Budget Defense Tactics

Use Business Sense & Strategic Partnerships to Survive

By Deborah L. Vence

Parks and recreation departments will continue to struggle well into 2012 and remain in defense mode of their budgets as the erratic economy forces municipalities to unwillingly shrink their already dwindling financial plans even more.

"I think from the NRPA's perspective, the whole range of parks and recreation—including at the state level—it's a tough time right now. The recession is clearly not over for them.

It's still taking its toll. A number of managers predicted that we haven't seen the worst of it yet. How long is it going to last? It will still go on for a couple of years—if it returns to whatever it was before. This is the new normal. It isn't going back to what it was," said Richard J. Dolesh, chief of public policy for the National Recreation and Park Association (NRPA), based in Ashburn, Va.

And, "2011 and maybe half of 2012 will be the worst in terms of decreasing tax dollars for municipalities and state budgets," said Janet L. Jordan, CPRP, an associate at Moody-Nolan Inc., a Columbus, Ohio-based company that specializes in architecture, civil engineering and interior architecture.

"Many municipalities depend on state dollars for their annual operating budgets and states, unlike the federal government, must always balance their budgets. In Ohio, we are facing an $8 billion shortfall, and the cuts affecting local government dollars will be deep," she said. "Hopefully, as the economy incrementally improves and tax dollars and employment stabilize, the 2012 and/or 2013 budgets (depending on the municipality's fiscal year) will begin to increase, although probably not back to pre-recession levels in the near future."

In the midst of this downturn and uncertainty, however, municipalities and other cash-strapped entities need to know how to defend their parks and recreation budgets from drastic cuts. No one-size-fits-all solution exists, but some industry experts are optimistic and believe that there are some clear-cut ways parks and recreation programs and facilities can be saved.

Make Your Case

One way to defend your budget is to make a compelling case as to why parks and recreation is so valuable.

"A strong case, and many try to make it, is [that parks and recreation] is an essential public service in the eyes of taxpaying citizens. What does it take to be perceived as an essential public service? It's a thorny question, but one worth delving into. Does your mayor consider you an essential public service?" Dolesh said.

"In the best sense, parks and recreation is. It's preventative and reduces other costs of government services," he added. "These are, increasingly, public parks that people go to and stay fit and stay active, reducing the cost of other things in many ways."

Community Surveys & Support

And, don't underestimate the power of a community, either, in helping to defend your budget.

The state of California's $20 billion budget deficit prompted Gov. Arnold Schwarzenegger to propose closing up to 220 state parks as a way to shrink the deficit. But, the governor backed down from his proposal after a huge public outcry.

Such community protests prove that people really do appreciate their parks, and that it pays to consult with residents before any major decisions are made.

Tacoma, Wash., has strong advisory council support and neighborhood councils scattered throughout the community to help find out what residents want in recreation services.

"We rely on community surveys that are both scientific and special interest groups," said Jack C. Wilson, executive director of Metro Parks Tacoma, created in 1907 as a municipal corporation to manage park, recreation and zoological services and facilities for Tacoma residents.

"In April [2010], we basically did our homework, and conducted surveys, public outreach, community conversations. We didn't wait until we were having to eliminate programs," Wilson said. "Based on forecasting and loss of property and sales tax, we were going to be challenged, and we didn't want to take the community down that road. But, we argued that if you support it, it will allow us to maintain the services. They were not, in that particular point in time, not willing to support anything new, beyond our core.

"They did have a respect, appreciation and an understanding and [understood that we] needed to secure additional resources just to maintain and sustain our efforts. We are in a position where we are not losing any services, or cutting back our programs. And, when you look around many other government entities, we feel very fortunate."

Sometimes you have to go a long way to get community support, which requires a great deal of conversation and public participation.

"It doesn't happen overnight," Wilson said. "The investment we have made, planning, community outreach is paying big dividends. I thought I could put together a strategic long-term plan in one year, but it took three years."

Metro Parks Tacoma provides a golf course and two zoos. It's a very diverse park system, which requires a great deal of strategy to make sure that it's bringing those interests to the community to advance the park and recreation system there.

"We really try to learn a lot from the data. We want to be data-driven, [and] gain interest through the community through the surveys. We craft our strategy from that, [and find out] what their interests are," Wilson said. "We want to help educate them and create an awareness around trends. What was valid 25 years ago, [maybe isn't] serving the community today. That's an important part of the process as well. There are expectations and new ways of providing service that really do support and get at the changing demographics that we have in the community."

Transforming old wading pools into spraygrounds, a key feature at many parks now, helps meet the needs of the community and moving along with changing trends. Fifty years ago, a rectangular type swimming pool met the needs of the community. But, that might not necessarily be the case today.

"[Community surveys] have really helped. There [has been] a feeling of trust and confidence in terms of transforming our parks system," Wilson said. "A fundamental part of our success and future success will be that genuine effort to engage and get the community involved."

Create Strategic Partnerships/Fundraising Efforts

In addition, parks and recreation departments need to look at strategic partnerships to allow the continuation of programs to the public, while reducing or shifting the costs on to others.

"Private nonprofit organizations, or … public partnerships, that's the strongest strategy in dealing with the crisis. From the small public park agency, up through big cities [and] up through large urban departments; create more partnerships with the private sector," Dolesh said.

For Metro Parks Tacoma, establishing agency partnerships is important in continuing the success of its parks and recreation system. It relies on partnerships with other public or government agencies, community and nonprofit organizations, and private corporations to achieve its vision, mission and goals.

Meanwhile, parks and recreation departments also can help prevent budget cuts through an aggressive fundraising component.

"There are organizations that have nonprofit fundraising arms," Wilson said. "We have a good product to sell and people are willing to support and contribute. Pursue partnerships and invest an effort in bringing on board volunteers, to apply good sound business principles, and look for every opportunity to be entrepreneurial."

As a result, Metro Parks Tacoma has been able to sustain its levels of service.

"In 2005, we passed a capital improvement bond issue that allowed us to upgrade our basic infrastructure throughout our park system," he said. "We delivered over the last five or six years. We delivered and followed through on the promises we made."

Set Up Long-Term Funding

To boot, establishing long-term funding mechanisms is another key way to help defend against budget cuts.

"Trends that go beyond the budget cutting and the internal consolidation is how to create fundable, sustainable, dedicated funds," Dolesh said, adding that the state of Iowa just passed a law this year to allow a portion of any fee increase to be dedicated to conservation.

"[The idea] is to have secure and sustainable long-term funding mechanisms in place," Dolesh said. "If primary funding mechanisms for public parks are dependent on general fund revenues, when they decline, discretionary spending has to be cut. They all rely on balanced budgets, and all have to balance within a one-year cycle."

The bottom line is, "When we look at communities that take pride in their quality of life, parks and recreation are the top three or four best assets. Businesses—in making relocation decisions—[consider parks and recreation] as one of the top reasons to relocate to another city," he said, adding that when people know that their tax dollars are largely going to support public lands, they often show their support.

Re-evaluate Programs & Fees

Even though many cities don't always appreciate parks and recreation departments as essential city services, an additional way to help protect your budget during lean times is to re-evaluate programs, services and management practices.

"Do you track direct and indirect program delivery costs as well as program revenues? Is there duplication of leisure services and programs in the community? Who are potential partners for programs and services and not necessarily dollars, like chamber of commerce members, civic associations and service clubs?" said Jordan, of Moody-Nolan Inc.

"If a parks and recreation department hasn't been tracking their services and budgets through consistent evaluations, telling their story and touting their triumphs to elected officials and their constituents before the recession, it's difficult to suddenly start when faced with budget cuts," she added. "Empirical evidence is the best first line of defense when justifying budget appropriation 'adjustments.' Anticipate change and be prepared."

Similarly, Dolesh said that parks and recreation departments need to look at fees and charges to see if changes need to be made.

"Increase fees, or find new ways to increase them. There are some who decry this. A danger is there that you are creating an unequal system … and that's a concern," he said. "Managers who have fixed or increase operating costs clearly are looking at diminishing budgets or mainstream cuts. They have to come up with new sources of revenue or lay off people."

Act Like an Enterprise

Finally, and quite possibly, most importantly, is to start running operations more like a business—something that should be the way of the future for parks and recreation, experts say.

Tom O'Rourke, executive director of the Charleston County Park and Recreation Commission in South Carolina, said parks and recreation departments need to start changing their ways and begin running their operations like a business if they are going to prevent budget cuts.

"Our budgets [at Charleston County Parks and Recreation] have increased each year. Seventy percent of our operating budget is generated by user fees. The way we set up this department, and it's simple to understand, is that whoever uses the service pays for the service," O'Rourke said.

"For example, we have events, attractions, waterparks, fishing piers, and we operate these as a business, and the money that's generated with some profits goes back in to cover the costs to run the park system," O'Rourke said. "The interesting thing is that governments are hurting because of the decreased tax base. And many departments rely on the property tax base 100 percent to run the programs.

"What we have found is that entertainment and leisure activities, and I don't care what people's wallets are, they are going to continue doing this. As municipal governments lose their budgets and cut services, the cuts are going to happen somewhere else," he said.

What works for Charleston County Parks is that it's not just a park system for people who have money. The commission developed a foundation to help fund other attractions and services, as well.

"We have people, young children in rural areas playing football, and don't pay any fee for that service," he said. "Historic parks, nature centers, they are a big part of what we do. We will make it in the fishing piers at retail sales and events, and do other things. I have been busy. I have been all over this country. People want to know, 'How are you doing this?' You set up a system where you have the users cover the costs of what they do."

And, it's easy to explain how it works.

"If you live in Charleston County and hate leisure services, none of the money [you spend] goes toward that. [On the other hand], if you live in Charleston County [and want to use parks and recreation services], you have to bring $11 to get in. It just makes sense," O'Rourke explained.

"What governments have is the bonding capacity to fund these things with revenue bonds—then they have extreme profits," he said. "So, it's a business model that is very structured, but consistent. We don't just make decisions to do new things without feasibility studies. We have to make sure that it will be supported by the users."

But, are parks and recreation departments beginning to see that things have to change in this way, and that a new direction and strategy needs to take place?

"I think some are starting to," O'Rourke said. "I think that what the elected people and city administrators and county administrator needs to do is to take this step. It's a very foreign concept to city administrators—to actually be in business. You have elected people that will say, 'I don't want go up on the baseball fee.' But, if you think about it, everybody else in the community is subsidizing that program. Sit them down and say, 'This is how much it costs to do it."

And, it's simple. If you pay, you play.

"It's just one thing that's very easy to understand—whoever uses the services pays for the service. We couldn't have this park system without being set up this way," O'Rourke said.

But, all things take time.

"You can't become this commission overnight. It took us 32 years to get here," he said. "You have to make calculated business decisions. The foundation of what we do speaks to the values that exist. It's not about money. It's about the people—what their wants and desires are. But, that doesn't mean you can't do that in a business environment."

Wilson added that there should be a greater demand and effort to be as entrepreneurial as possible.

"We need to find that balance between fee and free. There are opportunities to help the community, areas we can operate more like a business," he added. "If we can be more entrepreneurial from those reasonable efforts, we will be able to keep our demand on the tax base to a minimum."

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