Public Private Partners that Work

The National Park Service has dragged its feet over putting up new signs at the Ronald Reagan National Airport in Washington. But in other policy areas, the NPS is embracing market-based policies that Reagan touted.

Like all bureaucracies, the Park Service lives to expand its size and scope. But in this era of shrinking budgets, the agency is learning that the private sector offers a way to thrive.

The NPS has long engaged the private sector for high-profile jobs, such as restoring the Statue of Liberty in the '80s. Today, Target Corp. is helping underwrite the restoration of the Washington Monument.

Now the NPS is expanding its outside contracting for services in national parks. To meet an estimated $5.6 billion backlog of capital projects, private firms will not only provide services, but build the infrastructure as well.

At Gettysburg National Military Park, the visitors center is so rickety that a cherished painting gets wet with each rain. NPS is negotiating with a private firm to build and run a new center, bookstore, National Geographic theater and restaurant.

The $40 million in privately financed facilities would be built on private land within park boundaries and run by a nonprofit corporation. Under the proposed plan, both the land and the buildings will be donated to the Park Service after the debt is retired.

The Park Service sees such partnerships as a means to delivering high-quality services.

"If you want to balance the budget and pay less taxes, how do we build a new visitors center?" asks NPS spokesman Dave Barna. "We think we have a solution."

Even more promising are the results from the Recreational Fee Demonstration Program, a three-year experiment Congress authorized in '95 that lets the Park Service either hike or implement new fees at 100 selected sites.

The new program lets each park keep 80% of the incremental fees it collects. Before this, all money went directly to the federal Treasury. There, anything could happen. It could be spent on anything and everything—from cruise missiles to food stamps.

The old funding structure sometimes forced park managers to close popular and profitable attractions, notes Holly Fretwell, who studies the National Park Service at the Montana- based Political Economy Research Center.

Fretwell reports that in '96, Yellowstone National Park shut down a campground and two museums to save $70,000. The campground alone generated $116,000 in annual revenues. But because that $116,000 went directly to Washington while the cost of running the campground was borne by the park, it made sense to close the campground. Letting parks keep their fees balances incentives.

In its first year, the program raised $53 million more than the roughly $80 million that existing fees brought in. These fees generate less than 10% of the Park Service's $1.6 billion budget. But they add up to big bucks for individual parks.

Acadia National Park in Maine, for instance, plans to use $2 million it will collect in fees this fiscal year to restore a popular hiking trail and historic vistas. Alaska's Denali National Park will make major improvements to its campgrounds with its extra $2 million in fees.

The program is so popular that Congress will allow all fees—not just those raised under the demonstration project—to stay in the park where they're collected in 1998 and '99.

The arrangement pleases patrons and park managers alike. Eight in 10 visitors don't mind the new fees, found a NPS study. The 100 parks that raised fees saw attendance go up by 3.5%.

"If the fees are fair, easy to understand, and the money goes back to the parks, a large majority of the American people accept and support them," said Gary Machlis, chief social scientist at the NPS.

Park managers like it, Barna says, because it removes managerial decisions from "the political context."

Now if the NPS will just get those new airport signs up, the relationship will be complete.