O’Leary: Recreation Bond Project Series Part 3; Managing Spinning Plates

By SUSAN O’LEARY
Vice Chair, Los Alamos County Council

Caveat: Information included in all of these articles are my own views as an individual Council member and does not represent a formal opinion of the County Council.

When I worked in the corporate world, a particularly good boss used to compare the job of a senior manager to the ancient art of plate spinning. To do a good job, you need to have the right number of plates and you need to keep them all spinning at healthy speeds. It’s not possible to have all the plates spinning at top speed all the time, but if you’re paying attention, you can keep them all moving by making trade-offs and spinning those plates that need the help. I’d say the same is true for the job of serving in elected office; especially when it comes to deciding how to apply scarce taxpayer resources to competing demands.

This is the third article in a Recreation Bond Project Series aimed at sharing information about the recreation projects that will be considered for support by the County Council Dec. 20; and to prospectively be voted on by citizens in a May, 2017 bond election. The first article described the sixteen month process the County has taken to solicit public input and analyze candidate projects. The second article explained why so many citizens are asking the County Council to make recreation facilities a priority for capital improvement funding. This third article looks at financial issues and funding sources.

Since we’re one of the most educated, income-stable, and active communities in the United States, you might wonder why there’s so much pent-up demand today for County recreation facilities. The short financial answer is that, with a few exceptions, the County has prioritized investments in the County’s own operating needs and investments in non-recreation economic development projects over investments in sustaining and building new recreation facilities.

There are two aspects of County finances that illustrate this: Operating expenses for ongoing operations; and capital improvement funds that pay for new facilities and infrastructure upgrades.

This operating expenses chart showsthe biggest County department budgets and how they have changed over the past 10 years. The Parks & Recreation group oversees county parks and recreation facilities. It’s part of the Community Services Department and is broken out in this chart to show how its budget has fared over the past decade.

Ten-Year General Fund Budget History 2008-2017

   

Percentage Change in Funding

     

Parks & Recreation Group

 

-7%

     

Remaining Community Services Dept

 

+89%

     

Community Development Dept

 

+73%

     

Public Works

 

+131%

     

Fire Department (9 years)

 

+101%

     

Police Department

 

+26%

     

County Manager’s Office

 

+15%

     

Overall County Expenditure Budget

 

+42%

 

 

 

 

 

 

 

 

 

Other county departments have seen large increases to their operating budgets over the past decade while the Parks & Recreation budget has decreased, not even keeping up with inflation.

Capital improvement funds are tax dollars that are legislatively earmarked by the County for new major facilities and infrastructure upgrades. These funds are available to facilitate county improvement and renovation.

Since 2005, when tax revenue from the Lab started to grow, the County has spent $222 million on Capital Improvement Projects. I did a simple exercise of dividing these projects into four categories: Public Infrastructure (ie ROADS); County Government Self-Spending (ie Municipal building, Fire Stations, IT); Non-Recreation Quality of Life (ie Library, Teen Center, Ashley Pond, public art); and Recreation (ie trails, stable improvements, skate park, Sullivan field). The only item I split on my list was the Golf Course Clubhouse, which I split between Recreation and Quality of Life because so many non-golfers love and use the facility.  For the period from 2005 – 2016, this is what the data looks like:

Public Infrastructure

$122,228,978

55%

County’s Gov. Infrastructure

$  70,040,472

32%

Quality of Life

$  22,706,765

10%

Recreation

$    7,408,616

3%

     Total

$222,384,831

100.0%

 

Doing that simple exercise was a big eye opener for me.  What the numbers say to me is that the County has paid strong attention to providing the community with improved basic infrastructure and in particular to keeping our roads in top condition; to promoting economic development with infrastructure upgrades that have benefited the Smith’s Marketplace, new housing, and tech transfer businesses; and on a pretty strong push to upgrade the facilities the County uses to run its own operations. There have been some non-recreation quality of life investments, but recreation amenities, something that matters a lot to the typical family, have been quite thin beneficiaries of this spending. 

Now, I understand that infrastructure sometimes has to be addressed in a cyclical fashion to deal with pressing priorities. And, I’ll accept that the County’s own buildings and our roads needed some attention over the past decade. But having listened to citizens over the past sixteen months, and looking at where the money has gone over the past decade, I’ve come to the firm position that we’ve had a pretty good run of spending on roads and on the County government’s needs – those plates are spinning quite well. Now is the time in the cycle to make a big investment in recreation amenities that benefitthe everyday experience of our current residents.  We’ve taken care of the needs of County staff and we’ve invested in the hope of new businesses and new residents; but it’s time to spend more than 3 percent of our money on our existing residents. We need to give that recreation plate a good strong spin.

Because there is such pent-up demand and so many worthy recreation projects with significant public support;in March, 2016, the County Council decided to give the community the option of funding a number of these projects through an increase in property taxes. If voters approve a $20 million bond election in May, 2017, property taxes will rise modestly and the bond revenue, combined with available capital improvements funds,would pay for most of the recreation projects on the list.  At the public hearings many citizens favored this approach, rather than stacking the projects up and building them out more slowly in sequence as available funds permit, perhaps taking decades to complete the work.

Other counties have used a combination of property tax and GRT increases to pay for large recreation facilities. In 1998, City of Santa Fe residents approved a $25 million General Obligation bond to pay for construction of the Genoveva Chavez Community Center (GCCC); they also approved an 1/8th% increase to Gross Receipts Taxes to pay for a portion of the GCCC’s annual operating expenses, with the City of Santa Fe paying the remainder from general fund revenues.

To understand what approval of this bond election would mean to the typical homeowner: At today’s rates, a $20 million General Obligation bond with a 20-year term would mean an estimatedchange in the residential property tax rate of approximately 2.2 mils.The current residential rate is 24.374 mils and the non-residential rate is 27.575 mils. For a home with a market value of $300K, which has a taxable value of $100K, the bond would result in a tax increase of $220 annually, or $18.33 monthly. Since property taxes are deductible for income tax purposes, the effective cost would be quite a bit less for most homeowners.

I understand that there are some people who want to just pick their favorite project to be funded by us all, and ignore the other needs. And, I understand that there are people who are happy with the Aquatic Center or the trails or the libraries or senior services, who will not want to spend anything on projects to benefit anyone else. The 16-month public process undertaken by the County Council has confirmed that there are many people who do want these amenities and have asked the County Council to make them a priority now. The County Council decision to ask the voters to decide on this issue is the right way to determine whether there is a majority of residents willing to support this kind of investment.

My view is that we should look beyond our own individual interests and support the suite of projects to make the County a better, more vibrant, more attractive place for our friends and neighbors who enjoy a broad array of healthy recreational activities.  I believe it will boost home values, will promote Lab recruiting and retention, and most importantly will broadly support a healthy, engaged lifestyle for our current residents. 

It’s time to give the recreation plate a good spin, and close some of the gaping amenity gaps between us and our peer communities.

To read the other articles in this Series on the Recreation Bond Projects: click here and here.

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