Archive for March 2012

California Issues RFP For Private Operation of Five State Parks

Via Leonard Gilroy of Reason

For years, Reason Foundation has recommended that cash-strapped states consider tapping the private sector to take over operations of state parks as a means to lower costs and rescue parks threatened with closure in a difficult budget environment. Both the U.S. Forest Service (USFS) and BC Parks (British Columbia) have long pioneered the use of public-private partnerships (PPPs) for park operations, but states have been slow to follow their lead…until now, that is.

California State Parks (CSP) has issued a new request for proposals (RFP) seeking a five-year concession contract (or contracts) to operate campground and day use recreational areas at five park units in the Central Valley (Turlock Lake SRA, McConnell SRA, George J. Hatfield SRA, Woodson Bridge SRA, and Brannan Island SRA). This is the first serious and robust parks PPP procurement of its kind at the state level. The RFP is here, and CSP’s sample contract is here. Bidder responses are due on May 1.

The contract would be structured as a concession, a commercial lease through which the state would retain ownership and control over the parks while paying the private operator nothing to operate them. Instead, the private operator would be allowed to retain the user fee revenues (e.g., gate entry fees, camping fees, etc.), in return for an obligation to pay a set percentage back to the state annually as a form of rent. CSP has set a minimum annual rent level for each park that bidders must exceed in their proposals. Bidders can submit proposals for individual parks, but the procurement is designed to give maximum weight to those proposals that cover all five parks. In fact, the parks in question appear to be a mix of revenue generating and revenue losing parks (once operating costs are factored in), so bundling all of them together is likely to be an attractive option to bidders to maximize their ability to mitigate risks.

While this sort of arrangement is quite common at the Federal and local level, state parks agencies have resisted it for a variety of reasons.  Now, however, with increasingly high user fees failing to cover the cost of expensive government operations, and with parks facing failing infrastructure and even closure, more state parks agencies are considering this approach.   California State Parks is both the largest and in many ways most respected state parks agency in the country, so this step may help give increased impetus to private operations proposals in other states.

It will be interesting to see what public reaction will be.  Traditionally, environmental groups and state workers unions have opposed this approach, often not realizing many of the parks they already use and enjoy are already privately operated.  For example, in California, over 500 Federal and local public parks and campgrounds are privately operated, including most of the recreation areas in the US Forest Service.

Update: Apparently one Canadian province is considering a similar initiative

This Sounds Like Our “Tale of Two Parks”

From the Daily via Mark Perry

“While the Senate barbershop is federally subsidized, the House barbershop is a private business. Its three employees, one of whom is part time, are independent contractors. The House barbershop was privatized in 1994, a decision that House Republicans made after they took control of the lower chamber for the first time in decades.

The dueling business models of the congressional barbershops have produced different financial results.While the Senate barbershop required a $300,000 federal bailout last year, the House barbershop turned a profit. And while Senate Hair Care Services, the formal name for the Senate barbershop, is not charged a dime for its work space, House Cuts pays the government $2,000 to $3,000 in rent each year.”

A similar side by side comparison in parks yields roughly the same results.