I am Derrick Crandall and I am appearing on behalf of the members of the American Recreation Coalition (ARC) – more than 100 national organizations, representing virtually every segment of the nation’s $400 billion outdoor recreation industry, and tens of millions of outdoor recreation enthusiasts. A listing of our members is attached to this testimony. I am joined today by Curt Cornelssen, a member of ARC’s Board of Directors and chairman of ARC’s Task Force on USACOE Recreation Program Opportunities. Curt is the Director of Hospitality and Leisure Consulting at PricewaterhouseCoopers.

Our organization has played an active role in federal recreation policy since its creation in 1979. We were centrally involved in the creation and operations of the President’s Commission on Americans Outdoors in the mid-1980's and the National Recreation Lakes Study Commission, which submitted its report in 1999 to the Congress and the President. Both spoke directly to the topic before this body today. We also were actively involved in the creation of the National Recreation Fee Demonstration Program and have enjoyed opportunities to work closely with this committee on such diverse programs as the National Scenic Byways Program, the Recreational Trails Program, the Wallop-Breaux program aiding fishing and boating, and programs to provide access to and safe transit across our public lands. We thank the Chairman and members of this body for the continuing interest shown in these important issues.

Outdoor recreation is a vital and positive force in our nation today. Nine in ten Americans participate in outdoor recreation today, and a major catalyst for this involvement is the marvelous shared legacy of our Great Outdoors – one in three acres of the surface of the nation managed by federal agencies and hosting well in excess of a billion recreation visits annually. ARC monitors participation in outdoor recreation closely through annual national surveys. A summary sheet on participation is attached.

The benefits accruing from recreation participation are significant, and the appreciation for these benefits is growing. The economic significance of outdoor recreation is obvious in communities across the nation, and especially those communities proximate to federally-managed lands and waters. From boat dealers to campground operators, from RV manufacturers to ski rental shops, from retailers selling outdoors goods to guides and outfitters, tens of thousands of businesses and millions of Americans are supported by $400 billion in annual expenditures on recreation by American families. And increasingly, America’s recreational opportunities are a key factor in luring international visitors to enjoy the world’s best systems of parks and forests, refuges and other public sites.

But the public recognizes that recreation contributes far more significantly to our nation in ways beyond jobs. Recreation is understood as a valuable means to encourage the physical activity we need to maintain our health. With two in three Americans failing to get the minimum level of physical activity recommended by the Surgeon General – just 30 minutes daily of moderate movement like walking – and obesity now responsible for medical costs greater than those linked to tobacco, opportunities to combine exercise with fun are an obvious priority. And in fact, the President has now issued an Executive Order directing federal land managing agencies including the USACOE to assist in elevating the level of physical activity in our nation. Studies are now imminent which will document that increasing recreation participation can be among the most cost effective strategies for reducing public health costs.

And the benefits arising from recreation don’t stop there. Recreation can be a very effective means for increasing parent-child communications as well as a tool to deter violent crime and substance abuse. Outdoor settings and recreational activities have proven valuable as alternative educational programs, especially for disruptive youth and those with learning styles poorly suited to traditional classrooms.

Recreation and the Lands and Waters Managed by USACOE

The President’s Commission on Americans Outdoors helped the nation recognize several important trends. First, it noted the dramatic increase in recreation demand and predicted continuing, high growth in participation for several decades. Second, it noted the lure of water for recreational activities – including activities like camping and trail sports that are land-based. The Commission estimated that 75% of all recreation in America takes place within a quarter mile of the land/water boundaries of our oceans, lakes and rivers. The Commission also emphasized the need for support facilities for recreation experiences – from trails to marinas, campgrounds to ski areas and more. The Commission called upon Congress and federal agencies to assemble funding needed to build and maintain these facilities under innovative partnerships. The Commission also addressed paying for recreation services and facilities, urging federal policy to move toward a much greater reliance upon fees paid by those who visit federal lands and benefit from federal investments and spending. And it applauded the concept of special, earmarked funding sources such as the Wallop-Breaux fund, which imposes federal taxes on fishing equipment and then returns the collected taxes as user fees to programs aiding boating and fishing.

The Commission’s recommendations have produced important policy changes, and in fact stimulated the development of the National Recreation Fee Demonstration Program and new authorities for the National Park Service, the Forest Service, the Bureau of Land Management and the Fish and Wildlife Service which now provide some $200 million annually in supplemental funding for these agencies.

Ten years later, the National Recreation Lakes Study Commission added important information to the public policy debate regarding USACOE’s recreation program – and a new sense of urgency. The Commission's report, "Reservoirs of Opportunity," was submitted to the President and the Congress in June of 1999. It offered the following conclusions:

- Federal lake recreation is a significant national resource and a public benefit of federal water projects, making an important contribution to local, state and national economies. These lakes host 900 million visits annually, generating $44 billion in recreation-related spending;

- Recreation at federal lakes has not been treated as a priority, or often even as an equal with other reservoir uses, despite its status as an authorized purpose;

- Recreation management at federal lakes lacks policy direction and leadership as well as sufficient interagency and intergovernmental planning and coordination;

- Recreation facilities at most federal lakes are inadequately maintained, with a $1 billion maintenance backlog, and are insufficient for today's levels of public use;

- Current recreation user fee practices are not particularly successful as a revenue generator; the recreation fee demonstration program offers a model for more successful revenue generation;

- Better management will be necessary to meet current and future recreation demand, with or without increased appropriations;

- Partnerships with state and local governments and with private businesses need to be expanded and improved;

- Concessioner policies at federal lakes are inconsistent and a disservice to the public, which benefits when concessioners are able to operate under conditions that allow them to succeed;

- Federal agency policies limiting cost sharing with state and local government partners are unwise;

- Reservoir water management, including draw-downs and flow levels, can and should serve recreation and environmental purposes as well;

- Clean water is critical to lake recreation as well as lake health; and

- The concept of a national recreation lakes system has merit and should be tested through a demonstration program.

The Commission report also offered five major recommendations:

- Recreation should be made a higher priority at federal lakes;

- Federal recreation lake leadership should be energized and focused through the establishment of a Federal Lakes Recreation Leadership Council;

- Federal lake recreation should be advanced through innovation and revised policies;

- An environment for federal lake recreation management success should be created; and

- The gap between recreation needs and services should be identified and closed.

The Commission confirmed that the USACOE is far and away the greatest host of recreational visitors to public waters. The Commission’s work documented that recreation facilities at Corps sites were largely at or beyond their original design lives and that there were virtually no planned capital investments in recreational facilities, despite a pattern of growing demand.

Meeting the Challenge

The U.S. Army Corps of Engineers (USACOE) is the leading federal provider of recreation opportunities in America today. Recreational activities on the lands and waters it manages are varied and diverse, from fishing and camping to sailing and picnicking, from hiking and biking to waterskiing and windsurfing, canoeing to trailriding with horses and ATVs, swimming to diving – and dozens of other activities. Corps projects include highly developed sites as well as remote, pristine zones. What is consistent is the lure of the land-water intersection and its magnetic nature for leisure times.

Yet all is not well at too many USACOE recreation sites. In some instances, recreation demand is relatively recent, posing challenges to a mix of management missions and coming after most investments at the projects had been completed. In other instances, recreation facilities show the double impacts of normal aging and inadequate maintenance budgets. In some cases, the USACOE faces the threat of “turn-backs” – recreation facilities constructed in partnership with state and local governments that need substantial new capital spending, and the local partners flatly refuse to assume this burden alone, or perhaps at all. Changing recreation equipment demands changes in campgrounds, marinas and trails – in some instances changes that could generate additional recreation fees, but investments are a prerequisite.

It is time for action to enable the Corps recreation program to address national needs for recreation.

Some will fear that steps to meet recreation needs at sites managed by the U.S. Army Corps of Engineers will result in significant new costs to the federal budget. Although ARC will argue strongly that recreation program expenditures are legitimate and beneficial, we believe that improved recreation opportunities can be achieved without large increases in general funding for USACOE recreation facilities and programs.

What is needed are new strategies and new tools supplementing, but not replacing, proven and traditional operating and investment practices. In some instances, these new tools are adaptations of tools already in use by other federal natural resource agencies with recreation missions. In other instances, the tools are employed elsewhere within the Department of Defense.

Perfecting the tools and learning to use them wisely will require senior USACOE involvement, recruitment of top outside assistance and empowerment of a small number of carefully selected USACOE project staffers. Then and only then can the skills and tools be transferred for more universal application at USACOE projects nationwide.

We ask this body to provide the USACOE recreation program with new authorities and new directions. We recommend the following actions:

1) All USACOE sites should be given the authority to charge and retain recreation fees under an authority resembling that provided to four other federal recreation-providing agencies under the National Recreation Fee Demonstration Program. We applaud the Administration’s call for this authority in the President’s FY2005 budget proposal, although we disagree strongly with any provision that would limit the retention of fees to those exceeding the high point of recreation fee collections of $37 million annually. Such a threshold would have significant and adverse consequences. It would discourage alternative management strategies, including increased reliance on concessioners, at present fee sites – even if such alternatives would reduce overall USACOE operating costs. The threshold could also prove significant if forces such as storms, fires and other major events reduced fee collections at current collection sites and thus prevented planned retention of fees at new sites – and thus risks antagonizing visitors paying the new fees in expectation of enhanced services and facilities.

The details of the Corps new fee program are complicated by current revenue-sharing provisions with state and local governments. The problems are not insolvable, however. One alternative is to allow retention by the Corps of 75% of all “new” fees unless local government agrees to provide appropriate and offsetting services, including law enforcement and maintenance, in a project-specific agreement with the Corps.

Finally, and unlike under the fee demo program, the USACOE should retain at the project level 75% or more of the fees paid by recreation permitees and concessioners.

2) In another national policy change, the Corps should be encouraged to manage recreation at its sites, not be a direct provider wherever possible. This would parallel the role of the Forest Service with ski areas and campgrounds as well as the role now played by hundreds of state parks operating on USACOE lands;

3) The Corps should be given the authority to establish NAFI (Non-Appropriated Funding Instrumentalities) operations at all USACOE projects, paralleling the authority recently provided to the Department of Veterans Affairs;

4) A USACOE Recreation Demonstration Program should be authorized. This project to improve the USACOE recreation program should be based on a small number of carefully selected sites – no more than eight for FY 2005 and 2006. Efforts at these sites should be assisted and guided by several principles and authorities, including:

1) continuation of base-level recreation program funding at these sites;

2) continuation of all current missions for the involved projects;

3) demonstrated local support and interest;

4) maintenance of resource quality, and especially water quality;

5) retention of all new revenues generated through fees, permits, concessions agreements and other mechanisms linked to recreation activities and facilities;

6) coordinated development of new recreation facilities and opportunities;

7) full use of available discretionary funding for wildlife, fisheries, boating, trails, roads and more available through state and local governments; and

8) substitution of non-federal funding for facility construction and maintenance where practical.

To aid in the pilot effort at the selected sites, the USACOE needs specific legislative authorities exclusive to these sites:

1) the ability to issue permits and concessions which justify private investments in campgrounds, marinas, lodges and other public recreation sites. This authority should be parallel to that now available to the Forest Service and applying to ski area permits, utilizing terms of up to 40 years. Presently, some 60% of the nation’s skiing occurs on national forests at privately-developed ski areas;

2) the ability to competitively award long-term leases for development of publicly-available recreation facilities, an authority modeled after the Southern Nevada Public Land Management Act. Proceeds from any such sales would be restricted to use at the involved project and for specific purposes, including construction and operation of other public recreation sites, utilities and environmental stewardship;

3) the authority to enter into LIP (Lake Improvement District) agreements with local governments under which real estate surcharges would be levied on private lands and privately-owned investments on USACOE lands enhanced in value by recreation improvements linked to lake access, and where the LIP receipts would be earmarked for public recreation enhancements, utilities and environmental stewardship; and

4) an expedited permit review and decision making process.

Selection of the pilot effort sites should be made by a Lakes Initiative Advisory Board comprised of five persons. The panel could be chaired by the Assistant Secretary of the Army for Civil Works and include a Member of Congress with demonstrated interest in the USACOE program, two USACOE executives and a knowledgeable recreation industry executive. The panel should also provide oversight of the experimental efforts and, by February 2006, should submit a report to the President and the Congress recommending any new authorities and directions appropriate to assure the USACOE recreation program contributes to national, regional and local needs. To enable this panel to operate and retain needed expertise, a total of $350,000 per annum should be provided.

The Power of Partnerships

I close my testimony with an example of how the public can be well served through creative partnerships. The example comes from the lakeshore in Chicago.

By the mid-1990's, Chicago’s lakeshore had become a financial challenge to the city. Despite high demand for boat slip rentals and the lure of the lakeshore for other activities, the lakeshore operations had become a significant economic burden to the city – and a source of complaints from boat owners and others. Poor business practices allowed slips to go unrented despite long waiting lists and poor maintenance resulted in city payments for. The city turned over lakeshore responsibilities to an experienced marina operating firm, and an immediate turn-around occurred. Within two years, the firm presented the city with a proposal to redevelop the entire lakeshore, including 8,000 rental slips, restaurants, the lakeshore walk and more. The improvements would be made with revenues from city-issued bonds which would be repaid by the increased revenues from lakeshore operations. The operating firm acted as general contractor for the project, overseeing $52 million in investments on time and under budget. As a result, lakeshore recreation receipts have surged by more than $11 million annually – which allows full funding of operations, repayment of the bonds and $6 million annually in subsidies for city recreational programs ranging from ice skating rinks to a sailing program for handicapped youth.

Thank you for your interest and actions to produce a bright future for recreation on the lands and waters managed by USACOE.

Derrick A. Crandall, President
American Recreation Coalition
1225 New York Avenue, NW

Washington, DC 20005

202-682-9530, FAX 202-682-9529
dcrandall@funoutdoors.com