United States General Accounting Office
GAO Testimony
Before the Subcommittee on Interior and Related
Agencies, Committee on Appropriations, House of
Representatives
For Release
on Delivery
Expected at
RECREATION FEES
10 a.m. EST
Wednesday
March 3, 1999
Demonstration Has
Increased Revenues, but
Impact on Park Service
Backlog Is Uncertain
Statement of Barry T. Hill, Associate Director,
Energy, Resources, and Science Issues,
Resources, Community, and Economic
Development Division
GAO/T-RCED-99-101
Mr. Chairman and Members of the Subcommittee:
We are here today to discuss the Recreational Fee Demonstration
Program. Most of my statement will summarize the results of our recently
issued report on this program.1 However, as you requested, we will also
comment on two other issues—(1) the rate at which the National Park
Service spends revenue collected under the program in comparison with
the other agencies and (2) the impact of the fee program on the Park
Service’s maintenance needs.
In summary, our overall message about the demonstration program is
clearly positive. The program is providing hundreds of millions of dollars
to improve visitor services and address the backlog of unmet needs in the
four land management agencies. In addition, those who pay the fees
generally support the program, and it has not appeared to have adversely
affected visitation rates. Nonetheless, it is appropriate to focus today on
several areas in which changes or improvements may be needed.
Specifically, these issues include the need for greater coordination of fees
by the agencies, greater innovation and flexibility in revenue distribution.
These issues are important because the demonstration program is still at a
stage where experimentation is encouraged. Most of our observations
relate to doing just that—experimenting more to determine what works
best. Regarding the Park Service, we found that the agency’s spending of
demonstration program revenue has lagged substantially behind the other
three agencies in the first 2 years of the program. This has been due
primarily to the larger number and scale of Park Service projects and
additional scrutiny these projects are receiving within the agency and the
Department of the Interior. Further, the Park Service has not yet
developed accurate and reliable information on its total deferred
maintenance needs. Until this is done, determining the impact that the
revenue from the fee program is having on these needs is not possible.
The demonstration program affords opportunities to collect new and
Demonstration increased fees to the major agencies that provide the public with
Program Successful in recreational opportunities on federal land—the Park Service, Bureau of
Raising Revenue, but Land Management, and Fish and Wildlife Service (all within the
Department of the Interior), and the Forest Service (within the
Improvements Can Be Department of Agriculture). Each agency can experiment with new or
Made increased fees at up to 100 sites. By September 1998, such fees were in
1
Recreation Fees: Demonstration Fee Program Successful in Raising Revenues but Could Be Improved
(GAO/RCED-99-7, Nov. 20, 1998).
Page 1 GAO/T-RCED-99-101
place at 312 sites—100 administered by the Park Service, 77 by the Fish
and Wildlife Service, 68 by the Bureau of Land Management, and 67 by the
Forest Service. The four agencies reported that, because of the program,
their combined recreational fee revenues have nearly doubled, from about
$93 million in fiscal year 1996 (the last year before the demonstration
program was implemented) to about $180 million in fiscal year 1998. The
Park Service collected 80 percent of the fee revenue in fiscal year 1998, the
Forest Service 15 percent, the Bureau of Land Management 3 percent, and
the Fish and Wildlife Service about 2 percent.
Visitation appears largely unaffected by the new and increased fees,
according to surveys conducted by the four agencies. In fiscal year 1997,
visitation at the demonstration sites increased overall by 5 percent
compared with 4 percent at other sites. Effects varied somewhat from
location to location. Of the 206 sites in the demonstration program in fiscal
year 1997, 58 percent had increases in visitation, 41 percent had decreases,
and 1 percent were unchanged. However, with data from only 1 year, it is
difficult to draw definitive conclusions, either about the lack of a negative
effect on visitation at most sites or about whether fees had an impact at
sites where visitation declined.
Now, I would like to discuss several areas in which we think
improvements can be made to the demonstration program.
Improving Interagency The demonstration program was authorized with the expectation that the
Coordination four agencies would coordinate their fee collection efforts, both among
themselves and with state and local agencies, where it made sense to do
so. During our review, we did find examples of such coordination, with
demonstrated benefits for the public. In Utah, for example, where the Park
Service’s Timpanogos Cave National Monument is surrounded by a
recreation area in the Forest Service’s Uinta National Forest, the two
agencies decided to charge a single entrance fee for both. Such
coordination can reduce agencies’ operating costs, strengthen resource
management activities, and provide more agency personnel to assist
visitors.
We also found, however, that agencies were not taking full advantage of
this flexibility. For example, the Park Service and the Fish and Wildlife
Service manage sites with a common border on the same island in
Maryland and Virginia. The two sites are Assateague Island National
Seashore and Chincoteague National Wildlife Refuge. Administratively, the
Page 2 GAO/T-RCED-99-101
two agencies cooperate on law enforcement matters and run a joint permit
program for off-road vehicles, and the Park Service provides staff to
operate and maintain a ranger station and bathing facilities on refuge land.
However, when the agencies selected the two sites for the demonstration
program, they decided to charge separate, nonreciprocal entrance fees of
$5 per vehicle. Officials at the refuge told us that visitors are sometimes
confused by this lack of reciprocity. Our report discusses other cases in
which greater coordination among the agencies would either improve the
service to the public or permit greater efficiency in implementing a fee
program. These cases included (1) backcountry fees in Olympic National
Park and Olympic National Forest in Washington State, and (2) a proposed
fee at Park Service and BLM lands located in the El Malpais area of New
Mexico.
Demonstration sites may be reluctant to coordinate fees partly because
the program’s incentives are geared towards increasing their revenues. By
contrast, because joint fee arrangements may potentially reduce revenues
to specific sites, there may be a disincentive among these sites to
coordinate. However, at sites such as Assateague and Chincoteague, the
increase in service to the public may be worth a small reduction in
revenues. That is why our report recommends that the agencies perform a
site-by-site review of their demonstration sites to identify opportunities for
greater coordination. In commenting on our report, the agencies generally
agreed that more could be done in this area.
Greater Innovation Would The demonstration program also encouraged the four agencies to be
Make Fees More Equitable innovative in setting and collecting their own fees. Such improvements
take two main forms: making it as convenient as possible for visitors to
pay and making fees more equitable. We found many examples of agencies
experimenting with ways to make payment more convenient, including
selling entrance passes using machines like automated tellers, selling
hiking permits over the Internet, and selling entrance or user permits
through vendors such as gas stations, grocery stores, and convenience
stores. However, we found fewer examples of the agencies experimenting
with different pricing structures that could make the fees more equitable,
such as basing fees on (1) the extent of use or (2) whether the visit
occurred during a peak visitation period.
Most of the experiments with pricing have been done by the Forest
Service or the Bureau of Land Management. These two agencies have
experimented with setting fees that vary on the basis of (1) how long the
Page 3 GAO/T-RCED-99-101
visitor will stay or (2) whether the visit occurs during a peak period (such
as a weekend) or an off-peak period (such as midweek or during the off
season). For example, a 3-day visit to a recreational area might cost $3 per
car, compared with $10 per car for a 2-week visit. Such pricing has
resulted in greater equity to the visitors, in that visitors who use the area
for greater lengths of time pay higher fees. It would appear to have
broader applicability in the other agencies as well.
By contrast, the Park Service has done little to experiment with different
pricing structures. Visitors generally pay the same fee whether they are
visiting during a peak period (such as a weekend in the summer) or an
off-peak period (such as midweek during the winter) or whether they are
staying for several hours or several days. A more innovative fee system
would make fees more equitable for visitors and might change visitation
patterns somewhat to enhance economic efficiency and reduce
overcrowding and its effects on parks’ resources. Furthermore, according
to the four agencies, reducing visitation during peak periods can lower the
costs of operating recreation sites by reducing (1) the staff needed to
operate a site, (2) the size of facilities, (3) the need for maintenance and
future capital investments, and (4) the extent of damage to a site’s
resources.
Because it was one of the goals of the program, and because it could result
in more equitable fees to the public, our report recommends that two
agencies—the Park Service and Fish and Wildlife Service—look for further
opportunities to experiment and innovate with new and existing fees.
Permitting Greater The demonstration program required the agencies to spend at least
Flexibility in Allocating 80 percent of the fee revenues at the site where these revenues were
Revenues generated. However, some demonstration sites are generating so much
revenue as to raise questions about their long-term ability to spend these
revenues on high-priority items. By contrast, sites outside the
demonstration program, as well as demonstration sites that do not collect
much in fee revenues, may have high-priority needs that remain unmet. As
a result, some of the agencies’ highest-priority needs may not be
addressed.
For many sites in the demonstration program—particularly in the Park
Service—the increased fee revenues equal 20 percent or more of the sites’
annual operating budgets. This large amount of new revenue allows such
sites to address past unmet needs in maintenance, resource protection,
Page 4 GAO/T-RCED-99-101
and visitor services. The Park Service has set a priority on using fee
revenues to address its repair and maintenance needs. Some sites with
high fee revenues may be able to address these needs within a few years.
However, the 80-percent requirement could, over time, preclude the
agencies from using fee revenues for more pressing needs at other sites.
Two of the sites we visited—Zion and Shenandoah National Parks—are
examples of how this issue may surface in the near future. At Zion, park
officials told us that the park expected to receive so much new fee
revenue in fiscal year 1998 (about $4.5 million) that the park’s budget
would be doubled. The park’s current plans call for using this additional
money to begin a $20 million alternative transportation system. However,
park officials said that if for some reason this particular project did not
move forward, they might have difficulty preparing and implementing
enough projects to use the available funds in a manner consistent with the
program’s objectives. At Shenandoah, fee revenues for fiscal year 1998
were expected to be about $2.9 million—enough money, the park
superintendent said, to eliminate the park’s estimated $15 million repair
and maintenance backlog in a few years.
This is a significant and sensitive issue that involves balancing important
features of the program. Specifically, the increased efficiency that would
be achieved by allowing the agencies more spending flexibility needs to be
balanced with the continued need to demonstrate to the visitors that
improvements are being made with the new or increased fees and the need
to maintain incentives to collect fees. Our report stated that as the
Congress decides on the future of the fee demonstration program, it might
wish to consider modifying the current requirement. Providing some
further flexibility in the spending of fee revenues would give agencies
more opportunities to address their highest-priority needs among all of
their field units. If this is not done, undesirable inequities could occur
within agencies if and when the current legislation is made permanent. At
the same time, however, any change in the requirement would need to be
done in such a way that (1) fee-collecting sites would continue to have an
incentive to collect fees and (2) visitors who pay the fees will continue to
support the program. Visitor surveys show that putting fees to work where
they are collected is a popular idea.
Page 5 GAO/T-RCED-99-101
Through the first 2 fiscal years of the program, the Park Service retained
Park Service Spending about $182 million in recreational fee revenue, which represents over 80
Lags Behind Other percent of the total amount of revenue generated by all four of the
Agencies participating agencies. However, by the end of fiscal year 1998, the agency
had obligated only about $56 million, or about 31 percent, of this revenue.2
This spending rate was by far the lowest among the four agencies
participating in the program. Specifically, by the end of fiscal year 1998,
the Forest Service had spent about 63 percent of its revenues; the Fish and
Wildlife Service about 56 percent; and the Bureau of Land Management
about 72 percent. (See app. I for more specific revenue and spending
information.)
In order to understand why the rate of spending in the Park Service is so
far behind the other agencies, we visited four parks. For these parks, the
percentages of revenue available to them that was obligated through
September 30, 1998, varied from a low of 10 percent at Golden Gate
National Recreation Area to a high of 48 percent at Olympic National Park.
The other two parks we visited were Rocky Mountain National Park and
Grand Canyon National Park, which obligated 41 and 20 percent,
respectively. In total, these parks had proposed 101 projects for funding
under the demonstration fee program. Projects at the four parks ranged
from the planning and construction of major facilities, like a visitor
transportation and orientation center at the south rim of the Grand
Canyon for $18 million, to small projects, like the rehabilitation of trail
signs in Golden Gate for $11,000. They also included other projects, like
the replacement of outhouses and campground rehabilitation.
Our work indicates that there are two main factors that have contributed
to the Park Service’s low rate of spending over the program’s first 2 years.
These factors are that (1) the project review and approval process has
delayed the start of construction and maintenance projects and (2) the
capacity of the agency to handle the large number of projects planned
under the program is limited. The large size of some of the projects being
funded by the demonstration fee program also contributes to slowing the
agency’s spending rate.
2
The spending information that is provided by the agencies reflects funds obligated.
Page 6 GAO/T-RCED-99-101
Park Service Projects In 1997, this Subcommittee and others heavily criticized the Park Service
Receive More Scrutiny because of spending abuses involving an outhouse costing over $300,000 at
Than Those of Other one park and employee residences costing over $500,000 at another. In
response to these criticisms, and in order to avoid similar abuses in the
Agencies future, the Park Service and the Department of the Interior are paying
particularly close attention to how individual park units are using the
revenues provided by the demonstration fee program.
Park Service headquarters officials review all projects approved by regions
before individual parks are permitted to proceed with construction. As of
March 1998, the Park Service also required an additional review by top
agency officials of all projects costing $500,000 or more. Furthermore,
another level of review was added when Department of the Interior
officials decided that they too would review all of the projects that the
Park Service proposed for its recreational fee revenue. The
implementation of this Departmental-level review added more time to the
project approval process. Adding these layers of review specifically for
Park Service projects helps explain why the rate of spending for the
agency has been the lowest among the agencies participating in the
program. However, in light of the spending abuses noted earlier, in our
opinion, the additional Park Service and Departmental reviews appear
prudent.
In contrast, the projects being done by the other three agencies—the
Bureau of Land Management, the Fish and Wildlife Service, and the Forest
Service—have not had these additional levels of scrutiny. In those
agencies, determining how the fee money will be spent has been left to
on-site and regional managers. Not surprisingly, the spending rates for
these other agencies have been substantially higher than for the Park
Service.
Capacity of the Agency to Another factor limiting the pace of the Park Service’s spending relative to
Handle Large Volume of the other agencies in the program has been the agency’s ability to handle
Projects Limits Spending the large volume of projects that are now in the pipeline. All of the parks
we visited have had substantial funding increases in recent years to help
them address maintenance and other needs. These increases were due to
not only to the increased funding made available from the demonstration
fee program but also from appropriated funds such as those for repair and
rehabilitation and line item construction projects. This large inflow of
funding from a variety of sources has, according to some park managers
Page 7 GAO/T-RCED-99-101
we interviewed, exceeded their ability to get projects initiated and
completed.
At most of the parks and regional offices we visited, officials said there
was a bottleneck of projects that were both approved and funded but
waiting to be initiated. For example, Golden Gate National Recreation
Area has 14 projects costing about $4.7 million that have been approved as
part of the fee demonstration program. Managers at the site said they have
spent little to date on these projects because the current staff cannot
prepare plans and manage the large volume of projects now funded. Two
of the other parks we visited, Rocky Mountain and Grand Canyon, have
similar explanations about why their spending was relatively slow.
Another factor that has some impact on the spending rate for the Park
Service is the large scale of some of the projects being undertaken by the
agency. Some parks must accumulate a substantial amount of funds before
they could proceed with these large projects. For example, while Grand
Canyon has very high revenue under the program, over $20 million
annually, it also has some of the largest projects planned, like a new,
multimillion-dollar visitor orientation and transportation center. To begin
this project, the park has had to set aside millions of dollars during the
first years of the program in order to fund the construction contracts for
the new facility in later years. Setting funds aside for later use has the
effect of lowering the rate of expenditures in the initial years of the
program.
Given the substantial increase in funding that the Park Service will receive
Impact of the Fee under the demonstration fee program, now more than ever the agency will
Program on Park have to be accountable for demonstrating its accomplishments in
Service Maintenance improving the maintenance of Park Service facilities with these additional
resources. The agency cannot now do this. The Park Service will need to
Needs develop more accurate and reliable information on its deferred
maintenance needs (as well as its other park operating needs) and to track
progress in addressing them.
In administering its recreational fee demonstration program, the Park
Service decided that using the revenue to address its maintenance needs is
a high priority. However, during hearings before this Subcommittee last
year, we reported that the Park Service did not have a common definition
of what should be included in its backlog of maintenance needs and did
Page 8 GAO/T-RCED-99-101
not have a routine, systematic process for determining these needs.3 As a
result, the agency was unable to provide us with a reliable estimate of its
deferred maintenance needs.
At the same hearing, Interior’s Assistant Secretary for Policy, Management,
and Budget made several commitments to address these problems. The
commitments were to (1) establish common definitions for deferred
maintenance and other key maintenance and construction terms;
(2) develop improved data collection processes for accumulating data
about annual and deferred maintenance needs, among other things;
(3) provide guidance for preparing a 5-year priority maintenance and
construction plan for the fiscal year 2000 budget; and (4) issue instructions
for reporting deferred maintenance in agency financial statements.
To date, the Department of the Interior has made some progress in
meeting these commitments. In February 1998, common definitions were
developed for deferred maintenance. The Department has also provided
guidance for the agencies to use to develop priority maintenance plans. In
addition, the Department has issued instructions on how agencies should
report deferred maintenance in their financial statements. These are all
positive steps that should, if implemented properly, help the Park Service
as well as other Interior agencies manage their maintenance activities.
Nonetheless, the Park Service still does not have accurate information on
its maintenance needs. This is evident from a February 1998 Interior
report,4 which states, among other things, that the deferred maintenance
needs of Interior agencies, including the Park Service, have never been
adequately documented. To remedy this situation, Interior and its
agencies, including the Park Service, are beginning to develop a
maintenance management system that can generate consistent
maintenance data for all Interior agencies. Interior expects to identify the
systems needed to generate better maintenance data needs by June 1999.
However, this is just a first step. Interior and its agencies are also in the
process of obtaining better information on the condition of their facilities.
Any data improvements resulting from this effort will likely be several
years away.
The Congress has attempted to help the Park Service address its deferred
maintenance and other program needs in recent years by providing
3
National Park Service: Maintenance Backlog Issues (GAO/T-RCED-98-61, Feb. 4, 1998).
4
Facilities Maintenance Assessment and Recommendations, U.S. Department of the Interior,
February 1998, prepared for the Interior Planning, Design and Construction Council.
Page 9 GAO/T-RCED-99-101
additional appropriations and revenue from the recreational fee program.
Given this substantial increase in funds, the Park Service needs to be held
accountable for demonstrating what is being accomplished with these
financial resources. To date, however, the agency is not yet able to
determine how much these additional funds are helping because it does
not know the size of the problem. Accordingly, while we and others have
frequently reported on the deteriorating conditions of the agency’s
facilities, until accurate, reliable and useful data are developed about the
size and scope of the agency’s maintenance needs, the agency will be
unable to determine how much progress is being made to address these
needs and resolution of the deferred maintenance problem will continue
to elude the agency.
In closing Mr. Chairman, while our testimony today has focused on
improvements that could be made to the fee demonstration program, it is
important to remember that this program appears to be working well and
meeting many of the law’s intended objectives. So far, the demonstration
program has brought over $200 million in additional revenue to recreation
areas across the country with no apparent impact on visitation patterns. It
has created opportunities for the agencies—particularly the Park
Service—to address, and in some cases resolve, their past unmet repair
and maintenance needs. There are now more than 2 years remaining in
this demonstration program. These 2 years represent an opportunity for
the agencies to further the program’s goals by coordinating their efforts
more, developing innovative fee structures, and understanding the
reactions of the visitors.
This concludes my statement. I would be happy to answer any questions
you or the other Members of the Subcommittee may have.
Page 10 GAO/T-RCED-99-101
Page 11 GAO/T-RCED-99-101
Appendix I
Total Fee Revenues and Obligations for Four
Agencies Through September 30, 1998
Dollars in thousands
Percent of
Total revenues
Agency Total revenues obligations obligated
Park Service $181,217 $56,116 31
Fish and Wildlife Service $3,712 $2,095 56
Forest Service $30,029 $19,045 63
Bureau of Land Management $3,947 $2,857 72
Total $218,905 $80,113 37
Source: Department of the Interior and the Department of Agriculture.
(141251) Page 12 GAO/T-RCED-99-101
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Address Correction Requested
Recreation Fees: Demonstration Has Increased Revenues, but Impact on Park Service Backlog Is Uncertain
Published by the Government Accountability Office on 1999-03-03.
Below is a raw (and likely hideous) rendition of the original report. (PDF)