Joshua Bagnato - Excerpts from Capstone Report to the Rappaport Institute

Fellows work directly with officials from state and local public agencies in the Greater Boston area on policy research and management projects. In addition, at the end of the summer program, all fellows are required to submit a capstone project or report that addresses the policy and management challenges posed by their work. Here are some excerpts from our public policy fellows.

Joshua Bagnato

As a Rappaport Fellow, I began working for Secretary of Environmental Affairs Roy Herzfelder within the Executive Office of Environmental Affairs (EOEA) in May, 2003. The EOEA is the office charged with managing all of Massachusetts’ state environmental offices. When I arrived the EOEA proposed merging the Metropolitan District Commission (MDC) and the Department of Environmental Management (DEM) to create a new entity, known as the Department of Conservation and Recreation (DCR). Similar proposals to merge these park agencies had been denied in the past. It was unclear exactly how the merger would be accomplished.

Betsy Shure Gross, then a Special Assistant for Community Preservation at the EOEA, had proposed the formation of a new Office of Public Private Partnerships to support the newly created DCR. In early June, when the merger and subsequent proposal were approved by the legislature, I was asked by Ms. Shure Gross to submit a plan for this office’s structure. I spent the next six weeks researching and designing this framework. In late July, I formally submitted my proposal to both the Secretary and the transition team, the group responsible for the merger. Many of my ideas from this proposal were announced at an August 18, 2003 press conference announcing the Office of Public Private Partnerships to the public.

According to assessments performed by EOEA employees, DCR faced three primary issues: (1) lack of resources to maintain and expand DCR facilities, (2) loss of public trust, and (3) operational inefficiencies. This Office sought to create new partnerships and strengthen existing ones within the private and nonprofit sector to address these three issues. However, no organizational structure for the DCR had been proposed.

The DCR inherited a troubled legacy. The MDC and DEM combined budgets had been reduced from approximately $106 million in 2000 to approximately $71.5 million in 2003. Popular doubts about the agencies stewardship, compounded by the drastic budget cuts, exacerbated the crisis. For Boston citizens, the distrust of the MDC was publicized on a consistent basis in the local papers. The common perception was that the MDC was unable to manage and maintain many of its historic facilities, such as the Esplanade and The Blue Hills Reservation.

In order to ensure the on-going conservation and management of these areas, numerous nonprofits, like the Esplanade Association and MDC Blue Hills TrailWatch were created. These organizations sought to assist the MDC with maintaining its facilities, while simultaneously serving as watchdogs. Although less publicized, the DEM faced similar criticism from numerous citizen-supported groups. For example, the five largest Massachusetts' environmental groups partnered to create The Massachusetts Forests and Parks Partnerships. This partnership released a report on DEM's facilities called, "Our Forests and Parks in Crisis." The report was supported by over fifty environmental organizations and claimed that the DEM was failing to maintain its facilities. The partnership attempted to educate the Massachusetts' environmental community about this "crisis" and hoped that it would force the state to increase its support for these parks and forests.

A large constituency exists for potential partnerships. There are approximately 230 environmental groups in Massachusetts whose organizational missions rely on the health of DCR's facilities. Approximately 9 percent of Massachusetts' households have a membership in one of these organizations. This massive constituency has no centralized, formal office in which to voice their opinions or volunteer their support. Secretary Roy Herzfelder acknowledged that DCR could never succeed without improving these relationships. My task was to recommend a new structure for the Office of Public/Private Partnerships that created and nurtured these mutually beneficial partnerships.
DEM and MDC staff realized that organizational change was imminent and layoffs were inevitable. During my interviews with DEM and MDC field staff, my probing questions were typically greeted with caution. Service-employees were concerned that increased partnerships with the private sectors might eradicate certain positions. Efforts to centralize partnerships were typically discredited because they would create additional layers of bureaucracy. Employees explained that they generally engaged in informal partnerships with the nonprofit groups and private citizens, but kept these relationships guarded for fear of union and liability issues.

The plan I created for the Office of Public Private Partnerships divided this office into three distinct programs; (1) Park Partnerships (2) Revenue Enhancement (3) Massachusetts Parks Conservancy.
The Massachusetts Parks Conservancy program would seek private funds to support DCR facilities. I believed this Conservancy should be a tax-exempt nonprofit organization housed within a government office. The general expenses for this office would be paid for by the Commonwealth and the program would be governed by a Board of Overseers, comprised of both public and private individuals. Several state employees felt that a nonprofit was unnecessary because the state could approach private individuals on their own to solicit funding. DEM had successfully raised money from private contributions through their tax-deductible Conservation Trust program since 1993 to improve and enrich DEM facilities throughout Massachusetts.

My research from other federal and state programs indicated that an independent nonprofit, closely aligned with the public sector would be more successful than the Conservation Trust model. For example, the Golden Gate Conservancy raised $10 million in 2001 to support Golden Gate National Parks. Other successful examples included the California Coastal Conservancy, California State Parks Foundation and Partnership for Parks in New York.

I recommended the nonprofit model for several reasons. First, nonprofits are typically trusted more by private individuals, as they are viewed as less bureaucratic and more resourceful. This was an issue since citizens in the Commonwealth already distrusted state stewardship. I believed a nonprofit would be more successful at attracting corporate sponsorships on behalf of the state. Nonprofits often specialize in raising money and have fewer constraints compared to the public sector.
I recommended that a separate program within EOEA be established to be responsible for all partnerships involving revenue-generating contracts. Several MDC and DEM employees felt that the current system was successful. In Fiscal Year 2001, DEM and MDC combined to net $2.7 million from existing contracts They believed that centralizing the oversight of contracts at the state level would add unnecessary layers of bureaucracy, while simultaneously stifling creative entrepreneurial thinking on a regional level.

I argued that the current system was faulty for numerous reasons. First, the expenses associated with administering these contracts were unknown. Second, since the contracts were managed on regional levels, it was difficult to ascertain if they were maximizing revenues in each situation. Third, poor incentives existed to maximize revenue, since the revenues were allocated to the general fund rather than benefiting the parks directly. Lastly, other states, such as New York and Pennsylvania were generating significantly higher profits from their contracts compared to the Commonwealth. For example, New York Parks and Historic Sites, which manages a similar amount of acreage compared to Massachusetts, generated approximately $8 million in profit from their contracts in 2002.

For these reasons, I recommended that this office should be created to: (1) monitor all contracts, (2) partner with businesses that seek to maximize revenues, while staying consistent with DCR’s mission (3)seek new contract opportunities and maximize revenue with existing contracts (4) systematically determine standard contracts and rental payments. The upper-management agreed that the existing contract system should be centralized within EOEA.

I learned that to achieve change within the public sector, it is important to market your ideas to the constituent base. Since the structure does not allow for vertical communication of ideas from within the agencies, one also needs access to upper management to create change.