April 2021 - Parks & Recreation - 20

FINANCE FOR THE FIELD
Public-Private Partnership Models
By John L. Crompton, Ph.D.

I

n public-private partnerships, both a park and recreation department
and its partner bring assets to a collaboration that make it a viable
proposition. The deal structures for almost every joint venture are
unique. However, many share enough common characteristics to allow several general frameworks to be identified.
This column focuses on four characteristics: outsourcing, public-sector
leasing, leaseback from the private sector and takeover of failing private
ventures. Four additional models will be described in next month's column.

Outsourcing
The park and recreation field has a
long history of outsourcing, so the
principle is well-accepted. However, the range of services now being
outsourced has increased, as financial resources have been reduced.
While the focus is usually on direct
cost savings, there are often other
indirect benefits.
Outsourcing frees department
staff time for other purposes. It not
only saves money, but also removes
the headaches and hassles associated with day-to-day management.
One manager in the context of concessions noted that these included:
" scheduling of part-time employees,
purchasing perishable foodstuffs or
imported souvenirs, determining
what stands to open and for how

long, determining whether the sanitation policies are enforced, determining who might be stealing cash. "
On a similar theme, another manager observed: " I am not suggesting
that people who work in food and
beverage are one iota more dishonest
than anyone else, but these staff are
dealing in cash, food and drinks. I
can't think of three more temptingly
tradeable or consumable commodities handled together. "
Further, departments do not have
the freedom to establish autonomous purchasing and personnel procedures, which a contractor can do.
This freedom is especially important
in revenue-producing services, where
success often depends on an ability
to respond rapidly to changes in market volume and preference.

In public-private partnerships,
both a park and recreation
department and its partner bring
assets to a collaboration that
make it a viable proposition.

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Public-Sector Leasing
This uses the department's land
bank as leverage to stimulate
private-sector investment. The usual model is for a partner to inject
initial capital investment to create
or improve facilities in exchange
for the resulting cash flow for a
fixed period, a proportion of which
is shared with the department.
NRPA board member Jack Kardys
offered an example in the August
2015 issue of Parks & Recreation.
The Miami-Dade Department of
Parks, Recreation and Open Spaces
partnered with a private company
that invested more than $3 million
in developing and operating smallsided soccer fields at three of the department's parks. The department
received a guaranteed minimum fee
and a percentage of gross revenues.
The business model included stateof-the-art floodlit facilities, afterschool and summer camp programs,
and youth and adult soccer fields.
Many agencies have partnered
with waterslide suppliers that install and operate waterslides at
their pools at no charge and share
the accrued revenues. Similarly, a
growing number of departments
are partnering with healthcare providers and hospitals to incorporate
preventive and rehabilitation facilities into a recreation center's traditional fitness operations.

Leaseback From
the Private Sector
It is not unusual for governments
to lease office facilities from the
private sector. A similar approach
can be used to fulfill equipment or
April 2021 - Parks & Recreation

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