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Proposition A - 2023 Recreation Center Bond

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1. 1. Will my taxes go up if this project is approved?

The Council’s goal and directive with this project is to not increase the current City tax rate, however the city cannot control property appraisals. If approved, the GO bond’s debt service payment would come from the I&S side of the tax rate, which is funded by taxable assessed valuation (TAV) property tax collections. While keeping the tax rate the same, we will shift the payment to the I&S (debt) side and adjusting the M&O (operating) side of the budget. 

2. 2. If not, then why not lower the tax rate?

The Council has historically been lowering the city tax rate since 2009 when it was $0.710 and 2010-2016 when it was $0.699 to its current low point of $0.569 in 2023, While continuing to issue debt to fix roads and other infrastructure that has been neglected. 

3. 3. How is the City paying for this project?

If approved, the GO bond’s debt service payment would come from the I&S side of the tax rate, which is funded by taxable assessed valuation (TAV) property tax collections. While keeping the tax rate the same, we will shift the payment to the I&S (debt) side and adjusting the M&O (operating) side of the budget. 

4. 4. Is using CO's to issue debt against the City's own policy?

No, this is a common misconception and potentially generated from selective reading. Our financial policy directs that certificates of obligation can be issued for projects approved by the City Council and with the appropriate public notice to fund long-term capital. 

5. 5. Has the Council used CO's to issue debt in the past?

Yes. Recent examples include: 

• The ~$68M CO issuance of Oct 2021 which is actively funding or funded the Radio Infrastructure Replacement Project, Fire Admin and Emergency Ops Center Building Project, Austin Park, and Tawakoni Raw Water Line Replacement Project. 
• The ~$2.7M CO issuance of March 2023 which is actively funding a variety of projects throughout the City departments in police, fire, library, animal control, parks & rec / golf, civic center, community development, public works, facilities, downtown, and IT projects. 
• Also issued $20 million in 2019 for upgrades to the current water treatment plant. 

6. 6. Why not fix our streets instead of this project?

The City has spent or encumbered  approximately $120M in Street repairs and maintenance the past few fiscal years. It is a common strategic approach for a City to evenly address multiple needs and areas of the community instead of hyper focusing all of its funding/money/energy on just one specific issue or need. A $50 Million Road Bond is the most recent, $15 Million for Sayle and Stonewall, $4.5 for the expansion of Roy Warren, $12 million for north side of Stonewall (2014 or so, I would have to look that one up).  The City Council has invested in streets over the past 10 years, sticking to the plan to invest in infrastructure it is now they are investing in the community and a project that will generate new revenues, new property taxes, just fixing roads doesn’t always attract new families.  This project will have an economic impact that enable the City to invest further in infrastructure and continue to repair and fix even more streets and roads. 

7. 7. What area or fund from the budget will pay for this project?

The funding of the project would come from the I&S side of the City property tax rate in the budget throughout the life of the debt service payments. 

8. 8. For the operations cost to be paid out of the Enterprise Fund, will it be rolled together with another fund item or will it be an independent fund?

The operation of this facility would be out of the recreation fund which is an enterprise fund based on revenues and expenditures. 

9. 9. If it is combined with another Enterprise Fund area, what, if anything will need to be cut from the programs that are currently funded by that Enterprise Fund "business"?

The only potential change to the recreation fund to accommodate this project would be opportunities to add new programs and expand existing programs.  

10. 10. What will be cut from any other budget area?

No budget cuts are currently planned to accommodate the future facility or the debt service payments

11. 11. Will the parks and recreation budgets or services be cut as they are funded and staffed today?

There are no cuts needed.  

12. 12. If this Enterprise Fund "business" is short in any given year, what would need to be cut to pay the difference or where would the additional funds come from?

Per the Budget book, some Enterprise funds operate at a net loss or negative balance. Some Enterprise funds do come up “short” year over year and nothing needs to be cut or additional funds do not need to be made up as it is up to Council on whether they want to even out any of the Enterprise funds for any given fiscal year via transfers from non-Enterprise funds. I would assess the Council instead looks at the entire summary of fund balances to ensure financial health of funds and the City in entirety (there is a Summary of Fund Balances found in the Budget Book, consolidated below to show the overall status of all projected fund balances for the current fiscal year). 

  

13. 13. Why did the council deicide to use an unscientific survey instead of a scientific poll?

We are not sure you can categorize a poll/survey as “unscientific” or “scientific” as the textbook definition of “scientific” is “based on or characterized by the methods and principles of science” when science in its true form does not apply at all to this entire scenario. Mass surveys or opinion polls, which we believe is the type of survey that Parks and Rec utilized, are categorized as scientific polling for political scientists to measure public opinion. 

14. 14. What changes are being made to the originally presented proposal?

The RFQ amenities were broad to ensure a versatile firm to aid us in determining the amenities within the facility while aligning with public needs. The project goals were to be revenue neutral, a regional attraction and attract tourism. The only changes to the original presentation are to remove the golf and batting simulators.  

15. 15. Would these changes be done to better align with community wants or is it being done to make the project more profitable?

We always attempt to accomplish both while operating within the adopted budget.  

16. 16. Does taking on this project impact the cities’ ability to lower the tax rate to at or below the no new revenue rate?

In any given fiscal year’s budget season, there are a multitude and variety of factors that go into both the Council’s ability to lower the tax rate to at or below the no new revenue rate and their eventual decision on what that tax rate will be set at, and the I&S debt service payment obligation for any given fiscal year is one of those multiple factors. 

17. 17. What assumptions are being used to state the project will be revenue neutral?

That operational expenditures do not go over operational revenues. 

18. 18. Are funds being moved from parks and recreation or other budget areas to make it revenue neutral on paper?

No. The facility will be programmed and budgeted to be revenue neutral within the Recreation Fund. 

19. 19. What other budget assumptions are being made (such as future population/housing growth, inflation)?

In terms of the facility, all that plays a factor. The NRPA states the average jurisdiction population per indoor park and recreation facility is 1 Recreation Center for every 24,601 residents – 1 Community Center for every 26,668 residents and 1 Senior Center for every 32,075 residents. Currently we are deficient in indoor park and recreation facilities, so this facility would accommodate current need and future growth. In terms of operational budget assumptions, it will be based on the programming. In programming the expenses are budgeted not to exceed the revenues. If a program doesn’t make, then there is no revenue or expenditure. 

20. 20. If the projections are based on future growth and that growth doesn't happen as projected, how will it impact the cities' ability to provide current services while paying the note?

The debt service payment is made from the I&S side of the tax rate, which is supported and based on the taxable assessed valuation (TAV) and is not based on if anything is profitable or not. For example, we use bonds for various things such as Streets and any of those given streets cannot be solely determined as “profitable or not profitable” and the payment of that debt service on those streets is not determined or contingent by such an assessment. Historically, the TAV has grown year over year and any growth concerns from that standpoint on what generates that I&S side of the tax rate as far as funding goes off of the TAV would not be feasible even if it somehow did decrease given the fact we have debt consistently falling off down the road beginning in 2025 with massive drop off occurring in 2030.

21. 21. It is also being asked, because these assumptions are justification for doing the project (the future need) and if this growth doesn't happen as planned, would the project still be needed?

As stated on #19 we are already behind the service space needed for our community. So, this project would still be needed to accommodate current need. 

22. 22. Is the intent of the new recreation center to be tourism driven revenue?

The new recreation center will be a local and regional facility that will host up to 8 tournaments per year. The City has placed an emphasis on the ensuring our citizens are a priority by ensuring that these facilities are easily accessible. There will be an emphasis on public use times. The intent of Reecy Davis is to address existing facility upgrades, but also provide an alternate site to enjoy indoor court sports when tournaments are in town. One membership will be good at both facilities.

23. 23. How much will it cost to operate the new facility?

The facility will be operated as an enterprise. So, the projected expenses in the new facility are $2,770,000 and the projected revenues are $2,379,000 plus $160,000 in tournament revenues. The current projected cost recovery is 92% with very conservative projections. 

24. 24. Why does the bond language not reflect what the City has been saying?

The ballot language comes specifically from our legal bond council, and this is guided by the state laws and how it must be worded in the ballot. The language on the ballot is just a guarantee to the bond holders that the City will make the payments and that it is supported by property taxes. 

25. 25. Where there so many meetings about this project behind closed doors?

The reason we as staff take things to the council prior to the public is to ensure that we as staff are doing the correct things and spending the money where council goals direct it to be spent. City staff meets with the council subcommittees and council prior to any large project as a guide to ensure we are moving in the right direction and not wasting time or resources.  This process started over a year ago from the staff standpoint and included proprietary information regarding potential 3^rd party operators as well as lease options. It was vital for the council and staff to ensure that this would be a facility and project that was right for the citizens, taxpayers, and the community prior to taking it to the public. 

26. 26. Has the City looked at the potential traffic issues that could be created on Monty Stratton?

We have not done a traffic study for Monty Stratton but are aware of all the growth along Monty Stratton. We are aware that it is not ideal but feel that it will serve our immediate need with the subdivision, EOC, growth of Paris Junior College and the potential of this project. We do have future plans to fund and improve Monty Stratton and are considering all options and will take it to council once this project is completed. 

27. 27. Is the slide deck somewhere we can go and review all that?

Yes, ma’am we can make sure to tag it to our website. We can link to our website matter of fact I think there is one. If you go to the city’s website and it under projects, it should say recreation project. 

28. 28. The rates and the subscription rates for resident's vs nonresident, How were decisions made because I expected a larger discount or a greater fee for non-residents?

In terms of the cost differential, we looked at other standards and it comes in about 20%. So, when we looked at the differences non-residents and residents and compared to other cities, that seems to align with the fees we used. These are proposed rates obviously that’s not set. However, that is what we based the proforma with in terms of revenues or expenditures.

29. 29. Is the $65 million still the figure or will construction cost be more than that?

When we were talking last spring before it went the ballot, we were already working with the city thinking about what an acceptable cost would be relatively to construction cost for this project that could fit under this envelope. We have done a significant round of estimating for this project that gets us within the envelope that we are comfortable with. Moving forward we will be repricing it again this fall, and another 2 times before it goes for the bid to verify that we are in the right range to meet the target cost.

30. 30. If the price is increased, will you cut the size or some functionality to get it back under the 65 million or what’s the plan?

We would then formulate a gameplan of adjustments that could be made without sacrificing programming within the facility. There are things that we could do to try to   help in terms of shaving small areas here and there without sacrificing the programming  of the center, so that we can still meet the proforma and revenue plan that was laid out.

31. 31. How many cities vs. Private entities vs. Non-profits running recreational facilities are there? Are most cities running recreational facilities?

The vast majority that we have looked at have been community run or city run facilities at the municipal level rather than having another organization running a facility. The  majority are run by the city themselves and they are run efficiently and effectively.

32. 32. Have you looked at the insurance cost of amount of youth that are going to be using the facility on a regular basis?

We are covered under Texas Municipal League for all our current facilities, so we are  covered under a vast umbrella. We do think it will increase but not dramatically. It will be nothing that we can't handle from the maintenance and operations side. Because of     our splash pads, we are already covered for an aquatic element as well.

33. 33. With child watch, why wouldn’t a person bring their child to the facility and leave them? Will they be required to stay while the child is there, or will they be able to just leave that child ther

The child watch is intended to be used for people are who using the facility actively, 2 Hour maximum. It will be a completely secured environment that would be created for that child watch space.

34. 34. Will the low-income portion of our population be excluded from activities at the new facility?

We do not turn anyone down at our current facility and we will not at the new facilities. They will not be excluded.

35. 35. Would the work on both facilities be done simultaneously?

The intent would be to have them on parallel paths throughout the design process. We would get a contractor for them at the same time and work with them on how to sequence this project the best. We want to work to preserve activities at Reecy Davis and not put people out at that facility so one of our number one goals is finding a way to have those activities continue with the construction.

36. 36. Could the senior programs be expanded and will they be at both locations?

We are always trying to expand our senior programs. Once we know that there is a need for them then we can start working on them. All programming options are available at both sites.

37. 37. Right now there is no cost associated with senior programs. In the future will there be fees?

Our goal is to keep present programs the same. In the future, if we have programs that we are paying instructors then there may be a need for program fees, but we are planning to keep it as is.

38. 38. Will there be lifeguards on duty at all times during the facility hours?

We have worked with BRS to isolate certain times for certain activities. We were able to lay out an aquatics facility to ensure the staffing levels can be minimal, while ensuring the safety of everyone at the facility.

39. 39. Will the upgrade be enough without having to renovate again in the near future?

With this project, we are going big. We like to have at least 1 to 2 square feet of recreation space for each member of the community and are proposing significantly above the projected numbers needed. We are planning for over 150,000 square feet for both facilities combined. As growth happens there are some other opportunities that could be looked at as well.