VOL. 132 | NO. 49 | Thursday, March 9, 2017
View From the Hill
View From the Hill: Outsourcing Win More About Turf Than Trends
By Sam Stockard
As Fall Creek Falls folks celebrate a state decision to postpone park privatization, the question is whether public opposition or failure to follow long-standing state protocol led to the plug-pulling.
Make no mistake, people in Van Buren and Bledsoe counties around rural Spencer are thrilled to find out Gov. Bill Haslam’s administration is stopping – some say indefinitely – the request for proposals from private vendors to handle demolition of the park’s old inn and the construction of a $22 million inn.
Once the project is complete, under the governor’s plan, the concessionaire would keep control over operations, a move shifting state employees to the private company and away from state pay and benefits.
Yet, while legislative Democrats have been waging a public campaign to stave off the governor’s efforts to outsource state parks and college campus jobs, this holdup could be as much about the State Building Commission and its loss of authority over the inn’s construction as a grass-roots outcry.
Typically, the State Building Commission calls the shots on capital projects, as most people would expect. But its role in the Fall Creek Falls inn would not be the same as it has been for decades.
In a display of bipartisanship, state Sen. Mike Bell, a Riceville Republican, is among those pleased the governor decided to “rethink” and “pull back” the RFP (request for proposals) for Fall Creek Falls.
Part of his concern was the process, which as he understands it would be “vertical integrated construction,” through which the State Building Commission would approve a plan while the concessionaire or vendor would approve the building design and architect.
“So, it took a lot of the influence and power away from the State Building Commission, as I understand it,” Bell says.
“That’s why I’m kind of glad to see the governor’s pulled back,” he adds. “And I think there were some other concerns that have been expressed by members of the State Building Commission. The three constitutional officers, and at least (in) my conversations with the speaker of the Senate, that there were concerns they had as well.”
Secretary of State Tre Hargett, a Building Commission member, declined to comment on the matter.
But Lt. Gov. Randy McNally, also a member of the commission, calls the postponement “somewhere between a bump in the road and a roadblock. It’s not a roadblock, but it’s not as insignificant as a bump in the road.”
Asked about the administration’s decision to step back on the Fall Creek Falls project, McNally says, “I think they’re going to go back through the Building Commission process, which was what we wanted.
“And they’ll have to have the plan approved there, and the Building Commission will have to approve the design.”
The lieutenant governor, who is new to the Building Commission, previously said he didn’t know exactly how the construction process was to be handled, though he noted the contract would have to be approved by the Legislature’s Fiscal Review Committee.
“It’s all new territory, so I can’t comment on how that would work. We’ve never had a contract come through like that,” he said in mid-February.
Asked after the RFP postponement, though, whether the process was not done properly at the outset, McNally says: “I think the Building Commission realized what was going on. But I don’t know that the administration was fully aware of all the rules that they had to go through.”
McNally says he isn’t sure whether top officials weren’t aware of requirements or hadn’t been informed.
When everyone’s comments are taken into account, it seems the State Building Commission was ready to move ahead until the milk was about to curdle.
A spokesman for the Department of Environment and Conservation says the State Building Commission unanimously approved the RFP in December, one allowing a concessionaire to design, build and operate a Fall Creek Falls inn, including a gift shop, conference center and restaurant, along with running the park’s cabins and golf course.
In addition, the Office of the State Architect was consulted when the RFP was put together and gave guidance on complying with the law and SBC policy, explains Eric Ward, communications director for the Department of Environment and Conservation, which oversees state parks.
A contract would have to be submitted to the State Building Commission for review and approval before it could be finalized, according to Ward, and a detailed lodge redevelopment plan and budget would be attached.
Before the matter was postponed, Ward says, “Throughout the construction and operation phases, there will be state oversight of the project.” And after the contract is final, the Building Commission would have to approve any “significant deviations.”
After the postponement, asked if the outsourcing deal is dead, Ward says only, “The deadline has been postponed to make some content revisions to the RFP and attachments which will be done through the issuance of a future amendment. Updates to the schedule will be included in the future amendment.”
More than likely, the amendment will mean restoring the State Building Commission’s full authority rather than putting it through this “vertical integrated construction,” a bit of governmental gobbledygook meant to throw off the unwashed masses.
While TDEC isn’t saying when or if the RFP will be revived, McNally says he doesn’t think the holdup has the potential for pushing the matter past Haslam’s term in office. He has less than two years remaining.
But asked if he thinks the Fall Creek Falls situation will have any impact on other proposals for the outsourcing of facilities management of state properties, McNally, says, “I think they’ll need to go through the same process.”
Interestingly enough, Gov. Haslam spoke about whether the State Building Commission would be circumvented on the same day the Department of General Services postponed the entire RFP process. But he failed to mention the matter was taking a hiatus.
“The State Building Commission will obviously decide. And they’re having those discussions now,” Haslam says.
“Obviously, there’s a lot of discussion about what role architects play and when. Our main consideration is, when we build a new building there, how do we get the very best building built for our citizens for the very lowest cost and it’s one attractive to guests.”
Dems claim ‘victory’
Democratic lawmakers such as state Sen. Lee Harris of Memphis and John Ray Clemmons of Nashville are not opposed to building a new inn at Fall Creek Falls or updating other park facilities across the state. They just don’t want the state to invest millions of dollars and then hand the keys to a private vendor who would be able to pocket a chunk of the profit.
The seemingly indefinite postponement means rates won’t be doubled at the Fall Creek Falls inn and employees there won’t face the potential for job losses or lower wages and benefits when their jobs are transferred to a private vendor, Harris explains.
“So, we think it is a victory on many fronts. We think it means that we are, at least for now, back in charge of what we do with our public assets,” the senator adds.
“Because before the announcement of postponement, many of us believed that consultants were making the decisions about what would happen with our cherished public assets,” he adds.
“But no longer. The public is back in the driver’s seat.”
Clemmons contends there are no “expectations” for revisions to the state’s RFP for Fall Creek Falls and points out there is “no clear timetable.”
“Our position is that this should be a permanent postponement,” adds Clemmons, who visited Fall Creek Falls and Montgomery Bell State Park with Harris for town-hall gatherings.
Clemmons points out he and Harris haven’t found one person who supports privatization in their trips to UT-Knoxville, UT-Chattanooga or those parks, which are considered the crown jewels of the state park system and also the first in line for outsourcing.
“Remember,” Harris adds, “if the governor decides to renew this effort, and we hope that he will not, it will be a morale blow to state employees across Tennessee, because they celebrated yesterday (March 2) at Fall Creek Falls Park.
“The Tennessee State Employees Association is also in a celebratory mood, and I can’t imagine disappointing and taking those folks back to that place where they were before.”
Harris points out if the Fall Creek Falls project runs into the third or fourth quarters of 2017, it would be tough for Haslam to complete this type of “monumental” task when he has “lame-duck status.”
Pointing toward a “complete lack of transparency,” Harris says the Department of Environment and Conservation commissioner told him the department had been working on the matter since 2013, yet Fall Creek Falls employees didn’t find out about the potential outsourcing plan until Thanksgiving in 2016.
To stop it, House Minority Leader Craig Fitzhugh and Democratic state Sen. Sara Kyle of Memphis are sponsoring legislation prohibiting the outsourcing of state parks. Democrats also are backing legislation reversing a self-sufficiency requirement for state parks and requiring high-dollar contracts to come before the Fiscal Review Committee.
Fitzhugh, a Ripley Democrat considering a run for governor in 2018, says preserving state parks and facilities should be a priority, regardless of political party or place of residence, rural, urban or suburban, because all Tennesseans use them.
An increasingly tough situation is taking place at Henry Horton State Park, as well, where its inn is to be demolished with funding in the next fiscal budget with no hope for replacement, according to Fitzhugh.
“They’re in wonderful spots, the geography of this state is like no other, and we just can’t afford to turn them into something in a profit-making situation, the profit going outside of the state or to private individuals rather than the citizens of this state,” Fitzhugh points out.
Whether Democrats can maintain momentum on the governor’s outsourcing reversal could tell the story in whether they’re making strides back into the political picture across Tennessee or whether this is just a glitch in the government process caused by stumbling among state bureaucrats moving rapidly toward privatization of state government.
Sam Stockard can be reached at email@example.com.