Deep divisions that once existed between the Jefferson City Parks and Recreation Commission and the Jefferson City Council may be returning as the two entities grapple with issues of charges, rent and office space.
As Jefferson City officials prepare for the 2016 budget, two areas of potential change are the rent and administrative chargeback for the Parks, Recreation and Forestry Department. A proposal to increase both line items is expected in the 2016 budget discussions, but to fully understand both issues, some history is required.
Rent
The department, currently housed in the city annex with Fire Administration, pays $6,500 annually to the general fund for use of the first floor and portions of the lower floor.
Throughout the past year, there have been discussions about possibly increasing that amount, as the rent paid does not cover the actual costs of operating the building. (In 2014, the city spent more than $11,000 on utilities in the annex.)
In an April 22 memo to the mayor and City Council, City Administrator Steve Crowell said he would recommend increasing the rent to a market level rate and specified $35,000, not including utilities.
The parks department began to be charged rent for office space after moving out of the former offices on Missouri Boulevard, now known as the Washington Park Center, which is still owned and operated by the parks department.
In 1983, the new John G. Christy Municipal Building opened on East McCarty Street as the new City Hall, and the parks department had to leave its Missouri Boulevard offices.
"The park commission was kind of forced to move out of the offices out on Missouri Boulevard back in the early '80s and come into City Hall," said Bill Lockwood, director of the Parks, Recreation and Forestry Department. "We had free rent out there cause we owned the building, and when we came into City Hall, we had to start paying rent."
It's unclear exactly when the department began to pay rent. Lockwood said he believes the department began to be charged as soon as they moved into City Hall. However, George Hartsfield, mayor from 1979-87, said he does not recall charging them rent after moving the department into City Hall.
"We did not charge them during my tenure anything, so they didn't pay rent," Hartsfield said. "I felt like that was hopefully a savings to them and things have changed since then to where the city does charge them."
The department was forced to move into City Hall to encourage more cooperation between departments. Lockwood said before the new City Hall was built, departments were scattered all over, and it was a citywide effort to bring them together.
Hartsfield said the Park Board, now known as the Parks and Recreation Commission, was pressured to move into City Hall to combat what was seen as an extreme independence.
"Frankly, the Park Board was independent to the extreme, I thought, and the council thought at that time," Hartsfield said. "They did not interface with the city in any way. For example, if the streets in the parks needed to be patched, they'd hire a contractor, they had their own finance person."
Hartsfield said he wanted the department to use city services and become more integrated with the rest of the departments.
"They weren't happy about it, but they did it. And we told them that they need to be using city services, which once they moved in, they started to," Hartsfield said.
Post-Tribune articles from the early '80s reveal deep divisions between the Park Board and the City Council, with the board taking multiple votes through a three-year period on whether to move into City Hall. Hartsfield said he's afraid the park commission and the city are drifting apart again, though not to the extreme it was before 1983.
"There's some value in parks and rec ... being buffered from the regular politics and ups-and-downs of what the council and mayor is doing and the change in elected officials, but you can carry it too far," Hartsfield said. "They are a part of the city and they are receiving public funds from city taxpayers, so it should be balanced. I get concerned sometimes that it's drifting out of balance again."
According to Post-Tribune articles, the Park Board debated moving into City Hall for at least three years, even though the former board president was reported as saying the board would have no choice on the move. One article from May 3, 1983, noted the question of moving into City Hall had "developed into an issue of controversy between the park board and City Council." Another article from May 17, 1983, quotes a then-member of the City Council as saying the department needs to come to terms with the city rather than continue to play games.
Once the board made the final decision in early 1983 to move into the new building, the board and the council went back and forth on provisions to agree to the move.
One of the provisions of the agreement, which was approved by the City Council in June 1983, specified the "board shall not be charged rent for its allotted area, but the board may pay a pro rata share of operating and maintenance expenses based on the relation of the number of square feet allotted to the board compared to the total number of square feet maintained in the Christy Building."
City Attorney Drew Hilpert said that agreement is no longer applicable, as it was specifically for City Hall, not the annex where the department is currently housed.
Lockwood said the department moved into the annex in February 2001, as space had become cramped in City Hall. As the department and commission move forward on a proposed partnership with Lincoln University for a multipurpose facility on the LU campus, conversations about the home of the parks department have started again.
Parks staff have always planned on moving into the multipurpose building when its built, though the commission has not officially approved that plan, or any other. Hilpert has said he'd like to use the current parks offices as a permanent home for municipal court, which is currently operated out of the council chambers once a week.
However, until the department once again operates out of its own facility, a rent increase could be just around the corner. Also, while Lockwood said he isn't opposed to covering the costs of using the current space, he does not think it should be based on a commercial rate.
"We would prefer to just cover the costs for the building, not necessarily have our rental rate based on what a commercial building would rent for elsewhere," Lockwood said.
Administrative chargeback
Another potential change in 2016 is the possible increase to the administrative chargeback the parks department pays to the general fund.
Because the department is funded by a dedicated sales tax, it is treated like an enterprise fund, receiving very little funding from the city's general fund with the small amount of general fund money allocated to parks being for a specific function or task, such as tree trimming in city right of way. Enterprise funds, such as parking or wastewater, as well as parks, are self-sustaining funds and are charged annually for their use of general fund departments like human resources or finance in what's called an administrative chargeback.
In the 2015 budget, the parks department is expected to pay roughly $233,000 for its administrative chargeback, but under the formula used for all other enterprise funds, the department would have to pay approximately $180,000 more.
"Parks is the only one that's different," said Finance Director Bill Betts.
Betts said all other enterprise funds have to pay an amount calculated by taking all expenses for the city from the previous year and dividing it by the expenses of that particular fund from the previous year to get a percentage.
"Say the total was $50 million and that particular fund was $5 million, so that would be 10 percent," Betts said.
In that example, the staff would take the totals from all administrative funds, such as human resources and IT, and 10 percent of that total would equal the chargeback cost to that department.
However, with parks, Betts said the chargeback is calculated by taking 5 percent of the department's previous years sales tax revenue.
"It has nothing to do with the way that we figure everyone else's," Betts said.
Betts and Crowell were unsure of why the parks department was treated differently when it came to administrative chargebacks, but both acknowledged it was a result of the department's switch from a property tax to a sales tax, which happened in 2005.
"At some point in time, there's an agreement, a handshake agreement," Betts said. "There's no written agreement, no formal agreement, that this 5 percent is the way that it'll work."
Lockwood said the agreement came from a compromise between the commission and the city just before the election in 2005 to switch to a dedicated sales tax.
"It seemed this idea of administrative chargeback surfaced at the last minute and kind of really caught the park commission, and I think the people who were supporting our efforts to stabilize our funding source, caught them really by surprise, since no additional services were going to be provided," Lockwood said. "It was a compromise reached, I guess."
Lockwood said the commission has never had an issue with the department paying for the use of general fund departments, but the way those costs are calculated have been an issue since the chargeback began.
"I think just to base it on an arbitrary formula that does not have any relationship as we see it or to the direct measurement and accounting of costs is an argument that we've kind of perpetually had, or the commission has had, over this topic through all of the years," Lockwood said. "Obviously, it's of great concern to the parks commission."
Crowell said it's important to make sure enterprise funds are contributing toward the overall costs of operating the city, otherwise there isn't a full picture on what it costs to operate each department.
Lockwood said an increase to the administrative chargeback would hurt some of the department's long-range plans as the commission has worked to put aside funds for a variety of projects throughout the city. However, even with conservative budgeting, the department still has a list of unfunded projects throughout the community.
"I know the general fund is looking for any means possible to gain some additional revenue," Lockwood said. "Quite frankly, if the council decides to dramatically increase the administrative chargeback, I think it certainly jeopardizes a number of long-range planning issues that we've been trying to plan for."