City of Morgan Hill Fiscal Years 2020- 2022 Recommended Operating and CIP Budgets

 Implement miniature golf at the Aquatics Center to support increased attendance and revenue generation (Supporting Our Youth, Seniors, and Entire Community; Fiscal Sustainability)  Continue to offer a myriad of Developmental Asset based youth development programs (Supporting Our Youth, Seniors, and Entire Community) Financial Comments Prior to FY 2008-09, the City operated the Centennial Recreation Center, Aquatics Center, and recreation programs as independent divisions. Once combined to operate as one integrated division, the City was able to reduce duplication, leverage resources, and add value to the community membership model. As a result, the annual General Fund investment for these services is limited. Today, Membership and Program Services is responsible for generating the largest percentage of revenue for Recreation and Community Services and is the General Fund’s third largest source of revenue (behind property and sales tax). This market driven revenue source is dependent on attracting and retaining members and daily customers. Membership grew significantly each year since the facility was opened through FY 2012-13. The growth rate began to plateau in FY 2013-14 as the facility reached its load limit and an unprecedented community penetration rate (percentage of the population that is members – currently 23%) stabilized. With the soon to be completed CRC Expansion the focus for FY 2020-21 and 2021-22 will not only be on retaining the existing customer base but will also focus on new member growth with the new group exercise space and additional parking. Member engagement and well-maintained facilities and equipment will continue to be the cornerstone of this effort. The escalating cost of maintenance and minimum wage are accounted for in this budget. In total, an estimated $6 million in revenue will be generated in FY 2020-21 and $6.7 million in FY 2021-22 to support service delivery. Per the City’s partnership agreement with the YMCA of Silicon Valley, the table below formally establishes the partnership budget for Fiscal Year 2020-21. Membership and Program Services (continued)

Partnership Summary Table FY 2020 ‐ 21

City Total Revenue City Total Expense City Projected Net Gain

CRC/AC Partnership Member Initiation Fee

$4,489,992 $103,500 $4,593,492

$1,751,000

$2,738,992 $103,500 $2,842,492

$0

Total

$1,751,000

CRC/AC Partnership Detail Health and Wellness

$4,512,596

$1,650,000 $101,000

$2,862,596 ($101,000)

Teens

$0

162 COMMUNITY SERVICES