Top Interior Department officials trimmed a staff proposal to increase the government's income share from its concessions in Yellowstone National Park, which would have cost the park a potential $12 million, an internal document shows.
The decision is the first major test of Interior Secretary Manuel Lujan's new policy to increase revenues for cash-starved national parks as concession contracts come up for renewal.Lujan and top National Park Service officials decided last month to raise payments from Yellowstone's concession operator from the current 22 percent of gross revenues annually to 25 percent. The new figure was expressed as a minimum requirement for a new concession contract to take effect in November.
A Park Service staff analysis, obtained by The Associated Press, had recommended a minimum increase to 29 percent of gross revenues when the new contract is awarded.
A comparison of potential revenues - based on figures in the staff analysis - showed that at the 29 percent figure, the park could realize an additional $12 million over the 10-year contract. Total revenues could total $86.4 million at 29 percent, compared with $74.4 million under the 25 percent plan.
The Yellowstone contract is especially crucial to Lujan's program because the money goes directly to the park for maintenance and construction. Most companies operating on Interior Department lands pay a fee to the federal treasury, which is only indirectly returned to the system through congressional appropriations.
Park Service officials prefer sending the money straight back to the parks, because there is a $1 billion construction and maintenance backlog for federal lands under Interior Department management.
Park Service spokesman George Berklacy said the staff analysis "was in no way the recommendation" of top Park Service officials. The park, the (Park Service's Rocky Mountain) region and the Washington office were in full agreement on the final outcome."
Concessionaires operate a wide range of services and facilities on federal lands: lodges, marinas, gas stations, trail rides, river trips, stores and transportation services. The Yellowstone concessionaire, TW Recreational Services, is expected to earn more than $30.4 million in the current fiscal year from its operations in the park.
Berklacy said the staff analysis concluded that the Yellowstone concessionaire could afford a higher fee because it could cut its administrative costs.
"The park felt very strongly, and the regional office and the Washington office agreed, that to put that kind of a squeeze" on the concessionaire "would constitute heavy reductions in his administrative staff," he said.
"This contract calls for considerable administrative overhead to provide services. It's important that they have adequate manpower to manage this contract. The staff analysis would leave the concessionaire with inadequate staff," Berklacy said.
The staff analysis contended that at the 29 percent figure, the concessionaire's profitability would remain "at an acceptable level and should provide the basis for considerable competition between potential bidders. . . . "
A private analysis for the Park Service by the consulting firms of Cini-Little International and SBC & Associates supported the contract structure approved by Lujan as "an excellent base bid."
Yellowstone, established as the first national park in 1872, is mostly in Wyoming but also crosses state borders into Montana and Idaho. It had 2.8 million visitors in 1990 - fourth-highest among the national parks.
The Associated Press reported last March that private businesses in some of the nation's most famed recreation spots earned more than $1.5 billion in revenues annually and returned less than 3 percent of the gross earnings to the government.
The list included federal properties managed not only by the Park Service but other agencies such as the U.S. Forest Service and the Bureau of Land Management.
In 1979, the United States purchased all ownership interest in Yellowstone buildings and facilities. When TW Recreation Services took over as concessionaire, the government set a flat fee - currently 22 percent of gross revenues - that went into a capital improvement and maintenance fund in the park.