APRC just doesn’t get it– the budget is deep in crisis. Plenty of revealing, sometimes melodramatic, sometimes inaccurate testimony from the Commissioners and Director of the APRC
The joint meeting of the City Council and the Parks & Recreation Commission was fascinating and enlightening. I learned more about the commissioners, and how they think, than I could have possibly imagined.
I’ll first explain that nothing was decided, by design. It was just a study session. You may have read my previous article regarding APRC https://theashlandchronicle.com/aprc-meets-the-city-council/, in which I raised several questions that I thought needed to be answered. Unfortunately, none of them were answered. But many other questions that I wasn’t aware of were answered.
That previous article will provide background information if you’re not familiar with the financing issues that are discussed at this meeting: the so called 1.89 vs 2.09 and 25% vs 98% funding schemes.
You can view the meeting here: https://tinyurl.com/3ctjvmxh
I will provide you with verbatim transcriptions of many of the statements made at the meeting, followed by my commentary. Sometimes their expositions get a little long winded and disorganized, but I hope you will stick with it, because it’s just so illuminating. I’m noting the approximate times in the recording, so you can easily find and hear these quotes for yourself. By the way, if something doesn’t read like it makes sense, it’s because I’m transcribing verbatim, and extemporaneous statements often get a little wonky. Just put “(sic)” after each quote.
First, I will show you two graphs that are essential to your understanding. The first is a graph showing the APR actual revenues (2011-21) and their budgeted revenues (2022-23), the total city budget, and APR’s share of the total. The second is simply a graph of the annual ending fund balances of the entire Parks and Rec department. APRC and council statements follow, with my commentary.
24:00 [Dir. Black] “I will throw out one number and that’s just the central services fee going up about $800K in one year for us. That’s a very big hit to us, and we were able to cover that luckily with some ending fund balance. But in two years, we won’t have that ending fund balance to cover it anymore and we’ll see a drop off in all of our services as a result of that, because unless something different were to happen with central services and those fees were to come down.”
As you can see from the graph above, the statement regarding the ending fund balances is incorrect. The ending fund balance at the end of the 2021 fiscal year was $3,934,047. I do not understand how the Director of this department can be unaware of his ending fund balances or misstate them in a public statement. My data sources are the 2020 CAFR and the Fiscal Year 2021 Fourth Quarter Financial Update.
But Dir. Black was not done with the ending fund balance fallacy. Twenty minutes later he doubled down:
48:20 [Dir. Black] “The other thing I want to say is even if the funding were to stay $1.89 Ashland Parks and Recreation is on borrowed time. Um, I don’t know if it’s clear to everybody here but I want to be really clear. The only reason we’re able to function in this biennium is because we were able to scrimp and save and we have been extremely conservative with our budget over the last seven years that I’ve been here in order to build up our ending fund balance. And for the last two bienniums when we built up that ending fund balance we’ve had to use it in the very next bienniums just to make ends meet. We are transferring $1.3M from our ending fund balance which shouldn’t be a surprise to you because it was in the budget and it was approved. We are transferring $1.3M to keep ourselves afloat for the next two years. At the end of these two years there’s no magic $1.3M to keep us afloat in the next biennium. So I want to be really clear here that we already can’t afford to do what we’re doing. The only reason we’re able to do what we’re doing — and, and remember when I answered the question it was just about for this biennium– what do we need to keep ourselves moving and the current level of service this biennium because once, once we spend that ending fund balance and it gets drawn down there’s no other ending fund balance to keep us afloat in the next biennium which means we will be starting off around $600K per year less than we have this year plus increases in all of those, um, those things that increase with cost of living. Um, so, so, anyways, the point, the question was what, what changes a lot. It, we, we do our best and we have a very, very dedicated group of people who will work in, more than and harder just to keep things, try to keep things looking as, as good as possible. But the reality is we can’t keep up. I talked for a long time but um, I wanted to get to those few points and if I can answer any of the other questions I will, but the really important point is, we are already on borrowed time. We already can’t afford um what we’re doing, and if it wasn’t for the savings that we had in the last two biennia, um we wouldn’t even be offering half of the ser, well, a lot of the services that we’re planning to offer in this biennium.”
Once again, Dir. Black totally misrepresents the state of the budget and specifically the ending fund balance. He talks as if APR is going to die. This is what some of us refer to as “the fear card”. It is an implied threat that if you don’t give [fill-in-the-blank] the money they want/need, there will drastic repercussions.
After that, the Mayor asked about the specific revenue sources for APR. Dir Black had a small table prepared for this question, but it appears that he had not thought it through thoroughly. Madcap comedy ensues when he seems to realize that he is getting into hot water, and his “speakers” just happen to malfunction. I have no way of verifying his figures, because that information is not readily available on any public document that I can find; he offers a fairly broad disclaimer of accuracy as well. Here is the table he is referring to:
55:20 [Dir. Black] “If it’s ok Mayor I’ll just um show you. Now these numbers um these are just generally speaking these are rough proportion of what the numbers would be. Um I right before the meeting I hurried to put this together and I realized that um there, there probably are some updated numbers to this, like this number is a little bit lower for instance. But generally speaking, this shows you all of the, ah, the categories where our revenue comes from. So this cash forward, this carry forward, this is the funding that I talked about with our ending fund balance that we’re moving forward um you see here, and that should equal to, yes, $1.3M.Um… [breaks up] grants… um can you hear me, my speakers are acting kind of weird… we’ve got grants coming in…”
Fortunately, Cmsr. Landt jumped in to save the day, and boy, did he ever say the quiet part. First, take a look at the law pertaining to the F&B tax: https://ashland.municipal.codes/AMC/4.34.020:
C. The taxes collected by the City under this chapter shall be used as follows:1. Twenty-five percent (25%) shall be paid into a parks account for purposes of acquisition, planning, development, repair and rehabilitation of City parks per adopted plans of the Ashland Parks and Recreation Commission.
1:05:28 [Landt] “What we’re doing is um completing the city comprehensive plan in fact we pretty much have done as far as neighborhood parks pretty much accomplished that. And so that is kind of the end of that. But, so we don’t have a lot of um, the city doesn’t uh grow its urban growth boundary we’re unlikely to increase growth(?) in public parks. Those other comprehensive plan goals set out in that but that’s really it’s more minor in terms of expenditures. Right now a lot of what that 25% F&B money goes to is paying for projects that we already accomplished and now are paying off and transferring money from, into our operating um fund so we can do um major maintenance.”
Allow me to translate. APR has encumbered a large part of those F&B revenues into repaying debt on projects they have already completed. Thus, they have that much less of that revenue available, fewer discretionary dollars to spend.
And that, I believe, is the motivation behind wanting 98% of F&B revenues: so that APR will have QUADRUPLED the money made available for those purposes. This is important because they are able to use F&B revenue to finance (borrow) for capital projects within the scope of the ordinance, whereas they are NOT able to use property tax revenue to finance (borrow). The nature of those existing debts is defined differently in different official documents.
I also believe that the reason Dir. Black’s “speakers” (mic) malfunctioned was because he was approaching the $400,000 transfer from the CIP for “property management/maintenance”– uses that are clearly NOT appropriate for CIP funds. The legality of that would be something for the new city attorney and finance managers to look into.
Next up we have Cmsr. Gardiner, treating us to a large helping of pathos along with the fear card:
1:16:03 [Gardiner] “I just think that the council and everyone watching realizes how devastating it is hear the discussion of no funding in two years. To not wanting to really give this group of elected commissioners any hope for funding moving forward, that’s what this discussion sounds like to be honest with you. And you know we’re, we’re, what the hell I’ll say it and I think commissioner Landt said it, we’re trying to be team players. We embrace what came out of the citizens budget committee. We embrace what the council passed you know to get us through this budget but the requests that we have been sending in to you is answering what the joint meeting is supposed to be about, is long term stable funding for parks. You know, it’s like to just say we’ll just get us through this biennium, that doesn’t benefit anyone in the city, you know, it just really doesn’t. And I’m confident that council will figure something out. But that’s not the reason the commission’s here tonight is to try to help you figure out what you’re going to do moving forward. It’s not to put pressure on you, it’s not to come up with any cockamamie you know suggestions about how you can make us whole and fix the rest of the city, we’re just trying to move forward here. And I just think that needs to be clear.
At that point, Mayor Aikens spoke up:
1:17:45 [Aikens] “Thank you, I appreciate that. In candor, I’m not hearing people saying we’re not, Parks isn’t going to be funded in two years. That’s not what I’m hearing. That doesn’t mean, that doesn’t make what you’re hearing wrong, I’m just not hearing it that way. Maybe council can weigh in and tell us what they’re hearing but that’s not my assumption nor my impression.”
No, Mayor Aikens, it wasn’t what I was hearing, either. But it sure sounding like whining to me.
Councilor Hyatt made the basic problem very clear:
1:43:00 [Hyatt] “That budget, as it stands, does not adequately address roughly $4M in shortfall, or structural deficit. We can look at it and determine how we want, but it must be addressed. And I think a lot of times we look at the dollars in very cut, in these different slices. Not cutting budgets, but different slices. In doing that, we introduce some of our own confusion. Um, we are dealing with a general fund issue right now….
“… We have a new environment. And this environment unfortunately does not support that legacy goal [ed. The Parks & Rec system as it currently exists]. This environment doesn’t let us fund at 2.09. And it is possible that this environment doesn’t let us fund at 1.89. And that’s why I’m here listening tonight because I don’t see this as something where I want to say, well that’s just not gonna work, here’s what we do. I want to listen to parks. I want to hear your feedback. But I do see from listening intently and taking many notes tonight, that this current environment cannot sustain the incredible system that parks has built. The 1.89, though you can live within it, I’m not hearing that it can effectively sustain it….”
Then Cmsr. Lewis threw in a little pathos of his own:
1:50:15 [Lewis] “I don’t know if this is a matter of due diligence, or what the private sector would do, or any of those questions. I think I advocated to and voted in favor of moving this to the council for discussion. You people hold the purse, and we’re at your mercy, so we’re a bit frustrated and scared actually of what our future is. So I totally appreciate every councilor telling me what they think this is exactly what I would look for you to do as our proxies here in the city and I know there’s a lot of controversy in town and there’s a lot of ideas and there’s a lot of articulate people and I really appreciate people that look at it, study it and tell me what they think. Um, so, um I appreciate that and thank you for your answers.”
Next up, Cmsr. Bell giving a textbook demonstration of circular reasoning. He was responding to Clr. Moran’s statement that the golf course loses money every year, and perhaps might not be the best project to sink money into:
1:54:05 [Bell] The golf course does lose money. You could frame it that way or you could say the citizens of Ashland have decided that they want a golf course, because if it wasn’t for the citizens of Ashland supporting the golf course, they wouldn’t have a golf course then. And the same is true of most of the other things that the P&RC does. I mean most of our recreation opportunities are losing money and they would not exist if it wasn’t for the citizens and the taxpayers of Ashland wanting them there and supporting them in the form of the money that comes to the P&RC. And it’s not just the golf course that is you know the outlier in these things and um Patrick Arpalla (?) has doing an excellent job of improving the costs of representing you the ratio (?) the golf course. And actually during the pandemic it was even more popular than it has been in the past. And the golf course is a constant sort of hot button topic that’s actually been doing fairly well lately. Anyway, all of the things that we do are supported by taxpayers because taxpayers want them and they all to some extent. Dir Black I’m sure can provide better numbers than me, but they’re there at some cost because the citizens of Ashland want them.”
Well, no one at APR has ever asked anyone what they want in terms of specific projects as far as I know. How do they know what we want? They don’t. They spend our tax dollars on the programs that THEY want to fund at their discretion.
The city periodically produces surveys that are answered by a statistically insignificant number of respondents. Every survey I have seen has been poorly designed with inadequate and leading choices. They appear to me to be surveys designed to support certain priorities– they are not neutral.
Finally, Dir. Black made it clear that he is attempting to muddy the funding issue as much as possible by misstating the proposed changes, the alternatives, and what he and others had stated earlier in the session:
1:56:30 [Black] “I just want to say for those who are listening who um may not have the, well I just want to say really quick in summary that Ashland parks and recreation is um we’re asking through the budget document there was a proposal that was adopted for a different funding source, but I want to say very clearly, hopefully I can do it, is that $1.89 or this food and beverage ah option where its F&B and a portion of property tax, it’s the same amount of money. I just want it to be really clear that Ashland parks and recreation is not asking for more than the equivalent of $1.89 regardless of the ah the way we get to it the equivalent is $1.89.”
Let’s unpack that. Currently, APR is funded with $1.89/$1000 valuation from property taxes (which grows at a reliable 3.5%/year) PLUS 25% of the F&B taxes, which are much more variable. The approved budget proposes for NEXT YEAR an increase to 98% of the F&B taxes, and a corresponding DECREASE in property taxes. That cannot be achieved without a vote of the electorate [see AMC 4.34.020.C.5.d]. There is no plan for the future after 7/1/2023. However, one of the things APRC has been advocating is making that change permanent, AND extending the F&B ordinance for an additional ten years, as it is scheduled to sunset in 2030. Presumably, whether that happens or not, APRC’s funding will grow 3.5% (because that’s basically what property taxes do, by state law plus increases in assessed value). F&B taxes are anticipated to grow by 10% per year, according to the finance department. So if APR is funded by the new method, they stand to gain a significant increase per year in funding.
But here’s the crucial thing: the overall city budget general fund, which contains APR funding, has a structural deficit. If it’s not corrected by the end of this budget cycle, that city fund is liable to be in a deficit situation, which is not permissible by law. That’s the issue the Council must solve. They must reduce expenditures in the general fund.
The general fund includes Administration, Finance, Insurance, Fire, Police, Street, Capital Improvements, Central Service, Equipment, Community Development, and several smaller funds, along with Parks. The city CANNOT maintain the current level of funding for these departments. Where should they cut?
APRC says it doesn’t want MORE money, it just wants to stay the same. But the fact is that all of their proposed funding measures will INCREASE their funding. That just cannot stand. Cuts will have to be made somewhere. Do you want to cut Police (more than it has been), Fire, or Streets? I didn’t think so. APRC must be willing to accept a lower level of funding for the foreseeable future. They must continue the belt tightening that they have been making for the past few years, the savings that they are proud to tout.
This hearing made it clear to me that APRC is ignoring the greater needs of the City to the favor of their department. They either don’t realize or don’t care that cuts have to be made throughout the General Fund. Everyone loves and appreciates our Park system, and many people benefit from the recreational opportunities provided by APR. But we can’t afford it as it currently operates at this point in time.
If, and this is a big if, the new City Manager and Finance Manager along with the City Council can find ways to save money, economize, streamline, maximize efficiency, and make cuts in other non-essential areas, then, and only then, will Ashland be able to afford the level of funding for APR that we have enjoyed in recent years.
The City budget is not etched in stone. It is a fiscal roadmap. It is modified for myriad reasons every year. City Council appropriates money. It can approve whatever funding level it deems appropriate for any department. It will have to decide what to approve for APR and all of the other city departments in the best interests of the city as a whole and its residents. Let us hope that it makes wise decisions.
CORRECTION: An earlier version of this article made reference to Central Service Fees that was in error. That reference has been removed. My apologies for the error.