Lions, tigers and CARES: CFO keeps zoo thriving amid pandemic
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Lions, tigers and CARES: CFO keeps zoo thriving amid pandemic

5 months ago · 4 min read

The Akron Zoo’s finance leader handled COVID-19 with targeted cuts, PPP loans and a friendly face at the entrance.

When the Akron Zoo reopened in June 2020 following a three-month pandemic shutdown, zoo Chief Business Officer and Senior Vice President Mellissa Reed, CPA, was one of the first people some visitors saw as they entered the facility.

The revenue shortfall from the shutdown had prevented the hiring of the seasonal employees who work during the Ohio zoo’s busiest months, so employees from across the business had to help with operations. The zoo reopened using timed ticketing to minimize crowds at the welcome center, and one of Reed’s jobs was to make sure customers were entering at the right time.

Even as Reed applied for Paycheck Protection Program funding made available through the federal CARES Act, she worked at the front of the zoo and also spent time monitoring visitors outside the zoo’s habitats and exhibits, making sure that people were social distancing according to the markers on the ground.

“Everybody pitched in and helped where they could,” Reed said.

The fact that the zoo was open and had crowds to manage was in part the result of Reed’s efforts to keep the business on solid financial footing during the shutdown, work that has continued throughout the pandemic as new challenges have arisen. Finance leaders and CFOs everywhere have been playing pivotal roles in keeping organizations healthy amid the rapidly changing environment of the pandemic.

The work that helped the Akron Zoo adapt and thrive started long before the pandemic. Reed is part of an annual process that the zoo goes through with its auditors to assess its risks and identify controls that are in place to help mitigate those risks.

One of those controls is a contingency plan that describes the cuts that the zoo will need to make if it doesn’t look like its budget is being met halfway through the year.

“Usually we don’t need it,” Reed said.

This time, they did. The shutdown and limited capacity (25%) upon reopening resulted in a $3 million loss of revenue. But the zoo still needed to feed and care for more than 1,000 animals from around the world and make sure the habitats were clean. Management also did not want to lay off employees.

With so many expenses, Reed and the zoo’s leadership team:

  • Implemented the contingency plan and made additional cuts as well. Capital improvements were delayed, and the usual hiring of seasonal staff did not take place. This resulted in the all-hands-on-deck atmosphere that had Reed working at the front gate.

  • Appealed to donors for additional philanthropic dollars. Donors’ generous response resulted in $300,000 of additional unbudgeted revenue in 2020.

  • Applied for and received two forgivable PPP loans worth $1.4 million each to cover staff wages, benefits and utilities.

  • Applied for employee retention tax credits to help offset the payroll costs that were not covered by the PPP funds.

When the crisis related to the shutdown was over, the zoo’s CEO thanked Reed because the PPP loans had brought in more than any other funding source.

“Well, I’m just doing my job,” she said. “This is what I’m expected to do, to help the organization survive.”

Reed has been with the zoo for more than six years after starting her career in public accounting. She started her career as an auditor and later served as head of the not-for-profit group at Cohen & Company before moving into the lead finance role at the zoo.

There, she provides leadership and strategic input while also making sure the organization’s financial statements are accurate and transparent.

Shifting environment

The zoo’s challenges shifted once it returned to full capacity and the economic environment changed.

The high-inflation environment has led to some adjustments for the zoo. Ticket prices were increased by one dollar, and the gift shop raised prices as necessary to pass on its higher costs to consumers.

Lumber prices rose 110% in some cases, so some capital improvements were scaled back to more modest dimensions. One capital improvement that continued, however, was the purchase of a trash compactor. The zoo is paying significant fuel surcharges to its waste management vendor, but the compactor is expected to triple the amount of material that can fit in a trash bin. Reed expects a three-year return on investment as a result.

The Great Resignation hasn’t affected the zoo much because it has benefited from a pandemic-related trend that has seen individuals more motivated to seek employment where work is meaningful. The zoo has seen little turnover on its year-round staff and has easily filled the few positions that have come open.

With seasonal workers, though, the labor environment has been competitive. Numerous Amazon distribution centers and even fast-food employers are providing wages to these workers that the zoo can’t afford to pay.

“We have to be very diligent about raising those wages at a reasonable rate that’s affordable and sustainable,” Reed said.

A promising future

Forecasting has been a challenge for many finance leaders related to the pandemic because recent historical comparisons are lacking.

The same was true for Reed. Once the zoo’s capacity restrictions were lifted, its crowds immediately bounced back to pre-pandemic levels. But Reed didn’t know whether that would continue.

Were people with extra stimulus money just making a one-time visit because they had been cooped up for so long? It was difficult to know at first, so Reed was conservative in her budgeting for attendance and revenue.

But the attendance levels have been largely maintained with the 386,163 visitors in 2021 down roughly 4% from 402,143 in 2019, and the zoo has benefited from its engagement of more people through its virtual outreach. And the zoo’s financial support received a critical boost in November 2020 when a county levy that provides about half of the zoo’s operating funds was secured for 10 years when it was approved by 59% of voters.

Reed will take it year by year in budgeting to see if pre-pandemic numbers can continue to be relied upon. And if another crisis requires her to reforecast, implement a contingency plan, find extra assistance or even greet guests at the front entrance, she will be ready.

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