March 2021 - Parks & Recreation - 18

FINANCE FOR THE FIELD
Assets the Private Sector Can
Bring to Park Departments
By John L. Crompton, Ph.D.

T

he most obvious contribution the private sector can bring to park
departments is an ability to invest funds for operation, maintenance
and/or capital development. However, there are four additional aspects of private-sector involvement that may be attractive to park
and recreation agencies: specialized management and technical expertise, reduced labor costs, adaptability to scale of services, and reduced liability risks.

Access to Private Capital
The private sector can act quickly
once a pro forma shows a venture is
likely to receive a desired return on
investment. In contrast, for a park
department to secure capital it usually has to engage in an extended
process of soliciting broad public
participation and input; lengthy
legislative approval procedures;
extended budget hearings, and residents' affirmation in a referendum.
This lengthy process makes it difficult to respond to unanticipated
opportunities that arise in the marketplace. However, this is the milieu in
which a business operates, so it is well-

equipped to act expeditiously. In these
situations, a department may make a
potential private partner aware of an
opportunity and of the complementary assets the agency can provide to
assist in bringing it to fruition.

Specialized Management
and Technical Expertise
Sometimes recreation departments
do not have personnel with the training, experience and/or equipment to
effectively manage specialized facilities (e.g., skate parks, concessions).
Businesses that specialize in these areas are able to draw upon an array of
marketing skills and resources, cost

Public Agency vs. Private Business

Reduced Labor Costs

The mowing of athletic fields is now commonly contracted out to private-sector businesses.
Consider the compartive costs of the two entitites.

The labor-intensive nature of many
park services makes personnel the
major cost center in service delivery. Departments typically pay an
additional 30 to 35 percent of an
employee's salary for fringe benefits,
such as health insurance, retirement,
sick leave and maternity leave. Many
businesses do not, which enables
them to provide the same level of service at a lower cost.

Public Agency
Pays salary averaging $12 an hour for a 40-hour work week to
mowing crew staff

$25,000 a year

Pays a benefit package

$10,000 a year

Total Cost:

$35,000

Private Business

18	

controls and other systems that have
proven effective in similar facilities,
and a focused workforce with experience and strong technical expertise.
Thus, partnering with them is likely
to be an effective and efficient option.
Recreation departments typically
provide programs designed to offer
opportunities for self-development,
self-expression,
self-improvement,
character development and social
interaction. However, the recreation
preferences of many individuals lean
toward escapism, fantasy or role playing. These preferences are reflected in
the popularity of esports, computer
games, virtual reality simulation, television, social media, spectator sports,
urban entertainment centers, spas and
resorts. Again, management of these
types of services is not within the skill
set of many recreation professionals,
whereas the private sector has expertise in developing and operating facilities that offer these kinds of benefits.

Pays an hourly rate of $8 (but offers no paid vacation and does
not pay when weather conditions prohibit mowing) for the
equivalent of only 40 weeks

$12,800 a year

Pays a benefit package

$2,200 a year

Total Cost:

$15,000

Parks & Recreation

| M A R C H 2 02 1 | PA R K S A N D R E C R E AT I O N .O R G

Who Are You Going to Hire
to Mow Athletic Fields?
Most departments now outsource
March 2021 - Parks & Recreation

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