Coping with and recovering from the great recession
Since the tax revolt of the early 1970s, the operational mantra of public park and recreation agencies has been to “do more with less.” Agencies today are faced with levels of financial crisis not seen since the Great Depression. The Great Recession, as this economic downturn is now commonly termed, has forced park and recreation administrators to do even more with much less.
State, regional, county, and local agencies across the country have been forced to close facilities, cut staff, end programs, forego routine maintenance, and delay or cancel capital projects. At the same time, however, demand for low-cost public park and recreation opportunities has increased, placing an additional pressure on park and recreation professionals to pursue strategies to cope with budgetary losses, staffing cuts, and identify ways to sustainably continue their services. All this significantly hampers the ability of agencies to provide facilities and services to improve or maintain the guality of life in communities across the country.
Park and recreation directors now need to plan and implement creative and entrepreneurial business and managerial strategies. Some insights into current recession-coping strategies can be understood by what agencies have done to prepare for inevitable ebbs and flows in the budgetary environment. Indeed, policies and strategies enacted during the great economic expansion of the 1990s may have better prepared some organizations to weather the current economic storm.
According to 2003 research by John Crompton and Andrew Kaczynski, the years 1994-2000 were the “golden era” of park budgets, based largely upon the unprecedented growth of the U.S. economy during that period. Annual expenditure increases for local park and recreation services averaged $595 million (compared to decreases of $13 million from the period 1976-77 to 1985-1986). However, two consecutive recessions since 2000 likely ended that run of prosperity for parks and recreation.
In 2000, co-author Greg A. Weitzel conducted a pre-recession survey of park and recreation administrators to query their perceptions and plans for the next major economic recession. The study focused on general business and managerial strategies for use before, during, or after an economic recession. As timing would have it, this survey was conducted at the peak of park and recreation funding and just before the 2001-2002 recession. This study can provide a basis of comparison of what agencies reported and what they are now doing to cope with their current budgetary situation.
The sample for the 2000 survey was obtained from NRPAs Chief Administrators List of approximately 1,300 directors of public parks and recreation agencies throughout the United States. More than 260 agency directors in 45 states responded. The majority (79 percent) believed a future recession would cause fiscal problems for their agencies and 69 percent believed tax revenue allocations would decrease.
Increasing user fees is one approach to offset tax revenue shortfalls. However, directors believed participation in fee-supported programs would also decline during a recession. Instead, the directors reported that they would pursue numerous other recession coping strategies, including: seeking input from employees to reduce costs, postponing expansions, media outreach, increasing grant-writing efforts, performing economic analyses of services, and increasing solicitations for donations. Strategies less likely to be employed included: reducing programs, hiring more part-time employees, reducing communication expenses and activities, decreasing the number of full-time employees, and leasing out space.
Soon after the 2000 survey was completed, the world changed. Terrorist events, funding wars in Iraq and Afghanistan, and two recessions have helped to diminish budgetary shares for parks and recreation. To respond to these significant budgetary changes, NRPA and AAPRA collaborated to convene special sessions at the 2009 NRPA Congress to discuss how recession affects park and recreation services today and what agencies are doing to cope. Michael Mulvaney of Eastern Illinois University prepared a white paper detailing the findings of the two sessions (http://www.nrpa.org/uploaded-Files/Explore%5fParks%5fand%5fRecreation/Research/FC-WhitePaper-Final.pdf).
Several findings and recommendations were outlined, including how the recession is affecting the field of parks and recreation through significant declines in tax support and other revenues; the opportunity to use this time to improve efficiency and effectiveness; creating better business models and new efforts to elicit citizen involvement; increased use of benchmarking as a means to measure performance; and the need to effectively communicate the value of parks and recreation.
In addition, NRPA has recently conducted an Economic Update Survey. The purpose of the survey was to receive an interim report on the economic impact of the economy on parks and recreation service delivery. Preliminary findings indicate that most respondents expect additional budget reductions in the next fiscal year. Respondents do not expect recovery until FY 2013 or longer. Yet more than 60 percent of respondents have a confidence level of 50 percent or greater that their organization’s future economic situation will improve over the long run.
Following are four strategies and numerous tips based upon results from the 1998-2000 study, the 2009 economic roundtable, and the comments of other administrators.
At the 2009 NRPA sessions, three strategies emerged for engaging citizens at the grassroots level: greater reliance on citizens to raise funds for projects and programs, educating citizens more on the benefits of parks and recreation, and overall generation of more public involvement. Similarly, 66 percent of respondents from the 2000 survey said they would try to increase the number of volunteers in the face of a recession. However, cultivating citizen support based upon mutual interest can take time and may not immediately address resource gaps in programming, facility maintenance, and capital projects.
Still, some of the most effective approaches include: development of advisory councils, open forums, focus and neighborhood advocacy groups, and creation of special task forces. Whether you use direct solicitation or social media outlets to reach your constituents, your agency should concentrate on engaging existing organizations and groups with a special interest in public park programs and facilities. A financial task force, or “green ribbon” committee, of local financial experts and business owners could concentrate on your agencies’ financials and create short- and long-term strategies to increase revenues and decrease expenditures.
If your community doesn’t have a friends, foundation, or conservancy group dedicated to improving local parks and recreation, then you should make an extra effort to assist with the establishment of such an agency. In Allentown, Pennsylvania, a newly formed “Friends of the Allentown Parks” (www.allen-townparks.org) organization was established in 2009 with city and foundation support to assist with fundraising for capital projects, program development, outreach and advocacy. The group is overseeing the city’s remembrance tree program and a new adopt-a-flower-bed program. Eventually, the city would like to see neighborhood park friends groups and adopt-a-park programs established.
In some cases, nonprofit conservancies specifically created to steward public parks can be created. For example, the Pittsburgh Parks Conservancy (www.pittsburghparks.org) was founded in 1996 by a group of citizens concerned with the deteriorating conditions of Pittsburgh’s parks. Since then, the Parks Conservancy has worked closely with the city and other local funding sources and has raised more than $45 million for park improvements.
While seeking assistance from and establishing new stakeholders is essential, 89 percent of directors in the 2000 survey said they would seek input from employees to find ways to cut costs and raise revenue. Recessions are scary times for employees, and fear can lead to low morale. Directors can use the crisis to help bring together employees by letting them know you are committed to preserving their jobs, programs and facilities, and helping to empower them to be a part of the solution.
In the 2000 study, grants, donations, and cost/benefit analyses of services were cited by the majority of administrators as ways to secure additional sources of revenue. However, acquiring these revenues requires initial and on-going investments of agency time and resources. One option is to contract or hire an in-house development specialist or grant writer for special park initiatives and projects.
Another approach is the development of a Market Based Revenue Opportunities (MBRO) Plan. The objective of the MBRO is to generate recurring, long-term incremental revenues as well as savings as an alternative to raising taxes. Depending on your assets and potential, the MBRO can take many forms — from facility and park naming rights to corporate and event sponsorship and endorsement of an “official” city soft drink or other products. The MBRO will often look to bundle and/or package your unique assets for corporate sponsorships. For example, by bundling your summer concerts, movies in the parks, and special events the likelihood of securing larger dollar donations and/or sponsorships increases.
Contractual services, such as concessionaires (who offer both products/services), can provide the agency with more diversified revenue sources. However, concessions need to be treated as a central component of the agencies operations rather than just a nice after-thought for visitors/patrons. A number of strategies to expand an organization’s financial resources are listed in Figure 1. However, one should be cognizant and understand the political realities of exploring new ways to raise revenues. In Arizona, the senate recently rejected a proposal to allow people to make voluntary contributions to help avert state parks from closure. The measure would have allowed those who are applying for a renewal of their vehicle registration to donate $10, which would have gone into a special fund.
The number-one expenditure for most parks and recreation agencies is personnel. Even though a majority of respondents in 2000 indicated that they would not cut full-time positions (79 percent), the reality of this recession is that many agencies have no choice. Conducting an employee analysis in one form or another has become essential to reduce expenses. Many agencies are exploring consolidation of positions, hiring freezes, creating nine-month positions, instituting furloughs, and offering early retirement options. Many cities have frozen cost of living adjustments and merit-based pay increases, and others are even cutting back on paid holidays.
Nonessential spending, such as mobile phone services, holiday parties and banquets, training and travel expenses, subscription services, system upgrades, and uniforms, (actually anything outside of health, safety, and welfare may fall into this category), have been eliminated to cut costs. However, the long-term costs of these strategies may be unknown for several years.
In the 2000 study 80 percent of directors said that they would postpone expansion plans, which is a reasonable strategy. Yet administrators should view recessionary periods as opportunities to gather support and evidence that expansion is needed during a recession recovery period. The greatest development of parks across our nation was during the Great Depression. The Works Progress Administration (WPA) and Civilian Conservation Corps (CCC) helped put people back to work by developing park projects, which tend to be much less expensive than expansive bridge or other public works projects; therefore, completion and getting people back to work is done more quickly. Surely, it is also important that directors maintain or improve the quality of existing park and recreation assets during a recessionary period (so that some future dollars are focused on expansion rather than just on maintenance backlogs and infrastructure deterioration).(See Figure 2)
Conventional wisdom would suggest hunkering down and slashing costs. Usually, however, the wrong kinds of costs are slashed, particularly those that ensure agency visibility It is important to fund and sustain activities that ensure continued visibility and operations when other organizations or services are retrenching. Fortunately, in the 2000 survey. a majority of administrators said they would not reduce their public relations, publicity, advertising, or special promotions.
What is now needed is a reassessment of current promotional practices based upon today’s economic reality. Recessions present an opportunity for the park and recreation department to be noticed and to reach out to its citizens while other organizations are reducing their promotions. However, this doesn’t mean that it has to be expensive advertising. There are dozens or even hundreds of free or inexpensive ways to promote your agency without sinking a fortune into advertising. Using You Tube, Google’s Buzz, Twitter, Facebook, and email blasts can help attract attention to your agency as well as establishing “Save the Parks” or “Did You Know” grassroots campaigns.
Agencies should also maintain close relationships with local media outlets to successfully communicate the value of parks and recreation as a key component of a community’s economy, tourism, health, and overall quality of life (Mulvaney 2010). It is wise to emphasize your department’s strengths, accreditation, and special awards with slight emphasis on weaknesses and at the very least, update or create new press kits. Moreover, agency communications should emphasize the fiscal wisdom of investing in parks and recreation and how the field addresses both economic and social concerns at a local and national level.
The effects of the Great Recession will likely be felt for some time. This era of contraction presents many painful challenges as agencies adjust to new ways of “doing business.” While public park and recreation professionals have felt the sting of the economic recession, they also share a sense of hope and optimism about the future. Indeed, the current recession (or for that matter any other recession) can uncover new opportunities and creative operational practices for the park and recreation field.
If nothing else, this recession will force administrators to be better advocates for park and recreation causes and will compel agencies to align with new partners and new operational approaches. With the loss of seasoned professionals to early retirement and the recession lingering on, fiscal training and assistance for the next generation of leaders is poised to be an even higher priority.
The well-being of organizations (and their ability to address community concerns) depends on how well today’s leadership responds to the current economic crisis and how well they plan for future challenges.
By Greg A. Weitzel and Andrew J. Mowen
GREG A. WEITZEL, M.S., is Director of the Department of Parks and Recreation for the City of Allentown, Pennsylvania. He can be reached at (610) 437-7750 or by email at [email protected]
ANDREW J. MOWEN, PH.D., is an associate professor in the Department of Recreation, Park and Tourism Management at The Pennsylvania State University. He can be reached at (814) 865-2102 or by e-mail at [email protected]