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

2. Agenda Flashback to the 70sFlashback to the 70s The Big Four ObstaclesThe Big Four Obstacles Revenue ReviewRevenue Review Stress TestStress Test Conclusion / DiscussionConclusion / Discussion

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

4. Flashback to the 70s Tax RevoltTax 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)

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

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

7. 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)

8. 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)

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

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

11. Revenue Review Common Sources of RevenueCommon Sources of Revenue –Taxes –Fees –Debt –Grants –Donations –Sponsorships

12. Stress 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 Discipline –Allocation of Resources –Effectiveness of Service Delivery

13. Stress Test Part 1 – Fiscal DisciplinePart 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?

14. Stress Test Part 2 – Allocation of ResourcesPart 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 decision- making?

15. Stress Test Part 3 – Effectiveness of Service DeliveryPart 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?

16. Conclusion 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 Bransford Eppley Institute for Parks and Public Lands jbransfo@indiana.eduwww.eppley.org