$$$$$ Budgeting $$$$$

1. $$$$$ Budgeting $$$$$ HPR 322 Chapter 11

2. Public leisure and recreation services • Funded by a percent of taxes from an entity • May be an independent entity that has its own tax base (Illinois Park Districts; Hattiesburg Parks and Recreation) • Other funding sources include program fees, fund raisers, endowments, donations, grants • Traditionally have not always made enough to operate at a profit (or break even) • Ongoing pressure to become self-supporting (pay for programming through revenues)

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

4. Non-Profits • Varies from one to another • National organization (Family Y, Salvation Army, Boys and Girls Club) contributes to budget • Locations generally have revenue goals and expenditure caps • May be help in particular for unexpected • Resource sharing – spare equipment from one location to replace malfunctioning equipment at another location

5. Elements of Budget Revenues (MONEY COMING IN) Expenditures (COSTS)

6. Revenue sources in more detail • Compulsory resources • Revenues that occur as a result of taxing and regulatory powers of government • Decreased in recent times • Is recreation essential? • When recreation is competing for dollars with streets/roads, who wins? Who should win? • Sales taxes have increased in some places as a result of the unpopularity of property tax increases

7. Compulsory Resources – Sales Taxes and Fees • May provide a more equitable means of funding as people of various income levels buy things (esp in states like MS where groceries are subject to sales tax) • Other types of fees used by public entities include special taxes or charges (airport, rental car, hotel, parking meters and garages, parking infractions related to recreation like beach parking - things primarily designed to charge visitors and not residents)

8. Compulsory Resources cont’d • When property taxes are the basis for funding (recreation and/or schools), what is the result? • Inequity of resources, facilities, programs, quality when comparing areas of higher SES with areas of lower SES • Poorer communities, where low cost, proximate and accessible recreation may be more needed, may be areas where these things are less available (similar issues with schools) • Poor communities in wealthy counties, however, may benefit (when recreation is provided by county)

9. Earned Income • Revenues derived from fees and charges • Entrance or admission fees • Rental fees, or fees paid so a group can have exclusive use of a building, facility or field • User fees, paid so an individual or group can use a facility or attend a program, also includes things like annual membership fees • Sales revenues of food, merchandise, etc. • License or permit fees (sometimes needed to hold an event or activity in a park) • Any other special service fees (park department conducts a special session at another premises)

10. Contractual Receipts • Example in text – US Army purchases services from the University of Northern Iowa for a youth program • HS swim team may contract with university or YMCA to use pool • Longer term than rental agreement; usually has fee and contract negotiated between the parties

11. Financial Assistance • Donations, contributions • Sponsors (especially in athletics or special events) • Grants • US Government • Local, state governments or organizations (MS DD council) • Family foundations • National organization (VSA, USTA) • Corporate grants (Coca Cola, WalMart)

12. Expenditures Direct Indirect Services within an organization that cannot be directly traced to a specific program Energy for community center (that houses many programs) Administrative staff Supplies, equipment used by many • Costs made to produce a specific program • Program leaders • Supplies • Equipment, facility rental • Transportation

13. Budget defined • Financial plan • Estimate types and amounts of financial resources needed to implement a program for a specific period of time • Stated in various units (work hours) but usually in dollars

14. The process • Budgets usually created annually, monitored regularly and changed when circumstances change • Unforeseen expenses – car repair, fuel cost increase • Changes in revenue – decrease in program fees • Revenues not meeting projections (Florida property tax issues)

15. Types of budgets • Line item budgets • Most commonly used • Categories established, items fit under the category • Examples include personnel services, contractual services, supplies, materials, current charges, current obligations, property (capital improvements), debt payments • Program budgets • Increasingly used • Costs and benefits of a given program • Outcomes are emphasized

16. Types of budgets cont’d • Performance Budgeting • Relationship between amount of resources consumed and program output • Assessed by looking at workload measures, efficiency measures, effectiveness measures • Zero-based budgeting • Start from zero every year and re-justify expenses • Encourages re-examination of all programs and services • Still probably using prior budget as a ‘template’

17. Worksheets • Used to estimate program costs • Expenses include instructor costs, administrative fees, building use fees, supplies, equipment, maintenance, risk mgmt, etc. (direct and indirect) • Employee costs include salary and fringes • Income includes participant fees by session, program or year (minimum number required for break even)

19. Beyond revenues – “Resource attainment”

20. Alternative Resources • Gifts and donations (equipment, supplies) • Fishing equipment donated to Boys and Girls Club • Provided immediate programming for a group • Joint use agreements • School district uses park for events; park department can use school track or gymnasium for events; no money changes hands • In-kind contributions • “adopt a park,” “adopt a beach;” non financial support given to park or recreation

21. More alternatives • Sponsorship • Contributions of goods, services, facilities in return for promotion as food for events from grocery, Coca-cola trailer at local events • “Scrounging” term used in text • Turning discarded items into something else • Partnerships • Two or more entities put together joint programs • Volunteers • Unpaid staff • Students in recreation classes!!

22. This was a brief overview…. • Budgeting and financial management can be very complex and time consuming • Agencies or organizations usually employ bookkeepers, CPAs and use outside auditors • Computer programs can be helpful • Formulas for estimating costs (% of tax or benefits based on income) • Your involvement during an initial position or internship will probably be at the program level (budget for one program) • More about budgets in another recreation class

23. Program Budget Assignment • Line item budget • Expenditures (costs) • Revenues (funding sources) • Try to include all of the essentials • Use reasonable estimates • Program, not agency/entity specific • Due 11/5 • Try not to show a loss

24. Water Exercise Budget • Revenue – 55 participants at $40 each; 20 a.m., 35 p.m. • 1 instructor and 1 guard a.m. plus 1 addl for childcare ($8 hr) • 2 instructors and 1 guard p.m., no childcare • Pool mgr for both ($10 hr) • 1 hr pay for each employee per session • Using just wages, no fringes

26. 2012 Budget Ping Pongers of Hattiesburg Expense Instructors 40 hrs x $10.00 x 2 $800.00 Daycare workers 40 hrs x $8.00 x 3 $960.00 Building Use Fee $40.00/day x 5 $200.00 Supplies 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 Food Refreshments 60 Gatorades @ .80 ea $48.00 60 bags of chips @ .45 ea $27.00 Equipment Ping Pong Table $225.00 $225.00 T-Shirts 20 x $5.00 $100.00 _____________________________________________________________________________ Total Expense $2555.00 Income Participant Instruction Fees 20 x $100.00 ea $2000.00 Participant Supplies Fees Ping Pong balls 5 ea x 20 participants x .25 $25.00 Ping Pong paddles 1 ea x 20 participants x $6.00 $120.00 Food Refreshments 60 Gatorades @ $1.00 ea $60.00 60 bags of chips @ $1.00 ea $60.00 T-Shirts 20 @ $15.00 ea $300.00 Total Income $2565.00 ______________________________________________________________________________ Total Income – Expense $10.00