Saratoga News

Photograph by Robert Scheer

Recreation Department director Joan Pisani drops by the Warner Hutton House, which obtained its own nonprofit status last year so as not to be a drain on the city's Recreation Department.

Is Rec Department's cost-recovery burden fair?

By Sarah Lombardo

The Recreation Department, still struggling to meet the City Council's request to become completely cost-recovering, may soon get some relief in its quest.

The City Council formed a task force to look into the issue of costs, whether cost recovery can be achieved and and if the department has been saddled with the right amount of indirect costs to recover. The group is made up of members of the city's Parks and Recreation and Finance Advisory commissions.

According to task force member Barbara Olsen, the group has been working on fact-finding and trying to see what other Bay Area cities require in the way of cost recovery from their recreation departments. What she found in the informal study was that Saratoga's department more than held its own in terms of making enough money to cover its expenses.

"Actually, Saratoga is probably the best at covering costs, both direct and indirect," she said. "We're the only one at this point that is able to recover all its direct costs and part of the indirect costs."

It's the indirect costs that are haunting the department in its struggle to fulfill the council's mandate. Recreation Department director Joan Pisani said the department raised fees as high as it can without losing participants, but it might take the department longer to cover its indirect costs than the council wanted.

During budget hearings last year, the council requested that a new budget incorporate full cost recovery for each city department's costs, both direct--such as the cost of supplies for the department--and indirect--such as the cost of facility maintenance and staff time. The department, according to Councilmember Stan Bogosian, was given a four-year timeline to accomplish full cost recovery.

By raising fees and cutting out any program that did not make money--including the Warner Hutton House teen center, which went nonprofit in order to remain open--Pisani said she was able to cover all of her department's direct costs. But it's the indirect costs that are causing problems. And, she said, the issue pits what residents want against what the department can cover.

"[Covering indirect costs] is almost unheard of in any other city in this area," she said. "Our classes make more money than anything else because of sheer volume. ... Youth basketball doesn't make as much, and yet it's very labor-intensive."

Youth basketball, Pisani pointed out, is something residents pressured the city to reinstate years ago, and something that attracts more than 260 kids.

Pisani also questioned the appropriateness of the department being held responsible for indirect costs. After all, she said, if the recreation department went away, the indirect costs would still be there.

According to the Recreation Services Program Budget, direct costs for the department are expected to reach $518,880 in 1997-98. Projected revenue is estimated at $536,814. But the city's projected indirect-cost allocation for the recreation department is estimated to be $172,389, second only to street maintenance, at $297,466.

Bogosian, however, said he believes the department can still reach the council's goal, and said he wants to take a look at some of the department's direct costs--especially salaries.

"I don't think that during the reorganization [last year] we ever looked at the issue of salaries of management in the recreation department," he said. "I still maintain that we can do this program, and I feel that salaries for the department, which I think total about $150,000, need to be looked at."

The task force is scheduled to report back to the council on the cost issue sometime in March, Pisani said.

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