This article appeared in the October issue of Athletic Business. Athletic Business is a free magazine for professionals in the athletic, fitness and recreation industry. Click here to subscribe.
In 2010, when our country was in the middle of a difficult economy, all municipal departments here in Provo, Utah, were asked to look at 5, 10, or 15 percent reduction scenarios in order to balance the overall city budget.
While looking in our department for possible efficiencies that could save these targeted amounts, I experienced a paradigm shift. I asked myself, "Why are we only looking for better and more-efficient practices when finances are tight?"
We made it through the budget process that year with some difficult changes, but my perspective on efficiency in government operations was forever changed. Different practices work in different organizations and communities, but here are a six of the areas where a change in thinking has contributed to our success story.
1. Program recovery target
All of our programs are priced and designed to return 125 to 150 percent of direct expenses. This means that they cover all of the direct program costs, with some funds left over to go toward full-time staff in program administration. Looking at the price for the program at the end of this formula process, the decision on the viability of the offering becomes clear, when based on market price comparisons.
Adaptive and senior programs may not work in this sustainable pricing model, but a good discussion on program merits results from this pricing method and analysis. At the end of this process, you have a better understanding of what's driving your program decisions.
2. Incentivize efficiency
A citywide incentive program was themed by our department to focus on ideas implemented that increase the department's efficiency in day-to-day operations. The net result of these cost-cutting ideas was nearly $500,000 in savings without sacrificing high-level products and services. Savings were generated in areas such as lifeguard training, senior transportation, vendor/sponsor agreements, self-service technology to reduce customer service staff, mechanical system improvements, in-house project management, and volunteer/intern management, among others. These cost savings were incentivized by distributing approximately $25,000 among numerous employees. We will take this rate of return on investment any day!
3. Recognize subsidy reduction
An opportunity is never missed to discuss our accomplishments in subsidy reduction. I find a way to work this story into every presentation, giving individual staff contributors the public credit and recognition. I feel this is noticed and serves as a major motivator to staff for finding the next great efficiency idea.
Do not underestimate the improved perception of your department that this storyline creates. Who does not want to be known as the innovative and effective department in their organization? These concepts have been used at all facilities, including an arts center, a recreation center, an ice arena and a golf course. Each one has reduced its original subsidy by at least 50 percent, with some completely eliminating any general-fund assistance.
4. Bigger and fewer are better
After obvious cost-efficiency improvements have been made, facility operation costs are surprisingly inelastic. The best path for efficient operation comes from maximized use of each facility. Let the overuse of one facility dictate the creation of another, but understand the impact of diluting your user base and taking on the additional operation costs of another facility.
This concept is definitely affected by the characteristics of each individual community, but fewer and larger recreation facilities have allowed us to meet the demands of our community in a more cost-effective manner. With fewer same-service facilities come higher utilization rates, and less operational staff.
The mantra resulting from this facility placement philosophy is, "Increase impact, decrease subsidy." Quite simply, more people generate more revenues. Provo has a population of 120,000, and we built a centrally located 162,000-square-foot recreation center, not including the attached outdoor pool complex. After three years, this facility is generating $4.6 million in revenue, covers operation costs and an equipment/facility systems replacement fund, and even gives $500,000 back to the general fund.
5. Maximize programming
Two concepts to keep in mind throughout the design of a facility are program diversity and continual year-round use. They are both critical operational design strengths that every facility should have.
A great example of facility program diversity is our Peaks Ice Arena, a former 2002 Olympic venue. The two sheets of ice were doing well, but our financial sustainability was plateauing. This facility had a large indoor area where temporary bleachers were located during the Olympic Games — an area that was largely unprogrammed. Many of the ice users were pushing for a third sheet of ice, but we decided to diversify our programming and attract new users by adding indoor synthetic turf. Soccer, field hockey, football, baseball, Ultimate and many other sports soon followed and created a healthy diversity of interests for an expanding facility user base. The rental revenue from all these new groups was a critical step toward the financial self-sustainability of an ice arena in Utah.
We also did not realize how important the outdoor aquatic elements would be to our recreation center operations until we discovered that the months of June, July and August were our biggest revenue months. Summer months in our climate are normally slow for indoor facilities, but having an extensive outdoor aquatic area brought a large user base during these normally lighter months.
6. Change the 'government' paradigm
Many times the lack of trust in federal government spending spills over to local municipal government. Building more trust with citizens in our effective management of community resources makes the passing of bonds, district funding, and tax funding targeted for parks and recreation a much easier process. It also allows us to be more innovative and creative in our presentations, because the community has seen the care we take to efficiently utilize any resources provided. Parks and recreation is no longer the dessert in the municipal services meal but the go-to department to highlight municipal government at its very best.
Nobody knows your department and community better than you. This is just a short list of results from our Efficiency Initiative. Look for ways to promote continual improvement in your organization and celebrate your successes. When you do, staff members start to feel like they are part of something special and the enthusiasm experienced is overwhelming. It is harder to manage a high-performing group, as opposed to a mediocre staff, but all the challenges, work and effort could not be more worth it.
This article originally appeared in the October 2016 issue of Athletic Business with the title "A more efficient paradigm for parks and recreation"