Finance Committee Agenda and Packet 2025 06 11

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SUBJECT: PARKS FUND — LONG-TERM FORECAST STRUCTURAL ISSUE DATE: JUNE 11, 2025 PAGE 4 OF 5 2025-2026 Budaet Reductions It should be noted that approximately $80,000 in operating funds were removed from the 2025-2026 budget to achieve a stable 5-year fund balance. These funds were primarily removed from the Water & Professional Services line items based on historical trend analysis and some recent turf conversions, but any future reductions will be subject to annual operational reviews and priorities and these two operating lines are not expected to have additional flexibility that would allow for more cuts. As the intermediate forecast chart illustrates, currently any and all increases in costs to the 211 Fund will have a direct correlation on the reduction of a different service area's funding. Some of these increased costs currently paid from the 211 Fund are out of the department's control: for example, employee benefits, wage increases, goods and services cost increases, contracted labor, etc. If the projected revenues continue as forecasted there will be a need to utilize fund balance just to maintain the basic expense escalators within the next budget cycle. Again, this is only for operating expenses and after 2025 does not include any allocated funding for capital -level infrastructure improvements, new construction or basic depreciating asset management/deferred maintenance projects. General Maintenance Management Plan (GMMP) Per the 2022 City Council reviewed Parks Division General Maintenance Management Plan (GMMP) it was noted that with industry standard balancing of assets and park acreage vs. current staffing levels the community should expect a maximum service level 2 or 3 (3 being average system quality, 2 being basic maintenance functions with areas that would have lesser than average quality of service), however Louisville Parks staff were actively delivering level 4 (above average) or 5 (excellent) service throughout the entire Parks/Horticulture/Forestry/Streetscapes/Snow Removal system. This level of "overachievement" based on industry standards was noted as unsustainable and could lead to high staff turnover rates, decreased staff morale/performance and an unrealistic expectation to align financial resources with the community's expectations. This report estimated that the Parks Division would need an additional 5 FTEs to provide long-term level 3 (average) service levels consistently. This report was completed using the previous, more flexible & "pre-2C", funding models. Since that report was submitted, the Parks Division staffing levels have remained at the same numbers and operating funds, as noted above, have been reduced. However, the service level expectations of the community remain the same (if not higher) and there have been no formalized notifications or requests for service level reductions from the City Manager or City Council. To the contrary, Parks has worked to utilize a new Asset Management software to improve inventory controls, work productivity, effectiveness & quality from staff and to extend the life expectancy of Park assets. Per the GMMP as well as PROS Leadership's opinion, this level of service and the expectation of Tong -term FINANCE COMMITTEE COMMUNICATION