Financial Fitness for Park and Recreation Agencies Jeffrey

Financial Fitness for Park and Recreation Agencies Jeffrey J. Bransford, MS, MPA, CPRP Fri 20 Jan, 2012

Agenda • Flashback to the 70 s • The Big Four Obstacles • Revenue Review • Stress Test • Conclusion / Discussion

Flashback to the 70 s • Government – Fastest growing employment sector – Public spending approached 1/3 of GNP – CA state budget 12% annual growth Sources: Crompton (1999); http: //futurist. typepad. com

Flashback to the 70 s • Tax Revolt – Frustrated taxpayers – Misconception about waste – Local governments at frontline – Property taxes were most visible – Prop 13 (CA) – 36 states reduce prop/sales/income taxes Source: Crompton (1999)

The Big Four Obstacles of Entrepreneurial Managers Obstacle #1 Entrepreneurial managers seek autonomy, but autonomy often contradicts democracy Source: Crompton (1999)

The Big Four Obstacles of Entrepreneurial Managers Obstacle #2 Entrepreneurial managers need privacy to build partnerships, but privacy contradicts democracy Source: Crompton (1999)

The Big Four Obstacles of Entrepreneurial Managers Obstacle #3 Entrepreneurial managers have a level of vision, confidence, and knowledge that citizens and stakeholders often don’t have Source: Crompton (1999)

The Big Four Obstacles of Entrepreneurial Managers Obstacle #4 Entrepreneurial managers take risks and sometimes fail in an environment that has little tolerance for failure. Source: Crompton (1999)

Revenue Review • Operating (Base) Budget – Recurring – Day-to-day – Personnel, utilities, supplies • Capital (Project) Budget – Non-recurring / short-term – One-time events

Revenue Review • Restricted Funds – Dedicated to one project / purpose – Narrow scope – Tied to mission, strategy, or goal • Unrestricted Funds – Discretionary – Typically overhead is dependent on it

Revenue Review • Common Sources of Revenue – Taxes – Fees – Debt – Grants – Donations – Sponsorships

Stress Test • • Diagnostic tool to assess financial fitness Not comprehensive cure-all Based on research by World Bank Three underpinnings – Fiscal Discipline – Allocation of Resources – Effectiveness of Service Delivery

Stress Test • Part 1 – Fiscal Discipline – Is your fiscal situation stable? Sustainable? Predictable? – Is your financial framework sound and up to date? Grounded in strategy? – Does your framework have an appropriate level of constraint and review? – Does your framework allow for transparency and accountability?

Stress Test • Part 2 – Allocation of Resources – Does your organization generate a good value for its resources? – Is there consistency between stated organizational priorities and actual services? – Are policy/program tradeoffs adequately analyzed? – Is there adequate collaboration in decisionmaking?

Stress Test • Part 3 – Effectiveness of Service Delivery – Is your organization effective and efficient? – Is there an effective framework to ensure that spending units / programs receive the resources needed/promised? – Are spending units being responsible citizens of the organizational financial framework? – Is there mechanism to link assess performance and overall strategy?

Conclusion • • • Questions? Feedback on value of diagnostic tool? Suggestions for beta version? Format / delivery method? Additional information: Jeffrey Bransford Eppley Institute for Parks and Public Lands jbransfo@indiana. edu www. eppley. org