Posted 02/07/2015 1:37 pm
Most of the state-owned parks in San Diego County operated at a loss in the 2014 fiscal year, and seven of those parks were more than a million dollars in the red, according to a new financial report from the California State Park System.
The department has come under fire in recent years for financial mismanagement, and a transition team embedded in the department is charged with changing the way it does business. A September 2013 state audit found that the park system’s finances were in disarray, with local park districts waiting months to receive their cut of the annual budget.
The financial report is the department’s most comprehensive and accurate accounting to date of how much it costs to operate each park. Gov. Jerry Brown’s administration wants the department’s 280 parks to generate more revenue and become less reliant on state funding.
“The Park Unit Costing report gives us more detailed information regarding current costs to operate individual park units, which is information that did not exist in the past,” said parks director Lisa Mangat in a statement to the U-T. “This information will help us make better decisions that will strengthen the department and increase our fiscal accountability.”
The department also estimates it has $1 billion in deferred maintenance needs. In January, Gov. Brown pledged $20 million toward that.
“With the maintenance backlog that we have, whatever the estimate, it’s far beyond that $20 million,” said Christine Kehoe, a former state senator from San Diego and co-chair of Parks Forward, an independent state commission appointed to help reform the parks department. “That means you need a professional that can estimate what projects cost, what replacements cost and begin to prioritize.”
Kehoe said she has been encouraged by the department’s progress in recent months, but making the park system financially sustainable will require a fundamental change in the way it does business.
“They have really stepped up,” she said, “but we have to remain vigilant.”
Despite efforts to increase revenues, the park system operated 274 of its 280 parks at a loss last year. The gap between what it earned and what it spent to operate the parks was more than $300 million statewide.
In San Diego County, 14 parks operated at a loss, with $15.3 million in revenue and $45.1 million in costs.
The Ocotillo Wells State Vehicular Recreation Area had $10.8 million in expenses and $41,000 in revenue in 2014, leaving the largest gap in the county and one of the three largest gaps in the state.
Anza-Borrego Desert State Park ranked second in the county for losses, spending $6.9 million against $518,000 in revenue, and Cuyamaca Rancho State Park ranked third, spending $4.6 million while bringing in $712,000.
Silver Strand State Beach ranked fourth, spending $2.8 million more than it earned, but state officials cited it as a model for new revenue possibilities. From 2013 to 2014, its revenues jumped by half a million dollars because the park installed water and electrical hookups for RVs. Usage fees for such hookups could help other parks shore up their revenues, said Vicky Waters, the department’s deputy director for public affairs.
San Elijo State Beach and the Torrey Pines State Natural Reserve were among the six state parks statewide that earned more than they spent, but the net gain for the two was less than a million dollars combined.
In all, the state park system brought in $114 million in revenue last year, compared to expenditures of $445 million.
“They can find efficiencies in how they spend money, but those sorts of efficiencies kind of have a half life,” said Lance Conn, co-chair of the Parks Forward committee. “You can’t build a department on that. So you look at revenue generation as an obvious place for growth.”
Overnight cabin rentals could be a big source of revenues for the park, Conn said, but as with parking and admissions fees, it will be a delicate balancing act for the state. At a time it’s trying to make the park system more financially viable, the state also wants to make the park system more accessible and affordable for underserved communities.
Still, outside marketing expertise could help the state set the right price points to reach its goals, Conn said.
“People have done this before. It’s not rocket science,” he said. “It’s a matter of bringing the right people in to figure it out.”
Even with revenue gains at the parks, the system’s deferred maintenance needs will be a lingering issue, and the state is eager to identify and leverage additional funding streams outside what the state can collect.
“The department must maintain thousands of historic buildings and objects, archeological sites, trails, and campsites,” according to a Parks Forward report. “Today, the department does not have sufficient funds for its ongoing maintenance let alone the backlog of deferred maintenance projects and capital outlay projects. In the past, bond funds have paid for capital projects, but those funds will be spent before the end of the decade.”
“The reality is today it’s expensive to have parks and there isn’t enough tax revenue allocated for it,” said Peter Jensen, president of the Torrey Pines Association. “We keep cash reserves in case there’s a crisis.”
In line with Parks Forward’s recommendations, the state plans to develop a network of nonprofit partners to help shore up funding gaps, including Parks California, a yet-to-be formed nonprofit that is expected to collect and distribute funds from government programs and private donors.
The California League of Park Associations, an umbrella group for local park nonprofits, has expressed concern about how the network will work and whether it will hamper its members’ ability to target the needs of local parks.
“We’re key players, but we don’t have a seat at the table yet,” said Carolyn Christian, president of the association.
The role of Parks California has not been clearly defined yet, but Christian would like to see a representative of the group on the board of Parks California and on the parks department's transition team.
Waters, the deputy director, said the department values the association’s input, but it has not yet decided what role the organization will have in either entity.
Local nonprofit groups already step in to pay for projects that the state can’t afford, and local San Diego groups hope Parks California will help them invest more in their parks.
“If the government’s going to fund a new nonprofit, why can’t they help us?” said Kathleen Kooiman, an association board member who is also executive director of the Friends of Cardiff and Carlsbad State Beaches. “We’ve all been trying to do this for many years. If there’s a pot of money, why not underwrite the local co-ops that are successful?"
Kooiman said her group raised $211,000 to put recycling cans on the beaches to help meet state recycling goals, and it’s eager to raise more money to improve stairway access at area beaches.
Conn said the intent of Parks California wasn’t to compete with local park nonprofits, but he understands why the groups are concerned, with so few details available. Conn envisions Parks California providing fundraising and marketing assistance to the groups that will help them reach their goals while taking part in projects with statewide significance.
“It’s about filling gaps at scale,” he said.