Agenda Item Wording:
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Park & Recreational Facilities Impact Fee Fund Overview - Review currently approved park projects and available funding for future projects.
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Prepared by: Renee Nagel, Finance and Technology Director,559-713-4375, Renee.Nagel@visalia.gov Amee Swearingen, Budget Analyst, 559-713-4170, Amee.Swearingen@visalia.gov
Department Recommendation: Review currently approved park projects and available funding for future projects.
Summary:
The Parks & Recreation Department has several large projects that will need additional funding from the Park & Recreational Impact Fee Fund, grants and/or significant additional funding sources This report outlines the available funding, projects currently budgeted, additional funding needed on current projects and potential funding options that Council could consider.
Background Discussion:
The Parks & Recreation Department is charged with providing safe, clean, attractive parks and facilities in adequate numbers distributed throughout the community. The Department consists of 7 recreational facilities, 292 acres of parks (37 parks + 23 pocket parks), 164 acres of open spaces, and 25 miles of community trails.
Maintenance for these recreational facilities, except for pocket parks, are funded by the General Fund and Measure N. This includes all improvements to these facilities, including enhancements or updates. Pocket Parks are funded by the Landscape & Lighting District they are located within.
Construction for new facilities has several funding sources such as Parks & Recreation Impact Fee Fund for new parks and facilities, Measure R for trails listed in the Measure R plan, Landscape & Lighting Districts for pocket parks, and grant funding which is very limited and very competitive.
Funding & Projects
Maintenance & Facility Improvements Project Funding (General Fund, Measure N, ARPA)
The General Fund is the largest individual fund in the City and is comprised of 9 operating departments. The majority of the revenues come from sales tax and property tax. The General fund currently has 50 park and recreational facility improvement projects budgeted for $18.1 million with $9.5 million in grants. This total does not include vehicles and equipment needed for operations.
The larger projects include the Riverway Sports Park soccer field fencing, and Plaza Park lights and electrical upgrade. The grant projects are for new construction and are housed in the General Fund. Grants in the general fund include the basins at the East Side Regional Park, the inclusive park, and a community dog park. A list of the General Fund parks and recreation projects are attached. Additional projects that were approved by Council in June 2025 for $2.6 million from the General Fund are also included in the list.
Measure N has $1.5 million in recreation facility improvement projects budgeted in this fiscal year which includes HVAC replacements, updating interior and exterior of specific buildings. A list of the Measure N Fund projects for recreation facility improvements are attached.
In addition to the General Fund projects, the Park & Recreation Department was able to complete major updates to the parks and its amenities over the last 2 years due to the one-time ARPA funding that the City received. Projects completed with this funding included shade structures, new arbors, resurfacing blacktops, and new pond lining for Plaza park. The total park improvements projects funded by ARPA was $4.2 million.
New Park & Recreational Facilities (Park & Recreational Facility Impact Fee Fund)
The Park & Recreational Facility Impact Fee fund is for the acquisition and development of parks, open space, and recreational facilities. The fees are collected on new development in lieu of providing parks and open space. The fee is adjusted each year by the ENRCCI rate as part of the City’s annual Rates and Fees process. The amount of revenue collected each year fluctuates with development. The fees charged and when they are collected is shown in Table 1 - Park & Recreational Facility Impact Fee.
Table 1 - Park & Recreational Facility Impact Fee
The Park & Recreational Facility Impact Fee fund currently has 18 capital projects budgeted for $18.4 million and is projecting to have another $57.3 million in projects for FY 26/27 through FY 29/30. The costs for these projects far exceed the estimated revenue for the Fund, leaving a deficit of $44.6 million in FY 29/30 as shown below in Table 2 - Park & Recreational Facility Impact Fee Fund Projection. Several of these projects have already been identified as needing additional funding, which is not included in the projected deficit.
Table 2 - Park & Recreational Facility Impact Fee Fund Projection
Below is a list of the projects that is projected for the Park and Recreation Facilities Impact Fund for a five-year period. Fiscal Year 2025/26 is the only year with budget appropriation. The remaining 4 years (FY 26/27 - 29/30) will need to be appropriated in future budgets.
Table 3 - Park & Recreational Facility Impact Fee Fund Projects
Four projects listed in the current budget that will need additional funding to move forward in this fiscal year are shown in the table below Table 4 - Park Funding Shortfall. The $10 million shortfall is not included in the out years in Table 2.
Table 4 - Park Funding Shortfall
At the December 15th Council meeting, the Parks and Recreation Department will be presenting conceptual designs for parks at the Elliott Property and the Pearl Wood Property and be requesting to transfer funds from projects currently budgeted due to the funding shortfall.
In summary, the Park & Recreational Facility Impact Fee fund is not generating enough funds to construct planned projects. The City is currently updating the park and recreational facility master plan which will result in a recommended update to the impact fee. This is anticipated to be completed by Spring 2027. The master plan will most likely change the project list for the 5 years listed above. In addition, the list does not include an aquatic center that staff is currently researching at Councils direction, or construction of the East Side Regional Park, which is also a Council priority.
Funding Options:
Staff will continue to pursue grants for park and facility funding, and Council may choose to direct other funding, since as one-time property sales and surplus funds, towards the development of these amenities, but if there is interest in constructing these facilities in the near term, and in maintaining these facilities, other funding is likely too be needed.
If the Council chooses to accelerate construction of park and recreation facilities, and/or other Council priorities, perhaps including funding for maintenance of facilities, Council could consider other funding options including:
1. Increasing the Transient Occupancy Tax - each 1% increase could bring in an estimated $500,000 annually)
2. Increase the Sales Tax - Each .25% increase would generate an estimated $9 million. The maximum sales tax rate in California, 9.25%, which is .75% higher than Visalia’s current rate. An additional .75% would generate an additional $27 million.
3. Implement a Utility Users Tax - Visalia and Farmersville are the only two cities in Tulare County that do not have a Utility Users Tax. Locally, the tax rates range between 5-7%, with four of the six cities implementing a 6% Utility Users Tax (UUT). In Visalia, for each 1%, a UTT would generate an estimated 2.5 million or a 6% UUT could generate an estimated $15 million.
4. Increase the Park Impact Fee - This is expected to be a recommendation once the Parks Master Plan is completed, especially given the increase in construction costs. It is interesting to note that the projected cost of the Pearlwood Neighborhood Park is $7.5 million. Given the current single-family impact fee of $4,784, it would take impact fees from 1,581 houses to raise enough money for that Park. That would equate to almost every house built in 2022, 2023, 2024 and year-to-date in 2025.
5. Implement cannabis retail sales - Estimates vary, but it’s projected that cannabis could generate an additional $500,000 a year.
All revenue amounts included above are estimated, and dependent upon the rise and fall of the local economy. Should Council direct staff to pursue one or more of these revenue sources, more refined estimates would be developed as part of that process.
Fiscal Impact: None
Prior Council Action: None
Other: N/A
Alternatives: N/A
Recommended Motion (and Alternative Motions if expected):
recommendation
Staff recommends that Council receive the Park and Recreation Facilities funding update and revenue enhancements.
Environmental Assessment Status: N/A
CEQA Review: N/A
Deadline for Action: 12/2/2025
Attachments: Attachment 1 - General Fund Park - Recreation Facility Project, Attachment 2 - Measure N Facility Improvements, Attachment 3 - Park-Recreation Facilities Impact Fee Fund