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RCED-91-163 Federal Lands

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RCED-91-163 Federal Lands FEDERAL LANDS Improvements Needed in Managing Concessioners 1111111111111144099 ll ____ _--_ _-.” ,--___. I _-_._- I.. .“_ _.- ._._“..l.-- -___ ___---_ -__--~- -- (;AO/HC(:EI)-91-1~5:J United States General Accounting Office GAO Washington, D.C. 20548 Resources, Community, and Economic Development Division B-243993 June 11,199l The Honorable Mike Synar Chairman, Environment, Energy, and Natural ResourcesSubcommittee Committee on Government Operations House of Representatives Dear Mr. Chairman: In your June 1, 1990, request, you asked us to identify (1) the laws and policies governing recreation concessionoperations on federal lands, (2) the total number and types of concessionagreements, and (3) the total return to the government from concessionoperations. This report builds on our March 21,1991, testimony before your Subcommitteewhich describedthe results of our work as of that date.’ Our review involved federal recreation resourcesmanaged by six agencies:the National Park Service, Bureau of Land Management,U.S. Fish and Wildlife Service, and Bureau of Reclamation within the Department of the Interior; the Forest Service within the Department of Agriculture; and the U.S. Army Corps of Engineerswithin the Department of Defense. No one single law authorizes concessionoperations, and no agency main- Resultsin Brief tains a complete data baseto identify the number and types of conces- sion agreements.Further, total compensationto the federal government for the use of its recreational resourcescannot be calculated becauseof incomplete financial data and nonfee considerations that are not reported. The six federal agenciesidentified 11 different laws governing conces- sion agreementsand operations. Many of these laws are agency-specific and allow the agenciesbroad discretion in establishing policies regarding such things as the terms and conditions of concessionagree- ments, associatedfees, and the extent of agency oversight. The total number of concessionagreements is not known or documented by any of the six agencies.Only the Park Service maintains a centralized data base on concessionagreements; however, its information is not complete. At our request, the six agenciesidentified over 9,000 conces- sion agreementsin effect in 1989. ‘SeeRecreation Concessioners Operating on FederalLands (GAO/T-RCED91-16, Mar. 21,199l). Page 1 GAO/WED-91-163 Recreation Conmionere The six agenciesdo not collect the data neededto assessthe total return to the governmentfrom all concessionoperations. Also, someagency field office managersare permitted to trade fees for nonfee compensa- tion, such as capital improvementsto government-ownedfacilities. Information is generally not reported to headquarters on most of these nonfee compensationarrangements. Financial infe on abourcent of the 9,000 agreements.We determined that in cal- endar year 1989the federal governmentreceived from these agreements about $36 million in concessionfees from gross concessionrevenues of about $1.4 billion. This amount representsan averagereturn to the gov- ernment of about 2 percent. Each year millions of peoplevisit federal recreation lands. Visitor Background accommodationsand serviceson these lands are provided by private entrepreneursunder concessionagreements entered into with the fed- eral agenciesresponsible for administering the lands. Concession-oper- ated servicesinclude restaurants and snack bars; souvenir shops; marinas; ski lifts; sightseeingtours; guided fishing, hunting, and rafting trips; and a variety of other services. In recent years, attention has beenfocused on issuessuch as the quality of servicesprovided to the public by concessionoperators, the fairness of the chargesto the public for these services,the extent of conces- sioners’ profits, and the fees paid to the governmentby these conces- sioners.Since 1976,we and the Department of the Interior’s Inspector Generalhave reported on concessionerissues. (See app. I.) For example, we have cited problems in how the Park Servicemonitors its conces- sioners,determined that the fee systemswere inadequate,and con- cluded that someterms in the agreementswere not in the government’s best interest. In 1986 and 1990,Interior ’s Inspector Generalreported that the Park Serviceneeded to make improvementsin how it (1) deter- mines and establishesconcession fees, (2) implementsinternal controls over concessioncontracts, and (3) awards and renews concession contracts. While billions of dollars have been spent to develop the nation’s vast array of recreational resources,we have reported that many of these resourcesare now deteriorating and large funding increaseswill be neededto maintain and reconstruct them. For example,our 1988 report on park maintenancestated that the Park Servicehad a deferred main- tenancefunding shortfall of about $1.O billion. Similarly, in February Page 2 GAO/ICED-91-169Becreation Conmionem ES48998 1991, we testified that the Forest Service’smaintenance and reconstruc- tion backlog for its recreational resourcestotaled almost $660 million. Additionally, millions more are neededto develop specialrecreation areas to their planned levels and to maintain both them and wilderness areas at current standards. Maintenanceand reconstruction backlogshave resulted in health and safety hazards such as contaminated drinking water, untrimmed tree limbs, leaking toilets, cracked and crumbling fire pits, broken picnic tables, and disintegrating boat ramps. They have also resulted in site and resource damageincluding eroded paths, exposedtree roots, build- ings painted with graffiti, and damagedand destroyed information boards and signs. The ultimate result of these backlogs,if not corrected, will be the loss of recreational resources.Activities resulting from con- cessionoperations have contributed to these maintenanceand recon- struction backlogs.Fair and adequateconcession fees is one way that has beenproposed to help alleviate these problems. No one single law authorizes concessionoperations for all six agencies. ConcessionLaws and Rather, the agenciesidentified 11 different laws that govern concession PoliciesD iffer Among operations, many of which are agency-specific, Agencies With the exception of the ConcessionsPolicy Act aj!-HK%,which prescribesPark Servicepolicy for several key concessionagreement terms and conditions, the laws allow the agencieswide discretion in establishing concessionpolicies. As a result, the six agencieshave devel- oped policies that differ greatly, and there is little consistencyamong them regarding the types of concessionagreements, terms of the agree- ments, or the fees associatedwith these agreements.For example,under the ConcessionsPolicy Act of 1966, concessionershave the right to be compensatedfor improvementsthey construct on federal lands. This right, called “possessoryinterest, ” is unique to the Park Service. The 1966 act also grants existing Park Serviceconcessioners who per- form satisfactorily a preferential right of renewal when their agree- ments expire. The Bureau of Land Managementalso grants a preferential right of renewal; however, this right was establishedby policy and not by legislation. Forest Servicepolicy permits outfitters and guides to renew their agreementsbefore they expire, but this right is not extended to concessionerswith long-term agreements.The Corps of Engineers,Fish and Wildlife Service,and Bureau of Reclamation grant no preferential rights. Page 8 GAO/RCJSD-91-163Recreation Concessionera Policies also vary for other terms of concessionagreements. For example,the Bureau of Land Management,Bureau of Reclamation,and Fish and Wildlife Service allow their field office managersto negotiate nearly all the terms of concessionagreements, such as the length of the agreement,types of service provided, rates chargedto the public, and fee or nonfee compensationpaid to the federal government.Park Ser- vice field managersmay also negotiate agreementterms, but final approval for large agreements(revenues over $100,000)rests with the Director of the Park Service.Generally, the Forest Service and the Corps of Engineersallow their field office managersto negotiate only the length of agreements. The total number of concessionagreements is not known or documented NumberandTypesof by any of the six agencies.Only the Park Servicemaintains a centralized AgreementsAreNot data baseon concessionagreements; however, its information is not KIlOWIt complete.Because data were not available, we worked with the head- quarters staff of each agencyto develop an inventory of concession agreements. At our request, the six agenciesasked their field offices to report the number of concessionagreements in effect in 1989, as well as each agreement’stype, length, expiration date, grossrevenues, and fee paid to the federal government.On the basis of the information provided by the agencies’field offices, over 9,000 concessionagreements were identi- fied. (Seeapp. II.) The six agencieshave no commondefinitions for concessionagreements. Therefore, we grouped them into three categories:short-term agree- ments, long-term agreements,and land management1eases.2 Using the information provided by the agencies,we categorizedthem into about 7,000 short-term agreements,1,000 long-term agreements,and 1,000 land managementleases. The Park Service,Forest Service,and Bureau of Land Managementaccount for about 80 percent of all concession agreements.(See app. III.) 2Sho~tem agreements(leae than 6 years)are for servicesthat require little or no investmentin facilities. Exampleainclude Forest
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