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HPR 322HPR 322Chapter 11Chapter 11

Public leisure and Public leisure and recreation recreation servicesservicesFunded by a percent of taxes from an entityFunded by a percent of taxes from an entity

May be an independent entity that has its May be an independent entity that has its own tax base (Illinois Park Districts; own tax base (Illinois Park Districts; Hattiesburg Parks and Recreation)Hattiesburg Parks and Recreation)

Other funding sources include program fees, Other funding sources include program fees, fund raisers, endowments, donations, grantsfund raisers, endowments, donations, grants

Traditionally have not always made enough to Traditionally have not always made enough to operate at a profit (or break even)operate at a profit (or break even)

Ongoing pressure to become self-supporting Ongoing pressure to become self-supporting (pay for programming through revenues)(pay for programming through revenues)

Private, for-profit leisure Private, for-profit leisure or recreation providersor recreation providersEmphasis on profitabilityEmphasis on profitabilitySome are extremely profitable (professional Some are extremely profitable (professional sports)sports)More like a traditional business modelMore like a traditional business modelSome areas may subsidize others (charging less Some areas may subsidize others (charging less for some products/services because you are for some products/services because you are making more from others)making more from others)Support from product manufacturers who stand to Support from product manufacturers who stand to profit from public’s participation (golf is a good profit from public’s participation (golf is a good example)example)Costs keep going up, but so do revenues (for most)Costs keep going up, but so do revenues (for most)

Non-ProfitsNon-ProfitsVaries from one to anotherVaries from one to another

National organization (Family Y, Salvation Army, National organization (Family Y, Salvation Army, Boys and Girls Club) contributes to budgetBoys and Girls Club) contributes to budget

Locations generally have revenue goals and Locations generally have revenue goals and expenditure capsexpenditure caps

May be help in particular for unexpectedMay be help in particular for unexpected

Resource sharing – spare equipment from one Resource sharing – spare equipment from one location to replace malfunctioning equipment at location to replace malfunctioning equipment at another locationanother location

Elements of BudgetElements of BudgetRevenues (MONEY COMING IN) Revenues (MONEY COMING IN)

Expenditures (COSTS) Expenditures (COSTS)

Revenue sources Revenue sources in more detailin more detail

Compulsory resourcesCompulsory resourcesRevenues that occur as a result of taxing Revenues that occur as a result of taxing and regulatory powers of governmentand regulatory powers of governmentDecreased in recent timesDecreased in recent timesIs recreation essential? Is recreation essential?

When recreation is competing for dollars When recreation is competing for dollars with streets/roads, who wins? Who should with streets/roads, who wins? Who should win?win?

Sales taxes have increased in some places Sales taxes have increased in some places as a result of the unpopularity of property as a result of the unpopularity of property tax increasestax increases

Compulsory Compulsory Resources – Sales Resources – Sales Taxes and FeesTaxes and Fees

May provide a more equitable means of May provide a more equitable means of funding as people of various income funding as people of various income levels buy things (esp in states like MS levels buy things (esp in states like MS where groceries are subject to sales tax)where groceries are subject to sales tax)

Other types of fees used by public Other types of fees used by public entities include special taxes or charges entities include special taxes or charges (airport, rental car, hotel, parking (airport, rental car, hotel, parking meters and garages, parking infractions meters and garages, parking infractions related to recreation like beach parking - related to recreation like beach parking - things primarily designed to charge things primarily designed to charge visitors and not residents)visitors and not residents)

Compulsory Compulsory Resources cont’dResources cont’dWhen property taxes are the basis for funding When property taxes are the basis for funding (recreation and/or schools), what is the (recreation and/or schools), what is the result?result?

Inequity of resources, facilities, programs, Inequity of resources, facilities, programs, quality when comparing areas of higher SES quality when comparing areas of higher SES with areas of lower SESwith areas of lower SESPoorer communities, where low cost, proximate Poorer communities, where low cost, proximate and accessible recreation may be more needed, and accessible recreation may be more needed, may be areas where these things are less may be areas where these things are less available (similar issues with schools)available (similar issues with schools)Poor communities in wealthy counties, Poor communities in wealthy counties, however, may benefit (when recreation is however, may benefit (when recreation is provided by county) provided by county)

Earned IncomeEarned IncomeRevenues derived from fees and chargesRevenues derived from fees and charges

Entrance or admission feesEntrance or admission feesRental fees, or fees paid so a group can have Rental fees, or fees paid so a group can have exclusive use of a building, facility or fieldexclusive use of a building, facility or fieldUser fees, paid so an individual or group can User fees, paid so an individual or group can use a facility or attend a program, also use a facility or attend a program, also includes things like annual membership feesincludes things like annual membership feesSales revenues of food, merchandise, etc.Sales revenues of food, merchandise, etc.License or permit fees (sometimes needed to License or permit fees (sometimes needed to hold an event or activity in a park)hold an event or activity in a park)Any other special service fees (park Any other special service fees (park department conducts a special session at department conducts a special session at another premises)another premises)

Contractual Contractual ReceiptsReceipts

Example in text – US Army purchases Example in text – US Army purchases services from the University of Northern services from the University of Northern Iowa for a youth programIowa for a youth program

HS swim team may contract with HS swim team may contract with university or YMCA to use pool university or YMCA to use pool

Longer term than rental agreement; Longer term than rental agreement; usually has fee and contract negotiated usually has fee and contract negotiated between the partiesbetween the parties

Financial Financial AssistanceAssistance

Donations, contributionsDonations, contributionsSponsors (especially in athletics or Sponsors (especially in athletics or special events)special events)GrantsGrants

US Government US Government Local, state governments or organizations Local, state governments or organizations (MS DD council)(MS DD council)Family foundationsFamily foundationsNational organization (VSA, USTA)National organization (VSA, USTA)Corporate grants (Coca Cola, WalMart)Corporate grants (Coca Cola, WalMart)

ExpendituresExpendituresDirectDirect

Costs made to Costs made to produce a specific produce a specific programprogram

Program leadersProgram leaders

SuppliesSupplies

Equipment, facility Equipment, facility rentalrental

TransportationTransportation

IndirectIndirectServices within an Services within an organization that organization that cannot be directly cannot be directly traced to a specific traced to a specific programprogram

Energy for community Energy for community center (that houses center (that houses many programs)many programs)

Administrative staffAdministrative staff

Supplies, equipment Supplies, equipment used by manyused by many

Budget definedBudget definedFinancial planFinancial plan

Estimate types and Estimate types and amounts of financial amounts of financial resources needed to resources needed to implement a implement a program for a program for a specific period of specific period of timetime

Stated in various Stated in various units (work hours) units (work hours) but usually in dollarsbut usually in dollars

The processThe processBudgets usually Budgets usually created annually, created annually, monitored regularly monitored regularly and changed when and changed when circumstances changecircumstances change

Unforeseen expenses – Unforeseen expenses – car repair, fuel cost car repair, fuel cost increaseincreaseChanges in revenue – Changes in revenue – decrease in program decrease in program feesfeesRevenues not meeting Revenues not meeting projections (Florida projections (Florida property tax issues)property tax issues)

Types of budgetsTypes of budgetsLine item budgetsLine item budgets

Most commonly usedMost commonly usedCategories established, items fit under the Categories established, items fit under the categorycategoryExamples include personnel services, Examples include personnel services, contractual services, supplies, materials, contractual services, supplies, materials, current charges, current obligations, current charges, current obligations, property (capital improvements), debt property (capital improvements), debt paymentspayments

Program budgetsProgram budgetsIncreasingly usedIncreasingly usedCosts and benefits of a given programCosts and benefits of a given programOutcomes are emphasizedOutcomes are emphasized

Types of budgets Types of budgets cont’dcont’dPerformance BudgetingPerformance Budgeting

Relationship between amount of Relationship between amount of resources consumed and program outputresources consumed and program outputAssessed by looking at workload Assessed by looking at workload measures, efficiency measures, measures, efficiency measures, effectiveness measureseffectiveness measures

Zero-based budgetingZero-based budgetingStart from zero every year and re-justify Start from zero every year and re-justify expensesexpensesEncourages re-examination of all Encourages re-examination of all programs and servicesprograms and servicesStill probably using prior budget as a Still probably using prior budget as a ‘template’‘template’

WorksheetsWorksheetsUsed to estimate program costsUsed to estimate program costs

Expenses include instructor costs, Expenses include instructor costs, administrative fees, building use fees, administrative fees, building use fees, supplies, equipment, maintenance, risk supplies, equipment, maintenance, risk mgmt, etc. (direct and indirect)mgmt, etc. (direct and indirect)

Employee costs include salary and fringesEmployee costs include salary and fringes

Income includes participant fees by Income includes participant fees by session, program or year (minimum session, program or year (minimum number required for break even)number required for break even)

Beyond revenues Beyond revenues – “Resource – “Resource attainment”attainment”

Alternative Alternative ResourcesResources

Gifts and donations (equipment, supplies)Gifts and donations (equipment, supplies)Fishing equipment donated to Boys and Girls Fishing equipment donated to Boys and Girls ClubClubProvided immediate programming for a groupProvided immediate programming for a group

Joint use agreementsJoint use agreementsSchool district uses park for events; park School district uses park for events; park department can use school track or department can use school track or gymnasium for events; no money changes gymnasium for events; no money changes handshands

In-kind contributionsIn-kind contributions““adopt a park,” “adopt a beach;” non adopt a park,” “adopt a beach;” non financial support given to park or recreationfinancial support given to park or recreation

More alternativesMore alternativesSponsorshipSponsorship

Contributions of goods, services, facilities in Contributions of goods, services, facilities in return for promotion as food for events from return for promotion as food for events from grocery, Coca-cola trailer at local eventsgrocery, Coca-cola trailer at local events

““Scrounging” term used in textScrounging” term used in textTurning discarded items into something elseTurning discarded items into something else

Partnerships Partnerships Two or more entities put together joint Two or more entities put together joint programsprograms

Volunteers Volunteers Unpaid staffUnpaid staffStudents in recreation classes!!Students in recreation classes!!

This was a brief This was a brief overview….overview….

Budgeting and financial management can be very Budgeting and financial management can be very complex and time consumingcomplex and time consuming

Agencies or organizations usually employ Agencies or organizations usually employ bookkeepers, CPAs and use outside auditorsbookkeepers, CPAs and use outside auditors

Computer programs can be helpful Computer programs can be helpful

Formulas for estimating costs (% of tax or Formulas for estimating costs (% of tax or benefits based on income)benefits based on income)

Your involvement during an initial position or Your involvement during an initial position or internship will probably be at the program level internship will probably be at the program level (budget for one program)(budget for one program)

More about budgets in another recreation class More about budgets in another recreation class

Program Budget Program Budget AssignmentAssignment

Line item budgetLine item budget

Expenditures (costs)Expenditures (costs)

Revenues (funding sources)Revenues (funding sources)

Try to include all of the essentialsTry to include all of the essentials

Use reasonable estimatesUse reasonable estimates

Program, not agency/entity specificProgram, not agency/entity specific

Due 11/5Due 11/5

Try not to show a loss Try not to show a loss

Water Exercise Water Exercise BudgetBudget

Revenue – 55 participants Revenue – 55 participants at $40 each; 20 a.m., 35 at $40 each; 20 a.m., 35 p.m.p.m.

1 instructor and 1 guard 1 instructor and 1 guard a.m. plus 1 addl for a.m. plus 1 addl for childcare ($8 hr)childcare ($8 hr)

2 instructors and 1 guard 2 instructors and 1 guard p.m., no childcarep.m., no childcare

Pool mgr for both ($10 hr)Pool mgr for both ($10 hr)

1 hr pay for each 1 hr pay for each employee per sessionemployee per session

Using just wages, no Using just wages, no fringesfringes

Budget Water Exercise 2011 (82 classes)

Revenue

User Fees 2200Donations 1000Grant* 2500

Total 4800

Expenditures

Staff 4756Supplies 0Utilities 0Maintenance 0Insurance 0Equip Reserve 40

Total 4796

*city, county, university

2012 BudgetPing Pongers of HattiesburgExpenseInstructors 40 hrs x $10.00 x 2 $800.00Daycare workers 40 hrs x $8.00 x 3 $960.00Building Use Fee $40.00/day x 5 $200.00Supplies

Reading materials 10 x $5.00 ea $50.00

Ping Pong paddles 20 x $6.00ea $120.00 Ping Pong balls 100 x .25 ea $25.00

FoodRefreshments 60 Gatorades @ .80 ea $48.00

60 bags of chips @ .45 ea $27.00Equipment

Ping Pong Table $225.00 $225.00T-Shirts 20 x $5.00 $100.00_____________________________________________________________________________Total Expense $2555.00

IncomeParticipant Instruction Fees 20 x $100.00 ea $2000.00Participant Supplies Fees

Ping Pong balls 5 ea x 20 participants x .25 $25.00Ping Pong paddles 1 ea x 20 participants x $6.00 $120.00

FoodRefreshments 60 Gatorades @ $1.00 ea $60.00

60 bags of chips @ $1.00 ea $60.00T-Shirts 20 @ $15.00 ea $300.00Total Income $2565.00______________________________________________________________________________Total Income – Expense $10.00