Operating Costs Are Rising: 3 Ways to Offset Without Raising Fees

Fuels and utilities rose 3.4 percent in the 12 months ending December 2024, with natural gas up 4.9 percent (Bureau of Labor Statistics). Payroll is climbing too, though more slowly than budget conversations usually assume: compensation costs for state and local government workers rose 3.6 percent over the 12 months ending June 2026, with benefits up 4.0 percent and wages up 3.4 percent (BLS Employment Cost Index). Maintenance budgets have kept pace with neither. So the question for most directors is where to find offsets that do not touch programs.

Strategy 1: Lighting, Because the Savings Are Documented

Start with lighting, for one reason: the savings have been measured by someone other than the vendor selling you the retrofit. GSA's Green Proving Ground guidance, developed with Pacific Northwest National Laboratory, puts a conversion to LED at roughly 50 percent of the electricity a fluorescent baseline consumes, with lighting controls saving substantially more again on top of that (GSA, February 2024). That same guidance notes lighting is between 10 and 25 percent of a building's electricity, so a gym or a natatorium with original fixtures is carrying a real number here, not a rounding error.

Payback depends on your rate per kilowatt-hour, your run hours, and your rebate, which is why any vendor quoting you a single national payback figure is guessing. Get the three inputs from your own utility bill and let the arithmetic answer it. The rebate is the part departments most often leave on the table: most utilities run a business energy efficiency program that will scope the project and calculate the incentive at no charge, and most recreation departments have never called them.

Strategy 2: Price the Hours You Already Own

Every facility has time blocks that produce nothing: early mornings before programs start, late evenings after they end, weekend hours outside the regular schedule. The inventory already exists and the building is already heated.

Do this arithmetic with your own numbers rather than a benchmark, because the answer varies enormously by market. Count your genuinely empty hours in a typical week, set a rate below your peak rate to reflect lower demand, and multiply. Twelve empty weekday-morning hours a week at $40 an hour is about $25,000 a year of theoretical inventory, before you discount for the share you will actually sell. That ceiling figure is worth knowing before you decide whether marketing off-peak hours is worth staff time. Corporate offsites, birthday parties, faith community gatherings, and private fitness groups are the demand that reliably shows up, and they show up faster when booking does not require a phone call during business hours.

Strategy 3: Competitive Bids Before the Contract Rolls Over

Custodial, landscaping, grounds, waste, and insurance contracts tend to renew on autopilot, because renewing is easier than running a procurement and nobody is measured on the difference.

GFOA's guidance on financial services contracts is to review them every five years and re-procure them competitively, on the reasoning that a competitive process is what surfaces market rates, produces better terms, and keeps a government from becoming too dependent on a single vendor (GFOA). None of that reasoning is specific to banking. Apply the same clock to your largest service contract by dollar value: solicit real bids before the current term expires, and use them in the renewal conversation whether or not you intend to switch. The incumbent's renewal number tends to change once a competitive process exists.

What Not to Do

Do not cut programs to cover operating costs. Programs carry the revenue and the participation numbers that justify the budget, so cutting them to protect the budget is self-defeating in a way that shows up a year later, in the next budget cycle, when the participation figures are worse. Do not defer maintenance to free operating funds either, since deferral converts a scheduled repair into an unscheduled one at a worse price. And do not raise fees without a matching improvement participants can actually perceive, or the participation decline will eat the revenue gain.

The three strategies above find money in utilities, unsold hours, and procurement. None of them touch a program. Start there.

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