San Rafael staff propose phased fee increases and a 20% nonresident surcharge after cost study

The San Rafael Park and Recreation Commission on May 21 received a consultantprepared cost-of-service analysis that recommends phased fee increases for recreation and child-care programs and a uniform 20% surcharge for nonresidents to help the department maintain service levels.

The report, prepared by Barry Dunn project manager Jesse Ma, reviewed seven fiscal years (FY23through FY29 projections) and found baseline cost-recovery levels near 61.4% excluding administration and about 49.1% including administrative overhead. Ma told commissioners the divisionalready recovers a higher share of costs than the National Recreation and Park Associationself-reported average (about 27.2% in 2025), but projected expenditures could outpace revenues without changes.

Ma and staff framed a near-term revenue target of $100,000to$200,000 by FY29 to preserve current service levels and business continuity. To reach that goal, the report recommends prioritizing facility-rental increases (which generate roughly half of annual recreation revenue), modest aquatics-fee adjustments, and a consistent nonresident premium set at 20% across program categories. The presentation emphasized protecting lower-cost and nonrevenue services: consultants identified roughly $325,000 in nonrevenue programming that supports access and equity.

"When we approach the more individual-benefit realm we tend to see fees elevated a bit more," Ma said, describing the rationale for targeting facility rentals. He added the recommended targets aim to preserve a portfolio of low-cost programs delivered intentionally to maintain access for residents.

Staff summarized proposed implementation steps for the FY2627 budget process: a 5% increase to recreation program fees to take effect Jan. 1, 2027, with a possible 5% annual adjustment thereafter if enrollment and recovery targets require it; a proposed uniform 20% nonresident surcharge; and aquatics adjustments limited to market alignment. For child care, consultants recommended the fund remain self-sustaining with a targeted fund balance of about $600,000 (roughly 60 days of operating reserves) and enrollment-fee increases of about 7% in the upcoming year (to take effect in August 2026 to match the school calendar) and 6% in each of the next two fiscal years to restore the fund to roughly 100105% cost recovery.

Commissioners and attendees questioned how changes would affect contract instructors and participation. Commissioner Sandaval and others asked why staff-run programs carry a different cost-recovery expectation than contract-led classes; staff explained contracted classes typically use a revenue-share model that reduces the citypercent recovered. Staff also proposed a $10,000 recreation division scholarship fund to reduce barriers for San Rafael residents and said they would ask city council to include that funding in the FY26277 budget.

Scott Jensen, an instructor who identified himself as co-owner of 10,000 Victories LLC, urged the commission to cancel a proposed nonresident increase from 10% to 20%, arguing that losing even a single nonresident student could erase the revenue benefit for some classes. "If we lose one student, it's a net wash for the city," Jensen said, describing experience with local enrollment dynamics and marketing challenges.

City staff told the commission they will present the fee proposals to city council as part of the FY26277 budget packet and recommended additional program analysis and a more predictable scholarship funding mechanism to accompany any fee changes. A commissioner moved to receive the report; the motion passed unanimously.

Next steps: staff said they will include the recommended fee adjustments and scholarship request in the FY26277 budget materials to council on June 15 and will continue program-level analysis and community outreach before implementing changes.