Incorporating Equity Into Cost Recovery

December 22, 2022, Department, by Seth Hendler-Voss and Sara Smith

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From its inception in 1972 as a quasi-independent authority and carrying through a merger with the county government, the Prince William County (Virginia) Department of Parks, Recreation and Tourism (DPRT) has subscribed to an assertive cost-recovery model in which virtually all programming and indoor facility use require a fee. Today, DPRT is expected to generate 30 to 40 percent of its annual revenue from fees. The remainder comes from general fund subsidy. Cost-recovery targets range from zero percent to more than 100 percent across approximately 1,500 program offerings. We lean into our cost-recovery mandate because it spurs the ingenuity necessary to stay relevant in an environment where our customers can easily switch to private providers. It also helps us build the needed political capital to branch out into new areas. That is, if elected officials see we can deliver value-added programs that do not rely on tax-payer subsidy, they may be more apt to approve larger, bolder ventures over time.

To some recreation professionals, cost-recovery policies conflict with their intrinsic beliefs in public recreation, creating a moral dissonance between honoring our industry creed of dismantling access barriers and delivering new recreation opportunities that our governing bodies may not otherwise agree to subsidize. DPRT, like many agencies, walks this tight rope daily, but we now use equity as our balancing pole.

Bridging the Fee/Free Gap

Our recent focus on inclusivity as a core element of our strategic plan has challenged us to bridge the fee/free gap for the 10,000 children experiencing poverty in Prince William County who lack the financial means to participate in our highest-priced programs. The racial and ethnic representation of program participants is strong due to Prince William County’s status as the first majority-minority county in the state, but income level is an invisible factor we have not measured.

In 2021, we launched the Count-Me-In (CMI) scholarship program to provide free participation in summer camps, which are our most popular and second-most expensive offering, without undercutting our cost-recovery goals. Rather than using a discount model that requires foregoing revenue for registration slots filled, we sought a private-partnership route in which the costs are passed onto a third party.

Leveraging Partnerships

The Prince William County Park Foundation (Foundation) was created in 2010 to serve as a philanthropic fundraising arm for the Park Authority (Authority) and achieved early success with capital fundraising before going dormant in 2012, following the dissolution of the Authority. One prudent board member maintained the Foundation’s federal and state incorporation status, hedging that DPRT might desire to rekindle the partnership.

Recognizing the opportunity to capitalize on the county’s upward economic growth trajectory to expand recreation opportunity through private investment, DPRT set out to revive the Foundation in 2020. We helped the organization recruit a new board and update its bylaws, and encouraged the Foundation to make scholarship fundraising a staple focus.

The goal of the CMI scholarship program is to ensure every child can attend any program of their choice regardless of their ability to pay. For the start-up year, the Foundation, in consultation with DPRT, limited the programs to full- and half-day summer camps. The partnership mechanics entail DPRT advertising the scholarships and conducting registration. At the end of the season, DPRT billed the Foundation for the balance of scholarships awarded and recorded it as department revenue.

All scholarship awards were made on a first-come, first-served basis for children from families at or below 130 percent of the poverty level in accordance with federal poverty guidelines. Applicants verified eligibility by submitting an IRS tax form, free lunch voucher, or Supplemental Nutrition Assistance Program documentation along with an application. DPRT awarded 103 scholarships in the first year, totaling $16,690. Funds were awarded based on the cost of the desired program to each qualifying dependent in a household (with a maximum of $425 per dependent — the highest-priced camp). As funding for the CMI program increases, we plan to provide access to year-round programs, like swim lessons and before- and after-school care. Rather than an a-la-carte system, we will offer lump-sum grants in the future and applicants will need to cover any cost difference out of pocket.

Unless there is a philosophical sea change from future-elected leaders, DPRT will continue innovating to achieve greater cost recovery as long as residents are able and willing to pay for the value-added services we provide. However, we will not sacrifice our commitment to equity as a result. The CMI program has demonstrated our ability to maintain fiscal solvency, while also living the core values of our profession.

Seth Hendler-Voss is Director of Prince William County Department of Parks, Recreation and Tourism. Sara Smith is Senior Recreation Manager at Prince William County Department of Parks, Recreation and Tourism.