Month: May 2010

More Support for Private Solutions to AZ Parks Budget Shortfall

From the Goldwater Institute:

The Goldwater Institute responded to recommendations that state parks be funded through a new license plate fee with a simple suggestion of its own: instead of raising taxes for parks, keep them under state ownership but let one or more private companies manage them.
Senator Barbara Leff wrote and won approval for Senate Bill 1349, which gives the Arizona Parks Board authority to immediately contract with a private company to run state parks. Despite an offer from a Phoenix-based company, the parks agency has shown little interest and even outright hostility to the idea.

As an alternative, local communities have been making extraordinary efforts to keep open parks they deem important to their local economies.While private contracting is not always simple, its benefits in this case are clear. Parks would stay open and the state budget would face less pressure. Unfortunately, the State Parks Board has shown little willingness so far to move on this important issue.

Alberta Considers Private Park Operations

From the Calgary Sun:

The solution, says Alberta Parks Minister Cindy Ady, is to open the park gates to private enterprise — allowing developers to build and operate campgrounds under licence.

“The policy hasn’t been completely nailed down yet, so I can’t say how it will work, but what we know is this: It could be anywhere in the province,” said Ady.

“If somebody can bring to us a solid plan, there are private campground opportunities.

“They would build it, they would run it.”

The private campground scheme is imminent — Ady said she plans to bring it forward in the fall, as part of her capital budget plans.

“I’m hoping within this year to have that policy work done, so we can at least tell people the rules of engagement,” she said.

The article raises, and actually addresses, one of the great mythologies of private park management — the whole “neon sign in front of Old Faithful” meme.

Images of neon signs and Seattle-based coffee chains may have wilderness lovers horrified, but Ady assures those who head to the woods to escape the rat race, that respite won’t change.

“It will absolutely be the same standards as now — any time we let anyone in on contract, we’d be very careful because they’re still on park land or crown land,” said Ady.

The Power of Incentives

I can pretty much guarantee that our company does not have this situation with our assets in our public recreation management operations:

City Controller Wendy Greuel released an audit today showing that various City departments could not locate hundreds of items purchased with taxpayer funds, and that hundreds of other items had been sitting unopened or unused for up to 7 years….

* Of 254 items that we attempted to locate, 115 were not where they should have been. While 56 items were ultimately found in the wrong location, 59 were unable to be located at a cost of $938,000.
—Some of the items that were never found included a video recorder purchased by ITA for almost $60,000.

* Departments are supposed to conduct a physical inventory of items every two years to maintain accurate physical inventories of equipment. ITA and Sanitation have not conducted a review in at least 5 years and Recreation and Parks has not conducted a review of all items in at least 7 years.

* ITA and Recreation and Parks have 138 items that were purchased at least 1 year ago, still in warehouses or staging areas. These items are worth $237,000, and some were purchased over 7 years ago.
—Some of the items not placed into service included 9 microwaves, 1 deep fryer and 2 television sets by the Recreation and Parks Department and various computer equipment by ITA.

Parks are closing around the country for lack of money.

Ignorance, or Knowing Misinformation

This comes from New Jersey:

As the Christie administration considers privatizing New Jersey’s state parks and forests in order to keep them open and run more efficiently in tough budget times, environmental groups say the public could lose access to the open spaces if private vendors or corporations move in.

“The [DEP] commissioner said they were going to keep parks open, but with those kinds of [budget] cuts I don’t know how they are going to be able to run programs or have services at our parks,” said Jeff Tittel, the executive director of the Sierra Club in New Jersey. “These lands were bought by the public for public use and when you start privatizing it can change the hold dynamic on how we use or visit our parks.”

Tittel said private operators would potentially be under no obligation to guarantee public access.

“There’s a difference between having outsiders come in and let’s say run a concession stand like hot dogs or kayaking and things like that, versus actually managing the parks because they are going to be managing for a profit,” he said. “What we’ve seen happen in other states is that services go down and fees go up, and public use gets pushed to the side.”

Again, we see someone hypothesizing harms from public-private partnerships in recreation without ever having actually, you know, checked to see how it works in practice.  In reality, well-managed public-private recreation partnerships almost never fulfill these fears, though I will say these are the standard bogeymen trotted out whenever the privatization concept is raised.   Most of these issues are addressed in this FAQ, but a few quick thoughts:

  • Our company has 30 recreation operations contracts.  We don’t have a single one that allows us to change services, facilities or fees without the written permission of the parks agency
  • In a number of states, including Arizona and California, we operate facilities side-by-side with public agencies and in nearly every case, the fees we charge for similar facilities are lower than those of the state agency.  For example, in Oak Creek Canyon, Arizona State Parks charges $20 per vehicle to park at Slide Rock Park while right next door we charge between $8 and $10 at US Forest Service parks.  In California, standard State Park camping fees have risen to $30 for a site without utilities, while we charge no camping fee for a similar site higher than $18 at any of the facilities we operate.
  • At the end of the day, our company can run facilities to the same quality level much less expensively than can the civil service bureaucracy of most states.  Many folks who only deal with public management are unused to thinking in terms of productivity increases, and so assume reduced costs can only be obtained with decreased services.  While this is true in government jobs dominated by public sector unions that resist productivity increases, it is not true of the private sector.

I have run the numbers on New Jersey parks, and run their facilities and revenues through our costing models, and there are a number that may soon be closed that we could easily keep open without public subsidies — ie operate them within current fees collected.  One false assumptions embodied in this piece may be a vision that privatization means complete takeover of the public parks organization. In fact, though, in public-private partnerships, the public sector retains many responsibilities, and is only privatizing operational tasks.  Here is a picture of the typical public-private partnership in recreation: