Fee Revenues Will Support SPHS Capital Construction Projects

A primary outcome of the SPHS fee program is that it generates revenue dedicated to an enterprise account that will fund capital construction in the parks and sites.  SPHS superintendents believe this funding will significantly benefit the recreational quality of the parks and sites.  With the enterprise account, Wyoming state parks and sites have a consistent source of funding for major maintenance projects that affect public health and safety, as well as for facility enhancements that affect recreational opportunities.  The Legislature and SPHS have strategically moved the fee program toward providing this capital improvement fund, while maintaining operations funding from the General Fund.  Thus, SPHS is in a better position than most park systems, which face deferred maintenance backlogs with no dedicated funds to address them.

SPHS Retains the Majority of Fee Revenues for Capital Construction Projects

Receiving legislative authority to keep most fee revenue is a significant advance for the SPHS fee program.  According to professional literature, a critical principle in fee program design is whether a collecting agency is allowed to retain fee revenues.  Not retaining fees may provide less incentive to collect fees or for visitors to pay them.

Effective January 1, 2000, W.S. 36-4-121 (h) specifies that eighty percent of SPHS fee revenue goes into an enterprise account for the division to expend for capital construction projects; the remaining twenty percent goes into the General Fund.  Also by statute, the Legislature must approve expenditures from the enterprise account.

The 2000 Legislature authorized the Department of State Parks and Cultural Resources to expend $2,122,500 from the enterprise account during the 2001-2002 biennium for capital construction in the state parks and historic sites.  This authorization included approval for approximately $480,000 of specific projects in 2000.  In the 2001 session, the agency submitted and received authorization for a prioritized list of projects that it plans to undertake during the 2001 construction season with the remaining funding. 

Approved FY 2001-2002 SPHS Projects

Approved capital construction projects for the rest of the biennium encompass projects at nearly all parks and sites, including those that do not charge fees.  SPHS plans to undertake a range of projects, including emergency repairs at all parks, as well as restroom, sidewalk, and fuel storage tank replacements. There are also projects planned to develop more designated campsites, which will support the park management objectives discussed in the previous chapter.  SPHS senior management officials prioritized the approved list of projects from a list of nearly $5 million proposed by the parks and sites.  Officials expect the total list of proposed projects to change over time as some conditions become more critical or new situations arise.

The first list of capital construction projects funded by the enterprise account is consistent with the capital improvements that users have indicated they want through comments and statewide public meetings.  SPHS officials expect completion of these projects to help increase visitor support for the fee system. 

SPHS Prioritization Process

Using a project rating system, agency officials determined which projects to send forward for legislative approval.  The system gives highest priority to projects that, if not done, stand to affect the health and safety of visitors or SPHS employees or will violate government laws or regulations.  Other factors that give projects priority include whether structural damage is imminent if deferred maintenance is delayed, and whether projects will reduce operating costs. 

In determining priorities for the enterprise account, SPHS officials said they are being vigilant not to include projects that park and site managers should cover in their normal maintenance budgets.  However, if parks and sites proposed deferred maintenance projects for which SPHS lacked funding in the past, managers considered them.  A state facilities manager indicated that it is acceptable within the state capital funding process to propose health and safety projects as capital outlays.  SPHS officials point out that they intend to manage the enterprise account in a way that would not invite the Legislature to supplant General Fund appropriations for normal operations and maintenance. 

SPHS Pools Enterprise Account Funds

In developing its proposal for enterprise fund expenditures, SPHS uses a pooled approach.  This allows it to address capital construction and deferred maintenance priorities on a system-wide basis, including the needs of parks and sites that do not generate much fee revenue or charge fees.  SPHS superintendents of sites not offering camping, especially historic sites, indicated in our survey that the potential distribution of enterprise account funds was the fee program’s greatest contribution toward visitors’ recreational experiences.  On the other hand, with the pooled approach, users of parks that contribute greater amounts of fee revenue see less of it coming back to support the parks they frequent.

Another approach to distributing fee revenue is to retain all or most of it at the collection sites.  The FRD program, as discussed in the previous chapter, uses this approach.  It demonstrates to visitors that their fees go toward improvements in the parks they use, and increases the incentive for individual national park managers to collect fees.  However, there is also a potential over time for high revenue-generating parks to use fee revenues for lower priority projects, while other agency sites have high priority needs that remain unmet.  SPHS officials note this concern as a reason for implementing the pooled approach. 

SPHS Has a Consistent

Capital Outlay Source

Park systems nationally, including those of surrounding states, have perennial problems addressing infrastructure needs and maintenance backlogs.  States that get significant portions of their operations funding from fee revenues rarely also have enough from that source to keep up with maintenance needs and new construction.  Thus, they must obtain additional appropriations along with fee revenues to meet their needs.  If SPHS keeps its General Fund appropriations for operations and normal maintenance, the state’s parks and sites will have both operational funding and a consistent revenue source for capital construction through the enterprise account. 

SPHS officials report that having a stable revenue source for construction enables them to do long-range planning.  This was not possible before the Legislature established the enterprise account because SPHS funding for capital construction and deferred maintenance was inconsistent.  Then, SPACR projects had to compete with those from other state agencies in the state’s capital construction funding process to receive both the Governor’s recommendation and the Legislature’s approval. 

In many years, the state’s funding for capital construction was limited, and SPHS did not fare well.  According to agency records, in the last decade before the enterprise account was established, the Legislature appropriated about $4 million toward SPHS capital construction.  Most of that came in FY 1991-1992, when the Legislature appropriated $3.3 million.  In the subsequent eight years, SPHS received a total of $628,500 for capital construction, with biennial amounts ranging from zero to $425,000.  Now, the agency projects having at least $1 million per year with which to plan capital projects.

The Legislature and SPHS Strategically Developed the Fee Program to Include the Enterprise Account

Although the initial purpose of the fee program was to control use and access at state parks, longtime legislative and agency advocates also held the goal eventually to use fee revenues to improve park facilities.  In 1994, SPHS held statewide meetings in which the public told them that fees should go back into improvements at parks and sites.  Legislative leaders and agency officials recognized that implementing the fee program in allparks was a gradual process, and they concentrated on this as a first priority.  Over the years, they modified proposals to retain revenues for the parks until they succeeded in developing a proposal that won the support of the full Legislature.  The 1999 legislation establishing the enterprise account, which became effective in 2000, signaled the culmination of a patient and strategic process. 

Recommendation:  SPHS and the Legislature must keep facility improvements in proportion with operations capacity. 

At this point, SPHS is using the enterprise account to address projects that are largely health and safety related.  While this is necessary to ensure public and employee welfare, these improvements are not always observable to visitors.  In the future, if health and safety issues become a smaller portion of capital proposals, SPHS may face increasing public pressure to improve facilities and expand services.   Such moves could increase the agency’s operating costs. 

Capital improvements, in contrast to replacements or repairs of existing facilities, typically need maintenance and staff.  Many of the SPHS park superintendents surveyed expressed concern that operations and maintenance funding may not keep pace with the division’s capacity for capital construction.  At this point, the agency may need to engage the Legislature in discussion about how fee revenues can be used in other targeted ways to allow SPHS to meet visitors’ expectations while protecting park and site resources.