Fee Program More than Meets Costs

The fee program has operated at a net gain, both in aggregate and when the 16 locations collecting fees are considered individually.  The result of the fee program’s achievement is that, through the enterprise account, users are paying for capital construction at the parks and sites.  The enterprise account received just under $1 million dollars in fee revenues in 2000. 

SPHS has actively managed the fee program by isolating the expenses and assessing the bottom line for each location collecting fees.  Building on successes to date, SPHS can continue to improve the program by tracking permit use patterns and compliance levels with fees, and by re-evaluating how the fee collection staff is currently deployed.

Fee Program Operates at a Net Gain

In aggregate, the fee program has operated at a net gain:  revenues have exceeded expenditures for the past four fiscal years.  As shown in Figure 4, the net gain of the fee program during that period was nearly $2 million.  SPHS spent approximately $1 million for the fee program, or roughly 6 percent of the total authorization for the Parks and Sites Program during this period.

Figure 4:  Fee Program Revenues & Expenses

July 1, 1996 through June 30, 2000

FY97-98

FY99-00

Total

Fee Program Revenue

$1,308,005

$1,773,379

$3,081,384

Fee Program Expenses

$568,667

$555,780

$1,124,447

Net gain

$739,338

$1,217,599

$1,956,937

Source:  SPACR. 

Note:  These amounts do not include administrative or overhead costs.

SPHS tracks the direct costs of the fee program through internal budget categories.  Direct expenses include personnel costs for seasonal and intermittent fee collectors and supervisors, utilities and maintenance for fee stations, and supplies for the fee program. 

The largest expense for the fee program is personnel costs, which are tracked uniformly through the payroll system.  SPHS reports the number of seasonal fee collector positions varies since parks and sites employ fewer fee collectors early in the season, and more at the height of the summer and on peak weekends.  Superintendents reported a total of 43 fee collectors, 8 fee supervisors, and 3 other seasonal employees in 2000.  The overall determinant of the personnel employed for fee collection is the money available in the 100 series of the fee program budget, totaling $248,025 in fiscal year 2000.

Superintendents exercise some individual judgment regarding how supplies, utilities, and maintenance are charged to the fee program, as it can be more difficult to segregate these expenses related to the fee program from other operating expenses.  SPHS reports, however, thatthe expenses of the telephone and other utilities in a fee booth typically are metered separately and can therefore be charged to the fee program. 

Statute allows SPACR to contract with private selling agents around the state to sell annual permits, with selling agents retaining ten percent of the fee revenue they collect.  We considered this to be a fee program expense,amounting to $8,193 over the two most recent bienniums.

The costs presented in this report are not the “fully-loaded” costs, which would be the direct costs described above plus a proportional share of the overhead expenses of the particular location and the agency.  Wyoming state government lacks a cost accounting system to track overhead by program.  Nevertheless, we believe the overhead costs of the fee program are not large, and certainly are not large enough to change the overall net gain.  The fee program is not associated with agency functions that would be avoidable if the program were cancelled. 

Each Location Produced a Net Gain in 2000

The year 2000 was the first full year during which the fee program was completely implemented.  For this reason, we reviewed program revenues and expenses for the 16 individual locations collecting fees for calendar year 2000.  At each of the 16 parks and sites, the fee program operated at a net gain, although there is considerable variation among them in the size of the net gain.  Figure 5 details this information.

Figure 5:  Fee Program Revenues and Expenses

Calendar Year 2000[1]

Location

Revenues

Expenses

Net Gain/loss

Revenue/ Expense

Boysen

$95,076

$51,197

$43,879

$1.86

Buffalo Bill

$46,367

$27,601

$18,766

$1.68

Curt Gowdy

$92,432

$45,529

$46,903

$2.03

EKW

$25,868

$15,790

$10,078

$1.64

Ft Bridger

$32,336

$13,993

$18,343

$2.31

Ft. Fetterman/Kearny

$18,402

$5,013

$13,389

$3.67

Glendo

$497,494

$54,546

$442,948

$9.12

Guernsey/Hawk Springs

$196,346

$46,825

$149,521

$4.19

Keyhole

$176,942

$50,412

$126,530

$3.51

Medicine Lodge

$13,674

$3,277

$10,397

$4.17

Seminoe

$46,854

$2,349

$44,505

$19.95

Sinks Canyon

$15,036

$447

$14,589

$33.64

South Pass City

$17,685

$14,659

$3,026

$1.21

Trail End

$8,226

$2,619

$5,607

$3.14

Selling Agents

$41,418

$5,014

$36,404

N/A

Cheyenne HQ

$10,915

$52,001

($41,086)

N/A

Total

$1,335,071

$391,272

$943,800

$3.41

Source:  LSO analysis of SPACR data.

The ratio of revenue to expenses reflects how much revenue was raised for every dollar spent on the fee program.  For the fee program in total, $3.41 was collected for every dollar spent to operate the fee program.  We used two additional means of analyzing the results of the fee program at these locations:  revenues and net gain.  Glendo is the leader when considering revenues and net gain.  However, when considering the ratio of revenue to expenses, Sinks Canyon and Seminoe are the leaders because these two sites incur no personnel costs for fee collectors. 

Revenue from the fee program is larger at some locations, smaller at others, and very seasonal by nature.  For example, in 2000, Glendo collected nearly $500,000 or 40 percent of total fee revenues.  Average monthly receipts during the peak season of May through September ranged from about $98,000 at Glendo to $700 at Ft. Fetterman.  During the off-peak, monthly receipts averaged from roughly $2,000 at Boysen to $40 at South Pass City.  See Appendix D for further detail.

Direct Administrative Costs

For the year 2000, we includeddirect administrative expenses in the costs of the fee program and attributed them to the expenses for the Cheyenne Headquarters in Figure 5.  Three staff members in SPHS and two in the SPACR accounting office provide administrative support to the fee program, although none isdedicated to it full-time. 

SPACR estimated the direct administrative costs associated with administrative support to be approximately $52,000 for one year.  The net loss of roughly $41,000 for the Cheyenne headquarters reported in Figure 5 reflects the direct administrative costs minus the revenue from permits sold out of the Cheyenne office.  However, because the Cheyenne staff provide administrative support to benefit the fee program overall, the $52,000 could alternatively be attributed to the parks and sites charging fees. 

Cost of Seasonal Law Enforcement

Since the inception of the current fee program, law enforcement personnel have been hired for the summer season and deployed among the parks.  In 2000, SPHS hired five full-time rangers and approximately ten part-time rangers, plus additional law enforcement personnel hired for the peak summer weekends.  Checking for visitor compliance with fees is a part of the rangers’ job responsibilities, but maintaining order among visitors is their primary focus.

The two programs, fee collection and law enforcement, have been closely connected and are often inter-related.  Thus, we considered whether attributing the cost of seasonal law enforcement for the parks and sites would change the fee program’s net gain status.  We found that it did not:  the program still operated at a net gain for 2000.  Subtracting seasonal law enforcement costs of nearly $193,000, the fee program’s net gain was then approximately $751,000.  This calculation does not include any cost for permanent full-time law enforcement personnel, or superintendents or assistant superintendents involved in law enforcement.

Users Pay for Capital Construction

In 1999, the Legislature changed the distribution of fee revenues, directing for the first time that 80 percent be deposited to an enterprise account to fund capital construction projects at the parks and sites.  In calendar year 2000, the fee program generated about $1.3 million in fees, with roughly $270,000 going to the General Fund and just over $1 million dollars going to the enterprise account.  The cost of the fee program, about $390,000 in 2000, is included in the General Fund appropriation to SPACR. 

The decision to charge park fees is a common policy choice, and is often referred to as “user pays.”  Through the payment of taxes, the public supports the setting aside of land, protecting that land, and operating parks.  The user pays philosophy holds that users of parks have an obligation to pay a greater share of the parks’ costs.  The user pays philosophy is widely adhered to in park systems nationwide, with most state park systems as well as federal parks charging daily entrance and camping fees.  

According to the director of SPACR, “The fee program provides a financial infusion that we can use for capital construction projects that we couldn’t do otherwise.”  Wyoming’s fee program operationalizes the user pays philosophy in that user fees, channeled through the enterprise account, support the funding of capital construction projects.  In addition, we discuss certain non-monetary benefits of the fee program in Chapter 4.

Policy Affects Amount of Revenue

Generated for Capital Construction

Legislative policy changes can affect the amount of money available in the enterprise account for capital construction.  Statutory changes that take effect in January 2002 are predicted to decrease revenue from the fee program by an estimated $135,000 annually, or about 10 percent of the amount raised in 2000.  These changes will lower the non-resident daily-use and camping fees, as well as create a non-resident annual camping permit. 

We identified several ways in which, if it chooses, the Legislature could offset this loss and increase the revenue generating ability of the fee program.  The Legislature could authorize more parks and sites to charge fees, increase fees overall or selectively, or reconsider annual permits.  For example, in 1993, the agency and the PCR Commission were in favor of charging fees at Hot Springs State Park (HSSP), believing a fee program at HSSP could be successful.  However, since then, the Legislature has not authorized fees at HSSP or at several other locations, although it has been discussed.  The Legislature’s Travel, Recreation, Wildlife, and Cultural Resources Committee could revisit these policy matters if increasing the fee program revenue is desired.

SPHS Has Carefully Managed

the Fee Program

The fee program has operated at a net gain for a number of reasons, but fundamentally because doing so was a legislative requirement for establishing the program.  This legacy has had an impact on how SPHS manages the fee program today.  SPACR designed its internal budget to isolate the expenses of the fee program, so the administrator of SPHS can ensure revenues exceed expenditures at the locations charging fees.  

SPHS has worked to keep expenses low by tailoring the monetary controls needed for a cash-generating program to be economical.  SPHS developed a fee program operations manual and instituted internal controls through the use of cash registers and review of requiredcash register reports.  These systems help ensure the money collected from visitors is fully reported and transmitted. 

Varying circumstances at the individual parks and sites, combined with a small staff, have resulted in a program that is run with minimal monetary controls.  For example, SPHS does not conduct background checks on fee collectors, nor does it perform unannounced spot audits of the fee program.  Furthermore, fee collectors receive only a small amount of training from SPHS.  While these limitations introduce some risk, they give the program the flexibility necessary to keep expenses in check. 

In addition, some superintendents have been innovative in keeping costs down.  For example, during a short period of seasonal popularity, the superintendent of Glendo State Park stations a fee collector in a truck at an entrance normally having just a canister.  This helps ensure compliance with fees is high, but is not as costly as constructing and staffing a fee booth.

Ability of Parks and Sites to

Generate Revenues is Limited

This report presents a snapshot of the fee program’s success, in terms of revenues minus expenditures, for the year 2000.  However, certain limitations on the revenue generating capacity of the parks and sites could change the status of the program in future years.  The fee structure inherently limits the revenue generating capability of historic sites in two ways:  historic sites do not offer camping, and statute establishes a lower daily-use fee for sites than for parks.  In addition, annual daily-use and camping permits could be limiting revenue since visitors pay once for unlimited annual use.  SPHS has not studied or tracked patterns of use for permit holders.  Therefore, SPHS cannot estimate how much revenue is foregone through the sale and use of permits, or determine if an increase in the price of permits might be justifiable. 

The degree of visitor compliance with fees can also impact the bottom line of the fee program.  SPACR does not believe 100 percent compliance is a reasonable goal because staffing for that goal would be costly.  However, the agency does not know what level of compliance has been achieved because it has not developed a means of estimating compliance. 

Superintendents responded to our survey that compliance is high at staffed pay stations, but more problematic under the honor system (canisters).  At staffed pay stations, a majority of superintendents estimated compliance of between 90 and 100 percent, while none thought compliance to be below 70 percent.  Where the honor system is used, a majority of superintendents believed compliance to be 70 percent or less.

We analyzed revenue per visitor to give a rough gauge for compliance at the parks,[2] recognizing that other factors such as volume of visitors, length of stay, and the type of fees charged can also affect revenues.  We compared revenue per visitor for the parks charging both daily-use and camping fees, and found some indications of lower compliance at Boysen and Hawk Springs.  Both have low revenues per visitor while having an average length of stay per visitor that is similar to other parks.  Additionally, Hawk Springs indicated some compliance problems, and several officials mentioned problems with payment of fees at Boysen,

where the number of access points makes compliance harder to achieve. See Appendix E for detail on this analysis.

Some superintendents reported that a lack of personnel or facilities to collect fees were limiting revenues.  For this reason, we believe the fee program could benefit from a re-evaluation of the way fee collection staff are currently deployed among parks and sites.  The administrator of SPHS reports he would like to review the staffing of the fee program. 

From an aggregate perspective, the opportunity cost of placing fee collectors at one location versus another can impact revenue generation.  For example, Keyhole may be able to bring in more revenue with one more  fee collector (by keeping a fee booth open more hours) than Ft. Bridger does with a position.  However, particularly for historic sites, it appears the staff who collect fees also have other duties.  This may make it difficult to extract a fee collector position from an historic site without interfering with the manner in which work is currently organized.  Thus, the agency also needs to evaluate whether additional fee collection staff are warranted.

Recommendation:  The fee program has been successful, but SPHS can make improvements.

SPHS has been successful in operating the fee program at a net gain.  It can go on to improve the program by tracking and analyzing new information related to annual permit use and visitor compliance with fees.  Currently, the agency lacks data regarding how frequently permit holders utilize parks and sites; lack of this data hampered officials when they needed to estimate foregone revenue due to permits.  SPHS officials could use the fee program to track permit use patterns, since permit holders are required to stop at staffed entrances at all but one location.  SPHS should also develop a means to gauge compliance with fees and use this information to assess where more or fewer resources may be needed. 

Additionally, SPHS should re-evaluate the current staffing of the fee program to determine if some shifting of fee collector positions could improve the overall revenue-generating ability of the fee program, or if more staff are warranted.  When developing this information, SPHS may wish to initiate discussions with the Legislature regarding policy areas that merit reconsideration.  Such discussions can lead to refinements in policy that will keep the fee program in a net gain position, while continuing to achieve legislative and agency goals.