Alternative Mechanisms for Funding University of Michigan - Flint Recreational Services

Abstract

From the 1989/1990 fiscal year to the fiscal year of 1997/1998, University of Michigan-Flint Recreational Services overall budget reflected deficits that ranged from as low as $4,988 to as high as $305, 481. In an effort to resolve these deficits, it has been proposed on numerous occasions by University of Michigan-Flint Recreational Services administrative staff, that students be assessed a fee every semester to use the facility, rather than continuing to subsidize student use via a recharge system from the general fund. The subsidized amount to pay for student usage is based on the principle that of the 63,414 square feet of usable space, students use only 33.3% of this space. For example, if day pass and member revenue totaled $282,413; the University would divide $282,413 by 66.6 %, which equals approximately $423,619. $423,619 is than multiplied by 33.3% and the result is $141,207. The $141,207 is the amount paid from the general fund to cover student use. <p>The benefit to students is that there is no out of pocket expense. Moreover, the advantage to students is that they are getting the benefit of a service(s) for an abated price. Although, this benefit does meet the textbook definition of “Free Riding,” students are not paying for the service and the impact of their use on Recreational Services is producing additional expenses for the University of Michigan-Flint. According to the data presented from Recreational Services study, which recorded check-in and check-out times of day pass, member and student users, student use represents almost 50% of the overall use of the facility. When the percentage of student use and the student use subsidy is compared to day pass and member use and the revenue these two user groups generate, the amount of funding allocated to pay for student usage is disproportionate. <p>In addition, it was also determined from the data that additional information could be helpful to University of Michigan-Flint administrators. Information such as arrival times, the ratio of male to female users and the age of users could be used to restructure membership rates. Both the combined arrival time and length of stay set of data are helpful tools that can assist in describing potential user conditions and constraints. Furthermore, the data presented in this paper provides an outline for understanding user patterns, which can support programmers and managers in scheduling and developing programs and activities. <p>The information presented in this paper provides an explanation of why student user fee assessments are a viable option to be considered by University of Michigan-Flint administrators. Consequently, administrators will have an understanding of the steps that are necessary in operating a self-supportive Recreational Services department. This paper also presents specific examples of how student user fee policies are viewed by many in University Recreation as practical and acceptable options to be implemented when operating self- supportive recreation facilities. By acquiring this knowledge, an administrator will be in a better position to initiate student user fee policies. If student user fee policies are not necessary for an organization, an administrator, with the gained knowledge from this paper, will be better equipped to make decisions regarding fiscal policy.