Parks Revenue

AnnArbor BuyabrickParks Departments get their money from all kinds of sources. Some of their revenue comes from taxes, some come from construction fees and municipal charges, a little bit comes from usage fees (like field rentals). Together, all of this money creates a pile of money that the Parks Department uses to build new things and maintain its existing facilities. Every year, the City Council (or other governing body) reviews and adjusts the Parks budget, along with the budgets for other city departments like Fire, Police, Libraries, Public Works, and so on. It’s a tense time for all of these agencies, and they tend to compete for those limited funds.

The main sources of funding for parks comes from the following sources:

General Fund
Charter Funds
Fees and Charges
Bonds and Levies
Grants
Direct Donations

It’s not critical that you understand exactly where your Parks Department gets its money, or even how it’s divided between capital improvements (building new parks) and maintenance (keeping the existing parks open), but having at least a cursory understanding will help you translate budgetary discussions for your core group.

Here’s another way of looking at it. On one side of the Parks Department there is revenue coming from a variety of sources. On the other side there are all of the things that the Parks Department spends money on. When both sides are equal, (there is enough money coming in to pay for all of the expenses), the budget is balanced. Building new skateparks would be considered a “capital improvement” and is the first thing that is removed when there’s more expenses than revenue.

Parks Rev and Exp

General Fund

Parks Department budgets across the nation once relied heavily on funds from the city’s general fund. The general fund is the pool of money that the city’s leaders allocate to the various agencies that require ongoing capital. There are always more pressing expenses than funds to pay for, and every year tough decisions must be made.

Charter Funds

A second common source for parks funding is from charter revenues. Charter revenues are established as part of the city’s charter (its central governing documents). For example, your town’s charter might require that 10% of all receipts of the city—from various fines, fees, and licenses—go toward the Parks Department. This figure is generally fixed. A good example of this is funds that are allocated to Parks from taxes on home sales. (This source is as a real estate excise tax, or REET. You may hear this term come up in Parks meetings.) These are often a significant portion of Parks revenues. In recent years, housing prices have been tumultuous and the lack of home sales has severely damaged Parks’ budgets across the nation.

Fees and Charges

A third common source of income is from fees and charges associated with various Parks facilities. Green fees at the municipal golf course, baseball field rentals, or concession licensing fees are good examples of this type of revenue. This source is flexible and often adjusted so that a Parks Department earns the most money from a facility while continuing to attract the public.

Beyond these three major categories, there are some special situations that can create windfalls for capital improvement budgets. These are important opportunities for skatepark advocates that should be taken seriously.

Parks Bonds and Levies

Bonds and levies are slightly different funding mechanisms but they both require voter approval. Both bonds and levies are commonly used to fund new park projects. Bonds are financial devices that allow the Parks Department to take out a loan and pay back that loan to investors with interest. A levy imposes a surcharge on real estate values. Only homeowners are impacted by levies. As you might imagine, Parks revenue based on levies is dependent on local home market values.

Voters are more likely to approve bonds and levies when the money is for new parks, or substantial improvements to existing parks, than when the money is for operational funds. (People don’t find operational expenses as exciting as capital improvements.) This is another reason why Parks Directors are more concerned with finding funds for operational expenses than they are in creating new parks that they will need to maintain.

Grants

Grants are essentially financial gifts provided by charitable organizations, foundations, and governmental agencies. Grants do not need to be repaid. Grants are typically awarded based on the merits of the project, and different communities (or projects within a community) will compete for any particular grant. Each project will try to present the most exciting, important qualities in an effort to outshine the others. Grants are competitive.

The Tony Hawk Foundation is a good example of a nonprofit organization that provides grants. Like most nonprofits, foundations, and charitable organizations that provide grants, the awards are based on available funds and the quality of the project seeking them. For example, a foundation may have $100,000 to award to one or more projects. They may receive dozens of applications (far too many to award money to them all). The foundation reviews the applications and determines which ones are most appealing and awards funds to the most attractive projects until the money is gone.

Direct Donations

Corporations, private businesses, and individuals may be interested in donating to the Parks Department, particularly for capital improvements. For example, a local sports booster may help fund the renovation of a baseball field. Many larger companies, particularly if they are in retail sales, have policies of connecting to the communities that they do business in. These companies may donate cash or materials to a particular project. (These donations are often sweetened by the promise of naming rights, on-site signage, or mention on a donor wall.)

Every year, the Parks Director and their accounting department put together an annual budget that includes the money they’ll need to take care of the parks in their jurisdiction, fix what needs fixing, and build new facilities that the public is asking for. The Parks Department submits this budget request to their governing agency, usually the City or County Council, and it is approved.

It is often approved at a lesser amount and the Parks Department then needs to prioritize what they will spend the money on and what they will delay. When maintenance is delayed, the result is parks that are not maintained. These are sometimes known as “brown field parks” because they’re not watered or mowed. Sometimes partial maintenance will be conducted at a property; the lawn is watered and mowed but the bathrooms are never open to the public because they need repairs that aren’t in the budget. When maintenance is deferred until money is available, that facility or structure goes onto a “deferred maintenance” list. It’s possible that you have parks facilities or structures near you that need repair. Your Parks Department intends to get to it when they can afford it.