Funding Use: Operations/Maintenance

Co-sponsors, the EPA and the Urban Waters Federal Partnership, work to develop community capacity with modest financial and technical assistance to diverse local partnerships for urban restoration and education programs. Streambank and shoreline stabilization, stormwater management, urban tree canopy restoration, and projects to prevent trash in waterways are just a few of the projects awarded grants. The grants are administered by the National Fish and Wildlife Foundation’s (NFWF) Five Star and Urban Waters Restoration Grant Program.

A city’s general fund pays for most capital and operating expenses. The revenue comes primarily from property taxes and elected officials allocate the funds to city functions through the annual budget process. Parks and recreation funding can, therefore, vary, influenced by local politics, a city’s economic fortunes and the engagement of citizens in the budget process.

Parks and recreation departments are often the first to have their budgets slashed and the last to see them increased. Park advocates and nonprofits play an important role in ensuring consistent funding for parks year to year. Cities with strong nonprofits and organized advocates tend to have the most stable public funding for parks. For more information on making the case for parks and building a strong network of park advocates, see Other Resources below.

Multipurpose Grants provide funding to carry out a range of eligible planning, community engagement, assessment and cleanup activities with a proposed target area, such as a neighborhood, a number of neighboring towns, a district, a corridor, a shared planning area or a census tract.

Clean Water State Revolving Funds provide low-interest loans for water infrastructure and management projects. Beginning with The American Recovery and Reinvestment Act (ARRA) of 2009, Congress requires all CWSRF programs to use a portion of their federal grant for green infrastructure projects, water and energy efficiency, or other environmentally innovative activities, called the Green Project Reserve. The EPA issued a policy encouraging states to prioritize green infrastructure in their CWSRF programs in 2016. 

Although it is a loan program, CWSRF has the flexibility for debt purchasing or refinancing, loan guarantees and insurance to increase access to private credit markets or to lower borrowing costs. 

States can also reward high-priority projects with incentives, including subsidies. Some states have built-in priority points for green infrastructure, including Kentucky, Kansas, Indiana, New Hampshire, Maryland, and New Mexico. Several states have opted to provide principal forgiveness, negative interest loans, and grants. The EPA reported that from 2009 to 2015, states provided more than $70 million in additional subsidization for green infrastructure projects.

Water utilities may prefer investing in green over gray infrastructure. It is often less expensive and offers additional quality of life, environmental, and health benefits, which make it easier for utilities to “sell” necessary ratepayer increases.

In order to partner with a water utility on green infrastructure, it is essential to find projects that meet their regulatory requirements and the community’s park and greenspace needs. Other partners that can be critical to building a successful program include school districts, park agencies, departments of the environment, nonprofit land trusts, and park conservancies.

Many cities and wastewater utilities operate under an EPA consent decree that establishes clean water milestones to be reached over 20 years in order to avoid financial penalties. Some utilities have negotiated green infrastructure investments in their milestones.

Examples of water utilities partnering on park and green infrastructure investments is critical to convincing water utilities it is not only a viable, but an advantageous approach.

The US Department of Housing and Urban Development’s Community Development Block Grants (CDBGs) invests in urban communities to increase quality, affordable housing, improve community living environments, and expand economic opportunities. CDBG investments must benefit people of low and moderate incomes. As such, they can be a good source of funding for equitable park investments.

Under CDBG, public and nonprofit park leaders need to partner with local community development organizations and the city agency that manages the CDBG funds. Cities must develop a Consolidated Plan that sets local investment priorities and the projects need to meet the priorities outlined in the Consolidated Plan.

Because of their flexibility, CDBG funds have been tapped by many park systems. From 2010 through 2018, CDBGs funded nearly $900 million in parks and recreation projects. CDBGs can also provide for maintenance and operations, youth employment, and other park-related investments. The 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES) Act included $5 billion in funds for CDBG, an increase of $1.7 billion over the previous year’s funding.

New Markets Tax Credits finance projects that have social and economic benefit for low-income communities, including public housing authorities, schools, and community-based nonprofits. They attract private capital into low-income communities with tax credits in exchange for investments in Community Development Entities (CDEs).

They are complex, can be difficult to set up, often have high legal fees, and they need to generate a revenue stream to be viable, but for large projects in low-income communities, tax credits can be a significant source of funding. The park projects funded so far have included parks and recreation centers in Cincinnati, Ohio, Washington, D.C., and Pensacola, Florida.

As with all significant investments in low-income communities, existing residents should be involved in the planning and decision-making to ensure they benefit from the investments.

Opportunity Zones,¹ are a new federal tax incentive to encourage investment in recreation facilities and other park-like properties. However, because they are meant to support businesses (ideally ones that appreciate in value), it may be challenging to use them to directly improve public access to parks and green space. Given the current newness of the program, it’s too early to review their use in practice.

This program allows nonprofits, local governments and other organizations to recruit, train, and place unemployed and under-employed residents of areas affected by the presence of brownfields. These green jobs reduce environmental contamination and build more sustainable futures for communities. The program requires that training be provided in Hazardous Waste Operations and Emergency Response for all participants, so it may not be appropriate for all workforce development programs.

Parks are ideal venues for special events like concerts, a marathon or a wedding, which open revenue opportunities.

Many urban park systems find it profitable to have outside entities run restaurants, ice rinks and golf courses through a leasing agreement or royalties on sales. Concessions can increase the visitor rate and thereby parking fees.

In some cities, parking fees go to the city general fund and are then distributed, but not always to parks. Other park systems retain full control of parking revenues.

Funding park and recreation programs by revenue-generating activities decreases access to parks and programs for low-income residents. Equitable-access strategies include:

Free Park and Recreation Passes for members of households that qualify for TANF and SNAP benefits. Voluntary Fees are suggested donations for use. Those who can afford the donation contribute; those who cannot are not obligated. Scholarships are less effective, because few residents access them and volunteer programs in exchange free access can burden already-stressed families.

Programming Fees
Charging fees for usage of park programs—skating, golf, fitness centers, camps, concerts—is a common strategy for raising non-tax revenue.