like the pyramid a lot because it creates clarity,” said councilmember Beth Goldstone. “But I felt like the council stated a goal a while ago was to use less general fund money in those middle tiers. I also feel we could create scholarships if needed if costs went up. Covering 72% from the general fund seems like a lot.”

Billick said he was comfortable with a general fund subsidy but not sure of an exact percentage. “I’d like to see a baseline of what we’ve been doing for budget purposes,” he said. “If we see an increase in revenues, I’d like to see expansion of tiers one and two and not less subsidy from the general fund.”

“Is there any reason to subsidize high end individual events like weddings,” asked O’Neal.

“Those could be charged closer to market rate at 300% to 400% above cost at times,” said Robson.

“Especially in July,” noted Billick.

“But we should be aware it is also a way for locals to have an affordable venue,” said Prochaska.

Prochaska also emphasized she would not want to see fees increased in the first two tiers. Billick, Goldstone and councilmember Mallika Magner were less against that if there was a “robust scholarship” opportunity to help those that might need it.

“I’m okay charging more in the top tiers to help the lower tiers and even reduce the general fund subsidy,” said Billick. The rest of the councilmembers agreed with that sentiment.

Future thoughts… benches, snazziness, partnerships

The council shifted gears to discuss the PROST master plan action items. As in most plans, there are a lot of hopes and dreams to consider over the next ten years. A draft will soon be going out to stakeholders and the general public for feedback.

O’Neal was adamant that one thing he wanted to see at every park and with every expansion was benches. More benches. “They encourage human relationships, and I want the space we have to help encourage that,” he said more than once. “Whatever land we have, I want to use it to help foster connections. It’s foundational to the space.”

“I really like that,” agreed Guibert. “Another thing we need is to be careful about is that we don’t get too snazzy. There’s a lot of what looks like high end improvements in the plan.”

Billick asked that the potential partnership with the Gunnison County Metropolitan Recreation (MetRec) district be explicitly called out. “The MetRec budget is bigger than the town’s and they have an amazing revenue stream. How do we partner and adapt to that? We need to work out what the relationship is.”

“We currently strategize together and look at opportunities together,” said Hansen. “They support many of our capital projects.”

“The biggest elephant in the room is the lack of indoor recreation space,” said MetRec board president Cassia Cadenhead. “The solution is a new indoor recreation space but that’s millions of dollars. We need the town and MetRec to figure out how to move the needle on more indoor rec space.”

Hansen reminded everyone that the town was planning to expand the indoor space of Jerry’s Gym in town hall.

“We are still figuring out how town and MetRec work together in an outcome for this,” said Cadenhead.

“We appreciate the capital help but operations costs always seem to fall on the town,” noted Goldstone. “We need to figure out both in the future.”

Billick said it should be clear in the plan to prioritize keeping existing recreation spaces. “I’m hesitant to expand Jerry’s Gym until we have a plan with MetRec and other entities,” he said. “We need a coherent plan with the larger community.”

“The one thing missing to me is the acknowledgment of the fact we may be low in some things like indoor recreation, but we are fantastic in other areas like outdoor recreation,” said Prochaska. “We offer some amazing things already given where we are.”

“I agree and would frame it that the plan should also emphasize the things that brought a lot of us here,” said Billick. “Focus on the mountain community aspects.”

“We are looking forward to getting a draft of the plan in front of the public,” said Robson. “They will provide good feedback and tell us what we missed.”

The hope is for the council to consider adopting a plan in early May.