Interior Secretary Manuel Lujan has approved a work plan that is supposed to boost the federal government's revenues from private concessions in national parks and make other changes in the way concessions are handled.
Concessionaires make money from three large contracts in Utah national park regions, plus numerous small river-running operations along white-water rivers.Together, they likely are worth many millions of dollars yearly to their owners. However, the National Park Service maintains that a court decision prevents it from telling how much the exclusive contracts with this public agency are worth.
A memorandum concerning the 17-page work plan was sent on Sept. 18 from NPS director James M. Ridenour to Lujan. It says the service's goal is to make the changes by October 1991.
The first task listed by the work plan is to "set the franchise fee and other returns to the government" at the point where the concessionaire's profit is about average to what he would expect if operating outside a national park.
By law, the Park Service must examine its franchise fees every five years, deciding whether they are correct in light of the concession's profitability and assets, as well as other considerations. Concessionaires provide a tremendous amount of financial information, most of it confidential under NPS rules.
In the past the franchise fee has been "sort of a minimum amount," the official said. That is because the emphasis was on obtaining services that the NPS wanted for the public.
Some of those services provided by concessionaires aren't very profitable. For example, the company might have more employees than it strictly needs, so that there are enough people around to respond to questions by park visitors.
Revenue from the concession contracts was made secondary to preservation of park resources, and services to the public. But now Lujan wants what the official calls a "reasonable amount" of money to be returned to the Park Service also.
Another recommendation in the work plan is, "Where a contract term of more than five years is required due to economic considerations, the contract must be approved by the director." Also, the length of a concession contract is generally to be limited to a maximum of 15 years. Some of the contracts in effect today extend for 20 years at a stretch.
A draft bill to be introduced in Congress is undergoing a review by the Interior Department, in which better ways would be developed to fund maintenance and rehabilitation of facilities covered by concession contracts.
One proposal was vetoed by the Interior Department. It would have led to a bill in Congress proposing a change in the way concession contracts are renewed. Under that proposal, the existing concessionaire's preference right would be left up to the discretion of federal officials.
A National Park Service official in Washington, D.C., who asked the Deseret News not to use his name, said, he thinks Lujan wants the Park Service to change its way of doing business with the concessionaires.
"I think the secretary does want us to collect more in franchise fees," he said. "By the same token, he wants to continue an emphasis on good maintenance of facilities in the parks, and wants us to continue our emphasis to make sure it's economically feasible for the concessioners to continue to operated."
This means that when the Park Service renegotiates contacts, the Park Service may be tougher with the concessioners, trying to increase the franchise fees.
The official added that he hopes the change in the contracts won't make the concessionaires cut corners.
A main emphasis would be to change the possessory interest that concessioners have in building that they put up on park land. Because National Park Service land is not for sale, these buildings are officially park property.
But to allow financing of structure, such as a lodge in a national park, the Park Service allows the concessionaire to have what is called possessory interest, equivalent to the title of the property.
Under the work plan, the Park Service would replace this with a new system in which the book value of the concessionaire's interest is based on his investment, depreciated over a set period. That way, eventually the possessory interest is extinguished, and the building is owned by the Park Service, unencumbered.
Utah park concessions
Major concession contracts are in effect in three national park areas in Utah:
- Bryce Canyon National Park, where the concessionaire, TW Recreational Services of Cedar City, pays a fee of 2 percent of its gross revenues from the concession. The 20-year contract expires on Dec. 31, 2003. A substantial building program at Bryce is cited by National Park Service officials as the reason for the long contract.
- Zion National Park, where TW also pays a fee of 2 percent of gross revenues. This contract also expires on Dec. 31, 2003.
- Glen Canyon National Recreation Area: There are two large contracts at Lake Powell. The "Uplake Contract," covering the Utah resorts, expires on Dec. 31, 2007, and the franchise owner pays a 2.2 percent fee. The Wahweap Contract, for the Arizona resorts, is pegged at 2.25 percent and expires on Dec. 31, 1998. Both concessions are operated by ARA Leisure Services of Philadelphia, Pa.