Swimming Upstream?

Posted by:

Erin Eddy

www.ourayland.com
www.ridgwayland.com

November 14, 2008

Written By:

Samantha Tisdel Wright

Everyone knows that the Ouray Hot Springs Pool is the biggest cash cow the city has going, generating revenue of almost a cool million, annually.

But that money, which is used to prop up the city's whole "parks" infrastructure (from the North Ouray Corridor to the Community Center to Box Cañon Park and everything in between) has been stretched too thin. The 2008 ending fund balance for the Parks Fund is projected to be $793,464 in the red.

That's a pretty big number. Big enough to have caught the attention of auditors who scrutinize the city's books. And the word has come down: "You'd better fix it."

The city's draft 2009 budget proposes to start doing this by taking the community center (an annual $70,652 expenditure) and the dredging of the North Ouray Corridor (for which $20,000 is budgeted every spring) out of the Parks Fund and parking them in the General Fund, instead. But the city still has a long hard slog to get its parks budget back in the black. Administrator Patrick Rondinelli said if the current pattern holds, the Parks Fund is projected to remain in a deficit until "at least 2023."

How did this come to be? Quite simply, the cash cow is being multi-tasked dry. Or in the words of Rondinelli, "operating expenses are outpacing revenues." Of a projected $950,000 in pool revenues in 2009, the pool itself will rack up $822,000 in operating expenses. That doesn't leave a whole lot of leftovers to spread around to the city's considerable parks infrastructure.

"Per capita, Ouray probably has more park lands per resident than any other town in Colorado, with the possible exception of Boulder," Rondinelli said. "And we're trying to acquire the Ice Park, which will add even more."

Many municipalities have a taxable "Parks and Rec" district to cover the upkeep of their community assets. But the City of Ouray's budget is set up in such a way that the "Parks Fund" gets its revenues exclusively from the pool and Box Cañon Park (a combined $1.3 million in the 2008 budget).

This fund, set up as an "enterprise fund," is separate from the city's "General Fund" which pays for the day-to-day operations of the municipality. All taxes and fees collected by the city flow directly into the General Fund. By law, no more that 10% of moneys in one kind of fund can flow into another.

Thus, the sales taxes and fees collected by the city cannot, under the current structure, go toward the maintenance of the city's park lands.

The Parks Fund currently encompasses the Hot Springs Pool and gym, Box Cañon Park, Rotary Park, Lee's Ski Hill, the North Ouray Corridor, and "general parks and services," including Community Center expenses, which will shift to the General Fund next year. None of these places are cheap to maintain – the city spends $20,000 annually at Rotary Park, alone – and only the pool and Box Canyon Park bring in direct revenues.

Making matters worse is a $550,000 legal settlement pertaining to a 2004 dispute in which the city was accused of disturbing the Wiesbaden's geothermal source, which drains the Parks Fund of $114,000 annually in debt service. The last payment will be made in 2010.

All of this is bad news for the cash cow itself. According to Rondinelli, out of every $10 the Hot Springs Pool brings in, only $4 goes back to the pool. "If it were being run more like a business than a city facility, all of the money the pool brought in would be sunk back into improving the facility."

Pool revenues themselves are in a projected pattern of decline. In '08, actual pool attendance and revenues were down 3-4% from projected levels, and Rondinelli, a stalwart realist, sees no reason to hope economic conditions will change in the next few years.

"We're going to face significant changes, and not just in '09. I lie awake at night thinking about it," he admitted.

Working with City Council members over the coming months, Rondinelli hopes to start exploring some long-term solutions to the parks deficit dilemma. "A rec district is an option worth exploring," he said. "Or, what if the city leased the pool to a private entity? The Parks Fund is complicated. It has its own nuances that make it an interesting thing to work on."