NPS upheld a concessioner’s appeal of a denial by the local park unit of a requested 25% rate increase. The concessioner’s contract called for use of the financial analysis method (FAM) for setting its rates. Accordingly, the concessioner sought a 25% rate increase from its local park unit based on the FAM. The concessioner’s rates had initially been set using the FAM and were adjusted annually for the following eight years based on changes in the CPI. NPS’s policy, however, stated that annual CPI (or “index”) adjustments should not be made more than five years after the initial rate is set. At that point, a new rate analysis should occur.
In response to the concessioner’s request for increased rates based on the FAM, NPS stated that its policy required it to change from FAM to a comparability assessment once the agency was no longer able to implement annual CPI increases. Based on that position, NPS denied the full rate increase request. The concessioner appealed the denial of its request to the Regional Director. In its appeal, the concessioner pointed out that NPS policy in fact did not require a change from the FAM to a comparability method to assess rates after CPI adjustments were no longer to be used. The concessioner also demonstrated that, while no comparable operations existed, even if the alleged comparable operations were in fact comparable, both rate approval methods nonetheless supported its requested rate increase. The concessioner further asserted that undervaluing the rates to be charged results in a disservice to the general public which benefits from the park activities which are supported by the resulting franchise fees. The Regional Director upheld the appeal and approved the full rate increase request.
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May 23, 2024 9:04:27 AM