City seeks balance for programs and profit

Published 11:13 am Tuesday, November 4, 2014

As Mercer Island starts to put together a master plan for its Community and Event Center (MICEC), several changes are already planned.

In past years, the MICEC has operated within a set dollar subsidy level established by the City Council, which was increased annually for inflation.

In 2013-14, the Council did not authorize the increase, requiring the MICEC budget to stay within the approved 2012 General Fund subsidy level of $329,000 annually.

Due to budget challenges, the policy of setting a specific subsidy for MICEC is coming to an end next year. To balance funds across the entire department, MICEC operations will now be included in the overall Parks and Recreation budget.

The MICEC will also maintain its current policy of splitting facility usage 50/50 between recreational services and room rentals.

MICEC revenues have doubled since 2008, according to the 2015-16 Preliminary Budget. Parks and Recreation Director Bruce Fletcher said that to keep that trend up, he may have to turn to the private sector, allocating more space for room rentals and less for recreational programs or raising rental rates.

“We are now going from a Community Center to a potential Convention Center,” Fletcher said at the Oct. 20 Council meeting. “We have to continue to having to look at raising rates. We can’t stay flat and we can’t go backwards.”

The department has had  to “make cuts or charge more” for programs, Fletcher said. Many city departments are facing similar funding issues.

MICEC staff recently decreased instructor payments, increased the rental fee for recreation classes and events and decreased operating hours.

The MICEC’s primary source of funding is facility rental fees. Additional revenues are generated through drop-in programs and membership passes for the fitness room.

The MICEC also leases space to two childcare providers, and serves as one of the community’s emergency shelters.

Facility rental rates have been increased a number of times since the center opened in 2006. The 50/50 policy is not the norm across Washington, Fletcher said.

In other community centers, the most common practice is to let the recreation staff provide unlimited classes and programs and let the remaining rooms open up for rentals.

“This would not work on Mercer Island because of our high revenue goals and expectations,” he said.

Parks department operations are classified into three areas: recreation, MICEC and parks maintenance. Fletcher said the MICEC shouldn’t be managed as a separate entity, though the city expects it to raise more revenue than the other areas.

The department still expects to bring in 50-55 percent of its operating budget, Fletcher said.

“It’s hard as a director to run a department when you treat one division differently than others,” Fletcher said.

At the Oct. 20 meeting, Councilmember Mike Cero said he thought removing the fixed subsidy would make financial information more difficult to track.

“It’s a transparency issue,” Cero said. “The community center is a center by itself, and it’s evaluated by itself. The amount it gets subsidized is a good number in judging its performance.”

Councilmember Debbie Bertlin said she is opposed to the use of the word “subsidy” in reference to General Fund support of departments like Parks and Recreation or Youth and Family Services.

“It implies that it’s not in the inner core or central services that we deliver, and is perhaps an area that could be de-prioritized or is less important,” Bertlin said.

Youth and Family Services and the Community Center are not self-sufficient, though the city is trying for that, she said.

“As long as we have policies such that we want a 50/50 split between recreation programs and private rooms … there will need to be some degree of transfer from the General Fund to these facilities and services,” Bertlin said.

The Parks and Recreation budget in 2015 is $5.3 million, with $2.9 million expected in revenues. General Fund support of the department is $2.4 million, with $347,000 for the MICEC.

The 2015-16 budget also includes a $25,000 MICEC Master Plan. The plan will address issues like community and department needs, parking and property boundary encroachments.

City staff, with Sound Transit, has been looking into the possibility of building a Park & Ride in the MICEC parking lot.

There will be a community conversation about the Master Plan if it is given the go-ahead by the City Council on Nov. 3, after the Reporter deadline.