Managing facilities

In today's economic climate, few facility providers can afford to continually inject large amounts of money into sport and recreation facilities that are not seen to be successful.

Related topics: facility,management

In today's economic climate, few facility providers can afford to continually inject large amounts of money into sport and recreation facilities that are not seen to be successful.

As facilities become more sophisticated and elaborate, it's expected that they should be more efficient and effective and less draining on the public purse.

What constitutes a successful facility?

To determine the meaning of success facility providers need to identify what they want to achieve through their facility. These financial and social objectives should focus on meeting local needs.

Management structure options

There are a variety of management structures you can use for a sport and recreation facility depending on the social and financial outcomes you are seeking.

1. Direct Management
   The owner, usually a local government authority, employs a facility manager.

   The owner is responsible for all aspects of the facility's operation including operating policies, financial performance and asset maintenance.

   In some cases, a management committee may be established to help with policy development and to ensure community involvement in management decisions.

2. Contract Management
   The owner contracts the management of the centre to an individual manager, a community-based organisation or a facility management company.

   Responsibilities of the owner and contractor are set out in a formal contract for a fixed period of time.

   The owner is usually responsible for major building maintenance and any loan repayments.

   The contractor negotiates an operating budget and is responsible for financial performance in return for greater freedom in operating policies.

3. Lease Management
   A formal lease detailing the rights and responsibilities of the owner (lessor) and the operator (lessee) is adopted.

   The lessee has full property rights and is responsible for financial performance, asset maintenance and operational policies.

   The lessor receives an agreed rental income (or a percentage of the net surplus) but has no direct control over day-to-day management. The lease is usually set for a medium to long term.

4. Joint Management
   In the case of jointly developed facilities a workable management agreement should be prepared before the facility is built. Joint management agreements should detail funding, cost-sharing, legal and access arrangements, so that responsibilities and usage rights are clear.
   Which Management Structure Suits us Best?

Points to consider

Direct management

• The facility owner has complete control over centre operations.
• Most suitable option if there is a need to provide social services/programs that may need financial support.
• Recreation administrators and program staff often work evenings and weekends. Overtime and penalty rates set by awards can result in higher staffing costs. These increases may be avoidable where alternative management structures are used.
• Where only a few staff are employed at the facility, the owner may need to provide administrative support for the centre manager (banking, financial reports, assistance with taking bookings and key collection, secretarial and mail services). 

Contract management

• The owner has less administrative responsibility.
• Management 'freed up' to operate independently of the owner organisation. This may present opportunities to improve operational efficiency and adopt a more commercial approach.
• The contract can be structured so as to increase the reliability of the centre's operating budget.
• Where financial performance falls short of budget projections the contractor would normally be liable for the loss. Where an operational surplus is realised, the contractor normally retains the excess, or it may be reserved for capital purchases or improvements.
• Financial incentives are often built into the contract to encourage the operator to succeed.
• Owner has minimal control over day-to-day operations.
• Potential for reduced social benefit - contractor may only offer profitable programs and competitions and may disregard the social needs of the broader community.
• Facility owner is usually required to pay a management fee to the contractor.

Lease management

• The owner has no day-to-day administrative responsibility.
• The owner has minimal financial risk.
• Lessee may invest funds in the facility if they have sufficient tenure to generate an acceptable return on their investment.
• Difficult to lease a centre that projects an operating deficit.
• The degree of control that the facility owner has over centre operations is limited by the way the lease agreement is structured.
• Broader community benefits sought by the facility owner must be specified in the lease agreement. 
• The Lessee retains operational profits.
• Difficult for either party to withdraw from or change the terms of the lease without the consent of both parties.
• Operating costs are shared. 

Joint management

• Less duplication and maximum use of community facilities and services.
• Where two or more service providers are located on the same site it can create a community hub - a focal point for community activity.
• Increased community ownership of facilities.
• Access to a broader range of services and expertise.
• Increased usage levels have been linked to reduced levels of vandalism.
• Each party must consider the usage needs of the other and be prepared to share access and facilities.
• Administration systems may be more complex.

Management planning

Which ever management structure is adopted, a well thought out management plan should be prepared.

What is a management plan ?

A management plan (sometimes referred to as a strategy or business plan) is a document that sets out:

• What you are trying to achieve. (Aims and objectives)
• How you will achieve it. (Strategies to meet objectives)
• How you know if you are achieving it. (Evaluation)

Recreation and leisure centres are like any other business enterprise, so managers need to be entrepreneurial, customer focused and consistently delivering quality programs and services.

A management plan is a formal planning tool that aims to design the future operations of the centre, to achieve the best result with limited resources.

Why develop a management plan ?

A good management plan will enable you to improve the effectiveness and efficiency of your centre.

It will spell out whom you are servicing, what services are offered and why you are providing them. the reasons underlying their provision.

It will provide you with both short and long term goals and ultimately will enable you to manage a more successful operation.

Some specific outcomes include:

• Corporate Direction Consideration: identifying how the facility fits into the broader corporate direction of the parent organisation.
• Systematic Forward Thinking Management: evaluating the consequences of alternative strategies and tactics.
• Identification of Customers and Competitors' Services: meeting customer needs and discovering new opportunities and competitive advantages.
• Formation of Realistic Goals: aims and objectives are based on knowledge of existing conditions and opportunities.
• Co-ordination of Action and Resources: determining the amount of human and financial resources needed to launch or operate a facility.
• Production of Financial Forecasts: the financial requirements for any capital works and for all operational activities are detailed. Cash flows and balance sheets are projected for the next 1 - 3 years.
• Risk Minimisation: potential problems and risks associated with the facility are identified and ways of overcoming them are detailed.
• Formation of Performance Indicators: ways of measuring and evaluating the effectiveness of the facility are established.

A well developed management plan is a useful promotional tool for educating staff, community groups and decision makers about your facility, what you are trying to achieve, and why.

It can be used to gain support, attract funds, and substantiate achievements. It sets up policies and procedures, and provides a sound reference document.

The key components of a management plan for a sport or recreation facility

• Industry and organisational review
• Market research
• Customers services plan
• Human resources plan
• Asset management plan
• Financial plan
• Future considerations
• Performance indicators

The following publication can assist managing your facility.

Management Plan Guide

Further information on management planning

Establishing and Managing Sport and Recreation Facilities (1995). Department of Tourism, Sport and Racing. Brisbane. Queensland.

Leisure Centre Management (1993). Hillary Commission for Sport, Fitness & Leisure. New Zealand.
Making Your Recreation Centre Viable. (1990). The Sport and Recreation Ministers' Council. Commonwealth of Australia.

Marriot, K. (1986); Rural Recreation Centre Management - Making It Work. Recreation Australia, V6 (3), p9.

Programming

Programming sport and recreation activities into 'packages of quality experience' can transform under-utilised facilities into hives of activity.

In Western Australia, our relatively high level of facility provision, coupled with a competing market for the leisure dollar, demands an aggressive approach to programming to achieve maximum usage and financial viability.

Programming is largely determined by the needs of the community, the facilities available and the aims and objectives of the organisation. However, facility managers need to be creative, constantly changing and modifying their programs to cater for an ever changing and dynamic market.

Recreation professionals who have a marketing approach to programming manage our most successful facilities.

What is a marketing approach ?

• Targeting programs to address specific community needs. This requires ongoing market research and customer satisfaction surveys.
• Continually reviewing and evaluating programs.
• Looking for opportunities to use your facility in new ways. Being innovative, creative and entrepreneurial.
• Packaging the elements of a quality experience and 'on-selling' them as one product.

What are the benefits ?

• Increased usage and revenue.
• Achievement of social, financial and/or educational goals.
• Facilitating community and individual development.
• Offering something unique in the marketplace.
• Efficient and effective use of resources.
• Ensuring balance and fairness - a balanced program ensures equity of access.
• Creating order and structure - people know what to expect.
• Ease of access to recreation experiences - removes participants from the task of organising activities and makes it easy for non-users to participate.
• Partnerships

You do not have to provide all the elements of the program yourself.

Identify your core business and focus on providing it. Invite other agencies or businesses to provide non-core elements such as catering, transport or advertising. Aim to create a win-win situation within the partnership.

Management of shared-use facilities

Where appropriate, two or more parties can share a sport or recreation facility. The idea is to broaden access to the facility, maximise usage and apportion operating costs to get the best possible value from the facility.

Who could you share with ?

Potential partners for sport and recreation facilities include:

• Schools / Colleges / Universities
• Sport association headquarters
• Senior citizens centres
• Neighbourhood/ community centres
• Churches
• Community health centres / Child health clinics
• Health and fitness clubs
• Art and entertainment venues

The benefits of shared-use facilities

• Less duplication and maximum use of facilities and services.
• Creation of a community hub - a focal point for community services and activity.
• Shared operating costs.
• Potential to share services, resources and expertise.
• Improved relationships between participating organisations.
• Increased community ownership of facilities.
• Reduced vandalism.
• Design Issues

Shared facilities should be centrally located to the catchment population, provide safe and convenient access, be flexible in design so as to accommodate a range of activities, and provide adequate administration and storage areas.

Management agreements

Management agreements for shared use facilities should be comprehensive, detailing all cost sharing, legal and access arrangements, so that responsibilities and usage rights are clear.

While management agreements for shared facilities are essential, the key elements of a successful partnership are flexibility, trust, open communication and a spirit of co-operation.

The following focus paper can assist managing your facility.

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Contracting out facility management

Most of the larger metropolitan local government authorities in Western Australia contract out the management of some of their leisure facilities to an external provider.

Why contract ?

Most larger local governments in the metropolitan area in Western Australia contract out the management of some of their leisure facilities to an external provider.

There are a number of reasons why this is the way to go:

• Overcome a lack of in-house expertise.
• Reduce costs or demonstrate cost effectiveness.
• Increase productivity and efficiency.
• Improve service quality and/or customer satisfaction.
• Improve accountability.
• Move non-core operations to another party.
• Facilitate innovation / introduce new work practices / introduce cultural change.
• Share risks with another party.
• The Contracting Process

For further information refer to our Focus Paper Competitive Tendering and Contracting and look up the flow chart diagram.

Defining service quality requirements

One of the first tasks in contracting out the management of a facility is to define your service quality requirements. This will enable you to set the standard you need in your specification.

Expected standards of quality should be defined for:

• Customer Service
• Programming
• Facility and Equipment Maintenance
• Marketing
• Human Resource Management
• Financial Management
• Specifications for Facility Management

The specification forms the basis of the contract agreement and should detail the clients' requirements in terms of quality, quantity, cost and time.

There are two types of specifications:

• Specify Outcomes/ Performance: The outcomes must be clear, complete and measurable. Describe what you want and leave it to the service provider to work out how. Promote innovation and best practice.
• Specify Inputs/ Resources/ Method: Tell the service provider exactly how to do it and how often.

For further information refer to our Focus Paper Competitive Tendering and Contracting and look up the section on Specifications for Leisure Services.

Where would you like to go next?

• Facility Resources