Public/Private Model Might Save California's State Parks

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June 21, 2011 by   - () Leave a Comment

Gold stars indicate location of facilities administered by Recreation Resource Management.

Adopting a public/private management strategy used successfully for decades by the U.S. Forest Service might 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," Warren Meyer, president of Phoenix-based Recreation Resource Management (RRM), a $10 million company that manages public parks and recreation areas throughout the U.S., stated in a news release from his firm.

"With a public-private partnership model used by the U.S. Forest Service (USFS) for 30 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.

"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 25 California 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."

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 for their excellence by third-party reviewers such as Sunset Magazine.

Many public agencies considering such partnerships worry that this approach might not be applicable to their smaller parks. Allaying this concern, the USFS in California, 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. In doing so, we can help achieve financial sustainability for the public parks system and keep parks open to the public."

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 U.S. 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.
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