Statement of William J. Chandler

Congressional Testimony

Statement of
William J. Chandler
Vice President for Conservation Policy
National Parks Conservation Association
H.R. 4521, To Authorize and Provide Funding for Rehabilitation of the Going-to-the-Sun Road in Glacier National Park, and for other purposes

Before the Subcommittee on National Parks and Public Lands
U.S. House of Representatives Committee on Resources

June 27, 2000
Washington, D.C.

   Mr. Chairman, members of the subcommittee, my name is Bill Chandler and I am the Vice President for Conservation Policy at the National Parks Conservation Association. NPCA is America's only private, nonprofit advocacy organization dedicated solely to protecting, preserving, and enhancing the National Park System. NPCA was founded in 1919 and today has more than 400,000 members.

   Thank you for the opportunity to testify today on H.R. 4521. NPCA commends Rep. Hill for introducing legislation authorizing the repair and rehabilitation of concessions facilities, utility systems and roads at Glacier National Park. We share his objective of providing first-class visitor facilities and infrastructure in one of America's premier national parks.

   However, we disagree with some of the methods proposed for rehabilitating the park and do not support the bill in its current form. In particular we are concerned that H.R. 4521 pre-determines the concessions plan for Glacier before the Park Service has completed its concessions services plan. The bill also distorts the concessions contracting process by creating a demonstration project that is exempt from the new concessions law.

   The approach to concessions is opposite from the bill's treatment of the Going-to-the-Sun Road. With regard to the road, the Hill legislation authorizes a study of alternative road repair plans first, and leaves it to the Secretary to implement the best plan. This, we believe, is the correct way to proceed. Rehabilitation of the park's many concessions structures is just as complex as the road project. As such, it deserves a similar study of needs and alternatives by the Secretary.

Going-to-the Sun Road

   NPCA supports the repair of the Going-to-the-Sun Road based on a careful analysis of the feasibility of repair alternatives and the impacts on surrounding communities, as provided in the legislation. It should be noted that one component of the NPS commercial services plan now being prepared is a transportation study that:

explores modes and costs of transportation systems within the park linking regional systems to Glacier, including the future use of the historic red bus fleet. The study determines the economic feasibility of providing commercial transportation services. It will also provide information for compiling capital investment costs. (Project Agreement to Prepare Commercial Services Plan, NPS, 1999)
   The transportation study is being prepared parallel to, and will inform the deliberations of the Going-to-the-Sun Road Advisory Committee. The red bus fleet is a vital element of the next concessions plan and contract. Thus, it is premature to be determining the objectives and methods for rehabilitating the historic hotels by themselves without a complete plan for all concessions.

Sec. 3 Utility Systems 

   Park utility systems are in dire need of repair. NPCA supports the authorization of $20 million for the upgrade and maintenance of utility systems that the Park Service determines are needed to meet the objectives of park-approved development plans.

Sec. 4 Hotel Rehabilitation

   Section 4 authorizes the Secretary to enter "competitive leases of property . . . under which the lessee will be authorized to provide visitor services to the area." Although the language does not appear to require the Secretary to issue such a lease, when considered with the bill's findings in Section 1 and other provisions in Section 4, the clear intent is to exempt Glacier concessions from the policies and procedures of the National Park Concessions Management Improvement Act of 1998. That act reformed concessions contracting to make it more competitive, to provide better services to park visitors, and to increase revenue return to the parks.

   Among other things, H.R. 4521 states that:

  1. park infrastructure is inadequate for cold-season operation (sec. 1);
  2. remodeling costs for the hotels "exceed the capacity of the hotel concessionaire to finance them out of hotel revenues" absent "changes in Federal concessions law" and the "availability of historic tax credits up to 39.5 years . . ." (sec. 1(8));
  3. remodeling "costs are so high that the concessionaire will need to finance them by borrowing the remodeling expenses and repairing them over time out of net hotel income, which by current law is limited to 20 year concessions agreements." (sec. 1(9));
  4. "Because of many factors . . . concessionaires are unable to undertake the scope of remodeling that is needed . . ." (sec. 1(11));
  5. there "appear to be selected instances when the National Park Service needs additional authority to conduct demonstration projects" for concessions contracting, and a demonstration project is needed for Glacier. (sec. 1 (12) & (13));
  6. in deciding whether to issue a demonstration lease, the Secretary "may consider" the value of providing additional visitor services, including conference facilities, for groups of visitors in the early spring and fall months, especially as these additional services may provide extra revenue needed to finance improvements for the historic hotels… (sec. 4(b)); and
  7. in determining "reasonable rates" for visitor services, the Secretary "may allow rates to be set high enough to allow investment in capital improvements . . . to be reasonably recovered by the concessionaire . . ." (sec. 4(b))
   Construed together, these provisions strongly suggest that the answer to Glacier's concessions rehabilitation needs is to:
  1. issue a 40-year lease to a concessionaire outside the existing concessions law;
  2. expand the park's operating season to cover the spring and fall (at unspecified additional cost to the Park Service of operating the park);
  3. provide additional services (unspecified), including conference facilities; and
  4. raise rates for rooms and other services.
   This is in fact the same solution advanced more or less by the current concessionaire, Glacier Parks, Inc.

   NPCA believes it is extremely unwise and economically unsound for legislation to predetermine what concessions should be in the park and how they are to be financed. These issues require sophisticated economic analysis and planning with full public participation.

   Furthermore, we strongly oppose demonstration projects outside the concessions reform law before they are proved—not asserted—to be needed. Congress spent eight years shaping concessions reform legislation. Just a few months ago, final regulations were issued to guide the new contracting process. It would be a mistake to allow a major concession like Glacier to be exempted from that law. If Glacier is exempted, other concessionaires will seek the same exemption.

   It would be especially unwise to exempt the next Glacier contract from the concessions law just because the current concessionaire recommends this course of action. With all due respect to Glacier Park, Inc., the current concessionaire has a strong economic interest in renewing its contract.

   To maintain a fully competitive contracting system, it should be up to the Park Service to determine what concessions it needs in the park, and the mix of investments, revenues, and pricing required to secure competitive bids for the next contract. Competition is the heart of concessions reform and it should not be cast aside lightly.

Need for Commercial Services Plan

   The best way to determine what concessions are needed in Glacier is to allow the Park Service to complete its commercial services plan for the park which is due out in 2001. The Park Service should also provide a study of financing alternatives. While the Hill bill appears to assume that all concessions structures would be privately financed, there is nothing in law that says that is the best way to go in terms of policy or economic benefit to the taxpayer.

   We are especially concerned about concessionaires "owning" a compensable interest in national historic structures. Is it good public policy to have structures deemed important to the nation to be owned for all intents and purposes by private concessions companies? The capital repair of historic structures in parks is an obligation that has been assumed by the Park Service in some parks like Yellowstone and Crater Lake. Concessionaires use these facilities but have no compensable interest in them. A public-private partnership in the next concessions contract may be both viable and economically beneficial to both the Park Service and the concessionaire. It certainly is an option that should be examined before being rejected.

   Mr. Hill's proposition that some kind of innovative financing mechanism may be needed at Glacier may prove to be true. However it is our belief that these mechanisms should be compatible with existing concessions law, not outside it. Again, this is a subject that the Park Service should study as it prepares the concessions services plan, and as it collects the information and prepares the analyses required to issue the next concessions prospectus for Glacier. If it is shown that new financial tools are needed and that such tools are mutually beneficial to the public and the concessionaire, NPCA would support them.

   The Department of the Interior has offered the interesting new concept of a historic structure lease for the rehabilitation of the structure through payments made by the concessionaire under a sublease. Among other things, this approach pays off the rehabilitation costs of the historic structures, leaving them in full public ownership after a time. The historic lease/sublease approach also can be accomplished without breaching the competitive principles of the concessions reform act. Clearly, the lease/sublease approach is one that should be considered by the Park Service and employed if needed. However, a final determination of the optimum financing structure for the park can only be made after the National Park Service's commercial services plan is finished, and financing alternatives are developed and reviewed with full public participation.

   The rehabilitation of Glacier National Park is a major financial undertaking that must be and can be done right. Let's make sure it is accomplished by letting the Park Service prepare its plan to develop viable financing alternatives just like the bill provides for the Going-to-the-Sun Road.


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