INTERIM STUDY REPORT

Economic Development, Tourism and Financial Services Committee

Representative Randy McDaniel, Chairman

Oklahoma House of Representatives

Interim Study 11-011, Representative Leslie Osborn

October 14, 2011

State funding and budget of State parks and golf courses under the Department of Tourism

Deby Snodgrass, Executive Director

Oklahoma Tourism and Recreation Department (OTRD)

§  Oklahoma benefits from the state park system in several ways. The parks bolster Oklahoma’s third largest industry, travel and tourism, and preserve natural resources, including land and water, that might be damaged without the park designation. The state’s park system also encourages health and wellness among Oklahomans, which is important considering poor state statistics related to obesity and physical activity.

§  Most state parks are leased, not owned, and Oklahoma will always be in the state park business as a result of an agreement with the federal government under which state park assets were built with Federal Land and Water Conservation Funds (LWCF). These funds were provided to the state with a replacement requirement stipulating that if LWCF projects were removed from the park system and privatized, they would have to be replaced with assets of equal market value. As a result of the agreement and this arrangement, Oklahoma will never exit the park business.

§  In order to improve the quality of life and health of all Oklahomans, there should be an assessment of park locations and distribution across the state. Every five years Oklahoma is required by the federal government to do a Statewide Comprehensive Outdoor Recreation Plan (SCORP). Each SCORP has generated the same criticism that the state’s parks are not distributed in accordance with Oklahoma’s population.

§  There are two ways to reach self-sufficiency in park system operations. The state can either reduce operating costs or raise revenue generated by certain fees, although an uncontrollable factor like weather also plays a role in the financials. OTRD is looking at each park individually to find ways to increase visitation and raise revenue. Most of Oklahoma’s parks do not have one central entrance point. Therefore, the state cannot charge an entrance fee and generate income from park land. The lodges and golf courses associated with Oklahoma’s parks underwrite the entire system. In Texas, state residents buy an annual card that grants entrance into any state park.

§  The Oklahoma Legislature must authorize the transfer of park land. Next session, the Legislature will be asked to approve the transfer of title on land at Boggy Depot and Heavener-Runestone.

See presentation a.

Jonathan Small, CPA, Fiscal Policy Director

Oklahoma Council of Public Affairs, Inc.

§  There are core government services that should be provided by the state, but the government should not be providing a service that the private sector can or does provide already. Privatization of certain services should be considered.

§  Privatization is not a new or unusual idea. Oklahoma’s Department of Transportation privatizes most engineering and construction contracts, as officials believe that they cannot construct roads better than private sector. Additionally, the Oklahoma Insurance Department uses out of state vendors and online licensing, saving the state approximately $350,000 each year.

§  There are two types of concessions; concessions for a targeted interest like horseback riding, or whole park concessions. Several states and the federal government use the whole park concession model, which involves a commercial lease between the state entity operating the park and a private company. The private company agrees to run the park for a profit and the public entity is paid rent in equal to a percentage of fee revenues.

§  Costs and risks are borne by the private company. The risks transferred from the state to the private company include those associated with revenue fluctuation, changes in demand that may occur with changes in weather, appropriation risk, operational risk, and legal and liability risk. Oklahoma should consider whole park concessions and the legislature should be supportive of efforts by OTRD to move forwards with this model.

See presentation b.

Attached Documents:

Meeting Notice

Revised Meeting Notice

Presentation a by Oklahoma Tourism and Recreation Department

Presentation b by OCPA

AE