TRENTON - A task force report recommending New Jersey let private vendors run all 58 state parks met with controversy last week even before it was released, as audits circulated by environmental groups showed the state continues to "mismanage" 236 contracts already held with private entities operating on public lands.
The state Privatization Task Force, formed by Gov. Chris Christie, concluded the state Department of Environmental Protection could save "approximately $6 million to $8.2 million" by letting private companies manage state parks.
But for more than a decade, the DEP has mismanaged lease agreements and contracts, including failing to collect payments, by which public lands and facilities are operated and used by private entities, according to audits released in 1997, 1999, 2004 and last December by the Office of Legislative Services.
TOO SOON TO TELL
When asked about the task force report recommending privatization in light of the OLS audits, Christie spokesman Kevin Roberts said it was too soon to say how the state will proceed.
"We can't say whether anything is being adopted right now. ... These are just recommendations. The governor has received the report, and we will be reviewing the findings and recommendations," he said.
State parks are currently run by state employees, although private vendors are contracted to run boat rentals, marina operations and concession stands. The contracts are among 236 lease deals held by the DEP with companies and individuals using and operating publicly owned homes, farm fields, marinas, catering halls, utility easements and other facilities located on state land.
Around the country, parks have been privatized with successful results.
"As long as someone from the state is overseeing it and making sure someone is not building a McDonald's out there, privatized parks work. The state determines in the contract how to keep the character of the park the way they want it," said Warren Meyer of Recreation Resource Management, an Arizona firm operating 150 federal, state, county and local park operations in 12 states this year.
The OLS audits, however, have identified problems of lease payments not being collected, tenant operations not being monitored and liability insurance not being maintained. There have been improvements, according to the last audit, and the DEP said last week it has increased lease revenues by $700,000 annually since 2007 and collected $300,000 in unpaid rent and lease payments.
But the latest audit in December still found 112 of the 236 existing leases have been permitted to lapse, while the private entities still use state lands.
Additionally, for three consecutive years, a private vendor leasing one of the state's six public marinas has been a full year late in paying the state its due - an average of $282,000 per year.
The OLS also questioned whether fair market value is being charged for the properties by the state and could not substantiate that many leaseholders had liability insurance.
"That could leave the state vulnerable to litigation," the audit said, noting only three of 45 tenants leasing hangars, tie-downs and building space at the DEP-owned Aeroflex-Andover Airport have current insurance certifications. Only two have current rental agreements, and no records of agreements with 27 tenants could be found, the audit said.
The audits were circulated last week by environmental groups who have been critical about a $45,000 price tag the DEP put on a new proposed deal to let a gas line be erected through 177 acres of state parks and preserves in the protected Highlands region of North Jersey.
"Even during a time of fiscal emergency, when the parks are starved for cash, DEP has shown no ability to manage current lease and contracts. As a result, the taxpayers and the parks visitors both lose. ... At best, privatization is unproven and has had a scandalous past in New Jersey," said Bill Wolfe of Public Employees for Environmental Responsibility.
PEER, the New Jersey Chapter of the Sierra Club, the Nature Conservancy and the Association of New Jersey Environmental Commissions have opposed park privatization.
ECHOES OF WATERLOO
Jeff Tittel of Sierra said the state will fail to conduct proper oversight, pointing to how Waterloo Village, the historic 19th-century canal village in Byram, was shuttered in 2006 after the financial collapse of a private foundation.
The state is again trying to reopen it with private vendors.
"Most of the major forests and federal parks in the West would have been closed to the public years ago if not for private concessions because the federal government didn't have the money. This is not a takeover of the parks. It's about finding locations and tasks in the parks where private companies can operate it more effectively and efficiently," said Meyer, of Recreation Resource Management.