Sometimes, what one group sees as practical another considers morally repugnant. Such is now the case at the San Francisco Recreation and Park Department. Efforts to avoid cuts to maintenance and recreation budgets through revenue-generating partnerships have been reviled by a handful of critics who are wary of the intrusion of private interests into public spaces.
Parks are in peril across the country. The economic downturn has yielded closures and cutbacks from the national to the local level. Here in the Bay Area, 10 state parks may be shuttered in the fall, while services have been reduced in city parks from Oakland, which proposed significant programming reductions in its upcoming budget, to San Carlos, which last year outsourced maintenance.
In San Francisco, since the recession began in 2008, The City’s budget contribution to the Park and Recreation Department has decreased by $8.3 million, or 19 percent. Meanwhile, contributions from the Open Space Fund — funded by five cents out of every $100 paid in property taxes — declined by $6 million in 2010 due to falling real estate values.
Consequently, between 2008 and today, the department lost 100 employees. More than half worked in recreation, although department officials boast that last year they nonetheless managed to add 20,000 additional hours of programming. Gardening and custodial cuts have resulted in deferred maintenance throughout the system.
The solution proffered by Rec and Park has been supplementary revenue. Concessions, vendors and leases have been pressed into service to reduce the impacts of budget cuts. Yet a contingent of residents and park users hasn’t exactly embraced the changes.
At Stow Lake, the decision to bring in a new operator promising to invest $250,000 and hopefully earn The City an extra $50,000 a year was met with well- orchestrated complaints over the ousting of the previous tenant. At Dolores Park, proposals to bring in a coffee stand, and then a Yucatan-cuisine food cart, incited a group of protesters to stage a “puke-in” over what he deemed the privatization of a public park. And just this week, four progressive city supervisors introduced an initiative for the November ballot to ban new entry fees or leasing recreation center facilities to private entities.
But what about the alternative? Park and Rec General Manager Phil Ginsburg said the boost in revenues from concessions, leases and other fees has helped the department avoid severe service cuts. Without them, he said, things would be much worse. The department estimates that 69 gardener positions alone have been saved by new revenues over the last three budget cycles.
“We’re keeping our parks open, and we’re keeping our recreational facilities open,” Ginsburg said. “We’ve had to be a little more entrepreneurial in order to preserve our services.”
This entrepreneurship has taken a wide range of forms. A new citywide bike rental program is expected to earn $72,500 this year, and a Segway tour program in Golden Gate Park is projected to earn $35,000 this year and $100,000 in 2012. Then there’s the new antique fair at Candlestick ($120,000 a year), new leases with City CarShare and ZipCar in department parking lots ($150,000), and the granddaddy of them all, the Outside Lands Music and Arts Festival ($1.1 million), now in its fourth year.
The department also is redoubling its efforts to encourage philanthropic support of its operations, a departure from the more common approach of funding capital improvements. Last year, the department earned $1 million in support of operations and maintenance, including a $160,000 grant to keep the Joe Lee Recreation Center in Bayview open one extra day a week for three years, and another aimed at employing a part-time gardener at one city field.
To foster all these new relationships, two years ago Ginsburg created a six-employee department focused on property management and philanthropic giving. He said their work — plus improvements in “administrative efficiency” around overtime and worker’s comp — have helped keep the department from introducing new service reductions, fee increases or layoffs in the 2011-12 fiscal year, despite a net reduction in other revenues of $6.8 million.
But not everyone is buying it. Neighborhood activist George Wooding publicly challenged the department’s revenue-generation tactics and rationale at a charged Commonwealth Club discussion in May. “Once the city decided that the parks would have to be self-sustaining, the whole notion of public space has been destroyed,” he said at that event. “The new RPD staff now cares more about the money that it receives than the public need or sustaining the parks.”
Ginsburg said his department has been in the earned-revenue business since its inception more than a century ago, and adds that recent efforts have been geared toward improving visitors’ experience as well as increasing revenues. “That vast majority of San Franciscans want a safe and clean and fun park,” he said. “Everything that we’ve been doing has been to that end.”
Ultimately, Ginsburg said, there’s a ceiling to the amount of concessions and rentals the department can squeeze out of its parks — and that a long-term solution is likely to take other forms. For now, private revenue is a budget fix the department remains committed to.
“The best way to avoid criticism is to do nothing,” he said, “but our park department can’t afford to stand still right now.”
Presidio sets the standard for financially self-sufficient parks
Long before there was a food cart at Dolores Park, there was the Presidio, the country’s first privatized national park. Created in 1994, the park was handed over to the newly created Presidio Trust by Congress in 1996. Because of the incredible cost of maintaining the Presidio’s city-like infrastructure and hundreds of historic buildings, it was determined that the traditional financial model for public parks wouldn’t suffice. The new trust would be called upon to preserve natural, scenic, cultural and recreational resources while gradually becoming financially self-sufficient.
This scenario bears striking similarities to today, when public parks across the country are seeing year-over-year reductions in public funding and becoming increasingly reliant upon private funding. Just as the Presidio will be weaned off government funding for good after next year, California and San Francisco city parks are making financial decisions that may determine their ongoing viability.
Depending on whom you ask, the Presidio is either a cautionary tale or a role model for park preservation. The San Francisco Bay Guardian, for example, predicted disaster in calling the arrangement “a classic case study in everything that’s wrong with privatization of a public asset” in 2001. Later, it suggested that the Presidio could spawn copycats by providing privatization advocates a proven alternative to public funding.
While it’s impossible to say where city parks would be without the Presidio’s role model, the trust has succeeded in generating income to support the 1,300 acres it oversees to an extent the federal government never could. With the help of real estate leases generating tens of millions dollars annually, it has rehabilitated and rented out more than half of the park’s 469 historic buildings, some of which date to the 1860s.
The Presidio Trust currently manages nearly 1,400 leases, including 225 organizations employing 3,500 employees and 1,150 units housing 3,000 residents. Nonresidential tenants are as diverse as in any small city, including businesses, foundations, educational institutions, recreation providers and restaurants, from the tiny Warming Hut cafe up to the largest and perhaps most controversial tenant, Lucasfilm Ltd.
Lease revenues have grown precipitously over the years, from $15.2 million in 2000 to $68.5 million today. And the trust will have to keep growing; the park’s federal subsidy of $15 million this year will be reduced to $12 million next year, and then zero in 2013. At that point, with the exception of the 200 coastal acres still managed by the government, the Presidio will become a fully privatized public park.
Doing more with less
While the Recreation and Park Department has lost funding and employees, it has added services.
$8.3 million: Cut from Rec and Park budget
$6 million: Loss in funding from Open Space Fund
100: Employees cut since 2008
$4.9 million: Earned revenue from concessions, leases and other fees
20,000: Hours of programming added by Rec and Park since 2008
Source: Recreation and Park Department
Select sources of earned revenue
Arboretum and Carousel
*Projection not available
Source: Recreation and Park Department