by Leonard Gilroy, Harris Kenny and Julian Morris

Summary

The fiscal challenges that state governments have faced in recent years have placed significant pressures on state park systems, which have to compete for increasingly stretched funds alongside education, healthcare, higher education and other—often higher—spending priorities. In many states, this has led to declines in park funding, cutbacks in park services, and, in some cases, even the closure of parks themselves. Oftentimes, these funding pressures are occurring on top of—and exacerbating—a longer-term trend of inadequate or deferred maintenance in the parks, threatening the sustainability of these recreational assets. California’s state park system, for example, has accumulated over $1 billion in deferred maintenance over the last few decades, and given funding pressures in recent years it is uncertain how the state will begin to close the maintenance gap.

Such crises have prompted policymakers to rethink traditional approaches to funding and operating state parks. Public-private partnerships (PPPs) are one promising solution that would invite the private sector to play a bigger role in keeping state parks open without imposing additional burdens on taxpayers. Many states already successfully use private concessionaires to provide discrete services within parks—such as food, retail, lodging, recreational activities and other commercial services—and they can build on that by seeking to expand the private sector’s role to the operation of whole parks via PPPs.

A park operation PPP would transfer the responsibility of maintaining a state park to a private operator, while enabling that operator to raise revenue through entrance and other fees. This is far from a new concept. Private, for-profit recreation management companies currently operate over half of the U.S. Forest Service’s (USFS) thousands of developed recreation areas (e.g., campgrounds, day use areas) nationwide under “whole-park” concession agreements. Colorado, California, Oregon and Washington each have over 100 USFS recreation areas and campgrounds operated by private concessionaires, with most other western states like Arizona, New Mexico and Nevada each having dozens under private operation as well.

In 2012, budget pressures prompted California to become the first state in the modern era to enter into park operation PPPs for five state parks threatened with closure. These PPPs were structured as whole-park concessions in which the state retains ownership and control over the parks while paying a private operator nothing to operate them. Instead, the concessionaires pay the state a minimum annual rent for each park using revenues derived from camping and other user fees. Concessionaires are generally responsible for handling (and covering the costs of) minor improvements and day-to-day repairs, and for larger maintenance jobs, all revenues paid to the state as concession rent in these parks are put into a park maintenance fund from which the concessionaire can seek state approval to spend.

Concessionaires are also required to maintain the premises, trails, roads, facilities, furnishings and equipment in good condition in accordance with agency standards and contract provisions. And concessionaires are required to implement an operations plan for each park unit—prepared by the concessionaire and approved by the state—outlining how services will be provided and facilities maintained over the life of the concession to ensure that the public interest is protected.

Park operation PPPs like these can help ensure that parks remain open to the public, are managed according to the long-term vision of elected and appointed officials, and remain financially sustainable. Though pioneered at the federal level by the USFS, they are a perfectly feasible option at the state level as well, as evidenced by California’s experience. PPPs can offer a wide range of benefits in park operations, including financial sustainability, optimization of staffing and operations, enhanced risk management, accountability for outcomes, proper facility maintenance and much more.

State policymakers should carefully consider the long USFS history with park operation PPPs and California’s recent initiatives as they contemplate ways to ensure the long-term fiscal sustainability of their own state parks. PPPs have proven to be an effective conservation tool, which can provide stability in the face of fiscal uncertainty and transform underfunded state parks into self-sustaining public environmental assets.

Click here to download the full report: Parks 2.0: Operating State Parks Through Public-Private Partnerships