Public-Public Partnership
By Michael Axsom
Photos Courtesy Of Daviess-Martin Joint County Parks & Recreation Department
As public land managers across the nation examine new ideas to solve growing budget problems, a variety of old schemes have been altered into new ones. Some work and some don't. This article describes our foray into what may be considered a new paradigm, as it involves crossing county borders to form a profitable partnership.
The Daviess-Martin Joint County Parks & Recreation Department is the only one of its kind in Indiana. As far as can be determined, it is the only joint county parks department in the U.S. Although there are various partnerships involving a county and a city or two cities, serving two county governments poses some interesting challenges. And one of the counties is heavily Republican and the other is heavily Democrat, so the politics of the mix becomes even more challenging. One county has a much larger overall tax base and budget than the other as well, so discussions about sharing costs is an easy way to start a fight.
A Hybrid Model
The current joint park department administration came on board in 1994, stepping into a long history of disagreement, fiscal inadequacies, and a decayed infrastructure that had not received any funding for capital expenditures in more than 15 years. So, in 1996 a new “hybrid” plan was developed, presented, and approved by both counties. At first, privatization was thought to be a way out of the budget feuds, but it didn’t take long to determine that if a private operator could step in and turn the fiscal bleeding into a profit, the dual-county agency should be able to as well. But this could not be accomplished within the “normal” mode of a county parks department. The plan was to be removed from the local tax rolls, accept zero funding from the counties, and restructure the operation into a business plan that depended on revenue earned from activities to fund operations and capital improvements. As intimidating as that may sound, the agency ended 1996 in the black for the first time in 17 years. In 1997, the agency ended the year with a 20-percent profit, which was used to fund the first capital budget in two decades. Each year profits were placed back into the facilities, focusing on areas that were generating revenue. Programs that were found to be revenue-negative were cancelled, while others, deemed revenue-positive, were added. Operating like a business proved that the agency could achieve the same success as a private operation—or even better—because it was still tax-exempt, so none of the profits left the operation.
Turning A Corner
In 1994, the department operated on a budget of about $300,000 and fought over every dime. Twenty years later, with the self-reliant plan, the 2014 budget is $1.2 million. Millions of dollars have been spent on capital activities, much of which involved natural-resource work to improve the long-term viability of park properties. There is little debt, and the majority is only short-term. There are no bonds issued against local tax revenues, and not one penny has been accepted from the counties since 1996. More land has been purchased, and a 501(c)3 foundation has created endowments for the future of recreation in the communities.
In 2012, there was another “first” in Indiana when the parks department became a “private” contract operator of a state-owned campground. The 40-year-old camping facility in the Glendale Fish & Wildlife Area was under a contract that allowed the dual-county agency to operate and maintain the facility, freeing the owning department from including it in its budget. While the state agency has had zero operational costs, the facility has been operating at a profit, which has been used for improvements that make it even more attractive and thus more profitable over time.
Make It Work
To pursue a similar venture using a self-reliant approach, consider the following:
One of the primary differences in doing business with the private sector versus the public sector is that much of the public sector does not like to be forced to consider the will of the customer. For example, “A trip to the park should be nothing at all like a trip to the BMV.” The emphasis should not be about rules or taking a number or standing in line. When a customer walks through the front gate, everything—absolutely everything—he or she encounters should be about them. And it is definitely not what recreation planners think a visitor needs either. It has to be about what a customer wants, or rather what he or she wants badly enough to pay for because that is now the nature of the transaction. The customer has to be convinced to actually want to give the money to you, as opposed to paying taxes that are collected with the threat of government force.
A large part of park programming is about fun, with almost none of it about the managers’ likes. Those agencies that create a disconnect between revenue and park users—as most do in a tax-based structure—have the luxury of offering programs for free, or at a highly subsidized rate. That means they can offer dull, manager-interest programs that will likely draw people looking for something cheap. Switching to a self-funded model does not allow for this approach. Energy and resources are required to provide what a customer is willing to pay for. To quote Walt Disney, “I'd rather entertain and hope that people learn, than teach and hope that people are entertained.”
Some may “look down” on these capitalistic tendencies as if they are wrong. But almost all agencies are experiencing budget cuts to the point of closing facilities, losing staff members, and sometimes closing entire parks. For those considering privatization, ask how it is possible for someone else to run the park better and make a profit. Why can’t a public agency do what the private sector does, and do it as well, while leaving profits in the park?
Michael L. Axsom is the Superintendent for the Daviess-Martin Joint County Parks & Recreation Department in Loogootee, Ind. Reach him at (812) 295-3421, or mike@westboggs.com .