Public-Private Partnerships Could Save State Parks

Privatization won't ruin California's state parks, in fact the private sector may be needed to save them

Last year it was discovered that the California parks officials were hiding $54 million, in part because they were worried that if budget officials across this debt- and deficit-riddled state found out they hadn’t spent the money yet, it would be taken and their budgets would be cut. So, it’s clear the parks department could use some transparency and efficiency upgrades. The parks also have a lot of overdue maintenance: across the state, over $1 billion in needed maintenance has been deferred.

A recent report from the Little Hoover Commission recommends paring back the agency and devolving some of its key functions-most notably, the operation of parks themselves-to third parties. “The current model of a highly centralized state-run park system is obsolete,” the Little Hoover Commission report finds.

It calls for a new operating model that includes expanding the role of outside partners in the direct operation and management of state parks. These outside partners would include other governments, nonprofits, and for-profit companies.

Many taxpayers may be unaware that in 2012 California successfully turned over the operation of four state parks to for-profit park management companies. The state signed a five-year lease with American Land & Leisure, a Utah-based recreation company, to take over the campground and day use operations at three Central Valley recreational areas (Turlock Lake, Woodson Bridge, and Brannan Island). It also handed over operation of the Central Coast’s Limekiln State Park to the California-based Parks Management Company.

In doing so, the costs of operating and maintaining these parks was transferred from taxpayers to the private operator. The companies pay all operating costs. They also pay a pre-determined percentage of the revenues collected at those parks back to the state as rent, which is put into a park maintenance fund to cover upkeep costs.

State parks have suffered from a cycle of neglect and perennial budget games in Sacramento, but they now have a path to sustainability.

For those who may fear increased commercialization-or “Disneyfication”-of parks, the contracts don’t allow that. The state continues to own the parks and set the policy direction for them. The contracts hold the private companies accountable for meeting strict performance and operating standards that protect the character and mission of the parks, as established by the state. The operator cannot so much as change the design of a bathroom without state approval.

Private, for-profit management of public parks isn’t a new idea. In fact, it’s been happening in U.S. Forest Service (USFS) areas within California and across the country since the 1980s, when federal budget cuts threatened their closure. Private management has kept them open for decades. According to a January report released by the Conservation Leadership Council that I co-authored, recreation management companies currently operate over half of the USFS’s thousands of developed recreation areas (e.g., campgrounds, day use areas) nationwide under lease agreements, including over 100 each in California, Colorado, Oregon, and Washington. Other western states like Arizona, New Mexico, and Nevada each have dozens of parks under private operation as well.

Looking ahead, it’s hard to see where California is going to come up with an infusion of cash to rebuild and maintain its parks. An April 2013 Government Accountability Office report warned of a dire outlook for state and local government budgets all the way through the year 2060, with rising healthcare and pension costs contributing to growing debt as far as the eye can see.

“The results are clear. A great public institution is falling apart. Without a bold, new course equal to the vision that created the state park system, California risks a replay of closing parks that the state can no longer afford to operate,” Virginia Ellis, who chaired the Little Hoover Commission’s state parks study, said.

The old way of running the state parks doesn’t work any more. California parks need better government and management. Public-private partnerships-along with other worthy Commission recommendations like modernizing the park agency’s financial accounting systems, requiring it to prepare annual operating audits and performance reports, and giving it more hiring flexibility-can help preserve the state parks for generations to come.

Leonard Gilroy is director of government reform at Reason Foundation. This column was originally published by the Orange County Register on May 25, 2013.