FY 2425 2526 Recommended Operating Budget

Recreation Revenue

The City operates the Centennial Recreation Center, Aquatics Center, and recreation programs as one integrated operation to reduce duplication, leverage resources, and add value to the Community membership model. This model has historically supported limited annual General Fund investment for these services. The COVID-19 pandemic significantly reduced the number of users paying for services at the Recreation facilities. The City reduced expenses and staffing significantly to offset some of the revenue lost from lower use. Since that time, membership and program levels have not fully recovered, while expenses relating to personnel, electricity, supplies and services, and insurance have increased tremendously. While the City continues to rely on very reduced staffing levels and other cost containment, increased cost recovery has proven difficult due to these inflationary factors. Recreation services projected revenue for FY 24-25 and FY 25-26 is $7.6 million and $8.3 million, respectively.

Transient Occupancy Tax

As for the City’s Transient Occupancy Tax (TOT), or hotel tax, based on the current occupancy estimates and the projection of occupancy and daily rates, revenue is anticipated to remain below pre-pandemic levels until FY 25-26. It is estimated that FY 23-24 hotel tax revenue will come in at a lower amount of $2.6 million versus the budget amount of $2.8 million. The estimates for FY 24 25 and FY 25-26 are $2.7 million and $3.0 million, respectively. The higher growth rate for FY 25 26 reflects the opening of an additional hotel.

General Fund – Expenditures

The General Fund expenditures budget is $62.0 million and $63.2 million for FY 24-25 and FY 25 26, respectively. FY 24-25 recommended salaries and benefits increase by 11% or $3.5 million from the FY 23-24 Amended Budget primarily due to the additional staffing to enhance public safety, scheduled pay increases per the City’s Memorandums of Understanding (MOU) with the three bargaining groups, as well as increases in health benefits and pension costs. For FY 25-26, salaries and benefits are budgeted to increase by 5%, or $1.5 million, compared to the FY 24-25 Recommended amount, primarily due to the aforementioned reasons. The non-personnel budget for the General Fund in the Recommended Biennial Budget decreased 4%, or $1.0 million, for FY 24-25 compared to the FY 23-24 Amended Budget mainly due to the $2.0 million distribution of FY 22-23 General Fund budget savings, partially offset by the cost inflation factor. The non-

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