Understanding Per Capita Cost of Service

Many of you are familiar with PRORAGIS, NRPA's cutting-edge, online management tool designed specifically to aid public park and recreation agencies with benchmarking, best practices, and decision-making. If you haven’t had a chance to work with PRORAGIS, we highly recommend checking it out. 

The first is our series of "Unlocking the Secrets to PRORAGIS" is on per capita cost of services and programs. 

In recent years in light of the economic conditions, park and recreation departments have increasingly been asked for the per capita cost of services and programs. Elected officials seem to particularly deride or exalt this seemingly simple and straight forward ratio. Those who are supporters of parks and recreation services in their communities may want to see the ratio as above median (the national median per capita cost is $77.00). Those looking for cuts can see the same number as entirely too high. There are several variables that affect the per capita operating cost and they provide valid comparisons only when the differences and similarities are considered. Variables include: 

• Calculating annual operating expenditures
• Defining and calculating relevant operating revenue
• Department land base size
• Department functions performed
• Geographical and environmental location of department
• Demographics of jurisdiction served including:

                       a.  Population
                       b.  Age
                       c.  Cultural character
                       d.  Economic capacity

PRORAGIS can best help you understand how these variables come into play for your operation and enables you to make valid comparisons among your peers so that you can best position yourself when elected officials come calling for your per capita cost of service. 

We will go into greater depth on each of these variables so you can understand why they are important in comparing your per capita cost to others.

First up, the Total Annual Operating Expenditures. When working in PRORAGIS, this is found in the Budget and Finance tab.

We ask: what are your department's Total Annual Operating Expenditures for this fiscal year? Seems like a simple question, but how do you calculate this figure?

Total operating expenses include all annual operating dollars that are expended in any given fiscal year. It does not include capital funding sources except for any function that is paid from operations but is charged to Capital funds.

The chart below, sourced from current PRORAGIS profiles, shows the aggregated amount of 2011 profile operating expenditures. The median indicates the 50 percent mark on expenses. The FY 2011 profiles indicate slightly less than $2.8 million as the median amount of Total Annual Operating Expenses.

Two other critical components of annual operating expenditures include the sources of revenue – such as jurisdiction general fund and fees and charges – and the core trio of:

• Personnel
• Operations; and 
• Operating capital.

Next we’ll address the definition of relevant operating revenue. But before then, we want to hear from you. What are your thoughts about measuring per capita operating costs and the use of this factor as a metric for public parks and recreation?  What questions do you have about annual operating expenditures? When you look at the median annual operating expenditures, where do you fit in? What questions do you have about the variables associated with per capita cost of service?

Use the comments to share your thoughts – any comments and questions are welcome.