Despite one full year of furious activity from city events and
outside rentals, the new Community and Cultural Center is bringing
in less money than expected, though not as little as it first
appeared.
Despite one full year of furious activity from city events and outside rentals, the new Community and Cultural Center is bringing in less money than expected, though not as little as it first appeared.
The numbers come from a draft seen last week by the Parks and Recreation Commission and are in no way final, according to Recreation Manager Julie Spier, who is more optimistic than the report shows.
“We are still trying to get things charged to the right accounts,” Spier said Monday. “We’re actually very pleased. It’s meeting our expectations.”
Compared with September, the highest month for revenue, ($27,535 in expenses/$32,831 in revenue), July and August showed greater deficits. July: $31,948 outgo/$11,248 income; August: $36,884 outgo/$24,143 income.
Spier said this fluctuation is normal, especially in September. Averaged out over the three months however, the picture looks brighter with the Rec. Dept. earning $22,741 and spending $32,122.
Spier said the report was included in the PRC agenda only so she could get commissioners’ feedback. The numbers are not yet ready to go to the City Council, she said.
The community center is run by the city’s Recreation Department, whose operation and maintenance, including the community center, are paid from the general fund. Department operations are mostly supported by sales taxes – along with police and fire protection – and from a parks impact fee paid by developers building new houses.
While the center was under construction, from October 2001 to December 2002, the city contracted with Sports Management Group to help design a fee structure high enough to allow the city to recover all its costs for maintenance and operation but not so high that people could not afford to rent the facility.
Some costs – especially those charged to nonprofit groups – were reduced after City Council heard from the public.
Designed to be the hub of the community, the center offers a wide variety of classes for all ages and has frequently held holiday parties and dance and musical programs for the public. The music and dance events are free while the department charges for most classes and parties.
CLASSES
During October the center offered 16 children’s classes with an enrollment of 538; one teen class which 47 attended and 12 adult classes teaching 43. Spier’s draft report said the attendance of 628 is down 14 percent from September.
Revenue from classes was $11,220 from classes and a new $2 registration fee, $278 from park reservations (areas of all Morgan Hill City Parks can be reserved) plus $111 from ticket sales, totaling $11,609. On the minus side of the ledger, $576 was refunded, $83 in scholarships given and $6,865 paid to instructors, leaving $4,085 as profit to the city.
According to SMG, Recreation Dept. average monthly revenue should be $22,080; instead the department earned $11,609 in October. The city paid $44,659 to run the department in October, against the $11,609 in income.
September is a peak month, Spier said, as are January and April because the registration business increases.
“The activity guide goes out then and people tend to come in and pay quarterly for classes,” she said. “The payment only appears on one month’s balance sheet.”
The department offered 62 classes in October; 29 met the minimum required enrollment.
“This is about normal,” Spier said. Offering a wide range of classes and actually giving the ones with the most interest is a way to determine interest.
“Who would have thought fencing would be so popular,” Spier said. But it is.
FACILITY RENTALS
Spier said rentals continued to increase as more people discover the center as a place for parties, weddings and memorial services, meetings, art shows and other uses. The Playhouse is home to South Valley Civic Theatre and Easy Street Theater Company. It has also hosted church services and several lectures.
During October community center rentals totaled 47 ($18,985), the amphitheater, one ($160) and the Playhouse, nine ($2,335). October revenue totals $33,288, including $11,808 from Gavilan College renting its building on the center’s campus.
A chart showing rental hours available and used displays a wide gap. Facilities are available for rent for 5,225 hours during a typical month. In October, they were rented for 278 hours – or 10 percent of available hours.
The difference between monthly rental projections and actual revenue received is $39,908 expected and $33,288 received in October.
“We track when payments come in,” Spier said. “If a May wedding pays in December, the money is logged in December and nothing shows up in May. We are working on getting the true total cost of recreation and the true total cost of the community center.”
October, she said, is actually 69 percent of the projected total revenue, and the targeted cost recovery for the community center is 70 percent for the year.
“Not bad,” Spier said. “Sports Management Group calculated cost recovery at this point at 50-60 percent.”
“We are developing a system to properly track cost to the community center versus cost to recreation,” Spier said, “and this takes time – we’ve grown over 400 percent over the last year.”
November figures, four months into the fiscal year, show recreation at 56 per cent of revenue projections for entire year, Spier said. “And that doesn’t include rents from Gavilan or the Playhouse. With those figured in we would look even better.”
Cost recovery at the center is expected to reflect on City Council’s decision whether or not to go ahead with building the indoor recreation center, which is not expected to pay for itself for several years. A vocal and growing cadre of library fans is attempting to get the council to put the IRC on hold and, instead, build the less expensive library that they say was promised them when the Redevelopment Agency was extended in 1999.
The RDA pays for capital construction, not maintenance costs.
Also adding to the mix of financial tremor is the $19 million aquatic center, opening June 2004 on Condit Road, though Spier said that SMG projects full cost recovery. Opinions differ throughout the community as citizens and even Councilman Steve Tate worry publicly that the city will be left holding the ball for maintenance and operations costs for the pools too.
The entire center is available for rent, from the large Hiram Morgan Hill Room, to the smaller El Toro and Madrone rooms, art and dance rooms, the Children’s Pavilion with outdoor play yard and water feature – scene of many vigorous birthday parties – and the outdoor amphitheater, plus the renovated Community Playhouse, located next door at Monterey Road and East Fifth Street.
The center, at the corner of Monterey Road and East Dunne Avenue, was built for $21 million. The Playhouse renovation from an old church cost $3.5 million. Both were funded through the RDA.
Details on renting a Community and Cultural Center facility: www.mhcommunitycenter.com or 782-0008.
