Archive for the ‘Private Recreation Management’ Category.
Bill Frezza interviewed me for his show the other day. I felt it was not one of my better performances but he says he is a wizard of editing so we will see. Anyway, I am actually sharing the show with Coyote-favorite Dr. Richard Lindzen, so at least that half of the show should be worth your time. Here are the details:
Tune in Saturday, February 13th to RealClear Radio Hour with Bill Frezza with guests Richard Lindzen and Warren Meyer.
Government Science Monopoly
Richard Lindzen, atmospheric physicist, MIT professor emeritus, and lead author of the “Physical Climate Processes and Feedbacks” chapter of the 2001 Intergovernmental Panel on Climate Change report, attributes climate hype to politics, money, and propaganda. Lindzen particularly takes issue with the “97% consensus” claim that is being used to stifle debate and demonize skeptics.
Rescuing Public Parks
Warren Meyer, founder and president of Recreation Resource Management, shares how he has successfully managed public parks for nearly 25 years. Meyer advocates for whole park concessions—privatized management of public parks—to save them from closure and agency mismanagement.
The weekly one-hour program airs:
WXKS 1200 and WJMN 94.5F in Boston Saturdays 1p & 7p & Sundays 4a ET,
KNEW 960 & KOSF 103.7 in San Francisco Saturdays 10a & 4p & Sundays 1a PT,
1030 KVOI in Tucson, AZ Saturdays 4a MT,
KSBN 1230 Money Talk in Spokane, WA Saturdays 5a PT,
Cities 92.9FM WRPW in Bloomington, IL Saturdays 7a CT,
1590 WSMN in Nashua, NH Saturdays 12p ET,
KATE 1450AM in Alberta Lea, MN Saturdays 1p CT,
1330 WEBY in Pensacola, FL Saturdays 3p CT,
The Patriot, KRMR 105.7FM in Hays, KS Sundays 3p CT,
The Patriot, KNNS 1510AM in Larned, KS Sundays 3p CT,
KVOW 1450 in Riverton, WY Sundays 3p MT, and
WROM Radio in Detroit, MI Mondays 8p ET
A lot of folks have been asking for my thoughts on this conflict, where Delaware North, the departing concessionaire at the Yosemite Lodge, is claiming they own trademarks associated with the old, beloved lodges that must be bought out for lots of money, either by the government or the new concessionaire.
There are lots of versions of National Park Service (NPS) concession contracts floating around out there, and as I have had a few of these contracts, I am generally familiar with the terms and problems that arise (though I want to caution I am not privy to any insider details of this dispute). But here are a few thoughts:
One of the hardest problems with government concession contracts is how does the government provide incentives for the private company to invest capital in the concession without giving the concessionaire a long-term contract that reduces the government's control. Since any improvements made to the government land can't be removed and become the property of the government, it probably takes a 30-year contract to cause private companies to want to make such investments (as they would then have time to get a return from the assets, and most improvements tend to have a 20-30 year life anyway). But the government does not want to lock themselves into one concessionaire for 30 years - 10 is as far as the NPS generally wants to go.
So the NPS has a process by which private companies can make permanent investments in the facilities, and the amount of these investments are added to an account (it used to be called Leasehold Surrender Interest, or LSI, so I will call it that -- I am not sure what it is called in current contracts). At the end of the contract, there are some formulas for valuing the LSI in the account, and if the concessionaire loses the contract, the next concessionaire has to buy out the LSI. If there is no next concessionaire, the Feds have to buy it out.
This provides good incentive for investment, because money you put in you basically get out at the end, plus any return in the middle. Also, since there is a federal guarantee of repayment, this makes it possible to get a bank loan to finance the improvements (otherwise an investment in leasehold improvements on government land that the bank can't put a lien on is impossible to get bank financing for). But this also creates problems. Over the years, the LSI can grow so huge that it becomes impractical for anyone to buy out -- the LSI numbers at these large concessions can be in the hundreds of millions of dollars. This is what happened at the Grand Canyon, when the US Government had to pay down the LSI by tens of millions of dollars to get companies to bid. The other issue is that it creates a large, unfunded, off-the-books obligation for the government (because they ultimately back repayment of the LSI) in the billions of dollars.
Anyway, it is my understanding that it is not the LSI that is the problem here. NPS contracts also for years had a provision that not only did one have to buy out the previous concessionaire's LSI (which represents investments in permanent facilities), but one also had to buy all the personal property he had associated with the concession (eg boats, trucks, inventory, shelves, coolers, etc). While the LSI provision is generally sensible, though with some issues, this personal property buyout often led to disaster. Because, unlike LSI, there is no agreed-upon value for the property (if the NPS is following its process, they can tell you at any point in time what the LSI is worth and everyone should be in agreement -- no similar process exists for valuing personal property of the concession).
So here is the situation. The outgoing concessionaire has an asking price for his personal property, and the incoming concessionaire has an offer price likely well south of the seller's price. In a normal transaction, there is some negotiation. But a key part of the negotiation is that at some point the buyer can just walk away and refuse to buy. This walk-away is not allowed in the NPS contract situation. The incoming guy HAS to buy. So outgoing concessionaires, particularly unscrupulous ones, will set a huge asking price and refuse to come off it. Arbitration is possible, but mediators often split the baby in a way that sellers still get above-market rates for their stuff. And all the while this takes time -- one is supposed to be opening the concession and we have not even secured rights to the assets we need to run it! So the clock is ticking AND we can't walk away. Incoming concessionaires often get hosed (which is why I believe new contracts in the NPS do not include this personal property buy-out provision).
This happened to us at a NPS marina in Colorado. The previous concessionaire ran a number of businesses in the area. When they lost the concession, they stripped it of any good assets it had and then went around to all of its other businesses and gathered up all the junk and useless assets they could find and dumped them into the concession. They then demanded a huge price for all this junk. The NPS was absolutely no help -- they had no records of concession assets, and with turnover no one had even really visited the concession much. We ended up taking a loss in the $200,000 range, buying a whole yard of stuff that we almost immediately had to pay to have carted to a junk yard. Later we found that we were on the hook for almost a half million in facility repairs the previous company had never made -- the NPS had detailed notebooks of the failed inspections and required maintenance that was never performed, but never once disclosed any of this to us until we had signed the contract, and then demanded that we were on the hook for it all. But that is another story, which goes to explain why I will never, ever work with the NPS again.
Anyway, my take is that Delaware North is doing the same thing that happened to me in Colorado, but on a larger scale -- writing up the price of a bunch of assets (in this case intellectual property) and using the terms of the bad NPS contract to extract above-market pricing for them from the next concessionaire. All entirely legal, but at the cost of absolutely destroying their reputation with the NPS (I wonder if Delaware North is planning to exit the NPS concession business anyway such that they don't care). Anyway, the new concessionaire, Aramark has certain advantages that I did not have as a small company. In particular, they can simply refuse to buy the assets (which they have -- they have already renamed all the lodges and stores) and fight the issue in the courts later.
By the way, if you are wondering how the US Government can be so casual with trademarks and intellectual property, this tends to be, in my experience, a huge blind spot for them. As an example, the US Forest Service uses a single national reservations company and all of us concessionaires in the Forest Service are required to use that company. Years ago, the company who won the contract promised better information on the website about each campground. So, for the hundred plus campgrounds we operate, at the request of the US Forest Service, we spent weeks measuring sites, taking pictures, and drawing campground maps for posting on the reservation system. Several years later, when this reservation company lost the contract, it turns out the company had contract provisions from the government that the believed let them retain all the intellectual property. The company then claimed all the maps, pictures, and site descriptions -- that we developed -- were theirs. What a mess. I can't totally remember how it came out but I think we got the rights to the pictures and descriptions back but all new maps had to be made. The point is that the government has historically been myopic about the value of non-physical assets.
If you are really bored, and I mean for values of boredom approaching "Maybe I should pull out my old Menudo albums and give them a listen," you can watch me and others testify to the Public Lands Subcommittee of the House Natural Resources Committee.
As you will be able to tell, I pretty much never do the Washington thing. there really being nothing much my business needs up there other than to be left alone (unfortunately a vain hope most of the time).
This case is a bit unique. Fees and recreation on public lands are governed mainly by a certain piece of legislation called FLREA (I won't bother with all the actual words, everyone just calls it FLREA). The law governs fees the government can charge for public recreation, passes that provide discounts to these fees, etc.
The Forest Service has a unique program (at least among the Federal Lands agencies involved in FLREA) where private concessionaires don't just run a resort, like in the Park Service, but run an entire "park". This means that, unique to all the other agencies, the Forest Service actually has private companies charging park entry fees ("day use fees") and camping fees. In theory this should be relatively easy to manage, and the existence of the concession program has never really been an issue in these proceedings, but sometimes in the rush of legislation we are simply forgotten, and rules are written into the law that are simply unworkable for private companies. A good example in this law is the long fee approval process that could require 18 months to change a fee -- this provision would be a disaster for us because we often have to react to things like changing minimum wages on a couple months notice.
Postscript: Yes I know -- Moire fail on the tie
The title of this post is based on the single most common complaint I get from government employees when trying to convince them to allow our company to operate their recreation sites. Let me retell probably my favorite argument I ever had on this topic. I will confess I cleaned up some of the verbiage in the retelling. I will further observe that our company soon after mysteriously lost the bidding for the renewal contract, just about the only time we have ever lost such a renewal in over 40 bids.
I was having a discussion with one of the many US Forest Service District Rangers who do not like having private for-profit companies operating on public lands, even if we save the taxpayer a lot of money by doing so. He said to me, "It's not right to make a profit on public land." I thought a minute and responded, "So you work for free?"
He looked at me confused, "What do you mean?"
I said, "well, if you took a salary, you would be making a profit on public land, wouldn't you? "
He responded that "this was totally different -- a salary is not the same profit. And besides, my salary is nothing like your huge profits."
I said, "Are you kidding? My profits on this District are less than half your salary. And you earn your salary whether visitors are happy or not. Your salary is guaranteed and unless you are caught having sex with an eight-year-old on your desk, you probably have it until retirement. My profit is never guaranteed -- I might make it or I might not. And getting that profit requires investment of tens of thousands of dollars in trucks and such. And if I don't do a good job, customers stop showing up and I don't make any money at all."
He responded, "but your profits just add cost. A non-profit doing the same thing, or the government doing the same thing, would save that money."
I said in turn, "that is incredibly naive. What I do is operate efficiently and at low costs. So a non-profit or the government does NOT do the same thing, because without the incentive to make a profit they don't operate anywhere near as cost-effectively. I have never seen an example where the government could operate for less than twice my costs. So our company can save half the costs of operating the park, which dwarfs the size of my 5% profit margin. The savings I produce are 20 times my profit -- if anything, I am grossly underpaid.
I operate recreation areas in the US Forest Service and from time to time get criticized that my profit adds cost to the management of the facilities, and that the government would clearly be better off with a non-profit running the parks since they don't take a profit. What they miss is that non-profits historically do a terrible job at what I do. They begin in a burst of enthusiasm but then taper off into disorder. Think about any non-profit you have ever been a part of. Could they consistently run a 24/7/365 service operation to high standards?
Don Boudreaux has a great quote today that touches on this very issue
from page 114 of the 5th edition (2015) of Thomas Sowell’s Basic Economics:
While capitalism has a visible cost – profit – that does not exist under socialism, socialism has an invisible cost – inefficiency – that gets weeded out by losses and bankruptcy under capitalism. The fact that most goods are more widely affordable in a capitalist economy implies that profit is less costly than inefficiency. Put differently, profit is a price paid for efficiency.
It is also the "price" paid for innovation.
Last year, when Congress did a 1-year renewal of legislation governing public recreation and fee policies (FLREA) they left out a tiny provision that discouraged government agencies from taking back tasks they had privatized. With that gone, parts of the USFS immediately began to move to bring certain operations back in house, even when doing so required that they both spend more tax money AND reduce services levels to the public. Such is the strength of incentives in any government bureaucracy to expand their scope, staffing, and budget, even when it makes no sense for the public.
This week in an article at PERC, I tell one such story in depth. Here is an excerpt:
Consider one example: The Tahoe National Forest in California recently took the operation of some of their parks out of private hands, ending a nearly 30-year partnership with one of our competitor companies.
Did the Forest Service do it to save money? The private concessionaire operated entirely with the user fees paid by visitors, using no taxpayer money, and even paid rent back to the government. The agency’s in-house operating plan for running these campgrounds requires at least $2 million in taxpayer money over the next five years to supplement user fees.
Did they do it to improve service? The private concessionaire employed more than 60 paid workers living on site, with managers who worked weekends and holidays. The Forest Service plan calls for half this number of paid employees, and none will live on site or work weekends—the busiest time for recreation.
Did they do it to address some egregious for-profit abuse? The agency is actually planning to replace dozens of paid private workers with volunteers. At the same time that the federal government is mandating higher minimum wages for campground concessionaires, the Forest Service is replacing paid workers with unpaid labor.
Did the Forest Service do it to keep user fees low? The original stated reason for kicking out the private operator was the concessionaire’s request to increase user fees in response to recent increases in California’s minimum wage. In the end, however, the Forest Service raised fees even higher than those proposed by the concessionaire.
The interview is fairly short but covers the most common questions about Recreation PPP's and private operation of public parks. It is on the World Bank blog here.
Diana Furchtgott-Roth and Jared Meyer have an article in the Federalist discussing the hypocrisy of members of Congress who advocate for higher minimum wages while paying their interns nothing. It is worth a read, but rather than excerpt it, I wanted to add another example.
The example comes from the world of private operation of public parks, the business my company is in. We keep parks open by operating much less expensively than can the government, usually using only the fees paid by park users without any additional tax dollars.
Last year, Barack Obama issued an order raising the minimum wage of Federal contractors to $10.10 an hour. Though concessionaires like us are normally thought of legally as tenants of the government rather than contractors, the Department of Labor wrote the rules in such a way that this wage order would apply to concessionaires that operate Federal parks, such as those in the US Forest Service's campground concession program.
As a result of this order and similar minimum wage increases by the State of California, a concessionaire (not our company) that ran campgrounds in the Tahoe National Forest in California informed the Forest Service that it would need to raise camping rates to offset these minimum wage increases. As an aside, wages and benefits that are tied to wage rates (e.g. workers comp and payroll taxes) make up about 50% of a private concessionaire's costs. So if minimum wages go up, say, 20%, then (given the very low margins in the business) a 10% price increase is necessary just to stay even.
The Tahoe NF rejected the fee increase request, despite the fact that the concessionaire turned over its books to show that it was losing money at the higher minimum wage rates.
So what did the Tahoe NF do? It took over operation of the campgrounds itself, ending a successful 30-year partnership with private operators. How did it solve the minimum wage issue? Simple! Minimum wage laws don't apply to the Federal government. So it will use dozens of volunteers who are paid nothing to operate the campground.
In other words, at a time when the President believes it is a burning priority to make sure every campground worker makes at least $10.10 an hour, the US Forest Service is firing private, paid workers and replacing them with volunteers.
By the way, even using volunteers, the US Forest Service will STILL be paying more to operate the campgrounds than it did with the concessionaire. Under the private partnership, the private operator paid all expenses and paid the US Forest Service a concession fee, essentially rent. The campground's operation and maintenance were paid for entirely with user fees, and the USFS actually made money from the operation. Now, even with volunteers, the USFS operating plan shows it using $2 million of taxpayer money over the next five years in addition to user fees to keep the parks open.
Update: Despite the original (stated) reason for taking over the campground, and despite using dozens of unpaid laborers, the USFS still had to raise customer rates in the end -- higher than the original private concessionaire proposed!
Sunset Magazine just had its annual "Best Campgrounds of the West" issue and we have four of the campgrounds we operate on the list -- pretty good considering we only operate in two of the four regions they cover (we operate 4 of the 54 campgrounds they recognize in CA, AZ, and NM).
On the list were Sabrina (CA), Big Pine Creek (CA), Cave Springs (AZ) and Sleepy Grass (NM). We always love getting positive feedback, of course, but are particularly thrilled in this case since the frequent criticism of private operation of public campgrounds is that private companies will somehow ruin the recreation areas for profit. Exactly how we would make money by destroying the natural beauty which draws paying visitors to these parks is never explained. But it is good to have confirmation that we private operators are doing a good job.
Three of the visitor areas we operate -- Manzanita Campground, West Fork / Call of the Canyon Day Use Area, and the Grasshopper Point Day Use Area -- are finally being allowed to reopen October 1, 2014. If you are in the area, please come visit and enjoy the fall foliage and the beautiful weather.
Well it has been a busy 10 days for travel. Last weekend my wife and I were at Harvard for our 25th anniversary of graduating from the business school there. The way the b-school taught at the time, they basically locked 90 people together (a "section") in the same room for a year and threw teachers and course material at them. I may have spent more time in a room with those 90 people than I spent in the same room with my dad growing up. So you get to know them pretty well. It was fun seeing everybody, though intimidating given all the folks my age running Fortune 50 companies or cashing out billion dollar startups.
After that, I went to Bozeman early this week and discussed free-market options for reforming the National Park Service at an event hosted by PERC, the Property and Environment Research Center. On Tuesday we went into Yellowstone and met with the Superintendent there, who had also run the whole agency for about a year. A lot of the discussion was about sustainability - financially. The NPS raises less than 10% of its revenue from visitors, and so must constantly fight with Congress for cash. One problem is that Yellowstone (perhaps their premier park) charges just $25 per vehicle for a one week admission. This is insane. We have tiny state parks in Arizona with one millionth of the appeal that fill the park despite a $20 a day entrance fee. And the NPS (or really Congress) takes every opportunity to discount this already absurdly low rate even further. You can get into all the parks for the rest of your life for a single $10 payment with the Senior pass. This essentially gives free entry to their largest visitor demographic.
Today I am in Houston for a sort of climate skeptics' conference. If you are in the area and the agenda looks interesting, they are still selling admissions (I think) for $75 for the two day event at the Hyatt downtown. Rick Perry is speaking tonight, and that is supposed to be a draw I guess but I am actually skipping that and focusing on the scientists they have through the day. Hopefully it is interesting, but I am also a conference skeptic so we will see.
Glenn Reynolds is writing about colleges, but he could just as easily be writing about public parks:
Full-time administrators now outnumber full-time faculty. And when times get tough, schools have a disturbing tendency to shrink faculty numbers while keeping administrators on the payroll. Teaching gets done by low-paid, nontenured adjuncts, but nobody ever heard of an "adjunct administrator."
Replace "faculty" with "people actually working in a park" and administrators with "headquarters staff" and he has described the management of public parks exactly. Most parks agencies are suffering from administrative bloat, with more people in headquarters than out in the field actually running parks. When they have layoffs, it is always of field staff and not headquarters administrators. In the parks world they will even ignore major maintenance needs in favor of making sure they have the funds to keep paying headquarters staff.
It is just absurd. Of course, in my case, we make a business out of this. We run public parks, and have 300 field employees actually in the parks and 2 in headquarters. It allows us to cut costs while simultaneously doing a better job.
Hans Bader submitted a FOIA on October 9 about US Forest Service and Dept. of Agriculture decision-making leading up to the unprecedented shutdown of private operations on US Forest Service land. I have seen the FOIA results and -- almost laughably -- virtually all of the documents relate to the end of the shutdown, and all of the documents are dated after the date of his FOIA. In other words, the US Forest Service essentially ignored the documents requested by the FOIA request and submitted a stacks of unrelated documents.
Former Arizona State Parks director Ken Travous takes to the editorial page of our local paper to criticize current park management and the Arizona legislature for not sending enough money to parks"
Things were looking pretty good, and I guess that’s the problem. In some odd kind of way, employing some type of sideways logic, the Legislature deemed that if State Parks is getting along well, it must be out of our control. So, after 15 years of parks acting like a business, the Legislature decided to act like a government and take their money. A little bit here and there in the beginning, to test the public reaction, and then in breathtaking swaths.
Heritage Fund ... gone. Enhancement fund ... swiped. General fund? No way. A $250,000 bequest? Oops, they caught us; better put it back.
State Parks now has a mountainous backlog of maintenance projects all because the Legislature would rather wholly own a failure than share a success. We need to put people in the halls that care about those things that we want our children to enjoy, and a governor who will stand in the breach when the next onslaught appears.
I agree with Travous that our parks could use some more funds. But what Mr. Travous ignores is that the seeds of this problem were very much sown on his watch.
Travous points out that revenues in the parks expanded to nearly $10 million when he was in charge. But left unsaid is that at the same time agency expenses on his watch ballooned to a preposterous $33 million a year**. At every turn, Travous made decisions that increased the agency's costs. For example, park rangers were all given law enforcement certifications, substantially increasing their pay and putting them all into the much more expensive law enforcement pension fund. There is little evidence this was necessary -- Arizona parks generally are not hotbeds of crime -- but it did infuriate many customers as some rangers focused more on citation-writing than customer service. There is a reason McDonald's doesn't write citations in their own parking lot.
What Mr. Travous fails to mention is that the parks were falling apart on his watch - even with these huge budgets - because he tended to spend money on just about anything other than maintaining current infrastructure. Infrastructure maintenance is not sexy, and sexy projects like the Kartchner Caverns development (it is a gorgeous park) always seem to win out in government budgeting. You can see why in this editorial -- Kartcher is his legacy, whereas bathroom maintenance is next to invisible. I know deferred maintenance was accumulating during his tenure because Arizona State Parks itself used to say so. Way back in 2009 I saw a book Arizona State Parks used with legislators. It showed pictures of deteriorating parks, with notes that many of these locations had not been properly maintained for a decade. The current management inherited this problem from previous leaders like Travous, it did not create it.
So where were those huge budgets going, if not to maintenance? Well, for one, Travous oversaw a crazy expansion of the state parks headquarters staff. When he left, there were about 150 people (possibly more, it is hard to count) on the parks headquarters staff. This is almost the same number of full-time employees that were actually in the field maintaining parks. As a comparison, our company runs public parks and campgrounds very similar to those in Arizona State Parks and we serve about the same number of visitors -- but we have only 1.5 people in headquarters, allowing us to put our resources on the ground in parks serving customers and performing maintenance. None of the 100+ parks we operate have the same deferred maintenance problems that Arizona State Parks have, despite operating with less than a third of the budget that Travous had in his heyday.
I am not much of a political analyst, but my reading is that the legislature cut park funds because it lost confidence in the ability of Arizona State Parks to manage itself. Did they really need to cut, say, $250,000 from parks to close a billion dollar budget hole? Arizona State Parks had its budgets cut because the legislature did not think it was acting fiscally prudent, like cutting off a child's allowance after he has shown bad judgement.
I have met with current Director Bryan Martyn and much of the Arizona State Park staff. Ken Travous is not telling them anything they do not know. Of course they would like more funds to fix up their parks. But they understand that before they can expect any such largess, they need to prove that Arizona State Parks will use its funds in a fiscally sensible manner. And I get the impression that they are succeeding, that the legislature is gaining confidence in this agency. The irony is that Arizona State Parks will be able to grow and get more funds only when it has overcome the problems Travous left for them.
** Footnote: Getting an actual budget number for ASP is an arduous task. I once talked to a very smart local consultant named Grady Gammage who worked with parks and finally despaired of accurately laying out the budget and allocating it to tasks. What this achieves is that it allows insiders to criticize anyone they want as being "misinformed" because almost any number one picks is wrong. The $33 million figure comes from outside consulting reports. The headcount numbers come from numbers the ASP information officer gave me several years ago. Headcount numbers are different today but the ones above are relevant to the agency as it existed when Travous left.
I have not updated this story in a while, but we continue to litigate against the Federal Government over the closure of privately-operated and privately-funded parks on public lands. The closure is over, obviously, but it is a situation that is very likely to recur and we are attempting to fight this battle now to set a precedent. The Wall Street Journal's law blog is running an update on the story here.
You can find all my posts from the shutdown here.
The other day I sent out an email listing a job opening next summer for camp hosts. The job was in an out of the way place (in Arizona, north of the Grand Canyon) and had been hard to fill. I have a list of 22,000 people who have asked to have camping jobs sent to them.
The email batch of 22,000 had a 54% open rate. That is ridiculously high.
When people ask me about my business, one of the things that is hard to explain is just how deep and visceral the skepticism of private enterprise can be. I constantly have people take single words I might have uttered in the immediacy of a live TV interview and try to craft straw man positions for me out of them**. Sometimes it is not even something I said, but something where some lazy journalist has poorly paraphrased my position.
Here is a great example, where a Flagstaff writer (who by the way knows me and my phone number quite well but did not bother to interview me) tries to take my opposition to the government shutdown to paint me with some sort of entitlement. She lectures me that I don't actually own the land on which I operate, as if that is somehow news to me. You can read my comments if you are interested, but the issue with the shutdown was the lawlessness of Administration officials, not any sense that I am entitled to the land any more than my lease contract allows me to be. (As an aside, she seems to be expressing a strong theory of landlord rights, that my landlord (the US Forest Service) should have the absolute right to shut me down whenever they want. Why is it that I don't think she has the same position vis a vis other tenants and landlords?)
By the way, compare her straw man to my actual position on public land, which is likely to the Left of many of my readers:
In my history of public discussions on private operation of public parks, it is no surprise that I run into a lot of skepticism about having any private role at all. But I also run into the opposite -- folks who ask (or demand) that the government sell all the parks to private buyers. So why shouldn't privatization of parks just consist of a massive land sale?
The answer has to do with profit potential. Over time, if in private hands, a piece of land will naturally migrate towards the use which can generate the highest returns. And often, for a unique piece of land, this most profitable use might not be a picnic area with a $6 entrance fee -- it might instead be something very exclusive which only a few can enjoy, like an expensive resort or a luxury home development (think: Aspen or Jackson Hole). The public has asked its government to own certain unique lands in order to control their development and the public access to them.
Public ownership of unique lands, then, tends to have the goal of allowing access to and enjoyment of a particular piece of land for all of the public, not just a few. Typically this entails a public agency owning the land and controlling the types of uses allowed on the land and the nature and style of facility development. I call these state activities controlling the "character" of the land and its use. (One could legitimately argue that private land trusts could fulfill the same role, and in fact I have personally been a supporter of and donor to private land trusts. However, I am not an expert in this field and will leave this discussion to others).
Having established a role for the government in setting the character of the lands we call "parks," we can then legitimately ask, "does this goal require that government employees actually staff the parks and clean the bathrooms?"
** Postscript: A couple of years ago I was asked to do an interview with Glen Beck on my proposal to keep open, via private operation, a number of Arizona parks slated for closure. It was the first time I ever did live TV, and a national show to boot. I had never seen his show but he had the reputation of being freaky and unpredictable, which just made me more nervous. Anyway, during the interview I said that typically an agency would contract with us for a group of parks, instead of just one, so the stars could help cover the cost of the dogs. This terminology is from a framework many business school students learn early, often called a BCG matrix (named after the Boston Consulting Group). It is a two by two matrix with market share or profitability on one axis and market growth on the other. Anyway, the profitable high revenue units within a company are stars and the unprofitable stagnant ones are called dogs (the profitable stagnant ones were cash cows and I can't actually remember what was in the fourth box). You can see this nomenclature is so established they actually put little pictures of stars and dogs in the boxes.
Anyway, it was a poor choice of wording, but the nomenclature is wired do deep in my now it just came out. The context of the entire interview was that I cared deeply about the parks and that I was offended that the legislature was going to let them close when there was an easy solution at hand. No matter. The #2 guy at Arizona State Parks took the video and make the rounds of the state park staff, highlighting my use of the word "dog" and inflaming their rank and file that I thought their parks were bad places and I was bent on destroying them, or something. Anyway, none of the Arizona Park Staff I have ever talked to has ever seen an operations manual for their parks but they have all seen the video of me saying "dogs."
Postscript #2: Don't ever think that consulting is different from any other business. When I was an McKinsey, we had piles of frameworks we used (the 7S organization framework being perhaps the most common and actually fairly useful, as its intent was to take focus away from structure alone in organizational work). Anyway, McKinsey had to have a growth-share matrix, but to try to differentiate this product a bit they had a 3x3 matrix rather than a 2x2.
Since I am somehow oddly onto a consulting tangent here, the single most useful thing I garnered from McKinsey was the pyramid principle in persuasive and analytical writing. I have talked to a lot of other ex-McKinsey folks, and almost all of them wonder why the pyramid principle is not taught in high school. I am not a believer in business books -- I am looking around my office and I don't think I see even one here. But if I had to offer one book for someone who wanted a business book, this is it.
A customer of mine sent me this, about a Forest Service park we run in Florida called Juniper Springs. It's a bit crude in parts, but demonstrates the frustration the public had with closing Federal parks that should have stayed open under private operation.
Does it violate Godwin's law to get a 5-star rating from Hitler?
My company has been sued a few times for slip and fall type stuff but I have never in my life been the plaintiff in a legal action. As is perhaps appropriate given my political leanings, my first ever suit was against the the Federal government, specifically against the Forest Service seeking an injunction against their closure of the campgrounds we operate in the recent shutdown.
Unfortunately, the case reached the court on the day the shutdown lifted, but the judge was still very helpful in giving the Forest Service a swift kick in the butt to hurry them along so they didn't drag their feet reopening us.,
I had feared that we would lose the opportunity to set a precedent. Since the shutdown was over I though the Court might consider this issue moot. But apparently one can continue with such litigation to set a precedent if there is reason to think the circumstances will recur. And the government attorney was kind enough to make a statement right in the court transcript (granted in context of a different argument) that this same shutdown situation is likely to reoccur as soon as early next year.
The good news is that we appear to have an argument that the Court is willing to entertain. In fact, the statement below was a statement by the judge in the hearing (it's from the hearing transcript and Q&A with the government attorney and not from any official opinion). It is not in any way binding but it gives us some confidence to try to proceed to get a ruling on the legality of our closure now, so we have it in our pocket for next time. Here is the Court's statement, addressing the government attorney:
Well, the basic problem is that the Forest Service never should have closed these that were permitted properties. And they in fact violated the agreement they had with these plaintiffs in doing so without necessity and determining they had a right to do so, which I don't think they did....
[the Forest Service has] nothing to do with the administration and management of the campgrounds other than the inspections at any given time.
So, what they have done is unreasonably close these parks, preventing the concessioners who pay a premium in order to get this permit and lease the property under the requirements in this permit -- and the Forest Service was very ill-advised to make the decision to close these grounds under these circumstances, where you have given up the maintenance and administration of these campsites.
I understand the overall obligation for public safety, but you have delegated that to private entities. And you took it away when it wasn't costing you a dollar to leave it as was. And in fact, that's where we get into the restraint of trade and the fact that there are losses which are most likely uncompensatable.
By the way the case was National Forest Recreation Association et. al. vs. Tom Tidwell. My company, among others, was al.
Forest Service Closing Only Small Private Campground Operators, Not Closing Large Ski Corporations or State Parks that Operate on Forest Service Land
As readers will know, the US Forest Service has issued and unprecedented and unnecessary order to close over a thousand privately-funded campgrounds that don't take one dime of Federal money (example here). All the 100+ parks we operate in the US Forest Service have been ordered closed.
But there appears to be more to this story. There are several groups that operate parks on National Forest lands under agreements nearly identical to ours who appear to have been exempted from the closure order.
- Large corporations that run ski resorts and certain other large resort properties on National Forest lands have been exempted. It should be noted that ski resorts operators, unlike campground operators, have full-time lobbyists stationed in Washington and can afford in-house staff lawyers to fight these kinds of orders. My guess is that knowing they would immediately get sued if they ordered larger private firms to close, the USFS focused only on smaller and more helpless private firms.
- Many state parks, including at least 3 in Arizona and many in California, are actually on US Forest Service land and operate through special use permits almost identical to those we have with the USFS, yet none of these parks have been asked to close (Slide Rock and Fool Hollow State Park in Arizona and Burney Falls SP in California are just a few examples of state parks that operate on US Forest Service land).
In other words, the US Forest Service seems to be issuing closure orders inconsistently, targeting only private operators who are too small to fight back. The USFS has not been especially clear how they are justifying this order (perhaps since it can't be justified) but they have hinted that it is either because a) they can no longer "administer" these contracts, whatever that means since they have no day-to-day administration responsibilities or b) they are removing everyone from Federal lands. Note, though, that both explanation "a" or "b" would apply equally to ski resorts and state parks operating on Federal land leases which are not being closed.
I will also add that the USFS is continuing to allow individuals to hike and camp in non-developed areas of the forests. I have no problem with this -- there is no reason for the USFS to halt public access to public land just because their employees are getting a paid vacation. But this just highlights how crazy and inconsistent their policies are. People can camp in the National Forest everywhere except in developed campgrounds where private companies who take no Federal money normally have employees on site to clean up trash and provide security and prevent fires. Many campers take good care of the land but some do not, and driving these campers out of privately-operated developed sites into dispersed areas where their impact cannot be mitigated is just another way these actions increase rather than decrease costs.
From our shutdown order:
Congress has not provided appropriations for fiscal year 2014. Pursuant to applicable legal requirements in the Antideficiency Act and Attorney General opinions addressing agency operations in the absence of appropriations, the Forest Service is unable to administer federally-owned recreation facilities. Consequently these facilities will be shut down and posted accordingly with signs provided, with gates locked where they exist, restrooms locked, and water systems shut down. Visitors in occupied sites would be given 48 hours to vacate, with the area shut down as the last visitor leaves, not to exceed 48 hours.
In other words, we pay all the bills, run the parks in an independent manner, have no USFS people stationed in the parks, but we have to shut down because the Forest Service can no longer "administer" the facilities. Huh? What day-to-day administration is necessary. Remember that the USFS itself did not think their presence was necessary, originally confirming on Tuesday that we would stay open as we had in all past shutdowns.
We often go weeks and months in these facilities without ever seeing a USFS manager. The USFS considers it so important to have staff available to "administer" these facilities that none of their recreation personnel work on weekends or on holidays, by far and away the busiest and most difficult times in these facilities.
PS- I see the part about the Attorney General. Did Eric Holder decide to close us? Doesn't he know that poor and minorities disproportionately use public vs. private recreation? Isn't that a disparate impact issue in closing us?
I got this email a few minutes ago.
I just wanted to thank you for the letter you wrote to our senators and congressmen.
My fiance and I are scheduled to be married this Saturday at Red Rock Crossing. On Tuesday, I called and was told that the park would be open and unaffected by shutdown.
As you can imagine, the news today has me very worried. We have spent literally thousands of dollars to have a special couple of hours in the park with our families who are flying in from all over the United States and the thought of not being able to have our wedding in our dream location is upsetting to say the least.
I hope and pray that your parks and campgrounds continue to stay open.
Red Rock Crossing is a privately-operated campground that the USFS has slated for closure Friday not because it uses too much Federal money (it in fact uses none and pays rent to the Treasury) but because the White House apparently wants to artificially increase the cost of the shutdown. Well, you got your wish Mr. President.
PS- for those who are concerned, we are going to find a way to help this guy get married, even if I have to sneak them into the facility myself.
The US Forest Service, under pressure apparently from the White House, has reversed both its historical precedent as well as its position yesterday and will close over 1000 public parks and campgrounds that are operated by private companies without using one dime of public money. Why does the fact that our landlord the US Forest Service is going on an unpaid vacation mean that tenants of theirs have to close up shop too? We have no idea.
My company, based in North Phoenix, operates over 100 US Forest Service campgrounds and day use areas under concession contract. Yesterday, as in all past government shutdowns, the Department of Agriculture and US Forest Service confirmed we would stay open during the government shutdown. This makes total sense, since our operations are self-sufficient (we are fully funded by user fees at the gate), we get no federal funds, we employ no government workers on these sites, and we actually pay rent into the Treasury.
However, today, we have been told by senior member of the US Forest Service and Department of Agriculture that people “above the department”, which I presume means the White House, plan to order the Forest Service to needlessly and illegally close all private operations. I can only assume their intention is to artificially increase the cost of the shutdown as some sort of political ploy.
The point of the shutdown is to close non-essential operations that require Federal money and manpower to stay open. So why is the White House closing private operations that require no government money to keep open and actually pay a percentage of their gate revenues back to the Treasury? We are a tenant of the US Forest Service, and a tenant does not have to close his business just because his landlord goes on a vacation.