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Legislative Analyst's OfficeAnalysis of the 2003-04 Budget Bill |
The Department of Parks and Recreation (DPR) acquires, develops, and manages the natural, cultural, and recreational resources in the state park system and the off-highway vehicle trail system. In addition, the department administers state and federal grants to local entities that help provide parks and open-space areas throughout the state.
The state park system consists of 271 units, including 31 units administered by local and regional agencies. The system contains approximately 1.4 million acres, which includes 3,000 miles of trails, 285 miles of coastline, 822 miles of lake and river frontage, and about 13,500 camp sites. Over 80 million visitors travel to state parks each year.
The budget proposes about $1 billion in total expenditures for the department in 2003-04. This is an overall decrease of about $221 million (22 percent) below estimated current-year expenditures. Most of this reflects a decrease in bond funds for state and local parks.
The budget proposes $278.6 million in departmental support, $633.4 million in local assistance and $114 million in capital outlay expenditures. (Please also see the "Capital Outlay" chapter of this Analysis.) Of the total proposed expenditures in 2003-04, about $89.9 million (10 percent) will come from the General Fund; $717.6 million (71 percent) from bond funding; $96.7 million (10 percent) from the State Parks and Recreation Fund; $49 million (5 percent) from the Off-Highway Vehicle Trust Account; and the remainder $47.1 million (5 percent) from various other state funds, federal funds, and reimbursements.
The budget proposes to create $20 million of General Fund savings by increasing state park fees to pay for state park operations. The budget proposes additional General Fund reductions totaling $15 million by shifting funding to other fund sources ($6 million) and as a result of an administrative reorganization ($9 million).
The budget proposes to achieve $9 million in General Fund savings by reorganizing and consolidating the existing departmental administrative structure. We withhold recommendation on this proposal until the department provides information detailing how the proposed reorganization will achieve the anticipated General Fund savings.
Budget Proposes General Fund Savings Through Reorganization. The budget proposes $9 million in General Fund savings and the reduction of 90 positions through a reorganization effort. At the time this analysis was prepared, the department was not able to provide specific details on how this reorganization and subsequent savings will be achieved.
Recommend Department Report at Budget Hearings on Proposed Reorganization. Without information on how the reorganization will be achieved, the Legislature cannot determine the feasibility nor the programmatic impact of the budget proposal. We therefore recommend that the department provide details of this proposal to the Legislature prior to budget hearings that will allow for such an assessment.
The budget proposes $98 million from Proposition 40 for a new cultural and historical grant program. Although the budget proposal lacks details on the implementation of these grant proposals, we find that Chapter 1126, Statutes of 2002 (AB 716, Firebaugh), does specify an allocation process for the historical and cultural allocation of funds in Proposition 40. We therefore recommend the Legislature appropriate the funds requested in the budget proposal consistent with the provisions of Chapter 1126.
Budget Proposes $98 Million in Bond Funding for Historical and Cultural Grants Program. Proposition 40 (approved by the voters in March 2002) provides $267.5 million for historical and cultural resources preservation, $37.5 million of which is earmarked for two specific projects. Proposition 40 broadly defines the use of these funds to allow for the acquisition, development, preservation, and interpretation of many different types of cultural and historical resources, including buildings, sites, and artifacts.
The budget proposes a total of $98 million from this Proposition 40 allocation for a new historical and cultural grants program. Of this amount, $2.2 million is for administrative costs ($1.9 million and 16.5 positions in the DPR and $290,000 and 2 positions in the Secretary for the Resources Agency).
Budget Proposal Lacks Details. We find that the budget proposal for a new historical and cultural grants program lacks key information necessary to evaluate this initiative. For example, the proposal does not set out criteria or priorities for awarding grants, making it difficult for the Legislature to assess what the program might achieve in terms of protection and restoration of cultural and historical resources. According to the budget proposal, the administration proposes to introduce legislation to establish details of the grant program at a later date.
Funding Should Be Consistent With Existing Statute. However, we find that recently enacted legislation (Chapter 1126, Statutes of 2002 [AB 716, Firebaugh]), creates a structure and specifies priorities for the funding of historical and cultural grants and loans. Specifically, Chapter 1126 establishes the California Cultural and Historical Endowment, consisting of a specified membership, in the California State Library to administer an historical and cultural resources grant and loan program. The legislation further specifies that all Proposition 40 allocations for historical and cultural grants and loans be expended according to the provisions outlined in Chapter 1126. Therefore, since the Legislature has already specified an allocation process in Chapter 1126, we recommend the Legislature appropriate the funds requested in the budget proposal consistent with the provisions of Chapter 1126.
The budget proposes $35 million from Proposition 40 for a statewide acquisition program for state parks. However, the budget provides minimal information on (1) the administration's priorities for these expenditures, and (2) future costs associated with the acquisitions. Given the lack of information, we recommend the proposal be denied. (Reduce Item 3790-301-6029 by $35 million.)
Budget Proposes $35 Million for Statewide Acquisition Program. Proposition 40 provides $225 million for state park improvements and acquisitions, specifying that no more than 50 percent of the allocation is for land acquisitions. To date, the Legislature has appropriated $69 million from this allocation. The budget proposes an additional $35 million from this allocation for a statewide acquisition program.
Budget Provides Minimal Information on How Funds Will Be Spent. When making land acquisition funding decisions, we think it is important for the Legislature to have information about the general geographic area proposed for acquisition, the general type of acquisition that is proposed, such as urban parks or wildlife habitat, and an explanation of how the proposed acquisitions further the specific objectives for which the acquisitions is sought. This information is needed so that the Legislature can determine whether the proposed use of the funds is consistent with its priorities. In our review of the budget proposal, we find that none of the above information has been provided.
Land Acquisitions May Result in Unfunded General Fund Obligations. As we noted in our Analysis of the 2002-03 Budget Bill, state park-related land acquisitions can result in future development and operation costs. However, the department has provided no information on estimated future costs (both support and development) associated with the proposed acquisitions. Without this information, the Legislature cannot assess the full cost of the budget proposal, which could include future pressure on the General Fund.
Recommend Deletion of Funding. Given the lack of information needed to evaluate the proposed acquisition program, and the potential for the acquisitions to result in future General Fund obligations, we recommend the proposal be deleted.
Under current law, the Legislature is required to review and approve any proposed or amended concession contract that involves a total investment or annual gross sales over $500,000. In past years, the Legislature has provided the required approval in the supplemental report of the budget act.
The department has included six concession proposals and one proposed operating agreement in its budget that require legislative approval. We find all of the proposals to be warranted.
Big Basin Redwoods State Park, Big Basin Redwoods Concession. The department requests approval to solicit bids to operate and maintain the gift shop and camp store at the Big Basin Redwoods State Park (Santa Cruz County). Proposed conditions for the new contract include a term not to exceed ten years and minimum monthly rent of $1000 or 16.5 percent of the monthly gross receipts, whichever is greater.
Carnegie State Vehicular Recreation Area, Store, and Motocross Track Concession. The department requests approval to solicit bids to develop, operate, and maintain a store and the motorcross track at Carnegie State Vehicular Recreation Area (San Joaquin County). Proposed conditions for the new contract include a term not to exceed ten years, minimum annual rent of $150,000 or 10 percent of the gross sales, and a minimum capital investment of $400,000 to replace the existing store building.
Columbia State Historic Park, City and Fallon Hotel. The department requests approval to solicit bids to operate and maintain the City and Fallon Hotel complex concession (Tuolumne County). Proposed conditions for the new contract include a term not to exceed ten years, a minimum of $20,000 in capital improvements, and minimum rent of four percent of gross receipts.
Old Town San Diego State Historic Park, Three Retail Specialty Store Concessions. The budget includes three separate requests from the department for approval to solicit bids for three separate retail specialty stores. All three of the stores have contracts that have expired and are operating on a month to month basis. Proposed conditions for the new contracts vary slightly for each of the stores and include a five-year term, minimum monthly rent of $3,500 or 9 to 10 percent of gross monthly sales, and minimum capital improvement costs between $25,000 and $60,000.
Thornton State Beach, Operating Agreement. The department requests approval to enter into an operating agreement with the City of Daly City for the operation and maintenance of Thornton State Beach. The term of the agreement will not exceed 30 years.