Year: 2011

Can Private Management Keep State Parks Open In California?

The San Francisco Chronicle addressed the issue of private management of public parks last week.  Unfortunately, despite the author’s stated goal of helping to answer questions about this approach, the article only interviewed people without any knowledge or experience with private park management and seemed to engage in some really wild speculation.  Here is the letter I wrote to the author

I was surprised at the tone of your article on December 15, titled “Private Funds or California Public Parks Questioned,” particularly the implication that private operation of public parks is somehow new and untried, thereby justifying wild speculation on its outcomes.  In fact, over 500 public parks in California are already operated privately, with examples of successful public-private partnerships that date back over 30 years.

This paragraph, which I presume is your private editorializing since it is not attributed to any source, struck me as particularly over-wrought

The question is, how will these agreements work over time? If parks remain open using donations, what is the incentive for legislators to put money for parks in the general fund budget? And who is going to stop a rich crook or pot dealer from taking a park off the closure list and using it for fiendish pursuits?\

I understand that the California State Parks system engenders deep loyalty and affection.  And if the state were proposing to entrust these vital public assets to some crazy, untried system, I suppose such hyperbolic language (“fiendish pursuits”?) might be justified.

But private management of public park operations was pioneered in California at least three decades ago by the US Forest Service.  The USFS has created a process in which the government still excercises the strictest control of park facilities, quality, fees, and access while harnessing the lower costs and innovation of private operators.  Numerous public agencies, including large park systems like the East Bay Regional Park District and the Metropolitan Water District, have used variations of this model, such that over 500 public parks are managed privately in this state alone.  You have likely been to one and never knew it.  That is because they look no different than the parks run by California State parks  — they don’t have condos or a McDonalds or billboards or anything that it is sometimes supposed private operators might build on public land.

What these parks do have is well-maintained facilities and very reasonable fees.  The facilities are well maintained because they must be by contractual obligation — they are not dependent on the vagaries of the appropriation process for their maintenance.  The reasonable fees are due to substantially lower operations costs.  Just as an example, California State Parks charges $30 a night for a no hookup camp site.  Very similar campgrounds in California in the National Forest that are operated by private companies never charge more than $22 a night for the same site, and often charge less than $20.

Our company, among many others, have operated public parks for decades.  The key is an intelligent division of responsibilities.  The public agencies we work with retain control over facility changes, conditions, fees, services offered, etc.  Companies like ours pay for all the operations, from insurance to staffing to maintenance to utilities, and pay for this solely with the gate fees already paid at the park, generally without any public subsidies.  The success of this model in keeping parks open can be seen in the US Forest Service.  The US Forest Service in California has seen its recreation budgets cut far more than have the budgets of California State parks, but in general the USFS is not talking about park closures.  They have found a more sustainable financial model for recreation operations.

Even in California State Parks, this is not a radically new idea.  While there are no California State Parks whose entire operations are managed privately today, private companies do operate large portions of a number of parks.  The conference center at Asilomar SP, the cabins at Big Redwoods Basin and Burney Falls, the stores and marinas at dozens of parks, and the tours at the Hearst Castle, are all operated privately under the close supervision of California State Parks.  And in these cases, no one expresses serious fears of Asilomar harboring drug dealers or Hearst Castle being operated for fiendish pursuits.  In fact, more than any other state in the nation, California already has the expertise and infrastructure in place to manage a private park operations program.

Remember, we are not talking about handing parks over to private entities to do with as they please  — these are highly structured relationships that substantially reduce costs because private operators can clean the bathrooms and do the landscape maintenance and staffing far less expensively than a public agency.

There are plenty of public public officials and private companies that can discuss this park operation model in more depth.  I would love the chance to discuss it with you in more depth, and there are plenty of public public officials and private companies who could demystify this for you.  And I don’t think any of us are pot dealers.

Terrific New Study on Park PPP’s

Holly Fretwell of PERC has completed a great new study of how use of private companies to handle park operations can help keep parks open and well-maintained.  The introduction to the study is here and the study itself is here.

Some state park systems rely on tax dollars provided through state general funds. When state budgets are tight, park funding is a lower priority than projects such as schools and hospitals. Hence park budgets are quick to hit the chopping block, leading to threats of park closures or reduced services.

Rather than ride the roller coaster of state budgets, some parks have leased their operational activities to private managers. These private entities have proven they can operate the parks more efficiently, and sites that were once a drain on agency funds are now generating revenue.

Private management can provide consistent, quality stewardship as well as more customer service.

She also gives a nice plug for our upcoming national conference on November 2 in Scottsdale.

2011 Keeping Public Parks Open Conference – Update

On November 2, 2011, I am hosting a conference in Scottsdale, Arizona on how public agencies can keep parks open through private recreation management partnerships.

For thirty years, the US Forest Service has seen radically declining recreation budgets, with far greater reductions than places like California is facing, but has not had to close parks and has kept most of their recreation areas well-maintained.

Their innovation was to take advantage of the substantially lower costs of private operators to run their campgrounds and picnic areas.

For the last couple of years, it has frustrated me to no end to watch states like California and Arizona — really almost every state in the country — let some parks accumulate deferred maintenance while other are closed when it simply is not necessary.

The event flyer is here, which hopefully you can also forward as an email from the link at the bottom.  If you know anyone in public recreation or in the your state’s legislature who is interested in recreation issues, please point them to this site where they can learn about and register for this conference.  We have gotten some sponsorships such that government employees can attend for free, and the rooms in the hotel, a fabulous resort in Scottsdale, can be had for just $105 per night.

Labor Costs

This relationship between public and private labor costs here is very similar to what we find in parks.  Most park agencies have about 80% labor costs, while ours for running similar facilities is between 30% and 40%.

The New York Times reports that labor currently represents 80 percent of the Postal Service’s expenses, while it accounts for 53 percent at United Parcel Service and only 32 percent at FedEx

The difference mainly lies both in productivity expectations as well as escaping civil service pay and benefits scales.  The difference is typically NOT about number feet on the ground — in fact, private companies tend to have more customer contact people in the park than do state agencies.

Hostility to Reducing Costs via Private Operations

California makes noises about being open to any option that keeps parks open, but then I see stuff like this, demonstrating that the legislature cares far more about protecting current government jobs than it does about reducing costs or maintaining services to the public

Apparently, the folks in Sacramento believe that cities looking for ways to reduce expenses are better off with no libraries at all than with privately operated libraries.

Assembly Bill 438, sponsored by Assemblyman Das Williams, D-Santa Barbara, is headed to Gov. Jerry Brown’s desk because Democrats in Sacramento voted to control local decisions and prevent cities from making choices about what is best for their own libraries.

The bill represents a dramatic overreach by Sacramento into local communities. Via AB438 the Legislature mandates that cities choosing to privatize are not allowed to reduce the size of their library staffs. Further, the bill mandates that every single current library employee must keep his or her job in any future public-private partnership agreement, which explains why powerful unions have been pushing the bill. Cities will also be forced to spend time and money preparing and submitting studies and reports to Sacramento in order to obtain the state’s permission to privatize.

“We hope the governor will veto the bill, since he has talked a lot about the importance of retaining local authority,” said Dan Carrigg of the League of California Cities.

California has been a national leader in partnering with the private sector to operate libraries. In fact, the first-ever public-private partnership between a local government and private operator was signed in 1997 between Riverside County and Library Systems & Services Inc. and this agreement is still in place today.

How did that work out?

In June 2010, Riverside County published a report highlighting the results of their 13-year partnership with LSSI. The study found taxpayers have enjoyed better services with longer operating hours. Staffing has more than doubled. The number of open library branches increased from 24 to 33 and more than $15 million was invested in new facilities or major renovations.

Why The US Forest Service Turned to Private Recreation Management

Many people in the US Forest Service, from both organizational pride as well as their own individual incentives (supervisors in the government make more money and have more prestige if they have larger budgets and more headcount) are to this day not happy that the Forest Service has private companies running campgrounds and other recreation areas.  However, this program has been successful for over 30 years and is used to operate over half the USFS recreation areas by number, and probably over 80-90% by visitation.

The USFS originally pursued private management out of necesity.  Here is the only chart you need to see.  Thought the Y-axis says board-feet of timber, it is direclty proportional to USFS revenue (source)

In effect, the USFS recreation program, previously funded in large part by timber sales revenue, lost most all of its funding over the last 20-30 years.  And Congress has made clear that it will not make this up through appropriations.  Worse, every few years, what recreation budget remains is often swept in its entirety into the fire budget during busy fire seasons.

But unlike many state park organizations who are facing budget cuts far less drastic, the USFS is not talking about closing recreation areas, or even building up a backlog of deferred maintenance.  In California, a cut of about $14 million on a $400 million budget has caused over 70 parks to be proposed for closure.  The USFS has, on a percentage basis, seen a much larger decrease in its recreation budget, but it still can keep parks open, mainly because it has learned to use lower-cost private operators to keep parks open.

Law Enforcement and Parks

I am often asked by state agencies how private operators of public parks handle law enforcement issues.  After all, many of these agencies have scores or even hundreds of park rangers with law enforcement titles or certifications.

My response is usually in two parts:

Large law enforcement staff not necessary

The number of law enforcement officers (LEO’s) in state parks organizations is NOT a function or indicator of demand.  We operate nearly 200 public parks, and in only one case (in the urban LA area) do we find it necessary to have law enforcement officers on site during busy weekends.  In no park we operate is it necessary to have full-time LEO presence.   Generally, we operate just like any other private campground or outdoor business — we attempt to enforce safe conditions ourselves, but call out the local sheriff when needed.  While state parks organizations might have 5 full-time equivalents (FTE’s) of LEO staff (or more) on payroll for a park, we typically find the true demand for full-blown law enforcement (rather than rules enforcement) staff is generally less than a tenth of an FTE per park.

So why do state agencies have so many people with expensive LEO certifications?  The reason has to do with incentives.   Having an LEO title is a big benefit for employees.  It provides a boost in pay grade and, perhaps more importantly, in most states gives the employee participation in the state law enforcement pension plan, generally far more lucrative than other public (or private) plans.  Further, the free training and certification has value after an early retirement (which is allowed under most law enforcement pensions) as the foundation for a second career.  Finally, there are a number of folks who simply get a psychic reward from wearing a gun and a badge.

Large law enforcement staff is counter-productive

The vast, vast majority of the time, staff at public recreation facilities are providing customer service to visitors, rather than enforcing laws.   My company has found that a law enforcement mindset and good customer service seldom mix well.  Yes, rules, have to be enforced for safety, but this should be done, if possible, via some approach other than issuing citations and legal threats.  I am sure the folks at McDonald’s are frustrated when a customer parks in the wrong spot or makes a mess in the bathroom, but they are not crazy enough to issue them tickets.

Part of the problem is cultural.  Some (but by no means all) law enforcement organizations seem to foster an authoritarian mentality.  We used to hire a lot of ex-police for camp hosts, but found they had a huge failure rate in the job.  Time and again, we found they were taking an overly authoritarian badge-heavy approach with visitors.  Again, we have examples of ex-LEO’s doing a good job, but have enough failures to convince us there are real dangers to mixing the LEO and customer service roles.

To this end, here is an example from Utah state parks as reported by Reason

Utah Park Ranger Steven Powers marked the 4th of July by pulling a woman over for driving too slowly, then yanking her out of her car and slapping on cuffs when the woman insisted on filming the stop with her phone. Unfortunately for powers, that woman happened to be Celia Sullivan, “a longtime Photography is Not a Crime reader,” according to the site’s proprietor, Carlos Miller. Sullivan is also 50 years old, a mother of two, and about as non-threatening a person as any cop could hope to interact with while miles away from backup…

Sullivan was charged with “disobeying a lawful order” and “resisting arrest,” and was kept in handcuffs for 90 minutes before being released.

This kind of behavior is not unique to law enforcement in parks, but that is my point.  This kind of attitude mixes poorly with a customer service missions, and is a good reason not to have park customer service staff all carrying guns.  Seriously, can you imagine if McDonalds and Wal-Mart employees all had guns and badges?

FAQ (Newer Posts Below)

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:

Conference Announced: Implementing Public-Private Partnerships in Recreation

In partnership with the National Forest Recreation Association (NFRA), we will be hosting a half-day national conference in Scottsdale, AZ on November 2, 2011 at 1:00 PM.  The conference’s full title is “Keeping State and County Parks Open — Implementing Public-Private Partnerships in Recreation.”  The conference will be at a great venue, the Hilton Scottsdale, and we have focused on keeping costs low:  registration costs just $100, which includes attendance at a joint reception with the NFRA, and rooms are available for as low as $106 per night.

I will be publishing more on the conference later, but it is aimed at elected officials and public agencies who are interested in the use of private companies to operate public parks, campgrounds, and recreation areas.  By holding this conference at the same time and locations as the NFRA conference, we are able to take advantage of the resources of the US Forest Service, which has thirty years of experience operating over a thousand parks and recreation areas nationwide using this public-private model.

Topics will include:

  • History of recreation PPP’s, including current examples you may contact or visit
  • Case studies from the US Forest Service, the world’s largest user of recreation PPP’s
  • Advantages of recreation PPP’s, and pitfalls to be avoided
  • Typical division of responsibilities between the public and private partners in these contracts
  • Best practice contract structure and contracting process
  • Supporting legislation and relationships between agencies

The schedule will be roughly as follows:

  • 1:00-2:00  Joint session with the NFRA — Introduction and keynote address
  • 2:00-5:00  Detailed discussion of PPP’s in recreation
  • 5:00-5:30  Q&A with industry leaders and experts, both public and private
  • 5:30-7:00 Joint reception with the US Forest Service recreation leaders and the NFRA

Much of the material in this conference has been presented in private sessions with state park agencies in states including California, Arizona, and Utah and with elected officials in states including Pennsylvania, New York, and New Jersey.   Co-locating this conference with the NFRA gives us the opportunity to have some of the most experienced recreation managers in the country presenting this material.

If you would like to learn more, or would like to register for the conference, you may do so here.

If you want to ask a question, email me at the contact link above or hit our Facebook page shown to the right.

Keeping California Parks Open

From a press release last week

Adopting a public/private management strategy used successfully for decades by the U.S. Forest Service can ensure that endangered California state parks remain open, are properly and professionally maintained, and are available to the public for years to come.

Due to the state budget crisis, California State Parks has been forced to cut millions of dollars from its operating budgets. To make ends meet, California has proposed closing 70 state parks.

“It doesn’t have to be this way,” says Warren Meyer, president of Phoenix-based Recreation Resource Management (RRM), a $10M company that manages public parks and recreation areas throughout the U.S.

“With a public-private partnership model used by the US Forest Service (USFS) for thirty years in hundreds of California parks and campgrounds, the government retains ownership of the land and control of the use and character of the park while handing over operational tasks that are time, money, and labor intensive to a more cost-effective private company.”

When operating public parks in these partnerships, private companies typically provide visitor services, routine maintenance and repairs (such as bathroom cleaning), landscaping, trash removal and payment of utilities.

“While these operational tasks by no means constitute all the work required to keep parks open, they account for the vast majority of the money spent by the state parks organization in the field,” says Meyer.

“In these contracts, private concessionaires pay for all these costs solely out of the gate fees paid by the public, without further taxpayer subsidy. In addition, we pay the public agency a substantial concession fee, often converting a money-loser to a moneymaker for the government.”

In these arrangements, the public agency ensures that the private operator maintains the land in the condition and character the public expects.

“This USFS program is already working in hundreds of locations in California, and over a thousand nationwide,” states Meyer.

The fact sheet in this same release is a useful resource

How Recreation Public-Private Partnerships Work

  • The public retains ownership of the land. Private companies must maintain the desired character and facilities in the park. Typical concession agreements include extremely detailed operational requirements and restrictions.
  • The Parks Agency retains responsibility for strategic planning, habitat development and restoration, facilities planning, environmental sciences, rule-making, oversight, and fee approval.
  • The private company takes on operational tasks (from maintenance to bathroom cleaning) that consume much of the state parks budgets but don’t impinge on these strategic tasks.
  • Private company’s expenses, and therefore most park operations expenses, are paid out of park visitor fees without any additional payments from the state. In return for retaining these user fees, the company pays a competitively-bid rent to the state.
  • The state may use this rent to help cover its other expenses, or may reinvest the rent, as does the US Forest Service, in catch-up maintenance and park improvements.

Advantages for California

  • The substantially lower cost position of private companies allows park operations as well as major maintenance to be performed using existing visitor fees without taxpayer subsidies. Even smaller parks can benefit when bundled together into larger contracts. The result is that more parks can be kept open to the public.
  • More efficient management also allows for lower use fees — for example, while California State Parks typically charge as much as $30 for a campsite without utilities, at similar public campgrounds in California RRM charges no more than $18.
  • Private concessionaires have incentives that are well-matched to the public — they make money only if happy and satisfied visitors come back to the park. As a result, the parks operated in California by RRM receive very high marks from customers and in third-party surveys.
  • If the public agency wants to improve the facilities in parks, private companies can be a critical source of capital. RRM has invested more than $3 million across the country helping parks catch up with deferred maintenance and improve the visitor experience. At McArthur-Burney Falls SP in California, RRM has invested nearly $1.5 million in a new store and visitor center, new cabins, and new boat docks.

Florida Considers Private Management of Parks

From FlaglerLive.com

The  Division of Environmental Protection is proposing to partially privatize 56 parks, including Washington Oaks Garden State Park and Faver-Dykes State Park. The proposal is being submitted to the state Acquisition and Restoration Council next Friday (June 10) as an expansion of camping and RV opportunities at those sites. But the camping and RV sites would be built and operated by private companies.

The council is an 11-member panel with representatives from five state agencies who rank the state’s environmentally sensitive land-acquisition priorities through the Florida Forever program. Florida Forever has essentially lost its funding, leaving the council to focus on its other mission: reviewing management plans for state parks and conservation lands.

Opening parks up to camping and RV sites falls under park management plans, which would have to be amended to enable the change. Those plans, called the “unit management plan,” are reworked every 10 years, with public hearings and involvement. Washington Oaks’ 10-year plan is about two years away from just such a review. DEP is asking the council to accelerate the process, though it would also make provisions for a public “meeting” at each affected park. The DEP’s proposal does not specify a formal public hearing, though that may be a matter of semantics.

“The new facilities will be designed, constructed and operated by private entities selected through the department’s procedures for soliciting and contracting state park concession services,” the DEP’ssummary proposal reads. “The Department will retain full control over all aspects of planning, design, construction and operation of the new facilities to ensure consistency with the mission and quality standards of the state park system. This system-wide expansion of camping opportunities will increase the level of public benefits state parks provide, enhance the economic benefits of state parks, create jobs, and move the state park system closer to economic self-sufficiency.”

Under Private Management, How Are Park Entrance Fees Utilized?

Several years ago, I did an analysis averaging the results of a lot of contracts.  Of course this varies site by site — for example, a campground with hookups obviously is going to have higher electricity costs than a campground without them.  But the numbers have held up pretty well over time.

A Nice Parks Study in Utah

I have been disappointed with quality of analysis in some of the recent consulting studies that have come out in Arizona on parks and privatization.  In particular, one study early this year interviewed something like 60 employees of various state and local government agencies on privatization — but not a single one of these 60 or their agencies had any experience with concession management of whole parks.  It still puzzles me why the US Forest Service, which is right here in the state and has concession operation of whole parks in over 40 parks in Arizona, has apparently been ignored by every Arizona study on the topic.

Anyway, that is all water under the bridge.  I recently saw a study by a group in the Utah legislature on parks and how to make their state parks more financially sustainable.  While I quibble with some of it and would have done some things differently, it is one of the best public studies I have seen to date on this topic.  It actually gets at the elephant in the room that most studies ignore (ie park employee compensation rates) and even addresses some more subtle issues that are often missed (eg. proliferation of law enforcement titles due to individual incentives to seek such titles rather than demand for law enforcement).  I have linked the study below, which is a fairly large pdf.

Utah state parks audit

Proposed California Park Closures

California State Parks is proposing to close 70 mostly smaller parks in an effort to make ends meet on its budget.    The press release and list of parks is here:

NEWS RELEASE – 70 Park Closures -and attachments 5-10-11

Right now, our company and others are looking through the list to see if one or more would make viable candidates for private management.  One lost opportunity here is that the best way to keep these parks open might be to group them in private management contracts with larger parks that are remaining open.  This is what the US Forest Service does at 500 locations in California alone.

Update: An editorial in the Orange County Register writes:

Last year the state closed or deeply reduced services in 150 state parks. The Legislature in March approved $11 million in cuts to state parks in the next fiscal year and $22 million in cuts in future years.

Friday, state parks officials announced the closure of 70 parks from among the 270-park unit system. The department said service reductions at the listed parks will begin this summer, with closures beginning in September and all listed parks closed by July 1, 2012.

With the state’s perpetually tight budget, funding for education, health care and the state’s powerful prison guards union usually get top priority, leaving parks typically out in the cold year after year. The state has let the parks deteriorate to the point that they now need $1 billion in repairs and maintenance, according to the California State Parks Foundation.

…There are private companies out there that will see California’s parks wasting away and envision a way to bring them back to life. Some facilities, like Tecopa Hot Springs County Park in Death Valley, operate under whole-park concession agreements, a remnant of California’s once-innovative past where the state leased some parks to private companies.

Under these lease agreements, recreation companies manage and maintain the parks. The government can set any quality and maintenance standards it desires and hold the private company accountable to them with a performance-based contract.

Press Release: A Successful Model For Keeping Arizona State Parks Open Exists … Right Here in Arizona

Download MS Word Version here

Phoenix, AZ – Adopting a public/private management strategy used successfully for decades by The U.S. Forest Service can ensure that endangered Arizona state parks remain open, are properly and professionally maintained, and are available to the public for years to come.

Due to the state budget crisis, millions of dollars allocated for parks operations were diverted to the state’s general fund. As a result, state parks are suffering, and three parks have closed, according to a member of the Arizona State Parks Board.

“We don’t have any money for fixing buildings, or fixing trails, or fixing bathrooms. We are in a desperate situation,” said Reese Wooding, of the state parks board, to the Tucson Weekly.

The fund cuts in the state budget are so drastic that the agency will have difficulty making payroll on July 1. A statement from The Arizona State Parks Foundation says the proposed 3.5 million in sweeps, “May be fatal to a system on the verge of collapse.”

It doesn’t have to be this way,” says Warren Meyer, president of Phoenix-based Recreation Resource Management (RRM), a $10M company that manages public parks and recreation areas throughout the U.S.

“With a public-private partnership model used by the US Forest Service (USFS) for thirty years and in over 40 federally-owned parks in Arizona alone, the government retains ownership of the land and control of the use and character of the park while handing over operational tasks that are time, money, and labor intensive to a more cost-effective private company.”

When operating public parks in these partnerships, private companies typically provide visitor services, routine maintenance and repairs (such as bathroom cleaning), landscaping, trash removal and payment of utilities.

“While these operational tasks by no means constitute all the work required to keep parks open, they account for the vast majority of the money spent by the state parks organization in the field,” says Meyer.

“In these contracts, private concessionaires pay for all these costs solely out of the gate fees paid by the public, without further taxpayer subsidy. We pay the public agency a concession fee of 5 percent to 25 percent of park revenues, often converting a money-loser to a moneymaker for the government.”

In these arrangements, the public agency maintains the land in the condition and character the public expects.

This USFS program is already working in over 40 locations in Arizona,” states Meyer.

“Our expertise combined with an excellent cost position allows us to make the best possible use of the gate fees paid by the public. In the 35 Arizona public parks we manage, this efficiency stretches the gate fees paid by the public so we can continue to invest in needed maintenance and repair.”

“Over the last few years, our company, guided by the Forest Service’s wish lists, have invested in improvements such as new composting rest rooms at Crescent Moon, new shower buildings at Cave Springs and Pinegrove campgrounds, renovations to the Oak Creek Visitor Center, and ADA enhancements at nearly every facility,” says Meyer.

In part because of this attention to keeping facilities clean and in good repair, the public parks RRM operates are consistently ranked among the Top 100 Family Campgrounds in America since 2003, and are recognized as among the best in the state by third-party reviewers such as Sunset Magazine and CampArizona.com.

Many public agencies considering such partnerships worry that this approach might not be applicable to their smaller parks.    Allaying this concern, the USFS in Arizona, in order to keep parks open, is successfully bundling large and small parks together in contracts for a general geographic area. The parks are kept open using economies of scale, where profits from more lucrative properties are passed on to the less profitable locations

“The goal of such concession arrangements,” said Meyer “is to keep these special pieces of land beautiful, accessible and available to the public for generations. The objective is to form a partnership combining the public oversight and unique environmental knowledge of the state parks agency with the efficiency and customer service of a private company that can clean and maintain the parks without the need for a taxpayer subsidy. In doing so, we can help achieve financial sustainability for the public parks system.

# # #

Fact Sheet – Public-Private Partnerships for Parks

How it works

  • The public retains ownership of the land. Private companies must maintain the desired character and facilities in the park. Typical concession agreements include extremely detailed operational requirements and restrictions.
  • The Parks Agency retains responsibility for strategic planning, habitat development and restoration, facilities planning, environmental sciences, rule-making, oversight, and fee approval.
  • The private company takes on operational tasks (from maintenance to bathroom cleaning) that consume much of the state parks budgets but don’t impinge on these strategic tasks.
  • Private company’s expenses, and therefore most park operations expenses, are paid out of park visitor fees without any additional payments from the state. In return for retaining these user fees, the company pays a competitively-bid rent to the state.
  • The state may use this rent to help cover its other expenses, or may reinvest the rent, as does the US Forest Service, in catch-up maintenance and park improvements.

Advantages

  • The substantially lower cost position of private companies allows park operations as well as major maintenance to be performed using existing visitor fees without taxpayer subsidies. For example, the 35 USFS parks run by RRM in Arizona are up to date on their maintenance, while AZ state parks have years of deferred maintenance in their parks.
  • More efficient management also allows for lower use fees – for example, while Slide Rock SP summer day use rates rose to $20 last year, RRM lowered the day use rates at neighboring public parks it operates from $10 to $9.
  • Private concessionaires have incentives that are well-matched to the public – they make money only if happy and satisfied visitors come back to the park. As a result, the parks operated in AZ by RRM receive very high marks from customers and in third-party surveys such as CampArizona.com. In fact, per dollar of revenue paid by visitors, RRM typically has more people actually working in the parks to serve visitors than does most state parks agencies.
  • If the public agency wants to improve the facilities in parks, private companies can be a critical source of capital. RRM has invested in new facilities requested by the US Forest Service in a number of Arizona parks (from shower buildings near Sedona and Flagstaff to completion of the Oak Creek Visitor Center), and have invested more than $3 million across the country helping parks catch up with deferred maintenance and improve the visitor experience.

Even smaller parks can benefit from this model – the US Forest Service has learned to combine small, financially-challenged parks with larger more successful parks -creating regional bundles. There are six successful bundling areas in Arizona to ensure quality management of smaller parks. They are: Sedona/Oak Creek Canyon, Flagstaff, Payson, Mount Lemmon near Tucson, and properties around Kaibab and Show Low. Of the 35-plus sites Meyers runs, only perhaps seven could make money on their own.

“Others make money because they are grouped with other parks,” he said. “In other words, they would lose money as a stand alone but make money in a group because they benefit financially from sharing a manager, equipment, reporting, and excellent operational practices.”

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Sally Baker

Chief Idea Officer

Great Ideas PR Inc.

Getting you seen, heard, understood

602.524.8596

Twitter @Gr8ideaspr

Privately-Operated Federal Park Will Stay Open During A Government Shutdown

As occurred in 1995, when the government shuts down, most of its recreation areas have to close, from the national parks to the Washington Monument to the Smithsonian museums.

But when most Federal recreation is closed, potentially during a busy spring break week next week, one set of government parks will be open — US Forest Service recreation areas operated by private companies under concession contract.  Because private operators collect all the gate fees and pay all the expenses themselves without any government appropriations or labor, these concession campgrounds and day use areas do not have to close when the Treasury runs out of money.

This is something to think about with state parks in nearly all 50 states facing closures during local budget battles.  Privatization of park operation shields the public from budget shenanigans and the usual game of chicken legislators play with parks during the appropriations process.

Private Operation a Potential Alternative to Closures in California

From KCRA.com

Two California lawmakers are seeking answers concerning a list of state park closures that has yet to be released. Sen. Tom Harman, R-Huntington Beach, and Assemblyman Jim Nielsen, R-Gerber, want State Parks Director Ruth Coleman to provide information on what options are being explored to avoid expected closures.

Nielsen told KCRA Thursday he believes there is a path that could avoid park closures altogether.

“Public-private partnerships are but another consideration to assure that our parks are open and well-maintained,” said Nielsen. “There are even a lot of things local governments can do, some of which might want to take over the parks themselves.”

Parks spokesman Roy Stearns said that public-private partnerships are one option being considered

A Better Model for Keeping Parks Open

This was published today at Coyoteblog.com

Many of you may be familiar with threatened closures of state parks in many states in the country.  Due to budget issues, state parks budgets have been slashed for years, and in many cases state parks are litterally falling apart due to deferred maintenance.  Now, faced with further budget cuts, states are in the process of closing many state parks.  Arizona has already announced a closure list, and California is expected to release a closure list this week.  States including Washington, Texas, Florida, New York, and New Jersey are all actively discussing park closures.

Far larger than any state parks agency, in fact the largest public recreation agency in world (by total number of sites) is the US Forest Service, which operates campgrounds, picnic areas, hiking trails and boat launches in nearly every nook and cranny of the country.  Yesterday, in President Obama’s new budget, the President proposed drastically slashing the US Forest Service (USFS) recreation budget.  This is no surprise, as the USFS has had its recreation budget eroded for decades.

But despite these cuts, most USFS recreation sites will remain open.  There is no talk, as in the states, of wholesale closures.  There is, in most USFS recreation sites, no growing accumulation of deferred maintenance.  In fact, even if Congress and the President shut down the government (as happened under Bill Clinton and may happen this year), many USFS recreation sites, unlike nearly every other Federal facility, will remain open.

Why?  Because decades ago, the USFS was forced to find and adopt a new model for managing its recreation sites, a model that could easily keep most state parks open if states were willing to consider it.  To understand this opportunity, we first need to look at the traditional model for running public parks.

Traditional Model

The traditional model for running public parks and recreation sites has two components:

  • Use of high cost government labor to run park operations.  Beyond just being high cost (in absolute wages and benefits) this labor is generally not well-matched to the task.  For example, state employees are hired for 12-month-a-year jobs, even when park visitation is highly seasonal.  In addition, college environmental science and parks management grads are employed whose interests are not well-matched to mundane tasks that dominate park operations, such as cleaning bathrooms and picking up trash.
  • Providing free or very low cost access. Most state parks offer free or below-market public access fees for day use parks or campgrounds.  While it makes sense for agencies to offer free options for the public in their portfolio of parks, offering subsidized pricing at every park creates a huge need for appropriated funds (particularly given their high operating costs).  While this subsidized access seems to be a public benefit, it actually works against the public as general fund appropriations dry up and maintenance has to be deferred and parks have to be closed.

One step several states have taken is to abandon the second part of this model by charging market pricing, and even above-market pricing.  Arizona State Parks generally charges market-level pricing for park entry, but as budgets got tighter they actually doubled entry fees to as much as $20 per car to park  at certain popular parks.  California has done the same thing, increasing the price of no-hookup camping as high as $30 a night, when pricing of similar campsites in, say, the USFS in California typically run no higher than $18-$20 a night.  The reason for this is their very high cost operations model, and even these higher fees have not headed off park closures in these states.

A New Model

About 30 years ago, the USFS began experimenting with a new model for running its recreation sites.  I can’t say that the USFS did this willingly, and even today there are many in the agency who long for the day when they can return to the traditional model.  In fact, necessity, in the form of Congressional legislation combined with declining appropriated funds for recreation, really forced the change.  Today, over half of USFS recreation facilities are run under this new model, and if weighted by visitation, the number surely would be over 90%.

The model includes these two key elements:

  • Use of low-cost private labor for operations.  Thirty years ago the USFS began using private operators to run campgrounds and busy day use facilities under a concession arrangement, meaning the private operator collected all revenue and paid all expenses for the site, and paid the USFS a fee for the privilege of doing so.  With the stroke of a pen, sites that required appropriated money to operate suddenly were money makers for the USFS.  As a further refinement, Congress gave the USFS the authority (and the incentive) to apply the fees they earned from campground and park operators to maintenance and improvement projects in the recreation facilities themselves.
  • Charging market-based use fees.  In this program, private operators charge market-based fees (which must be approved by the USFS) that fully cover their costs AND allow for a payment back to the USFS.  Recreation sites in this program no longer require public appropriations at all — they are entirely self-sustaining.  That is why many USFS recreation sites will remain open even if the government shuts down

As both the public agency and private operators have gained knowledge about the program, this model has continued to be improved.  For example, early on the USFS merely offered the largest facilities to private managers.  However, they soon learned that if they continued to do so, they might be worse off budget-wise because they would be left with many small, expensive facilities to manage themselves.  As a result, the USFS has learned to offer private operators packages or bundles of recreation sites, that generally include all the sites in one geographic area, big and small.

It is important to understand that this is merely a lease arrangement — this is not a stealth way to dispose of public lands into private hands.  These are highly structured arrangements that require the private operator to conform to numerous restrictions.  In particular, the private operator may not change or add facilities, services, operating hours, or fees without the agency’s written permission.  No one, in other words, is out there building a McDonald’s in front of Old Faithful under this arrangement (there are several other very predictable critiques of this model, which hare answered here).

One added benefit of this arrangement is that, though there are some bad private operators, in general facilities are actually run better under this model.  One reason is that maintenance and operations are fully funded, so no skimping is required.  Another reason is that since they are paid with park revenues (rather than some flat fee), private operators benefit from, and therefore have the incentive to encourage, higher visitation.  Finally, the skills and preferences and background of most private workers are better matched to the routine operating tasks required.  As a result, most privately operated public parks get good reviews for their quality.   As just one example, this independent site ranks public campgrounds in Arizona — in this survey, three of the top five sites are run by a private concessionaire in the USFS program, while none are operated by our state parks agency.

The Future

As I mentioned earlier, there are many people both inside the USFS and in the general public that long to return the traditional model — Agency leaders would love to have the prestige that would come from larger headcounts and budgets;  public employees unions would generally rather see parks closed than have further precedents for private management established; and certain recreation user groups would prefer that taxpaying non-users pay for their recreation.

But the bankruptcy of the traditional model is likely here to stay.  Current budget problems in state parks is not simply a product of this recession — for example, here in Arizona, park maintenance was under-funded even in the good times.  The reality of government is that non-discretionary expenditures (e.g. health care, entitlement, pensions) are growing far faster than the economy and are going to totally consume government budgets.  Discretionary spending, particularly in the case of things like parks that can support themselves with fees, is going to continue to be crowded out.

If you are interested in this model, you can find out more at this site  (just scan down the page).  We are planning a national conference on private management of public parks as a way to keep parks open, and you can sign up for information on the conference here.  And, as usual, you are always welcome to email me at the link on this site.

2011 Recreation Privatization Conference

I am in the planning stages for a national conference on private operations of public parks and recreation.  The date and time have yet to be set, but it will be targeted at legislators, administrators, parks directors, and private practitioners.   If you would like to be on our mailing list to receive more information as the details are firmed up, please click the link below or in the sidebar on the right.

2011 National Conference Information Mailing List

Steadily Making Progress

Efforts to bring private management to recreation in Arizona State Parks got a pretty nice write-up by Mark Duggan, which includes supportive comments from the model from Jay Zieman of Arizona State Parks.  I have been talking to skeptical parties in and out of state parks about this idea for over a year.  I think a big part of the breakthrough in understanding has been that private companies are not trying to take ownership of the land or even control how it is used — we are merely trying to run many of the mundane park operations.

In particular, I think this chart resonates with many of the folks I present it to who are concerned about privatization:

I make the case when presenting this chart that private companies are really only aspiring to perform the duties on the right, under strict supervision and controls.  The state retains all the higher value-added duties on the left, as a minimum, and may under certain arrangements retain some roles on the right side.   The opportunity for the public is that a huge percentage of the budget in state parks is spent on the right side, and private companies typically offer a minimum of 30% lower costs on these activities.