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New study recommends privatizing state parks
Written by Mark Lineberger   
Wednesday, 19 January 2011 00:00

A study released last week recommends Arizona should look at privatizing the operations of some of its state parks.

The Arizona State Parks system, which oversees 28 parks of natural or historical significance, has fallen on hard times in the past couple of years. The agency saw its budget gutted as the State Legislature looked for ways to cut spending and solve other financial shortfalls since the economy took a turn for the worse.

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The study was commissioned by the Arizona State Parks Foundation, a nonprofit group founded in 2004 to help support the state’s park system. The 63-page report was prepared by PROS Consulting, an Indiana-based firm.

“The paramount issue is that the state of Arizona is going through a period of severe financial turmoil,” the report reads. “The financial scarcity of state funding has cast a spotlight on the debate between what are appropriate government functions, and where government has grown beyond what is necessary and affordable.”

The answer isn’t complete privatization of all parks, according to the study, but the potential creation of a “quasi-governmental agency” that would outsource some operations while leaving in place a public oversight function dedicated to ensuring that the state’s historic and cultural resources are preserved.

The study points out that the state has already had some success in cutting costs while keeping several parks open, thanks to other funding sources, including partnerships with local governments. In several cases, the parks are in towns that depend on the parks to bring people in to generate local revenue.

“To demonstrate the effectiveness of recent measures at Arizona State Parks, the field operational costs of state parks in [fiscal year] 2010 cumulatively were only $326,765 in excess of earned revenues as a result of reduced staffing and operating schedules,” according to PROS Consulting.

Five parks were closed, five parks were being operated by another entity or agency and other parks were kept open with the help of $500,000 in support from local governments.

By way of comparison, the operational costs were $1.7 million over revenues in fiscal year 2009 and a $2.3 million in fiscal year 2008.

The consulting firm looked at each park individually in order to come up with suggestions for increasing efficiency and expanding privatization opportunities.

In state parks in the Verde Valley, the study suggested a number of possible options.

At Dead Horse Ranch State Park in Cottonwood, the park actually brought in $110,000 more last year than it cost to operate. Still, the state could look at expanding offerings through private organizations, including offering amenities like a café, a bed and breakfast or even an equestrian center.

The picture is some what different in Camp Verde, home to Fort Verde State Historic Park. The town, along with the support of Yavapai County, instituted emergency funding measures along with the community helping to organize a massive volunteer operation to keep the 19th-century military post open. Just over 12,000 people visited the park in fiscal year 2010. The fort brought in a little over $35,000, but cost nearly $150,000 to operate.

The study recommends that the park could be closed from November through March, with a reduced operating schedule the rest of the year, along with management by a possible regional park authority, the aforementioned private-public “quasi-governmental” agency.

The same seasonal closure and reduced scheduling was also recommended for Jerome State Historic Park where more than 60,000 visitors brought in just over $160,000 in fiscal year 2008.

The park cost more than $270,000 to run and received $30,000 in temporary financial assistance from Yavapai County.
Red Rock State Park outside Sedona also operated at a loss, with nearly 60,000 visitors in fiscal year 2010. The park enjoyed $160,000 in financial assistance from Yavapai County and the Benefactors of Red Rock State Park. Once again, the study recommends closure from November to March, along with increased use of volunteers and outsourcing as many functions as possible. An environmental education center and an amphitheater were suggested as potential future revenue sources.
Slide Rock State Park in Oak Creek Canyon operated in fiscal year 2010 as one of the state’s more successful properties, bringing in $710,000 in revenues with a cost of $490,000 to run. A café and a zipline or canopy tour could bring in additional revenue, according to the study.

“The best solution for privatization of Arizona State Parks is to transition the current agency to a quasi-governmental entity accountable to the state of Arizona for purposes of managing state parks, promoting rural economic development, and developing financially beneficial partnerships,” the consulting firm determined. “While future funding mechanisms for the quasi-governmental agency can be determined at a later time, it is critical that the current agency funding be held harmless through the transition.”

The study is available online at the Arizona State Parks website.

 

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