In the last few years, reports of municipalities cutting funding for public recreation facilities have become common.
“The recent economic conditions have caused a lot of jurisdictions to look at all of their operations—not just parks and recreation,” says Bill Beckner, research manager for the National Recreation and Park Association (NRPA). “But parks and recreation in many cases are not seen as essential in comparison to police and fire services.”
Some municipalities have slashed recreation facilities’ services or hours. Others have reduced overhead by combining recreation departments with those that manage other community services, such as libraries. And quite a few others have found no alternative but to close facilities altogether.
Beckner says in most of the cases he has studied, the facilities that are picked for closure are older constructions that are more expensive to maintain and are underused because they cannot offer the same quality of comfort or services that their more modern counterparts can.
Recreation may be considered more elective than essential when it comes to balancing a city or county budget, but the public still wants these services. Increasingly, municipalities are looking to partnerships with private, nonprofit entities in order to meet that demand.
At press time, the residents of Delaware, OH, were considering a plan that would hand over the management of all its recreation programming to the local YMCA. Delaware, which currently subsidizes its rec department by about $350,000 annually, proposed partnering with the Central Ohio YMCA after learning that its state local government fund would be cut by around $500,000 over the next two years, according to media reports. City officials estimate that Delaware will save around $70,000 per year if the Y takes over. The Central Ohio YMCA and the city of Delaware have an existing relationship.
In 2008, residents voted to raise the city income tax by 0.15 percent in order to fund the construction of a $14 million recreation and fitness facility that will be owned by the city but operated by the Y. The Delaware YMCA Community Center is scheduled to open this fall.
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In Nevada, one of the states hit hardest by the recession, the city of North Las Vegas recently awarded the YMCA of Southern Nevada a contract to manage its 36,000-square-foot SkyView Multi-Generational Center. SkyView, which features a 5,000-square-foot fitness center, an indoor swimming pool and several group exercise studios, was intended to open in 2010 as the city’s third full-service community recreation center. Due to financial shortfalls, the center’s construction fell behind schedule, and last October, the city decided to solicit bids from nonprofit organizations to manage the facility when it became clear its budget could not support it. The center opened under Y management this month.
“Probably eight or nine years ago, the city officials started looking to the future and what type of recreational opportunities they wanted to provide for residents,” says Mike Lubbe, CEO of the YMCA of Southern Nevada. “But during the time it took to master-plan for a facility, issue bonds for the building costs, then design and construct it, the community changed a lot in terms of the economy.”
The YMCA of Southern Nevada already manages two other public facilities in nearby Las Vegas, and Lubbe says SkyView Multigenerational Center made perfect sense because he already knew firsthand the opportunities the partnership would give the Y in terms of spreading its brand.
“In these cases, we don’t have to conduct capital campaigns—going into the community and private sector to seek donations—or go through a several-year construction process,” Lubbe says.
Lubbe adds that the partnership offers the opposite advantage for the city—they put in the capital but don’t have the ongoing costs of managing the center. The city instead pays an annual management fee to the Y, which is able to operate the facility for significantly less money than the municipal department.
The savings is due in part to lower labor costs related to the number of staff, how their salaries are administered and the efficiencies at which they operate, Lubbe says. The Y’s pricing structures also give it an advantage—public facilities tend to charge per-use fees, rather than establish annual memberships that provide a more secure level of cash flow, he adds.
Although the city of North Las Vegas has not yet provided him with figures on how much it stands to save through the SkyView partnership, Lubbe says that an internal audit estimated that Las Vegas saves an average of $1 million per year by having the Y operate its Durango Hills Community Center.
“A partnership really utilizes both of our strengths,” Lubbe says.
Nonprofits do have one major advantage when it comes to operating recreational facilities, Beckner says. Although their goal is not to make profits, management still has the private sector’s mentality toward generating revenues. This is definitely not a strength for most parks and rec departments. NRPA research says that for every dollar a municipality spends on its parks and recreation, they only take in around 35 or 40 cents.
Beckner says that parks and rec departments’ philosophy toward generating revenues is historical. In 1978, California’s Proposition 13 sparked a nationwide trend of laws limiting property taxes that in turn led to reduced funding for public services. Having to shift to a revenue-centered model to survive was a huge blow to the public industry, Beckner says, because its employees had always considered themselves more aligned with social services than a commercial operation of any type.
More than 30 years later, many parks and rec departments still struggle with revenue generation.
“Nonprofit organizations are more business-focused,” Beckner says. “The public parks and recreation departments tend to see themselves as being service oriented rather than revenue oriented. In a successful organization, these aren’t mutually exclusive.”