Monday, March 14, 2011

Summary and Conclusion of Legislative Proposals Analysis 2011 as to Oklahoma Scenic Rivers


Two bills impact the future of Oklahoma Scenic Rivers. If Oklahoma fails to pass a budget adequate to support the functions of the Oklahoma Scenic Rivers Commission, it will pay the price in diminished tourism revenues for the counties in the watershed. Locals will see less income, and the state will hurt itself by having fewer taxpayers contributing to the coffers for all state services. Thus, a bigger tax bill will have to be paid by others in order to make up for cutting off the state’s revenue stream from this area if goals of fiscal austerity are to be achieved. Simply, $349,239 solves that. Its less than eleven cents a person.



The second issue is agency consolidation. Consolidation may be appropriate for some agencies but OSRC is a prime example of the goal of agency efficiency because it draws on a wide circle of resources that do not burden taxpayers. In essence, Oklahoma’s getting three dollars of direct goods per dollar of that $349,239 spent—plus volunteerism and unmatcheable expertise.



In recommending a best case scenario for the management of the Illinois River it would be ideal to retain the Oklahoma Scenic Rivers Commission as its own agency and avoiding the foibles of HB1514, and it would be ideal to fund $349,239 of Scenic Rivers Commission budget rather than shut down the tourism jewel of Northeastern Oklahoma.

Historical Knowledge and Local Decentralization and Expertise in an Arena of Specialized Skills -- Oklahoma Scenic Rivers Management

A tenet in rightsizing government has been to look at need and capacity, and customize services so they are scaled to exactly the geographical area served.1 Policy gurus hail decentralization as a method of ‘not overbuying government.’2 Recently when attending a meeting of the Oklahoma Scenic Rivers Commission in Tahlequah, city Mayor Ken Purdy pointed out this trend and lauded decentralization as a form of efficiency that was important to the regional economy in Northeastern Oklahoma and Green Country. Moving operations to Oklahoma City would increase the net travel time for stakeholders. But, rather than drive 360 miles round trip most people would simple forego attending.…and especially so if a statewide agency is governing, simply because the perception would be that government is too big to listen to stakeholder insights. One of the dividends of local management is a rich multidirectional communications network.

Oklahoma Conservation Commission is generally regarded as being governed by a Board of Directors, both knowledgeable and committed to conservation efforts in Oklahoma. But there is no obvious method of imparting the wealth of historical knowledge of the facts and circumstances, the local views, the geography, and such. The lines of communication would not be bidirectional.

At present, OSRC rulemaking is by eleven diverse Citizen Volunteers comprising the Oklahoma Scenic Rivers Commission uncompensated.3

Tahlequah Mayor Ken] Purdy also expressed concern about losing scenic-river representation. The decision-making Conservation Commission board's five members are from five areas of the state. Although the bill does call for a Scenic Rivers Advisory Council, Purdy said advice from those in the scenic-river area would not be binding.4

The Oklahoma Conservation Commission is a non-regulatory agency responsible for our state’s soil and water conservation efforts related to production agriculture, upstream flood protection strategies, non-point source lead agency for carrying out non-point source mgmt programs of the federal Clean Water Act, reclamation of abandoned mine land, wetlands, conservation education, carbon sequestration certification program and geographic information council.

The skill set is broader for the Oklahoma Scenic Rivers Commission. It maintains a litter-free environment; builds, cleans and maintains toilet facilities; it mows and maintains the public access areas; it manages stream gaging sites for forecasting floating and flooding conditions; it conducts the abatement of navigational hazards; it conducts rescue response and does swift water rescue; it recovers drowning victims; performs law enforcement; it regulates commercial floating services offered and does oversight for potential hazards and improvements; it manages the licensing and user fee collection systems; it balances competing uses between stakeholders for multi-use; it provides tourist information; does planning and serves as a coordinating liason with other agencies. OSRC is the human face of the river, and it is the presence of Oklahoma in the tourism experience.

Public Perception and Superior Operational Effectiveness of OSRC

The public perception is that the FY2012 Oklahoma Executive Budget proposal is a death knell to state efforts to provide public safety, education, stream gaging, water quality monitoring, cleanup and maintenance along the Illinois River, Flint Creek Barren Fork Creek and the 500,000 visitors for recreation each year. The half-million river users, if all from Oklahoma, would equate to approximately 1 out of every 6 persons residing in the state. (Actually, many of the dollars dropped into local coffers are ‘import’ tourism dollars, drawn from other states.)

The proposed budget probably does not take into account the additional costs that will be incurred at the state level in order to accommodate the differences between being a conservation agency to being a recreation and law enforcement agency. It isn’t known whether Oklahoma Corporation Commission has overtime policies for weekend and holiday work—which are OSRC peak-load times. If so, overtime policies would increase the operational cost over the existing staffing cost estimates.

OSRC operates nine hours per day year round, Monday thru Friday. From Memorial Day to Labor Day, OSRC is open 8-5 seven days per week. This amounts to 28 days of peak-time service in addition to the 45-hour work weeks, or 252 extra peak-load hours during tourist season, plus and added approximate 180 hours annually of extended-day for a grand total of 2,412 service hours per year. This is accomplished with no premium cost because employees stagger their hours and are paid salary rather than hourly. A key factor in these hours is because the need for services correlates with river use—weekends and long days in warm weather. Recreation peak-loads are countervalent to usual business office hours. Eight to nine staff members operate the basics of the OSRC.1 In addition to the administrator/chief law enforcement officer Ed Fite, year-round staffing includes two additional full time River Rangers, three maintenance workers, an administrative manager and a clerk. As many as 20 people work in law enforcement and maintenance during the peak season.2 In many instances, Community Service laborers are supervised from local courts for litter abatement and public access area cleanup. These added workers are in addition to the budgeted posts, and only the management cost of these workers is subsumed in the budget. In other instances, conservation groups and local churches and other entities send volunteers for river cleanups where the garbage bags, canoes, and even heavy equipment and solid waste disposal tipping fees are comped by community philanthropists. A strong collaboration ethic and appreciation for the river makes it difficult to put a dollar amount on the actual true cost of river management if it were not for the community relationships which are built, day by day, locally.

Oklahoma Scenic Rivers Commissioner Steve Randall, elected by Adair County stakeholders, praised Ed Fite, the OSRC staff and volunteers for the work they accomplish. “The team is made up of informed, selfless and understanding employees and volunteers who value the greater good and work hard grappling with all the complex issues of the day,” he said. “Never again will I be naively content to take our Oklahoma scenic rivers for granted.”3

Matching Funds Leveraging, as to the Management of Oklahoma Scenic Streams

Would a 51.9% reduction in the OSRC budget be offset by OCC cost-share matching funds at a rate of 4-to-1 and 6-to-1? The hope, by state budget revampers, is that federal grant funds thru a couple of USDA programs could be used at a rate of 75% to 87.5% and Oklahoma would be responsible for just putting in the remaining 25% to 12.5% of the budget currently supporting the existing functions performed by the Oklahoma Scenic Rivers Commission.

 
Leveraged federal cost share matching funds are available, but only for specific targeted purposes, such as stream bank stabilization and riparian zone protection strategies and best management practices to reduce non-point source pollution. River Rangers, maintenance staff workers, administration and management, fuel, uniforms and vehicles would not be eligible for leveraged match to use federal dollars. Both the CRP and CREP programs have goal-specific limitations on what the federal dollars can be used for.1

The idea of consolidating OSRC may have been based on a cursory preliminary view of just some aspects of its role, or a sense that its essential role could be reshaped to fit within a conservation model, but that is not the case.

The unanswered question becomes, “What if the OSRC cannot be compacted 51.9 % more? Where is the funding for the public safety functions which are clearly outside USDA program guides?” It would be difficult to overcome the loss of a 30-year learning curve if it were subsequently determined that the bold steps proposed, would not be adequate. At minimum a conservative approach would be to not leave the tourism economy of the Illinois River Watershed worse off, and take government on the wrong track.

User Fees as a Component of Funding Oklahoma Scenic Rivers Programs

In 2008, statewide 2 percent of the total Oklahoma budget was satisfied by assessing a variety of user fees such as the commercial floatation device user fee and other user fees combined.1 Statewide, the average person paid $1,160 in user charges for all user fees.2 Natural resource and parks and recreation fees generated approximately $90 million in 2008. City and county park systems collected much of this revenue, but the Oklahoma Tourism and Recreation Department collected $12 million from the 14 million users of state parks and the Oklahoma Department of Wildlife Conservation charged $27 million to users, mainly for hunting and fishing licenses.3

Budget Considerations in the 2011 Legislature and Oklahoma Scenic Rivers Administration

Since 2002, the Oklahoma Scenic Rivers Commission has consistently been one of the first agencies to undergo a budget cut, and often tops the list of agencies forced to absorb the largest cuts.1 For fiscal year 2011, the commission received $279,239 in state appropriations, which doesn't begin to pay for the services more than 500,000 visitors demand each year. Operations are funded primarily by $130,000 in fees paid annually by the commercial flotation device operations, service contracts with the Oklahoma Department of Environmental Quality and the U.S. Army Corps of Engineers, and, ironically, a $1.1 million grant from the poultry companies paid to the agency in four installments from 2005 to 2009.2



Oklahoma Governor Mary Fallin’s proposed Fiscal Year 2012 Executive Budget, prepared by her staff and Office of State Finance, includes 51.9% reduction (from Fiscal Year 2011 amount of $279,239.00 down to $134,391.00) in appropriated state funds to the Oklahoma Scenic Rivers Commission.3



Averaged, the Illinois River experience carries an actual cost of about $1.20 per user. This $1.20 is used for litter abatement, safety, aesthetics, protecting the water quality to make it suitable for recreation, and other ‘public goods’ that must be provided as a shared, overall governmental function.4



Of course, the user fees apply to just a few of many types of uses. Thus, a grade school student who is writing a paper about the Illinois River doesn’t pay anything for downloading information from the website. And individuals calling to ask about the river level don’t dial a toll number that charges them for the information.



Scenic Rivers Commission Administrator Ed Fite said about a third of the commission's $700,000 budget comes from state funds. The state allocation this year is $279,000, and the fiscal year 2012 allocation drops to $134,391.5



Statewide, Oklahoma’s population consists of 3,751,351 people.6 If State of Oklahoma made up for the $70,000 EPA grant expiring this year and reinstated the $279,239 at the current funding level, per capita cost for the OSRC would be less than 11 cents per person. In Oklahoma the median household income for the most recent year available, 2009, was $41,664, or per capita $17,646.00.7 Per capita, that 11 cents a person represents only .000062% of the per capita family budget. The individual savings to every Oklahoman would be inconsequential. It would be tenuous to express the proposed actions as a taxpayer relief measure, since it amounts to something in the vague neighborhood of forty cents of a family’s annual tax bill. Or, to look at it from the perspective of what the budget bill does, the tax savings would, on average, be less than twenty cents per family.



Two motivations for the proposed consolidation and budget cut were given: The commission would become a division of the state Conservation Commission as a way to save money and capture more federal matching dollars, according to the proposal. Alex Weintz said eliminating employees would be involved.8



In preparing this analysis within a short time, it was not possible to run a planning modeler such as MPLAN, for the purpose of comparing the cost of jobs lost to the benefit of saving $134,391.00.9 However, we can draw from other states’ experiences with the same question recently. A recent Arizona economic impact study has addressed whether a sales tax or whether job cuts gave the better macroeconomic result for the state.10 Arizona found that job losses attributable to reducing government services have a greater cumulative adverse statewide economic effect, sometimes due to losing leveraged matching funds in addition to the more commonly cited reasons for not powering down a swift economy. In this instance, don’t confuse the data. Below we address matching fund leveraging as being dedicated for the purpose of riparian conservation programs from USDA that can’t be used for law enforcement and public safety or litter abatement and other tourism management functions. In Oklahoma, we can’t just Ex-out the law enforcement functions because that would have big negative economic implications as tourists stopped coming to an unsafe river. The point of the Arizona study is that a tax increase actually has less adverse consequences to the state’s economy than does shaving jobs. It offsets the employment gains which are one of the stated goals of the Oklahoma Governor’s platform. Moreover, the cumulative impact on the state’s economy from joblessness is greater than the cumulative impact of either tax mitigation or debt reduction.



We do not have current 2011 numbers, but Oklahoma governments (combined state, municipal and quasi-governmental entities such as utility districts) spent a total of $6,691 per person in 2006, well below the national average of $8,381, in services and public goods to the people of the state. In 2005, the state of Oklahoma ranked last among the states in combined state and local spending per person.11 It might be worthwhile to apply the budget premise (lower taxes) in an IMPLAN model to explore whether tax reduction strategies ‘waste’ synergistic opportunities and starve Oklahoma of its economic fuel that otherwise would be spent again and again if the focus were on ‘rapid recharge’ of revenues. If that premise were indeed supported by the forecasting model, the bonus would be offering good service to state residents, while yet satisfying the main objective of adequately funding our affirmative goals within the Oklahoma economy as a whole.

Economic Facts about the Illinois River, Lake Tenkiller and the OSRC


Knowledgeable law enforcement officer Dan Garber (retired) put it succinctly:
“Because of the popularity of the Illinois River among Oklahomans, in no small part due to us being a tourism destination, a law enforcement presence is vital for the safety & enjoyment of visitors and local residents alike.
I have worked as an OSRC River Ranger and as a Cherokee County Deputy and I can assure you that the Sheriff's office cannot replace the job done by the rangers.
It would require an auxiliary Sheriff's staff just for the calls & emergencies, something the county has never been able to afford. The job of the OSRC Rangers simply would not get done without OSRC staff. And, of course, the supervision of the mission should be located as close to the river as possible to be effective for the staff and our citizens.”

Lake Tenkiller hosts almost 2 million visitors per year. It is the 3rd most visited lake in the region encompassing Oklahoma, southern Kansas and northern Texas. Visitor spending at Lake Tenkiller alone resulted in an economic impact of $30 million dollars and supports 549 jobs locally. Lake Tenkiller is the attraction for five of the top twenty parks within the inventory of the Tulsa District Corps of Engineers office, encompassing Oklahoma, the southern half of the state of Kansas and the northern half of the state of Texas.

Tahlequah Mayor Ken Purdy said the city, chamber of commerce and Scenic Rivers Commission are working on a report to the Legislature on the economic impact the budget cut could have on the local economy. "The Illinois River is a major draw for tourism," he said. "We get half a million visitors annually."1

There are about ten major outfitter businesses covering the 60 rivermiles.2

Tourism visits to the Illinois River range in the neighborhood of 400,000 direct visitors, of which about 200,000 float the Illinois River. Float trips generated a direct economic impact of $12 million dollars into the local economy at last count. These dollars are re-spent locally. The outfitters pay workers who patronize the local businesses who in turn pay workers, and so forth. Tourism dollars have a greater multiplier3 in the geographical area than if the economic draw was commerce/shopping or other activities that depend heavily on imports.

Individually, each floater puts an averaged $60 of ‘new money’ into the local economy. Thus, two couples floating the river would infuse, on average, about $240 in the Tahlequah area in the form of purchasing fuel, paying for their float, buying food and lodging and spending on souvenirs and other entertainment such as the NSU Playhouse, a concert or museum visit. If the primary reason for their visit were ‘no longer there’ then not just the outfitters would suffer an economic decline— the abundance of surrounding restaurants and fuel stations, stores and lesser incidental attractions such as museums and playhouses would also suffer an economic decline.

But the economic losses caused by lost confidence in float trip safety would not just be a short term and temporary impact. It would have a greater-than-one-for-one impact on the future of the area. (And in fact, even the hint or risk that the Illinois River would be under new management gives rise to a bit of lost confidence in the river adventure float experience.) In the past, businesses have relied upon having a predictable tourism future, as they made decisions about putting in restaurants and hotels, improving their guest services, adding more amenities in anticipation of meeting the coming Summer’s capacity for earnings from floaters. Businesses asking whether Tahlequah would have the capacity to sustain a successful economic enterprise might be discouraged by the lack of predictability. Successful business forecasting depends in large part on the ability to make assumptions about the future, based upon historical information. Would the new paradigm have the ability to insure that floater safety is up-front and taking place at every opportunity in advance of putting amateurs out on a wild river? Would there be a Ranger to call when a swiftwater rescue is needed? Would the new administrators have the knowledge to successfully gage floating conditions from afar? Would the risks to floaters go up if there is no one working on Sunday afternoons? Would guests perceive a bad aesthetic experience if the public lands are not kept litter-free, even if each of the outfitters does a fine job of their own properties? These are subtle factors that have, in the past, been satisfied by a refined management methodology that have grown tourism, grown river education, grown a solid cohesive way of thinking about shared utilization of the resource for multiple use. The existence of a steady-state economy has been an assumption upon which much of Tahlequah’s enterprise has been assumed. Changing the assumptions about whether the river will continue to draw tourists, would have long-term negative implications for Tahlequah’s future.

Oklahoma Scenic Rivers Commission makes contact individually or online with about 500,000 potential river visitors who either visit the OSRC office, call with questions, receive safety talks before floating, participate in training, receive information by mail or brochure, or visit the website. Note: It is critical to public safety that recreationists have access to OSRC, know the rules, and feel assured that help is available. A regulatory presence in Oklahoma City is not an adequate substitute for local presence to sustain peoples’ confidence in floating.

It would be valuable for some of the obvious concerns influencing economic viability of the proposed alternative to be researched before a decision was made either way. Advance planning (more than a few months or even a year) would be needed to address issues such as operating rescue dispatch from OKC or contracting it to an inexperienced and unqualified law enforcement agency lacking in familiarity with the river’s characteristics, as a sideline. You can measure in human lives saved, the level of expertise being tapped to manage and perform lifesaving activities on this river. Likewise, safety education in advance of putting people out on the river is a key onsite, hands-on, preventive piece that can’t be solved with remote management and a 51.9% budget cut. An old Oklahoma adage is “The Devil Is In The Details.” It would be difficult if not impossible to reinvent a wheel which has been in design refinement for thirty years, on less money, with less information, from further away. Site-specific expertise and specialized skills are two of the assets intrinsic to successful river tourism management.

2011 Proposed Legislative Changes to the Oklahoma Scenic Rivers Program

In 2011 the Oklahoma state legislature is considering two bills of particular impact. One bill would reduce the OSRC’s state budget by 52 percent. The other bill would abrogate the Commission’s rulemaking authority and transfer administration about 190 miles away to the Oklahoma Conservation Commission of the Oklahoma State Department of Agriculture in Oklahoma City.

Proponents of the changes say that cost savings and streamlining bureaucracy would result. Critics charge that it would only cost 11 cents per capita to keep the OSRC with its wealth of specialized expertise, which is needed to safely managing the 400,000 river visitors, and without local rulemaking and safety services the tourism economy would collapse.

Unique Tourism on the Illinois River

 The Illinois River is said to be the best canoe stream in the state of Oklahoma with interesting and sometimes challenging waters. Both experienced paddlers and novices … enjoy float trips on the Illinois River as it winds by high bluffs, gravel bars and lush forests.1

There are a number of float trip outfitters along Scenic State Highway 10 North which offer canoes, kayaks and rafts. Most outfitters rent the watercraft including life jackets and paddles and shuttle guests up the river, allowing them to float back down to the outfitter. Many float trip outfitters also offer camping, cabins or motels as well as amenities such as swimming pools, volleyball and basketball courts and picnic areas. Canoes offer superior maneuverability and make the float trip faster, while rafts carry more floaters and offer more stability. Outfitters … help floaters select the best watercraft for their group and skill level.2

Wildlife is abundant along the scenic Illinois River including deer, fox, bobcats and a wide variety of birds. Bald eagles inhabit the area year-round.3

The Illinois River offers excellent fishing for smallmouth and largemouth bass, channel and flathead catfish, walleye, and various sunfishes. The Lower Illinois River offers year round trout fishing. The designated fishing area is a 7.75 mile stretch from Tenkiller Dam to Highway 64 bridge near Gore. Bank access and boat ramps are available throughout the area for the convenience of fishermen. Overnight camping permitted at fee areas and the Gore Landing North. Daily limits and size regulations apply for brown trout and smallmouth bass.4

One of the most remarkable and unique features constituting a draw for the area is that tourists can get a variety of outdoor experiences within a compact geographic area including the Illinois River, Lake Tenkiller, The Cherokee Nation, and Tahlequah with its artisan musical offerings and fine restaurants. Tourists nationally on average will spend four days on a regional vacation, and the area offers a compliment of activities to fill the time. Illinois River tourism is unique because of its Ozarks Bioregion characteristics which bring visitors from West, South and North.

Background to 2011 Legislative Session Illinois River Bills

Background


For over 30 years, the Oklahoma Scenic Rivers Commission has protected and preserved the Illinois River and its tributaries while providing an atmosphere for a safe and healthy out-of-doors recreational experience for millions of visitors wanting to enjoy Oklahoma Scenic Rivers.

The Oklahoma Scenic Rivers Act was passed in 1970, on the heels of the 1968 creation of the National Wild and Scenic Rivers Act. In 1975, the Oklahoma Scenic Rivers Commission came into being. At the time the NWSRA was considered, rivers in the U.S. had little or no federal protections. According to OSRC Administrator Ed Fite, the law covered eight rivers instantly designated as components of the NWSRA, along with listing 27 other rivers marked to study for possible inclusion in the system of protected rivers. “The Illinois River and tributaries were not named on that list at the time, yet their possibility was discussed,” said Fite. “What is interesting is that our [country] has in excess of 10,000 rivers, with stream reaches in excess of 3.5 million miles.” During the late ‘60s, there was talk of adding the Illinois River to the list of nationally protected streams.1

[T]here were approximately 30 states that went about the business of passing some type of local- or state-level wild and scenic rivers protection acts in hopes of diverting any possible use of the NWSRA in their respective states,” said Fite. “Oklahoma was one of those states.”2

The Oklahoma Scenic Rivers Commission provides many services that are often taken for granted and would be greatly missed if not provided. It would be impossible to continue the level of service based upon bills that cut the budget and move decision-making out of the Illinois River Basin, for reasons set forth in this analysis.

White Paper: Survey of Illinois River Tourism Implications - Pending Legislation:

Commissioned by Save The Illinois River, Inc.  EcoLaw Institute, Inc., P.O. Box 1116, Stilwell, OK 74960.  Principal Investigator Kathy Tibbits, Esq., Kathy Tibbits Strategy and Policy Consulting;  About the author:  Kathy Tibbits has degrees in Political Science (OU, 1980) and Law (TU, 1983) with Water Law emphasis and ten years’ experience as a Strategy Team Writer and Policy Group Advisor to the Cherokee Nation. She is a member and Director for nonprofits EcoLaw Institute, Inc. and Save The Illinois River. She works as a private consultant and as an attorney, and is licensed to practice before the United States Supreme Court.
 
Executive Summary


Ultimately, the questions are how we fund the state scenic rivers program if there is a commitment to tourism, and what the real cost would be to consolidate.

Oklahoma Scenic Rivers Commission was created as a state alternative to including the Illinois River in the National Wild And Scenic Rivers program, to allow commercial enterprise to develop for regional tourism of the unique stream.

Two bills in the 2011 Session would impact the tourism economy of the Illinois River Watershed. HB 1514 would reduce services or increase cost to manage the river for tourism. The proposed Governor’s Budget would cut funding 51.9%, yet OSRC is already diversified so just a third of its budget comes from the state. Just $349,239 would prevent the budget from adversely impacting the virtuous cycle of tourism revenues that would spiral downward if the existing skilled services are not provided.

Maintaining economic staisis for Illinois River Watershed tourism will take both actions:

1. Choosing Not To Consolidate and Centralize the Oklahoma Scenic Rivers Commission.

2. Adequately funding $349,239 of the $700,000 by changing the Governor’s budget.

If the agency is consolidated, costs will be higher because locals are providing a wealth of services at only management cost. The skills performed will require new added state agency functions beyond the mission scope of OCC. The operational costs will be much higher and communications will be more difficult. Key services such as swiftwater rescue will be compromised. Tourism will decline when safety programs are dispersed.


If funding is inadequate, the existing leveraged and diversified funding from other grants, private gifts and public sources which are available to the Oklahoma Scenic Rivers Commission will not be adequate to meet minimum expectations for tourism. As tourism declines, the state would face additional NE Oklahoma income tax and sales tax diminutions, and local governments would have reduced sales and property taxes.