Concession Reform


   I was asked to give an update on S208 the Concessions Reform Act now before Congress. I wish the newsletter deadline were next week, as Congress has at least one more week in session, but at this moment (which is a key word) it appears likely S208 will be passed into law. Many people in and out of our industry have spent the last six months trying to insure S208 deals fairly with guides and outfitters. Although S208 will have an immediate and direct effect on Grand Canyon companies, this was viewed by America Outdoors (AO, our national guide and outfitter organization) as the battleground to the future of the guide and outfitting businesses, large and small, that conduct their business on public lands. Doug Tims, the President of America Outdoors, recently sent out a letter on S208 to help explain the current version of the bill now before Congress. I think it tells the whole story better than I could, so below is a shortened and slightly altered version of his letter:

   BACKGROUND
   Every business that operates on public lands is facing substantial review and changes in their relationship with the federal government. Timber has taken the biggest hit, with supplies from the National Forest system reduced from 11 billion board feet in the Reagan era, to 4 billion today. Grazing and mining are struggling with stricter environmental controls and potential large fee increases. Large concessioners in the National Parks are facing buyouts of their possessory interests and future bidding on the their contracts without preference. Eleven years after agreement on the national outfitter and guide policy that governs Forest Service (FS) and Bureau of Land Management (BLM) permits, the FS version has expired without formal adoption. Nor have the agencies implemented a consistent, effective evaluation system for outfitters as required by the policy. New policy proposals have surfaced in both the Forest Service and Park Service that are very hostile to the industry. Outfitters in Alaska face bid/prospectus from the Fish & Wildlife Service. BLM feels it is being pushed towards similar actions with respect to outfitter and guide rules. Many, including the President, GAO and the outfitting industry, have called for standardization of outfitter policy among the agencies. S208, a bill to reform National Park concession policy, became the vehicle for Congress to give the agencies some guidance.

   America Outdoors (AO) didn’t choose the vehicle and we couldn’t control the process. AO did decide the bill was likely to pass and we needed to influence the outcome in any way we could. The goal: put into law directions that assure the agencies must continue preference in renewal, no fee bidding, and a viable business environment. We think the current version of S208 provides direction to the agencies in some key areas that are very important to our industry’s future.

   PREFERENTIAL RIGHT OF RENEWAL
   S208 currently says there will be no preferential right of renewal, with two exceptions - 1) outfitters and guides, and 2) non-outfitter concessioners grossing less than $500,000. Prior to S208, preference exists in law only for NPS outfitters. Preference is common practice for Forest Service, BLM and USF&W permitted outfitters, but preference is not protected by law. Early versions of S208 eliminated preference for all concessioners, and if passed in that form, would have been used to end preference for all outfitters at all agencies in the future. AO wanted a performance based evaluation process where outfitters could earn preference by doing a good job. The current version of S208 grants preference to outfitters who perform in an “Excellent” manner during half of their permit term,— a higher standard than current “satisfactory” requirements. There is concern by many AO leaders and members that ill trained, or biased agency persons, might use this “Excellent” category unfairly to get rid of outfitters they don’t like. It is our challenge to assure through future rule making processes that a fair, understandable, appealable evaluation system is put in place. The bill states the system must be “clear and achievable”. This should have been done ten years ago, as directed by the national outfitter policy. If S208 passes in it’s current form, outfitters will have strong political allies with the force of recent law behind them to help us assure fair treatment in future rule making.

   FRANCHISE FEES S208
   currently states, “…the fee shall be determined in a manner that will provide the concessioner with a reasonable opportunity to realize a profit on the operations as a whole, commensurate with the capital invested and obligations assumed.” It further says, “…the Secretary shall establish a standardized schedule of minimum acceptable franchise fees…” for outfitters and guides offering “…similar services at the same approximate location within a specific park…” The word “schedule” allows the National Park Service the continued option of establishing different fees based on some differences, like we currently have in Grand Canyon, where fees charges for motorized trips are higher than fees charged for oar trips. In the negotiations on S208, in order to get preference in renewal, we had to make some concessions on fees. There is a provision that allows for some fee bidding at renewal, but it does have a cap which should be something that will not ruin the industry.

   FEES TO SPECIAL ACCOUNT
   You’ve probably heard outfitters say they wouldn’t mind the fees so much if they went to the local resource. S208 has provisions where at least 50 percent of the franchise fee collected will be returned to the units of the National Park System where it was collected. There are some special provisions and limitations, but it is the first time franchise fees have not gone directly into the national treasury to be lost forever.

   FINAL COMMENT
   It would be nice in today’s political and business environment if we could just avoid change. Unfortunately that is not an option. Perhaps we could have sat on the sidelines and let others decide our fate. We did not. The good ole days—when we could just float the river or ride through the woods, when no one knew or cared what we were doing or who we were— are gone. I am proud of the professional effort AO has put forward to protect the essentials of a viable outfitting industry. I hope you will join me in continuing our efforts in the coming year to influence the inevitable rule making process. We are outfitting in the ‘90s. Even with the trials and tribulations of surviving the current political environment, it beats the hell out of an 8-5 desk job in an urban environment.

Doug Tims
President

 

   I realize this is pretty dry reading, but some of you have followed the battle quite closely. Thanks are in order to GCRG for their letters of support on some of the issues in S208. At one time it looked pretty bleak for the industry, but I think the current version of S208 (if it passes and is not changed again) is something we can live with. The “Excellent” rating should guarantee a continued high standard of quality for our industry. It will be crucial that we closely follow the rule-making process, so the new regulations don’t sanitize and standardize the industry so much, that the spirit of the industry as expressed in GCRG’s byline, “Celebrating the unique spirit of the river community” becomes a casualty in the process. n

Bruce Winter
Arizona River Runners