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Saving Pleasanton's Arts & Recreation Programs By Privatization
<br />Summary
<br />Pleasanton's arts and recreation programs have the customers, revenues, and gross profit for a private, for-profit operator
<br />to run sustainability and financially independent of the city. The benefits to the city and residents include:
<br />1. The city saving at least $1,879,685 annually net revenues;
<br />2. Prices remaining competitive to regional private and publicly-subsized programs; and
<br />3. A new local business furthering the city's economic development goals.
<br />Background
<br />Pleasanton is careening down a fiscal water slide from an annual deficit of $10 million to $17 million—$22 million in a
<br />recession—in four years. The city will eventually execute everything on the list of 28 potential reductions. Arts and
<br />recreation proarams can be saved while realizina savincis by letting them continue financially independent of the city.
<br />Privatized Vs Contracted
<br />Privatization of a city -run program involves the transfer of its operations, financials, and liabilities to an independent
<br />private operator. This means the city will no longer be involved in or be responsible for the program. A privatized operator
<br />is fully responsible for the quality and profitability of the program but is free to decide how to achieve that. A for-profit
<br />operator may choose to improve existing services, market them better, or offer new services to reach new customers. A
<br />non-profit may choose to seek grants, wealthy donors, or corporate sponsorships. A contracted operator is hired by the
<br />city to run a program within predefined constraints; the city is still responsible for the program administration.
<br />Why Civics Arts Division (CAD) and Recreation Services Division (RSD)?
<br />CAD and RSD were chosen because it has growing revenues over a large customer base with a healthy gross profit; the
<br />revenues are mostly driven by independent contract instructors; they are operating at a net loss mostly due to
<br />administrative inefficiency; and CAD and RSD programs were on the list of services to be eliminated or reduced.
<br />In addition, many cities in the region already contract out aspects of their civic arts & education programs. Cities such as
<br />Livermore and Walnut Creek work with local nonprofits to offer youth theater camps and art classes. San Ramon relies on
<br />their for-profit contract recreation instructors to offer those camps and classes on city property. Only Pleasanton runs their
<br />program, Pleasanton Youth Theater Company (PYTC), in-house.
<br />CAD and RSD 3 -Year Financials Summary
<br />CAD and RSD consistently deliver a gross profit for the past 3 fiscal years. CAD is profitable even when factoring
<br />temporary employees, contract services, and other expenses. Administrative overhead is the only reason for its net loss.
<br />RSD is increasingly unprofitable when factoring temporary employees, contract services, and other expenses. The
<br />aquatic center and adult sports regular and temporary employees are driving costs. Once again, administrative overhead
<br />is the biggest reason for RSD's net loss.
<br />Civic Arts Division Profit & Loss Summary FY 2022 to 2024 Actuals
<br />FY
<br />Total Revenues
<br />Gross Profit
<br />Less Em to ees
<br />Less Services
<br />Less Expenses
<br />Less Overhead
<br />2024
<br />1,646,552.29
<br />954,913.99
<br />545,181.05
<br />520,284.33
<br />363,247.32
<br />607,077.69
<br />2023
<br />1,509,595.89
<br />773,026.20
<br />336,231.47
<br />311,215.25
<br />161,601.82
<br />(762,899.21)
<br />2022
<br />1,244,862.03
<br />707,093.92
<br />492,218.06
<br />480,459.65
<br />448,016.74
<br />(218,635.89)
<br />Recreation Services Division Profit & Loss Summary FY 2022 to 2024 Actuals
<br />FY Total Revenues
<br />Gross Profit
<br />Less Employees
<br />Less Services
<br />Less Expenses
<br />Less Overhead
<br />2024 1,817,856.67
<br />920,809.14
<br />(108,680.58)
<br />(192,749.96)
<br />(290,048.45)
<br />(1,272,607.16)
<br />2023 1,677,383.41
<br />852,389.99
<br />128,720.97
<br />(3,521.62)
<br />(113,366.82)
<br />(1,123,374.26)
<br />2022 1,547,595.76
<br />837,069.19
<br />377,927.31
<br />284,249.31
<br />191,378.47
<br />1,036,773.11
<br />Please see the attached Civic Arts Division - All Programs - Profit & Loss and Recreation Services Division - All Programs
<br />- Profit & Loss for expanded accounting.
<br />Questions/comments: openfinanceproject@gmail.com Page 1
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