VOL. 132 | NO. 34 | Thursday, February 16, 2017
View From the Hill
View From the Hill: Outsourcing, Rates Worry Park Fans
By Sam Stockard
Dunlap resident Kathy Gilbert opposes privatization of Fall Creek Falls on a number of fronts.
If a vendor comes in to run the state park, as planned by Gov. Bill Haslam’s administration, she’s worried about the possible loss of jobs or pay and benefits by state employees, the funneling of revenue to private investors and the raising of rates at the state park’s lodge when it’s rebuilt, potentially making it less affordable for families to visit.
Ultimately, she believes the region and state will lose.
“I feel like it’s our park, the people’s park, it’s for people to use and it should be affordable and accessible to all of the state’s people and to visitors from all over the world to kind of show off our natural resources, our treasures,” says Gilbert, a business manager who lives in Sequatchie County south of Fall Creek Falls.
Tennessee put its parks on the market more than a year ago as part of Haslam’s proposal to outsource facility services in departments across the state, but got no takers from the private market.
To that end, the Department of Environment and Conservation, which oversees state parks, is taking proposals from vendors to run Fall Creek Falls as the state plans to raze the park’s lodge and build a new one for an estimated $22 million.
State officials say the winning bid could be selected this spring, and demolition of the lodge could begin by December, according to reports, an effort to inject life into a region where Fall Creek Falls is a major economic driver.
To sooth nerves, Haslam and other state officials have said repeatedly state workers won’t lose jobs, pay or benefits as part of a facilities services contract available for universities, prisons and other state departments across Tennessee.
But Gilbert and many of the region’s residents who live about two hours southeast of Nashville and north of Chattanooga displayed their skepticism recently at a meeting at Fall Creek Falls. Not only are they worried the 48 full-time state employees could wind up losing pay and benefits, if not their jobs, they don’t like the idea of a private enterprise capitalizing on Tennessee taxpayers.
Tennessee already outsources part of its facilities management to Chicago-based JLL (Jones Lang LaSalle), which reported a 14.5 percent profit in its annual report, Gilbert says. Aside from “secrecy” surrounding the state’s plans for outsourcing since it surfaced in news reports two years ago, Gilbert worries about money leaving the community and state.
“My concern as a taxpayer is that when you outsource there’s always profit,’’ Gilbert says. “That means my tax dollars are going to whatever percentage of profit the company will be earning. And that goes to investors who are typically quite rich and wealthy. I would rather that part of my taxes go to help my own community.’’
Typically, most regions would be excited about a capital project such as a new inn, and some people are thrilled about the project. But lodging rates are expected to jump to about $150 from $76 a night, possibly putting it out of reach for many Tennessee families to enjoy an inexpensive trip to Fall Creek Falls.
“It’s supposed to be a park for everybody,” Gilbert explains.
The state could put funding into maintenance and improvements at the lodge rather than outsourcing it to a “global” contractor, she points out. Instead, the Haslam administration is prepared to spend millions on construction, a plan people fear will put Fall Creek Falls on the skids for a while.
Gilbert also wants some assurances in the state’s request for proposals that lodge rates will remain affordable and that work will go to local people.
But those aren’t in the documents, and it doesn’t appear to be part of Haslam’s philosophy.
Government like business
During public speeches, the second-term Republican governor consistently says Tennesseans want him to run government like a business but only to a point.
He often points out people can’t build a road system, run prisons or operate schools, all of which he says should be left to state government. He doesn’t hold the same view toward parks.
Asked about fears regarding Fall Creek Falls, Haslam says, “People should take great encouragement in that the state’s investing money in Fall Creek Falls. We haven’t done that in forever, and we have a facility that literally is substandard and it’s hard to keep the number of guests coming there we’d like to.”
“All we’ve said is, with all the things the state does, I’m not certain that running a lodge or running marinas or running golf courses is part of what we do better than other folks,” Haslam said. “If there are other folks that can run that better, they’ll do that. The jobs won’t go away; they will still be the same exact jobs there. The question is should the state be running golf courses and hotels or can somebody else do that better than us?”
Another question is whether Fall Creek Falls is just the first of the state parks targeted to be run by a private vendor.
The governor’s fiscal 2017-18 budget plan shows $10 million for the Henry Horton State Park Inn, restaurant and visitor center, $4.9 million for the Rocky Fork State Park visitor center, $11.6 million for a Pickwick Landing State Park Inn renovation and $23 million for Paris Landing Inn replacement.
Several of these will be ripe for the picking, especially with their golf courses already well established.
Lt. Gov. Randy McNally says he believes these types of projects should be evaluated to see if savings are possible, whether the state can manage them better or whether it can increase traffic to the sites. He points out the state had a hard time managing the restaurant at Cove Lake State Park in Campbell County and wound up contracting it successfully.
“But we’ll have to look at each individual project to make sure it’s in the best interest of the state financially and also that the employees are not harmed in the transition,” McNally adds, saying he believes these properties should be assets rather liabilities.
Room rates at Fall Creek Falls would need to be competitive with those at surrounding hotels, and that should be considered as the matter goes through the Legislature’s Fiscal Review committees, McNally says.
But Senate Republican leaders, who are in control, aren’t certain whether these matters will come through the General Assembly or be handled exclusively by the Haslam administration. They’re also not sure whether the State Building Commission will oversee the demolition and construction of Fall Creek Falls’ new inn or if the new vendor will run the bidding and award a contract.
“We’ll start asking those questions as soon as they start coming through the committee process,” says Sen. Bill Ketron, when asked about the process. He assumes it will come through the Senate’s State & Local Government Committee as well as Fiscal Review, which he formerly chaired.
However, Senate Majority Leader Mark Norris said, “There may be a difference of opinion on it. I’ll have to look into it, because the administration may feel as though it’s got the authority to move forward (without the Legislature.)
“I don’t want to say that that’s their position, but I heard tell.”
Queried further about outsourcing at universities across Tennessee, which is to be decided by each institution’s board of trustees, Ketron urges the governor’s administrative to bring privatization matters through the General Assembly so legislators can review them and ask questions.
What the Dems say
While some lawmakers are trying to figure out exactly what the Haslam administration is doing with outsourcing, state Sen. Lee Harris (D-Memphis) and Rep. John Ray Clemmons (D-Nashville) are traveling the state, meeting with campus workers and community residents to find out how they feel.
They’ve been to University of Tennessee campuses in Knoxville and Chattanooga as well as the University of Memphis and recently traveled to Fall Creek Falls, where Harris says they met with about 100 community members, only about two of whom were state park workers.
“There was so much concern it was unbelievable to me that there could be a politician in Nashville that could be supportive of anything the governor’s doing, given what we heard from that crowd,” Harris said.
“There was not a dissenting opinion. They were uniformly and vigorously opposed to everything Haslam has proposed,” Harris said. “It was the most shocking thing I have seen, and it was a bigger crowd, more adamant than any of the previous crowds.”
People see Fall Creek Falls as the “center of their universe” and they’re worried the governor’s plan is a “mistake” that will “erode that asset,” Harris says, adding residents feel “powerless” and unheeded.
Harris hopes lawmakers will file legislation this session to do something about the governor’s privatization plan. Steps could be taken to remove parks from the state’s self-sufficiency laws requiring parts of government to make a profit or at least cover expenses, he explains.
Harris confirms the TDEC anticipates lodge room prices will have to be doubled at Fall Creek Falls with a new lodge, and he believes a private operator will expect to profit.
The state could maintain control of the Fall Creek Falls lodge and double rates itself, which would still hurt accessibility, but at least it would generate money for Tennessee’s general fund, he says.
“Now we’re doubling rates and doing all that stuff just for some private vendor to put it in their pocket,” Harris says, “so they can smoke cigars and eat whatever they eat. In the cartoons, they eat caviar.”
Harris notes Fall Creek Falls is the “cream of the crop” for Tennessee state parks, and he says Montgomery Bell State Park west of Nashville could be next in line for outsourcing. Another town hall is in the works there, but if Haslam is listening it doesn’t seem to be registering.
Sam Stockard can be reached at firstname.lastname@example.org.