Tax woes wipe out parks department: lessons from the demise of the Cheney, Washington Park and Recreation Department.

Early this year, the city of Cheney, Wash., effectively abolished its park and recreation department when citizens failed to approve a tax hike proposed to save the Cheney Park and Recreation Department. Although recent developments give a glimmer of hope see--"Partial Resuscitation" on p. 53--the Cheney experience offers both cautionary and useful lessons for public park and recreation agencies throughout the country.

Economic hardships and local polities in the 9,000-person city led Cheney's government to offer Proposition No. 1 to voters in February. Proposition No. 1 would have raised the tax on electrical and natural gas utilities by 6.5 percent on all residents, business and other entities within the city limits. The sole purpose of the tax hike was to fund the Cheney Park and Recreation Department. Failure of the measure meant that the department would close its doors for lack of funds. On Feb. 4, the citizens of Cheney voted Proposition No. 1 down. By March, the Cheney Park and Recreation Department ceased to exist.

The Cheney Park and Recreation Department had employed almost nine full-time equivalent employees at the outset of 2003, in addition to numerous part-time employees. The department provided many programs to the residents of Cheney, as well as to many people outside the city limits. These programs included youth and adult sports programs, concerts, a basketball tournament, youth and adult dance, after-school activities, discount prices on local recreation opportunities and a swimming pool during the summer months with swimming lessons.

A variety of economic factors forced Cheney to search for enough revenue to keep the department in service. Political issues were the driving force behind the development of citizen-driven Proposition No. 1 as a means to generate that revenue.

Purpose of the Proposition

According to Cheney administrator Paul Schmidt, the city had a 12 percent tax rate on electrical utilities in 1998. In January of that year, the state auditor notified city officials that they could not exceed a 6 percent electrical utility tax without public support. After this notification, and having not found an authorization by vote for the extra 6 percent tax, the city was forced to do away with the tax, "which at that time took about 10 percent of [the city's] general fired away," says Schmidt.

The following year, Washington state voters passed Initiative 69.5, which, among other things, limited the registration fee for motor vehicles to $30 per year. This initiative eliminated the current motor vehicle excise tax, which was based on the value of the vehicle, thereby saving many motorists hundreds of dollars annually. Even though the state Supreme Court decided in October 2000 that Initiative 695 was unconstitutional, Governor Gary Locke and the state legislature passed the legislation, which made the excise tax cut permanent.

Schmidt says that the elimination of the motor vehicle excise tax hurt Cheney because some revenue generated under the tax was dispersed by the state to qualifying cities as sales tax equalization. Sales tax equalization revenue is doled to cities that generate sales tax proceeds of less than 70 percent of the statewide average. In Cheney's case, says Schmidt, the disparity is caused by the lack of retail opportunities in Cheney compared to those in neighboring Spokane. "Not only did we lose a portion of the utility tax in 1998. Effective 2000, we lost another 12 to 15 percent of our general fired money in two years," says Schmidt.

In addition, according to the Cheney Free Press, "the city will see a net loss of $66,300 in tax revenue for 2003 because of the loss of its two car dealerships and the warm winter weather keeping taxes low." As people did not use as much electricity and natural gas to heat their homes during the warmer winter weather, tax revenue generated from those utilities decreased.

Compounding these financial woes, "[Cheney] has a very low property tax base," says Schmidt. With Eastern Washington University and the local school district occupying a significant amount of property within the city limits, their tax-exempt status as state institutions prohibits Cheney from generating revenue from them, while still responsible for providing police, fire, parks and street services to the entities.

These economic conditions forced the city to consider a means to head off an impending fiscal disaster. After meeting with the city council in March 2002, Schmidt said the city had only two options--to decrease expenditure or increase revenue. The city considered cutting portions of the police, fire arm recreation budgets, says Al Frank, former park and recreation director. Officials decided that the city's liabilities would be too high if members of the police force and fire department were cut. As such, the city needed to devise another method to decrease expenses. The remaining option, the park and recreation department, was also considered for budget cuts; this option, too, was deemed unsatisfactory. Says Schmidt, "Everyone agreed--the city council, the mayor, staff; the citizens--that parks are a vital service to a community. That was all clearly recognized."

In an effort to keep all the city services at current levels without decreasing funding, in July 2002 an ordinance was set forth that would increase the taxes on water, sewer and garbage. This was a general fund tax, meant to replace funds lost with the repeal of the motor vehicle excise tax. The ordinance did not require a vote by the citizens.

The Citizens Speak

At this point, Arlene Mowatt, a citizen of Cheney, headed a referendum to send the utility tax increase to a community vote. According to Mowatt, she had been attending city council meetings and studying the city budget, and disagreed with the city's call for a utility tax increase. "They [the city of Cheney] kept saying they're cutting [the budget], but they couldn't show us where they were cutting," she says. "I felt like they were hiding something. All I wanted to know was, if, in fact, the general fund had gone up every year since 1999, where have the cuts been made?"

Although signed by the required number of citizens, the referendum petition was flawed and did not pass the county auditor's scrutiny. Even so, the council decided to put the issue to a vote. "Politically, is it very wise to disregard 700 signatures?" asks Schmidt. "They could have merely started an other petition behind that one and referred it again and again ... More petitions would cost the city money and time, while not necessarily resulting in a productive outcome."

This process gave birth to Proposition No. 1, a new city ordinance different from the previous measure opposed by Mowatt.

In November 2002, the city council scheduled the election for Feb. 4. Instead of the original utility tax on water, sewer and garbage, the city changed the ordinance to tax electricity and natural gas at a rate of 6.5 percent. According to Schmidt, this ordinance, in contrast to the previous one, stated that the tax was specifically to fund the park and recreation department. Schmidt says it was structured this way so that the voters could see that the money would be used for one understandable purpose, instead of disappearing into the general fired budget with no clear purpose. (If the city intended the tax to increase the general fund, and if the measure failed, then the city would still be stuck with a decreasing budget and the same operational expectations.)

By targeting a specific department for funding through Proposition No. 1, the city's budget would be capable of sustaining the remaining departments if the singled-out department was eliminated. The park and recreation department was chosen over the police or fire departments because a failure would not jeopardize the city's liability and public safety to the same extent as taking a policeman or fireman off the street.

The tax increase was limited to three years, as the city was planning to create a park and recreation district by the end of the tax hike period. A park and recreation district would tax people outside of the city limits, thus generating more revenue. According to Frank, 50 percent of the park and recreation department's participants came from outside the city, and creating such a park and recreation district was the only feasible option for long-term survival of municipal recreation in Cheney. In light of more-immediate department-related events, the park-district idea has, for now, been shelved.

The election was a mail-in ballot only; the first in Cheney's history. Ballots were mailed to registered voters around Jan. 14, giving voters three weeks to cast their vote by the Feb. 4 deadline. When the votes were tallied, the measure had failed by 114 votes. The Cheney City Council voted afterward to pass a budget amendment by a margin of 5-2 that eliminated the park and recreation department. The department ceased to exist on March 1.

Election Aftermath

According to Schmidt, there was some confusion between the city and the county elections department. City officials were under the impression that they were required to handle the election as a mail-in ballot as advised by the elections department. At that time, they did not realize that the elections department did not have the legal authority to mandate that Cheney use a mail-in ballot. Schmidt contends that the biggest reason the measure failed was because of the mail-in ballot. "This is the one regret I have--we should have pursued this issue further," he says. "The election board didn't bare the right to tell us it was mail-in only."

Don Wall, a member of the Cheney Park Board for more than 30 years, also blames the mail-in ballot for contributing to the failure of the proposition. "A lot of those ballots went to students who lived in various [university residence halls] who were no longer there," he says. "So that might explain, in addition to the typical voter apathy, the very low voter turnout." Frank also notes that the mail-in ballot might have been hindered by all of the university students who move from year to year and may not have received a ballot.

Mowatt strongly supported the mail-in ballot, and she places the blame for the failure elsewhere. She attributes the ultimate defeat of Proposition No. 1 to the initial absence of alternative solutions offered by the city, as well as an absence of clarity regarding the budget by Cheney's government. "It was never about parks and recreation," she states.

In an interview with the Cheney Free Press, Cheney Mayor Amy Jo Sooy said the vote failed for a combination of reasons. She said that people believed that the city would find the money necessary to run the park and recreation department, even if the vote failed. She described citizens stating that they should not have to pay for the park and recreation services if they don't participate in the programs. Mayor Sooy is also quoted in the paper as stating that many people don't trust the government to act in the best interest of the community anymore.

Lessons from Loss

The ultimate demise of the Cheney Park and Recreation Department could have been avoided, says Wall, the park board member. For example, a park and recreation director should not wait until the full development of a budget or political problem that threatens the agency's survival before trying to head it off. "A parks department should not let itself get to the position where this becomes an act of desperation," he advises. "Keep the department and its contributions, as much as possible, in the forefront of the public's mind." Schmidt agrees. "As a parks director, promote your programs constantly to inform the community about the contributions of the department before a ballot measure develops," he says.

Adds Wall, "You want somebody who's going to be a cheerleader. Somebody who's going to get out there and force people to acknowledge the benefits of this department."

Schmidt states, "Advertising and showing all the benefits of keeping kids active in parks will save on juvenile delinquency. That stuff should be hammered home all the time. What we didn't do was toot our own horn." The necessary act of self-promotion extends to the city government as well; all in the community must be aware of the value of the park and recreation department.

Moreover, with a routine of sell-promotion in place, the risk of appearing to act in a conflict of interest may be avoided if the existence of a department be put in jeopardy. If not part of standard operating procedures, promotion may be seen as encroaching on the boundaries of conflict of interest if used only when attempting to save the department.

Regular communication is very important, says Mowatt. "The only message I have is that it's all about communication and education. Get more facts out there," she says. In her opinion, if the city had been communicating more effectively about why the budget was increasing, while at the same time contending they were making cuts, she would have been more open to the energy tax increase.

"Make sure you have good communication with the city council and mayor on what they're going to do in the future for revenues and budgets," advises Frank. He also laments the poor communication between city government, himself and the community. "I wish [communication] would have been better with the community regarding what was going to happen [if the vote were to fail]. A lot of people were angry because they didn't feel this was going to happen."

Citing the claims of many voters who felt blackmailed into putting the park and recreation department into this situation, Wall says, "Some of this could have been avoided by better information being disseminated to the community." Poor communication was cited as a major contribution to the elimination of the park and recreation department. It is essential to ensure open channels of communication before difficult situations arise. In this case in Cheney, mistrust and suspicion arose when information was not shared effectively.

Adequate knowledge of the budget is a necessity, says Frank, who advises, "I would say to be proactive and know where your revenues come from." Schmidt echoes Frank's advice: "As a parks director, you have to be a budget animal," he says. "You have to have a keen sense of revenue and expenditure." This approach to knowledge of the budget may mean park directors will have to further refine their skills in the areas of public accounting and business administration, and should have all accurate picture of revenues and expenditures at all times. Admittedly, this role may be difficult for many in the park arm recreation field who began their career with an emphasis in programming. Nonetheless, spending more time strengthening the political and budgetary supports of a municipal park and recreation department should be a priority for the proactive director.

Another key concept is regularly implementing effective evaluation methods. Specifically, the benefits-based approach to using evaluation may help significantly with meeting the needs of participants and reinforcing the positive contributions that a park and recreation department makes to the community. As one well-stated definition puts it, the benefits-based approach to evaluation is an "approach to programming that suggests that activities must be designed and implemented to meet certain outcomes that address specific community needs. Evaluation of programs is a means to determine whether those activities have been successful."

Not only does participant evaluation of programs and facilities help to improve the service a department offers to the public, it also serves as a time for employees to educate the participants about the functions the department performs. In other words, regular evaluation is a means to move beyond the cost-effective mindset of spreadsheets and numbers and into the realm of defining the often times nebulous benefits associated with a park and recreation department. Armed with more meaningful information, a park and recreation director can provide an accurate picture of where funds are spent and how participants and the community are benefiting from services. Equally important, the park and recreation director is able to see if the benefits offered are meeting the current and projected needs of the whole community. Effective evaluation of participants, programs and facilities should not be viewed as a luxury, but rather a necessity for long-term survival.

The Handwriting on the Wall 

The Cheney Park and Recreation Department's lack of education and communication led to its eventual downfall. For example, when describing the citizens' knowledge of The department, Wall states, "There's a failure of leadership to educate people. I don't think he people in Cheney had one iota of conception of all that we did with the honey in the parks department. The leadership should have gone to great pains to publicize all the things the parks department did with its money."

The Chancy Park and Recreation Department fell victim to a variety of circumstances, some of which were outside the span of control of the city government. The elimination of the vehicle excise tax and the resulting loss of sales tax equalization revenue was one such issue. Another factor that limited Cheney's budget is the small property tax base, resulting from Eastern Washington University and the school district. This was especially problematic for Cheney given its size and substantial public safety responsibilities.

That said, factors similar to these may handicap other city governments. Departments facing a situation similar to that of Cheney's have the ability to mitigate other potential factors by taking proactive measures and showing assertive leadership. For example, positive channels of communication must be opened and maintained regularly with park and recreation users, the community at large and the city government. Second, on-going evaluation, self-promotion and education about the benefits offered by the park and recreation department should be a regular part of the standard operating procedures. Last, park and recreation directors must possess budget expertise and an aptitude for working within the nuances of the political process. All of these measures should be studied and implemented by those in a municipal recreation leadership position. Doing so may make the difference in preventing the loss of any more of our community park and recreation resources.

PARK DIRECTOR OPPORTUNITY

A 300 acre park in Westfield, Massachusetts---The Stanley Park of Westfield--seeks qualified applicants for park director to oversee gardens, trails, woodlands, and playground areas. Park director would also be involved in educational and entertainment programs, and required to manage staff and general operations. Strong interpersonal, communication, and management skills essential.

College degree in related field and ten years progressive experience required. Starting salary negotiable, with significant current and retirement benefits. Equal opportunity employer.

To receive consideration, applicant must respond by mail to: Director Search, The Stanley Park of Westfield, Inc., P. O. Box 1191, Westfield, MA 01086 with resume, statement of qualifications, and cover letter on or before January 31, 2004.

web-site: www.stanleypark.org

Partial Resuscitation

With the help of a community group named Save our Parks end Recreation, the citizens of Cheney passed a 4.75 percent utility tax increase on Sept. 16. This proposition, which passed with 59 percent approval, provides a dedicated source of funding for park end recreation services. The tax increase is anticipated to generate approximately $380,000 in dedicated funding. (The budget prior to closing was $830,000). The tax will remain in effect until another source of funding is located; discussions are still occurring over the creation of a parks district, but first the city needs to conduct a feasibility study.

Although revenue began to accrue on Nov. 1 city administration anticipates re-opening the department on Jan. 1, 2004. The new structure of the department has not yet been determined. Public sentiment prior to closing was that the old department was too top-heavy, so it is suspected that a new director will not be named. In addition, it appears that maintenance functions will remain under the Public Works Department.

According to sources, much of the feedback from residents stemmed from dissatisfaction with the closure of the outdoor pool over the summer months. Moreover, no park restrooms were opened during that season.

Matthew Chase, Ph.D., is an assistant professor of recreation management in the Recreation and Leisure Services degree program at Eastern Washington University in Cheney, Wash. Ryan Shannahan is a recent graduate of the program, and is currently completing his professional internship as a wildland firefighter with the Bureau of Land Management in southeastern Oregon. Chase can be reached at [e-mail].