FINANCIAL SUSTAINABILITY STRATEGY
City of Fort Bragg/CV Starr
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1. CONTEXT - parks & recreation and quality of life services2. WHEN we began to pay attention3. WHAT & HOW - designing a financial sustainability strategy4. Thoughts, Comments, Questions5. Next Steps Financial Sustainability Strategy
agenda
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Financial Sustainability Strategy
The Birth of Public Spaces•Boston Common was the first public space or “commons” in the United States allowing for self directed leisure. 4 SERVING THE PARKS AND RECREATION INDUSTRY.
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Financial Sustainability Strategy
Structured Activity
Initially, the movement focused on places. As it progressed, the importance of programming was acknowledged. “The playground that has no program achieves little.” (Curtis 1915). 5 SERVING THE PARKS AND RECREATION INDUSTRY.
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Waterpark: Elsaboath (2021); Playground: Lee (2020); Summer Camp: Kniaz, A. (2020).
As the profession matured and diversified, the guiding philosophy shifted away from a social welfare model to a demands satisfaction model… 6 SERVING THE PARKS AND RECREATION INDUSTRY.
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Mission Creep?
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No Limits?
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Parks &
Recreation
Conditions in play
Public health crisis
Community disparities
Housing insecurities
Growth & development
Staffing deficiencies
Conflicts b/w community
demands and needs
Increasing infrastructure
maintenance demands
Environmental impacts
(e.g., climate threats)
Economic
volatility
Lack of revenue diversification
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Financial Sustainability Strategy
WHEN we began to
pay attention
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Financial Sustainability Strategy
SE RVIN G TH E PA RK S AN
D RE
CR EA TION I ND USTR Y.
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F
i
n
ancial Sustainability Strateg
y
The Great Recession’s Profound Impact on Parks & RecreationBy: Nicholas Pitas, Ph.D., Austin Barrett, Ph.D., Andrew Mowen, Ph.D. act
w
e
n, P
h.D.
11 SERVING THE PARKS AND RECREATION INDUSTRY.
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50%
• 100
%
1989 2003 2008 2013
*Dollar figures are adjusted to 2014 values to control for the impact of inflation Parks &
Recreation
Spending
1989 - 2013
Source:
The Great Recessions’ Profound Impact on
Parks & Recreation 2018
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%
Operating &
Capital
Expenditures
2000 - 2013
2000 2008 2013
Capital
$12B
(33.8%)
Operating
$23.5B
(66.2%)
Operating
$28.9B
(71.7%)
Total Expense
$40.7B
Capital $6.6B
(20.3%)
Operating
$25.9B
(79.7%)
Total Expense
$32.5B
Total Expense
$35.5B
Capital
$11.8B
(28.9%)
2023
Source:
The Great Recessions’ Profound Impact on
Parks & Recreation 2018
13 SERVING THE PARKS AND RECREATION INDUSTRY.
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2023-agency-performance-review.pdf
Towns: Average of $1.4MCities: Average of $19.8MCounties: Average of $26.9MPark Districts & Authorities: Average of $9M Deferred maintenance across various local jurisdictions 14 SERVING THE PARKS AND RECREATION INDUSTRY.
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The Great Outdoors Act (2020)“Fully” and permanently fund the Land & Water Conservation Fund (LWCF) with $900M per year.Provide $9.5B over 5 years ($1.9B/year) to address the maintenance backlog of the National Park Service. 15 SERVING THE PARKS AND RECREATION INDUSTRY.
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The Great Insufficiency of The Great Outdoors Act
$500M Backlog
$1B Backlog
$15-24B Backlog
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2013 – 2018 Financial performance
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or…
We’re fiscally well and want to stay that way!
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REALITY
POLICY
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Thoughts? Questions?
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Parks & Reconomics©
How we manage finite resources
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Financial Sustainability Strategy
Are you smart about
managing money?
S ERVING THE PARK S AND RE CR
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Common language and understanding leads to improved communication, collaboration, and a better prepared community of professionals. 24 SERVING THE PARKS AND RECREATION INDUSTRY.
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Costs
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Direct costs can be traced directly to the provision of a service.
This cost would not be incurred if the service ceased.
DIRECT COST
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Indirect costs are incurred with or without the provision of a service. These costs are not traceable to any particular service, benefit the system as a whole and do not benefit any one single service.
INDIRECT COST
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Cost Recovery & Subsidy
Cost Recovery
…
recovering or offsetting the costs (expense) of delivering services.
Subsidy
…
a benefit given by the government; typically to remove some type of burden and often considered to be in the overall interest of the public. 30 SERVING THE PARKS AND RECREATION INDUSTRY.
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if
Cost recovery =
50%
then
Subsidy =
50%
31 SERVING THE PARKS AND RECREATION INDUSTRY.
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if
Cost recovery =
72%
then
Subsidy =
28%
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Need
33 SERVING THE PARKS AND RECREATION INDUSTRY.
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Need = Want
Park Facilities #1 #2 #3 #4 #5 TOTAL RANKAdditional football/soccer/lacrosse fields 30 56 34 31 22 173 14Additional recreation center 13 22 42 43 34 154 15Additional senior center 31 20 29 21 32 133 16Additional basketball courts 8 31 24 20 17 100 17Additional softball fields 10 27 21 13 14 85 18New indoor tennis center 15 13 19 11 17 75 19New disc golf course 7 12 7 13 19 58 20Additional tennis courts 3 13 9 16 16 57 21New BMX track 4 5 15 14 10 48 22New indoor pickleball court 4 7 10 8 7 36 23Additional skate park 4 4 5 9 11 33 24Additional outdoor pickleball courts 2 4 12 5 9 32 25 34 SERVING THE PARKS AND RECREATION INDUSTRY.
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Partnerships
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If an organization is giving and not receiving something of equal value in return, they are a granting organization (this is not a partnership).
Partnership = Reciprocal Benefit
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Ability vs. Willingness to Pay
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Thoughts? Questions?
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Cost ofService
Beneficiary
of Service
Service
Categories
c
C
e
FinancialSustainability
Three-legged Stool
Tax use/revenue
enhancement philosophy
40 SERVING THE PARKS AND RECREATION INDUSTRY.
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Service
Activities, courses,
classes, events, rentals,
and other types of leisure
experiences
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Where “likeness” of service is the principal
consideration in the coordination and/or
organization of various services.
Service Area
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Service Category
Where “like purpose” is the principal
consideration in the cataloging of services.
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Why Service Categories?
http://brochures.lerntools.com/pdf_uploads/Web_WinterGuide2014.pdf Eliminates arbitrary
goal setting
Discourages attempts to
make cost recovery
decisions based upon
special interests or
social values.
Aligns with interests in
equity-based decision
making – age, interest,
etc. become irrelevant.
It’s all about “purpose”.
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Seniors
(Intro to Fitness)
Service Areas vs. Service Categories
CR Goal = 25%? CR Goal = 40%? CR Goal= 50%?
Aquatics
(Learn to Swim)
Youth Sports
(T-ball)
45 SERVING THE PARKS AND RECREATION INDUSTRY.
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Service Categories
Seniors
(Intro to Fitness)
CR Goal = 25%? CR Goal = 40%? CR Goal= 50%?
Aquatics
(Learn to Swim)
Youth Sports
(T-ball)
Beginner Level Activities
Similar purpose = Same CR Goal
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Cost ofService
Beneficiary
of Service
Service
Categories
c
C
e
FinancialSustainability
Three-legged Stool
Tax use/revenue
enhancement philosophy
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What is Beneficiary of Service?
Identifies and categorizes beneficiaries (those who receive value) Individual/
Exclusive Benefit
Community/
Common Good Benefit
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Aquatics
(Learn to Swim)
Aquatics
(Masters Swim)
http://brochures.lerntools.com/pdf_uploads/Web_WinterGuide2014.pdf Service Area CR Goal = 75%?
Beneficiary of Service
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Aquatics
(Learn to Swim)
Aquatics
(Masters Swim)
Aquatic
s
http://brochures.lerntools.com/pdf_uploads/Web_WinterGuide2014.pdf Service Area CR Goal = 75%?
Beneficiary of Service
Different purpose = Different service category = Different CR Goal Service CategoryBeginner level activities
Service CategoryCompetitive level activities
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High Subsidy –
Low Cost Recovery Beneficiary of Service Model
Low Subsidy –
High Cost Recovery
Common Good © 2025 110% Inc. All rights reserved. Exclusive Benefit Common Good(i.e., essential, community-wide impacts, universal value, access for all, no competition with other sectors) Exclusive Benefits (i.e., discretionary, self-interest, limited impact, exclusive, access for some, competition other sectors) 51 SERVING THE PARKS AND RECREATION INDUSTRY.
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Cost ofService
Beneficiary
of Service
Service
Categories
c
C
e
FinancialSustainability
Three-legged Stool
Tax use/revenue
enhancement philosophy
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Understanding Cost of Service
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Direct CostsCan be traced directly to the provision of a service. Would not be incurred if the service ceased.
Incurred with or without the provision of a service. Not traceable to any particular service, benefit the system as a whole and do not benefit any one single service. Indirect Costs vs.
54 SERVING THE PARKS AND RECREATION INDUSTRY.
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Financial Sustainability Strategy
https://unsplash.com/photos/man-sitting-on-bench-while-leaning-on-wall-sWXn6KkLxtM Ice Cream Cone Sales50,000 cones/year
Other CostsUtilities, management, landscaping, equipmentDirect CostsIce cream, cones, napkins 55 SERVING THE PARKS AND RECREATION INDUSTRY.
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https://unsplash.com/photos/man-sitting-on-bench-while-leaning-on-wall-sWXn6KkLxtM 50k cones/yr
Other CostsUtilities, management, landscaping, equipmentDirect CostsIce cream, cones, napkins x $1/cone
$100k/yr
$50k/yr
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Financial Sustainability Strategy
https://unsplash.com/photos/man-sitting-on-bench-while-leaning-on-wall-sWXn6KkLxtM Cost of Service$150k/yr
100% Cost Recovery?$3k/cone
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High Subsidy –
Low Cost Recovery
Low Subsidy –
High Cost Recovery
Common Good © 2025 110% Inc. All rights reserved. Exclusive Benefit Common Good(i.e., essential, community-wide impacts, universal value, access for all, no competition with other sectors) Exclusive Benefits (i.e., discretionary, self-interest, limited impact, exclusive, access for some, competition other sectors) Transformation from
Beneficiary of Service Model to
Financial Sustainability Strategy
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*Heavy reliance upon the GF; no self reliance; no reinvestment High Subsidy –
Low Cost Recovery in the organization
Low Subsidy –
High Cost Recovery
Common Good © 2025 110% Inc. All rights reserved. Exclusive Benefit Cost Recovery Strategy Example*
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*Continue to subsidize the majority of services; remain largely dependent upon the GF; some reinvestment in the High Subsidy –
Low Cost Recovery organization; increase self reliance
Low Subsidy –
High Cost Recovery
Common Good © 2025 110% Inc. All rights reserved. Exclusive Benefit Financial SustainabilityStrategy Example*
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*Reduce reliance on the GF; reinvestment in the organization; increase self reliance; emphasize High Subsidy – how taxpayer dollars are spent
Low Cost Recovery
Low Subsidy –
High Cost Recovery
Common Good © 2025 110% Inc. All rights reserved. Exclusive Benefit Community Investment Strategy Example*
Common Good © 2021 110% Inc. All rights reserved. Individualized High Subsidy –
Low Cost Recovery
Low Subsidy –
High Cost Recovery FINANCIAL SUSTAINABILITY STRATEGY
2022-2024
Financial Sustainability Continuum
Common Good © 2025 110% Inc. All rights reserved.
High Subsidy –
Low Cost Recovery
Low Subsidy –
High Cost Recovery
FINANCIAL SUSTAINABILITY
STRATEGY
2025-2027
Exclusive
PARKS & RECREATION
Financial Sustainability Continuum
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Thoughts? Questions?
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Service Category Development Cost of Service Analysis Work Continues Beneficiary of Service Work Session - TBD Next steps