BILL ANALYSIS �
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2011-2012 Regular Session |
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BILL NO: SB 1078 HEARING DATE: April 24, 2012
AUTHOR: Evans URGENCY: No
VERSION: April 17, 2012 CONSULTANT: Bill Craven
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: State lands: delinquent rent program: state park
revenue generation program.
BACKGROUND AND EXISTING LAW
For the past several years an effort has been underway to
understand and react to the fiscal crisis at the California
Department of Parks and Recreation (DPR). DPR operates a
world-renowned network of 278 parks that serve 70 million
visitors each year. Last year, the budget bill contained
criteria for DPR to follow in closing state parks, and the
department is going through a very difficult process in
arranging to close some parks and at the same time, to work with
local nonprofits and communities in a last-ditch effort to keep
open a number of parks slated for closure. The good news is that
some, but not all, of the parks slated for closure will remain
open thanks to these new operating agreements. The bad news is
that it seems inevitable in this budget climate that some parks
will close. The exact number of those closures may not be known
until closer to the beginning of the new fiscal year, but it is
definitely fewer than the 70 that were once identified for
closure.
A key component that has been identified within DPR, by the
Legislature, and by others concerned with the future of
California's state parks is the need to establish a long-term,
sustainable funding structure that is not as dependent on the
decreasing General Fund commitment that has occurred over the
past several years. DPR and many others concerned with the
future of state parks are engaged in an urgent effort to enhance
the ability of DPR to generate more revenues for itself in ways
that are consistent with the mission of the widely varying state
parks that it administers.
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Revenue generation efforts are being considered in the ongoing
budget process by the two relevant Budget Subcommittees in both
houses, by DPR itself, and by individual legislators. SB 1078
(Evans) and AB 1589 (Huffman) are two key measures. Both are
focused on identifying new revenue enhancement opportunities for
state parks.
The 2011-12 budget for DPR contained an $11 million general fund
reduction. The proposed budget for 2012-13 contains an equal
reduction.
As noted by the LAO, the proposed budget proposes $329 million
in total expenditures for state parks which is a decrease of $93
million, or 22%, below the estimated level of current-year
spending for state parks. This reduction includes reduced bond
expenditures and General Fund support. The $329 million that is
proposed would be comprised of $80 million in visitor fees, $112
million from the General Fund, and $137 million from special
funds.
The proposed budget includes a $15.3 million appropriation to
create incentives within DPR for revenue generation. Various
strategies to increase park revenues are recommended by the LAO.
PROPOSED LAW
This bill contains various findings about the importance of DPR
becoming more self-sufficient and proposes to title this law as
the "California State Parks Sustainability Through Innovation
Act." The bill proposes to create innovation working groups at
districts or units with DPR and an innovation team with the
department.
Other provisions of the bill:
1. Require DPR to establish an innovation team consisting of not
more than 10 current employees.
2. The innovation team would be required to develop and
implement ways to increase and generate new revenues, providing
assistance to districts or state park units in developing an
innovation working group and business plans.
3. Possible revenue generation projects include: regional park
passes, cooperative agreements with county park departments to
establish a regional park pass, a voluntary income tax checkoff,
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improvements in concessionaire contracts that will improve
revenues, arrangements with transportation agencies to allow the
use of toll passes such as FasTrak to pay for park admissions,
the use of credit cards at entrance kiosks, the sale of entry
fees at retail stores, and increasing the use of historic
buildings at parks for the purpose of revenue generating
activities under specified conditions.
4. The innovation team would have certain administrative and
management responsibilities regarding the innovation working
groups that would be formed at the district or unit level
including oversight of business plans. Business plans would be
required to be consistent with a park's general plan. Business
plans would also be approved by the director, and upon approval,
could be implemented by the district or the park.
5. Innovation working groups would be formed by district
superintendents or park managers, and not by DPR across its
entire system. For each innovation working group, a community
advisory board of no more than six members would also be
established.
6. The innovation working group at a park or district would
develop a five year business plan to make the district or park
more self-sustainable and generate more revenue. It would also
make recommendations to the district superintendent about the
use of any new revenues.
7. Innovation working groups would be required to meet at least
quarterly with the advisory board and would also report annually
on the implementation of the business plan.
8. The revenues generated by the business plan would be divided
between DPR and the district or unit from which they originated.
Seventy percent would go to a new account to hold revenues for
each park district or unit and would be continuously
appropriated for purposes of revenue generation. Thirty percent
would go to the existing State Parks and Recreation Fund for DPR
to propose allocations for the entire parks system.
9. The department would report to the legislature on the
expenditure of revenues assigned to the parks/districts. Parks
or districts would report on their expenditures to DPR.
10. DPR would be directed to provide technical assistance to
nonprofits or others with operating agreements that are in place
or proposed that would enable the nonprofit to join an insurance
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risk pool for the operation of that unit of the state park
system.
ARGUMENTS IN SUPPORT
Sierra Club California supports all of the provisions in the
bill because, in its view, state parks are important natural
resources that California needs to protect and to maintain
access for all Californians. It considers the provisions in the
bill as steps that will keep parks open for all visitors.
Audubon California considers state parks to be of vital
significance as places of recreation, but also for their habitat
values for birds and other wildlife.
COMMENTS
1. This bill is an important measure that parallels ongoing
planning at DPR, possible action in the budget that directs DPR
to undertake yet-to-be determined revenue generation activities,
and legislation in the Assembly. As such, the Committee should
be aware that several provisions in this bill may undergo some
changes as the author continues her work on this bill.
2. In addition, based on discussions in the Budget Committee
subcommittee process, staff anticipates that DPR may propose its
own revenue generation program in the near future, and the
author may find that this bill and the DPR proposal may need to
synchronized in ways that can't be predicted when this bill is
heard in Committee. One example could well be the proposed
division of revenue generated by the innovations that will be
proposed. There may be reasons that something other than the
70-30 split proposed in this bill should be enacted. That said,
the idea of allowing the districts or individual parks to retain
a significant share of the revenues they generate is a very
important principle that should be maintained in the bill.
3. This bill allows innovation working groups to be proposed by
districts or by parks. Another approach would be to require all
districts to develop a revenue generation program, even a modest
one, that would help with the DPR fiscal crisis. For example,
virtually all districts could start collecting day use admission
or parking fees. DPR's own data indicates that approximately 30%
of day use at state parks is free.
4. The bill contains a continuous appropriation, which is often
discouraged by the Legislature, often for very good reasons.
This may be a case in which a continuous appropriation makes
some sense in order to allow the department and its parks or
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units to retain access to the funds it generates. This is a
simple incentive that lead the department or individual parks to
generate additional revenue and to pay for the projects that
will allow DPR to create those additional revenues. These funds
could also be used to generate better visitor data that will
help DPR target is revenue generation activities. However, the
exact amount of money that is appropriated for this purpose and
any other provisions related to the continuous appropriation
will likely be resolved after the bill leaves this Committee.
Such a continuous appropriation is also included in the
Governor's budget.
5. The author should consider additional criteria in the
business plans that are approved that focus on projects with the
greatest potential for revenue generation and that consider
prioritization of those projects. The business plan should
include a market analysis, cost information, marketing plans,
and other traditional components of a business plan.
6. The author may want to explore whether a park's revenue
generation proposals must be authorized by a parks general plan.
Many general plans are decades old and as such, did not
contemplate revenue generation activities that are being
considered in the current budget crisis. For example, if DPR is
considering expansion of campgrounds to allow for more
recreational vehicles or to construct cabins, a bed and
breakfast, or a special events facility that could be rented for
weddings or other activities, the general plan may be silent on
such innovations. Although some may think such a proposal is
controversial, we all need to think about whether revenue
generation activities should be delayed while amendments to
general plans are considered and potentially adopted. Typically
such an amendment process takes years. It may be preferable to
allow the director to approve revenue generation activities that
are consistent with a park's mission, rather than its general
plan, and to accommodate such an outcome.
7. The Committee will likely want to continue to work with the
author on this bill assuming it goes forward and may ask to
re-hear the bill later in the session.
SUPPORT
Audubon California
Sierra Club California
OPPOSITION
None Received
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