Mid-Year Meeting Minutes

 

 NPHA Mid-Year Meeting

October 02-04, 2006

 
Harborside Hotel & Marina
Bar Harbor, ME
 ____________________________________________________________________________________ Members Attending: Dave Woodside, Pam Pitts, Bradford Hill, John Schoppman, Bill Butts, George Campsen Jr., Carol Metzler, Ron Felty, Barbara Burch, Joe Fassler, Clay James, Gerry Gabrys, Dick Buck, Rod Fair, Meg Fair, Ed Wimberly, Betty Gripentog, Phyllis Prevost, Lee Harlow, Mark Saferstein, Joel Saferstein, Jon Shultz, Bonnie DenDooven, KC DenDooven, J. Craig Erickson, Kevin Emmons, Kevin Garden, and Dick Camp NPS Staff Attending: John Wessels, Jo Pendry, Bob Hyde, Ernest Jutte, Sheridan Steele, and Elizabeth Weston Invited Guests: Jack Harrison, Geoff Baekey, and Michael Tang NPHA Staff Attending: Tod Hull, Jim Santini, and Carmen Escalera The National Park Hospitality Association gratefully acknowledges our 2006 Annual Meeting sponsors: Acadia Corporation, American Park Network, Americana Souvenirs & Gifts, Clarion Associates, Inc., KC Publications, and KLS Technologies 
 
Tuesday, October 03, 2006 The 2006 NPHA Annual meeting opened Tuesday, October 3, at the Harborside Hotel & Marina in Bar Harbor, ME.  Chairman, Joe Fassler called the meeting to order at 8:35am.  Joe Fassler asked everyone to look at the next two days of the conference as a conversation among people gathered in a living room. The invocation was lead by Rev. Richard Camp. Joe Fassler introduced Dave Woodside Dave Woodside welcomed everyone to his part of the world. He distributed information packages to each in attendance with information of Acadia National Park, Bar Harbor and the surrounding area. Dave spoke of the damages to Acadia National Park attributed to the earthquake the previous night. (“At 8:07 p.m. on Monday, October 2, a minor earthquake of magnitude 4.2 shook the ground around Acadia National Park. The epicenter of the earthquake was located in the Atlantic Ocean just off Schooner Head, on the eastern side of the park”. Dave also went over the activities planned for Wednesday afternoon. (Trolley ride up to Cadillac Mountain and lunch at Jordan Pond House). 

Joe Fassler introduced John Wessels, Assistant Director of Business Services, National Park Service
 John Wessels presented Joe Fassler with a National Park silver lapel pin as a token of appreciation for the partnership NPHA has with the National Parks Service. John informed the attendees Mary Bomar was confirmed as the new Director of the National Park Service and her swearing in date will be within the next couple of weeks. “Civic Engagement”, a theme started by Fran Mainella will be heard a lot from Mary Bromar.  John Wessels spoke of the concessioner’s and the national park’s fates being tied together despite the conflict between conservation and recreation. There is a need to preserve our resources while still providing millions of visitors with a great experience.. There will always be a dynamic tension between conservation and recreation and it is not true that where there is a conflict, recreation will be thrown out. The dynamic tension is not political.  Management Policies are designed to inform the actions and decisions of those in charge of managing the parks. Management Policies are not set in stone because each park has a different visiting public, type of resources and resource challenges. There may be similarities and similar issues between some, but, no two are exactly alike. Management Policies are a framework of how decisions are made and not an absolute set in stone. You’ll find we now have Management Policies which we feel free to discuss and debate in an open forum. There aren’t a lot of differences between the new Management Policies and the previous.  The new Management Policies are much more service oriented and much more positive.  In the past there was a list of things you could not do, now there are areas highlighted to show the areas where we both have vested interests in preserving resources or preserving visitor experience. A special new section on tourism has also been added be added. Questions and Answers with John Wessels Q:        Joe Fassler asked if John Wessels was aware park visitation has decreased and how will the new Management Policies reverse that trend?  A:        John Wessels answered he is not sure the Management Policies is equipped to address those specific issues. Management Policies, when implemented by superintendents will help these superintendents to attract the next generation of park visitors. Hopefully concessioners and the park people can work together to make park visitation more successful. Q:        Tod Hull commented that the Management Policies drafted in October of 2005 and June 2006 were dramatically different than those presented for comments in June of this year. A:        John  Wessels answered that the park service received over 45,000 comments and once it became a political process, the park service did the best it could with conservation versus recreation issue.  Q:        Joe Fassler asked what initiated the changes mentioned that we were already aware of? A:        These policy changes were initiated by the previous administration. The current administration went back to figure out what it really thinks; went back to see if the balance is appropriate. We now have a scientific basis to see what constitutes impairment. The new Management Policies has a much improved concessions section; a much broader view of what civic engagement means. In the past, the National Park Service has not been very open to civic engagement, as it is stated in the new Management Policies, it is now a requirement for the National Park Service. John added the process has changed for park fee increases. Under the new Management Policies the park must invite comments from park visitors before park fees are increased. John discussed some of the questions, issues and responses brought up during the confirmation hearing for Mary Bromar. John Wessels continued his discussion stating there has been a shift in the focus and willingness to invest by the National Park Service.  Q:        Bonnie DenDooven said in the last twelve months she has sensed a philosophical change in the Natural History Associations.  Associations they say the park superintendents want more money from them and they are therefore forced to carry more and more products that compete with concessions. with each other to make more money. They say they have to carry less books and more magnets because the magnets sell more and they need to make more money. What is your opinion about that? A:        The National Park Service’s partnership group and the concessioners group are now working to identify the appropriate role for the cooperating associations to better deal with these issues in the future. A cooperating association which does not provide interpretive experience is not a cooperating association. There needs to be a clear expectation of when you sign on as a cooperating association with an interpretive portfolio that your role and function is different than that of a concessioner who competes through a highly competitive process.  The National Park Service needs to do a better job of telling the cooperating association what their role and functions are in the parks. Q:        KC DenDooven said the cooperating associations need to go back to the fundamentals because they are selling things, which are not interpretive. We are a for profit interpretive publications business and have a problem with these associations selling thousands of products which are not interpretive. A:        John Wessels said Jo Pendry receives about a letter a week dealing with this issue, the inventory mix between cooperating associations and concessioners. John said it is something they are paying increasing attention to. Q:        Joe Fassler asked if the superintendents are aware of or should be made aware of this issue. If the superintendents are putting pressure on the cooperatives, they may be encouraging the cooperative services to violate 501c3 without their realization. A:        John Wessels agreed with Joe that the superintendents should be reminded to tread lightly so as not to pressure the cooperative services. He said Geoff Baekey, of PriceWaterhouseCoopers, and Jo Pendry have been working together to develop a superintendent curriculum on concessions. He continued by saying a lot of the superintendents are not business folks. He said he is not sure the superintendents are up to speed on concessions, policy, laws, and expectations.  Q:        John Wessels asked Jo Pendry if the superintendent’s curriculum has been tested. A:        Jo Pendry said the superintendent training program is designed as an executive level training where the superintendents are brought in along with their concessions specialist and taught everything they need to know at the executive level. They will teach them how to manage and oversee the programs. The issues of concessions and cooperating associations has been around for many years but has recently become more difficult because cooperating associations are finding it difficult to sustain themselves from the types of sales that they do have and they are being asked to do more and more as parks have less and less discretionary dollars outside of paid salaries. It is a vicious cycle of problems. The superintendent’s pot of money includes OMPS money, money from concessions, money from fees and a small amount of money (or volunteerism or whatever he may get in terms of non-monetary benefits) from cooperating associations. As certain pieces of the pie shrink the superintendent is pushed into trying to find revenues from other sources. Jo said the larger issue is part of a larger funding issue and how do we support the National Parks as expenses go up. Steve Martin and I are going to look more seriously at the roles of the cooperating association, concessioners, and other partners. The National Park Service needs to decide what role it wants the various groups to play.  Q:        Bonnie DenDooven wanted to broaden what John Wessels said. She said she has noticed the National History Associations have decided over and over again to go into publishing and they have made very poor business decisions on how to spend their own money and capital. They have taken on projects that have not been profitable. Part of their financial dilemma is of their own poor business practices.  A:        Jo Pendry answered that as you educate superintendents on business, they see they get 100% of the cooperating association profits but if they are mismanaging their profits are not nothing compared to private sector corporations who hopefully know how to run their business, they need to understand 100% of nothing is a lot less than 4% of a lot. Q:        Jim Santini asked if there was a director’s order that deals specifically with 501c3 organizations that tells them what they can and cannot do? A:        John Wessels answered that there is a director’s order on cooperating associations. He pointed out superintendents are required to read every director’s order and the Management Policies. They have to know what is allowed and not allowed. Concessioners can choose whether or not to read them. This is a big part of the superintendents training; knowing what can and cannot be done. Q:        Phyllis Prevost asked if the superintendents would be a tested at the conclusion of their training. A:        John Wessels said it would not be a bad idea to test the superintendents before giving them a 60 million dollar project to run. Q:        Tod Hull commented there are some improvements in the 2006 Management Policies: the civic engagement and the tourism sections. However, one resource that causes a lot of concern is soundscape; when you deal with a resource, like soundscapes, any mechanical noise could be considered an impairment of that resource. In the existing Management Policies, if the resource is predominant, the natural soundscape for example, is being impaired by motorboat noise, the motorboats are going to be eliminated. That’s our concern. The 2005 Management Policies, we felt, addressed that concern directly. With the 2006 Management Policies, all it would take would be an activist court to decide yes, indeed, there has been an impairment of the resource by the motorboats and recreation areas will be shut down to motorized recreational activity. It may not be probable to some but, it still causes concern because it is a individual decision by the superintendent, or by the court, or by environmental groups, like the Blue Water Network which wants to get rid of all motorized recreational activity in the national parks. Can you comment on that? A:        John Wessels said he is aware of the radicals out there and thinks there needs to be a reasonable response in such matters. Are they going to ban children because they make too much noise? Are they going to stop firing cannons in the Civil War parks? These are the fundamentals and appropriate for these parks. Through the Management Policies we can take full advantage of civic engagement and mandate a balanced discussion about what is appropriate with regards to what constitutes natural quiet or soundscapes.  Joe Fassler introduced Jo Pendry, National Park Service Jo Pendry spoke of the partnership between the park service and concessioners. She hopes NPHA can help smaller concessioners who do not have the same resources as the large concessioners, teaching them to provide better services to visitors. At the same time she hopes NPHA can work on some of the larger issues that face national parks and concessions. She stated she knows concessioners help their superintendents everyday understand more about their business; she stressed the importance of a good working relationship between superintendents and concessioners. Jo Pendry spoke about the newly designated National Park Service director, Mary Bomar. Jo feels Mary Bomar will be good because she has served in a variety of capacities as a superintendent.  Jo spoke about the concessions program of the National Park Service, specifically the conditions assessments tool. The National Park Service has completed 75% of National Parks Concessions Managed assets.  Having conditions assessments is the first step in allowing the park service to track lease-hold-surrender interest pluses and minuses. This Conditions Assessments Tool also provides a facility condition index so we have a better understanding of conditions the facility is in compared to other facilities. Facilities with low FTIs (Facilities Conditions Index) are in better condition than those with high FTI’s. For example, if you have a facility condition of .2, it means that the cost to repair the building is 20% of the cost to replace the building.  You would be better off paying 20% to fix the building than replacing the whole building. If you have a higher facility condition percentage it is saying it would cost more to fix the building than to replace it. We have a baseline facility condition index of .29 for concession facilities. As we get our condition assessments completed we’ll have the actual along with the baseline. We now have about 70% of the assessments completed. As we get closer to 100%, we’ll be able to have a real number that tells the overall condition of any facility. This will be a tool for concessioners as well. It can be used in prospectus development and also in responses. If you have a better idea of the condition of the facility; you go into prospectus development knowing the conditions, you’ll have a better opportunity to write a better proposal that will respond to the needs of the park service. Another main issue we’ve been working on is the “Made in the USA” provision in last year’s appropriation bill. There is language in the appropriations bill from last year that requires the park service to produce a report on how we are encouraging the sale of products made in the USA, Native American, and other American handicrafts. That report is due anytime now. I know Tod and Judy worked on a survey which was sent out to all the concessioners. I believe most of you have responded. The bottom line is our Congress has told us to promote and sell more American made products. We need some help from you concessioners with this. I need to understand the challenges you face. What we hoped to find from this survey, is an understanding of the baseline: where are you now? What are you selling now? I also need some input on how are you promoting “American Made” products? I know it is a challenge on a lot of soft goods to find those made in America. Q:        Jo Pendry asked what types of challenges do you face? A:        Brad Hill answered about 40% of the items he carries are made in America, but he has to break it down into smaller segments of merchandise. Almost none of the books are made or printed in the United States anymore, so 99% of everything you sell in the publishing world is made overseas.  Like you said, soft goods, it is hard to find a tee shirt made in the US. I don’t know that people will pay much more for a tee shirt. If you have an American made hat and another hat made overseas, it is about a $4.00 to $5.00 difference.  At the retail level it is very hard which is why I think you need to break it apart: American made and Native American handicrafts being one segment and souvenir industry the other, (not made in the USA and I don’t think that is going to change anytime soon.) Q:        Jo Pendry continued the topic by saying those behind the “Made in the USA” provision felt American crafters were under represented in the national parks and our sale of souvenirs. What response do you have to that? A:        Dave Woodside responded they used to sell crafts produced here in Maine and now they say they are produced in the “offshore” studio. Their “offshore” studio means way “off shore”. What they do is develop and design the products here and produce it overseas. In a number of instances, good selling craft products are no longer produced here in the USA.  Q:        Jo Pendry asked what about locally available crafts? Are there any? A:        Pam Pitts answered we have one Native American lady who makes handmade baskets but, no jewelry; it is just nonexistent in our park. The same is true for local artists. We are limited by the amount of local craftsman around. It is really challenging. A:        Lee Harlow answered that in Hawaii they don’t have Native American crafts, but they do have local Hawaiian crafts. It is such a limited market appeal for park visitors. Visitors look and appreciate it ,but it not something they are looking desperately to take home with them. We’ve tried to work with local artist who produce more contemporary island made things and the park service said we could not do that because it doesn’t fit with the native Hawaiian artwork. So we are just left out in a limbo about what we can do. Q:        Jo Pendry asked if there are any success stories? Not necessarily Native American or Hawaiian crafts, but other local crafters that you have a created a special partnership with? A:        Pam Pitts answered she had a few but their items are so expensive. A mug that is made locally sells for $19.95 as opposed to others for $4.95. People are buying the $4.95 mugs. Mark Saferstein commented a recently published hard cover book on the national parks, which they felt should be printed in the USA, but the US printer, with whom they had a long standing relationship, would have charged them 3 times more and taken much longer to print than a printer in Asia. Other than local crafts, it seems the decision to be made is whether you want higher volume sold at the national parks and keeping down the fees or do you want to have very high priced items people aren’t  buying. In my mind, we need to sell more.  Jo Pendry agreed with Mark. Q:        Jo Pendry asked how much of an incentive would it be not to have to pay a franchise fee; currently you don’t have to pay a franchise fee Native American, Native Hawaiian or Native Alaskan handicrafts? A:        There was a  couple of “not much” from the audience. Q:        How much incentive would it add if the regulations were changed to read “American” crafters? Does everyone agree it would be quite a bit for American crafters? A:        The audience nodded in agreement. Q:        Jo Pendry asked if the products you sold come already labeled from the crafter as an authentic “American” made and if they don’t come that way, do you label them?  A:        Phil Prevost said she labels all the authentic “American” made. Q:        Jo Pendry asked if a regulation to label them would be a hardship? A:        Phyllis Prevost and Bill Butts both said no it would not be a hardship. Jo Pendry said she had told them it would be a hardship for the concessioners to label their items so they compromised and agreed the items would be grouped together and labeled as “authentic” American made. Jo said the survey was still circulating so concessioners would be allowed to comment. Liz Weston commented on visiting the place where handmade baskets sold at Acadia National Park are created. She said she’d always wondered why they cost $300 or more. After seeing the process, which starts from selecting the wood to actually producing the basket, she understood why it costs so much. Maybe understanding the process would help people understand why the products cost more. Jo Pendry agreed that it depended on the person and how much they value handmade items. Jo Pendry switched gears to show prospectus contracting and the presentation on concessions contracting backlog. Jo Pendry gave the status of concessions contracts:             580 contracts            206 contracts have been extended or continued            128 contracts are on backlog – where prospectuses have been released (as of September)Over the last two years we’ve had over 214 contracts come off the backlog. We expect the backlog to be less than 100 by December of this year. Jo Pendry said they have very challenging issues with some of the lake park units, specifically Lake Meade and Lake Powell, whose water levels have continually dropped. Concessioners have a fair opportunity for a profit. So those contract backlogs will take a little longer. Q:        Jim Santini asked if there was any word of encouragement for Landmark Tour’s Tom Mack contract renewal? A:        Jo Pendry said work is still being done on the transportation plan in that park and didn’t have any specific idea when it would be out. We are working on an appraisal, there is a significant amount of personal property and we have begun the process to hire an appraiser to appraise the personal property and also to appraise a few buildings.  Jo Pendry stated she and John Wessels are in the final version of a report due to Congress. They were specifically asked to analyze improvements to visitor service, the improvements to the infrastructure and analyze improvements to competition. We were able to prove that there has been improvement in contract competition. There is significantly more competition than previously in concession contracts. We spent a significant amount of time on improvement in our services. We have received great quality offers in response to prospectuses. Don’t think that just because you’ve been the concessioner for a long period of time you are automatically going to have the better response. Take a critical look at your operation as an outsider; maybe even hire an outsider to take a look. The report will mention 81% of contracts are awarded to incumbents, leaving 19% are not. I would encourage you to take a look at your operation as an outsider looking in. Q:        Dave Woodside asked if Jo Pendry could comment on how the three largest concessioners to the national parks, which are not members in the association, affect your approach to address the concessions industry as a whole? A:        Jo Pendry answered the park service walks a fine line because they cannot encourage membership to any association. It would be easier if all concessioners belonged to the same association. She also stated she gave all concessioners the same information; I have an open door policy whether they belong to the association or not. Q:        Joe Fassler asked if when evaluating new offers, are any extra points given to association members versus association members. A:        Jo Pendry answered she is not allowed to do that. It is strictly based on the requirements of the prospectus. Q:        Joe Fassler asked wouldn’t it be easier if you didn’t have to go to 70+ concessioners who are not members; wouldn’t the park service encouraged the creation of a concessioner association.   A:        Jo Pendry agreed it would be easier to go to one association but, she did not think she, as a public servant, she is allowed to endorse any private organization including this one. Q:        Joe Fassler said maybe endorsing might be a strong word, how about encourage. A:        Jo Pendry said she gently encourages concessioners to join the association. John Wessels encouraged the association to keep in touch with Capitol Hill and other government agencies because it is an effective group.  Jo Pendry agreed NPHA is a very effective group. She has conversations at least once a week with Capitol Hill and NPHA is constantly being mentioned. She said she and the park service think very highly of the organization and it’s work. She continued by saying the organization and its people have a lot of influence with the Interior Department and are very important to the park service as individuals as well as an organization. Jo Pendry introduced Geoff Baekey, PriceWaterhouseCoopers Geoff Baekey spoke of helping the park service, from time to time, to understand the insurance requirements of big contracts. We look at those on a contract by contract specific basis because there are inherent risks for each contract. In doing so we found there was an increasing need for us to look at the program and begin to develop a comprehensive set of insurance requirements for some of those contracts below the three million dollar threshold. He proceeded to show the draft of a new insurance requirements program. None of it is finalized and feedback is needed from the concessioners.  Q:        Joe Fassler asked what examples of Alternative Risk Financing Techniques would be?    A:        Geoff Baekey answered it is through some type of atypical insurance provider. A financial institution or maybe even the a small business association may have an atypical insurance carrier that would insure against a number of things, but not necessarily against fire protection, to the extent that you require for liability insurance. I can’t give you a specific example, but I do know through the Small Business Administration, there have been problems with some of the providers they recommended to their members that haven’t had the depth needed and got together with other financial institutions to provide insurance in a non-traditional way. Q:        Rod Fair asked how would you handle a slip? Do you take the lead on the slip and bring them back to rating in size or would you divide it down and review everybody in the slip it was covering? Do you know what a slip is? Q:        Jo Pendry asked, like in a marina? A:        Rod Fair answered, in our particular case, in the boating business, we found a lot of slips pulled together to cover us because we couldn’t find one particular underwriter who would take the whole package. Q:        Joe Fassler asked what is a slip? A:        Rod Fair answered a slip is a group of insurers that combine together to give you a policy, but you take more of the risk. Q:        Joe Fassler asked what does a concessioner do if they cannot get insurance for one of their properties? How do they deal with that? A:        Jo Pendry kiddingly answered, you might not be allowed to operate. Q:        Joe Fassler asked if the park service could conceivably close those operations? A:        Geoff Baekey said there was a risk of that happening. He added the park service can’t be at risk if you’re operating without any insurance. Jo Pendry said it might be a default of your contract. Brad Hill said he had such a case like that at the Statue of Liberty right after 9/11; no one would insure me. You require admitted carriers only, but I have not been with an admitted insurance carrier for about six years because after 9/11 there are none that will insure me, so I cannot meet those qualifications. Your requirement for 100% replacement value is not obtainable for my location. I finally found one admitted carrier and my premiums are well over $200,000. In essence I would be penalized because, as a smaller concessioner, I cannot compete against the big guys like  Aramark or Delaware North who can spread their risk because they are buying insurance for more locations.  I would have to stop the prospectus at that point because I knowingly cannot commit to those terms. The other problem I see is the “business interruption of service” issue. When I tested it, in almost every case, at least in our instance, when this “business interruption of service”  insurance would apply, the cases were decided by government actions. Government actions were not included in “business interruption of service” insurance. For example, the government provides my power, and it is a government action if I don’t have power. Therefore it would not apply. What it becomes is acts of God, therefore, for my business interruption of service insurance, I receive nothing and it is useless. You’re asking me to do something I can’t do because of the exclusions on the insurance are very specific. Q:        John Wessels asked if anyone else has faced the same issues as Brad Hill? A:        Betty Gripentog answered she thought everyone probably has at some point because all insurance policies read the same; for example, even an act of terrorism is not covered. Brad Hill said he faced this when he was bidding on Mt. Rushmore.  He could not find one company that would give him business interruption service insurance. Bigger companies probably could, but he couldn’t. Carol Metzler said she was just beginning to look into insurance because it is due to be renewed in December. What I have seen is if there is damage due to a named storm, the deductible will be substantially higher than a non-named storm. Any wind or water damage would basically not be covered under the normal deductible. Geoff Baekey said he had heard rumors to that effect as a result of hurricane Katrina. As you can see it is a moving target. The insurance industry is getting very risk averse as a result of all these national disasters. It is a changing landscape. So  if we need to take a look at deductibles and other issues we will but, we feel, at this time, it is mutually beneficial to provide the highest level of protection for  all. Brad Hill agreed, but said, here is what really happens during the bidding process: for example, I can put in my cost of insurance at $100,000 while a larger company puts down $80,000 and I am then penalized on my ratio because I am unable to obtain insurance at a lower rate. I could lose the bid by having to pay higher insurance while bidding against larger companies like Delaware North whose insurance is less because they have more properties to insure. A:        Geoff Baekey answered it poses an interesting dilemma because we can’t gauge the level of claim that is placed against you or the park service because you’re small versus big. We’re trying for consistency but not at the expense of the little guy, in favor of the big guy.  Jo Pendry said the information in the handout was a great guideline, but would like to have a forum to better understand and maybe the association can create a committee to look at the concerns of the concessioners and then sit down with her. Our goal is not to be overly aggressive, but to be within industry norms. I’d like to have additional conversation with the committee about your insurance concerns. Q:        Joe Fassler said it seemed the smaller concessioner was hurt the most by the requirements. Did you take that issue into consideration when looking into the liability side of a bid? A:        Geoff Baekey answered the basis of the requirements are really evaluated based on risk; regardless of  whether you are big, small, or medium sized. If you have a business opportunity that carries a lot of potential risk, then the coverage we are proposing  are commensurate with that level of risk. Q:        Joe Fassler asked if it was not based on size. A:        Goeff Baekey answered it was not. A:        Jo Pendry answered the park service has shared the draft regulations with America Outdoors and they were very happy with them. They represent a lot of small operators and they had very few comments. Q:        Brad Hill asked if any of the operators were over 3 million dollar operations. A:        Jo Pendry answered they were all under $3,000,000 operations. A:        Goeff Baekey answered the above $3,000,000 operations are done contract specific, so the minimums could fluctuate significantly if we identify incremental risk above and beyond what we feel is appropriate for that particular contract. At a $50,000,000 marina operation, there could be risks surpassing an outfitter guide. Goeff Baekey continued his presentation on insurance requirements. Q:        Phyllis Prevost asked who decides what the minimums are. A:        Goeff Baekey answered the minimums are provided for a first step and then based on the requirements of a particular contract that would get further fleshed out throughout the process. Q:        Phyllis Prevost said her property limits are based on value that included a capital expansion amount and she has not been able to perform the capital expansion improvement for the first two years of the contract, but she’s been paying very high premiums on a higher limit. Can I get any relief from that? A:        Jo Pendry recommended Phyllis request a contract amendment based on the service. Based on the services it would be reasonable for an amendment. Q:        Phyllis said she had approached the park, but had gotten no response from them. A:        Jo Pendry stated she could not address this issue in a large group, but would discuss it privately with Phyllis later on. Jo Pendry concluded the morning session by saying the insurance guidelines, which will become a part of NPS 48, are still in draft form and there are some significant concerns, not necessarily with the limits, but with other provisions. Jo went on to say she is willing to go over insurance concerns with anyone who approaches her. She went on to say the park service is not trying to put businesses out of business nor are they trying to give businesses unfair competitive position with anyone, but they need insurance guidelines and procedures that are equivalent to the private sector.  Meeting adjourned at 12:00pm for lunch.


 

Afternoon Session:  Tuesday, October 03, 2006 Jo Pendry introduced Bob Hyde, NPS Concessions  Bob Hyde discussed the draft of Annual Financial Reports in the electronic format while Michael Tang from PriceWaterhouseCoopers navigated through the process on the computer. The electronic format allows concessioners to submit their financial reports on-line with checks and balances mechanism in place to ensure all necessary information is submitted. Concessioners who want to submit financial reports manually will still be allowed to do so, but the park would highly encourage electronically, There is a new statistical information requirement, (similar to the one in the 70’s), which will help us know what is going on and help us make decisions, both about employees and operating statistics. Q:        Joe Fassler asked when the new form would be due? A:        Bob Hyde answered it should be completed soon and tested in the next few months. It is his hope to have 2005 information ready in January 2007 whereby concessioners can start submitting their 2006 information. Q:        Brad Hill asked if anyone was worried the information to be given for the statistics is considered proprietary? A:        Bob Hyde answered that all financial information is proprietary. Jo Pendry added that the annual reports are not released. Q:        Brad Hill said some of the information sometimes shows up in a prospectus. For example, number of employees, average time at check-out, etc.  A:        Bob Hyde said the statistics help internally in prospectus development, but he had not heard any  interest in anyone wanting more information. Q:        Rod Fair asked if there would be a cost increase in fees for audits? A:        Bob Hyde said it should not cost any more in fees for audits because all we are adding is information that is broken down anyway.  You’ve already been collecting a lot of this statistical information.  Q:        Rod Fair asked if the audit reports would be coming to him via audits? A:        Bob Hyde said no, the audit report would handled a little differently in that those requirements for review in a full audit opinion will still be done in paper format. It will be sent out electronically, but the paper copy will have to follow. Q:        Jo Pendry asked Bob Hyde to discuss the proprietary nature of the report because there was concern with the release of information on the Annual Financial Report.  A:        Bob Hyde answered anyone wanting financial information must submit a request. We generally don’t release any information except for those few instances in a prospectus where we list gross receipts, franchise fees, and that type of thing. Q:        Phyllis Prevost said you said “generally” what exactly do you mean? A:        Bob Hyde answered he says generally because the Department of Interior requires a process for solicitors who says I must check with you if someone requests such information. I have to ask you if it would have an adverse effect on you and your business.  If you say yes, I cannot give out the information. Q:        Phyllis reiterated you said “generally”, what does that mean? A:        Bob Hyde answered generally speaking because we need a response by you, but if none is forthcoming, I’m in a position to follow some sort of other alternative. A decision is supposed to be made on the basis on your response. In the past it has always been, no we do not release that information. Jo Pendry said it is under the Freedom of Information Act procedures and can be withheld as business confidential. Bob Hyde added sometimes the Personal Privacy Act may also apply. They both agreed no financial information would be released without permission. Michael Tang from PriceWaterhouseCoopers did a step-by-step overview of the draft electronic financial report. Q:        Pam Pitts asked if this report would also be used for the monthly reports? A:        Bob Hyde answered no. The monthly reports would still be reported in the same fashion. The goal is to ultimately have them online as well. Q:        Carol Metzler asked if there would be an email confirmation of receipt of the report? A:        Mike Tang answered they had not really thought about it, but it would be a good idea.  Joe Fassler introduced John Wessels and Jo Pendry John Wessels and Jo Pendry discussed the Service Contract Act: what it is and what it means to the National Park Service. They presented a slide presentation. Jo Pendry spoke of the history of concessions contracts. She said when the original Service Contract Act was passed the National Park Service did not think it was included because there was no mention of the parks. It did not specifically say anything about the national park service concessions contracts. It was generally believed it was not intended to apply to the National Park Service or other federal agencies concessions contracts. The subsequent Service Contract Act changed the language to read that specific activities they thought the National Park’s provided were exempt.  They thought the National Park Service would still be exempt.  Recently, after a complaint by a contractor, the Department of Labor ruled the Service Contract Act did apply to a National Park Service concessions contract.  Q:        Gerry Gabrys asked if a lot of the concessions contracts would still be exempt under the wording of the Service Contract Act? A:        Jo Pendry replied that yes a lot of the concessions contracts would still be exempt from the Service Contract Act.  Mark Saferstein spoke about a special project he had just completed; a picture book photographed entirely by one photographer of each national park in the order they became certified public lands. The book stressing the importance of public lands. American Park Network is donating all the first run copies to the Yosemite Association who will market and sell the book.  Site specific copies (local national park on the front cover) will be made for sites ordering a minimum order (TBD). All sales earnings will be used towards education of the National Parks. The retail price will be $24.95.   Dave Woodside introduced Sheridan Steele, Superintendent, Acadia National Park Sheridan Steele spoke about trail closures due to the recent earthquake. He had a slide presentation about Acadia National Park. He spoke of the historic trails, carriage roads, historic resources, and the history of Acadia National Park.  Q:        Tod Hull asked who owns the buses? Why is L.L. Bean’s name on all the buses? How are you allowed a corporate sponsor? A:        Sheridan Steele answered L.L. Bean has donated over $1,000,000 for the first 4 years of  operation and they are not owned or operated by the park service. The buses are actually island wide, not just the national park. Q:        Joel Saferstein asked if anyone knew why people preferred to drive themselves instead of using the available buses? A:        Sheridan Steele answered people like the flexibility and like to carry their own stuff with them. Q:        Joe Fassler asked if restricting cars attributed to lower visitation. A:        Sheridan Steele answered no, there are no restrictions on cars. There is limited parking and people decide not to return because of  the inconvenience if they cannot park and have to go back around. That is where the buses help. Q:        Joe Fassler asked why there has been a decline in visitation. A:        Sheridan Steele answered there are several reasons, not just here in Acadia, but nationwide. First of all, schools are extending school years, people are very busy so they are shortening their vacations and weather are some of the factors contributing to lower visitation.  Betty Gripentog commented the media is constantly telling people the national parks are dangerous and I’m sure all this negative publicity is not helping park visitation. Sheridan Steele agreed. Pam Pitts introduced Jack Harrison, Director, California Parks Hospitality Association  Jack Harrison spoke of the parallels between the two associations; they are the only two hospitality associations in the country. He spoke of the getting together, for the first time, as a group. Jack started with an overview of California Parks Hospitality Association (CPHA) formed with the desire to have a united voice. It started out adversarial, but has evolved from there. The mission is to monitor policies and laws in California and try to have some influence, and to provide training and networking for members.  The money generated at the parks in California does not stay with the park. It goes to a general parks fund; there is no true incentive to make money. CPHA has the same problems as NPHA in getting members; only 25% of all concessioners are members. Jack Harrison spoke about the California state park system and the similar partnership it has with CPHA as the National Park Service has with NPHA. Some of the issues the association has dealt with are contract negotiations(contracts are for ten years but are re-negotiable under certain circumstances), park visitation, maintaining park resources, and providing services to the public.   Meeting adjourned at 5:00pm for the evening.
Wednesday, October 04, 2006
 Joe Fassler spoke about the new direction the NPHA.  He said the association needs to increase membership to increase its effectiveness.  He encouraged all members to recruit others to join the association. Joe Fassler introduced Jim Santini, NPHA Legislative Counsel Jim Santini spoke of the changes in the Department of Interior over the last six months. Many members have either moved or have been reassigned in anticipation of the Institute for Electronic Government (IEG) report to Congress due out soon. He spoke about the radical revisions and the passage of the Management Policies. He gave the association an update on Tom Mack’s Landmark Services Tourmobile, issue still unresolved.  Jim Santini spoke of the upcoming elections.  He anticipates getting to know new chairs on committees. He will continue do whatever he can with whomever is in power, regardless of political party affiliation, to help association members. He asked for and received donations to CONPAC.. Tod Hull, NPHA Washington Representative Tod Hull, as recommended by Clay James, will be sending out monthly activity reports to all members instead of just the board about his activities to keep all members informed. In Tod’s report he discussed working with Jim Santini on HR5802,  legislation which would amend the 1998 Concessions Act, specifically the part dealing with cross-collateralization. Cross-collateralization allows the usage of  a contract as collateral for bidding on another contract. The bill also raises the ceiling for preferential right of renewal from $500,000 to $750,000. Not sure where the bill is at this, time but it is doubtful it will get on the floor. Tod and Jim have been working on the DeNovo amendment, a little provision in the Interior Appropriations bill, which allows the park service to take an adverse decision in binding arbitration to court. Tod commented on the fact that when the 2006 Management Policies came out in June there wasn’t an opportunity to comment as in the past.   Tod discussed his work with the Service Contract Act; taking a different approach than the park service who is seeking a legislative change. Tod is seeking a regulatory change, asking the Secretary of Interior to speak with the Secretary of Labor to make change through regulations. To say the Service Contract Act does not apply to park service concessions contracts is our goal. Tod discussed his unsuccessful attempts to increase membership, even offering free provisional membership. He asked every member present to consider recruiting members.      Lastly, Tod explained the proposed amendment to change NPHA bylaws on how the NPHA board is elected. Currently each concessioner gets 1 vote/contract; if a company has 5 contracts, they get 5 votes. The board voted to approach members with 1 vote/company making it more equitable. The board believes all companies should have the same vote regardless of the amount of contracts they have. Q:        Gerry Gabrys asked if the amendment would have an impact on dues. A:        Tod answered it would not, but, a change in dues structure was discussed at the board meeting, maybe having a tiered  structure. Q:        Gerry Gabrys thought changing the voting process would be tied into how dues are collected. Gerry asked how are dues determined now. A:        Carol Metzler answered dues are determined by every contract’s gross revenue average for the past three years with a minimum of $200 per contract and based on budget needs, a percentage is established. Example, if your gross revenues are 10% of all the member’s gross revenues, then you pay 10% of the budget. Q:        Gerry Gabrys asked what is the total budget. A:        Carol Metzler answered the total budget was about $350,000 a year. The dues structure has been less than that because there has been a surplus.  Because of the surplus, the whole budget has not been billed out. The dues billed out recently total $135,000 to current members and $50,000 to Xanterra for partial year dues. Q:        Gerry Gabrys asked to be told about the surplus. A:        Carol Metzler explained the current surplus (built up over years) stemmed from the time the park service was being sued and the association had anticipated high legal expenses.  Q:        Gerry Gabrys asked if the surplus had been depleted. A:        Carol answered that was why the association has not billed the projected budget; the surplus has been used to subsidize the budget. The surplus at the end of this year will be between $450,000 and $500,000 depending on whether Xanterra pays their bill. Joe Fassler explained the need to reduce the surplus so as not to lose the non-profit status of the association. A surplus is looked at as a profit which could make this organization seem profitable and have it’s non-profit status taken away. He further explained the association still needed a surplus in case of the possible loss of additional members with large companies. Joe also emphasized the need to increase membership to spread the cost of the membership. Had the association not had a surplus, the association would have been either out of  business or the current members would have had to pay more dues to make up for the large companies the association has lost. Q:        Gerry Gabrys asked what impact did losing Xanterra have on this year’s dues. A:        Joe Fassler answered Xanterra paid 50% of the total dues for the 2005–2006. If they are not replaced, each member will have to pay a lot more. Q:        Gerry Gabrys asked if by using the surplus this year were the dues going to be the same as last year. A:        Joe Fassler answered yes, but we cannot continue this way. One of the things on the agenda for March’s meeting is restructuring the dues because in speaking with Delaware North and Aramark, they have both said they do not want to pay 50% of the association’s budget. We’re thinking of making about 4 or 5 tiers to make it more equitable. Q:        Joe Gabrys asked what is the theory behind having tier dues and equal representation. A:        Joe Fassler explained his understanding as to what happened last March. According to the bylaws, Andy Todd was voted out because, although it paid 50% of the dues, it had less contracts than Forever Resorts, who has less gross revenues than Xanterra.  Q:        Gerry Gabrys asked if there was a certain level the board would like to see for the surplus. A:        Joe Fassler answered to get it down to a level we believe will not jeopardize our non-profit status; don’t know the exact amount, maybe $200,000 or maybe having 1 year in reserves in case of a catastrophe. Q:        Gerry Gabrys asked how much surplus has been used. A:        Carol Metzler and Joe Fassler answered it has been about $90,000 per year for the last two years. Q:        Rod Fair asked what if a company wants to join and pay based on their smallest contract and nothing else? It needs to be stated somewhere in the bylaws the dues are based on total gross revenues for all of it’s contracts and not just one. A:        Joe Fassler and Tod Hull answered the question was a valid one and one that would have to be taken up with the board before bringing it back to the members. Joe Fassler said the question today is only to amend voting to “1 company, 1 vote” regardless of the amount of contracts.   Dave Woodside pointed out the current bylaws states “dues are based on average gross receipts on all contracts, permits and services and units administered by the National Park Service” and is not being changed. This should circumvent that particular issue. Any other changes will have to be discussed at a later date. George Campsen strongly urged the members to support this vote now before a company with several contracts joins and has the power to shift things around. Motion to approve the “1 company, 1 vote” amendment was made by Gerry Gabrys and seconded by Rod Fair. Amendment was approved unanimously. The 2006 Mid-Year NPHA meeting adjourned at approximately 10:15 am  Respectfully Submitted by Carmen Escaleraand Reviewed by Pam Pitts      
  NPHA Mid-Year Meeting

    October 5-7, 2005                                                                                               

 

The Westin

St. John, Virgin Islands  

Members Attending:

 

Rik Blyth, Pam Pitts, Dick Camp, Mark Saferstein, Joel Saferstein, John Schoppman, George Campsen Jr., Carol Metzler, Gerry Gabrys, Ron Hallagan, Phyllis Prevost, Dave Woodside, Ron Felty, Steve Tedder, Andrew N. Todd, Dick Buck, Julia Gregoire, Dennis Harper, Mike Welch, and Mike Weber

 

NPS Staff Attending: Jo Pendry, Pat Hooks, and Art Fredrick

 

Invited Guests: Honorable Lynn Scarlett, Julien Harley, Geoff Baekey, and  Aubrey King

  

NPHA Staff Attending: Tod Hull, Jim Santini, and Anne Mitchell

 

The National Park Hospitality Association gratefully acknowledges our 2005 Mid-Year Meeting sponsors: Caneel Bay Resorts, Coca Cola Company, Clarion Associates, Inc., KC Publications, Eastman Kodak Company and Spherix, Inc.

  
 
Thursday October 6, 2005 

The 2005 NPHA Mid-Year meeting opened Thursday October 6, at the Westin Hotel in St. John.  Chairman Andrew N. Todd called the meeting to order at 8:35am.  The invocation by Rev. Richard Camp was postponed due to travel problems.  Everyone seated made introductions.

 

Andy Todd introduced Rik Blyth of Caneel Bay and thanked him for the welcome reception held at Caneel Bay Wednesday evening.  Rik spoke briefly about the Virgin Islands and introduced Julien Harley, Island Administrator of St. John.  Mr. Harley spoke about the Island of St. John and it’s unique relationship with the National Park Service.

 

George Campsen, Jr. introduced Tod Hull, new NPHA Washington Representative at 8:45am.  Tod spoke briefly about his background working on the Hill and the Subcommittee on the National Parks.  He thanked the sponsors for their participation in the mid-year meeting including American Park Network, Caneel Bay, Clarion Associates, Inc., KC Publications, Eastman Kodak Company, and Spherix, Inc.

 

Andy Todd introduced the Honorable Lynn Scarlett, Assistant Secretary for Policy, Management and Budget, Department of the Interior at 8:45am and thanked her for traveling to St. John and presenting to the NPHA membership.

  

Lynn Scarlett Remarks   

  

Question and Answer Period with Lynn Scarlett:

 

Q:        Mark Saferstein asked about Directors Order #21 regarding NPS Fundraising.

 

A:         DO #21 has been in place a long time.  One of the concerns is the growing extent of our enthusiastic partners teaming up with our parks to embark on major visitor center construction projects or other major construction projects.  Many of these projects have price tags in the tens or hundreds of millions of dollars.  The concern is that fundraising comes up short, the building is half done and Appropriators are left with making up the difference.  This does not allow for a look at all the park priorities and the best use of those dollars.  With that concern comes significant encouragement by the Congress to re-examine our process for entering into such agreements, especially construction agreements.  DO 21 needed revamping to ensure that the process was clear and that expectations were clear.  Second area of concern is in the realm of donations and what the boundaries around donations should be.  The Parks have an image to maintain.  We want good relationships with partners, advertisers, gateway communities – but need to make sure those efforts are consistent with the image of the Parks. Need to clarify what kinds of donations are welcome, under what circumstances, what limitations, etc.  These are being laid out in the revised order.  You will see greater clarity, greater specificity of expectations but not a total revamp.  Need to assure there is no conflict of interest.

  

Q:        Steve Tedder asked about Directors Order #21 and the $1 voluntary donation.

 

A:         Don’t recall specific references to that guest donation type of activity.  Most of the focus is on corporate partnerships and especially construction partnerships.  The $1 type donation from guests has not been the center of controversy or concern. 

 

            On a separate track – The National Park Foundation is reexamining everything they do – what they do, their relationships with local partners, etc.  We are working with them as they reexamine how to proceed rather than mandating how they proceed. 

  

Q:        Jim Santini asked about the “Buy America” amendment.

 

A:         Our focus is really about partnerships that add best value. We understand that in a global economy best value does mean acquisitions that include both domestic and international sourcing.  We don’t have a formal position, we do understand the emotion that lies behind “Buy America” and embrace and support business to the degree possible but a hard and fast rule would limit the opportunity to achieve best value in an international economy.

  

Q:        Dave Woodside asked about the “certainty and clarity” in regard to concessioners contracts.

 

A:         I think you’ll hear more about this from Jo, but let me make a couple of comments.  First, one of the priorities that Jo has is that the process is consistent and clear.  Also, as we define what we are buying in a concession relationship, we must clearly specify without prescribing, (because that would limit your creativity), what it is we are looking for.  Secondly, the PI issue and LSI issue.  Anytime a concessioner is investing modest or large amounts of dollars, they want to know there is some security in that asset, and some way to recoup that asset, especially when in a competitive environment they may not hold that contract 10 or 20 years hence.  So, bringing some clarity and certainty to that, which is what Jo, working with you and the Congress and our auditors are doing - that process is all about trying to find that point of agreement with clear rules with what your expectations should be with respect to your assets.   We understand that if you are going to invest millions of dollars, and then you have a great big question mark at the end of ten or twenty years, that is going to be a real inhibitor to that investment. And that is not good for the Parks; we need that investment therefore we need that balance.  But then I want to say something on the flip side of the coin – as you know the 1998 Act introduced competition where, in many instances, there had not been competition for a century.  At the same time that we are looking for clarity and certainty in process of asset valuation, we also recognize the importance of competition in all of America’s economy.  It does cause folks to be the best they can be.  We need certainty of process and decision –making.  Competition that was introduced in the 98 Act is important because it keeps everyone on his or her toes. Let me be clear that when I say certainty, that certainty does not mean permanence of place until doomsday.  I mean certainty of process, clarity of prospectus and expectations, clarity of the rules of the game so that you can make proper investment decision, proper business decisions, as any business would do.

  

Q:        Dave Woodside asked about contract awards and why someone won and someone else didn’t.

 

A:         I understand and appreciate that and it is one of the things Jo is working on.  The Park Service historically has not been staffed by people with business backgrounds but they have resource management backgrounds, historic preservation backgrounds, and cultural resource backgrounds – all of which are extraordinarily important to the Parks.  In this complex world in which we live in which parks have water sewage plants, boat docks, hotel, restaurants, laboratories, and lots of people visiting every year, we really are talking about a business operation when it comes to management.  So we are staffing up with business managers – just hired a couple of folks with MBA’s.    As we bring in those folks, and make management a central part of that compass I described, rather than it being ancillary and an afterthought, that will allow us to develop some of those practices you see in the private sector when you know what is expected, know the points you are getting for various things, and you see the result after the decision is made.  So that you are able to make a better assessment of where you fell short or excelled.  We are not there yet, but it is where we want to be.  Partly the staffing improvements will help us get there along with the simple consciousness that this is a critical issue.  The 1998 law is only seven years old and has compelled the Park Service to think in a more business like fashion.  This is an area where your input is critically important.  We need all those ideas to inform this process.

  

Q:        Pam Pitts commented on contract awards evaluations in the California State Parks system.

 

A:         That’s the kind of observation that is important to us. Knowing that you had a satisfactory experience at the state park level - we can look at California to see what they are doing and not necessarily adopt it wholesale, but learn from it and adapt what works.

  

Q:        Tod Hull asked about NPS general management policies.

 

A:         There have been headlines on our management practices and their review and updating.  Right now, our regional directors, Steve Martin, and a senior team of managers are hard at work looking at a final draft that a collaborative group of Park folks have put together and they are very close to having a document that everyone feels comfortable with.  You should see a document that will be going out for review very soon – weeks, not months.  Now it does have to go through the internal process within the Department and it has not yet done that. So, It is imminent.  Back to the focus of the document, the four points of the compass I talked about earlier give you an insights regarding what you can expect in that document. It is an attempt to upgrade the document to insure more emphasis on management; more emphasis on the make or buy process so that we are not just buying, but buying efficiently, the emphasis on the twin goals and their balancing. Preserving while assuring access.  In the old document, a lot of the language is in the negative.  “You can’t do this, or you can’t do that or you can’t do something else”.  We’ve tried to flip that around to cast things in terms of the park inviting the public to enjoy the park consistent with insuring protection of the resource- a more inviting document.  The four points of the compass really hit the highlights of what you see reflected.  This is not a transformation; it is an iteration and an evolution and is a consensus document that has emerged through dialogue with political leadership and career park service.  No document or management policies will be any good if they are not embraced by the Park Service.  The Park Service has to feel comfortable with them and that is what we are striving for and at the same time ensuring that our vision is fulfilled. 

  

Q:        Steve Tedder asked about staff movements from agency to agency within the federal system.

 

A:         We really are focused on assuring that we have the right people, with the right tools at the right place and time.  Sometimes that means extending our sights outward, bringing in people with MBA backgrounds. We also have tremendous assets within the Park – people with incredible skill sets.  Where we need a particular talent we will look to other agencies and to the larger universe.  At the same time we believe strongly in the role of giving people opportunity within the Park Service and our other agencies to advance and develop new skill sets – as any other business would do.

  

Q:        Jim Santini asked about the NPS reservation system.

 

A:         The goal is to have an integrated reservation system.  The American public seldom wakes up and says “Oh by golly I want a forest service experience today or a BLM experience today”  – they say,  “I want a public land experience”. The reservation system is intended to provide a one- stop shop so that if you want to go camping you can just go on line and see what all the opportunities are.  We tried to piggyback that reservation system on the Forest Service system.  We tried to go through all the hoops, cross all the T’s and dot all the I’s in the contracting process. Our efforts were challenged in court and that is still the case.  I think we are now talking into next year because of the latest court decision.  Don’t hold your breath, but we will get there.  I hate to set a date, because the date keeps getting pushed further.  It’s hard to imagine it taking more than another year.  The genesis was not to make concessioners have a uniform system but to make sure that we, the federal family, has a uniform system.  Our hope is that if this reservation system is done well and is successful, then other private entities will want to use it, will see value in it.  That is incumbent on us to make it successful and attractive rather than to impose something when you already have a system that works for you.   There are synergies here that if we have a one stop shop for all these federal places, that if you are linked to it, you will actually add customers who didn’t start out looking for you but found you in their search.

                                               

 Tod Hull introduced Pat Hooks, Southeast Regional Director, National Parks Service and Art Fredrick, Superintendent, Virgin Islands National Park at 9:50am 

Pat spoke about the Southeast Region of the National Parks Service and focused her remarks specifically to the Concessions Program.

 

Pat Hooks Remarks:  (Please see remarks following minutes)

  

Art Fredrick spoke about the Virgin Islands National Park and the issues he and his staff deal with routinely. 

 

Art Fredrick Remarks:  (Please see remarks following minutes)

  Andy Todd introduced Jo Pendry, National Parks Service Concession Program Manager at 11:03am 

Jo gave an update on the concessions program and then introduced Geoff Baekey of Price Waterhouse Cooper to talk about Standards, Evaluation and Rate Approval (SERA). 

 

Questions and Answers with Jo Pendry and Geoff Baekey:

 

Q:        Phyllis Prevost asked Geoff how long it will take to implement SERA.

 

A:         The pilot project will tell us a lot.  The pilot will begin ASAP.  Standards may need to be relaxed for some period of time.

 

Q:        Phyllis Prevost asked Jo about implementing LSI standards

 

A:         Tracking of LSI is a significant issue.  The NPS has executed 13 contracts with LSI included so far but have lots more work to do.  It takes a long time to do some of these things.

 

Q:        Gerry Gabrys asked about Possessory Interest and who evaluates it and the value set.

 

A:         1.  Concessioner notifies Park Service of their desire to have LSI included.

2.      Park Service has already done due diligence of the value (at the time of contracting).  Concessioner should also do their due diligence.

3.      A negotiation session is scheduled.

 

Jo is currently working on the debriefing and appeals system on contract awards.

 

Q:        Mike Welch asked about exemptions on “Made in America”.

 

A:         There is no plan to reinstate the “Made in America” language.  There is too much difficulty in putting into words exactly what would be included.

 

Q:        Carol Metzler volunteered to be a volunteer for the electronic filing pilot and asked how to become involved.

 

A:         Jo asked that anyone interested should contact her.

  Continuation of General Meeting – Afternoon Session 1:30pm. 

Andy Todd introduced Geoff Baekey of Price Waterhouse Cooper to talk about Lease Surrender Interest. 

 

Questions with Geoff Baekey:

 

Q:        Andy Todd asked about the valuation of PI and LSI crediting before the contract prospectus is developed.

 

A:         LSI has to be ironed out in year 0 before the contract is ever signed.  If the concessioner funds the capital investment, they will get LSI credit.  If NPS funds are used, the concessioner will not get LSI credit.  Source of funding  - if you pay for it you get credit for it.  If the Park Service pays for it - they get credit for it.  There is also, per the statute, a CPI adjustment factor that gets applied to the LSI value at the conclusion of each year of the contract.

 

Q:        Mike Welch asked about increased LSI throughout the period of the contract due to appreciation.

 

A:         Interim LSI is never calculated but will be calculated at the end of the contracting period.  Appreciation and depreciation only have an impact at the end of the contract.  The state of the assets will be taken into consideration at the start of a contract.  A new concessioner will not be penalized for the poor maintenance practices of the previous concessioner.

  

Q:        Andy Todd asked about the Replacement Reserve Account.

 

A:         If the concessioner makes an investment beyond the RRA, they will get credit if using their own funds but will not get credit if using NPS funds.

  

Q:        Andy Todd asked who gets any extra money in the RRA account at the conclusion of a contract.

 

A:         This issue is still being debated.  If the money goes back to the Park Service it will go to the general fund and will be lost to the NPS and the concessioner.

 

Q:        Dave Woodside asked about what qualifies as repair and maintenance expense and what qualifies as RRA.

 

A:         Repair and maintenance expense is anything with a life less than seven years.  RRA is for anything with a life in excess of seven years.  This is based on industry standards.  Need to have specific definitions so that questions can be answered.  Unforeseen events – such as someone punching a hole in the drywall – becomes part of normal maintenance.  A roof that is blown off prematurely due to a hurricane – if RRA does not have enough money, then NPS will decide if it will pay for the roof (no LSI credited) or if the concessioner will pay for the roof (LSI credit will be given). 

  

Q:        Andy Todd asked how decisions will be made insofar as LSI crediting

 

A:         We need to look at what decisions should be made at the local level - perhaps related to a dollar level and then what decisions should be made at the regional level and which decisions should be made in Washington.

 

Q:        Steve Tedder asked about the “seven year” concept with some examples – painting and carpet.

 

A:         Based on industry standards.  Arguably these items have different life spans based on usage – seasonally, etc.  Again we have to be very specific to the definitions and rely on industry standards and manufacturer expectations for these items.

  

Q:        Phyllis asked about furniture and if LSI will be granted.

 

A:         There will not be any LSI credited for any personal property (anything that is removable).  Removable items are considered personal property and are not eligible for LSI crediting.  A rug is personal property (no LSI) while carpeting is real property (LSI will be credited).  LSI is only credited for real property.

 

Q:        Phyllis asked where the information regarding LSI comes from in the first place.

 

A:         Info comes from the original condition assessment.  If a contract is already in place under the 98 law and is modified to include LSI, a condition assessment will be done and some calculation regarding depreciation will be taken into account.  This is not easy to do.  There will likely be some healthy debates about this.

 

Q:        Andy Todd asked if condition assessments will be done every year.

 

A:         Jo will be required to do annual visual inspections and periodic condition assessments on all NPS assets including concession managed assets.

 

Q:        There are likely to be different interpretations of the language and debates resulting from this.

 

A:         Trying to mitigate problems by sitting side-by-side writing operational guidelines while they’re writing regulatory language. 

                                                                                                                       

Q:        Phyllis asked when recommendations will be ready.

 

A:         They have been accepted by the Board and forwarded to Director Mainella and are on her desk for review.  We are continuing to work on the nuances.  Hesitant to make a commitment for a date as dates always seem to get pushed back.  Expect that something should be ready to review by early next year.

 Tod Hull introduced Mike Weber from Eastman Kodak Company at 2:45pm 

Mike talked about digital imaging photography and trends in the industry.  He had planned to showcase the end product – photographs of the NPHA mid-year conference so far – however his printer got lost en route to St. John.

 

Ron Hallagan asked what might be considered “necessary and appropriate” regarding digital photo imaging.  Jo Pendry responded that she could not answer the question regarding the Park Service as a whole but the question could be answered specific to one park.  Mike added that park superintendents have asked for a one-year out clause when beginning their relationship with Kodak, but so far all the parks have continued the contract past the initial year.

 The meeting was adjourned at 3:15pm 

The dinner and live entertainment hosted by NPHA and held in a canopy on the beach was well attended and thoroughly enjoyed.  The dance was new to the NPHA experience and the feedback was very positive.  It was a good way for NPHA members and Park Services staff to get to know each other in a relaxed setting.  NPHA will keep this in mind for future conferences.

            

Continuation of General Meeting Friday October 7, 2005 

Tod Hull announced at 8:30 am that Honorable Donna Christensen, Member of Congress, could not be here today as Congress is still in session.  This is an unusual occurrence, but it does happen from time to time.

 

Tod introduced Rev. Richard Camp, Jr., A Christian Ministry in the National Parks.

 

 Rev. Camp reminded us “Time is like water spilled on dry ground that can’t be gathered up again”.  He urged us to think about how we spend our time and to think often of what we will remember and think of as important at the end of our lives.

 

Tod Hull introduced Aubrey King, President of the National Alliance of Gateway Communities at 8:45am.

 

 Aubrey spoke about gateway communities and their role with the national parks and park concessioners. 

 

Aubrey King Remarks  

  

Following Aubrey King’s remarks, Andy Todd announced that the business meeting of the NPHA would begin.  Members of the Park Services staff departed.

 

Andy Todd introduced Jim Santini, at 9:20am Jim shared with the members the Washington legislative report.  Jim focused on the idea that NPHA is moving into a new and challenging era.  A new era of activism on behalf of all members and where every member is needed. 

 

At 9:40am Tod Hull gave his activity report since becoming NPHA’s Washington Representative in June 2005.  Tod spent some time talking about future directions for the association and there was some discussion around the marketing strategy for recruiting new members.

 

At 9:55 Andy Todd closed the 2005 Mid-Year meeting with the following remarks:

 

·         Andy asked that all members please respond to the survey that Tod emailed to everyone.  Input is vital to the future direction of the association.

 

·         The association will make a major push for new members over the coming year

  

·         Need to focus more on what the association does for its members and share those stories with potential members. (Members sharing info with each other on a one to one basis; roundtable discussions; etc.)

 

·         Need to stay on top of new regulations. As with many things the devil is in the details and all members need to be aware of what is proposed and happening in Washington.

  

·         We all need to understand the era of competitive bidding is here to stay.  We are consistently hearing: COMPETITION, COMPETITION, COMPETITION.  We are all going to win some and lose some.

 

·         Mark your calendars now for upcoming meetings:

o        March 19 –21, 2006 is the Annual NPHA meeting at the Madison Hotel in Washington DC

o        October 2-4 2006 is the Mid-Year NPHA meeting at Acadia National Park.  Please remember that this is foliage season and room rates will be in the range of $199 – 249.

 

Andy Todd spent a few minutes discussing the fact that Aramark has left the Association.  

Blue and Gold lost their contract to Hornblower.  Need to remember that competition for bids will come form within the association and from outside.

 

Dave Woodside added that he would rather be involved in the Association and know what is going on than to be isolated outside the Association.    He also talked about the rumors of a North Woods National Park.  This idea has been around for a long time and has few supporters.  If it ever does come to pass, it is more likely to be a National Forest than a National Park.

 

There was a question about whether or not there is a checklist to assist with bid development.  Version 2.0 from the March meeting was very helpful.

 

The 2005 Mid-Year NPHA meeting adjourned at 10:15am.

 

Respectfully Submitted by Anne Mitchell

and Reviewed by Pam Pitts                                                              

        
 
  PAT HOOKS REMARKS NPHA 2005 MID-YEAR MEETING  Good morning, Todd and National Park Hospitality Associates.  Thank you so much for the opportunity to participate in these discussions with you.  I am pleased to be here. We are here in the Southeast Region. This Region is made up of 67 parks in 9 states and the Virgin Islands and Puerto Rico. Through these parks we protect nearly 4 million acres of land and water and we tell the stories of over six thousand years of human survival on this earth.   As so many of you know, our charge is to preserve these resources while we provide for visitor enjoyment.  Our concession program plays a crucial role in supporting our efforts to provide visitor services and ensure a quality park experience. The diversity of our region's parks sets the stage for the wide range of concession operations available. At large parks and small parks; from horseback riding and fishing in the mountains of Tennessee ;to windsurfing and scuba diving in the waters of the VI; and from camping to lodging and restaurants and service stations, our concession operations provide unparalled visitor opportunities. These popular activities support a revenue range of $50,000 to $ 3 million. Managing in the 21st Century -- it is a busy time for concessions contracting in the Southeast Region and throughout the Service. The National Park Service Concessions Improvement Act of 1998 provides the direction and guidance for concessions contracting. Although passed in 1998, the regulations were challenged, and it wasn't until 2003 that the NPS was able to begin renewing contracts that were held up during the challenge. But we are moving forward now. In the Southeast Region eight concession contracts have been awarded this year and seven more will be awarded before the year ends. Now those might sound like small numbers in comparison to the total, but I think anyone involved in concessions contracting understands the complexity of the process. We are challenged by a small concessions office staff and a vacant Chief's position. The process to fill that critical position is underway and we expect to have the Concessions Manager in place in the near future.  We are seeking a manager with qualities such as:  (1) understanding of business, (2) business focus, (3) accountability, and (4) delivery.  In addition to contracting, we are also beginning to implement a new permitting program which will allow smaller commercial activities in parks.  This replaces our Incidental Business Permits with Commercial Use Authorizations. Once final approval has been received, some of our agreements will be converted.  These CUA's will be used for parties whose total gross sales of convenience items are less than $25,000.00. You will here from Jo Pendry, our Chief of Concessions in the Washington Office.  I don't want to duplicate what she will share with you, rather I want to share a few of my thoughts on the future role of concessions in the Southeast Region. Everyday we are reminded of how very much it takes to fulfill our mission. And everyday I hear stories from parks as to how they are tackling their challenges. The strong theme that emerges from these stories is that of partnerships. How the parks are learning that we are able to accomplish so much more when we embrace others whose goals match our own. What better potential partner than our own concessioners? Now I know that on the local level parks and concessions are looking for opportunities to join forces. I applaud those efforts and I encourage all of you to look for ways to create synergy. Through synergy, as you will recall from high school science, to be the interaction of two or more agents with the combined effect of all being greater than the sum of their individual parts, we will achieve our goals.  We have the potential, if we put our minds together, to achieve that synergy. Your businesses are based upon contact with visitors. We need your expertise to provide services that we do not have the ability to provide on our own. We provide for you, a location where visitors gather and take advantage of your services.  This is true partnership.  Drawing again on science, we are symbiotic. Our relationships provide mutual benefit. You already share our collective message with millions of visitors a year. And for that I thank you. In what other ways can we work together so that our combined efforts are greater than anything we could each do alone? The possibilities are endless. I challenge you, and I challenge ourselves and our parks, to take advantage of us all being here today to begin for some, continue for others, this conversation.  Join us as we remember and use important tools of:  innovation, creativity, and dialogue.  We are pleased to be with you to continue this journey in businesssuccess and management excellence. Again, thank you for inviting me, and for your time.            

ART FREDRICK REMARKS

NPHA 2005 MID-YEAR MEETING

  

Good morning… I want to begin by thanking the National Park Hospitality Assoc. Rank and file membership, the Board and of course Tod Hull, Exe. Director of NPHA for giving me the opportunity to speak to you for a few minutes this morning. 

 

On behalf of the staff at the two Virgin Island units, I am truly delighted to welcome you.

 

Virgin Islands National Park was the 29th National Park that was established in National Park System.  That was in August 1956.  In fact, 2006 will be the 50th Anniversary of the park. The unit was borne out of the idea of philanthropy. And I think we all owe a great deal of gratitude to Mr. Lawrence Rockefeller, who spearheaded the idea of having a National Park in the Virgin Islands.  He was able to secure 5000 acres during the late 40’s and early 50’s for the creation of the park.  When the bill was introduced in congress, there was only one dissenting vote. A Congressman from the state of Washington who just could not see how or why one would come to a park that was separated thousands of miles from the US mainland.

 

Today, we can readily see the lack of vision of that congressman, for the Virgin Islands National Park is one of the most popular units in the National Park Service. The park has a little over 9,000 acres of terrestrial land and 5,600 aquatic acres. The Coral Reef National Monument which was established in 2001 is totally, a marine resource with approximately 13,000 acres. The park receives over a million visitors annually and is a huge economic engine for the territory and in fact it was revealed to us just recently, due to an economic impact study conducted by a CPA hired by the Friends of the Virgin Islands NP that the park generates annually 123 million in revenue for the entire Territory.  Thus, it has become as with other National Park units located in Gateway communities, a tremendous asset to the St. John community and the Virgin Island Territory, as a whole.

 

There has been a concession operation at the park since 1970.  The operation is under the auspices of Caneel Bay Resort and since 1970, the park and Caneel Bay has worked closely together to provide the visiting clientele with a quality visiting experience.  Concessions services at the park includes, but is not limited to the Cinnamon Bay campground which has a total of 126 units, consisting of 40 beachside cottages, 58 tent sites of which 28 offers one a primitive or backcountry camping experience…there is the Tree Lizard restaurant with a seating capacity of 175 and the sales and snack bar operation at the renowned Trunk Bay beach.

  

Under the concessions contract, Caneel Bay was recently granted a contract where the park has provided the resort with moorings which enables Caneel to offer watersports activities such as kayaking, snorkeling, day sailing, windsurfing etc.  This action has proven to be extremely beneficial, for it allows Caneel Bay clientele to enjoy these activities, but by using park provided moorings the marine life is being protected for those that are boating no longer have to use an anchor, when the park has made the moorings available for such uses.  The park also has a similar watersport concession contract with Maho Bay campground.  In short, there are three concession contracts at the park; two are classified as Category 3 and one as Category 1. Of the three, one Cat. 3 have been awarded; one will be awarded within a few months and hopefully around the spring or summer of next year the Category 1 will be awarded.

 

The park also issues about 100 Incidental Business Permits annually.  They include but not limited to daysailing, scuba diving, snorkeling, hiking, weddings, taxi operations etc. There are two employees on the staff that are responsible for the concessions operation.

 

As superintendent, I’m oftentimes asked what are the challenges of operating a National Park on a small Caribbean island.  Now, the challenges are too numerous for me to address in this forum, but I thought I would list a few, to just give you a glimpse at some of issues that we are faced with at Virgin Islands NP.  First of all, since it is a small unit, we are constantly faced with the question of carrying capacities and the impacts that certain decisions would have on the VI tourism industry.  In other words, how do I balance the mandate of protecting park resources when that decision could have a major negative impact on the tourism industry.

Next, how do I deal with cultural sensitivity issues or better yet ARPA at the Cinnamon Bay and Truck Bay concession sites … when those recreation sites were constructed in an area that dates back to the Pre and Post Columbian Period, thus creating a situation where it limits the park’s and concessionaire’s ability to expand and improve on services to keep pace with increased visitation when any act that we take in those areas pose a potential threat to the archeological resources within those areas. There is also the difficulty of accommodating large passenger cruise ships, some with nearly 4,000 passengers which causes impacts to the infrastructure and the quality of customer services.  How do I address the constant request for new concessions/IBP services, such as, passenger transporting service, pizza delivery service via boat,  massages and facials on the beach, seaplane services etc.

How do I provide adequate parking to accommodate the ever –increasing visitation to the Virgin Islands National Park.   As it is with numerous park units, the Virgin Islands National Park is truly suffering from a “Loved to Death Syndrome”.

  

Fortunately for me and the staff, a Commercial Services Plan was established in 2001 which gives me guidance when dealing with some of these issues, but more importantly the park is in the early stages of developing a new General Management Plan that will provide the park with long range guidance on management practices within the park.  And this is inclusive of the concession management program, in fact depending on the direction of the GMP; the Commercial Services Plan may need to be revisited and updated based on the dictates of the new GMP. 

 

The Virgin Island National Park has a wonderful relationship with our concessionaires.  In fact, what Caneel and others do in terms of delivering excellent customer services to our visitors is without a doubt one of the main reasons why our visiting clientele continues to return.    At Virgin Islands National Park, we have second and third generations of visitors that visit us each year.  Some have been returning to the park and eating at the restaurant and residing at the campground since the concession operation came into effect.

 

 Lastly, as superintendent, I envision, we will continue to have this high level of return or repeat visitors.  Coupled with first time visitors, the visitation will certainly continue to increase. I am also confident that with the partnership that has been forged between the Virgin Islands National Park, Caneel Bay Resort and our other concessionaires, we will be able to meet the needs of our visiting clientele, regardless of the visitation levels and challenges.  But, we will also continue to preserve and protect the precious cultural/natural/scenic resources of the Virgin Island National Park and Coral Reef national Monument.  Again, I welcome you and thank you for allowing me the opportunity to give you a brief view into the park’s concession management program.  THANK YOU!

  

 

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