Annual Meeting Minutes

 NPHA Annual Meeting

March 4 - 6, 2007

The Madison Hotel

Washington, DC

____________________________________________________________________________________

Members Attending:

Joe Fassler, Cindy Ognjanov, John Ognjanov, Bradford Hill, Dave Woodside, Pam Pitts, Carol Metzler, Ron Felty, Gerry Gabrys, Dick Buck, Ron Hallagan, Douglas Verner, Kirk Huserik, Paulette Lassiter, Julie Maillet, John Rutter, Ed Wimberly, Rex Maughan, John Schoppmann, Bill Butts, Tom Mack, John Potocko, Ramona Pariente, John Pucetas, Steve Rose, Kevin Emmons, George Campsen Jr., Alan Saltman, Ruth Tiger, Mark Saferstein, Joel Saferstein, Phyllis Prevost, Gary Papke, Rev. Dick Camp, Lyle Parker, Laurel Parker, David Ohanesian, Paula Ohanesian, Terry MacRae and Lee Harlow.

NPS Staff Attending: Jo Pendry, Bob Hyde, Ernest Jutte, Judy Bassett, Craig Ackerman, Debra Harvey, and Dan Wenk

Invited Guests: Senator Craig Thomas, Tom Lillie, Congressman Rob Bishop, Congressman Nick Rahall, Derrick Crandall, Timothy Helm, Chuck Birenbaum, Bob Spagat, and Geoff Baekey

NPHA Staff Attending: Tod Hull, Jim Santini, and Carmen Escalera

The National Park Hospitality Association gratefully acknowledges our 2007 Annual Meeting sponsors: American Park Network, Clarion Associates, Inc., Coca Cola Company, KC Publications, SiteTek Financial Arts,  Inc. and Winston & Strawn, LLP

Monday, March 05, 2007

The 2007 NPHA Annual meeting opened Monday, March 5, at the Madison Hotel in Washington, DC.  Chairman, Joe Fassler called the meeting to order at 8:35am.  Joe Fassler asked everyone to stand up and introduce themselves.

Joe Fassler introduced Tod Hull

Tod showed everyone a plague made for the previous chairman of  NPHA, Andrew Todd. Tod also explained the Congressional Packet and explained which issues the association would like members to discuss when visiting Congressman and Senators: the De Novo Amendment and the Service Contract Act.

The invocation was lead by Rev. Dick Camp.

 Joe Fassler introduced Ron Felty and David Ohanesian, Nominating Committee

Ron Felty went over the nominations for the board and then opened the floor for any additional nominations. George Campsen, Jr., nominated John Schoppmann for a position on the board. Ron Felty moved to close nominations. Phyllis Prevost seconded motion. Nominations were closed.

Joe Fassler introduced Jo Pendry, National Park Service

Jo Pendry spoke on what will be discussed at the Concessions Management Advisory Board meeting taking place on Wednesday and Thursday of this week:  contracting status, lease/hold surrender interest tracking tool, insurance, outfitter and  guide update and the superintendent training.

2005 revenue over 800 million in concessions

589 – 600 contracts currently; 78% of contracts are < $500,000

Report to Congress took 9 months to go through the review process

Q:        Joe Fassler asked when the Management Advisory Board would be terminated, he understood there was a time limit to it’s existence.

A:        Jo Pendry answered the time limit is 10 years and it is currently in it’s last year. She also said Judy Bassett was working on getting it extended either through legislation or administratively. Jo added Clay James was being nominated to chair the board.

Q:        Rex Maughan asked what does the Concessions Management Advisory Board actually do?

A:        Jo Pendry answered it gives her additional forum to interact directly with concessioners and helped get rid of the 50% Rule and also that this forum gave the Outfitters and Guides a chance to voice their concerns.

Q:        Rex Maughan asked why is the board paying millions to accounting firms?

A:        Jo Pendry answered the board made recommendations but, the accounting firms are doing the actual work.

Rex commented that he felt like his (Forever Resorts) voice has not been heard for the last eight years and was concerned about this and that the Board doesn’t listen to the concessioners.

Jo Pendry commented back that the Advisory Board has Clay James coming on and that will give NPHA an opportunity for input.  In addition, she commented that her office is always open to any concessioner and is open to hear any of their concerns.

Q.                Tom Mack asked who are the “stakeholders” in NPS program development.

A:         Jo answered suppliers, Regional Chiefs, Superintendents, cooperating associations.

            Tom commented that he was concerned that with his operation on the Mall and who were the stakeholders and the influence they have on park programs.

Tom was also concerned about the permitting process, about 2500 per year, on the Mall and how many permits were handed out and that it denies citizens access to facilities on the Mall.  He further commented that the Marine Corps Marathon had a great impact and that now the Park Service has approved another marathon.  The point being that the general public is unaware of the events on the Mall and has a great impact on their desire to visit the Mall in the context of a planned vacation.

Q:        Tod Hull asked about the Report to Congress and the lack of two items that were supposed to be in the report – 1) an assessment of competition and solicitation of prospectuses and 2) an assessment of the problems encountered by the concessions program in implementing the 1998 Concessions Act.  He said that they were very important to concessioners and that it wasn’t mentioned in Pendry’s presentation.

A.        Pendry answered that they are not part of this presentation.

Pendry next gave a status report of the concessions contracts and that there are 569 contracts.  The number changes depending on a number of factors, like contract expirations and renewal.  125 contracts are still in backlog.  67 of them are very complicated and will take some time to deal with.

She next spoke about Leasehold surrender interest continues to be problematic in its valuation and tracking.  Now have three recommendations from the Advisory Board – 1) crediting LSI based on the source of funds; 2) Allocating LSI to the building and component level and; 3) Tracking the base value and depreciation of LSI.  New regulations have been drafted and she hopes they will be available by late spring of 2007.

Pendry also spoke about the NPS LSI tracking tool and stressed that it was internal to the NPS.  Information will be available throughout the year and the NPS will have a final number when the contract is up.

Q:        Phyllis Prevost asked when it will be up and running and useable.

A:         Deb Harvey from the NPS answered that the park service is using it now as a pilot project and all units that deal with LSI will be using the tool and doing facility condition assessments.

Q:        John Pucetas asked if it was the intention of the Park Service to make the tool available to concessioners.

A:         Jo Pendry answered that it will be an internal tool for the Park Service only and that they needed a true-up to establish the LSI valuation.  However, she also said that if the concessioner, as agreed to in an individual contract, wants a voluntary or mandatory true-up they will do that and emphasized that the Park Service will work with the concessioner on the facility condition assessments.

Q:        John Pucetas asked if the tracking program was Excel based.

A:         Deb Harvey answered it is now, but eventually wants to change it to Oracle because it will be a Park Service-wide data base.

Jo Pendry commented that the LSI is a lump sum value which can be higher or lower at contract end.  The better the concessioner maintains the facilities the better chance the LSI will go up or remain the same.

Jo Pendry commented that the Annual Financial Reports are now in an electronic format.  OMB is asking for public comment on the form.  There will be two comment periods.

Q:        Jo Pendry asked Carol Metzler how long it had taken her to fill out the electronic form and said it will officially come in to use in May of 2007.  Paper AFRs will still be accepted.

A:         Carol answered about an hour to fill out.

Jo Pendry next commented on the Superintendents Pilot Training Course – PAM – Planning, Award, and Management of the Contract.  NPS needs to work on its presentation, although the material presented was good. 

Q:        Jim Santini asked Pendry about the De Novo Amendment and hoped that Park Service would not pursue.

A:         Pendry answered that concessioners can now take disputes in arbitration to court. She also said that the NPS cannot take a decision to court using the De Novo amendment, solely because they did not like the final valuation, but can take it to court if the arbitration decision did not follow the 1965 Concessions Act.

Santini commented that it only takes the creativity and allegation of an agency solicitor to take the decision to court and that it was inherently unfair for smaller concessioners who do not have, nor can afford legal counsel.

Q:        Gerry Gabrys mentioned that the average franchise fee was 3.4% and asked about franchise fees and if the NPS could reveal the range of franchise fees.

A:         Pendry answered from 0 to over 20%.  Fifty percent of all the franchise fees went up, twenty percent went down, and thirty percent stayed the same.

Brad Hill commented that the franchise fees haven’t really improved all that much since the Lujan days.

Meeting adjourned shortly for Morning Break at 10:15am

Meeting continued at 10:30am

Joe Fassler led off after the break commenting on the two prominent issues facing NPHA – the De Novo amendment and the Service Contract Act and asked Santini and Hull to further explain the two issues.  Santini explained De Novo and commented that NPHA has been active on Capitol Hill talking to the Appropriations Committee in removing the amendment. 

Pendry mentioned that the provision has never been used. 

Q:        Hull then asked why do we need the amendment if the Park Service has not used it. 

A:         She answered that they need it for protection to put the NPS on equal footing with the concessioners.  Hull responded by saying that the 1998 Concessions Law specifically states that disputes over possessory interest valuations shall be decided by binding arbitration and that the concessioner does not have the opportunity to take it to court.  He further commented that the intent of that provision in the 1998 Law was to keep disputes out of court because they were costly.   Hull said that the bottom line is the value determination and that is why the Park Service wants to take adverse binding arbitration decisions to court.  Pendry said not necessarily. 

Q:        Hull then asked Pendry if the Park Service would take a favorable decision by the arbitrators to court. 

A:         She answered that they might if the proceedings were contrary to the law.  Hull read the actual De Novo provision indicating that the Park Service could take things to court for more than just being contrary to law. 

Q:        Fassler asked if the issue has been brought before the Advisory Board. 

A:         No one thought that it had, but Pendry said it may be appropriate to do that.

Q:        Terry MacRae asked the group how many would be affected by this valuation.

A:         The group answered that almost everyone of them would be.  Pendry further said that the De Novo only applies to contracts with possessory interest and that there are approximately 50 contracts left with possessory interest.

Q:        John Rutter asked Pendry if there was a particular event that was the basis for the De Novo amendment being introduced.

A:         Pendry answered not a particular event, but a general concern about contracts still falling under the 1965 Concessions Act.  Hull said that there were two particular events that did set it in motion – the Hamilton Stores arbitration at Yellowstone and the Xanterra arbitration at the Grand Canyon.  Pendry said that in both those cases the Park Service thought the law had been misapplied.

Q:        Rutter asked if the De Novo amendment had solved the problem.

A:         Pendry answered not necessarily, but it gives the court the opportunity to interpret the law.

Q:        Rex Maughan asked Jim Santini if the De Novo amendment wouldn’t come into play in the 1998 Concessions Law.

A:         Santini answered that it did not come into play in the 1998 Law.

Joe Fassler Introduced Senator Craig Thomas, Ranking Member of the Senate National Parks Subcommittee.

Sen. Thomas thanked the group for hosting him and said he was glad to be with the NPHA.  He mentioned that the Senate is just starting its year and there is not a lot to report insofar as specific parks legislation.  Sen. Thomas introduced his Subcommittee Staff Director, Tom Lillie.  He mentioned that park visitation is down and the price of gasoline as one of the reasons.  He said there is a need to look at visitation and especially focus on the young people and the fees charged for entrance.  He also commented on the maintenance backlog and the importance of the budget along with adequate funding for the national parks.  Lastly, he commented that binding arbitration is the best way to settle disputes when there is a difference in the valuation of assets between the NPS and the concessioners.

Q:        Joe Fassler asked Sen. Thomas about the binding arbitration and the De Novo amendment and said that binding means binding.

A:         Sen. Thomas answered that it asked for by the NPS and is currently in the Interior Appropriations Bill and suggested the best way to solve the problem is to remove it from the bill.  He will work to keep it out.

Q:        Rex Maughan asked the Senator about how the NPS seemed, at times, to wanting to keep visitors out of the national parks in reference to the Yellowstone winter situation.

A:         The Senator mentioned that access for visitors is a critical part and that some controls need to be in place for the park’s protection.

Q:        Maughan then commented that the fees to get into the parks was a concern.

A:         The Senator commented that it is a concern of his too and will be looking at it.

Q:        Joel Saferstein asked the Senator about the NPS Centennial Challenge.

A:         The Senator answered that it was a good idea and doesn’t see any problem with it and is getting support.  Tom Lillie joined in the answer and said it was a two-stage process – it needs to go through both the appropriators and the authorizers if it is to be extended.  He also said that boundaries need to set for the money.    The Senator also said that the Secretary and the President are both committed to the project and it has support, even from the philanthropic end.

Q:        Jim Santini asked the Akaka priorities for this Congress.

A:         The Senator answered that it is too soon and they have not had any meetings as yet.  He mentioned that Akaka’s priorities are largely out in the Pacific.  Tom Lillie said that the Subcommittee will be looking at fees and at Heritage Areas.

Q:        The Senator asked the group what their priorities would be if they were on the Subcommittee.

A:         George Campsen answered that he would be looking at the Service Contract Act issue.  He wanted to assure that Park Service concessions contracts would be exempt from the SCA.   Joe Fassler joined the conversation to say that the NPS and the concessioners are “on the same page” on this issue and hoped it could be fixed through legislation or rulemaking.  Tom Lillie said that it would be hard to fix legislatively, and be easier through the rulemaking process.

Q:        Tod Hull asked the Senator about Heritage Areas.  He said that he attended a House budget hearing on the Park Service and that Cong. Kildee asked about land acquisition in Heritage Areas.

A:         The Senator said that that may happen, but if it happens it should be very local.  He also said that they should stay Heritage Areas and not become park units.  Jim Santini commented about the new Supreme Court decision on condemnation of land and linked that to land acquisition in Heritage Areas.

Q:        Mark Saferstein asked a question about the Centennial Challenge and it’s relationship to the Director’s Order 21 and the proud partners program and the exclusivity of the proud partners making contributions to the NPS, while others cannot.

A:         Tom Lillie answered that the NPS needs to stay within the law and must be held accountable.

Afternoon Session:  Monday, March 05, 2007

Joe Fassler Introduced Timothy Helm, Team Leader for Government Contract Enforcement, Department of Labor

Tim thanked the group for being here.  He began by saying there currently is a case involving the Service Contract Act in California (Alcatraz Cruises) and is being reviewed by the Administrative Review Board of the DOL and that he was unable to talk about the specifics in that case.  Tim gave a general basic overview of the SCA.  The SCA was passed in 1965 and has a contract wage threshold of $2500.  It covers contracts entered into by the US government and a contract principally for services and for work only performed in the United States.  The SCA generally does not cover salaried employees.  Tim went over the exemptions by DOL regulations from the SCA.  He further stated that any contract with five or more employees must contain a wage determination and the wages must reflect the wages prevailing in the locality.   Contracts covered by the SCA must also contain employee benefits, like vacation benefits, and health and welfare (fringe) benefits currently at $3.01/hr.  This amount in reviewed every year in June.  He also said that wage determinations resulting from bargaining agreements are transferable to any successor concessioners and that they are obligated to pay the bargaining agreement wage.  For concessions contracts, wage determinations are made every two years.  Also, there is a process of challenging the DOL wage determinations.  When paying employees make sure that the amounts paid for wages and to the fringe benefits have a separate accounting on the pay stub.  Employee complaints triggering a DOL investigation can be submitted by just about any means – phone, fax, written letter.  There is no standard form.    Complaints also can come from third parties. 

Q:        Alan Saltman asked if the complaintant can be identified by the employer.

A:         Helm answered that that information is not released nor does the DOL even say that the investigation is based on a complaint.

DOL has 700 investigators and only about 125 of the 700 are capable or qualified in researching Service Contract Act issues.  Investigators look at wage classifications, fringe benefits, overtime pay, and public posting of the conformance information (does not have to be posted in Spanish).   If it is found that a company is in noncompliance with the SCA, DOL can ask the contracting agency to withhold amounts due the employees.  In serious offenses, the company is barred from any government contracting for three years. 

Q:        Phyllis Prevost  asked if there were any monetary penalties placed on the employer if a violation occurs.

A:         Helm said only for the overtime pay law ($10/day), otherwise there is not.

Q:        Pam Pitts asked what is the timetable between a complaint and the investigation.

A:         Helm answered it depends on a number of factors as to when an investigation begins.  But after it does, a typical investigation lasts about 30 to 60 days without appeals.

Q:        Alan Saltman asked in the cases where employers are in violation, how much time is given to make restitution to the employees.

A:         Helm answered it depends on the amount, but DOL gives wide-latitude.

Q:        Pam Pitts asked for a  list of exemptions from the SCA.

A:         Helm answered food, lodging, automobile fuel, newspaper stands, recreational equipment, and souvenirs.  Everything else is not covered, but there are grey areas.

Q:        Lee Harlow asked if maintenance type people would be covered under the SCA.

A:         Helm answered if it is primarily a lodging contract, then those employees would be covered under the SCA.

Q:        Terry MacRae asked why is there suddenly interest in the SCA as it applies to park service concessions contracts.

A:         Helm answered he wasn’t sure why and said maybe the concessioners have been lucky so far.

Joe Fassler Re-introduced Jo Pendry who Introduced Geoff Baekey of PriceWaterhouseCoopers to Speak on the Proposed NPS Insurance Guidelines

Jo Pendry stressed that the insurance guidelines are only in draft stage right now and the concessioners have the opportunity to comment on the guidelines to the NPS.  Baekey stressed that they were definitely looking for concessioner feedback on the insurance requirements.   Baekey mentioned that the requirements are needed to protect the NPS from claims and liabilities and to assure visitor service continuation.  The proposed insurance requirements are generally proposed for those contracts under $3 million.  Contracts over $3 million usually will have the insurance requirements as part of their contract.  Concessioner must provide proof of insurance within 30 days of the contract award or operating season.  NPS currently looking at surplus line providers who carry less than an A- financial strength rating, usually around B or B+.  Anything less than B- is not acceptable.  Also, NPS is not looking favorable on alternative risk financing techniques.  Self-insured must be approved by the NPS Director.  NPS leaning toward one hundred percent coverage on real property and will not accept partial coverage.

Q:        Joe Fassler asked about the requirement for continuance of visitor services given the example if a fire destroys a hotel.  The insurance will cover the cost, but what about the visitor services.

A:         Baekey answered that it is clearly unavoidable to disrupt visitor services in this example, but the point is to get back in service as soon as possible.

NPS is looking at partial coverage for concessioner personal property. 

Q:        Joe Fassler asked about workers compensation and if a company is self-insured, does the $1million coverage apply.

A:         Baekey answered that a company cannot be self-insured unless there is a qualified insurer standing behind the self-insured and even then that will be looked at on a case by case basis.

Q:        George Campsen commented that, because of the hurricanes, in South Carolina some insurance companies are just canceling their policies and asked what can you do if you simply can’t get insurance coverage.

A:         Baekey answered that he wasn’t sure and maybe a policy decision by the NPS.

Q:        Alan Saltman asked if there was going to be a formal comment period on the insurance guidelines.

A:         Pendry answered that everything to date has been informal and that these are just internal NPS guidelines, thus no legal requirement for a formal comment period.

Q:        Terry MacRae asked if the current contract requirements allow a concessioner to change the insurance requirements if circumstances change.

A:         Pendry answered contracts can be modified if it is in the interest of the government.

Q:        Phyllis Prevost asked if a current contract has minimum amounts of insurance below what the proposed guidelines are indicating, would the NPS go back and change them.

A:         Pendry said it can only be dealt with on a specific contract.

Q:        Brad Hill asked if the insurance covering inventory is for the purchase price.

A:         Baekey answered it is the purchase price.

At this point the floor opened up for general questions for Jo Pendry and Geoff Baekey.

Q:        Gerry Gabrys asked how many positions are open in the NPS concessions program.

A:         Pendry answered that her office is about 90% staffed, most regional offices are at 100%, while others are staffed at lower percents.  Pendry said she did get some additional funding in this years budget and will be hiring 7 new concessions employees.  She said that there are about 200 concessions specialists system-wide, but only 30 are full-time.

Q:        Pam Pitts asked how many are staffed in the NPS Tourism office.

A:         Pendry answered it was still only one, Dean Reader, but with the Centennial Celebration it would be a good time to expand this office.  She also said that a good idea might be to have a tourism staff in the WASO concessions office.

Joe Fassler Introduced Congressman Rob Bishop, Ranking Member, Subcommittee of National Parks

Cong. Bishop thanked the group and was glad to be on the Parks Subcommittee.  Cong. Bishop talked about Congress and the thought that there is a lack of civility on the Hill.  However, said that this so-called lack of civility has been a long history of going on and is not quite as bad as some people say.  He mentioned there may be an identity crises in the national parks.  We need to decide what is the purpose of our national parks.  He said that some look at them as places that need absolute protection instead of places where the public can enjoy them.  We must assure that visitation increases to our national parks, not only in total number, but also in demographics.  He mentioned that the amenities offered by the concessioners are very important.  He also said parks need to become relevant - parks must adapt to newer technologies, especially to the younger citizens.  Congress also must look at a business approach to managing the national parks.  He stressed that he needs input from the group and others to help him define the problems.  Parks are national treasures, but become relevant only if people are there to see them and visit them.

Q:  Terry MacRae asked about international visitors to the national parks and mentioned some the barriers they face, such as visa restrictions, and that it is important for them to have a good experience in the United States.

A:  Cong. Bishop answered that the international visitor is important.  We need to have more people visit and experience the United States to see for themselves what America is all about, instead of the image they may see on televisions shows.

Tuesday, March 06, 2007

NPHA Business Meeting

The Meeting was called to order by Joe Fassler at 9am.  Joe then introduced Ron Felty.

Ron Felty, chairman of the Nomination Committee announced the slate of Board nominees – Joe Fassler, Dave Woodside, Pam Pitts, Rex Maughan, George E. Campsen, Jr., Carol Metzler, John Rutter, Dick Buck, Ed Wimberly, Tom Mack, Phyllis Prevost, John Schoppmann, and Brad Hill.  

Action Item:

There were only 13 nominees, the exact number of Board positions, and Ron entertained a motion to the general membership to accept the Board nominations as presented.

The nominations were so moved by Gerry Gabrys and seconded by David Ohanesian.   Ron asked for a show of hands to accept the Board nominations with unanimous acceptance and the motion to accept a Board of Directors for 2007 was approved.

Joe Fassler then led a discussion of the NPHA dues structure.  He mentioned that the current structure was confusing to prospective members and that many were unwilling to make their gross revenues available to calculate their possible dues.  He also commented that the dues need to meet the financial obligations of the association.  Joe called on Dave Woodside to explain the new dues structure.

Dave Woodside requested John Rutter to assist him in explaining the new dues structure.   John commented that there was an effort to keep the dues close to what has been paid in the past and that the new dues structure will be a graduated dues structure based on revenues and percentage – begin by paying a higher percentage, but as the revenue increases the percentage decreases.  There will also be a dues cap at $32,625.  The new dues structure can be useful for anyone wanting to calculate their dues.  The three- year gross revenue average will still be in place.

Dave mentioned that the dues cap would be useful to the bigger concessioners who were thinking of joining the association, i.e., they would know that they would not pay any amount more than $32,625.

Carol Metzler commented that the NPHA website could post the dues structure, so that prospective members could calculate their dues.

Gerry Gabrys asked if the new dues structure accounted for this year’s budget.  Dave W. answered that it did not and that Carol M. was going to present the budget a little later.

Action Item:

Dave W. asked for a motion to approve the new dues structure.  George E. Campsen Jr. so moved and was seconded by Ron Felty.  Dave W. asked for any discussion.  Ed Wimberly asked if the new dues structure was for the 2007 calendar year.  Dave said it was.   Ron Felty gave a clarifying point that the dues were per concessioner, not per contract.  Dave W. asked for a voice vote.  The motion was carried unanimously and accepted by the general membership.

Tod Hull requested that we also needed to amend the NPHA Bylaws to repeal the old dues structure and replace it with the new one.

Action Item:

Dave W. asked the membership for a motion to amend the Bylaws.  The motion was so moved by Dave W. and seconded by George E Campsen. Jr.  Dave asked for a voice vote.  The motion was carried unanimously and accepted by the general membership.

Carol Metzler next presented the NPHA budget.  Copies were passed out to the membership.  For 2007 the association will run a deficit of approximately $131,000 for 2007 which will come out of the reserves.  The goal is to have a balanced budget by 2008.   George Campsen made a motion to give Carol Metzler the flexibility to adjust the budget.  Gerry Gabrys asked why there was a need to “adjust” the budget.  It was agreed that there was really not a need to adjust the budget.  Campsen withdrew his motion.

Action Item:

Carol asked for a motion to approve the 2007 NPHA budget.  It was so moved by Joe Fassler and seconded by Dave Woodside.  Carol asked for a voice vote.  The motion was carried unanimously and accepted by the general membership.

Tod Hull next introduced an impromptu guest, Dan Wenk, the new Deputy Director of the NPS.

Dan thanked the association for having him there and was pleased to be in his new position as Deputy Director.  Dan was previously at the NPS Denver Service Center and was superintendent at Mount Rushmore.  He commented that he was familiar with concessions issues and extended his apologies that Director Mary Bomar could not be at the meeting.  He mentioned that concessioners are a very important part of the park experience.  Dan also talked about the additional $258 million dollars for park service operations in this year’s budget and the Centennial Initiative.  There will be an additional 3,000 seasonal employees for 2008.  He also talked about competitive sourcing, not in a concessions sense, but in other services like garbage pickup. 

Q:  Jim Santini asked Wenk if the Park Service was going to get support from ReserveAmerica.

A:  Wenk answered that the Park Service is putting in a reservation system and it may be available to the concessioners at a future time, although no formal decision has been made yet.  It is not a requirement that the concessioners use it either.

Q:  Joe Fassler asked why the Park Service doesn’t use the reservation system by the concessioner already in place.

A:  Wenk answered that the Park Service wants a “one stop shopping” type of reservation system instead of having the park visitor contacting a number of parks if traveling to different places.  Jo Pendry added that the reservation system is not just for the Park Service, but also for the other land management agencies.

Tod Hull introduced Chuck Birenbaum and Bob Spagat from Winston & Strawn, LLP.

Chuck Birenbaum thanked the group and said he was here to make a presentation on the Service Contract Act.  At the heart of the issue are two federal agencies which have a legitimate dispute over the interpretation of the SCA and its application.  The problem arose with the Alcatraz contract when Alcatraz Cruises, after being awarded the contract, did not recognize the employees used by the predecessor concessioner, Blue & Gold Fleet.  The unions then began a corporate campaign using a number of sources to pressure Alcatraz Cruises to hire union employees.  In 1965, both the Concessions Policy Act and the Service Contract Act were passed by Congress.  The Concessions Policy Act was tailored very narrowly to apply only to the Park Service.  During debate of the SCA, it was made clear that the SCA was not to apply to Park Service concessions contracts.  The purpose of the SCA was to provide labor standards for contracts furnishing services to federal agencies, not to the public. 
This is an important distinction when looking at concessions contracts.  The Dept. of Labor originally agreed with this position.   In 1983 that position changed because of a dispute with NASA – not the National Park Service – and DOL changed their regulations to exempt certain types of services offered by Park Service concessions contracts.  Bob Spagat offered that it was his opinion that the Interior Dept. never commented on the new regulations.  No one actually knows how these exemptions were formed. 

Q:  Ron Hallagan asked if there were examples of recreational equipment not covered by the exemption.

A:  Spagat answered that there are none and there remains much uncertainty as to what is covered and what isn’t by the exemptions.

In 1998 the Interior Department made it clear that contracts under the new 1998 Concessions Act were not federal procurement contracts within the laws governing federal procurement actions.   In other words, federal contracting laws do not apply to concessions contracts and that the Park Service, and only the Park Service, has the authority to establish the terms and conditions of the contract under the 1998 statute.  Spagat made the point that changes in the political winds will have an impact on,different interpretations of the SCA applicability to concessions contracts.  He also cautioned that the DOL regulations, regardless of the exemptions, state that if the contract offers substantial services other than those mentioned.  Substantial services are also subject to interpretation by DOL and gave the example of the Denali case where the contract covered many services that are exempt, but had one, the transportation segment of the contract, which was not, yet DOL determined that the SCA applies.

Q:  Pam Pitts asked if all wages for the Denali contract fell under the SCA.

A:  Spagat answered that yes, it was for all the wages under that contract.

Spagat emphasized the point that the applicability of the SCA is very subjective by the DOL and they have wide discretion in determining what is covered and what isn’t.

Joe Fassler introduced Congressman Nick Rahall, Chairman of the House Natural Resource Committee.

Cong. Rahall thanked the group and was pleased he could attend the meeting as the new Chairman of the House Natural Resources Committee.  The Congressman gave a short summary of the National Park Service and praised its offering to the visiting public.  Mr. Rahall then talked about the NPS Management Policies and was happy to see the Management Policies not drastically changed as was proposed in the first draft.  He next mentioned the NPS Centennial Challenge, however questioned the means by which the program will be funded, i.e., the philanthropic contributions.  The funding of the Parks is a federal responsibility and should remain that way.  He also had concerns for the rising recreation fees on our public lands.   He further has great respect and confidence in the Secretary of the Interior, Dirk Kempthorne.  As far as the Committee’s activities, Mr. Rahall said that there will be oversight hearings on the recreation fee issue and a possible oversight hearing on the NPS Concessions Program.  He praised both Staff Director, Rick Healy and the new Subcommittee Chairman, Raul Grijalva. 

Q:  Jim Santini asked how the NPHA can be of help to the Committee.

A:  Mr. Rahall answered that NPHA has been of help in the past and looks forward to the continuing knowledge of Park Service the concessioners have.  He likes to see coalition building to solve problems.

Q:  Joe Fassler asked about the Service Contract Act and how his Committee might help the DOI come to an agreement with the Department of Labor in solving this issue.  It seemed to Fassler that the DOL is overstepping their boundaries and that it is difficult for two agencies to solve a problem without the influence of the Congress.

A:  Mr. Rahall was aware of the problem and would possible talk to Congressman George Miller about it.

Q:  Tod Hull asked about the decline in park visitation and asked Mr. Rahall to comment on this and if the Committee had any plans to address the problem.

A:  Mr. Rahall responded by saying that one of the problems was the proper and adequate funding of the parks.  Without it, the facilities fall into disrepair thereby influencing people’s choices not to visit the parks.  He also said it takes an improved marketing effort to motivate people to once again visit the parks. 

Q:  Hull then commented on the international visitor and what could be done to attract them, for example, develop a Department of Tourism.

A:  Mr. Rahall said that the international visitor was an important part and that the federal government has a part in this to assist appropriate government agencies to improve the message to foreign travelers and promote America’s natural resources.  Mark Saferstein commented that the Park Service has a Director of Tourism now, but has no operating budget.

Q:  Rex Maughan commented that in the parks where the fees have gone up, the visitation has gone down.

A:  Mr. Rahall said that this was a good point and would look into it.

Joe Fassler Asked Jim Santini, NPHA Legislative Counsel to Give His Legislative Report

Jim mentioned a transition going on within the Park Service linked to the Inspector General’s report that there were problems “from top to bottom”.   He said that with the issuance of the report significant changes began in the DOI.  Secretary Gale Norton resigned and Assistant Secretary of Fish, Wildlife, and Parks, Paul Hoffman was moved into a less influential position because of the changes he proposed for the NPS Management Policies.  Santini went on to explain the sequence of events that took place with the Management Policies.  Jim gave a background of new Secretary of the Interior, Dirk Kempthorne and praised Jo Pendry, the Concessions Program Manager along with Dan Wenk, the new NPS Deputy Director.  However, we still have significant policy and legal issues that we need to tackle.  The best way we can do that is to work with the leadership of both the Congress and the Administration.  He mentioned that a good way to illustrate the concessioner issues is with examples we could show the Park Service and the Interior Department, like the Tom Mack issue.  Jim also stressed the point that the NPHA membership is key in getting our issues in front of the Congress.  Santini mentioned that it was important to enlist new members by showing them examples of how and where NPHA has been effective in improving the concessions business.

Tod Hull, NPHA Washington Representative, then Gave His Report

Hull mentioned that it was very important to build the NPHA membership so that we can be as effective as we can be when dealing with the Congress and the Administration.  He said that the members can and must help in building the association.  As far as his accomplishments, Hull went on to say that he has been working with the Service Contract Act and met with both the NPS and Department of Labor.  Hull also spent a lot of time on the De Novo Amendment and trying to get that stricken from the Interior Appropriations Bill.  In addition, Hull spends a lot of time and effort putting together both the Annual Meeting and the Mid-Year Meeting.  He also said that in 2006, up until September, he devoted much of his time to the NPS Management Policies.  During the later part of the year and into 2007 Hull has spent a lot of time with the American Recreation Coalition building ideas and a program to increase visitation to the national parks.  He stressed the point the members need to communicate their issues to him so that he can help solve them.

Tod Hull Introduced Derrick Crandall, President of the American Recreation Coalition

Derrick thanked the membership and was happy to address them.  There have been disappointments, such as the NPS Management Policies.  However, there are good signs.  The Park Service is beginning to address the decline in visitations.  He had recently met with President Bush and the First Lady, explaining to them this issue.  He mentioned that partnerships are important and that the concessioners and the association needs to work with partners in raising the awareness of the American public to visit the public lands.  He said that we need to help the federal agencies with new ideas and new technologies to appeal to the park service visitor.  He also stressed that, as parents, we need to get our children into the outdoors in order to appreciate what it offers.  Crandall made the point that the Park Service needs to embrace the new technologies available, like downloadable I-pods, that have appeal to the younger generation of people to visit the parks.  Crandall also talked about the Centennial Challenge and how traditional type projects like new water systems or vegetation restoration projects may help build a better park system, but does nothing to draw visitors into the parks.   The Centennial Challenge also provides the opportunity to implement and design projects that would increase visitation to the parks.  Crandall then linked health and health care issues to increasing visitation to the national parks.  There is an opportunity to capitalize on the interest in health issues and healthy lifestyles and getting people to recreate in the outdoors.  There may also be an opportunity to tap into an untraditional revenue stream from the Department of Health and Human Services or the Department of Education in pursuing healthy lifestyle recreational programs.

The 2007 Annual NPHA meeting was officially adjourned by Joe Fassler at approximately 11:56 am. 

Dave Woodside made some parting announcements that the Mid-Year Meeting will be held at the Green Valley Ranch Resort in Henderson, NV, October 15 – 17, 2007 and that the 2008 Annual Meeting will be March 9 – 11, 2008 at the Madison Hotel in Washington, D.C.

Many of the NPHA members spent the afternoon of March 6, 2007 visiting Members of Congress on planned Capitol Hill visits.

Respectfully Submitted by Tod Hull

and Reviewed by Pam Pitts      

 NPHA Annual Meeting

March 4 - 6, 2007

The Madison Hotel

Washington, DC

____________________________________________________________________________________

Members Attending:

Joe Fassler, Cindy Ognjanov, John Ognjanov, Bradford Hill, Dave Woodside, Pam Pitts, Carol Metzler, Ron Felty, Gerry Gabrys, Dick Buck, Ron Hallagan, Douglas Verner, Kirk Huserik, Paulette Lassiter, Julie Maillet, John Rutter, Ed Wimberly, Rex Maughan, John Schoppmann, Bill Butts, Tom Mack, John Potocko, Ramona Pariente, John Pucetas, Steve Rose, Kevin Emmons, George Campsen Jr., Alan Saltman, Ruth Tiger, Mark Saferstein, Joel Saferstein, Phyllis Prevost, Gary Papke, Rev. Dick Camp, Lyle Parker, Laurel Parker, David Ohanesian, Paula Ohanesian, Terry MacRae and Lee Harlow.

NPS Staff Attending: Jo Pendry, Bob Hyde, Ernest Jutte, Judy Bassett, Craig Ackerman, Debra Harvey, and Dan Wenk

Invited Guests: Senator Craig Thomas, Tom Lillie, Congressman Rob Bishop, Congressman Nick Rahall, Derrick Crandall, Timothy Helm, Chuck Birenbaum, Bob Spagat, and Geoff Baekey

NPHA Staff Attending: Tod Hull, Jim Santini, and Carmen Escalera

The National Park Hospitality Association gratefully acknowledges our 2007 Annual Meeting sponsors: American Park Network, Clarion Associates, Inc., Coca Cola Company, KC Publications, SiteTek Financial Arts,  Inc. and Winston & Strawn, LLP

Monday, March 05, 2007

The 2007 NPHA Annual meeting opened Monday, March 5, at the Madison Hotel in Washington, DC.  Chairman, Joe Fassler called the meeting to order at 8:35am.  Joe Fassler asked everyone to stand up and introduce themselves.

Joe Fassler introduced Tod Hull

Tod showed everyone a plague made for the previous chairman of  NPHA, Andrew Todd. Tod also explained the Congressional Packet and explained which issues the association would like members to discuss when visiting Congressman and Senators: the De Novo Amendment and the Service Contract Act.

The invocation was lead by Rev. Dick Camp.

Joe Fassler introduced Ron Felty and David Ohanesian, Nominating Committee

Ron Felty went over the nominations for the board and then opened the floor for any additional nominations. George Campsen, Jr., nominated John Schoppmann for a position on the board. Ron Felty moved to close nominations. Phyllis Prevost seconded motion. Nominations were closed.

Joe Fassler introduced Jo Pendry, National Park Service

Jo Pendry spoke on what will be discussed at the Concessions Management Advisory Board meeting taking place on Wednesday and Thursday of this week:  contracting status, lease/hold surrender interest tracking tool, insurance, outfitter and  guide update and the superintendent training.

2005 revenue over 800 million in concessions

589 – 600 contracts currently; 78% of contracts are < $500,000

Report to Congress took 9 months to go through the review process

Q:        Joe Fassler asked when the Management Advisory Board would be terminated, he understood there was a time limit to it’s existence.

A:        Jo Pendry answered the time limit is 10 years and it is currently in it’s last year. She also said Judy Bassett was working on getting it extended either through legislation or administratively. Jo added Clay James was being nominated to chair the board.

Q:        Rex Maughan asked what does the Concessions Management Advisory Board actually do?

A:        Jo Pendry answered it gives her additional forum to interact directly with concessioners and helped get rid of the 50% Rule and also that this forum gave the Outfitters and Guides a chance to voice their concerns.

Q:        Rex Maughan asked why is the board paying millions to accounting firms?

A:        Jo Pendry answered the board made recommendations but, the accounting firms are doing the actual work.

Rex commented that he felt like his (Forever Resorts) voice has not been heard for the last eight years and was concerned about this and that the Board doesn’t listen to the concessioners.

Jo Pendry commented back that the Advisory Board has Clay James coming on and that will give NPHA an opportunity for input.  In addition, she commented that her office is always open to any concessioner and is open to hear any of their concerns.

Q.                Tom Mack asked who are the “stakeholders” in NPS program development.

A:         Jo answered suppliers, Regional Chiefs, Superintendents, cooperating associations.

            Tom commented that he was concerned that with his operation on the Mall and who were the stakeholders and the influence they have on park programs.

Tom was also concerned about the permitting process, about 2500 per year, on the Mall and how many permits were handed out and that it denies citizens access to facilities on the Mall.  He further commented that the Marine Corps Marathon had a great impact and that now the Park Service has approved another marathon.  The point being that the general public is unaware of the events on the Mall and has a great impact on their desire to visit the Mall in the context of a planned vacation.

Q:        Tod Hull asked about the Report to Congress and the lack of two items that were supposed to be in the report – 1) an assessment of competition and solicitation of prospectuses and 2) an assessment of the problems encountered by the concessions program in implementing the 1998 Concessions Act.  He said that they were very important to concessioners and that it wasn’t mentioned in Pendry’s presentation.

A.        Pendry answered that they are not part of this presentation.

Pendry next gave a status report of the concessions contracts and that there are 569 contracts.  The number changes depending on a number of factors, like contract expirations and renewal.  125 contracts are still in backlog.  67 of them are very complicated and will take some time to deal with.

She next spoke about Leasehold surrender interest continues to be problematic in its valuation and tracking.  Now have three recommendations from the Advisory Board – 1) crediting LSI based on the source of funds; 2) Allocating LSI to the building and component level and; 3) Tracking the base value and depreciation of LSI.  New regulations have been drafted and she hopes they will be available by late spring of 2007.

Pendry also spoke about the NPS LSI tracking tool and stressed that it was internal to the NPS.  Information will be available throughout the year and the NPS will have a final number when the contract is up.

Q:        Phyllis Prevost asked when it will be up and running and useable.

A:         Deb Harvey from the NPS answered that the park service is using it now as a pilot project and all units that deal with LSI will be using the tool and doing facility condition assessments.

Q:        John Pucetas asked if it was the intention of the Park Service to make the tool available to concessioners.

A:         Jo Pendry answered that it will be an internal tool for the Park Service only and that they needed a true-up to establish the LSI valuation.  However, she also said that if the concessioner, as agreed to in an individual contract, wants a voluntary or mandatory true-up they will do that and emphasized that the Park Service will work with the concessioner on the facility condition assessments.

Q:        John Pucetas asked if the tracking program was Excel based.

A:         Deb Harvey answered it is now, but eventually wants to change it to Oracle because it will be a Park Service-wide data base.

Jo Pendry commented that the LSI is a lump sum value which can be higher or lower at contract end.  The better the concessioner maintains the facilities the better chance the LSI will go up or remain the same.

Jo Pendry commented that the Annual Financial Reports are now in an electronic format.  OMB is asking for public comment on the form.  There will be two comment periods.

Q:        Jo Pendry asked Carol Metzler how long it had taken her to fill out the electronic form and said it will officially come in to use in May of 2007.  Paper AFRs will still be accepted.

A:         Carol answered about an hour to fill out.

Jo Pendry next commented on the Superintendents Pilot Training Course – PAM – Planning, Award, and Management of the Contract.  NPS needs to work on its presentation, although the material presented was good. 

Q:        Jim Santini asked Pendry about the De Novo Amendment and hoped that Park Service would not pursue.

A:         Pendry answered that concessioners can now take disputes in arbitration to court. She also said that the NPS cannot take a decision to court using the De Novo amendment, solely because they did not like the final valuation, but can take it to court if the arbitration decision did not follow the 1965 Concessions Act.

Santini commented that it only takes the creativity and allegation of an agency solicitor to take the decision to court and that it was inherently unfair for smaller concessioners who do not have, nor can afford legal counsel.

Q:        Gerry Gabrys mentioned that the average franchise fee was 3.4% and asked about franchise fees and if the NPS could reveal the range of franchise fees.

A:         Pendry answered from 0 to over 20%.  Fifty percent of all the franchise fees went up, twenty percent went down, and thirty percent stayed the same.

Brad Hill commented that the franchise fees haven’t really improved all that much since the Lujan days.

Meeting adjourned shortly for Morning Break at 10:15am

Meeting continued at 10:30am

Joe Fassler led off after the break commenting on the two prominent issues facing NPHA – the De Novo amendment and the Service Contract Act and asked Santini and Hull to further explain the two issues.  Santini explained De Novo and commented that NPHA has been active on Capitol Hill talking to the Appropriations Committee in removing the amendment. 

Pendry mentioned that the provision has never been used. 

Q:        Hull then asked why do we need the amendment if the Park Service has not used it. 

A:         She answered that they need it for protection to put the NPS on equal footing with the concessioners.  Hull responded by saying that the 1998 Concessions Law specifically states that disputes over possessory interest valuations shall be decided by binding arbitration and that the concessioner does not have the opportunity to take it to court.  He further commented that the intent of that provision in the 1998 Law was to keep disputes out of court because they were costly.   Hull said that the bottom line is the value determination and that is why the Park Service wants to take adverse binding arbitration decisions to court.  Pendry said not necessarily. 

Q:        Hull then asked Pendry if the Park Service would take a favorable decision by the arbitrators to court. 

A:         She answered that they might if the proceedings were contrary to the law.  Hull read the actual De Novo provision indicating that the Park Service could take things to court for more than just being contrary to law. 

Q:        Fassler asked if the issue has been brought before the Advisory Board. 

A:         No one thought that it had, but Pendry said it may be appropriate to do that.

Q:        Terry MacRae asked the group how many would be affected by this valuation.

A:         The group answered that almost everyone of them would be.  Pendry further said that the De Novo only applies to contracts with possessory interest and that there are approximately 50 contracts left with possessory interest.

Q:        John Rutter asked Pendry if there was a particular event that was the basis for the De Novo amendment being introduced.

A:         Pendry answered not a particular event, but a general concern about contracts still falling under the 1965 Concessions Act.  Hull said that there were two particular events that did set it in motion – the Hamilton Stores arbitration at Yellowstone and the Xanterra arbitration at the Grand Canyon.  Pendry said that in both those cases the Park Service thought the law had been misapplied.

Q:        Rutter asked if the De Novo amendment had solved the problem.

A:         Pendry answered not necessarily, but it gives the court the opportunity to interpret the law.

Q:        Rex Maughan asked Jim Santini if the De Novo amendment wouldn’t come into play in the 1998 Concessions Law.

A:         Santini answered that it did not come into play in the 1998 Law.

Joe Fassler Introduced Senator Craig Thomas, Ranking Member of the Senate National Parks Subcommittee.

Sen. Thomas thanked the group for hosting him and said he was glad to be with the NPHA.  He mentioned that the Senate is just starting its year and there is not a lot to report insofar as specific parks legislation.  Sen. Thomas introduced his Subcommittee Staff Director, Tom Lillie.  He mentioned that park visitation is down and the price of gasoline as one of the reasons.  He said there is a need to look at visitation and especially focus on the young people and the fees charged for entrance.  He also commented on the maintenance backlog and the importance of the budget along with adequate funding for the national parks.  Lastly, he commented that binding arbitration is the best way to settle disputes when there is a difference in the valuation of assets between the NPS and the concessioners.

Q:        Joe Fassler asked Sen. Thomas about the binding arbitration and the De Novo amendment and said that binding means binding.

A:         Sen. Thomas answered that it asked for by the NPS and is currently in the Interior Appropriations Bill and suggested the best way to solve the problem is to remove it from the bill.  He will work to keep it out.

Q:        Rex Maughan asked the Senator about how the NPS seemed, at times, to wanting to keep visitors out of the national parks in reference to the Yellowstone winter situation.

A:         The Senator mentioned that access for visitors is a critical part and that some controls need to be in place for the park’s protection.

Q:        Maughan then commented that the fees to get into the parks was a concern.

A:         The Senator commented that it is a concern of his too and will be looking at it.

Q:        Joel Saferstein asked the Senator about the NPS Centennial Challenge.

A:         The Senator answered that it was a good idea and doesn’t see any problem with it and is getting support.  Tom Lillie joined in the answer and said it was a two-stage process – it needs to go through both the appropriators and the authorizers if it is to be extended.  He also said that boundaries need to set for the money.    The Senator also said that the Secretary and the President are both committed to the project and it has support, even from the philanthropic end.

Q:        Jim Santini asked the Akaka priorities for this Congress.

A:         The Senator answered that it is too soon and they have not had any meetings as yet.  He mentioned that Akaka’s priorities are largely out in the Pacific.  Tom Lillie said that the Subcommittee will be looking at fees and at Heritage Areas.

Q:        The Senator asked the group what their priorities would be if they were on the Subcommittee.

A:         George Campsen answered that he would be looking at the Service Contract Act issue.  He wanted to assure that Park Service concessions contracts would be exempt from the SCA.   Joe Fassler joined the conversation to say that the NPS and the concessioners are “on the same page” on this issue and hoped it could be fixed through legislation or rulemaking.  Tom Lillie said that it would be hard to fix legislatively, and be easier through the rulemaking process.

Q:        Tod Hull asked the Senator about Heritage Areas.  He said that he attended a House budget hearing on the Park Service and that Cong. Kildee asked about land acquisition in Heritage Areas.

A:         The Senator said that that may happen, but if it happens it should be very local.  He also said that they should stay Heritage Areas and not become park units.  Jim Santini commented about the new Supreme Court decision on condemnation of land and linked that to land acquisition in Heritage Areas.

Q:        Mark Saferstein asked a question about the Centennial Challenge and it’s relationship to the Director’s Order 21 and the proud partners program and the exclusivity of the proud partners making contributions to the NPS, while others cannot.

A:         Tom Lillie answered that the NPS needs to stay within the law and must be held accountable.

Afternoon Session:  Monday, March 05, 2007

Joe Fassler Introduced Timothy Helm, Team Leader for Government Contract Enforcement, Department of Labor

Tim thanked the group for being here.  He began by saying there currently is a case involving the Service Contract Act in California (Alcatraz Cruises) and is being reviewed by the Administrative Review Board of the DOL and that he was unable to talk about the specifics in that case.  Tim gave a general basic overview of the SCA.  The SCA was passed in 1965 and has a contract wage threshold of $2500.  It covers contracts entered into by the US government and a contract principally for services and for work only performed in the United States.  The SCA generally does not cover salaried employees.  Tim went over the exemptions by DOL regulations from the SCA.  He further stated that any contract with five or more employees must contain a wage determination and the wages must reflect the wages prevailing in the locality.   Contracts covered by the SCA must also contain employee benefits, like vacation benefits, and health and welfare (fringe) benefits currently at $3.01/hr.  This amount in reviewed every year in June.  He also said that wage determinations resulting from bargaining agreements are transferable to any successor concessioners and that they are obligated to pay the bargaining agreement wage.  For concessions contracts, wage determinations are made every two years.  Also, there is a process of challenging the DOL wage determinations.  When paying employees make sure that the amounts paid for wages and to the fringe benefits have a separate accounting on the pay stub.  Employee complaints triggering a DOL investigation can be submitted by just about any means – phone, fax, written letter.  There is no standard form.    Complaints also can come from third parties. 

Q:        Alan Saltman asked if the complaintant can be identified by the employer.

A:         Helm answered that that information is not released nor does the DOL even say that the investigation is based on a complaint.

DOL has 700 investigators and only about 125 of the 700 are capable or qualified in researching Service Contract Act issues.  Investigators look at wage classifications, fringe benefits, overtime pay, and public posting of the conformance information (does not have to be posted in Spanish).   If it is found that a company is in noncompliance with the SCA, DOL can ask the contracting agency to withhold amounts due the employees.  In serious offenses, the company is barred from any government contracting for three years. 

Q:        Phyllis Prevost  asked if there were any monetary penalties placed on the employer if a violation occurs.

A:         Helm said only for the overtime pay law ($10/day), otherwise there is not.

Q:        Pam Pitts asked what is the timetable between a complaint and the investigation.

A:         Helm answered it depends on a number of factors as to when an investigation begins.  But after it does, a typical investigation lasts about 30 to 60 days without appeals.

Q:        Alan Saltman asked in the cases where employers are in violation, how much time is given to make restitution to the employees.

A:         Helm answered it depends on the amount, but DOL gives wide-latitude.

Q:        Pam Pitts asked for a  list of exemptions from the SCA.

A:         Helm answered food, lodging, automobile fuel, newspaper stands, recreational equipment, and souvenirs.  Everything else is not covered, but there are grey areas.

Q:        Lee Harlow asked if maintenance type people would be covered under the SCA.

A:         Helm answered if it is primarily a lodging contract, then those employees would be covered under the SCA.

Q:        Terry MacRae asked why is there suddenly interest in the SCA as it applies to park service concessions contracts.

A:         Helm answered he wasn’t sure why and said maybe the concessioners have been lucky so far.

Joe Fassler Re-introduced Jo Pendry who Introduced Geoff Baekey of PriceWaterhouseCoopers to Speak on the Proposed NPS Insurance Guidelines

Jo Pendry stressed that the insurance guidelines are only in draft stage right now and the concessioners have the opportunity to comment on the guidelines to the NPS.  Baekey stressed that they were definitely looking for concessioner feedback on the insurance requirements.   Baekey mentioned that the requirements are needed to protect the NPS from claims and liabilities and to assure visitor service continuation.  The proposed insurance requirements are generally proposed for those contracts under $3 million.  Contracts over $3 million usually will have the insurance requirements as part of their contract.  Concessioner must provide proof of insurance within 30 days of the contract award or operating season.  NPS currently looking at surplus line providers who carry less than an A- financial strength rating, usually around B or B+.  Anything less than B- is not acceptable.  Also, NPS is not looking favorable on alternative risk financing techniques.  Self-insured must be approved by the NPS Director.  NPS leaning toward one hundred percent coverage on real property and will not accept partial coverage.

Q:        Joe Fassler asked about the requirement for continuance of visitor services given the example if a fire destroys a hotel.  The insurance will cover the cost, but what about the visitor services.

A:         Baekey answered that it is clearly unavoidable to disrupt visitor services in this example, but the point is to get back in service as soon as possible.

NPS is looking at partial coverage for concessioner personal property. 

Q:        Joe Fassler asked about workers compensation and if a company is self-insured, does the $1million coverage apply.

A:         Baekey answered that a company cannot be self-insured unless there is a qualified insurer standing behind the self-insured and even then that will be looked at on a case by case basis.

Q:        George Campsen commented that, because of the hurricanes, in South Carolina some insurance companies are just canceling their policies and asked what can you do if you simply can’t get insurance coverage.

A:         Baekey answered that he wasn’t sure and maybe a policy decision by the NPS.

Q:        Alan Saltman asked if there was going to be a formal comment period on the insurance guidelines.

A:         Pendry answered that everything to date has been informal and that these are just internal NPS guidelines, thus no legal requirement for a formal comment period.

Q:        Terry MacRae asked if the current contract requirements allow a concessioner to change the insurance requirements if circumstances change.

A:         Pendry answered contracts can be modified if it is in the interest of the government.

Q:        Phyllis Prevost asked if a current contract has minimum amounts of insurance below what the proposed guidelines are indicating, would the NPS go back and change them.

A:         Pendry said it can only be dealt with on a specific contract.

Q:        Brad Hill asked if the insurance covering inventory is for the purchase price.

A:         Baekey answered it is the purchase price.

At this point the floor opened up for general questions for Jo Pendry and Geoff Baekey.

Q:        Gerry Gabrys asked how many positions are open in the NPS concessions program.

A:         Pendry answered that her office is about 90% staffed, most regional offices are at 100%, while others are staffed at lower percents.  Pendry said she did get some additional funding in this years budget and will be hiring 7 new concessions employees.  She said that there are about 200 concessions specialists system-wide, but only 30 are full-time.

Q:        Pam Pitts asked how many are staffed in the NPS Tourism office.

A:         Pendry answered it was still only one, Dean Reader, but with the Centennial Celebration it would be a good time to expand this office.  She also said that a good idea might be to have a tourism staff in the WASO concessions office.

Joe Fassler Introduced Congressman Rob Bishop, Ranking Member, Subcommittee of National Parks

Cong. Bishop thanked the group and was glad to be on the Parks Subcommittee.  Cong. Bishop talked about Congress and the thought that there is a lack of civility on the Hill.  However, said that this so-called lack of civility has been a long history of going on and is not quite as bad as some people say.  He mentioned there may be an identity crises in the national parks.  We need to decide what is the purpose of our national parks.  He said that some look at them as places that need absolute protection instead of places where the public can enjoy them.  We must assure that visitation increases to our national parks, not only in total number, but also in demographics.  He mentioned that the amenities offered by the concessioners are very important.  He also said parks need to become relevant - parks must adapt to newer technologies, especially to the younger citizens.  Congress also must look at a business approach to managing the national parks.  He stressed that he needs input from the group and others to help him define the problems.  Parks are national treasures, but become relevant only if people are there to see them and visit them.

Q:  Terry MacRae asked about international visitors to the national parks and mentioned some the barriers they face, such as visa restrictions, and that it is important for them to have a good experience in the United States.

A:  Cong. Bishop answered that the international visitor is important.  We need to have more people visit and experience the United States to see for themselves what America is all about, instead of the image they may see on televisions shows.

Tuesday, March 06, 2007

NPHA Business Meeting

The Meeting was called to order by Joe Fassler at 9am.  Joe then introduced Ron Felty.

Ron Felty, chairman of the Nomination Committee announced the slate of Board nominees – Joe Fassler, Dave Woodside, Pam Pitts, Rex Maughan, George E. Campsen, Jr., Carol Metzler, John Rutter, Dick Buck, Ed Wimberly, Tom Mack, Phyllis Prevost, John Schoppmann, and Brad Hill.  

Action Item:

There were only 13 nominees, the exact number of Board positions, and Ron entertained a motion to the general membership to accept the Board nominations as presented.

The nominations were so moved by Gerry Gabrys and seconded by David Ohanesian.   Ron asked for a show of hands to accept the Board nominations with unanimous acceptance and the motion to accept a Board of Directors for 2007 was approved.

Joe Fassler then led a discussion of the NPHA dues structure.  He mentioned that the current structure was confusing to prospective members and that many were unwilling to make their gross revenues available to calculate their possible dues.  He also commented that the dues need to meet the financial obligations of the association.  Joe called on Dave Woodside to explain the new dues structure.

Dave Woodside requested John Rutter to assist him in explaining the new dues structure.   John commented that there was an effort to keep the dues close to what has been paid in the past and that the new dues structure will be a graduated dues structure based on revenues and percentage – begin by paying a higher percentage, but as the revenue increases the percentage decreases.  There will also be a dues cap at $32,625.  The new dues structure can be useful for anyone wanting to calculate their dues.  The three- year gross revenue average will still be in place.

Dave mentioned that the dues cap would be useful to the bigger concessioners who were thinking of joining the association, i.e., they would know that they would not pay any amount more than $32,625.

Carol Metzler commented that the NPHA website could post the dues structure, so that prospective members could calculate their dues.

Gerry Gabrys asked if the new dues structure accounted for this year’s budget.  Dave W. answered that it did not and that Carol M. was going to present the budget a little later.

Action Item:

Dave W. asked for a motion to approve the new dues structure.  George E. Campsen Jr. so moved and was seconded by Ron Felty.  Dave W. asked for any discussion.  Ed Wimberly asked if the new dues structure was for the 2007 calendar year.  Dave said it was.   Ron Felty gave a clarifying point that the dues were per concessioner, not per contract.  Dave W. asked for a voice vote.  The motion was carried unanimously and accepted by the general membership.

Tod Hull requested that we also needed to amend the NPHA Bylaws to repeal the old dues structure and replace it with the new one.

Action Item:

Dave W. asked the membership for a motion to amend the Bylaws.  The motion was so moved by Dave W. and seconded by George E Campsen. Jr.  Dave asked for a voice vote.  The motion was carried unanimously and accepted by the general membership.

Carol Metzler next presented the NPHA budget.  Copies were passed out to the membership.  For 2007 the association will run a deficit of approximately $131,000 for 2007 which will come out of the reserves.  The goal is to have a balanced budget by 2008.   George Campsen made a motion to give Carol Metzler the flexibility to adjust the budget.  Gerry Gabrys asked why there was a need to “adjust” the budget.  It was agreed that there was really not a need to adjust the budget.  Campsen withdrew his motion.

Action Item:

Carol asked for a motion to approve the 2007 NPHA budget.  It was so moved by Joe Fassler and seconded by Dave Woodside.  Carol asked for a voice vote.  The motion was carried unanimously and accepted by the general membership.

Tod Hull next introduced an impromptu guest, Dan Wenk, the new Deputy Director of the NPS.

Dan thanked the association for having him there and was pleased to be in his new position as Deputy Director.  Dan was previously at the NPS Denver Service Center and was superintendent at Mount Rushmore.  He commented that he was familiar with concessions issues and extended his apologies that Director Mary Bomar could not be at the meeting.  He mentioned that concessioners are a very important part of the park experience.  Dan also talked about the additional $258 million dollars for park service operations in this year’s budget and the Centennial Initiative.  There will be an additional 3,000 seasonal employees for 2008.  He also talked about competitive sourcing, not in a concessions sense, but in other services like garbage pickup. 

Q:  Jim Santini asked Wenk if the Park Service was going to get support from ReserveAmerica.

A:  Wenk answered that the Park Service is putting in a reservation system and it may be available to the concessioners at a future time, although no formal decision has been made yet.  It is not a requirement that the concessioners use it either.

Q:  Joe Fassler asked why the Park Service doesn’t use the reservation system by the concessioner already in place.

A:  Wenk answered that the Park Service wants a “one stop shopping” type of reservation system instead of having the park visitor contacting a number of parks if traveling to different places.  Jo Pendry added that the reservation system is not just for the Park Service, but also for the other land management agencies.

Tod Hull introduced Chuck Birenbaum and Bob Spagat from Winston & Strawn, LLP.

Chuck Birenbaum thanked the group and said he was here to make a presentation on the Service Contract Act.  At the heart of the issue are two federal agencies which have a legitimate dispute over the interpretation of the SCA and its application.  The problem arose with the Alcatraz contract when Alcatraz Cruises, after being awarded the contract, did not recognize the employees used by the predecessor concessioner, Blue & Gold Fleet.  The unions then began a corporate campaign using a number of sources to pressure Alcatraz Cruises to hire union employees.  In 1965, both the Concessions Policy Act and the Service Contract Act were passed by Congress.  The Concessions Policy Act was tailored very narrowly to apply only to the Park Service.  During debate of the SCA, it was made clear that the SCA was not to apply to Park Service concessions contracts.  The purpose of the SCA was to provide labor standards for contracts furnishing services to federal agencies, not to the public. 
This is an important distinction when looking at concessions contracts.  The Dept. of Labor originally agreed with this position.   In 1983 that position changed because of a dispute with NASA – not the National Park Service – and DOL changed their regulations to exempt certain types of services offered by Park Service concessions contracts.  Bob Spagat offered that it was his opinion that the Interior Dept. never commented on the new regulations.  No one actually knows how these exemptions were formed. 

Q:  Ron Hallagan asked if there were examples of recreational equipment not covered by the exemption.

A:  Spagat answered that there are none and there remains much uncertainty as to what is covered and what isn’t by the exemptions.

In 1998 the Interior Department made it clear that contracts under the new 1998 Concessions Act were not federal procurement contracts within the laws governing federal procurement actions.   In other words, federal contracting laws do not apply to concessions contracts and that the Park Service, and only the Park Service, has the authority to establish the terms and conditions of the contract under the 1998 statute.  Spagat made the point that changes in the political winds will have an impact on,different interpretations of the SCA applicability to concessions contracts.  He also cautioned that the DOL regulations, regardless of the exemptions, state that if the contract offers substantial services other than those mentioned.  Substantial services are also subject to interpretation by DOL and gave the example of the Denali case where the contract covered many services that are exempt, but had one, the transportation segment of the contract, which was not, yet DOL determined that the SCA applies.

Q:  Pam Pitts asked if all wages for the Denali contract fell under the SCA.

A:  Spagat answered that yes, it was for all the wages under that contract.

Spagat emphasized the point that the applicability of the SCA is very subjective by the DOL and they have wide discretion in determining what is covered and what isn’t.

Joe Fassler introduced Congressman Nick Rahall, Chairman of the House Natural Resource Committee.

Cong. Rahall thanked the group and was pleased he could attend the meeting as the new Chairman of the House Natural Resources Committee.  The Congressman gave a short summary of the National Park Service and praised its offering to the visiting public.  Mr. Rahall then talked about the NPS Management Policies and was happy to see the Management Policies not drastically changed as was proposed in the first draft.  He next mentioned the NPS Centennial Challenge, however questioned the means by which the program will be funded, i.e., the philanthropic contributions.  The funding of the Parks is a federal responsibility and should remain that way.  He also had concerns for the rising recreation fees on our public lands.   He further has great respect and confidence in the Secretary of the Interior, Dirk Kempthorne.  As far as the Committee’s activities, Mr. Rahall said that there will be oversight hearings on the recreation fee issue and a possible oversight hearing on the NPS Concessions Program.  He praised both Staff Director, Rick Healy and the new Subcommittee Chairman, Raul Grijalva. 

Q:  Jim Santini asked how the NPHA can be of help to the Committee.

A:  Mr. Rahall answered that NPHA has been of help in the past and looks forward to the continuing knowledge of Park Service the concessioners have.  He likes to see coalition building to solve problems.

Q:  Joe Fassler asked about the Service Contract Act and how his Committee might help the DOI come to an agreement with the Department of Labor in solving this issue.  It seemed to Fassler that the DOL is overstepping their boundaries and that it is difficult for two agencies to solve a problem without the influence of the Congress.

A:  Mr. Rahall was aware of the problem and would possible talk to Congressman George Miller about it.

Q:  Tod Hull asked about the decline in park visitation and asked Mr. Rahall to comment on this and if the Committee had any plans to address the problem.

A:  Mr. Rahall responded by saying that one of the problems was the proper and adequate funding of the parks.  Without it, the facilities fall into disrepair thereby influencing people’s choices not to visit the parks.  He also said it takes an improved marketing effort to motivate people to once again visit the parks. 

Q:  Hull then commented on the international visitor and what could be done to attract them, for example, develop a Department of Tourism.

A:  Mr. Rahall said that the international visitor was an important part and that the federal government has a part in this to assist appropriate government agencies to improve the message to foreign travelers and promote America’s natural resources.  Mark Saferstein commented that the Park Service has a Director of Tourism now, but has no operating budget.

Q:  Rex Maughan commented that in the parks where the fees have gone up, the visitation has gone down.

A:  Mr. Rahall said that this was a good point and would look into it.

Joe Fassler Asked Jim Santini, NPHA Legislative Counsel to Give His Legislative Report

Jim mentioned a transition going on within the Park Service linked to the Inspector General’s report that there were problems “from top to bottom”.   He said that with the issuance of the report significant changes began in the DOI.  Secretary Gale Norton resigned and Assistant Secretary of Fish, Wildlife, and Parks, Paul Hoffman was moved into a less influential position because of the changes he proposed for the NPS Management Policies.  Santini went on to explain the sequence of events that took place with the Management Policies.  Jim gave a background of new Secretary of the Interior, Dirk Kempthorne and praised Jo Pendry, the Concessions Program Manager along with Dan Wenk, the new NPS Deputy Director.  However, we still have significant policy and legal issues that we need to tackle.  The best way we can do that is to work with the leadership of both the Congress and the Administration.  He mentioned that a good way to illustrate the concessioner issues is with examples we could show the Park Service and the Interior Department, like the Tom Mack issue.  Jim also stressed the point that the NPHA membership is key in getting our issues in front of the Congress.  Santini mentioned that it was important to enlist new members by showing them examples of how and where NPHA has been effective in improving the concessions business.

Tod Hull, NPHA Washington Representative, then Gave His Report

Hull mentioned that it was very important to build the NPHA membership so that we can be as effective as we can be when dealing with the Congress and the Administration.  He said that the members can and must help in building the association.  As far as his accomplishments, Hull went on to say that he has been working with the Service Contract Act and met with both the NPS and Department of Labor.  Hull also spent a lot of time on the De Novo Amendment and trying to get that stricken from the Interior Appropriations Bill.  In addition, Hull spends a lot of time and effort putting together both the Annual Meeting and the Mid-Year Meeting.  He also said that in 2006, up until September, he devoted much of his time to the NPS Management Policies.  During the later part of the year and into 2007 Hull has spent a lot of time with the American Recreation Coalition building ideas and a program to increase visitation to the national parks.  He stressed the point the members need to communicate their issues to him so that he can help solve them.

Tod Hull Introduced Derrick Crandall, President of the American Recreation Coalition

Derrick thanked the membership and was happy to address them.  There have been disappointments, such as the NPS Management Policies.  However, there are good signs.  The Park Service is beginning to address the decline in visitations.  He had recently met with President Bush and the First Lady, explaining to them this issue.  He mentioned that partnerships are important and that the concessioners and the association needs to work with partners in raising the awareness of the American public to visit the public lands.  He said that we need to help the federal agencies with new ideas and new technologies to appeal to the park service visitor.  He also stressed that, as parents, we need to get our children into the outdoors in order to appreciate what it offers.  Crandall made the point that the Park Service needs to embrace the new technologies available, like downloadable I-pods, that have appeal to the younger generation of people to visit the parks.  Crandall also talked about the Centennial Challenge and how traditional type projects like new water systems or vegetation restoration projects may help build a better park system, but does nothing to draw visitors into the parks.   The Centennial Challenge also provides the opportunity to implement and design projects that would increase visitation to the parks.  Crandall then linked health and health care issues to increasing visitation to the national parks.  There is an opportunity to capitalize on the interest in health issues and healthy lifestyles and getting people to recreate in the outdoors.  There may also be an opportunity to tap into an untraditional revenue stream from the Department of Health and Human Services or the Department of Education in pursuing healthy lifestyle recreational programs.

The 2007 Annual NPHA meeting was officially adjourned by Joe Fassler at approximately 11:56 am. 

Dave Woodside made some parting announcements that the Mid-Year Meeting will be held at the Green Valley Ranch Resort in Henderson, NV, October 15 – 17, 2007 and that the 2008 Annual Meeting will be March 9 – 11, 2008 at the Madison Hotel in Washington, D.C.

Many of the NPHA members spent the afternoon of March 6, 2007 visiting Members of Congress on planned Capitol Hill visits.

Respectfully Submitted by Tod Hull

and Reviewed by Pam Pitts