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While many park authorities have allowed private companies to operate gift shops or rental concessions within parks, private management of entire parks under concession agreement is relatively new but growing rapidly.  As state and local governments come under increasing budget pressures, private management of public parks can be a useful tool for public authorities trying to keep parks open for the public.  A great introduction to this model is here.  Here is an example private park operator.

Private recreation operators aren’t trying to take ownership of the land.  They aren’t trying to pave the wilderness.  They aren’t trying to build condos in front of Old Faithful.  They are in fact willing to accept whatever recreation mission or preservation mission the public owner of the park sets and manage the park to that mission. What they bring to the table is that in many cases, private companies can operate the park and keep it open with the fees paid at the gate, without big price hikes and without the need for taxpayer subsidies.

Frequently Asked Questions:

An Economics Professor Visits the National Parks

This is a blob post from an economics professor at the University of Rochester, who spent the summer with some students in Kentucky and comments on visiting the Great Smoky Mountains National Park:

Any of you who read about parks and recreation have heard the noise that our National Parks are “woefully” underfunded, that there are decades of deferred maintenance backlogs, that they are threatened by overuse and so on. And nominally, all of that is true. But consider that the Great Smoky National Park is THE MOST visited park in the entire national park system … and it’s not even close. It gets almost triple the amount of visits as the Grand Canyon! From talking to a ranger, he thinks they get over 11 million visitors per year at the park.

And they charge each of these visitors … zero. Mind you, most visitors who come there are spending an inordinate amount of money to get to the park and to stay and eat and recreate near the park. If you’ve ever been to Gatlingburg and Pigeon Forge, you know what I mean (I’ll leave that rant for some other time). Needless to say, if a family of four is staying at a decent place near the main entrance to the park (there are other less busy entrances, I was over by Wear Cove) and they eat out once per day and they avail themselves of some of the absurd Vegas-like places, they are dropping an easy $2,000 just to be there. Yet, to “ensure access to all” the park remains free. I spend some of the most glorious recreational days of my life in the park this past week and paid zero dollars for it. Compared to everything else I was doing, it was worth well north of $500 to me.

Bringing Private Capital to Refurbishment and Expansion of Public Parks: A Success Story

A while back I made a presentation at the RecX conference, held at the Department of Interior in Washington, DC.  The RecX conference is a venue for exchanging new ideas on the frontiers of public recreation.

In this brief, 13-minute presentation, I discuss our experience re-opening, refurbishing, and expanding two large TVA campgrounds.  In these examples we invested over a million dollars of private capital in exchange for a revenue-sharing operating agreement for the park.  Here is the story (You have to watch just to find out why this case study video uses the image below:)

ParkPPP Blog is Rebooting!

Over the past year we have been pretty deeply immersed in some new business launches.  Over the coming weeks, I will spend some time outlining the opportunities we saw and how we believe these new offerings will support public recreation agencies.

In addition to a lot of new content and news, expect a new look at this site soon.  We have already revamped our recreation partnership services website and have a lot more exciting changes in the works.

By the way, if you will be at the NRPA conference in September 2018 in Indianapolis, come by booth 2512 and say hi.

The Unsustainability of Free Public Camping

Secretary of Interior Zincke has proposed more private operation of Department of Interior campgrounds.   As readers of this blog would expect, I think this is a good idea.  However, many critiques have been raised of late.  One example is this one from the Rebecca Moss of the New Mexican claiming that “many fear” that private operations of public campgrounds will cause their rates to “skyrocket.”  This is part of a letter I wrote her in response (my company was mentioned in the article but was not contacted by her for comment on the story).

Pretty much no one that I know of is advocating for a full privatization of public campgrounds.  It is not what we do, certainly.   We privatize the operation of public campgrounds, which is different in important ways, as described here:  http://parkppp.com/2012/09/essay-response-should-national-parks-be-privatized/I don’t mind folks being skeptical of things I am passionate about, but I do think this bit of your article was deceptive.  Let me quote it in full:

Private companies are contractually obligated to maintain the properties they operate in national parks. But the Center for American Progress found this doesn’t always happen. Instead, the organization said, some private companies have skirted these obligations and instead further added to the backlog of maintenance for which taxpayers are responsible.

All but one of New Mexico’s national parks had hundreds of thousands of dollars in deferred maintenance as of 2016, totaling more than $213 million, according to National Park Service documents. Carlsbad Caverns National Park has the highest backlog, with $44 million in deferred maintenance, about half for a modernized elevator system. Of the overall total, $16 million in maintenance is considered critical, according to the federal budget. The backlog at Bandelier National Monument is $23 million and it’s $17 million at Chaco Canyon National Historical Park.

The implication is that the second paragraph follows from the first, that these are examples of private companies not keeping up with regular maintenance in parks, but in fact this is untrue.  These are examples of the public agency not keeping up with deferred maintenance.  In fact, the deferred maintenance in privately-operated public facilities tends to be way lower than in publicly operated facilities

The reason the government can charge low fees for camping is in part because these fees do not cover the full costs of operating these camping areas. Oddly, in the same article you sort of brag about low public camping fees in NM while complaining about the amount of deferred maintenance, but you never connect the two.  Have you ever seen a free BLM campground after the campers leave? The cleaning and trash pick-up bill alone is enormous. That is why we get deferred maintenance in public campgrounds, because use fees do not cover the full costs or operation and maintenance while budget appropriations have fallen and the difference is made up by not fixing things. The American Society of Civil Engineers recently estimated the total deferred maintenance at state and Federal parks at $114 billion. Our company operates a number of Forest Service campgrounds in New Mexico and across the country — the total deferred maintenance for which we are responsible at these locations is essentially zero.

This deferred maintenance issue in publicly-operated parks is made worse by the administrative bloat in public agencies.  Rather than use the money they have to provide services on the ground for visitors, much of their budget goes to off-site administrative staff.  My company has 350 employees, two of which are not located in a park (one of whom is me).  Arizona State Parks, which I have studied, has about the same number of employees but over half sit in off-site offices away from parks. Even when these agencies get more appropriated money, they spend it on more administrative staff and not on working down their maintenance backlog.  Well over 90% of the money our company collects in fees gets spent right back in the park itself — no government agency can say that.  Even the concession fees we pay to the government generally go back into the park in the form of capital improvements due to the smart structure of US Forest Service concession agreements.  And when government budget crunch time hits and park funds get swept up into the general fund for other purposes, fees paid to private operators are protected and still go to the parks.

I would distrust private companies to fully control the character and access of parks.  Given a choice, if I had a really nice piece of public land, I might make more money turning it into an exclusive Ritz Carlton resort.  But that is not how these contracts work.  The government retains control of the development and character of its concession-operated parks, so Forest Service campgrounds are always going to be a lightly-developed in a natural setting with total public access for all.  Given that, what we are talking about is whether the bathrooms are cleaned by efficient private companies or by civil service employees with large expensive administrative staffs.

In California, the state parks agency operates its own campgrounds and charges $35 a night (soon to go up I hear) for a primitive campsite without any utilities.  My company operates many public campgrounds in California, many right next door to state parks, and we charge no more than $24 a night and often less for the same site.  And we receive no subsidy of any sort, while California State Parks also gets $400 million or so of taxpayer money in addition to their fees.  And we have no deferred maintenance, while California State Parks have deferred maintenance of $1.2 billion growing at $120 million a year (an older estimate but still probably close to the mark).

When Government Employees Are Supposedly Cheaper and Better Motivated than Private Contractors

When approaching public agencies, I hear this all the time:  that their accounting shows that it is cheaper to do tasks themselves than to use private sources for the same service.  The problem is that government accounting systems are not set up to make this sort of decision well.  Critical cost categories, from capital assets like trucks or equipment to insurance to building rent to employee benefits, often hit other budgets and are not included in the analysis.  When a full-cost analysis is done, government in-sourcing seldom makes any sense financially.

The other argument I hear frequently is that government employees are bound to do a better job because they are motivated only by helping the public rather than by crass profit.  But while individual government workers may have a gung-ho interest in public service, their agencies as a whole tend to have a different focus.  Lack of competition, inability to fire poor performers, and few (or no) customer service metrics tend to lead to deteriorating service, as in this great example at the Washington Metro.

One example cited in this article is the decision by the Washington Metro to terminate its service contracts with private escalator maintenance companies and to bring escalator maintenance in-house, where it was said it could be done cheaper and better.   There does not seem to have been any really good analysis on this point at the time of the decision, and one suspects this was more an accommodation to a public employees union eager to increase its membership base.  But, for whatever reason the decision was taken, it has been a disaster:

Our Company Has Four Campgrounds on Sunset Magazines Best of the West List

Sunset Magazine just had its annual “Best Campgrounds of the West” issue and we have four of the campgrounds we operate on the list — pretty good considering we only operate in two of the four regions they cover (we operate 4 of the 54 campgrounds they recognize in CA, AZ, and NM).

On the list were Sabrina (CA), Big Pine Creek (CA), Cave Springs (AZ) and Sleepy Grass (NM).  We always love getting positive feedback, of course, but are particularly thrilled in this case since the frequent criticism of private operation of public campgrounds is that private companies will somehow ruin the recreation areas for profit.  Exactly how we would make money by destroying the natural beauty which draws paying visitors to these parks is never explained.  But it is good to have confirmation that we private operators are doing a good job.

I have our trade group counting up the total number of privately-operated public recreation areas on the list and I will post the number here when I have it.

Applied Underwriters Review

A week or two ago at another blog I posted my review and very negative experiences with Applied Underwriters.  Since that time, Applied Underwriters has responded by threatening me with lawsuits to try to get me to remove these reviews from the internet.

All their lawyers’s actions have done is convince me that it is more important than ever that other business people get good information about what they are getting into before signing up with Applied Underwriters.

To that end, if you are considering workers compensation providers, please see my Applied Underwriters Insurance review here.

Over-Policing of Parks

I have written before about the tendency of parks agency to go crazy on police coverage.  For some reason, it has become common for parks to either a) make all park staff law enforcement officers or b) create vast law enforcement infrastructures as separate departments in parks.  In many locations, this is entirely unnecessary.  Worse, it greatly increases costs and hurts customer service.

The latter point has been the source of many arguments between myself and government parks agencies.  I know parks where the parks manager has one and only one metric for their staff — how many citations did they write each week.  This is crazy.  McDonald’s and Marriott do not give their customers parking tickets.

I thought I had seen every bit of craziness, but I guess I was wrong:

Chaparral-covered hillsides dotted with oaks surround both sides of a barbed-wire fence with signs reading: “U.S. boundary.” John Gladwin, whose Australian cattle dog, Molly, runs freely through the idyllic Simi Hills on a Sunday afternoon, is careful not to cross this border into the federal territory called the Santa Monica Mountains National Recreation Area.

If he’s caught with so much as a foot in the park, which stretches 50 miles from the Hollywood Hills to Point Mugu, the 69-year-old retiree will go to jail. Even more unusual, Gladwin cannot leave a seven-county area, for any reason, without permission from his probation officer.

“The probation department doesn’t even take it seriously,” he snickers. “They deal with gangbangers, drug dealers, murderers. And here I am, for a dog leash.”

The crime for which Gladwin has twice been convicted is a dog-leash citation, violation of Title 36, Volume 1, Section 2.15, Part 2 of the National Park Services’ remarkably detailed regulations: “failing to crate, cage, restrain on a leash, which shall not exceed 6 feet in length, or otherwise physically confine a pet at all times.”

A year of Federal probation for an off-leash dog in a park?  This is just insane.  I understand that leash rules are hard to enforce — everyone thinks leash laws are written for all those other peoples’ dogs.  THEIR dog is an exception.  But our company manages to get compliance without ever handing out even a citation.   A year of Federal probation?  Wow.

Supervisory Park Ranger Bonnie Clarfield, of the U.S. Department of Interior, testified against Gladwin at his November 2013 and April 2014 trials. Colleagues have teasingly dubbed her the “dog narc” — for her strict enforcement of leash laws during her 33 years on the job.

This is not an aberration.  It is incredibly typical or government park management that a park manager has built a reputation not on environmental stewardship or visitor service but on aggressive enforcement of petty ordinances.

How Are Public Parks Like Universities?

Glenn Reynolds is writing about colleges, but he could just as easily be writing about public parks:

Full-time administrators now outnumber full-time faculty. And when times get tough, schools have a disturbing tendency to shrink faculty numbers while keeping administrators on the payroll. Teaching gets done by low-paid, nontenured adjuncts, but nobody ever heard of an “adjunct administrator.”

Replace “faculty” with “people actually working in a park” and administrators with “headquarters staff” and he has described the management of public parks exactly.  Most parks agencies are suffering from administrative bloat, with more people in headquarters than out in the field actually running parks.  When they have layoffs, it is always of field staff and not headquarters administrators.   In the parks world they will even ignore major maintenance needs in favor of making sure they have the funds to keep paying headquarters staff.

It is just absurd.  Of course, in our case, we make a business out of this.  We operate public parks, and have 300 field employees actually in the parks and 2 in headquarters.  It allows us to cut costs while simultaneously doing a better job.

Government Shutdown and Privately Operated Federal Parks

The government shutdown in October was an interesting chapter in the business of private operation of public parks.

For years I have said that one of the advantages of private operation of public parks is that these parks are sheltered from budget shenanigans.  If the park  is operating with no public money, they can’t be closed when budgets are cut.  In fact, in all past Federal shutdowns, such as the two under President Clinton, private concessionaires in the US Forest Service stayed open.

Well, I guess this Administration was dead-set on making a liar out of me, because private Forest Service concessionaires were shut down in the recent budget battle.  In the early days of the government closure, we were told that we would stay open, as in the past.  Then we got the fateful call from a senior US Forest Service executive telling us that the decision had been made “above the Department of Agriculture” (ie in the White House) that we had to close.  So we did.

However, we filed suit in Federal court to block the closure, and on the last day finally had our day in court, where the Federal judge excoriated the Forest Service for closing us.

If you are interested, I documented the whole saga at my other blog, with all the articles on the shutdown collected here.

By the way, in the interest of fairness, if you want an opposing viewpoint from someone who seems thrilled that we were closed, see here (along with some of my responses in the comment section, if they have not been deleted).

Rethinking California Parks

The Little Hoover Commission, a sort of internal consulting arm attached to the California legislature, has released a report called “Beyond Crisis: Recapturing Excellence in California’s State Park System“.

I am still skimming the report.  Certainly private partnerships play a role in the recommendations, but they appear to be the more tepid “private partnerships to increase revenue” rather than the more impactful “private partnerships to reduce operating costs.”  At best, private partnerships might generate a few extra million dollars in park revenues, but private operations could cut park operations costs by half, or by over $100 million.

Using Private Operators To Short-Circuit the Sequester

Derrick Crandall has an article recently on ways the NPS can survive the sequester.  Here is a key bit:

Second, there are roles and functions that could and should be reviewed and could be transferable to private sector operations.  For example, NPS directly operates most of its campgrounds while a sister federal agency, the Forest Service, relies largely on concessioners.  NPS campgrounds are now underutilized, full only during peak seasons and some weekends.  Concessioner operation would add camper services, introduce dynamic pricing and start marketing these campgrounds.  NPS costs would drop by millions of dollars, its receipts from franchise fees would rise … and campers would have increased satisfaction levels.  Estimated net financial gain from this change is at least $25 million.

The other related advantage of private operation, particularly in a concession model where companies are paid with visitor fees, is that these fees are protected from legislative sweeps and government closures.  By contract, the user fees in concession contracts remain in the park, supporting operations and improvements.

Huff Post Live Discusses National Parks and Privatization

I was on Huffington Post Live the other day in a panel discussion on privatizing National Parks.  The link to the video and comments is here.

None of the panelists, including me, advocated for privatizing National Parks.  The whole point of public lands, as I have written on this site before, is to change the decision-making calculus around development of and access to these lands from net present value to broader access and more natural settings.  In other words, no one wants a McDonalds in front of Old Faithful.

What I did advocate for, as discussed starting around the 7 minute mark, is for privatization of certain operational tasks, from bathroom cleaning to maintenance to landscaping, in order to reduce costs.  Already, the high cost of using civil service employees to perform these tasks are crowding out things like maintenance and renovation.

Parks 2.0

A relatively new group called the Conservation Leadership Council kicked off their tenure by sponsoring six articles on the future of environment and land management.  One of those size initiatives was called Parks 2.0: Operating State Parks Through Public-Private Partnerships.

I won’t be coy — the authors interviewed me several times and I helped them find the relevant data.  But they did a great job outlining how parks agencies can reduce operating costs and thus keep their parks open using PPP’s for park operations.  A great primer for those interested in this model.

Essay Response: Should National Parks Be Privatized

I was asked to write a 400-word essay for an outdoor magazine on “should national parks be privatized”.  Here my response. By the way, I put the stuff about myself and my company in under duress.  It was not in the original draft and he wanted something personal.

Should National Park’s be privatized, in the sense that they are turned entirely over to private owners?  No.  Public lands are in public hands for a reason — the public wants the government, not, say, Ritz-Carlton, to decide the use and character and access to the land.  No one wants a McDonald’s in front of Old Faithful, a common fear I hear time and again when privatization is mentioned.

However, once the agency determines the character of and facilities on the land, should their operation (as opposed to their ownership) be privatized?  Sure.   The NPS faces hundreds of millions of dollars in capital needs and deferred maintenance.  It is crazy to use its limited budget to have Federal civil service employees cleaning bathrooms and manning the gatehouse, when private companies have proven they can do a quality job so much less expensively.  The US Forest Service, for example, has had private operators in over a thousand of its largest parks for nearly thirty years, and unlike state parks agencies or even the NPS, it is not considering park closures or accumulating deferred maintenance, despite having its recreation budget axed.  Why? Because its partnership program with private operators is a fundamentally sounder, lower-cost approach to park operations.

In fact, such public-private partnerships are nothing new for the NPS.  The NPS was an early innovator in this field, and currently private companies operate many of the visitor services in parks, such as lodges and gift shops.  The US Forest Service innovation, which has been copied by many agencies including most recently California State Parks, has been to turn over operations of the whole park, not just the lodge, to a private company.  These are highly structured contracts, wherein the private company cannot modify the facilities or change fees without agency approval, and must meet a range of detailed performance goals.

Most critiques of private park operations center around quality and fees.  While there certainly have been some isolated failures, in general the results have been quite good.  In Arizona, a recent poll by CampArizona.com ranked the top 10 public campgrounds in Arizona.  Of these, three of the top five were US Forest Service campgrounds run by a private operator, as was the top Arizona campground in Sunset Magazine’s “Best of the West”  (OK, I have to brag, these are all run by my company). As for fee concerns, state-run parks in California charge $30 for a no-hookup camp site.  Privately operated public campgrounds in California forests seldom charge more than $18.

My company operates over 150 state, county, and federal parks.  I encourage you to take the “Pepsi Challenge” and see some of them for yourself.  They are well-run, generally with more staff than a typical state park, and have no significant deferred maintenance backlog.  Oh, and not a single one has a McDonald’s, a billboard, or a neon sign in front of a national monument.

A Few Privatization Updates

I just wrote three new articles for the Privatization Blog.

The first looks at which types of public decisions should stay public in a privatization effort

The second looks at implementation issues and learning in privatization

The third acknowledges that privatization efforts can fall into cronyism, but points out that generally in these cases the public alternative falls into the same behaviors.  A great example is prisons, where privatization is derided by folks like Think Progress for the lobbying the prison companies do both for contracts and harsher laws, but they never acknowledge that public prison unions have demonstrated the same behaviors and for much longer.

Public Recreation Fail: Providing Customer Service with Law Enforcement

One of the issues that comes up a lot when we discuss private operation of parks is law enforcement.  For a variety of reasons, most state park rangers are also law enforcement officials.  In fact, in many state parks organizations, one could not advance far in the state parks hierarchy without a badge.

So, do state parks need to have what is essentially the highest local law enforcement officer density of any spot in the country? The answer, with a few exceptions, is generally no.  Our company operates scores of parks where sensible rules enforcement combined with backup from a local sheriff is more than sufficient to keep recreators safe.  And that is the point of public recreation — to give the public a fun, safe outdoors experience.  The point is not to concentrate the public on public lands in order for law enforcement to more carefully monitor their behavior so as to identify infractions.

One reason most park staff have law enforcement credentials is not due to demand, but due to incentives.  Law enforcement certification increases pay, opens up promotion opportunities, and in most states allows access to much more lucrative pension plans.  Some people also get psychic benefits from carrying a gun and a badge.

Though this is not the type of article I generally expect to see at The Frisky, but Julie Gerstein has a interesting piece called, “I Went Camping, And All I Got Was Harassed By The Police.” As I tell my clients all the time, providing customer service with law enforcement officials has more downsides than just cost.

Update: I edited out some details from the original post that referred to specific parks in which we operate.  While these details came from public, online review sites rather than from our insider knowledge, upon reflection I have decided it was not professional to discuss problems in the partnerships we are a part of.  The agency referenced is in many ways more advanced and innovative than most any other recreation agency we deal with.  Focusing just on this one issue, where I disagree with their approach, left an impression about that agency’s overal competance which I did not mean to convey

Private Park Operations on the Freakonomics Blog

A nice article on the private park operations contracts recently issued to keep some California State Parks open.  In particular, I cheered at this:

The experiment upon which the state is set to embark will provide an opportunity to compare the relative efficacy of resource management provided by central government control, private ownership, and local cooperation.

I welcome this comparison.  In fact, I long for it.  Beg for it.  I have always thought it was telling that for all the skepticism aimed at private operations of public facilities, the private operators in this case are the ones who have been begging for an independent comparison of costs and results, while state agencies have resisted such studies.  I wrote in the comments:

I was one of four private companies that bid on these parks. One thing that is often lost in all this is that there are over 1000 very similar public parks already under management in a USFS service program that dates back over 30 years. Three of the four bidders for the CA parks, and the winning bidder, came from this program.

I applaud your observation that a natural experiment seems to exist here. But the odd part, for me, is that such an experiment has existed for decades, and no one wants to follow up. Here in AZ, AZ state parks has 35-ish parks under its management and our company has 35-ish federal parks under private management. Many are next door to each other. But it turned out to be virtually impossible to get the faculty at Arizona State who was preparing recommendations on private management, or the press, or the agency itself to actually do the comparison. Everyone wants to hypothesize on the results based on their faith or lack thereof in private enterprise, no one wants to do a direct comparison.

This frustrated me since I knew we managed the parks at half the cost, and had better customer service (camparizona.com ranks public campgrounds. In the survey taken a year or so ago our company had 3 of the top 5 public campgrounds under our management, and the state parks agency had zero)

I tried to do one direct comparison on my own: http://parkppp.com/2012/01/case-study-private-vs-public-park-operations/. It would be awesome if someone in academia were to take this on. Those interested should contact me at my park blog: http://www.parkppp.com.

By the way, it is incorrect to talk about loss of control to private operators. All of our contracts are highly structured with hundreds of pages of standards and restrictions. We cannot add a new service, modify or add structures or facilities, change fees, or most anything else without seeking approval from the parks agency. The agency still establishes the character and services and facilities of the park – we just provide the customer service and cleaning much less expensively.

These contracts are almost always structured as concession agreements, meaning the private operator gets paid just with gate fees from the customer, not with appropriations. If customers hate the park or the service, no revenues. I get asked all the time, “won’t you just stop cleaning the bathrooms so you can make more money.” I answer, “Sure, same way that McDonalds and Marriott and Nordstroms make most of their money by not cleaning their bathrooms.”