Financial Fitness for Park Financial Fitness for Park and Recreation Agenciesand Recreation Agencies

Jeffrey J. Bransford, MS, MPA, CPRPJeffrey J. Bransford, MS, MPA, CPRP

Fri 20 Jan, 2012Fri 20 Jan, 2012

AgendaAgenda

• Flashback to the 70sFlashback to the 70s• The Big Four The Big Four

ObstaclesObstacles• Revenue ReviewRevenue Review• Stress TestStress Test• Conclusion / Conclusion /

DiscussionDiscussion

Flashback to the 70sFlashback to the 70s

• GovernmentGovernment– Fastest growing Fastest growing

employment sectoremployment sector– Public spending Public spending

approached 1/3 of approached 1/3 of GNPGNP

– CA state budget CA state budget 12% annual growth12% annual growth

Sources: Crompton (1999); http://futurist.typepad.com

Flashback to the 70sFlashback to the 70s

• Tax RevoltTax Revolt– Frustrated taxpayersFrustrated taxpayers– Misconception about wasteMisconception about waste– Local governments at Local governments at

frontlinefrontline– Property taxes were most Property taxes were most

visiblevisible– Prop 13 (CA)Prop 13 (CA)– 36 states reduce 36 states reduce

prop/sales/income taxesprop/sales/income taxes

Source: Crompton (1999)

The Big Four Obstacles of The Big Four Obstacles of Entrepreneurial ManagersEntrepreneurial Managers

Obstacle #1Obstacle #1

Entrepreneurial managers seek autonomy, Entrepreneurial managers seek autonomy, but autonomy often contradicts democracybut autonomy often contradicts democracy

Source: Crompton (1999)

The Big Four Obstacles of The Big Four Obstacles of Entrepreneurial ManagersEntrepreneurial Managers

Obstacle #2Obstacle #2

Entrepreneurial managers need privacy to Entrepreneurial managers need privacy to build partnerships, but privacy contradicts build partnerships, but privacy contradicts

democracydemocracy

Source: Crompton (1999)

The Big Four Obstacles of The Big Four Obstacles of Entrepreneurial ManagersEntrepreneurial Managers

Obstacle #3Obstacle #3

Entrepreneurial managers have a level of Entrepreneurial managers have a level of vision, confidence, and knowledge that vision, confidence, and knowledge that

citizens and stakeholders often don’t havecitizens and stakeholders often don’t have

Source: Crompton (1999)

The Big Four Obstacles of The Big Four Obstacles of Entrepreneurial ManagersEntrepreneurial Managers

Obstacle #4Obstacle #4

Entrepreneurial managers take risks and Entrepreneurial managers take risks and sometimes fail in an environment that has sometimes fail in an environment that has

little tolerance for failure.little tolerance for failure.

Source: Crompton (1999)

Revenue ReviewRevenue Review

• Operating (Base) BudgetOperating (Base) Budget– RecurringRecurring– Day-to-dayDay-to-day– Personnel, utilities, suppliesPersonnel, utilities, supplies

• Capital (Project) BudgetCapital (Project) Budget– Non-recurring / short-termNon-recurring / short-term– One-time eventsOne-time events

Revenue ReviewRevenue Review

• Restricted FundsRestricted Funds– Dedicated to one project / Dedicated to one project /

purposepurpose– Narrow scopeNarrow scope– Tied to mission, strategy, or goalTied to mission, strategy, or goal

• Unrestricted FundsUnrestricted Funds– DiscretionaryDiscretionary– Typically overhead is dependent Typically overhead is dependent

on iton it

Revenue ReviewRevenue Review

• Common Sources of RevenueCommon Sources of Revenue– TaxesTaxes– FeesFees– DebtDebt– GrantsGrants– DonationsDonations– SponsorshipsSponsorships

Stress TestStress Test

• Diagnostic tool to assess financial fitnessDiagnostic tool to assess financial fitness

• Not comprehensive cure-allNot comprehensive cure-all

• Based on research by World BankBased on research by World Bank

• Three underpinningsThree underpinnings– Fiscal DisciplineFiscal Discipline– Allocation of ResourcesAllocation of Resources– Effectiveness of Service DeliveryEffectiveness of Service Delivery

Stress TestStress Test

• Part 1 – Fiscal DisciplinePart 1 – Fiscal Discipline– Is your fiscal situation stable? Sustainable? Is your fiscal situation stable? Sustainable?

Predictable?Predictable?– Is your financial framework sound and up to Is your financial framework sound and up to

date? Grounded in strategy?date? Grounded in strategy?– Does your framework have an appropriate Does your framework have an appropriate

level of constraint and review?level of constraint and review?– Does your framework allow for transparency Does your framework allow for transparency

and accountability?and accountability?

Stress TestStress Test

• Part 2 – Allocation of ResourcesPart 2 – Allocation of Resources– Does your organization generate a good Does your organization generate a good

value for its resources?value for its resources?– Is there consistency between stated Is there consistency between stated

organizational priorities and actual services?organizational priorities and actual services?– Are policy/program tradeoffs adequately Are policy/program tradeoffs adequately

analyzed?analyzed?– Is there adequate collaboration in decision-Is there adequate collaboration in decision-

making?making?

Stress TestStress Test

• Part 3 – Effectiveness of Service DeliveryPart 3 – Effectiveness of Service Delivery– Is your organization effective and efficient?Is your organization effective and efficient?– Is there an effective framework to ensure that Is there an effective framework to ensure that

spending units / programs receive the spending units / programs receive the resources needed/promised?resources needed/promised?

– Are spending units being responsible citizens Are spending units being responsible citizens of the organizational financial framework?of the organizational financial framework?

– Is there mechanism to link assess Is there mechanism to link assess performance and overall strategy?performance and overall strategy?

ConclusionConclusion

• Questions?Questions?

• Feedback on value of diagnostic tool?Feedback on value of diagnostic tool?

• Suggestions for beta version?Suggestions for beta version?

• Format / delivery method?Format / delivery method?

• Additional information:Additional information:Jeffrey BransfordJeffrey Bransford

Eppley Institute for Parks and Public LandsEppley Institute for Parks and Public Lands

jbransfo@indiana.edujbransfo@indiana.edu www.eppley.orgwww.eppley.org