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General Government 

### Executive Summary

#### Key Questions
- What is the overall fiscal feasibility of the state park system?
- What are the challenges associated with the current operation of state parks?
- What are national or regional best practices that could be implemented in Oklahoma?
- What are organizational and policy options that the Legislature may consider regarding how Oklahoma operates its state park system?

Oklahoma’s state parks system contains 38 parks totaling more than 80,000 acres. The diverse system provides access to waterways and offers outdoor experiences such as hiking, camping, boating, and golfing. Additionally, some of Oklahoma’s state parks offer lodging facilities, which can be used for overnight stays or for hosting events. The State owns approximately 25,000 acres of park land and leases the rest from various governmental entities. State parks generate some revenue through lodging, fees, and food service, with state appropriations offset- ting operational losses.

![ok-parks-map.png](https://dy8iim215g2zo.cloudfront.net/ok_parks_map_2f76a685ce.png)

The size and condition of the various parks under the State’s administration have fluctuated, as have the costs to maintain them. The State Parks Division (Parks), within the Oklahoma Tourism and Recreation Department (OTRD), oversees the operation and maintenance of most state parks. Parks has recently undertaken a strategy of park asset improvement. In 2020, the Legislature authorized $48.6 million in bonds for Parks to use for capital improvements. Additionally, in its most recent legislative budget request, OTRD has requested an appropriation increase of $19.3 million for capital asset maintenance.

In the agency’s most recent strategic document – and reiterated at legislative meetings - OTRD has stated its intent to reduce the number of parks if adequate funding for maintenance is not provided.

With this evaluation, the Legislative Office of Fiscal Transparency sought to examine the financial feasibility of the park system, identify operational challenges to sustainability, and identify opportunities for improved operation.

This evaluation resulted in three key findings:

#### Finding 1: Improperly Valued Assets are Driving OTRD’s Request for $19.3 Million in Increased Funding
In its most recent “Strategy Document” (2020), OTRD estimates it will take a decade of proper fund- ing and maintenance to overcome decades of deferred maintenance. OTRD estimates an annual asset maintenance cost of $46.5 million. OTRD requested a $19.3 million increase in appropriations for FY23, with the expectation that it could meet approximately 59 percent of its maintenance needs. Parks arrived at the $46.5 million figure by multiplying the value of its assets ($1.16 billion) by four percent. However, LOFT identified significant flaws in the agency’s valuations:

- Assigning the same replacement cost to every asset within a specific asset category, which does not account for variations in actual replacement cost of an asset nor the wide variances among each asset’s utility and condition.
- Approximately 20 percent of estimated asset valuations are based on data from 2013 or use vague sourcing that make it difficult to properly ascertain the basis by which assets were initially valued.
- Recent expenditures on several restaurants located within State parks exceed Parks’ estimate of the restaurant’s replacement value multiple times.
- The significant capital improvement investments in several restaurants exceed OTRD’s own asset management plan to reinvest in no more than one restaurant per year.
- Per the U.S. Government Accountability Office, by relying on estimates that do not consider the status of individual assets, OTRD is not maximizing the value of its asset portfolio or using quality data.

The lack of informed asset valuations makes maintenance costs difficult to predict and impedes the agency’s ability to assess whether to replace, repair, or reduce facilities. Without quality data, it is impossible to calculate what the financial impact of preventative maintenance could be.

#### Finding 2: Parks’ Investment Strategy is Negatively Impacting the Parks System’s Financial Feasibility

There have been ongoing policy discussions about the financial feasibility of the State Park system, and whether individual parks can or should be self-sustainable. If self-sufficiency is a goal, the strategy of increasing asset values (and thereby increasing maintenance costs) moves Oklahoma further away from that goal. For example, in 2019, the park system would have needed 12.9 million visitors to offset expenditures. Using 2021 expenditures, the park system would have needed 16.6 million visitors to break even; a 29 percent increase. Over this same period, attendance increased from 9.2 million visitors to 11.6 million.

LOFT also found significant growth in expenditures for state park lodge restaurants and food and cater- ing services, of which nearly $6 million in expenses were related to construction costs, management fees, and reimbursements. OTRD also covered more than $2 million in operational losses for the contracted restaurant vendor.

Under Parks’ capital-intensive maintenance and recapitalization strategy, expenditures on assets are outpacing attendance growth. Parks’ investments in assets such as lodges and restaurants have trans- formed these properties into higher replacement assets, effectively increasing the assets in Oklahoma’s state parks and the funds required to maintain them.

LOFT also found that Parks’ investment strategy does not align with customer data. Using either independent survey data from 2017 or OTRD’s internal data, the amenities selected by respondents as being most important to their visit were things that require a low level of investment, such as camping sites, clean bath- rooms, hiking and watchable wildlife. Parks has placed an emphasis on improving lodges, restaurants, cabins, yurts, and other accommodation assets.

![ok-parks-lodge-criteria.png](https://dy8iim215g2zo.cloudfront.net/ok_parks_lodge_criteria_ec561a2b40.png)

#### Finding 3: Oklahoma’s Diverse Park System Can be Improved by Aligning Spending to Purpose
LOFT examined the statutory purpose of the State Park System and found the law’s broad language does not define the degree of access or the specific recreational opportunities Parks should make available to residents and visitors. In 2020, Parks enacted a parking fee at 22 state parks to assist with capital maintenance. De- tractors of the fee have expressed concern that it may hinder some residents’ access to parks.

While LOFT found surrounding states’ statutes differed regarding the statutory purpose of their park systems, there was generally emphasis on preserving the state’s resources and offering access to recreational activities. Some states, like Colorado, emphasize the importance of land conservation and preservation. Other states, like Arkansas, emphasize the state park system’s role in aiding the state’s tourism industry.

Oklahoma’s parks can be organized into three main categories, based on function: those that offer recreational access, preservation of cultural or natural heritage site, or being a “flagship” park that includes an upscale lodge with on-site dining. Each of these subcategories has different investment and maintenance needs. A park whose main attraction is hiking trails may need minimal funding to maintain, while a tourist destination will need to stay competitive with similar facilities. Parks that provide access to waterways may need to prioritize access points, such as boat ramps. As such, it is unlikely that one investment strategy can equally address the varied purposes of Oklahoma’s parks system.

Oklahoma could pursue a singular vision for its State Park system, either prioritizing access and land preservation or developing centers of tourism. But there are opportunities for Oklahoma to adopt a pronged approach that recognizes the different purposes of the varied parks within the system. Aligning the Legislature’s intent with targeted investments toward each park function may strengthen and stabilize the overall park system, and clarify Parks’ mission.

Executive Summary

Rapid Response Evaluation: State Parks

Report

Report & Resources

### Summary of Policy Considerations and Agency Recommendations

#### The Legislature should consider the following:
Clarifying the legislative intent for the State Park System.
- Freezing capital expenditures for OTRD until completion of an asset inventory. Afterwards, the Legislature may consider requiring approval for purchases of capital assets valued at $1
million or more.
- Requiring Parks to conduct an impact analysis regarding access fees for the State Park System.
- Requiring Parks to present the Legislature with a plan for investments in any assets that will require significant long-term, ongoing maintenance and recapitalization costs, such as lodges and restaurants, among others.
- Requiring the following from OTRD’s budget request:
   - Inclusion of individualized key performance indicators for each park type, based on park function and purpose.
   - Reporting of self-sufficiency metrics, similar to what had been reported by the agency prior to 2013. The metrics should be presented per asset or asset class.
- Requiring Parks implement a new strategic planning process that incorporates stakeholder input from legislators, community members, park visitors, and others.
• Requiring Parks to produce individualized strategic plans that align with the different types of state parks according to park function and purpose.
- Clarifying the procedure for roads and parking lots maintenance within parks pursuant to 69 O.S. § 502 and 74 O.S. § 2226.
- Requiring Parks to provide industry-specific data and best practices to support management strategy and decisions.
- Identifying specific investments for enhancing the accessibility of activities available at State Parks as an eligible recipient of existing funding streams that have discretion to promote or support public health.

#### The Oklahoma Tourism and Recreation Department should:
- Identify and implement best practices for long-term strategic planning for the state park system, including aligning strategy with legislative and constituent goals.
- Consider more detailed investment strategies, including a requirement that assets such as lodges and restaurants be self-sustaining or offset any increased budget needs for maintenance and recapitalization through revenue. 
- Utilize customer survey data to inform Parks’ expenditures and strategic planning process, with annual reports on customer satisfaction regarding amenities and activities.
- Undertake an independently confirmed asset inventory and maintenance schedule.
- Adopt the U.S. Government Accountability Office’s standards for asset management, including utilizing quality data to maximize the value of Tourism’s asset portfolio.
- Develop an MOU with the Department of Transportation (ODOT) to solidify the two agencies’ working relationship so that appropriate costs for maintaining roads and bridges are
allocated to ODOT.
- Utilize Not-For-Profit State Park Foundations for supplemental revenue sources, as statutorily authorized (74 O.S. 2225).

Recommendations

Oklahoma's State Parks

Impact Evaluation

March 2022

Evaluations In Progress

Health and Human Services

Agency Investigation: Financial Condition of the Oklahoma Department of Mental Health and Substance Abuses Services
Expected Date Published: March 2025

Financial Condition of the Oklahoma Department of Mental Health and Substance Abuse Services

Report: 24-000-01
Identify all reports statutorily required to be provided to the Legislature. 

Agency Reports

Report: 24-296-01
Conduct an operational assessment of the Ethics Commission.


Operational Assessment of the Oklahoma Ethics Commission

Oklahoma's State Parks

More Reports & Evaluations

Financial Condition of the Oklahoma Department of Mental Health and Substance Abuse Services

Agency Reports

Operational Assessment of the Oklahoma Ethics Commission