oversight

National Park Service: Concerns Over Costs Relating to Army's Transfer of the Presidio of San Francisco

Published by the Government Accountability Office on 1997-04-03.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                       United States General Accounting Office

GAO                    Report to




April 1997




GAO/OSI/RCED-97-114R
          United States
GAO       General Accounting Office
          Washington, D.C. 20548

          Office of Special Investigations

          B-276610

          April 3, 1997

          The Honorable Frank H. Murkowski
          Chairman, Committee on Energy and
            Natural Resources
          United States Senate

          Subject: National Park Service: Concerns Over Costs Relating to Army’s
          Transfer of the Presidio of San Francisco

          Dear Mr. Chairman:

          Following your February 5, 1997, request, we agreed to perform a limited
          assessment of your concerns about possible excessive and wasteful
          expenditures by the National Park Service (NPS) at the Presidio of San
          Francisco. Those expenditures involved infrastructure and building
          improvements being made in connection with the transfer of the Presidio
          from the U.S. Army to NPS. Your specific concerns follow:

      •   Were fiber optic cables installed to every building on the Presidio?
      •   Did NPS install excess fiber optic cable capacity across the Golden Gate
          Bridge?
      •   Was unnecessary emergency response equipment purchased for the
          Presidio?
      •   Was the capability of the NPS radio system on the Presidio reduced?
      •   Were the renovation costs for a Presidio bed and breakfast reasonable?
      •   Was the Tides Foundation lease inappropriate?
      •   Was the NPS use agreement for the Presidio’s NCO (Noncommissioned
          Officer) Club inappropriate?

          On March 19, 1997, we briefed your office on the results of our inquiry and
          agreed to provide you this letter summarizing our findings.

          In brief, the actions about which the concerns were raised appeared to be
          reasonable and consistent with the objectives of the Final General
          Management Plan [GMP] Amendment, issued in July 1994, which guides the
          overall management and development of the Presidio. Our observations
          with regard to the specific concerns follow:

      •   NPS did not install fiber optic cables to every Presidio building but instead
          used, where appropriate, a mix of copper and/or fiber optic cable for the
          Presidio telephone system, as suggested in the GMP.




          Page 1                  GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
    B-276610




•   NPS installed fiber optic cables across the Golden Gate Bridge in excess of
    immediate Army needs. The excess cables were installed at minimal cost
    and may provide future revenue for the Presidio Trust.
•   NPS purchased emergency response equipment sufficient for, not in excess
    of, the Presidio’s minimum needs for fire protection, emergency, and
    medical services.
•   NPS upgraded its Presidio radio system to meet Federal Communication
    Commission requirements and improve system capabilities.
•   The costs associated with the bed and breakfast renovation project
    appeared reasonable, based on the project’s anticipated use and the
    competitive bids for the project renovation.
•   Leasing arrangements with both the Thoreau Center partners (Tides
    Foundation-Letterman Properties) and the Golden Gate National Park
    Association (NCO Club) appeared appropriate. All participants in the
    transactions appeared to benefit.

    We conducted a limited review of the seven concerns from February 9 to
    March 7, 1997. We reviewed the Presidio legislation and its legislative
    history; NPS financial data and Department of Defense documents, as
    provided by NPS; and various contracts, leases, and studies concerning the
    Presidio. We also interviewed NPS headquarters and regional officials,
    including current and former park managers, tenants, and park
    consultants. We obtained official agency comments on the results of our
    work from NPS headquarters and Presidio officials, including the Interim
    General Manager of the Presidio who acted as spokesperson for both the
    Presidio and NPS. The officials concurred with the factual content of the
    information we presented. Enclosure I provides the overall results of our
    inquiry and assessment.


    We will make copies of this letter available to others upon request. Major
    contributors to this letter include Leo Acosta, Kevin Craddock, D. Patrick
    Dunphy, Ned Friece, M. Jane Hunt, Chester Janik, and A. Richard Kasdan.




    Page 2                 GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
B-276610




If you have any questions or need additional information, please contact
me or Assistant Director Barney Gomez of my staff at (202) 512-6722.

Sincerely yours,




Donald J. Wheeler
Acting Director
Office of Special Investigations

Enclosure




Page 3                 GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
Enclosure I




  GAO   Briefing for the Chairman, Senate
        Committee on Energy & Natural Resources



        The Presidio of San Francisco




                Page 4     GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
               Enclosure I




GAO   Briefing Request

      As requested by the Senate Committee on
      Energy and Natural Resources, we agreed
      to

      -- assess concerns of possible excessive
      and wasteful expenditures related to
      infrastructure improvements at the
      Presidio of San Francisco and

      -- provide a limited assessment of the
      issues.




               Page 5        GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
               Enclosure I




GAO   The Presidio - Issues

      Were fiber optic cables installed to every
      building on the Presidio?
      Did NPS install excess fiber optic cable
      capacity across the Golden Gate Bridge?
      Was unnecessary emergency response
      equipment purchased?
      Was the capability of the radio system
      reduced?




               Page 6        GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
              Enclosure I




GAO   The Presidio - Issues (cont'd)


      Were renovation costs for the bed and
      breakfast reasonable?

      Was the Tides Foundation transaction
      inappropriate?

      Was the NCO Club transaction
      inappropriate?




              Page 7        GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
              Enclosure I




GAO   The Presidio - Overall Assessment


      The actions taken concerning these
      issues appeared reasonable and
      consistent with the objectives of the
      General Management Plan (GMP) for
      the Presidio.
      The GMP guides the overall
      management and development of the
      Presidio.




              Page 8        GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
                  Enclosure I




GAO   Background--NPS & Trust
      Relationship
      Presidio transferred from Army to NPS, 10/01/94.
      Congress did not provide for recovering costs of
      the transfer to NPS.
      In 1997 NPS will transfer control of operations to
      Presidio Trust (a wholly-owned gov't corp.).
      New approach to managing parks--perhaps "blue
      print" for future.
      Goal to save federal $$ through public/private
      partnership.
      Details of transfer to Trust to be negotiated.




                  Page 9        GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
Enclosure I




Page 10       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
               Enclosure I




GAO   Scope and Methodology


      Visited the Presidio.
      Interviewed NPS officials, including
      current and former park managers;
      tenants; and park consultants.
      Reviewed Presidio legislation; DOD and
      NPS financial data; and various
      contracts, leases, and studies.
      Limited observations/findings.




               Page 11        GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
                Enclosure I




GAO   Funding Information--1989-1997

        Estimated funding all sources--$348 M

         DOD transition funds, FY 90-94--                          $129 M
         DOD environmental remediation, FY 89-97-- $107 M
         Funds available to NPS, FY 95-97--       $112 M
         -- Appropriated funds              $74 M
         -- Tenant capital improvements     $27 M
         -- Tenant reimbursements           $11 M




                Page 12        GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
               Enclosure I




GAO   Were Fiber Optic Cables Installed to
      Every Building on the Presidio?
      Fiber optic cables were installed to
      Presidio buildings that were identified in
      the GMP for commercial use--not to
      every building.
        Army telecommunications system
        inoperable.
        Full system replacement needed.
        NPS used existing Army contract,
        minimizing cost (DOD funds--$8.7 M).




               Page 13       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
               Enclosure I




GAO   Did NPS Install Excess Fiber Optic Capacity
      Across the Golden Gate Bridge?

      NPS installed excess capacity over the
      bridge--likely create future revenue.

        Army needed telephone service to
        East Fort Baker.
        DOD paid for installation--$300 K.
        NPS provided cable capacity of 192
        lines.




               Page 14       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
               Enclosure I




GAO   Did NPS Install Excess Fiber Optic Capacity
      Across the Golden Gate Bridge? (cont'd)

        Cost of installing 192 fiber optic lines
        about the same as replacing then
        existing service.
        186 lines available for expansion or
        leasing, perhaps generating millions in
        revenue--revenue recipient undecided.
        Revenue due for conduits/easements
        not collected since 1989.




               Page 15       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
Enclosure I




Page 16       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
               Enclosure I




GAO   Was Unnecessary Emergency Response
      Equipment Purchased?
      Equipment purchased met minimum needs--
      to address 1993 NPS assurance to city and
      Army of same level of services.
        Army left NPS 2 fire trucks in 10/94, both in
        need of major repairs. (1--later retired)
        NPS purchased 3 fire trucks, $750 K
        ($200 K +$350 K--NPS; $200 K--DOD).
        Minimum need of 4 trucks met.
        Proposed modifications to existing
        firehouse appear appropriate.




               Page 17       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
              Enclosure I




GAO Was Unnecessary Emergency Response
    Equipment Purchased? (cont'd)
      Letterman Hospital closed.
      Ambulance and EMT positions not
      transferred from hospital to NPS.
      NPS leased used ambulance from
      GSA--for EMT equipment transport, not
      patient-transfer, use.
      Local hospitals provide ambulance
      transport for patients, per GMP.
      NPS reclassified existing vacancies as
      Firefighter/EMT.




              Page 18       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
Enclosure I




Page 19       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
                Enclosure I




GAO   Was the Capability of the Radio
      System Reduced?
      Capability was not reduced; system needed
      for FCC requirements.
        New system provided capabilities not
        available before--but concerns still exist.
        Upgrade of system needed--FCC required
        change from VHF to UHF in 5 yr.
        1996 NPS upgrade cost $5 M (DOD paid).
        Immediate upgrade saved $1 M.




                Page 20       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
              Enclosure I




GAO   Were Renovation Costs for the B&B
      Reasonable?
      Costs appear reasonable, based on
      anticipated use and bids.
        Historic building renovated as model
        for B&B.
        NPS estimated cost of $559 K.
        Lowest competitive bid--$619 K.
        $56 K of modifications increased final
        estimated cost to $675 K.




              Page 21       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
Enclosure I




Page 22       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
               Enclosure I




GAO   Was the Tides Foundation Transaction
      Inappropriate?
      Transaction appears appropriate.
        Transaction--55-year lease of Letterman
        buildings to Thoreau Partners. A Tides
        Foundation subsidiary is the major partner.
        NPS has specific statutory authority for this
        lease, which reflected FMV.
        Thoreau Partners' renovation costs are
        $5.5 M ($4.5 M loans; $1 M sale of tax
        credits).




               Page 23       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
               Enclosure I




GAO   Was the Tides Foundation Transaction
      Inappropriate? (cont'd)
       NPS agreed to 10-year rent relief to
        ensure project viability,
        avoid $5.5 M renovation cost,
        obtain Tides Foundation and its affiliate
        as anchor tenants,
        benefit from tenants' maintenance, and
        create a model of public/private
        partnerships.




               Page 24       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
               Enclosure I




GAO   Was the Tides Transaction
      Inappropriate? (cont'd)
       Thoreau received
        a long-term lease,
        $1 M in tax credits,
        cash flow, and
        participation in an important historic
        preservation project.




               Page 25         GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
Enclosure I




Page 26       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
Enclosure I




Page 27       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
                  Enclosure I




GAO   Was the NCO Club Transaction
      Inappropriate?
      Transaction appears appropriate.
         GGNPA and NPS entered a cooperative
         agreement.
         GGNPA paid for furnishings/landscaping--
         $289 K--& received 7-year, no-cost lease.
         NPS renovated building with Army funds--less than
         $1.4 M.
         GGNPA will use NCO Club net revenues--
         estimated to be $100-250K annually--on
         Presidio-related activities.
         NPS reviews list of all NCO Club activities.




                  Page 28        GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
           Enclosure I




(600437)   Page 29       GAO/OSI/RCED-97-114R NPS and Costs of the Presidio Transfer
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