"Although the governor doubled the beach fees . . . all the money, as we found out, is all going to an out-of-state company. The state isn't even getting the money for that."
John DePetro on Monday, July 7th, 2014 in a talk radio comment
John DePetro says all the revenue from governor's beach fee increase went to out-of-state firm
Rhode Island dramatically hiked its beach fees in 2011. But according to WPRO talk-show host John DePetro, the state didn’t get any of that extra money.
DePetro was talking about tourism on his July 7, 2014 show, when he told his audience this:
"I got so much email from people again complaining just how high the beach fees are. And then we learn this year that although the governor doubled the beach fees, where I think it's 28 bucks if you're from out of state and you want to go to a Rhode Island state beach on the weekend. But on top of that, all the money, as we found out, is all going to an out-of-state company. The state isn't even getting the money for that."
When we emailed DePetro, he said his source was a May 19, 2014, story on WPRI.com, "Out-of-state company scored when R.I. hiked beach fees."
However, the talk show host is misreporting the facts of the story.
Here's the nitty gritty:
In 2009, the state went out to bid seeking a vendor to collect fees at the beaches. Propark America, a parking management company based in Hartford, Conn., got the five-year contract, which ends this year.
Under the deal, Propark paid the state $1,880,857 for the right to collect fees at the seven state-owned beach facilities. If Propark collected more than that sum, it got to keep the rest until its profit hits $502,143.
Beyond that point, once $2,383,000 in beach fees had been collected, the state got 80 cents of every dollar and Propark got 20 cents.
Then, in 2011, the General Assembly approved Governor Chafee’s plan to raise money by dramatically increasing the beach fees, effective that July 1.
Daily weekday rates went from $6 to $10 for residents and from $12 to $20 for non-residents. Weekend and holiday rates doubled, going to $14 for residents and $28 for non-residents. The price of a season passes also doubled. Seniors get a 50-percent discount.
The state’s contract with Propark required the state to share 20 percent of the extra revenue.
According to figures from Terrence Maguire, the Department of Environmental Management's assistant director for financial and contract management, Propark's revenue from the contract jumped from $581,039 in 2010 (the summer when the old fees were still in effect), to $734,963 in 2011 (when the old fees remained in effect through June 30).
Propark's profit increased to $822,595 in 2012 (the first full year of the higher fees). Last year, the company took in $756,228.
But the state was the biggest winner. Revenue from the beach fees, which had been $1.6 million before the increase, jumped to $2.2 million during the transition year and rose further to nearly $2.8 million in 2012. It declined to $2.5 million last year.
As a side note, the big losers were the host communities of Charlestown, Westerly, Narragansett and South Kingstown, which initially got 27 percent of the money from the sale of daily passes, for a total of $558,000 in 2010.
But in 2011, their share dropped to $344,000. The chief reason: the General Assembly cut the towns' share from 27 percent of the daily fees to 16 percent.
But back to DePetro's point.
Overall, from 2011 through 2013, Propark made an extra $571,000 because of the increase in beach admission fees. But contrary to DePetro’s claim, the state made nearly five times as much -- $2.6 million extra compared with 2010.
The money goes to the state's general fund, not to DEM.
One final point. DePetro is correct that Propark is an out-of-state company. However all of Propark's workers at Rhode Island beaches are Rhode Island residents, Maguire said.
John DePetro said emphatically that ALL of the beach parking revenue generated when the governor raised its fees went to a private company outside Rhode Island.
First of all, the governor proposed the fee increase but he didn’t do it on his own. It got the approval of the General Assembly as well.
Second, all of the new revenue did not and does not go to the private company.
When the state raked in that extra money, Propark got 20 percent of the new revenue. The state might have wanted to take all the additional revenue, but its contract with the company collecting the fees required both to share in the extra revenue. The state got 80 percent of that additional money.
DePetro cited WPRI as his source. But while they got the essential facts right, he did not.
We rate DePetro's scorcher of a claim Pants on Fire!
(If you have a claim you’d like PolitiFact Rhode Island to check, email us at email@example.com. And follow us on Twitter: @politifactri.)