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Cougar Hot Springs: Hoodoo Help

  

Email from Chuck Shepard, owner of Hoodoo; to Greg Thorne  4/13/05 12:51pm

While I have not actually signed the contract, the deal is done. I can see from your proposal that you are hoping that your organization will be able to manage the area instead of us this year. I have got to tell you that you are wasting your time. I have given them my verbal promise. I do a lot of work with the FS and I wouldn't back out on them now. (Actually I wouldn't back out on anyone when I give my word)  If you really think that you want to do it in the future, I would be glad to explain the kind of things that you have to do and know. While to you this decision may seem to have come out of no where, it really has been developed over a period of time. I was asked about my willingness to help here as much as four or five years ago. I suspect that the FS has lost money from the beginning and so they have had this in the back of their minds for some time. The people in charge at the district office have all changed recently, and I suspect did not know a lot about you guys, and I don't think that they realized that the old FS regime had spent so much time talking to me about this already. I know that I was told that the pool cleaner was the main person in the Friends.
       However, what you don't realize and what I naively am still finding out is that things are much more complicated when dealing with the FS. It is not like they are a local business that can make snap decisions. The whole ability of them asking someone else to manage an area like Terwilliger is governed by Washington, DC. I was fairly astounded that Maria had the contract with them for cleaning the pools. I am guessing that took a while to happen.
       Let me give you a little background on what it would take for you to be a concessionaire. First you can't just have a bunch of volunteers to do the job. There has been a fairly recent court case with the FS that does not allow that. The reason is that some union felt that this was unfair and took away jobs for their workers. (A friend of mine told me a story recently where a kid did an explorer scout project to fix up a bus stop. The story hit the paper and the union that would have gotten that job sued making the bus company pay the union the value of the improvements). Like I have said before it is a good thing to give living wages, but there is cost that goes along with it. For you to come in and say that you can do this cheaper is a little like Wal Mart coming into town. Not that you are big, but rather that you can undercut the competition by paying less by paying your attendants less, but don't you think that it is fair to give health benefits, etc? I don't pretend to be a lawyer, but for you to bid on this and hope to use volunteers, would mean that at the least you would want to budget in legal fees at least in the beginning so that if you do feel that somehow you fit into a loophole that you can legally assure that FS that this is true. There are some exceptions to this, for instance some of our camp hosts only receive a stipend for their utilities and a free campsite, but we could not do this for an attendant at Terwilliger. The backups to Chip will be paid at least minimum wage per hour. All of our employees receive more than minimum wage. Just to clean the pools the FS is paying Maria $7,000. You can figure out how much she is paid per hour. We will have someone there for about 2,000 hours.
       Normally you do not get concessionaire positions like this unless you currently are already dealing with the FS. There are exceptions but they are few. The way I started managing the campgrounds is that I already dealt with them through the ski area. It is possible that if you had five years of dealing with them in such a way as they saw a real effort on your part to know the law and you had a history of being a positive force for the concession then that might count when the concession comes up for bid again. But be ready to join organizations like the National Forest Recreation Association which meets several times a year to discuss problems in the forest. I am on the board of directors of NFRA. We meet with the leaders of the FS in Washington, DC at least once a year and usually more often. Also make sure that you have no police record and have good references.
       You also need to be aware of the way these concessions work. For the most part the FS asks for between 6% and 13% return on the gross income, regardless of whether you have made a profit or not. (I doubt that they would except the 1/3 you mention because they know that is not realistic) Since you do not have a history with them, I would guess that they would ask for all the money up front for each year. I pay part of my campground fees to them before the season begins. Since the losses at the hot springs have been in the $30,000 range I suspect that they would ask that you put at least that much in a separate holding account to prove that you will pay all of your bills or be able to take out a bond for about $100,000. You will need to be licensed which doesn't cost much, but you will also have to be insured as a business and possibly as a contractor. That premium could be about $10,000. You will also need to carry liability insurance. We carry a 3M dollar policy. Just getting that policy is not easy these days. But I would assume that again you might be talking about a $10,000 premium. While I pay a lot more than this for my insurance, I also do a lot more than Terwilliger so my cost for the site is not as bad but it is high.
       We are asked to have a logoed vehicle that carries a minimum amount of fire fighting equipment. Again you are expected to know these things. Our people are expected to wear uniforms, which isn't much but an attendant who is not willing to tow the line is not acceptable. You need to provide garbage service and pump the toilets. There are certain rules under which this is done. They aren't difficult but they do need to be followed. You will have a certain amount of overhead. I am guessing that you could undercut us here, but you need someone who is knowledgeable about paying salaries and employee taxes. You need to get workmen's comp and have a safety committee. Of course it is just assumed that you will know all of these things.
       I can go on and on, but I think that you might have the idea. This is not something that you just decide to do one week and get the job the next. If you feel that your group would be the best for Terwilliger, then be a positive force in the eyes of the FS. I guarantee you that getting angry at them doesn't help your case at all. Increasingly it is difficult for them to deal with many different concessionaires, but things may change. Several years ago the local South Fork campground concession went up for bid. We had done it for a period of years and knew that we lost money doing it and decided to not bid again. However, no one else did either. If you had been there at that time with the right credentials I am betting that you could be doing it now. After we did not bid, the FS came to us and asked if we would be willing to come back, which we agreed to do, but they know that we did something nice for them. We have proved ourselves.
       Finally let me address the most important problem as I see it. I would like to talk to you about this in person and I would be willing to talk with anyone else who cares. While the emails that I have received have been concerned about nudity and the possibility of giant improvements, I can see that they got that from your Alert. I hope now that you can see that these two items are really not an issue. However, if you still do think that I will screw this up somehow, I would be more than happy to talk with you to try to ease your mind and look at any suggestion that you might have that would help. But keep in mind that you are not the only group that uses the hot springs. I have seen that you take real ownership here and that is not fair. The forest and the hot springs are owned by all of us, even those who are foolish enough to want to wear a suit in the pools. It will be up to me to help protect everyone's rights with the understanding that the status quo here should be protected.
       So the real issue as I see it is the fee. I think almost everyone who has been here awhile understands why the fee is important. Perhaps that is still open to argument with some people but that is a political thing beyond my scope. So why $5? I completely agree that it is a high fee and that it seems to be too high from first blush. However, this fee was not adopted lightly. First was the fact that if the FS collected from the same amount of people the fee to break even would have had to be $6, even worse. We looked at the FS costs and felt that we could offer more for the same amount of cost, but we did agree that their cost estimate was realistic. We believe that if 12,000 people pay the fee that Hoodoo will be able to pay all of its direct costs. This doesn't mean any money for overhead, like salaries for those in the office, it just means paying for the increase in direct costs from our managing the hot springs. For us to actually make a profit so that it is financially worth a company to do this would mean about 20,000 paid people. That seems like an awful lot of people to me. I can't imagine that the springs will get that many, plus we will have discounts for the Golden Age and the annual pass. We don't want to start an advertising campaign any more than what we have on our website or yours. Too many people will ruin the experience for everyone. So realistically this is what it takes to be worthwhile to do. It is true that you can save money by paying people less or cutting corners here and there, but even then you won't go much lower. We thought about raising the fees to $4 but decided against it, because honestly more people have $5 on them than $4 (4 x $1) and we didn't want to have too much change on the premises. Besides we wanted a fee that would not have to be raised for many years. If we collect from over 20,000 people we will certainly revisit the fee and quite frankly I would be glad to have you join in the discussion if we actually do collect that much.
       As I have said, I will be glad to talk to you about this. I hope that we can meet tomorrow. If you would like to call me, I will ask the receptionist to make sure that you can get through. I don't mean to be a jerk about this, but I just don't have time to talk to everyone who calls. It is not that easy to get me by phone. However, I do try to answer all emails, because I can more easily do those on my time, normally by getting up early or going to bed late. I have taken a long time in writing a lengthy email because I too think that this is important, but I couldn't do this for everyone, so I appreciate the fact that you have printed these on your webpage, but face to face contact is always better. I will try your phone number to confirm our meeting at 10 AM tomorrow.
Thanks,
Chuck
      

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