Great Expectations: Financially Balancing Quality Programming and Equity

August 20, 2020, Department, by Chris Nunes, CPRE, and Donna J. Kuethe, CPRP

2020 September We Are Parks and Rec Great Expectations 410

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The park and recreation profession has been focused on equity since its inception during the late 1800s to early 1900s. Over the past few decades, the profession has increased its focus on this area, largely due to the focus NRPA has placed on this issue. Today’s challenge is to identify methods in which to balance this concept and the ever-present financial constraints in public parks and recreation. Using business acumen coupled with a cost recovery plan, the services we provide can be equally accessible and available to all people regardless of income level, ethnicity, gender, ability or age.

Understanding the Consumer
Our profession must move from the nomenclature of “resident” or “participant” to “consumer.” Many program users have a choice in who they use for recreation services. No matter what the ability to pay, consumers deserve a product that meets their physical and social needs, attitudes, aspirations and other psychological criteria. Secondly, programs where the “economic need” may be the greatest are often perceived as “less than” services, but users have the same needs as those in revenue-generating programs. Finally, the professional must understand there is no “one size fits all” consumer. For example, in youth sports, there are multiple market segments (instructional, recreation, competitive, elite). An agency doesn’t need to provide service at each level, only the level that makes sense for the agency in terms of participation (access) and financial mandates due to local competition from other municipal providers, nonprofits and for-profit entities. According to Corey King, director of parks and recreation in Matthews, North Carolina, “There are services offered by agencies that have proven to be revenue generators….These facilities meet the consumers’ needs…and the positive revenue affords the ability to divert dollars to fill true ‘gaps’ in recreation services.”

Entrepreneurial Approach
Our programs, services and facilities must be relevant and brilliant. Creating relevant and brilliant services is manifested in understanding user needs; tracking and applying market changes; enhancing customer service technologies; implementing common sense procedures and policies; and most importantly, creating a fun, exciting, beneficial and rewarding experience. Offering meaningful experiences will bring the consumer back. Secondly, embracing entrepreneurial approaches can help us develop programs that are “cash cows,” which provide revenues that are greater than their direct and indirect costs. These carry programs that may have limited revenue potential. Thirdly, a determinization on the potential for establishing a revolving fund should be made. This business approach allows the agency to retain revenue (year after year) from revenue positive programs; directly use the revenue for costs and to provide dollars for programs that may not generate positive revenue. Cesar Gomez, parks and recreation director for the city of West Park, Florida, says, “The concept of the ‘cash cow’ programs to establish a revolving fund to carry other programs is no different than the model that most college campuses use, as they use revenues from football and men’s basketball to often carry most of the entire athletic department operational budgets. Combined with donations, endowments [and] sponsorships, these two forms of revenue usually carry an entire university’s athletic department.”

Driving Cost Down
In addition to producing brilliant services, our goal must be to do so at the lowest possible cost. This means constantly evaluating all program costs. The lower the program’s expenses, the less is needed to be generated by the agency. Overall, the question to be posed is, “Where can I reduce my costs without negatively impacting services?” As labor costs typically range from 60 to 70 percent of total operating costs, the professional must match use levels with the need for staff. For some agencies, contracting programs may make the most financial sense. In terms of supplies, is the agency purchasing in the most efficient manner, are supplies enhancing the experience of a program, and can the agency leverage “in kind” sponsorships to reduce costs? Finally, an active approach toward implementing conservation-minded systems, such as low-flow toilets and LED lights, reduces operations costs. According to Oscar Carmona, director of parks and recreation for Raleigh, North Carolina, “Having a revolving fund has really allowed us to take on more of an entrepreneurial and creative approach to programming and cost management. Staff know that the more successful and profitable a program is, the more we can invest back into our facilities or equipment to better enhance our customer experiences. In addition, revenues are also used to subsidize free or low-cost programming.”

Cost Recovery System
The single, most important aspect is the implementation of a cost recovery philosophy. This philosophical approach translates community values into a “pro forma.” Overall, it asks the community how it views the value of individual programs and if, and at what level, there are both individual and community benefits. Recommendations are developed to identify which programs benefit the community and should receive tax dollars and which are to be supported by other revenue. From a long-term perspective, this provides the agency and community an action plan for financial sustainability, as well as a logical and rational approach toward price setting. Geronimo Aguirre, parks and recreation manager for New Braunfels, Texas, states, “Now, more than ever, future decisions must be driven by past and current cost recovery analysis in order to make sound business decisions that will have an immediate impact on your financial bottom line.”

NRPA has identified three key priorities for the field: advancing community health and well-being, equity at the center and climate-ready parks. We must face that these worthy concepts all require money. To succeed at achieving equity, park and recreation professionals need to keep programs relevant and make them brilliant, stay on top of trends, understand the needs of their community, view users as consumers and develop a cost recovery philosophy that is vetted with public input. While these business approaches are needed and critical to our success, the profession must never forget our roots. We answer a myriad of social challenges and we need to truly believe in our missions and be fully committed to ensuring those we serve have equal access to the benefits of local parks and recreation services and facilities.

Chris Nunes, CPRE, is Director of Parks and Recreation at The Woodlands Township, Texas. Donna J. Kuethe, CPRP, is the former Recreation Director at the town of Moultonborough, New Hampshire (retired September 2020) and Executive Director at GP RED.