Public Rec Agencies Are Increasingly Challenged to Offer Widely Affordable Services

As pressure mounts to operate economically sustainable facilities, public rec agencies are increasingly challenged to offer widely affordable services.

As marketing coordinator for sports and recreation facility architect Sink Combs Dethlefs, April Luxner has a vested interest in the success of public recreation facilities. Her livelihood depends on it.

Nevertheless, rather than join the public recreation center that opened in their community three years ago, Luxner and her husband opted to give their money to a private health club.

The Luxners' decision wasn't one based solely on convenience-in fact, both the rec center and the health club are located within walking distance of their home. Actually, economics were to blame. In the end, the Luxners declined to join the rec center because it proved to be less affordable.

"When we got our flyer, I recall it costing $760 for an annual membership," says Luxner. Meanwhile, the health club offered the Luxners a $540-a-year membership that included fees for all fitness classes.

"I just want to go somewhere, be able to park, get in, take a class and not worry about having to pay extra for whatever class I take," says Luxner. "The rec center has a boot camp class that's probably phenomenal, but I can get it for free at the health club. At the rec center, I'd have to shell out another $40 a month, on top of my membership fee. That would make me start to feel like I'm getting nickeled-and-dimed."

The perceived excess of program fees may negatively influence the purchasing decisions of potential public recreation consumers-including those as industry-savvy as Luxner. Yet on the other side of the turnstile are rec administrators who are likely just as frustrated by current trends in the pricing of recreation services, albeit for very different reasons.

"Historically, public recreation was designed to be affordable to the masses," says Ken Ballard of Ballard*King & Associates, a recreation facility planning consultancy based in Highlands Ranch, Colo. "Twenty to 30 years ago, there was a lot of talk that said you really shouldn't be charging fees at all, or if you did, they should be nominal. But as we move forward with more elaborate facilities and, certainly, more demands on government funding for all sorts of purposes, there is a lot of pressure on practitioners to reach a balance between the use of tax dollars and dollars from individuals who are paying for those services. How you price your services, whether they're facility memberships or swimming lessons, now becomes a paramount issue."

Are civic authorities to fault for the added fiscal pressure on rec professionals? "Yes and no," says Ballard. "Here's the dilemma: On one hand, you hear from the politicos that you need to provide this service to the community and it needs to be affordable. Then on the other hand, you hear that this facility needs to be self-sufficient or can only afford to have a certain subsidy level. You get these mixed messages. Oftentimes, the practitioner is left sitting there in the middle saying, `So what am I supposed to do?' "

Good Times, and Bad It's a question not easily answered-even when asked of Texas A&M University distinguished professor John Crompton, a leading researcher of parks and recreation issues for the past three decades. "There's a three-hour answer to that question," he says.

However, Crompton is sure that the public has never been more supportive of public recreation. Pointing to data collected by the U.S. Census Bureau from all 87,000 local governments, spending on public recreation was higher than ever at the turn of the 21st century. By then, one-third of the money spent on public recreation programs and services was generated by user fees. Over the previous 10 years, recreation services had seen a 64 percent increase in funding from local governments. "I'm tired of going to places and having people tell me how bad off we are," says Crompton. "I'm here to tell you that this is the golden age of parks and recreation. We have never had the dollars that we have today."

Yet Crompton is quick to couch that statement with a forecast many rec professionals may find disturbing. "The amount that agencies can get from user fees, in my view, has peaked," he says, noting that public expenditures on recreation, though relatively high compared to earlier years, remained stagnant throughout the 1990s. "The days of public recreation are numbered. This is clearly a life-cycle on the decline."

For largely environmental and social reasons, parks and conservation movements have garnered the lion's share of public funding in recent years, Crompton says. That doesn't necessarily mean that people are completely forsaking their local recreation facilities; it simply suggests that they see the agencies responsible for parks' operation as being better suited to positively effect change in their communities. "Elected officials are elected on platforms to solve problems," he says. "They are mandated to prioritize the spending of money that goes toward solving those problems. If public recreation does not contribute to solving those problems, then elected officials have no mandate to give recreation any money."

There's even less cause for such a mandate when one considers that public recreation centers are used by a fraction of the population. "Public recreation started as a niche serving boys to keep them out of crime. We broadened that in the 1950s, '60s and early '70s by saying, `Public recreation is for everyone.' It clearly isn't," says Crompton. "You never had more than 10 percent of a city's population, 10 percent of families, using a public recreation facility. Now that niche has gotten much narrower for three reasons: One, you have nonprofits doing all kinds of things that they were not doing back in the '70s. Two, you have the commercial sector in fitness and in ice rinks-there was no commercial sector back then. And three, government has since the '70s taken on a slew of additional responsibilities, and since government has a fixed budget you have less money for this field."

Public recreation facilities can survive this economic climate, continues Crompton, but their operators must learn to adapt. "Recreation is not about making sure some middle-class people are having a good time. That's not it anymore," he says. "The essence of the issue is repositioning to solve community problems. How do you ally with others to solve the problems in your community?"

A Philosophical Discussion Building alliances with community organizations-local schools, hospitals or other nonprofit entities-has long been a strong suit of public recreation centers. But partnering with diverse groups can occasionally muddy a recreation facility's mission, leaving practitioners struggling to clarify to constituents their rationale for a host of official actions-especially as they relate to setting fees.

In seemingly simpler times, pricing wasn't as critical an issue. "Because the idea was that public recreation programs, services and facilities had to be affordable to everyone, you set the bar at the bottom level so that literally everybody could afford them," says Ballard. "That resulted in charging 50 cents to go swimming, or sometimes even offering free services. Yet then you had potentially 90 percent of the population able to pay for those services but still getting discounts. So gradually, we've seen that bar come up, but we need to decide where we want our prices to be."

Rec professionals received some much-needed guidance in this area nearly two decades ago, when Crompton and other recreation and leisure educators and management consultants introduced to the industry a pyramid pricing strategy that recommends different pricing for different levels of services. Basic services, or those perceived as providing a benefit to most, if not all, of the community (think youth and senior programs) inhabit the bottom of the pricing pyramid. As such, they are heavily subsidized by tax dollars.

Although there is no expectation for basic programs to generate revenue, it's important to recognize that in most communities the residents they serve can afford to pay at least a nominal fee. This has been true even in low-income, inner-city communities soon to be served by Salvation Army Kroc Centers, one of which is planned for Detroit's East Side. "The idea was, `Well, this place is poor, so there's no way you can charge any fees,' " says Ballard, who is serving as a consultant on the Detroit project. "Well, we found out after going in there that while certainly we're not setting fees like in the suburbs or more wealthy communities, in most cases there is an expectation and a willingness from people who have a lot less discretionary dollars to pay for some of these services. We don't have to give them away."

There are certainly no giveaways of more specialized recreation programs (say, group fitness classes or personal training), which cater to smaller segments of the public and inhabit higher levels of the pricing pyramid. In most cases, a specialized program's fees should exceed the actual cost of providing that service so the program functions as a revenue-generator, helping subsidize the cost of offering basic services.

Although many rec departments have employed this type of pricing strategy as standard operating procedure, an uncertain economic climate in recent years has made it more difficult for them to maintain a healthy balance between subsidized and revenue-generating programs.

"We have had some cost-recovery challenges in the past couple of years because of the ever-increasing price of gas and electricity," says Gina Barton, recreation supervisor of the City Park Recreation Center and Fitness Center, a twin-facility complex in the Denver suburb of Westminster. Of the two facilities, the recreation center offers programs geared more toward youths and seniors and has a cost-recovery expectation of 65 percent. The fitness center, however, is open only to patrons age 15 and older and is expected to recover 85 percent of its operational costs. "We've met our cost recovery," says Barton, "It has just been more challenging because we've seen our revenues drop."

Among the points recently debated by Westminster recreation officials is whether to include in the price of a fitness center pass access to group fitness classes. "We've struggled with that question," says Barton. "Our fitness center is the only center in the city that includes fitness classes. When we opened that facility-it has been almost eight years-that was the trend. In my mind, if you have the opportunity to offer more benefits, why not do it?"

Yet these days, some of Barton's colleagues wonder if their department can still afford to do it-especially considering that in a short span of time, Westminster's fitness and recreation market has become increasingly glutted with both public and private providers. One newcomer, a small fitness facility that opened two miles from Barton's fitness center, charges members $19 a month compared to City Park's approximately $30 a month. "Their whole philosophy is that they don't offer the amenities such as the big locker rooms and showers; they just offer a changing area," says Barton. "But they outprice us because they don't have the overhead, they don't have programs. It's basically a weight room, a place for people to get in and out. It has hurt us a little bit."

In years past, the Westminster recreation department set its pricing according to fee-related survey data recorded at nine similar recreation facilities. "We try to price ourselves at least in the middle," says Barton. "We don't want to be the lowest, but we also don't want to be the highest."

Now, some measure of uncertainty surrounds this evaluative process. Although she wonders what form her department's fee-setting philosophy will take next-"We've really had to think about it, and I don't think we're there yet"-Barton is optimistic that it will eventually rediscover that ever-elusive middle ground. "It's all about trying to have that perfect balance of programs that will bring in revenue and programs that you subsidize," she says. "It can be done."

Needs of the Many It may seem ironic to some that the more public recreation facilities broaden their scope to offer programs and amenities for just about every possible user group-leisure pools for children and families, strength-training areas for weightlifting enthusiasts, ballroom dance classes for active seniors, and so on-the more difficult it is for them to achieve balance.

For her part, Sink Combs Dethlefs' Luxner understands that her neighborhood rec center's menu of programs-and thus, its prices-likely won't ever be as lean as those at the single-purpose health club to which she currently belongs. And for the time being, that's just fine with her.

"I like to work out as quickly and painlessly as possible. The health club is really nice for me because it meets my needs," she says. "Right now, I'm in my twenties and I don't have children. But if I had kids, I could see myself using all those things at the rec center. I do think when you have kids, it changes the ballgame completely."