an all-too-common challenge to cities across the country: how can the municipal government

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1 To: Professor John Yinger and Travis Rothweiler From: Kacie Galbraith, Biff Beecher Jones, and L. Sookyung Oh Date: May 9, 2011 Re: Trimming Costs for the City of Twin Falls Department of Parks & Recreation I. INTRODUCTION The City of Twin Falls, Idaho (hereafter referred to as the City or Twin Falls ) faces an all-too-common challenge to cities across the country: how can the municipal government continue to provide a satisfactory level of services to a growing population during a time of economic uncertainty? Cognizant of this challenge, the City has identified its Department of Parks and Recreation (hereafter referred to as the Department ) as a prime candidate for cost savings and improved efficiency. Built into the City s comprehensive plan is growth in parks and open spaces valued public goods that provide psychosocial and economic benefits. However, today s fiscal constraints pose challenges to implement tomorrow s vision. This memorandum outlines four specific avenues by which the City can advance towards this goal. We recommend that the City: 1) become more deliberate in organizing and executing community engagement initiatives; 2) relax the rigidity of park amenity standards; 3) lay the groundwork for managed competition between Department personnel and private service providers in specific, easily regulated service areas; and 4) create more pricing options in future fee rate schedules. These recommendations are the product of a literature review of relevant public finance documents, analysis of City-prepared reports (such as the Twin Falls Vision 2030 report) and internally produced Parks and Recreation programmatic and financial documents, interviews with the City and Department management, and interviews with appropriate staff from other municipalities and relevant professional associations. The remainder of this memorandum consists of three sections. Section II provides a brief background of the City and the Department, including a review of acreage accumulation and cost Galbraith, Jones & Oh Page 1 of 17

2 trend data; section III fleshes out the details of our four recommendations, highlighting specific steps that need to be taken in order to ensure that cost savings are actually realized; and section IV concludes. II. BACKGROUND Twin Falls is the seventh largest city in the state of Idaho and is the principal city of the Twin Falls Micropolitan Statistical Area. The population has been steadily increasing; in 2000, the population was 34,469 and had grown nearly 24% to 42,741 by Long-term forecasts project the population to increase to 66,500 by Currently, Twin Falls fully maintains acres of parks and open space. 2 Parks fall in the following categories: Neighborhood Parks, Community Parks, and Large Regional Parks. Those categories are defined by average size, proximity to residential areas, level of development, and availability of additional amenities. A survey of community residents in 2007 highlights that use of parks and open spaces varies, ranging from 6% - 64%. The same survey also indicates service demand and projected need, according to future residential growth patterns. City and Department staff Cumulative, Fully Maintained Park & Open Space Acreage expect an increase in residential subdivision development to accommodate the projected Cumulative, Fully Maintained Acreage population growth, which will lead to a greater obligation by the City to develop and maintain Source: See appendix, Table A.I. 1 Twin Falls Vision 2030: A Comprehensive Plan for a Sustainable Future. Page ix. 2 This figure was calculated from data provided by the Twin Falls Department of Parks and Recreation (See Table A.I.) Galbraith, Jones & Oh Page 2 of 17

3 neighborhood parks. Twin Falls Park ordinances call for developers to set aside or acquire land within, adjacent to, or in the general vicinity of the subdivision for neighborhood parks The number of acres of land set aside for neighborhood parks shall be the minimum of the sum of the number of household units in the subdivision multiplied by The City is continuously accumulating parks and open space. Fully maintained park space has grown at a rate of 1 percent annually over the last eighteen years (See Figure 1). This accumulation of park space has directly impacted the City s budget over time accordingly. There appears to be a two-year lag between new acreage and budget impact. For example, the acreage of fully maintained parks grew by 1.7% from 2000 to Two years later, total park expenditures shot up by 3.8% (see Figure 2). We also observed this Figure 2 Park Acreage, Personnel Cost, and Total Cost Trends Cumulative, Fully Maintained Acreage Total Park Personnel Costs Total Park Expenditures relationship between park acreage and budget impact in response to acreage growth rates of 2.8% from 2003 to 2004 and 3.4% from 2006 to The associated twoyear lagged impacts on total park expenditures were 5.4% growth Source: Author calculations based on data provided by the City of Twin Falls and 7.7% growth, respectively. Though delayed, these budgetary shocks have real implications for the City s financial wellbeing; however, the following recommendations identify specific steps that Twin Falls can take to avoid fiscal duress as the City continues to accumulate additional park acreage. 3 Parks and Storm Water Retention/Detention Ordinance. City of Twin Falls, Idaho. PDF copy ed by Dennis Bowyer on April 13, Galbraith, Jones & Oh Page 3 of 17

4 III. RECOMMENDATIONS #1) The City of Twin Falls should institutionalize community outreach and engagement duties for the expressed purpose of exploring and creating opportunities for citizens to help, maintain, expand, and invest in parks. The volunteerism outweighs the staff time and resources we put in. Dennis Bowyer, Director of the Department of Parks & Recreation, Twin Falls Residents of Twin Falls heavily use the existing trail system and consequently have ranked trail expansion as a top priority for the City. 4 Specifically, connecting gaps in existing trails is the most desired improvement to the trail system. The City acknowledges this demand and outlined expansion in its Twin Falls Vision 2030 comprehensive plan. While the plan does not provide cost estimates for building almost 45 miles of new trails, one option for financing this initiative is community partnerships. For example, the Twin Falls Rotary Club announced in January 2011 that they would cover 100% of the construction costs for a proposed new trail that would link the College of Southern Idaho to Pole Line Road, a project already prioritized by the Department. Construction of this.64 mile trail is estimated at $250,000. The Rotary Club asks that upon completion, the City cover the $4,000 cost for maintaining the trail s slurry seal every seven years. A second Rotary Club is willing to raise the funds necessary to install three pieces of playground equipment and a shelter, as long as the City installs a restroom. Mobilizing volunteers to help maintain, expand, invest in, and even operate parks is a clear cost-savings option with benefits beyond the dollars saved. In the past, Twin Falls experimented with an Adopt-A-Park model, but failed to devote the resources necessary to 4 Results from a citywide survey in April 2007, which helped inform the Twin Falls Vision 2030 comprehensive plan, report that respondents ranked parks and trails as either their number one or two priority when asked to prioritize the City s focus for available resources. Galbraith, Jones & Oh Page 4 of 17

5 sustain this activity. And though the Department continues to work successfully with a wide range of volunteers on smaller-scale initiatives, the City could generate even more cost-savings by institutionalizing community engagement. This could be done by dedicating specific staff time to identify potential collaboration partners and to maintain key relationships. A part-time or full-time Civic/Community Manager, or an advisory team to coordinate this effort, is essential. Another key responsibility beyond matching needs with skilled volunteers is ensuring that accountability standards are met, and that the volunteer program does not displace current staff. The exploration, creation, and support of volunteers to implement select public services need not be isolated only to the Department. Countless cities like Dana Point, California (population: 37,326) 5, Shawnee, Kansas (population: 62,209) 6, and Philadelphia, Pennsylvania, (population: 1,447,395) 7, are increasingly turning to volunteers to enhance existing municipal functions in a range of activities, from tutoring/mentoring high school youth, to acting as unofficial greeters at convention centers. If done right, a volunteer program could not only save Twin Falls money, but further provide citizens opportunities to exercise civic pride and duty. #2) The City should relax the rigidity of its park amenity standards. The current standard exceeds both citizen demand and regional standards. Section 9-2 of the City s Comprehensive Plan identifies the amenities that are currently required in all of the City s neighborhood parks : a restroom, shelter, picnic table, playground structure, open grass area, shaded area and at least one basketball court, tennis court, volleyball court, sport court, paved walking trail, climbing wall, baseball/softball diamond, or comparable 5 Volunteers in Police Services, 6 Sheperd, Sara. Shawnee to consider adding volunteer coordinator to 2012 budget. Shawnee Dispatch, April 7, Accessible at: 7 Serve Philadelphia. Galbraith, Jones & Oh Page 5 of 17

6 specialty amenity. 8 Mandating the presence of so many amenities in every neighborhood park is not an inherently poor policy choice; however, it is a policy choice with significant cost implications. These cost implications may be justifiable with requisite citizen support, but this support is lacking. A survey conducted in conjunction with the City s Vision 2030 Comprehensive Plan highlights citizen reservations to fund the construction of the statutory amenities. Although only three of the City s fourteen neighborhood parks met the standard for amenities at the time the survey was completed, citizens were most likely to advocate for no improvements when asked to identify the improvements needed in existing parks. There were only two parks for which this was not the case, Harry Barry Park and Ascension Park. But Harry Barry Park is already equipped with all of the required amenities, so any new amenity would exceed the statutory minimum. Ascension Park, on the other hand, is an eight acre park with only two of the required seven amenities (play equipment and soccer fields). Additional amenities in this park are probably warranted. When compared to a random draw of other Idaho cities, Twin Fall s amenity standard for neighborhood parks is high. For example, Idaho Falls, Idaho requires neighborhood parks to be outfitted with four amenities: a tot lot (children s play equipment), open green space, landscaping which includes shade trees, and picnic areas. The city of Eagle, Idaho does not identify any required neighborhood park amenities in its comprehensive plan. Thus, it appears that the City s current amenity standard exceeds both citizen demand and casually observed regional standards. 8 Twin Falls Vision 2030: A Comprehensive Plan for a Sustainable Future, February 2009, section 9-2. Galbraith, Jones & Oh Page 6 of 17

7 How to relax the amenity standard In order to relax the rigidity of its park amenity standards, we recommend that the City restructure the way it thinks about park amenities. Rather than requiring every neighborhood park to meet the current amenity standard, proximate parks should be grouped together and the standard should be applied to each group of parks. These park groupings should be arranged such that citizens throughout the city are benefited; low-income households should have comparable access to park amenities as high-income households. This recommendation can be achieved by engaging in a planning process that includes the Department of Parks & Recreation, the City Manager, the Parks & Recreation Commission, the Planning & Zoning Commission, and the City Council. The City should engage the Parks & Recreation Commission in the nascent stages of the new planning process. This body can lay the groundwork prerequisite to change by identifying potential park groupings and detecting particular sections of the City that may be park amenity deficient. In light of the City s exceptionally high standard relative to other cities, the Commission should also re-examine the list of required amenities and exclude those which may be superfluous. To be clear, revising this list would not restrict the City from providing any of the currently stipulated amenities, rather, it would release the City of its obligation to provide them. Once park groupings have been made, the Parks & Recreation Commission should also be responsible for identifying which amenities still need to be built, and recommend where those amenities should be located. When requisite, the Commission should have access to the expertise of city personnel as it completes its work. Once the groundwork has been laid, the planning process should advance to the Planning & Zoning Commission and then to the City Council. Revising the amenity standard will impact Galbraith, Jones & Oh Page 7 of 17

8 the City s Comprehensive Plan and, therefore, necessitate the public s inclusion in the amendment process. 9 Therefore, formal public hearings should be held on two separate occasions: first, when the Planning & Zoning Commission meets and, finally, when the City Council meets to review the new plan. These meetings will provide citizens with an opportunity to voice their concerns about the reduced amenity standard and for the City to demonstrate the potential cost savings. An illustrative example of one potential park grouping The City currently Illustration of One Potential Park Grouping maintains three neighborhood parks that are less than one mile apart, each of which is Willow Ln Park Sunrise Park Ascension Park required to meet the high amenity standard described above. Willow Lane Park is a Legend Neighborhood Park Retention/ Open Space Rivers and Streams Teton Park 0.25 mi 0.5 acre area with none of the Source: Modified rendition of a Twin Falls Department of Parks & Rec. map required amenities, Sunrise Park is a 2 acre area and is outfitted with all but two of the required amenities (restroom and informal playing field), and Ascension Park is an 8 acre area with only soccer fields and two units of playground equipment. 10 The City is presently obligated to provide three separate restroom facilities, two sheltered areas, two picnic tables, one unit of play equipment, three informal playing fields, and one specialty amenity to meet the current standard for these three parks. Roughly estimated, the up-front costs for these amenities would be nearly 9 This requirement was highlighted by Mitchel B. Bumble, the City s Community Development Director. 10 This prognosis is drawn directly from the City s Vision 2030 Comprehensive Plan referenced in footnote #8. Galbraith, Jones & Oh Page 8 of 17

9 $425, By grouping these three parks together and maintaining the current amenity standard, the City s up-front obligation would be reduced by $325,000; providing one restroom facility and one informal playing field would meet the new standard at an expense of nearly $100,000. Because these parks are so close together, these new amenities should sufficiently meet the needs of citizens visiting all three. Incorporating Teton Park (a retention area/open space) to this neighborhood park grouping might also allow for additional savings. #3) The City should lay the groundwork for managed competition between Department personnel and private service providers in specific, easily regulated service areas. To lower costs and increase departmental efficiency, Twin Falls should consider subjecting specific maintenance services to managed competition. Municipalities across the country have had success in utilizing this variation of privatization in which government departments are included in competition with private firms to secure service delivery contracts from the government. 11 Rough cost estimates for each amenity were provided by the City s Department of Parks and Recreation and are reported in Table A.II. of the appendix. To be conservative, it was assumed that each open grass area was only.5 acres large and that the new specialty amenity is a volleyball court (the least expensive option). Galbraith, Jones & Oh Page 9 of 17

10 While governments typically turn to this method as a means for cost-savings, there is an additional goal of stimulating government employees to think in innovative ways to provide services at a lower cost. Therefore, regardless of whether the government department or a private firm wins the bid, the local government will benefit from a decrease in costs for providing that specific service. It is often the hope of the government to keep production inhouse, rather than privatizing, and subsequently losing a part of its staff. However, we support a fair and honest process, which means departments must strive to streamline their operations to produce bids that are truly competitive with private firms. Benefits of Alternative Service Delivery There are several benefits from the use of alternative service delivery. Should the Department fail to win the contract for service delivery, the service in question would be privatized. The potential benefits of privatization include: increased efficiency, cost savings, and better service quality. Private firms often have fewer constraints than the public sector, which can lead to increased efficiency. They may also benefit from economies of scale meaning that average cost per unit falls as the scale of output is increased. And, they may increase service quality as the private sector can more quickly take advantage of technological improvements. However, the government is also capable of providing the same benefits of increased efficiency, cost savings, and better service quality. Department personnel have the benefit of firsthand experience providing the specific service, allowing them unique insight as they examine new options that may reduce costs. Governments can facilitate this process by providing employees with the flexibility [to] restructure and reengineer service delivery systems. Consultative expertise can also be provided to insure that state of the art equipment and Galbraith, Jones & Oh Page 10 of 17

11 practices are being used by public employees. 12 In addition, the Department may be able to keep lower costs than private firms because of the absence of transaction costs. Private production would entail costs of the government negotiating with, and monitoring, these private firms who have their own incentives. How to implement managed competition The City must determine its capacity to enact the process required to utilize managed competition for specific services. We recommend that the City make seven considerations in deciding how to structure the managed competition process. If any of these prerequisites cannot be met, managed competition, or even strictly privatization, will not be successful for the service in question and should not be pursued. 1. Calculate costs: Calculate the full cost of delivering a service. This should encompass both direct costs (salaries, wages, benefits, materials and supplies) and indirect costs (administrative expenses). 13 The city must also consider any costs of transitioning to alternative service delivery. Twin Falls must seek to separate avoidable from unavoidable costs, because ultimately, only avoidable costs are relevant to a privatization decision. 2. Ensure competition: The City must verify that there is a pool of qualified vendors for the specific service. Without this essential element of competition, there will be no incentive for any party to minimize costs. 12 Martin, Lawrence L. "Public-Private Competition: A Public Employee Alternative to Privatization, Review of Public Personnel Administration, (1999): 69, accessed April 30, 2011, doi: / x Alternative Service Delivery: A Civic Federation Brief, The Civic Federation (2006): 6, accessed April 30, Galbraith, Jones & Oh Page 11 of 17

12 3. Run a fair bidding process: Use an outside agency to lead the RFP process. This may be a consultant, or even another City department. This practice will ensure fairness, and should result in a firewall between the RFP process and the Parks Department. 4. Compose and use clear contract language: Create very clear and specific guidelines in the contract to make certain that service delivery will be to the exact specifications of the City. Describe the results of the work being solicited; do not simply explain the way the job is currently performed. 5. Determine monitoring and oversight capacity: It is essential to determine the monitoring or oversight costs that would result from a change in service provider; and ensure that the city does have the capacity (technology, human resources, organizational structure) for the desired level of oversight. The city will need to develop quantifiable performance standards to make sure the service provider is performing to the level that was specified in the contract. 6. Secure stakeholder support: Key stakeholders need to be involved in the managed competition process to give the government a better opportunity to convince stakeholders of the value of a competitive service model. This may include employees, media, advocacy groups, and the public. 7. Let employees prepare: Give the Department up to three years notice before starting the process of managed competition to establish a completely transparent process. Proper notification will provide the Department with adequate time to become as efficient as possible before outside firms become engaged in the bidding process. Other cities, such as Indianapolis, have utilized a no layoff policy to ensure employees focus only on constructing a quality bid, not on the worry of being fired. If a private firm wins the Galbraith, Jones & Oh Page 12 of 17

13 contract, options for displaced employees include: shift them into other public jobs, require private bidders to hire them, or provide outplacement services, severance packages, or early retirement benefits. 14 However, the City of Twin Falls has much fewer employees and thus may not find a no layoff policy to be feasible. It is our expectation that, if nothing else, the enacting of a managed competition process will give employees the motivation they need to rethink the way they operate. We believe that the threat of managed competition will motivate Department personnel to challenge the status quo and to discover more efficient ways to deliver the services they provide. #4) Create more pricing options in future fee rate schedules. Debates about providing public services often focuses on supply side management and efficiency. The other side of the picture is demand side management, which we touch on in Recommendation #2. Another approach practiced in parks and recreation is building different pricing options in park fees. Public pricing is an alternative to taxation that utilizes user fees, with the benefit of linking payment for a public service to the actual users of the service. Shoshone Falls and Dierkes Lake are the only park spaces that currently charge user fees. It is reasonable to assume that for the immediate future, user fees should only apply to these two spaces. Shoshone Falls is the more important revenue source because it attracts tourism from throughout the southern Idaho region. The City charges a $3 daily parking fee per vehicle or a $25 season pass to access Shoshone Falls and Dierkes Lake, as they share a common entrance. The practice of charging fees dates back to 1980 when the fee was originally instituted at $1. The 14 Hai-Chiao Chang, Youhei Itou, Velika Kabakchieva, Lesia Lozowy, Ramon Munoz-Raskin, Rene Ramos, Mark Seaman, and Yasemin Tugce Tume. Managed Competition in Indianapolis: The Case of Indianapolis Fleet Services. School of International and Public Affairs, Columbia University. December 2005: Galbraith, Jones & Oh Page 13 of 17

14 City increased the fee to $2 in 1990 and then to $3 in These fees collect into a separate enterprise fund that pays for improvements in Shoshone Falls or Dierkes Lake. For the last six years, no money from the City s General Fund was needed for maintenance. Last year, the Department collected $181,000 and expects to collect $200,000 this year. This information suggests that Shoshone Falls has a high level of cost recovery, but with the anticipated growth of the region as a whole, we question whether this trend will continue. The amount of the user fee and decisions to increase the fee appear to be done arbitrarily. Therefore, we recommend that the City and the Department take a longer-term perspective in managing costs of Shoshone Falls and Dierkes Lake. This can be done by considering the following pricing criteria: 1. Set two parking fees based on which site the primary driver wishes to access. A higher fee could be created to enter Shoshone Falls, which is primarily visited by non-residents, than Dierkes Lake, which is primarily used by residents of Twin Falls. 2. Set two fees based on season. A higher fee could be set during peak visiting months (April to October), reflecting greater maintenance needs that are incurred during that time. However, the City should carefully study how park demand will change if prices are raised. Prices that are too high may discourage use, and can be unfair to citizens with lower incomes who must use a greater percentage of their income than high-income individuals in order to benefit from the same amount of services. Having a richer understanding of park finance and usage should lead to more options of pricing and servicing standards that keep the parks open for the benefit of all today, while protecting them for future use. Galbraith, Jones & Oh Page 14 of 17

15 IV. CONCLUSION Parks and open spaces are public goods that deserve the attention needed to ensure their provision remains at a level that is satisfactory to City residents. This paper has outlined four specific recommendations that will help the City of Twin Falls reduce costs now, and more importantly, in the future. Our recommendations of community engagement, relaxing the rigidity of park amenity standards, managed competition, and re-structuring user fees respect the needs of Twin Falls residents and the capabilities of City staff in both the short- and long-term. Acknowledgements We extend a special thanks to the following individuals and organizations for generously supporting us during our research and recommendation formulation: Dennis Bowyer, Director, Department of Parks and Recreation, Twin Falls, ID Travis Rothweiler, City Manager, Twin Falls, ID Todd Andersen, Park Coordinator, Department of Parks and Recreation, Twin Falls, ID Kevin Skelton, Park Coordinator, Department of Parks and Recreation, Twin Falls, ID Darren Huber, City Budget Coordinator, Twin Falls, ID All other contributing City personnel Stuart Schillinger, Deputy City Manager/Administrative Services Director, Brisbane, CA Nate Stevens, Administrative Director, Dept. of Parks and Recreation, Onondaga County, NY International City/County Management Association National Parks and Recreation Association Galbraith, Jones & Oh Page 15 of 17

16 APPENDIX Table A.I. Cumulative, Fully Maintained Park & Open Space Acreage Year Park & Open Space Acreage Source: Twin Falls Dept. of Parks & Recreation Galbraith, Jones & Oh Page 16 of 17

17 Table A.II. Estimated Amenity Costs Up-Front Cost Annual Maintenance Cost Restroom $90,000 $3,300 Shelter 40, Picnic Table 2, Play Structure 40, Open Grass Area 20,000* 1,200* Shaded Area 350 per tree 25 per tree Specialty Amenities: 1/4 Basketball Court 8, Tennis Court 25,000 ϯ 800 ϯ Volleyball Court 1, Paved Walking Trail 50 per linear foot.25 per linear foot* Baseball/Softball Backstop 2,500 ϯ 50 Source: Twin Falls Dept. of Parks & Recreation Notes: * Rough estimates ϯ Additional costs may apply for upgrades (e.g. lights) Galbraith, Jones & Oh Page 17 of 17