Beyond Disasters and Deficits, Great Outdoors
Alabama’s state parks are fighting their way back from five years of revenue transfers and a maintenance backlog that runs deeper — to natural disasters as far back as Hurricanes Ivan and Katrina.
State Parks Director Greg Lein says the system faces a backlog of around $40 million of maintenance and improvement projects.
During the five years ending 2016, the Legislature sought to fix emergency budget shortfalls by transferring more than $30 million from the Alabama Department of Conservation and Natural Resources to the general fund. Half of that came from the state parks division of Conservation, a disproportionate share owing to the fact that state park funds are not tied to federal funds, as are much of the other three divisions of Conservation — Marine Resources, State Lands and Wildlife and Freshwater Fisheries.
But this was not money the Legislature reeled back. It was money they dipped into. State parks are 90 percent funded by user fees — a degree matched or surpassed by only seven other states, including Florida.
The funds transfers forced the closure of five state parks and stalled park maintenance and improvements for five years.
To prevent further erosion of state parks at the expense of the general fund, voters in November approved, by a 79 percent majority, Amendment 2, which prohibits the Legislature from future raids on state parks.
We spoke in December with State Parks Director Greg Lein to see where state parks now stand.
Lein was appointed parks director in 2012, after serving as head of the Forever Wild program within the State Lands division of Conservation.
Amendment 2 will stabilize the budget situation, but it doesn’t return the money that was lost. I am optimistic that we are beginning to dig out of this hole, relative to not being able to attend to the maintenance of state parks. Because of the budget transfers and inherent things like natural disasters — the tornado that hit Guntersville and the tornado that hit DeSoto, the ice storm that damaged Cheaha and the Gulf State Park hurricanes. All those go back to the fact that ours is a user-funded system and not a tax dollar-funded system. So when we have a natural disaster, it inhibits our ability to maintain parks according to our business model.
Today we estimate there is a backlog of around $40 million of maintenance and improvement projects. That’s why we’re cautious when we describe our situation beyond Amendment 2. Now we’re back to a foundation where there will be no more money taken out of the system, but the recovery is going to take some time. It’s going to take several years of dedicated work.
We know that our customers are willing to pay for the services they receive within the parks, but at the same time, there is a delicate balance, because we need other monies to help support the maintenance of those facilities and also the money for developing new amenities, and we don’t think that relying on our customers to fund that is the best source. We feel that the state should contribute to those needs. State parks are an economic generator for these areas and for the state. They have an almost $400 million annual economic impact. That demonstrates that they are a good investment for the state economy. We don’t have an issue with it being a largely customer-supported system, but there needs to be some other money.
The intention of the state’s investment in the Gulf State Park Lodge and Conference Center is to provide a new source of revenue from which the system as a whole will benefit. Gulf State Park is our biggest operation. It has 42 percent of our customer utilization, and that one park accounts for 24 percent of our annual revenue. It is the biggest operation and the most profitable park in the system. We are seeing $1.5 million in profit each year. More money is invested in that park because we know that as a vacation destination the opportunities for revenue enhancement are greater than in other park settings.
There is a small contribution from the cigarette and use tax, but that contribution started in the year 2000 and there has not been any adjustment in that in the 16-year period. Not an escalation in the percentage we get adjusted for CPI or inflation. And it was taken away from us in the past five years.
Prior to that we relied on occasional bond initiatives to make renovations and make improvements. You might see a contribution every 10 to 15 years. Prior to that there was a greater contribution from the general fund. But in the ’70s and ’80s they were trying to create an environment that would generate more revenue and would have to rely less on contributions from the general fund. That has almost been a success. We are almost self-sufficient, except for the dynamics associated with natural disasters.
We track the utilization of the system, and in September there was a press release saying we expect a record year in 2016 — the first time we have broken the 5 million user mark since 2008. In 2008 we started seeing the impact of the recession. Business fell off and on top of that we had the natural disasters.
In addition to our user survey, we are doing some survey work to better understand the changing trends of what users are looking for. For one thing, we know there is a greater demand for changes in the electrical allowances, to accommodate the newer and bigger RVs. That will require an upgrade of our electrical systems. Also customers will want to see wi-fi, which is even more important with young people. Some of our sites are very remote. There are greater advances in other states in broadband that make it easier for them — a question of how fiber has been laid out in rural areas. We have a greater challenge than our neighbors have.
We had five parks we had to close, but over the last year we have been successful in seeing those parks reopen under a new management structure that includes local governments. Three were taken over by county commissions — Chickasaw, Paul Grist and Bladon Springs. Florala became a city park. And at a fifth, Roland Cooper, we brought in a concessionaire. We are excited by that last development, because it might be another way of getting the job done. We do similar things with some of the recreational programs. Companies develop and operate zip lines in state parks. We’ve been able to do that at no cost because we have partnered with the private sector. They design, build and operate them, and we see increasing utilization of the parks and get the financial benefits of that increased usage. The concessionaire at Roland Cooper is Recreational Resource Management. They’re a top-notch organization, the type of concession partner you want. They have been entrusted to run facilities in numerous states and even federal property.
Every time we consider a concessionaire, we bid that out. Their niche may be managing campgrounds and they’re not interested in restaurants or golf courses. They can be a good fit in one setting but not another. We make the opportunities broadly known. We bid out one of our golf courses this year, but we had to close the Lakepoint State Park Golf Course because we got no bids.
Chris McFadyen is the editorial director of Business Alabama.