City of Morgan Hill Bikeways, Trails, Parks and Recreation Master Plan

REVENUE ANALYSIS

BIKEWAYS, TRAILS, PARKS & RECREATION MASTER PLAN |

A-3

Parcel Tax: A parcel tax is either based on a flat per-parcel rate, calculated on the use,

size and/or number of units on each parcel or an asset valuation. A parcel tax requires

approval by two-thirds of city voters.

Sales Tax: Cities can generate revenue by increasing the 7.5% state sales tax to increase

the general fund or to fund a specific purpose (e.g. parks and recreation). A sales tax

increase dedicated to a specific purpose requires approval by two-thirds of city voters.

Real Estate Transfer Tax: A real estate transfer tax, is levied when there is a transfer of

real property and when residential, commercial and industrial construction occurs.

Adoption, and any increase or changes to a real estate transfer tax requires approval by

two-thirds of city voters.

FEES AND CHARGES

Cost recovery through user fees is typically only used to offset General Fund maintenance and

operations costs. Fees and charges create a direct connection between the funding source and the

beneficiary of the service. This is a widely accepted way to provide services, however fees and

memberships can keep lower income residents from participating in recreation programs. Equity

concerns may be addressed when developing a pricing system to ensure that the City is providing its

core services to all citizens.

TABLE A.1. TYPE OF RECREATION AND PARK FEE

Types of Recreation and Park Fees

Fee Type

Description

Example

Entrance/

Parking

Charges to enter a developed recreation

site at the patron’s first contact with the

area; the area may contain facilities or

activities for which fees are charged

Large parks, gardens, wildlife

preserves, historical areas.

Admission

Charges to enter a building, structure or

natural chamber where entry and exit

are controlled and attendance is

regulated.

Museums, historical buildings.

Programs

Charges for participation in an activity.

Lessons, camps, classes, leagues.

Sales

Revenues obtained from stores, gift

shops, restaurants and other retail

Food and drink items, catering service,

souvenirs, firewood, film, clothing.