Friday, March 13, 2009

Recession hits cemeteries hard

By Deborah Woodell
Whistling Past the Graveyard

Unlike banks, brokerage houses and automakers -- and even you and me -- there is no rescue plan for financially struggling cemeteries in the United States.

“There is no bailout; there is no magic bullet,” Robert Fells, external chief operating officer and general counsel of the International Cemetery, Cremation and Funeral Association, a trade organization of some 7,200 members, told Whistling Past the Graveyard.

Cemeteries don't generate big headlines the way General Motors, AIG, or Bank of America do. But stories of struggling cemeteries are everywhere -- just look in your favorite search engine.

In Colorado Springs, Colo., city officials have requested information from potential business partners to help control costs and grow revenue for two municipally operated cemeteries.

Cash-strapped Pontiac, Mich., which faces a budget deficit of more than $6 million, is in the process of selling two historic cemeteries for $475,000 to StoneMor, of Levittown, Pa. Mayor Clarence Phillips told the Detroit Free Press that Oak Hill and Ottawa Park cost the city $300,000 to $400,000 a year to maintain, and some residents reportedly have complained about the lack of care there.

"I think it's a great deal because, they will take care of the cemeteries properly," Phillips said.

Greenville, Texas, recently agreed to contract out its lawn and maintenance work to a private contract.

"The Parks and Recreation Department looked at if they could maintain the cemeteries cheaper than a private company," director Colby VanGundy told Whistling Past the Graveyard in an e-mail. "A cost analyst was done and the bid came cheaper than what the City had been doing the work."

He recommended a contract of about $75,000 a year for a landscaping company to mow and trim vegetation, as opposed to the $110,000 the city was spending.

The stories are similar all across the country -- from Littleton, Massachusetts, to Fresno, California. Sometimes, it's the government seeking help from private enterprise; sometimes private operations seek help from their local governments.

“The cemetery is a business like no other,” Fells said. “It is the only business that says, ‘We will be in service FOREVER. We’ll be in business until doomsday.’ ”

Even North America's largest provider of death-care services has felt the pinch. In its end-of-the-year financial report, the publicly traded Service Corporation International reported a drop in revenue from $760 million in 2007 to $679.9 million last year. In its news release reporting the annual finances, the company said: "Cemetery operations were more susceptible to economic and financial market conditions, with comparable gross profit decreasing $28.4 million or 59%, driven by lower preneed sales, lower trust fund income recognized and less cemetery property construction revenue."

Besides those problems cited by SCI, myriad other problems have led cemeteries to these dire straits. The costs of basic cemetery care – watering, mowing, trimming, and the workers who perform those tasks – are rising, and many governments have already privatized those services as a way to contain costs – or at least have a firm number. The Colorado Springs Gazette reported that the water bill rise from rose from $37,710 in 2003 to $115,000 in 2007, leading to privatization of those services.

"Out here, we irrigate our cemeteries, and water is expensive,” Will DeBoer, manager of two city cemeteries, Evergreen and Fairview, told Whistling Past the Graveyard. Neither of those cemeteries receives taxpayer support.

As burials drop, so does revenue. Nationally, about 25 percent of the public is choosing cremation over traditional burials. In Colorado Springs, that number is 66 percent.

“Typically, people in the West are not from the West,” DeBoer said, which means their cremains are sent home, or scattered in their favorite places. And it means fewer burials.

Sometimes, cemeteries are faced with unforeseen expenses, such as the estimated $3 million in damage that Atlanta’s historic Oakland Cemetery suffered after a tornado in March 2008, or the estimated $100,000 each in vandalism damage in February at cemeteries in Kentucky and Georgia. Scrap metal thieves are increasing targeting cemeteries; cemeteries in San Diego have lost more than 300 brass and bronze grave markers since 2006, according to the National Insurance Crime Bureau.

“There is no greater underdog than the cemetery,” said Dusty Smith, who heads the International Association of Cemetery Preservationists, which is based in Florida.

In some cases, the cemeteries’ perpetual care funds have been rocked by the financial crisis itself – DeBoer noted that his cemetery perpetual-care fund took a $1.5 million hit because of the market in 2008.

Fells said the lack of proper business planning is a problem.

“Show me a cemetery in trouble, and I'll show you a cemetery that doesn't have sound business practices," he said.

“Some of them have no five-year plan, or 10-year plan.” Others, he noted, are hamstrung by both their operators' fiscal conservatism -- "Some of them don't invest in anything riskier than a passbook savings account, or maybe a six-month CD" -- or by regulations that restrict investment strategies.

Like many cemetery operations, Klamath Memorial Park, which opened in 1946 in Klamath Falls, Oregon, the $400,000 principal is untouchable until the cemetery is full. In the meantime, the city plays about $150,000 a year to operate and maintain the cemetery.

Smith noted that perpetual care seldom keeps pace with rising costs, even in good times. When the nation’s earliest cemeteries were established in the 1600s and 1700s, perpetual care cost a dollar.

“Now, what does a dollar get you?” she said.

“We have a product no one wants now,” DeBoer said. He went on to note that while there might be strong emotional and cultural sentiments about cemeteries, “Bottom line, it’s a business.”

Cemeteries also suffer from a lack of attention, unless they’ve turned themselves into a cultural or historic landmark. Smith said her research has shown that many cemeteries begin to fall into neglect and disrepair about 40 years – about a generation – after the final plot is filled. Except for people interested in history and genealogy, few people find a reason to visit a cemetery, once the immediate descendants of those buried die.

In Florida alone, she said, of the 4,000 known cemetery locations in Florida, 63 percent of them are considered abandoned or severely neglected.

Added Fells: “Once or twice a year, I’ll get a telephone call from an elderly man … and he'll say that no one is stepping forward. ‘Who will take over for me when I’m gone?’ ”

So, how will cemeteries be rescued, and where will the money come from?

In this tough economy, selling off land for development does not appear to be an option, according to DeBoer, whose city previously did just that.

“We’ve sold off parcels to developers in the past, but the real estate market and development are really down,” he said.

Depending on what business partnerships Colorado Springs can develop, he won’t rule out closing off the cemetery to new burials – while reassuring concerned residents that the cemeteries themselves won’t close.

“Every cemetery has a finite life span [regarding active burials],” he said, “but I’m confident that the cemeteries will always be there ... Cemeteries are in it for the long haul."

The joke going around now is that nothing is more "shovel-ready" than cemeteries, but there is little direct funding for them in President Barack Obama’s $787 billion stimulus package. It does include $50 million for memorial maintenance projects for Veterans Affairs' National Cemetery Administration. According to a statement from the office of U.S. Rep. Chet Edwards, a Democrat from Texas' 17th Congressional District: “These funds will enable the National Cemetery Administration to work toward an established set of cemetery standards of appearance throughout the system.”

Some states undoubtedly will use stimulus funds for specific projects. Hawaii Gov. Linda Lingle already has indicated that some funds will go toward veterans’ burials in state or county cemeteries, because there is no national cemetery in the state.

But unless governments fund their cemeteries – an increasingly unattractive option for them – most of the money to fix up cemeteries and keep them operating will from individual operators, community organizations and individual residents – just as it always has.

Smith said that there once were 4,300 sources of federal dollars for historic preservation, but now there are only 222. She did say the private sector does have about 16,000 grants for preservation, but the competition for those funds is growing.

“A lot of that money goes to keep [historically designated] cemeteries in good shape, instead of fixing up the abandoned ones,” she said.

Smith, who got her start in cemetery preservation as an outgrowth of an interest in paranormal research, requires her members to perform cemetery cleanup work once a month as part of their membership in IACP. That organization is a 501(c)(3) non-profit, but gives out advice and guidance, not funds.

Around the country, individuals and organizations hold cleanup days and perform other community activities. As winter recedes and spring arrives, the number of those projects will rise, giving many citizens the chance to do what the economy isn't -- keep our cemeteries in good health.


Dusty Smith said...

Nice job with the article. I found it very informative and poinaint. I hope those who read it will be just as outraged as the rest of us in the field and get out there and start helping to save their historic past for their children's future.
Dusty Smith

Jack Robinson said...

I believe you have made a bold statement. I agree with you in each aspect of your article.

Keep putting the word out.

Good job.

Best wishes,