Prince William County, Virginia

When Prince William County in northern Virginia faced huge budgetary shortfalls in the 1980's and early 1990's they built new facilities and created an enterprise division to finance and run park programs. This new entity, which focuses on raising revenue, has provided a wider range of services for park users, established greater independence from the county budget, and kept fees on other, non-revenue-generating programs reasonable.

Project Background

The Prince William County Park Authority was hit hard by the recession budget cuts in the late 1980's and early 1990's. The county gave the park authority a mandate: work toward self-sufficiency. Although the authority was already charging user fees for many of its recreation facilities it would now need to explore new avenues for revenue generation.

The park authority contracted with marketing consultants for help. In 1993, an extensive marketing study was conducted to determine where additional revenues might be generated within the park system. The consultants identified seven different options and presented these to the authority. The park department settled on a mix of three different activities -- two golf courses, an ice rink and the creation of a water park from an existing city swimming complex.

To manage the revenue-generation program, and to keep it's activities separate from regular "community recreation" programs, the authority established an "enterprise division" to manage the fee and revenue-generation campaign and reorganize the concessions. The division was established as a 501 c (4) not-for-profit corporation which enables it to conduct business normally not within the public sector's domain -- such as selling alcoholic beverages at golf courses. The park authority basically contracts out the concessions and revenue-generating operations to this separate division, freeing them from standard county and state regulations, and demonstrating that those programs fully support themselves. The park authority then attempts to maintain county support for the basic community recreation programs, like field sports and classes.

Funding

The authority issued revenue bonds for the golf course redevelopment and the water park. It decided to enter into a partnership with a private management firm to operate the ice rink. The county retained ownership of the property while the private firm operated the facility including its concessions and all events. Fifteen percent of the net profits from the ice rink (about $25,000) goes back to the park authority. Concessions -- food and beverages -- provided $469,000 or 8% of the total in the last fiscal year. With the fees from the golf courses and other programs, the authority can now account for 60% of the park system's total operating budget. The other 40% comes in a transfer payment from the county. The department currently projects that it will operate its recreation facilities beyond their current break-even level. While the county's contribution to the budget was slashed dramatically from 1992 ($8 million) to 1997 ($5.2 million), it has stabilized and will actually be slightly increased this year.

Impacts

Over the last 3 years the park authority has been able to raise its revenue-generating contribution from 32% to over 60% of the operating budget. By focusing on enterprise programs the park authority is on the road to self-sufficiency while maintaining its many services.

Prince William County has a plethora of programs, events and activities for its residents. In addition to the golf courses and the ice rink, fee programs include a myriad of classes in such varied disciplines as dancing, aerobics, yoga, martial arts, dog obedience, and baby-sitting. There are seven swimming facilities including the new water park, which includes an Olympic-sized pool, hydrotube water slide, tennis courts, and a volleyball court. There are field sports such as baseball, football, soccer and volleyball, and the county leases a stadium to a minor league baseball team.

This targeted approach to new revenue-generating programs has allowed the county to leave most of their other fee programs at current levels. League fees have not been raised across the board, nor have other recreation fees. The golf courses are projected to become profit-centers in the future, at which time the park authority can provide more "community recreation" style programs cheaper, or even for free. However for now, the authority remains dependent on fees, although they do have a reduced fee program for low-income county residents.

Lessons Learned

Prince William County has a huge, popular park system that serves its growing population with programs, activities and services. While most of these facilities charge a fee, projections show that certain larger enterprises, like the golf course, will soon be throwing off net profits to fund other programs. If these projections bear out, and the county builds another golf course as planned, the park authority may be able to lower or eliminate some fees and provide other programs to meet the increasing demands of the community. The critical part of the park authority's restructuring keeps the self-supporting enterprise programs separate from the county-supported community recreation programs, thus proving what can pay for itself, and what cannot. While it is a less than ideal situation for a county park to charge local users, because of the enterprise division, fees have remained reasonable, and the variety and success of the programs offered testify to their usefulness to the community today.

Contact

Michael Lidel, Prince William County Park Authority, Finance Division, 703-792-7060

(Spring 1997)