Stakeholders Review Permit Proposals


by Leo Keeler

In the spring of 1998, the Alaska Department of Fish and Game began evaluating potential changes to access restrictions and management of the McNeil River State Game Sanctuary and Brown Bear Viewing Program. The budget cuts, the reluctance of the Alaska State Legislature to fund the program and the letters and comments to ADF&G from visitors to the Sanctuary indicated a need to adjust the bear viewing program. To identify what options existed, the Department contracted with Dr. Alan D. Bright of Washington State University to conduct a survey of past applicants to find out what their key points of interest were. In addition to the survey, the Department formed a "Stakeholders" group to help review the survey results and develop alternatives to modify the McNeil River viewing program. The group consisted of 11 members: Jonne Slemons, ADF&G Program Coordinator; Vikki Gross, Anchorage Advisory Committee; Ellen Maling, Alaska Conservation Foundation; Leo Keeler, Friends of McNeil River; Jack Cushing, Mayor of Homer; Jon Berryman, Beluga Air; Barbara DeCreeft, Kachemak Air Service; Jack Lentfer, Homer resident & bear biologist; John Schoen, Audubon Society, Hal Gage, American Society of Media Photographers and Roy Corral, photographer.

The managers of the Sanctuary also brought in comments they'd received from Sanctuary visitors and offered their expertise. The Stakeholders Group was formed to help address the issues presented in the following memo, McNeil River State Game Sanctuary Visitor Permit System:

The purpose of this memo is to propose an alternate version of the current visitor permit system at MRSGS. We have attempted to gather many smaller proposals into a single package that will stimulate a one-time overhaul of the system that will endure.

While making any changes to the visitor program we must follow the statutory and philosophical guidelines already established. Each element of the proposal is based on the following guidelines:
According to statute, human use is secondary to maintenance of the concentration of bears. Based on this premise, it is well established that the maximum size of a bear viewing group should never exceed 10.
All of the following proposals can be evaluated by the following three criteria:
Maximizing human use under the 10 people/day guidelines,
making the system as fair and as simple as possible, and
enhancing revenue.

The political and social environment surrounding the sanctuary has changed since its establishment. There is presently an increasing need to generate more revenue for the operation of MRSGS visitor program. Over the last several years a lot of time and energy has been put into fine tuning the permit system. This memorandum packages all of the previous smaller "adjustments" with our new suggestions.

This package of proposals can be divided into the following components:

Change the regular permit period from 4 days to 3 days
Eliminate standby permits
Hold a second drawing to maximize the number of regular permits
Eliminate the rule that only allows visitors to apply every 4 years
Eliminate the 65/35 Alaskan/nonresident split
Develop commercial user permits
Develop an auction for a limited number of permits
Raise user fees

The Permit System Comparisons

Current Permit System
185 regular 4-day permits
15 special permits
95 standby permits
295 total permits

Proposed Permit System*
255 regular 3-day permits
15 special permits
No standby permits
270 total permits

* 3 day permits would require an 81 day season instead of an 80 day season. June 7 - Aug. 26 are the proposed dates .

Current Fee Structure
(4 day permits with standby permits)

Regular permit resident - $100
Regular permit non-resident - $250
Standby resident - $50
Standby non-resident - $125

Current Revenues
185 regular permits
120 permits (65% residents @ $100) = $12,000
65 permits (35% non- residents @ $250) = $16,250

95 standby permits
62 permits (65% residents @ $50) = $3,100
33 permits (35%) non-residents @ $125 = $4,125
Total = $35,475

Projected Revenues
270 regular permits
175 permits (65% residents @ $100) = $17,500
95 permits (35% non-resident @ $250) = $23,750
Total = $41,250

Difference between 4-day permit with standbys and 3-day permit without standbys = $5,775 Discussion of proposed changes:

1. Three day permits
One of the major considerations in the decision to allot four-days permits was based on assumptions that bad weather would limit viewer opportunity by stranding people in Homer or limit the number of good weather days for viewing. In recent years it's been virtually unheard of for a group to get totally weathered out all four days. Storms seldom last several days. Typically, a group gets weathered out of the sanctuary for a day eight-to-ten times during a season. A four-day permit maximized visitors chances for at least one good weather viewing day.

In recent years the average length of stay of regular permit holders has been 2.8 days. Visitors arrive late or leave early or for a variety of reasons or they do not go to the falls all four days. People who don't go to the falls may have health reasons (blisters, fatigue), or they want take a hike, relax in camp, fish or they're good Samaritans who want to allow a standby to take their place.

Advantages:
Switching from four-day to three-day permits means an additional 70 regular permits will be issued. Financially this means a gain of $5,775.00

Disadvantages:
The visitors who prefer to stay at the sanctuary for four days will be penalized.
A somewhat larger proportion of visitors will be affected by weather during their permit periods by arriving at the sanctuary late or having fewer good weather days at the sanctuary.

2. Eliminate standby permits
Eliminating the standby system is something sanctuary staff had considered for many years before the issue of revenue enhancement came up. It is a system that originated to help maximize full human use under the 10 visitors/day blueprint. It had the added benefit of providing some spontaneity to the program, although spontaneity was lost when the standby system went to the lottery beginning in 1992. The standby lottery system was designed to control the growing number of standbys.

The percentage of people who pay for and use their regular permit has increased through the years making standby permits less necessary to maximize use. But the real drawback to standby permits has always been that it created a group of second class citizens that are treated differently than other visitors. It is heartbreaking to the staff and to standbys when they have to draw cards to see who will get to fill in for an absent regular permit holder. It has long been a goal of the sanctuary staff to find a way to eliminate a camp drawing that leaves winners and losers.

It does need to be noted that virtually every standby permit holder that has come to the sanctuary and is willing to wait more than one day has gotten to visit a bear viewing area at least once.

By eliminating standby permits 95 fewer potential visitors will come to the sanctuary. But only 50-60% of standby permits typically are used. Of the potential 95 standby permitees realistically only about 50 actually show up. If we lost these 50 standby permits and we gain 70 regular permits by going to 3 day permits, that's a potential net gain of 20 permits annually. In reality the net gain may be slightly less due to the current no-show rate of about 10% for regular permit holders.

The following table is a best guess at comparisons between current and proposed permit systems showing what's available and typical numbers used.

Current System

Maximum Permits Available
Regular Permits (including special) - 200
Standby Permits - 95
Total Permits - 295

Typical Number Of Permits Used
Regular Permits (including special)** - 180
Standby Permits - 45
Total Permits - 225

Proposed Permit System

Maximum Permits Available
Regular Permits (including special) - 270
Total Permits - 270

Estimated Number Of Permits Used
Regular Permits (including special)** - 245
Total Permits - 245
**Based on 90% historic use rate of regular permits

In reality, the net gain based on past use is about 20 people per year. The actual number of visitors over the last several years had averaged 225 (out of a potential 295). The three day/eliminate standby proposal actually looks like it might increase that number.

Advantages:

Eliminates "second class" visitors
If we go to three day permits and don't eliminate standby permits, standby permit holders will have even less chance to visit the falls.
The net gain is about 20 people per year.

Disadvantages:

Without standby permit holders, there will be less flexibility to fill in for no shows or people who don't want to go to the falls all three days of their permit.
We will probably still have a 10% no-show rate for regular permit holders.

3. Hold a second drawing to maximize the number of regular permits issued
The following table summarizes the rate of regular permits not paid for after they were drawn, and regular permits paid for, but not used.

Permits issued 1995-96

Potential Regular Permits 100%
Regular Permits not paid for by deadline=11%
Regular Permits not used=17%

In the last two years the percent of regular permits not paid for after they were drawn, or not used after they were paid for was about 17%. So 83% of people who were drawn for a regular permit then paid for it and showed up at the sanctuary to use it. If we start with the 270 regular permits, approximately 240 (89%) are issued in the first drawing. Of the remaining 30 permits, another 27 (89%) could be issued in the second drawing making the total issued approximately 267 out of the potential 270.

Example of First Drawing

Potential regular permits in lottery = 100% (270)
Permits NOT paid for by deadline = 11% (30)
Total drawn and paid for = 89% (240)

Example of Second Drawing

Potential regular permits in 2nd lottery = 100% (30)
Permits NOT paid for by deadline = 11% (3)
Total drawn and paid for = 89% (27)

By virtue of the second drawing, 267 out of the potential 270 permits are drawn and paid for. This represents a 10% gain in efficiency and revenue for the permit system.A second drawing would move up by a month all deadlines, e.g. application deadline would be February 1. The following table illustrates how the deadlines would change.

First Drawing and Notification:
Current Date: March1
Proposed Date: February 1

First Drawing Fees Due:
Current Date: March 15
Proposed Date: February 15

Second Drawing
Proposed Date: April 15

Second Drawing Fees Due:
Proposed Date: May 1

Advantages:
This second drawing helps to eliminate the standby system making the regular permit system simpler and easier to understand. It also helps to increase the number of regular permit winners (and users) and because regular permits cost more than standby permits, increases the amount of user fees.

Disadvantages:
Changing the deadline confuses the public and requires a global advertising campaign about deadline changes. The second drawing requires somewhat more administrative labor.

4. Eliminate the rule that allows a visit only every four years and replace with a weighted system.
Several years ago the Board of Game passed a regulation prohibiting a visitor to MRSGS from visiting again until four years had passed. This has been a major element in reducing the number of applications each year. The regulation does what the Board of Game intended: it increases the odds of being drawn for those who haven't been to MRSGS in four years. But it also deters permit winners from applying every year and sending in their application fees of $20.00 per person. The number of applications has dropped by about 700 over the last few years. This is about $14,000.00 of potential revenue lost. This regulation also requires us to keep track of permit winner histories. Some former permit winners also find it difficult to recall when they last visited.

A "weighted system" would help satisfy the Board of Game's original concern albeit in a slightly different way. Instead of allowing only one visit every four years, a weighted system allows anyone who wants to apply to do so in any year they desire. However, for each unsuccessful attempt by an applicant, their name is added to the drawing pool one more time. For example, a person applies unsuccessfully 10 years in a row. In year 11, this applicant's name is entered in the drawing 11 times. This system gives them a better chance to be drawn and it gives them credit for each unsuccessful attempt. Thus, a weighted system would encourage applicants to apply and to continue contributing $20 a year in application fees.

Advantages
The weighted system has the potential to increase revenues substantially
The weighted system allows everyone the chance to go to MRSGS every year.
The weighted system increases the perception of fairness

Disadvantages
Changes to the system are difficult for the public to absorb
Administration and reprogramming is somewhat labor intensive
Increases in higher weighted applications decreases the odds for new applicants

5. Eliminate the 65/35 Alaskan/non-Alaskan split on permits. The Board of Game passed this regulation to ensure Alaskans got at least two-thirds of the available permits. The unforeseen consequence has been loss of revenue because non-Alaskans literally pay twice as much as Alaskans. In 1996, this restriction caused a deficit in the number of permits allotted in the first drawing. For some permit periods there weren't enough resident applicants to fill the 10 slots per day. The department was forced to hold a 2nd drawing to fill those slots only a month before the McNeil visitor season began. Prior to the 65/35 restriction, Alaskans received approximately 60% of the permits, so the restriction has had little affect on opportunities for Alaskans

Advantages

It will be simpler to administer the permit system
Revenue will increase
It removes the problem of having unfilled resident slots

Disadvantages

Perception of prejudice for nonresidents

6. Develop Commercial User Fees for Special Permits
Special permits are given for educational, scientific and administrative reasons. Currently they are free. The educational ones tend to be commercial ventures designed in some way to make money for the visitor. Even though the product may be very high quality and indeed satisfy the educational requirement it has long been felt by field and administrative staff that any special permit given to a venture that will financially profit should pay for that permit.

Advantages

More revenue will be generated
Financial requirement will select out many poor applicants

Disadvantages

Some worthwhile, but poorly funded projects may suffer

7. Develop an Auction for a Limited Number of Permits
This is a concept that is well along its way to becoming a reality. It's included here because it's a part of the bigger revenue generating package.

8. Raise user fees
If after implementing proposals one through eight, the program still needs to increase revenue, then the final option is to raise user fees. The current fee schedule is based roughly on an economic study done in 1990 by graduate student Creed Clayton. Almost 10 years have passed and his work is, no doubt, somewhat outdated. Visitors willingness to pay may have changed and inflation could justify raising fees as much as 25 percent. The McNeil staff feels strongly that the program needs to be run at a high standard and that if funding is the roadblock to that type of a program then after all other proposals have been implemented, fees should be increased.

Hopefully this proposal will generate widespread review and comment, and after consensus, will result in a proposal for the winter 1998 Board of Game.