[Special Report on the Cost of Construction of Employee Housing at Grand Canyon and Yosemite National Parks, National Park Service]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 97-I-224

Title: Special Report on the Cost of Construction of Employee Housing at
       Grand Canyon and Yosemite National Parks, National Park Service

Date: December 6, 1996


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of Inspector General, Division of Acquisition and Management Operations at (202) 208-4599.

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United States Department of the Interior
OFFICE OF INSPECTOR GENERAL
Washington, D.C. 20240

MEMORANDUM

TO:                 The Secretary

FROM:               Wilma A. Lewis
                    Inspector General             

SUBJECT SUMMARY:    Final Special Report for Your Information - "Cost of
                    Construction of Employee Housing at Grand Canyon
                              and Yosemite National Parks, National Park Service"
                    (No. 97-I-224)

Attached for your information is a copy of the subject final special report. At the
request of a member of the Congress, we reviewed the costs associated with
constructing employee housing at Grand Canyon and Yosemite National Parks. The
objective of the audit was to determine the costs of constructing housing at the two
parks and to determine whether the National Park Service constructed "employee
only" recreation areas on public lands in El Portal, California.
Based on our review of Park Service records, we determined that the total cost of
planning, designing, developing infrastructure for, and constructing 23 single-family
houses at Grand Canyon National Park and 34 apartments and 19 single-family
houses at Yosemite National Park was $29.2 million. On a per house basis, the
average costs of a single-family home were $390,000 and $584,000 at Grand Canyon
and Yosemite National Parks, respectively. In contrast, we estimated the cost of
private sector housing construction for a single-family house to range from $115,000
to $232,000 near Grand Canyon National Park and from $102,000 to $250,000 near
Yosemite National Park. Further, realtors near the parks stated that 1,200 to 5,000
square-foot homes near Grand Canyon National Park were selling for about $125,000
to $289,000 and that sales prices near Yosemite ranged from about $80,000 to
$300,000 for 1,200 to 2,400 square-foot homes.
We also reported that Park Service officials had testified before the Subcommittee
on Interior and Related Agencies, Committee on Appropriations, House of
Representatives, regarding the "high" costs associated with constructing housing at
Grand Canyon and Yosemite National Parks. According to Park Service testimony,
the high housing costs were related to the environmental and "quality" aspects
designed into the homes. Our review confirmed that the designs and materials used
to achieve these aspects, such as energy efficiency, low maintenance, and durability,
contributed to the higher costs of construction.

 
Furthermore, we found that the recreation facilities being constructed on public
lands in El Portal will not be designated for exclusive use by Park Service employees
but will be available for use by the general public, the local community, and area
schools.

We recommended that the Park Service review its strategy for meeting its housing
needs, particularly at these two parks, to ensure that housing is designed and
constructed in a cost-effective manner.  Although the Park Service concurred with
the recommendation, we believe that it should have specifically described actions it
would take to reduce or contain housing construction costs rather than focusing on
attempting to justify the high costs it incurred for housing construction at the two
parks. As such, we requested that the Park Service reconsider its response to the
recommendation.

If you have any questions concerning this matter, please contact me at (202) 208-
5745 or Mr. Robert J. Williams, Acting Assistant Inspector General for Audits, at
(202) 208-4252.

Attachment

 

W-IN-NPS-001-96
United States Department of the Interior
OFFICE OF INSPECTOR GENERAL
Washington, D.C. 20240

Memorandum

To:   Assistant Secretary for Fish and Wildlife and Parks

Subject: Special Report on the Cost of Construction of Employee Housing
at Grand Canyon and Yosemite National Parks, National Park
Service (No. 97-I-224)

This report presents the results of our review of costs associated with constructing
employee housing at Grand Canyon and Yosemite National Parks. We conducted
the review in response to a request from a member of the Congress who asked that
we evaluate the "excessive costs" of employee housing in the two parks and the
construction of employee-only recreation areas on public lands.

Based on our review of Park Service records, we determined that the total cost of
planning, designing, developing infrastructure for, and constructing 23 single-family
houses at Grand Canyon National Park and 34 apartments and 19 single-family
houses at Yosemite National Park was $29.2 million. On a per house basis, the
average costs of a single-family home were $390,000 and $584,000 at Grand Canyon
and Yosemite National Parks, respectively. (These averages were derived from
actual and future estimated total costs.) In contrast, we estimated the cost of private
sector housing construction for a single-family house to range from $115,000 to
$232,000 near Grand Canyon National Park and from $102,000 to $250,000 near
Yosemite National Park. To further put these costs in perspective, realtors near the
parks stated that 1,200 to 5,000 square-foot homes near Grand Canyon National Park
were selling for about $125,000 to $289,000 and that sales prices near Yosemite
ranged from about $80,000 to $300,000 for 1,200 to 2,400 square-foot homes.

We also reported that Park Service officials had testified before a Congressional
Subcommittee regarding the "high" costs associated with constructing housing at
Grand Canyon and Yosemite National Parks. According to Park Service testimony,
the high housing costs were related to the environmental and "quality" aspects
designed into the homes. Our review confirmed that the designs and materials used
to achieve these aspects, such as energy efficiency, low maintenance, and durability,
contributed to the higher costs of construction.

Furthermore, we found that the recreation facilities being constructed on public
lands in El Portal will not be designated for exclusive use by Park Service employees

 


but will be available for use by the general public, the local community, and area
schools.

In the October 18, 1996, response (Appendix 4) to the draft report from the Acting
Deputy Director, National Park Service, the Park Service stated that "both Grand
Canyon and Yosemite National Parks have established their employee housing needs
at a level consonant with the operational needs of each respective park." The Park
Service also said that our report does not accurately portray the "extraordinary" costs
of building on National Park Service land, which, according to the Park Service,
increased the cost of constructing single-family houses at Yosemite National Park by
$236,298 per house. The Park Service further stated that it agreed with and had
implemented our recommendation to ensure that the two parks are meeting their
housing needs in a cost-effective manner. In that regard, the Park Service provided
information on actions it is taking to address its housing needs that it said constituted
implementation of the recommendation. However, we concluded that the Park
Service's response was an attempt to justify the high costs it incurred for housing
construction at Grand Canyon and Yosemite National Parks as appropriate to the
Federal Government rather than specifically describing actions it would take to
reduce or contain housing construction costs. Now that Federal guidance does not
specify a limit on housing construction costs, we believe that it is imperative that the
Park Service focus its efforts on meeting its housing needs in a cost-effective manner.
As such, we request that the Park Service reconsider its response to the
recommendation (see Appendix 5).

In accordance with the Departmental Manual (360 DM 5.3), we are requesting a
written response to this report by February 21, 1997. The response should provide
the information requested in Appendix 5.

The legislation, as amended, creating the Office of Inspector General requires
semiannual reporting to the Congress on all audit reports issued, actions taken to
implement audit recommendations, and identification of each significant
recommendation on which corrective action has not been taken.

We appreciate the assistance of National Park Service personnel during the conduct
of our review.

 
CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
OBJECTIVES AND SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PRIOR AUDIT COVERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

APPENDICES

1. STATUS OF HOUSING CONSTRUCTION AND COSTS
  AS OF JANUARY 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . ...27
2. HOUSING ENHANCEMENTS PER
  NATIONAL PARK SERVICE . . . . . . . . . . . . . . . . . . . . . . ...28
3. RELATIVE COSTS OF CONSTRUCTING AND AVERAGE
  SALES PRICES OF 1,800 SQUARE-FOOT SINGLE-
  FAMILY HOMES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...29
4. NATIONAL PARK SERVICE RESPONSE . . . . . . . . . . . . . . . . . 30
5. STATUS OF SPECIAL REPORT RECOMMENDATION . . . . . . 64

 
BACKGROUND

INTRODUCTION

Since its inception in 1916, the National Park Service has had a tradition and a
Congressional mandate to provide some of its employees with housing. As of
January 1996, the Park Service had a housing inventory of about 5,200 units.1 Some
of this housing was either transferred to or acquired by the Park Service as each park
was authorized by the Congress, but the majority of the employee housing was
constructed during the 1920s and 1930s and between 1956 and 1966. Since the late
1970s, the Park Service has classified much of its housing as unsafe, substandard, and
overcrowded and has sought Congressional funding for a Servicewide employee
housing initiative program to address this critical problem. From 1989 through 1995,
the Congress appropriated over $80 million to alleviate critical housing conditions
Servicewide. Of this amount, about $38.1 million has been used for planning,
designing, and constructing new employee housing at Grand Canyon and Yosemite
National Parks (see Appendix 1).

Grand Canyon National Park

Grand Canyon National Park, located in northern Arizona, has provided housing to
most of its employees since the Park was established in 1919. As of January 1996,
the Park had 344 units to house its 210 permanent and 160 seasonal employees.
According to the Park Service, it is necessary to have these units in the Park because
of the remote location of the Park. Various Park Service reports have identified
housing shortages and unsafe and substandard housing conditions as critical problems
within the Park. Based on these conditions, the reports identified a need for an
additional 253 employee housing units to replace and/or supplement units necessary
to house permanent and seasonal employees. One of the reports also noted that
existing housing had "inadequate electrical wiring . . . rotted floors from leaking
pipes; leaky roofs; old, unsafe, inefficient furnaces; [and] rodent, termite and other
pest problems; etc." Since 1991, the Park has been provided $14 million to construct
new housing for its employees.

Yosemite National Park

Yosemite National Park, located in central California, has provided its employees
with housing since it was established in 1890 because of the generally remote location
of the Park. Employee housing is currently located in Yosemite Valley, Wawona,
Hodgdon Meadows, Crane Flat, Tuolumne Meadows, and El Portal, California. As
of January 1996, the Park reported that 433 housing units were available to house
its 390 permanent and 120 seasonal employees. From 1980 through 1995, the Park's
General Management Plan and various assessment reports identified housing
shortages and unsafe and substandard employee housing, such as deteriorated trailers

lAs defined by the Park Service, a housing unit is a single-family house, one-half of a duplex, an
apartment, a townhouse, a trailer, a dormitory room, or a place for one employee to live.

1

 
and tent cabins, in the Valley and in the nearby communities. During 1995, about
100 permanent employees' offices were transferred from the Valley to the Park's
administrative site in El Portal. Since 1991, approximately $15.4 million has been
provided to construct new housing for employees at the Park.

Denver Service Center

The Park Service's Denver Service Center is the lead office within the Park Service
for planning, designing, and overseeing construction for projects that are included
in the Park Service Line Item Construction Program, including housing projects.
These activities, which are funded under a separate Park Service appropriation and
carried out by either contract or in-house personnel, include performing advanced
planning for technical investigations; conducting land surveys; preparing architectural,
landscape, and construction drawings and specifications, final cost estimates, and
contract bid documents; and providing on-site construction supervision.  From
October 1990 through January 1996, the Center expended approximately $8.7 million
for the planning, design, and oversight activities related to employee housing at
Grand Canyon and Yosemite National Parks.

OBJECTIVES AND SCOPE

The objectives of our review were to determine the costs of constructing employee
housing at Grand Canyon and Yosemite National Parks and to determine whether
the Park Service constructed "employee-only" recreation areas on public lands in El
Portal. We conducted our review from October 1995 through August 1996 at Grand
Canyon and Yosemite National Parks, the Park Service's Pacific West Regional
Office, and the Park Service's Denver Service Center.

To accomplish the objective relating to housing costs, we reviewed housing program
activities for Grand Canyon and Yosemite National Parks for fiscal years 1991 to
1996, which included: (1) applicable laws, Office of Management and Budget
circulars, and Departmental and Park Service guidelines pertaining to the
authorization and construction of employee housing; (2) general management and
housing management plans and designing and planning documents; and (3) costs
incurred and estimated to be incurred by the Park Service for planning, surveying,
designing, supervising, and building the employee housing at both parks. In addition,
we interviewed Park Service officials responsible for the construction and
management of the housing program at the parks, as well as Park Service officials
at the Pacific West Regional Office, the Denver Service Center, and the Park
Service's Washington Office.  We also obtained information on the cost of
constructing houses in the private sector and on sales prices of homes in areas near
Grand Canyon and Yosemite National Parks from the following: (1) city and county
planners, building inspectors, land developers, private home builders, and realtors in
Coconino County in Northern Arizona (including the Cities of Williams and
Flagstaff, which are the closest to Grand Canyon National Park) and the Counties
of Mariposa, Merced, and Tuolumne in Central California (including the City of
Mariposa), which are closest to Yosemite National Park; (2) the Bureau of Census
and the Construction Industry Research Board for estimates of planned construction

2

 


costs required to obtain a building permit; (3) the National Association of Home
Builders publication "Builders Survey of Construction Costs," published in 1995; and
(4) the electronic publication "Money On Line," prepared by Time, Incorporated.
From the Federal sector, we obtained information on the construction of employee
and family housing from the Bureau of Indian Affairs, U.S. Department of the
Interior; the U.S. Department of Housing and Urban Development; and the U.S.
Army Corps of Engineers.

Regarding "employee-only" recreation areas, we reviewed applicable laws, visited the
sites, interviewed Park Service officials, and discussed the use of these facilities with
local community leaders to determine whether the general public could use these
facilities.

PRIOR AUDIT COVERAGE

While the Office of Inspector General has not performed an audit of the Park
Service's employee housing program within the last 5 years, the General Accounting
Office has issued two reports on the conditions and need for employee housing as
follows:

   The report "Condition of and Need for Employee Housing"
(No. GAO/RCED-93-192), issued in September 1993, concluded that 40 percent of
the Park Service's housing units were classified in good or excellent condition,
45 percent were classified in fair condition but required maintenance ranging from
replacing appliances to making minor structural repairs, and 15 percent were
classified in poor to obsolete condition and required extensive repairs. In addition,
the General Accounting Office found that the Park Service did not adequately justify
its need for 12 percent of the employee housing inventory and that the accuracy of
the Park Service's estimate of the housing maintenance backlog could not be verified.
The General Accounting Office recommended that Park Service officials reassess the
need for all permanent housing units, develop a strategy to eliminate those units that
were not needed, prepare a repair and/or replacement estimate to maintain the units
that were needed, and develop a plan to close the differences between rental income
and maintenance costs.

- The report "Reexamination of Employee Housing Program Is Needed"
(No. GAO/RCED-94-284), issued in August 1994, concluded that, even when housing
needs were clearly defined and the housing inventory at the parks was reduced to the
greatest extent possible, the Park Service needed to further explore other
opportunities to help finance its housing program. The report also stated that Park
Service officials could explore ways to move employees out of Park Service housing
and into available housing in local markets and pursue alternative financing
arrangements for repairing, rehabilitating, and replacing housing units. The General
Accounting Office recommended that the Park Service conduct a park-by-park
review of housing needs to determine whether its current inventory at each location
was needed and justified. The General Accounting Office also recommended that
the Park Service review the housing alternatives identified by the General
Accounting Office from the employee housing studies, evaluate and compare their

3

 
respective costs and benefits, develop a strategy for implementing the alternatives
considered to be the most effective, and present the strategy to the Park Service's
legislative and appropriations committees in the Congress.

During our review, Park Service officials informed us that the Park Service had
initiated several actions in response to the recommendations made in the General
Accounting Office reports. Park Service officials told us that the Park Service, in
1994, started an "in-house" needs assessment review of housing requirements at
36 park areas (including Grand Canyon and Yosemite National Parks). These
officials further stated that the effort was ongoing and was expected to be completed
in 1997. In July 1995, the Park Service, in conjunction with the Bureau of Indian
Affairs, contracted with an independent consulting firm to review four parks in detail
to better document the repair and rehabilitation backlog that was identified. In
addition, in January 1996, the Park Service requested that the Department's Quarters
Office, which is under the Bureau of Reclamation, review the various factors that
impact upward adjustments to housing rental rates, which are limited by the
Congress. Further, the Park Service had initiated the process of establishing
"partnerships" with outside groups, such as the National Park Foundation, to improve
employee housing conditions.

4

 


DISCUSSION

The Park Service decided to build high quality, energy efficient, single-family homes,
which resulted in high-cost employee housing and unmet housing needs. We found
that the total estimated cost of planning, designing, developing infrastructure (roads,
utilities, and building sites) for, and constructing 23 single-family houses at Grand
Canyon National Park and 34 apartments and 19 single-family houses at Yosemite
National Park was $29.2 million. Based on the total costs, we estimated that the cost
to build a single-family home at Grand Canyon National Park ranged from $337,000
(1,258 square feet) to $473,000 (1,764 square feet), or an average of $390,000, while
at Yosemite National Park the range was from $425,000 (1,267 square feet) to
$681,000 (2,030 square feet), or an average of $584,000. In contrast, we estimated
that the total cost to construct an 1,800 square-foot, three-bedroom house2in the
private sector ranged from $115,000 to $232,000 near Grand Canyon National Park
and from $102,000 to $250,000 near Yosemite National Park. To further put these
costs in perspective, we obtained, from realtors near the parks, information on sales
prices for housing in the local areas. The realtors provided information which
showed that sales prices for a 1,200 to 5,000 square-foot home in the Grand Canyon
National Park area ranged from about $125,000 to $289,000 and that sales prices
near Yosemite ranged from about $80,00 to $300,000 for 1,200 to 2,400 square-foot
homes. Additionally, Park Service officials chose to build primarily single-family
homes instead of multi-family housing units to meet the housing needs. As a result,
approximately 50 permanent and 100 seasonal employees at Grand Canyon National
Park and at least 70 seasonal employees at Yosemite National Park will still be living
under the same conditions that prompted the funding for the employee housing.

Also, we found that the recreation areas being constructed by the Park Service at
Yosemite's El Portal administrative site will not be restricted to employees but will
be available for use by the general public, the local community, and area schools.

Guidelines for Construction

In January 1988, the Department of the Interior issued a final rule amending
Title 41, Part 114-51, of the Code of Federal Regulations to change its procedures
governing the "provision and assignment of government furnished quarters." The
final rule stated that it was issued because "changes [were] made necessary by the
repeal of Congressional limitations on the costs associated with construction of
[government furnished quarters]." The final rule further stated that because of the
"rapidly increasing costs of housing," the unit costs of future construction would be
identified by agencies in their budget justifications and "controlled through the
normal budget process." The final rule also "eliminate[d] the design standards in the

2We chose an 1,800 square-foot home as the basis for our comparative analyses of the cost of
housing
construction in the local communities, since we believed that this size best represented the larger
of
the houses being constructed by the Park Service and therefore more fairly shared the costs
associated
with infrastructure, planning, design, and construction supervision that were allocated on a
square-foot
basis.

5

 
regulations [Code] and substituted] those found in Office of Management and
Budget Circular A-18 ["Policies on Construction of Family Housing"], as amended."

In October 1993, the Office of Management and Budget rescinded Circular No. A-18
by merging some of its provisions into the revised Circular No. A-45, "Rental and
Construction of Government Quarters," which provides general policies and
procedures to guide Federal agencies in determining the rental rates for housing
units to be provided employees at a given location. Additionally, Circular No. A-45
does not specify a limit on construction costs. Without cost limitations, we found
that the Park Service emphasized the environmental and quality aspects of planning,
designing, and constructing housing over the cost aspects. In that regard, Park
Service officials stated that the organization had a "tradition" of providing
single-family homes to its employees and that they used these homes as
"inducements" to recruit and retain employees.

Employee Housing at Grand Canyon National Park

At the time of our review, the Park Service was constructing 59 single-family homes
at Grand Canyon National Park. Since construction had not been completed, we
could only summarize the estimated costs to construct the first 23 of 59 houses.
Based on our review of the Park Service's records, we determined that the total cost,
including the costs associated with infrastructure, "line item" house construction,
planning, design, and supervision, was approximately $8.9 million. Based on the total
cost, the average cost to construct a single-family employee house was about
$390,000 ($8.9 million divided by 23 houses), and the per unit cost ranged from
$337,320 to $472,999, as shown in Table 1.

 
Table 1. Estimated Costs To Build 23 Single-Family Houses

No. of
Units

             Unit Costs*
Unit Square       Planning/Design   House   Per Unit
Footage  Infrastructure  Supervision   Construction  Total

1,258    $50,857    $106,383    $180,080  $337,320
1,298    52,476    109,765    185,805   348,046
1,327    53,648    112,217    189,957   355,822
1,461    59,066    123,549    209,138   391,753
1,475    59,631    124,734    211,142   395,507
1,686    68,162    142,576    241,346   452,084
1,764    71,315     149,172    252,512   472,999

Total Cost* *

$1,011,960
1,740,230
355,822
1,958,765
1,582,028
904,168
1,418,997
$8,971,970

*As shown in this schedule, we estimated, based on Park Service available records, the per unit
costs attributable to the three
major components of total cost. These amounts were derived by assigning the costs incurred or
estimated to be incurred to
the applicable square footage for each housing unit. The amounts allocated were $1,352,722 for
infrastructure; $2,829,540 for
planning, design, and construction supervision; and $4,789,708 (including $950,143 in contract
cost overruns) for "line item"
house construction.

**The total cost for each housing unit was derived by multiplying the units constructed by the
per unit total cost.

We found that the former Park Superintendent decided to build 59 single-family
homes, even though other Park Service officials from the Denver Service Center and
the Pacific West Regional Office had recommended constructing up to 114 housing
units composed of a mix of both single-family and multi-family units, such as
apartments, town houses, or "cluster" homes, to better meet the Park's housing

shortage and overcrowded, unsafe, and substandard housing conditions. As such,
according to Park officials, approximately 50 permanent and 100 seasonal employees
at the Park will still be living in deficient housing at the completion of this housing
construction.

Employee Housing at Yosemite National Park

Between March 1993 and June 1996, the Park Service constructed 34 apartments and
19 single-family homes at Yosemite National Park. Since the Park Service has
basically completed currently funded housing construction at the Park, we
summarized the actual costs to construct the 34 apartments and 19 houses at the
Park as of January 1996.  Based on our review of Park Service records, we
determined that the total cost, including the costs of infrastructure, "line item" house
and apartment construction, planning, design, and supervision, was approximately
$9.1 million for the 34 apartment units (Table 2 and Figure 1) and was about $11.1
million for the 19 single-family homes (Table 3 and Figure 2). Based on the total
cost, the average cost to construct a single-family employee house was $584,000, and
the per unit cost ranged from $425,294 to $681,410, as shown in Table 3.

7

 
Table 2. Apartments

Unit Costs*

Unit Square        Planning/Design  Apartment   Per Unit
Footage   Infrastructure  Supervision   Construction   Total   Total Cost **

740    $53,163    $55,737    $115,953   $224,853   $3,147,942
1,014    72,848    76,374    147,996   297,218   5,944,360
                           $9,092,302

*As shown in this schedule, we estimated, based on Park Service records available, the per unit
costs attributable to the three
major components of total cost. These amounts were derived by assigning the costs incurred to
the applicable square footage
for each apartment unit. The amounts allocated were $2,201,242 for infrastructure; $2,307,798
for planning, design, and
supervision; and $4,583,262 for "line item" apartment construction.

 
Table 3. Single-Family Houses

No. of
Units
1

5

3

Unit Square
Footage
1,267

1,550

1,675

1,865

1,900

2,030

          Unit Costs*
     P1anning/Design   House   Per Unit
Infrastructure   Supervision   Construction   Total
$90,310    $95,430    $239,554   $425,294
110,482    116,746    293,060   520,288
119,392    126,161    316,694    562,247
132,936    140,472    352,617   626,025
135,430    143,108    359,235   637,773
144,696    152,900    383,814   681,410

Total Cost* *
$425,294
2,601,440
1,686,741
3,756,150
1,275,546
1,362,820
$11,107,991

*We estimated, based on Park Service available records, the per unit costs attributable to the
three major components of total
cost. These amounts were derived by assigning the costs incurred to the applicable square
footage for each housing unit. The
amounts allocated were $2,358,764 for infrastructure; $2,492,491 for planning, design, and
supervision; and $6,256,736 for "line
item" house construction.

 


As documented in the Yosemite Valley Housing Plan, the substandard and
overcrowded housing conditions that existed in the Park cannot be addressed by
adding only 19 single family homes and 34 apartment units. Annual budget requests
for the Park Service from 1991 through 1993 indicated that, in addition to the
single-family homes and apartments that were being built, two 40-room dormitories
would be constructed in El Portal to provide housing primarily for seasonal
employees, most of whom were living in substandard housing in Yosemite Valley.
However, the two 40-room dormitories were not built because, according to Park
Service officials, the Park Service decided to house seasonal employees in studio
apartments rather than in dormitories. As of January 1996, the Park Service had not
requested funding to construct these studio apartments.  In addition, all 34
apartments were rented by permanent, not seasonal, employees because, according
to Park Service officials, of the "quality" and "built-in" features of the units and
because housing managers generally preferred the stable incomes associated with
renting to permanent employees. Park Service officials also said that the rent (from
$270 to $376 per month) for the new apartments was too expensive for seasonal
employees. As a result, we estimated, based on Park Service records, that after
construction of the housing units in El Portal, at least 70 seasonal employees would
still live under the same conditions that prompted the funding for the new employee
housing.3

Construction Cost Factors

We noted that Park Service officials had testified before the Subcommittee on
Interior and Related Agencies, Committee on Appropriations, House of
Representatives, for fiscal years 1994 and 1995 on the high costs associated with
housing at Grand Canyon and Yosemite National Parks. During these hearings,
Park Service officials provided reasons as to why they believed the construction costs
for the employee housing at these parks were so high and informed the
Subcommittee of the estimated average cost of the houses. Specifically, the Park
Service testified, among other issues, that the average cost for housing would be
$386,000 at Grand Canyon National Park and $305,300 at Yosemite National Park.
The Park Service testified that the reasons for the "high" costs of construction were
related to such factors as the "remote location" of the construction and the
environmental and "quality" aspects that were designed into the houses.

In addition to its testimony, the Park Service stated during our review that a primary
reason for the high costs of housing at Grand Canyon and Yosemite National Parks
was the addition of nonstandard and energy efficient materials to the homes,
apartment units, and related infrastructures during the planning and designing
processes. The Park Service provided us with a list of items, such as solid core
doors, solar water heaters, extra large baths, and commercial-grade floor coverings
(see Appendix 2), that were used in constructing the housing. Park Service officials

3According to Alternative E in the Addendum to the Yosemite Valley Housing Plan, Draft
Supplement
to the Final Impact Statement for the 1980 General Management Plan, the Park Service plans to
construct five single-family homes at Rancheria Flats and multi-family housing for 108
employees.

10

 
told us that the items were necessary for "durability" and "long-term maintenance
savings, " energy efficiency, remoteness of sites, fire-resistant and handicap
accessibility requirements, noise control in apartments, and landscape enhancements.
Park Service officials also told us that energy efficient houses were necessary to aid
in the preservation of the environment and to reduce the employees' costs for
energy. However, we were not provided any data or cost-to-benefit analyses during
our review to determine and validate the incremental costs or benefits associated
with the use of these nonstandard and energy efficient items. On the other hand, we
found reports and documents that did question the use of these materials. For
example, in notes of a meeting between Yosemite National Park officials and
representatives of the contracted architectural and engineering firm, the firm stated,
"If some of the top-of-the-line items that the Park is insisting on, i.e., doors and
windows, could be lowered a notch in quality, then the unit costs would go down
significantly."

In addition to the use of nonstandard and energy efficient materials, we determined
that the Denver Service Center's costs for planning and supervising the construction
of the housing contributed to the high costs of housing at the parks. We identified
charges of $8.7 million for planning, design, and construction supervision costs at
both parks. Specifically, we found that as of January 1996, these costs totaled
$3.9 million at Grand Canyon National Park. Of this amount, planning and design
costs totaled about $1.3 million for seven home designs and the 23 home sites.4
About $1.1 million was charged for supervising the construction of the first
23 homes, which were 70 percent complete. At Yosemite National Park, costs for
planning, designing, and supervising the construction of housing were about
$4.8 million as of January 1996. Of this amount, $3 million was charged to planning
and design, and $1.8 million was charged to construction supervision for the
34 apartments and 19 housesat the Park. The costs for the 19 houses included costs
for construction of recreation facilities. However, we were unable to determine, nor
did the Park Service identify, the amounts associated with these facilities, since the
costs for these facilities were commingled with the contracts awarded for the
construction of the housing.

Housing Construction Costs in the Private Sector and at Other Federal
Agencies and Sales Prices of Homes Near the Parks

On June 3, 1996, we provided the Park Service with a preliminary draft of this
report. In the Park Service's June 14, 1996, response, the Associate Director,
Professional Services, National Park Service, did not agree with the manner in which
the cost information was presented in the preliminary report, stating that the report
"bundles three types of expenses and costs, artificially enlarging the housing
construction costs to a figure abnormally higher than a similar housing unit
constructed in a suburban subdivision." The response also stated that our report

4Planning and design costs for the 59 homes, which were based on nine different designs, totaled
about $2.8 million as of January 1996. Four additional homesites were planned and designed for
concessioner housing at the expense of the Government.

11

 
"inflated" the cost of housing by including "specialized" expenses particular to Federal
agencies and to the Park Service and therefore did not state the "true" cost of
constructing the housing units.

We believe that the Park Service's comments in this regard are without merit. As
stated previously, the Park Service, in its testimony to the Congress in fiscal years
1994 and 1995, openly acknowledged the "high" costs of construction in the parks.
By way of example, the Park Service noted that the average cost of housing at Grand
Canyon would be about $386,000, which is only $4,000 less than our estimate of the
same housing. In addition, our review found that Park Service records did not
segregate "specialized" expenses from total costs, thus rendering difficult the type of
separation of expenses that the Park Service now states is appropriate. Also during
our review, we requested that the Park Service provide support for its statement that
Park Service per unit construction costs were comparable to those in the private
sector. However, the Park Service was not able to provide documentation for this
statement.

In any event, in order to provide a more definitive response to the Park Service's
concerns and to place the housing construction costs at Grand Canyon and Yosemite
National Parks into even clearer perspective, we obtained information on: (1)
housing construction costs incurred by the private sector; (2) expenses particular to
Federal agencies; (3) housing construction costs incurred by other Federal agencies;
and (4) the prices of homes sold in areas near the parks.

  Private Sector Construction Costs. According to information provided by the
National Association of Homebuilders, we estimated that the national average cost
of constructing an 1,800 square-foot single-family house (including infrastructure)
within the United States in 1995 was about $125,000.5  In addition, based on
information provided to us by local officials and land developers near both parks, we
derived two estimates of the costs to construct an 1,800 square-foot house: an
estimate to construct a "good" quality house that would exceed national standard
building codes and an estimate to construct an "excellent" quality house, which
incorporated additional high quality material and workmanship in the construction.
Using this information, we then estimated that the private sector construction costs,
including design, planning, infrastructure, supervision, and profit, would range from
$115,000 to $232,000 near Grand Canyon National Park and from $102,000 to
$250,000 near Yosemite National Park.

Regarding the cost of constructing infrastructure near the two parks, city and county
officials and private land developers told us that these costs (building roads or
extending water and sewer systems) were borne by the land developers or the
individual home builders and were not funded by local governments. Therefore,
despite the Park Service's position that general site improvements were not financed
and constructed by the private sector home builder, we believe that it was

5The $125000 does not include costs of land, capital, selling expenses, or profit, which also were
not
included in our estimates of housing constructed by the Park Service.

12

 
  



appropriate to include the infrastructure expenses in the overall costs of constructing
the employee housing units.

  Specialized Expenses Particular to Federal Agencies. In commenting on our
preliminary draft report, the Park Service said that there were nine factors particular
to Federal construction that increased the cost of construction: Davis Bacon Act
wage adjustments, Buy American Act procurement requirements, archaeological
study requirements, Endangered Species Act requirements, remote location cost
adjustments, unusual site conditions, Small Business Administration Minority
Program procurement requirements, Americans With Disabilities Act access
requirements, and fire suppression requirements. However, the Park Service did not
provide us with cost records that would be necessary to identify the additional costs
associated with these factors. Therefore, we estimated the increased costs associated
with these nine factors based on information obtained from other Federal agencies
and private land developers. Our estimates of the additional costs associated with
these factors to build an 1,800 square-foot home in the private sector near both
parks are shown in Table 4.

13

 
Table 4.

Specialized Federal Expenses

Description

Davis-Bacon Wagesl
Buy American Act2
Archaeological Studies3
Endangered Species Act3
Remote Location4
Unusual Site Conditions5
Requirements of Small Business
Administration Minority Program2
Americans With Disabilities Act6
Fire Suppression7
Combined Totals

Grand Canyon National
  Park

2,646

3,600
$15,444

Yosemite National
  Park

$64,559 0 0 0
17,766
5,976 0

2,592
3,600
$94,493

lWe did not increase wage costs at Grand Canyon because local wage rates in that area generally
exceeded the Davis-Bacon
wage rates. For the Yosemite area, the Davis-Bacon wages generally exceeded local wage rates
for some construction workers,
and we increased wages to 200 percent based on the Park Service's statement that Davis-Bacon
wage rates were 200 percent
higher than local rates.
2Based on discussions with representatives of other Federal agencies, we believe that the
additional costs associated with the
requirements of the Buy American Act and the Small Business Administration Minority Program
are minimal.
3Based on discussions with private contractors, land developers, and representatives of other
Federal agencies, we did not
increase costs at either park because we believe that home builders in the private sector also incur
the same costs for
performing archeological studies and for complying with the Endangered Species Act.
4Based on the "Residential Cost Handbook," we increased the price of the house for the remote
location--$5.l1 times
1,800 square feet at Grand Canyon and $9.87 times 1,800 square feet at Yosemite.
5Based on the "Residential Cost Handbook} we increased the price for constructing houses on
hillsides at Yosemite ($3.32
times 1,800 square feet).
6Based on discussions with representatives of other Federal agencies, we provided for a 2
percent increase to the base price
of the house--$1.47 times 1,800 square feet at Grand Canyon and $1.44 times 1,800 square feet
at Yosemite,
7Based on discussions with representatives of the private sector and other Federal agencies, we
increased the priceof the house
($2.00 times 1,800 square feet).

Including these specialized Federal expenses in our estimate of private sector
construction costs to build both a good and a high quality home resulted in costs
ranging from $130,500 to $247,500 near Grand Canyon National Park and from
$196,500 to $344,500 near Yosemite National Park.

  Other Federal Agency Housing Construction Costs. We also contacted
representatives of other Federal agencies to obtain information on their respective
costs of constructing employee and family housing. Although these examples do not
directly compare Park Service housing with that of other Federal agencies, these
examples do represent the average costs that other Federal agencies are incurring
in attempts to meet their respective housing needs. Also, agency representatives told
us that they were required to comply with many of the same "specialized expenses
particular to Federal agencies." The housing costs ranged from $105,000 to $150,000
for single-family houses, as shown in Table 5.

14

 
Table 5. Cost of Employee and Family Housing at Other Federal Agencies

Department
Interior, Bureau of
Indian Affairs

Housing and Urban
Development, Indian
Development Program
Defense, U.S. Army Corps
of Engineers

3 bedroom
(single
family)

lThis estimate, which was based on information provided by Departmental officials, represents
the average cost
nationally of constructing a single-family home for eligible recipients within the Bureau of
Indian Affairs.
2Constructed in 1992 on the Havasupai Reservation, Peach Springs, Arizona.
3Constructed in 1994 at Fort Irwin, Barstow, California.

Housing constructed by the Corps of Engineers consisted of 220 multi-family housing
units (110 duplexes) (see Figure 3) and infrastructure such as roads, utilities, water
and sewer facilities, basketball courts, sports fields, a sand volleyball court, picnic
shelters, and tot lots. At an average of $105,000 per unit, the project was completed
for a total cost of $23.2 million.

15

 
Figure 3. A duplex constructed by the U.S. Army Corps of Engineers. (Office of Inspector
General photograph)

  Home Sales Prices. Realtors near Grand Canyon National Park indicated that
the average price of an 1,800 square-foot home selling in the Flagstaff, Arizona, area
(79 miles away) was about $175,000. A realtor in Williams, Arizona, which is about
60 miles south of Grand Canyon, told us that the average size of the homes ranged
from 1,200 to 1,500 square feet and that the homes, when available, were selling for
about $125,000. In addition, the sales prices of a 2,000 square-foot home and a 5,000
square-foot home were $155,000 and $289,000, respectively. Further, according to
the electronic publication "Money On Line," the median prices of a three-bedroom
home in Flagstaff and Phoenix, Arizona (217 miles away), were $130,000 and
$115,000, respectively.

A realtor near Yosemite National Park in Merced, California (68 miles away), stated
that the sales prices for 1,750 to 1,850 square-foot homes ranged from $85,000 to
$195,000 in 1995. In addition, we reviewed a publication entitled "Home Search,"
produced by the Merced County Realtor Association, and another home
advertisement publication for the areas of Catheys Valley (45 miles away) and
Mariposa (30 miles away). The publications indicated that sales prices, which
generally included 3 to 5 acres of land, ranged from $80,000 to $300,000 for 1,200
to 2,386 square-foot homes, respectively. For example, we noted a 1,200 square-foot
home on 1 acre of land selling for $79,500; a 1,500 square-foot home on 5 acres
selling for $159,000; a 1,578 square-foot home with horse facilities on 5 acres of land
selling for $199,500; a 2,060 square-foot three-bedroom home on 14 acres of land
selling for $229,000; and a 2,386 square-foot home on 5 acres of land selling for
$299,500. In addition, according to "Money On Line," the median prices of three-
bedroom homes in Merced and Modesto, California (95 miles away), were $91,000
and $113,000, respectively.

16

 


Summary

Grand Canyon and Yosemite National Parks built high-cost residences for park
employees. Specifically, as detailed in Appendix 3, the total costs (including
infrastructure) for the Park Service to construct 1,800 square-foot homes at Grand
Canyon and Yosemite National Parks were $473,000 and $626,000, respectively. In
contrast, we estimated that the average cost nationally to build an 1,800 square-foot
home was $125,000. In addition, we estimated that the private sector construction
costs adjusted for the specialized expenses identified by the Park Service for an
excellent quality home, which incorporated cost factors for high quality materials and
workmanship, were $247,500 and $344,500, respectively, at Grand Canyon and
Yosemite. Further, realtors' estimates of sales prices for houses of comparable size
in areas near Grand Canyon and Yosemite were $175,000 and $195,000, respectively.

In addition, after completion of the 59 single-family houses at Grand Canyon
National Park and the 34 apartment units and 19 single-family homes at Yosemite
National Park, the parks' housing needs have not been met. In that regard, the Park
Service, in response to the August 1994 audit by the General Accounting Office, said
that it is conducting a needs assessment of housing requirements at 36 park areas,
including Grand Canyon and Yosemite. Given the options for meeting housing
needs (for example, constructing single-family homes, multi-family homes,
apartments, or dormitories or purchasing homes in local markets), as well as the
individual park's preferences for housing and Federal guidance that does not specify
a limit on construction costs, we believe that the Park Service should closely monitor
housing construction at its parks in conjunction with completion of the needs
assessment to ensure that housing needs are fully met in a cost-effective manner.

Recreation Facilities at El Portal

At the time of our review, the Park Service was also constructing recreation facilities
in the same vicinity as the houses under construction at El Portal. The facilities
under construction included a baseball and soccer field, an outside basketball court,
and a tot play area (Figure 4).

17

 
Although these facilities were being constructed on Federally owned land within
Yosemite National Park's administrative site, we determined that the Park Service
did not intend to restrict the use of these areas to Park Service employees.
According to Park Service officials and local community leaders, these facilities will
be available for recreation use by the general public, the local community, and area
schools. In addition, the legislative history which supports the Yosemite National
Park-Administrative Site-Acquisition Act of 1958 (Public Law 85-922) stated that the
Director of the National Park Service "assured the committee that the public will not
be barred from fishing and other recreational pursuits in and along the river flowing
through the administrative site." (Emphasis added.) We estimated that these
facilities represented about 2 to 3 acres of the 1,200 acres set aside for the
administrative site at El Portal.

Recommendation

We recommend that the Director, National Park Service, review the strategy that the
parks, particularly Grand Canyon and Yosemite National Parks, have for meeting
their employee housing needs to ensure that housing is designed and constructed in
a cost-effective manner.

National Park Service Response and Office of Inspector General Reply

In the October 18, 1996, response (Appendix 4) to the draft report from the Park
Service's Acting Deputy Director, the Park Service agreed with the recommendation
and said that the information provided would "evidence the implementation" of the

18

 


recommendation.  The response included as attachments comments from the
Superintendents of Grand Canyon and Yosemite National Parks; the Acting
Director, Denver Service Center; and the Park Service's housing program manager.
However, based on the information contained in the Park Service's response, the
recommendation is unresolved, and the Park Service is requested to reconsider its
response to the recommendation (see Appendix 5).

Comments on Special Report

The Park Service provided a lengthy response (34 pages) to the draft report that
contained information not previously provided to us and comments on some of the
specific text presented in the draft report. We modified the report as appropriate
based on the Park Service's comments. Furthermore, our reply to those aspects of
the Park Service's response that we believe have the most significance is presented
below.

Introductory Remarks

Park Service Response. The Park Service noted at the outset that "like other
ordinary people, the Park's employees expect standard, comfortable homes with
normal amenities and facilities such as are used in day-to-day living."

Office of Inspector General Reply. We agree. The issue, however, is what it
should cost to provide "standard, comfortable homes with normal amenities and
facilities such as are used in day-to-day living." When compared with private sector
and other Federal agency housing, the significantly greater cost of Park Service
housing at the two parks reviewed suggests that the Park Service is not in fact
building "standard, comfortable homes with normal amenities and facilities," but
rather high cost, high quality homes. The Park Service did not provide information
or documentation that would refute that suggestion.

Cost of Housing at Yosemite National Park

Park Service Response. The Park Service stated that our report:

fails to accurately and fully identify all the extraordinary costs which the
Park [Yosemite National Park] identified . . . . These costs total
$4,489,662 . . . and are costs which a private home construction company
would not expend because these costs are extraordinary to the Federal
important distinction drawn here is that these extraordinary expenses attach
to construction on NPS [National Park Service] lands, because of the laws
which Congress has enacted. [Emphasis in original.]

The Park Service said that its does "not concur with the costs identified as
`Specialized Federal Expenses' listed in Table [4]." The Park Service further stated
that "[t]he increased costs per house for Yosemite NP [National Park] should be
$236,298 rather than $94,493." In that regard, the Park Service concluded that the

19

 


$236,298 was the estimated cost of complying with requirements associated with
building on National Park Service lands (including matters such as preparation of an
environmental assessment and related site surveys for archeological sites and for
threatened/endangered species and preparation of environmental compliance
documentation required by the National Environmental Policy Act). Regarding the
$4,489,662 (which the Park Service computed by multiplying $236,298 by the 19
houses built at Yosemite National Park), the Park Superintendent broke down those
costs by category as follows: unusual site conditions -$ 1,358,500; cultural and natural
resource compliance and monitoring - $327,370; Americans With Disabilities Act
requirements - $49,248; larger capacity water tank and fire suppression systems -
$504,393; propane distribution system - $62,985; remote location - $337,554; Davis-
Bacon wage rates - $1,226,621; and recreational facilities and open space -$622,991.

Office of Inspector General Reply. Although in its response the Park Service
describes at length the various categories of costs that it considers to be
"extraordinary costs" related to construction on national park lands, there is no
explanation in the response as to how the "extraordinary cost" estimates were
derived. During our review, we examined the bid abstracts and other Park Service
documentation for the housing construction contracts in an attempt to identify the
extraordinary costs that are peculiar to the Park Service.  However, the
documentation did not break out or identify this information. Also, when we
repeatedly requested that park managers provide us with information on the Park
Service's increased costs associated with the nine categories of specialized expenses
that the Park Service had identified (see Table 4), they said that the information was
not available. Therefore, we were not able to determine the validity of the Park
Service's estimates of its extraordinary costs, which now include costs for two
categories--( 1) site utilities and (2) recreational facilities and open space--not
identified by the Park Service during our review.

Had the Park Service provided this information to us during our fieldwork, together
with an explanation of how the numbers were derived, we would have attempted to
determine the validity of the estimates. For example, the Park Service's computation
includes $71,500 per house ($1,358,500 in total) for unusual site conditions. In this
case, we would have attempted to determine whether the Park Service could have
used different building techniques to reduce costs, whether Federal requirements
restricted building sites to those selected, and whether the computation included only
properly allocable costs. In another instance, the Park Service added $32,789 per
house ($622,991 in total) for recreational facilities and open space. While we
recognize the importance of recreational facilities, especially to individuals living in
isolated communities, we would have attempted to determine the validity of the
amount presented, as well as to determine whether this amenity can properly be
considered an "extraordinary" Federal expense.

In the absence of the requested information from the Park Service, we developed a
table of Specialized Federal Expenses for the nine categories of expenses identified
by the Park Service (Table 4). We estimated the costs associated with these
categories based on information obtained from other Federal agencies, private land
developers, and reference materials. Our presentation was intended to provide our

20

 


best estimate, based on the sources consulted and in the absence of more specific
information, of the increased costs over normal construction costs associated with
complying with Federal regulations on sites similar to those on which Park Service
housing was constructed. Our conclusion was that specialized Federal expenses
should increase the cost of construction at Yosemite National Park by $94,493 per
single-family home. (Our presentation was not intended to identify the costs actually
incurred by the Park Service for these categories.)

If, as the Park Service states, the cost of constructing single-family housing on Park
Service lands at Yosemite National Park added $236,298 rather than $94,493 to each
home, we believe that the Park Service should have opted for alternative housing,
such as multi-family housing. Moreover, assuming that the Park Service's estimates
are accurate, even a cost of $348,000 (average cost per house of $584,000 minus the
Park Service's estimate of Federal expenses of $236,000) is high when compared with
the $102,000 to $250,000 range in the private sector for building single-family homes
in the same area.

Bids of Competing Contractors

  Park Service Response. The Park Service stated that the report does not
consider the competing contractors' bids as "fair competitive examples of equivalent
cost comparisons for the construction of housing" in Yosemite and Grand Canyon
National Parks. In that regard, the Park Service stated:

We take the position that open competition by housing construction
firms, bidding on a uniform set of specifications which apply to the Park,
is the only proper theater of cost comparison because the natural
incentives of such competition serve as independent controls that
establish the reasonable range of costs for the construction specifications
identified. . . . The OIG draft special report gives no explanation as to
why it failed to compare competitive bids we received and have in file
to establish the reasonable level of cost we have experienced under
current Federal laws. This seems elemental to us.  [Emphasis in
original.]

  Office of Inspector General Reply. We strongly disagree with the statement
that "bidding on a uniform set of specifications which apply to the Park, is the only
proper theater of cost comparison." Indeed, such a statement by the Park Service
suggests a fundamental misunderstanding of the issue.  As the Park Service
acknowledges, the bids provide a range of costs for "the construction specifications
identified." In other words, the bids merely indicate the range of proposed costs that
prospective contractors offer in response to bid specifications for the particular type
of housing requested by the Park Service. For example, if the specifications for
housing at Yosemite National Park had called for 5,000 square-foot single-family
homes instead of 1,200 to 2,000 square-foot homes, the bids would have been higher.
Conversely, a representative of the contracted architectural and engineering firm (see
that the Park is insisting on, i.e., doors and windows, could be lowered a notch in

21

 
  *



quality, then the unit costs would go down significantly." (Emphasis added). In
addition, the bids do not provide any related information on the alternatives to
building single-family homes or on the reasonableness or efficiency of the design.
Thus, far from being "the only proper theater of cost comparison''--let alone
"elemental''--we believe it would be virtually useless to rely on bidding information
to determine whether the cost of Park Service housing is higher than it should be.

Comparisons With the Private Sector and With Other Federal Agencies

Park Service Response. The Park Service stated:

[T]he OIG [Office of Inspector General] draft special report only offers
non-comparable comparisons to the housing construction on non-NPS
[National Park Service] (private) lands and to some Federal housing (by
other agencies on non-NPS lands) which the OIG report admits ". . .
these examples do not directly compare. . . ."

  Office of Inspector General Reply. As stated in our report, we presented the
information on private and other Federal agency construction costs in response to
a Park Service comment to a preliminary draft of this report. The Park Service had
stated:

To fairly represent the modest types of housing which NPS [the National
Park Service] is constructing, your final report should not include the
Federal construction overhead and the NPS mission/infrastructure
expenses in per unit average costs. By doing this, your final report
would establish a per unit construction cost comparable to that found in
the Private sector, thus enabling the reader to determine the reasonable
level of NPS investment. [Emphasis added].

In response to that comment and to the extent that cost information was available,
we separately identified infrastructure costs related to Park Service housing
construction (cost information on Park Service overhead and mission was not
available) and included the information on private sector housing to provide the
perspective that the Park Service's initial comment suggested.

We do not agree that the private sector comparisons are "non-comparable." To the
contrary, we believe that the private sector information, which includes estimated
costs for constructing "good" and "excellent" quality homes, provides useful and
appropriate comparisons provided that certain factors peculiar to the Federal
construction are taken into account, as our special report does. Moreover, as
previously noted, even if the Park Service's higher estimates for Federal expenses are
accepted, a significant disparity remains between the cost of Park Service housing
and that in the private sector. Thus, the private sector comparison, which the Park
Service suggested, does not support either the proposition that the Park Service is
constructing "modest types of housing" or that the housing costs represent a
"reasonable level of NPS [National Park Service] investment."

22

 


In addition to the private sector comparison, we also introduced information on
housing constructed by the Bureau of Indian Affairs, the Department of Housing and
Urban Development, and the U.S. Army Corps of Engineers. The Park Service's
suggestion that the special report acknowledges that "these examples do not directly
compare" must be placed in context. The report states, "Although these examples
do not directly compare Park Service housing with that of other Federal agencies,
these examples do represent the average costs that other Federal agencies are
incurring in attempts to meet their respective housing needs." We believe the
examples of how some other Federal agencies, which also have to comply with the
requirements for building on isolated Federal lands, have met their housing needs
is information that the Park Service should find relevant in assessing its own costs.
Regarding the Corps of Engineers multi-family housing project, the Park Service
stated that the per unit housing cost of $105,000 for 220 multi-family housing units
"supports the benefits of the economy of scale for the construction of large scale
housing projects." Given these circumstances, we believe that, instead of focusing on
the construction of single-family homes, the Park Service should consider
constructing more apartments and multi-family homes.

Cost of Grand Canyon Homes

  Park Service Response The Park Service stated that based on Denver Service
Center records, its computation of the average price per single-family home at Grand
Canyon National Park is $338,359 as opposed to the per home price of $390,000
presented in our special report. The Park Service also stated:

Even $338,359 is high for a relatively small single family home. We
believe there are three categories of factors which contribute to these
costs being higher than new homes in surrounding communities:
construction on NPS [National Park Service] lands and the mission of
the National Park Service, federal requirements and the circumstances
of the site, and commitment to quality and energy efficiency.

  Office of Inspector General Reply.  During our review and at the exit
conferences, we presented, to project managers from the Denver Service Center and
Grand Canyon and Yosemite Parks, our estimate of $29.2 million for the total cost
of planning, designing, developing infrastructure for, and constructing the 23 single-
family houses at Grand Canyon and the 34 apartments and 19 single-family houses
at Yosemite and our estimates of $390,000 and $584,000 for the average costs of
single-family homes at Grand Canyon and Yosemite, respectively. The project
managers agreed with our estimates.

Regarding Grand Canyon, although the Park Service computed an average per home
cost that is about $52,000 less than our estimated cost of $390,000, it did not provide
support for the costs included in its calculation. Without this additional information,
we did not change our $390,000 estimate. In any event, the Park Service openly
acknowledges that even its estimate of $338,359 is "high for a relatively small single
family home."

23

 


Ongoing Housing Programs at Yosemite National Park

Park Service Response. The Park Service stated:

There is no mention of other ongoing housing programs at Yosemite
[National Park] that also result in housing for employees, yet the report
indicates that the park is doing little to address continuing employee
housing needs beyond the completion of this last construction phase.

  Office of Inspector General Reply. Our report accurately states that the Park
Service has "basically completed currently funded housing construction at the Park
[Yosemite National Park]" and that the Park's housing needs cannot be fully met by
the construction completed as of January 1996. In addition, the park Service's
response indicated that the Park Service had not yet requested funds for additional
planned construction. However, to address the Park Service's concern, we have
modified our report (footnote 3) to reflect that the Park Service "plans to construct
five single family homes at Rancheria Flats and multi-family housing for 108
employees."

Use of "High" Quality Construction Materials and Energy Efficient Products

Park Service Response. The Park Service stated:

Although some of these materials are not commonly used in traditional
track, "private-owned," single family houses, the National Park Service
has experience that supports the use of heavy duty materials for the
highly transient population that typically rents these units. The use of
durable, maintenance-free products minimizes recurring maintenance
costs (labor, materials, etc.). . . . Although the Park Service did not
provide written documentation in the form of life cycle costs to support
the use of these materials, there was documented discussion with park
maintenance staff regarding historical use, and recurring maintenance on
specific issues (e.g. exterior siding, flooring, doors, plumbing, windows,
and electrical wiring). Their knowledge of labor costs and material life
were used to make collective decisions on the use of these items.

... The use of energy efficient products is mandated through the Energy
Conservation Standards for New Federal Residences (10 CFR 435). All
new federal housing . . . must meet or exceed the energy performance
standards established in this regulation. Life cycle cost information
regarding the selection of heating and lighting systems were provided to
the OIG [Office of Inspector General] during preparation of the audit.

  Office of Inspector General Reply. The Park Service did not provide us with
documentation of its meetings with park maintenance staff that demonstrated the
costs or benefits of using "maintenance-free products." Furthermore, we were not
able to otherwise verify the long-term costs to benefits of the use of "durable,
maintenance-free products," because, as stated in the Park Service's response, "The

24

 
Park Service did not provide written documentation in the form of life cycle costs to
support the use of these materials."

Regarding the use of energy efficient products, the Park Service stated that "[a]ll new
federal housing . . . must meet or exceed the energy performance standards"
established in the Code of Federal Regulations (10 CFR 435). However, we noted
that the applicable regulation (10 CFR 435.300) provides flexibility in the selection
of specific products and systems. Specifically, it requires only the establishment of
"an energy consumption goal or goals to be met without specification of the method,
materials, and processes to be employed in achieving that goal, but including
statements of the requirements and evaluation methods to be used." Further, the
Park Service's suggestion that it provided life cycle cost information that supported
the selection of heating and lighting systems is misleading. The only documentation
provided by the Park Service indicated that the Park Service did not follow the
recommendation of its contracted architectural and engineering firm to install a heat
pump system as the most efficient and economical based on a life cycle cost analysis.
Instead, the Park Service installed a more expensive propane system.

Park Service Response. The Park Service stated:

Labeling construction materials as "enhancements" is incorrect and
misleading. Most of the materials are either mandated by legislative
action or are NPS [National Park Service] mission-related.

  Office of Inspector General Reply. During our review, Park Service managers
used the term "enhancements" when characterizing the materials and systems which
they said "added quality to our houses." Therefore, it was not a label chosen by our
office.  Furthermore, while we agree that Federal legislation or Park Service
guidelines establish certain building requirements, it was the Park Service, for the
most part, which decided how it was going to meet those requirements. To that
extent, we believe that it is appropriate to describe as "enhancements" any high
quality materials (as opposed to standard or upgraded materials) that were used to
meet those requirements.

Future Housing Needs

  Park Service Response. The Park Service outlined the actions it had taken or
was taking to meet its future housing needs in a more cost-effective manner. It also
stated, "We would also like the reader to understand that with the cost limitation in
place, the Service was unable to construct quality housing units . . . ."

  Office of Inspector General Reply. Overall, we concluded that the Park
Service's lengthy response was an attempt to justify the high costs it incurred for
housing construction at Grand Canyon and Yosemite National Parks as appropriate
to the Federal Government rather than specifically describing the steps it would take
to reduce or contain housing construction costs. Now that Federal guidance does not

25

 


specify a limit on housing construction costs, we believe that it is imperative that the
Park Service focus its efforts on meeting its housing needs in a cost-effective manner.

Although the Park Service's response indicated that several efforts were under way
to ensure that employee housing needs would be met in a cost-effective manner and
stated that it had made improvements that "extinguish the former practice of custom
designing all housing, custom development of all bid specifications, and the
inefficiencies which can result by lack of a uniform housing needs assessment
process," the Park Service did not indicate how it would control costs or detail which
initiatives it would implement. For example, in discussing standardized designs, the
Park Service stated:

in 1994 we began to develop a catalog of Standardized Housing
Designs. This catalog presents prototypical plans recommended for use
in constructing new housing for the National Park Service. . . .

This selection of prototypical (standardized) housing plans can be
flexibly adapted to unique programmatic, cultural, climatic and physical
site constraints of park locations.  They will accommodate pre-
manufactured or site-built construction technologies.

However, the Park Service did not indicate when or where these designs would be
used. We believe that the use of standardized designs is appropriate and should
result in a reduction of planning and design costs, which, based on the $5.8 million
for planning and designing 76 housing units at Yosemite and Grand Canyon Parks,
averaged $76,300 per unit. Therefore, given the opportunities for reducing costs
through the use of standardized plans, the economies of scale in constructing multi-
family units, and the high costs of building single-family units on Park Service lands,
we request that the Park Service reconsider its response to the recommendation
focusing on specific actions that it intends to take to ensure the cost effectiveness of
its housing program (see Appendix 5).

26

 
APPENDIX 1

STATUS OF HOUSING CONSTRUCTION AND COSTS
      AS OF JANUARY 1996

Construction    Contract    Denver Service
Contract     Amounts    Center Costs
Award Amounts*   Expended     Expended* *

Grand Canyon National Park:

38 Home Sites         $2,200,000
23 Houses (70% Completed)     3,800,000
36 Houses (5% Completed)     8,000,000
Totals          14,000,000

Yosemite National Park:

20 Apartments
8 Apartments
6 Apartments and
11 Houses
8 Houses
Totals

Grand Totals

3,800,000
1,800,000

5,700,000
4,100,000
15,400,000

$29,400,000

$2,200,000
2,800,000
300,000
5,300,000

3,800,000
1,800,000

5,700,000
2,400,000
13,700,000

$19,000,000

$3,900,000

4,800,000


$8,700,000

*These costs include the contractual amounts paid to companies for construction, as well as the
costs for infrastructure,
such as preparing sites, building streets, and installing utility lines and sewer and water pipes.

**Denver Service Center amounts include expenditures associated with special studies, surveys,
preliminary design and
construction documents, and construction and post-construction supervision. Since housing
construction has not been
completed, the amounts cited are not final costs and can be expected to increase.

27

 
APPENDIX 2

HOUSING ENHANCEMENTS PER NATIONAL PARK SERVICE

FOR DURABILITY
- Cast iron sewer pipes
- Solid-core doors
- Commercial grade floor coverings
- High quality windows
- Durable gutters
- Heavy-duty plumbing fittings
- Additional electrical outlets and circuits
- Stucco finish

FOR ENERGY EFFICIENCY
- Extra insulation
- Extra floor mass for solar storage
- Extra windows for ventilation
- Four alternate means of cooling
- Solar water heater
- Energy efficient appliances
- Commercial grade fluorescent fixtures
- Linear building form for solar gain

FOR FIRE RESISTANCE
- In-house sprinklers*
- Smoke detectors with automatic dialer"
- Concrete tile roofs

FOR HANDICAP ACCESSIBILITY
- Extra large baths*
- Extra large doors and corridors*

FOR ENHANCED ENVIRONMENT
- Have extensive outdoor living areas
- Avoid low-end housing "boxiness"
- Built within existing trees

OTHER ENHANCEMENTS
- Hillside location
- Enhanced planting plan
- Noise control for apartments



*Enhancements identified in the Park Service's "Housing Design and Rehabilitation Guideline"
(NPS
76) and/or the Americans With Disabilities Act.

28

 


APPENDIX 3

RELATIVE COSTS OF CONSTRUCTING AND
   AVERAGE SALES PRICES OF
1,800 SQUARE-FOOT SINGLE-FAMILY HOMES

Grand Canyon       Yosemite

29

 
Department

United States
     NATIONAL PARK SERVICE
           P.O. Box 37127
        Washington, D.C.  20013-7127

        APPENDIX 4
        Page 1 of 34
of the Interior

IN REPLY REFER TO:
D3415(2613)
October 18, 1996
Memorandum
To:     Acting Assistant Inspector General for Audits
Through:   Management Officer
From:

Subject:   Comments on Draft Special Report on the Cost of Construction
     at Grand Canyon and Yosemite National Parks, National Park Service
     (Assignment No. W-IN-NPS-001-96)

of Employee Housing

The September 18, 1996 memorandum transmitting the draft report states that this review of
costs associated with
constructing employee housing at Grand Canyon and Yosemite National Parks was requested by
a member of
Congress who asked OIG to evaluate the "excessive costs" of employee housing in the two parks
and the
construction of employee-only recreation on public lands.

The OIG draft special report recommends that the Director, National Park Service, review the
strategy that the
parks. particularly Grand Canyon and Yosemite National Parks, have for meeting their employee
housing needs to
ensure that housing is designed and constructed in a cost-effective manner.

We agree with the recommendation and, by the following comments, evidence the
implementation of it.

Our review has produced the clarification that both Grand Canyon and Yosemite National Parks
have established
(Attachments 1 and 2) their employee housing needs at a level consonant with the operational
needs of each
respective park. Our review considered the analysis (Attachment 3) of construction planning,
design and supervision
provided by the Denver Semite Center and, additionally, recognizes what the Service's Housing
Program Manager
has done over the last several years to make further and continuing improvements to the Housing
Program.
(Attachment 4).

Yosemite National Park

The comments from Yosemite National Park, Attachment 1, clearly recite the variety of housing
programs (e.g.
apartment construction, trailer replacement, house construction) necessary to the accomplishment
of the Park's
mission, in accordance with Guideline NPS-36 and the statutory provisions codified at 5 U.S.C.
5911. The general
comments and background information contained on pages 1 through 3 of Attachment 1 provide
assurance that

we believe, demonstrates significant managerial restraint and, to the Park's credit, an admirable
degree of creativity
to keep so few permanent employees on Park lands in government housing at such a remote
environmental location.



It is important to note that, like other ordinary people, the Park's employees expect standard,
comfortable homes
with normal amenities and facilities such as are used in day-to-day living. We find this
expectation on the part of

30

 
2

APPENDIX 4
Page 2 of 34

our employees to be entirely reasonable and necessarily compatible with the Service's mission.
We see no inference
contained within the OIG draft special report suggesting that we deny our employees such
reasonable facilities and
force them to live in substandard housing. Rather, the OIG draft special report recites the various
reports which
described " . . the housing shortages and unsafe and substandard employee housing...in the
Valley and in the nearby
communities. " (underlining added for emphasis.)

Because of the Park's remote location on the Sierra Nevada mountain range, and the Park's
widely dispersed work
locations, the Park has assiduously monitored its housing needs over the years. Attachment 1
documents
on pages 3 through 4 the Park's housing construction history from 1966 to the present. This
history
shows that the Park has taken 30 years to bring it to the present status of accomplishing its
mission with only half
its permanent staff being required to live in the Park. We must also note that the full, operational
staff size of the
Park, including additional seasonal employees during the peak visitor season, is 770 employees.
In light of this,
we feel that the Park ought to be commended for restricting it's housing needs as it has done.

The Park is currently working on a parkwide housing needs assessment as a result of the
Service's improvements
to the housing program over the last 2 years. The assessment will be completed during the Spring
of 1997. The
Park is reviewing its Housing Management Plan for further refinement that will ensure the most
effective
management of its inventory of employee housing. These steps further illustrate that Park
management continues
to ensure that employee housing is efficiently and economically managed. Within the next few
months, the Park
will release a draft Housing Environmental Impact Statement that will help to chart the course
for any further
develop of necessary housing. The responsible official is the Yosemite National Park
Superintendent.

Grand Canyon National Park

The comments from Grand Canyon National Park, Attachment 2, recite some of the variety of
alternatives its
housing program contains (e.g. multi-family housing, relocation of some jobs outside the Park,
construction of
housing outside the park) above and beyond single-family housing within the Park necessary to
the accomplishment
of the Park's mission, in accordance with Guideline NPS-36 and the statutory provisions codified
at 5 U.S.C. 5911.

The Park's comments contain cost data obtained from the Denver Service Center which shows
that the total cost
for the 23 homes was $7,782,262, which averages $338,359 per unit. The Park then discusses
(Attachment 2,

31

 
APPENDIX 4
Page 3 of 34

3



   

The comments from the Denver Service Center (Attachment 3) provides further corroborating
details concerning
the costs of housing construction at both Parks, and also references the major steps taken to
streamline the planning
and design process, discussed more fully in Attachment 4 prepared by the NPS Housing Program
Manager.

Supported by the positive feedback received from GAO staff on our progressive improvements
to the Housing
Program as a result of GAO recommendations, we conclude that our approach, as discussed in
these comments,
also implements the recommendation of this OIG special draft report.

We appreciate the opportunity to comment.

Attachments

32

 
Memorandum

To:   Director, National Park Service

GENERAL COMMENTS:
This particular housing construction program at Yosemite has been ongoing for the past
eight years. Many of the complications encountered during this construction and related
decisions were not addressed in the report. It is imperative that all aspects of these
projects be considered before judgments are made concerning planning and construction
costs and the resulting end product.

There is no mention of other ongoing housing programs at Yosemite that also result in
housing for employees, yet the report indicates that the park is doing little to address
continuing employee housing needs beyond the completion of this last construction phase.
The Phase I apartment construction and the Trailer Replacement Program for example,
which have realized new homes in place of old amortized trailers was not mentioned as
part of the overall plan to improve housing in Yosemite.

BACKGROUND:
Title 5, U.S.C. 5911 states: "The head of an agency may provide, directly or by contract,
an employee stationed in the United States with quarters and facilities, when conditions

1

33

 
 
APPENDIX 4
Page 6 of 34

perform their professional responsibilities well. Like other ordinary people, Yosemite
employees, living in government housing, expect standard, comfortable homes, regular
amenities and facilities used in day-to-day living.

The Rancheria area of El Portal, where construction has occurred, is comprised of 60
acres, varies in grade from 16-33 percent, is extremely rocky and has potential for mud
flows and slides. For these reasons, the area required extensive planning and design.

In 1991, the Draft Yosemite Valley Housing Plan proposed using the Forests area for
housing and administrative functions; Wawona was also evaluated. However, because of
great public concern over development in those areas, both alternatives were rejected. El
Portal remains the only viable option for housing and administrative functions. Thus, site
development requires extraordinary site selection and preparation to effectively utilize a
limited land base with steep, rocky conditions.

The first NPS housing constructed in the Rancheria area was in the early 1960's, (part of
the Mission '66 program) twenty-six 3-bedroom, single family homes were built at that
time.

In 1988, Phase I of the current housing construction program began with the construction
of 24 apartments. Phase 11 included construction of 34 apartments. These apartments
were built to replace Yosemite Valley tent cabins that were destroyed by flooding and
wind fall. In keeping with the GMP, this replacement housing was built in El Portal.

Phase III included plans for construction of 26 single family homes. Nineteen have been
built to date.



El Portal has 750 residents; a post office, one gas station and a very small grocery store
(convenience store type - bread, milk, fruits and vegetables). The nearest community with
a population base large enough to support all amenities is approximately 1-1/2 hours
away. No commercial laundry or storage facilities, theater, or other commercial amenities
exist at El Portal. Mariposa County provides an elementary school in the El Portal
community. The school facility includes a ballfield, but it is off limits during school

3

35

 




APPENDIX 4
Page 7 of 34

DEFINING THE ROUTINE GOVERNMENT CONTRACTING COSTS AND THE
EXTRAORDINARY CONSTRUCTION COSTS ON THE EL PORTAL SITE WHICH
ARE ABOVE AND BEYOND THE COSTS PRESENTED BY THE OIG FOR
TYPICAL PRIVATE SECTOR CONSTRUCTION:
The OIG Report states its estimate for constructing an 1,800 square-foot single family
house in the private sector, including design, planning, infrastructure, supervision and
profit would range from $102,000 to $250,000 near Yosemite National Park. These
private sector estimates apparently do not include site preparation.

We do not agree that most private developers incur all costs associated with infrastructure.
It is true that a developer will construct secondary delivery systems and their tie-into the
primary system. These costs will be passed on to a home buyer. However, primary
distribution systems for water and sewer are typically community costs, which are passed
on to the home owner through taxes and utility bills, not by the private developer. The
El Portal project includes elements that would be considered in both categories, primary
and secondary distribution systems.

In keeping with this comparison, the following costs should not be included in the
"normal per-unit" costs of constructing houses at the El Portal site (Yosemite).

Unusual Site Conditions -$1.358,500:
The El Portal (Yosemite) site is extremely rocky with many rocks and boulders up to two
cubic yards in size - during construction, many required blasting and rock splitting efforts.
Many boulders had to be hauled out and fill hauled in adding to the expense. Due to the
slope of the mountain, many retaining walls had to be constructed, some as high as eight
feet.

The services of a geophysicist were required to determine the stability of the hillside and
it was determined that mudslides/flows were possible. As a result, three large berms
above the housing area had to be constructed. Gullies and creeks required culverts and
in one instance, a fairly large bridge had to be added.

El Portal is extremely hot during the four months of summer with temperatures
consistently over 100 degrees. Both the planning and construction phases of this project
worked to retain native trees where possible to preserve shade.

Six different basic floor plans were designed to accommodate the slope (down-slope, up-
slope, across-slope), siting and different numbers of bedrooms. Then configurations were
modified to fit specific terrain.

The National Environmental Policy Act and Section 106 of the National Historic
Preservation Act apply upon federal lands but not on private lands. Environmental

4

36

 
APPENDIX 4
Page 8 of 34

assessments and archeological compliance and surveys are required. We do not work
under California statutes, which might place some requirements on private developers, but
we are not aware of that being the case.

Prehistoric and historic Native American occupation and continuing Native American
interest has complicated the planning and decision making process in El Portal. There are
a number of burials, archeological sites and gathering areas (for certain plant materials
used for basketry, etc.), that must be dealt with in a sensitive manner. There are certain
sites that the Native Americans request we avoid/protect thus complicating the planning
and construction process. Both Native American and archeological monitors are on site
at all times during construction.

The Valley elderberry bush,  habitat of the threatened invertebrate, the Valley elderberry
beetle, was found in several places in the project area and had to be avoided during
planning and construction. Also, Congdon's wooley sunflower, State listed rare species;
Tompkin's Sedge, State listed rare species and Congdon's monkey flower, sensitive
species - limited occurrence in the park, only known occurrence in Rancheria,  had to be
avoided during planning and construction.

Americans With Disabilities Act Requirements -$49.248:
The National Park Service is mandated to provide a portion of housing for disabled
employees. The subject houses were built to meet the minimum requirements of the
Uniform Federal Accessibility Standards and with the Americans with Disabilities Act.

Lamer Capacity Water Tank and Fire Suppression Systems -$504,393:
The water tank, to provide culinary water as well as fire protection to the El Portal
Community, was increased in size by one-third as a part of this construction.

Houses were built to include inhouse sprinkler systems and autodialer smoke detectors
and fire retardant materials. Requirements for fire protection and suppression for
employee housing were met.

A major wildland fire burned 16,000 acres in 1990. This fire came very close (within a
few hundred feet) to some of the Mission 66 houses in El Portal. Residents were
evacuated on three occasions during the fire. Phase II planning was occurring at that time
and fire specialists became involved in the planning process along with the regular
planning specialists. Many changes and improvements made in Phase II were illustrated
as necessary as a result of the 1990 fires. Incidentally, 13 homes in Foresta not far from
El Portal were lost in the fire. Due to El Portal's remoteness and size, structural fire
suppression is accomplished by a volunteer fire department.

Propane Distribution System -$62,985:
An entirely new propane distribution system with "tank farm" was designed and installed.
Private sector construction does not routinely include these costs as part of the house
construction cost. They would have expected each occupant to contact an LPG vendor
and make arrangements for the purchase or lease of a propane tank.

5

37

 
APPENDIX 4
Page 9 of 34

Remote Location -$337.554:
El Portal is considered a remote and isolated location. Labor and supplies come from
long distances. The nearest metropolitan city is Merced (population 73,000, 68 miles
distance), thus construction costs are increased proportionately for these reasons.

Davis-Bacon Wage Rates -$1.226.621:
In this geographic area, labor costs for certain disciplines required by Davis Bacon Wage
Rates are twice the prevailing wage rates, again driving up construction costs.

Recreational Facilities and Ope n Space -$622.991:
The NPS thought it was important for the well-being of the employees and other residents
of El Portal to improve the existing ballfield and to add a basketball court- a small play
field and a tot lot. These were constructed in Phase III in addition to improving the
existing ballfield to meet little league and adult softball specifications. Without these
recreational facilities included in this housing construction program, the available housing
in the Rancheria area was to quadruple without adding any additional amenities for this
isolated population of employees and partners.

Total Extraordin arv Costs -$ 4,489,662:
Total of extraordinary and government contracting costs currently included in the El
Portal per house figures presented in the OIG report - $4,489,662. We believe these
amounts should not be included in the comparison of costs for constructing housing at El
Portal with the costs of routine private sector housing construction.

PLANNING AND DESIGN CHANGES AFTER COMPLETION OF PHASE 1:
The OIG report does not recognize or include information on Phase I construction of 24
apartments which were completed eight years ago. It is important that the Audit report
reflect information concerning the Phase I construction program since many decisions for
Phases II and III were made because of the lessons learned in Phase I.

Cedar siding was used in Phase I and now needs major maintenance due to the extreme
heat in the area and its effects on the siding. It has been eight years since these units were
constructed and we are presently re-staining the exteriors at a cost of $18,000 per
building. In six to eight years, the siding will need major maintenance again and
thereafter. By comparison, the stucco-sided Mission 66 houses did not need to be
refinished for 25 years. For this reason, it was decided stucco siding, which withstands
the heat better and is easier to maintain would be used in the next phases. Stucco also
provides better fire protection than many other options. Fireproof materials were also
used under the eaves and decks of later phases. It should be noted that in the Central
Valley, within 100 miles of El Portal, it is not uncommon for stucco siding to be used in
housing tracts.

It was learned from experience that composition shingle roofing does not holdup as long
as predicted due to the high temperature fluctuations in the El Portal location.
Replacement is required every 10-15 years at a cost of $11,000 per roof.  Concrete
shake roofs were used in Phases II and III and will save $33,000+ per house over a period

6

38

 
APPENDIX 4
Page 10 of 34

of 50 years. These shakes also afford better fire protection.



Covered parking was not constructed in Phase I and again with the extreme heat of El
Portal, this was considered a serious problem by the occupants. In Phases II and III,
covered parking was constructed.

Storage space was minimal/inadequate in the Phase I apartments. In Phase II, additional
storage space was built and in Phase III, 2-car garages were constructed. Employees
generally travel about two hours to be able to do grocery shopping as well as other
shopping and generally stock up for a month or more so it is critical to have adequate
storage.

Construction in Phases II and III included handicap ramps, wider bathroom doors, and all
living areas on one floor where possible. Units that were not fully accessible were made
handicapped "friendly" whenever possible.

Phase I apartments had serious noise problems, water in the lines could be heard as well
as conversations from one apartment to another. Phase II included extra sound proofing
including a layer of 1-1/2 inch concrete between floors with a rubber underpayment
between flooring materials along with rubber spacers for noise isolation of supply and
waste plumbing pipes.

The electric heating systems (heat pumps) in Phase I apartments were inefficient and
costly to operate. In Phases II and III propane heating systems were installed.

Phase I landscaping included small and slow maturing trees, which provide little shade.
Wildflowers which were planted, have since turned to weeds, increasing the fire hazard.
In Phases II and HI, early maturing trees, lawns and natural landscapes were added for
shade, fire protection and for easy and cost effective maintenance.

In conclusion, we feel it is essential to consider the lessons learned on the initial phase
of housing construction. Decisions made in the later phase were as a result of this
experience.

The sizes of the apartments in Phase II and single family homes in Phase III are not large
or spacious. The apartments are 1,039 square feet for 2-bedroom; 800 square feet for a
1-bedroom. Most of the newly constructed homes are 3-bedroom with an average size
of 1,200 square feet. The living room is 16x13 (211 square feet) and the master bedroom
is 10x13 (134 square feet).

SPECIFIC COMMENTS DIRECTED AT SPECIFIC TEXT:
The OIG Report states: "During 1995, about 100 permanent employees were transferred
from the Valley to the Park's administrative site in El Portal, California."

This statement needs clarification - only these employees' offices were moved. This
move did not result in any employees changing residences. In fact, only two of the 100

7

39

 
APPENDIX 4
Page 11 of 34



employees lived in Yosemite Valley. The others lived in El Portal or surrounding
communities.

The OIG report states: "We found that the decision to construct 19 single-family homes
and 34 apartment units did not fully address the substandard and overcrowded housing
conditions that existed in the Park".

As documented in the Yosemite Valley Housing Plan, Draft Supplement to the Final
Impact Statement for the 1980 General Management Plan and the Addendum to the
Yosemite Valley Housing Plan Draft Supplement to the Final Impact Statement for the
1980 General Management Plan, the substandard and overcrowded housing conditions in
the park cannot be addressed by adding only 19 single family homes and 34 apartment
units. The five phases of construction only completed the Rancheria area housing
construction program. Future construction, as outlined in the planning documents, would
continue our efforts to improve the housing conditions.

The OIG report states: "Annual budget requests for the Park Service from 1991 through
1993 indicated that, in addition to the single-family homes and apartments that were being
built, two 40-room dormitories would be constructed in El Portal to provide housing
primarily for seasonal employees, most of whom were living in substandard housing in
Yosemite Valley.  However the two 40-room dormitories were not built because,
according to Park Service officials, the Park Service decided to house seasonal employees
in studio apartments rather than dormitories. As of January 1996, the Park Service had
not requested funding to construct these studio apartments."

This statement is misleading. Budget requests through FY93 included the request to build
dormitories based on the employee numbers and housing types considered appropriate
during the mid-1980's. During 1991, a formal housing needs study was initiated which
assessed current and projected employee numbers and needs.

Since 1993, the park has converted 84 seasonal/temporary positions to permanent status
due to an OPM ruling on service-wide personnel practices. In addition, due to increased
visitor use and expanded shoulder seasons, the park is utilizing longer "term" (up to 4
years) and "temporary" (up to one year) positions rather than the short 3 to 4 month
seasonal college student of 5 to 10 years ago. The term/temporary staff is comprised of
older, career employees with more personal belongings, working longer seasons and
expecting to live in private, non-shared housing.

The OIG Report states: "In addition, all 34 apartments that were built were rented by
permanent, not seasonal, employees because, according to Park Service officials, of the
"quality" and "built-in" features of the units and because housing managers generally
preferred the stable incomes associated with renting to permanent employees. Park Service
officials also said that the rent for the new apartments was too expensive for seasonal
employees. As a result, after construction of the housing units in El Portal, we estimated,
based on Park Service records, that at least 70 seasonal employees would still live under
the same conditions that prompted the funding for the new employee housing."

8

40

 


APPENDIX 4
Page 12 of 34

The apartments were constructed to replace seasonal Camp 6 tent housing that was earlier
eliminated due to unsafe conditions, including a fatality, from hazardous trees in the area.
In the interim, seasonal employees moved into permanent employee housing as it became
available. Upon completion of the apartments, seasonals remained in the previously
permanent employee housing and the new apartments were made available to permanent
employees. As houses in Rancheria are being completed, permanent employees are
moving from apartments, with seasonals moving in behind them.

At no time have managers restricted seasonal employees from housing based on stability
of income. Seasonal employees are valued and respected members of the Park Service
family, with housing needs that are critical. Management of the park practices the
philosophy that it is important to the mission of the parkas well as the well being of the
seasonal employees to house them inside the park in government housing. This is
currently being done. Living conditions of seasonal employees continues to improve as
new housing is built and existing housing is rehabilitated/improved. As permanent
employees move into the new, single-family housing, seasonals are moving into the
apartments. Fifteen seasonal employee trailer units have been removed during the past
few years due to deterioration.

In addition, rental rates for all employees are collected through payroll deduction and
permanent and seasonal employees are on the same salary structure with the same
capability to pay rent.

SUMMARY:
Direct comparisons of federal and private home construction are difficult because of the
costs specific to federal projects and the nature of the El Portal project: items such as
compliance and public processes, community planning and infrastructure, Davis-Bacon
wage rates, remoteness, unusual site conditions, and other elements of the project in
question add to the Government's construction costs.

Increased operational funding is increasingly difficult to obtain therefore consideration and
importance must be placed on building for durability, longevity and efficiency.

Yes, the NPS made deliberate decisions to emphasize durability, energy efficiency, fire
resistance and handicap accessibility.  We emphasized durability to reduce annual
maintenance costs which could be a drain on base funding levels, which in turn have not
kept pace with our increasing expenses of the past two decades. We emphasized energy
efficiency because such considerations are required of the NPS. We emphasized fire
resistance because of the specific site conditions and local fire history and incidence. We
emphasized handicap accessibility because it is required by law.  But, we believe we
were justified in our planning, design and construction of these housing units.

We believe the apartments, homes and recreational facilities in question to be of
reasonable design, size and quality, and are comparable with average housing in nearby
communities.

9

41

 
OIG REPORT RECOMMENDATION:

APPENDIX 4
Page 13 of 34

The NPS has several efforts underway to assure that employee housing needs are met and
to assure that housing is designed and constructed in a cost-effective manner.

Yosemite is currently working on a parkwide housing needs assessment that will identify
the park's requirements for staff occupancy on-site to protect the park's resources as well
as to protect and assist park visitors. At the same time, employees' personal housing
needs are being considered to assure, with the lengthy commute from neighboring
communities to the park, that adequate human resources are available. This process will
be completed during the Spring of 1997.

There are continuing efforts being made to obtain the legislative authority to be able to
construct government housing on private neighboring lands; to allow employees to
purchase government-owned houses on government land; and other innovative ideas and
concepts to improve the government-provided housing program.

There is a continuing effort to upgrade and improve existing government housing at
Yosemite. Current efforts involve rehabilitation projects on 97 housing units that include
replacing roofing, decks, refinishing exterior walls, installing thermal windows and energy
efficient heating systems, adding insulation, upgrading plumbing and electrical systems,
and adding required fire sprinkler systems.

The current Housing Management Plan for the park is also being re-done to identify the
specific housing needs for each district of the park and generally identify how the park
will most effectively manage the stock of housing for employees.

The park will be releasing within the next few months a draft Housing EIS that will help
to chart the course for further housing development within Yosemite. The NPS is
standardizing several housing construction plans for the Service to eliminate some of the



10

42

 
APPENDIX A

APPENDIX 4
Page 14 of 34

Yosemite takes exception to the report in the comparisons to Merced and Mariposa
housing, costs for "unusual site conditions", open space and recreation facilities and
enhancements.

Merced and Mariposa Housing Comparisons:
Within the El Portal housing area, efforts were made to maximize the number of units
within the area by fitting houses to the land with stepped foundations and zero lot line
design and elimination of individual propane tanks with centralized propane distribution.
All techniques m aximized utilization of the topography and buildable areas.

By contrast, developable rural land in Mariposa County is zoned for 2.5 and 5 acre
parcels, with construction limited to one primary house and one guest or rental house on
the parcel. Within those parcels, flat terrain is usually available for development with
flexibility for easy access and propane service. If flat terrain is not available and services
are not proximate, development typically does not occur.

Increased required fire flow water demand from the additional houses and the newly
constructed warehouse and office complex located one mile from the new houses, in El
Portal, necessitated improvements to the existing water system. The El Portal housing
concentration placed added responsibility on the NPS to provide fire protection
capabilities to prevent catastrophic losses such as occurred in the nearby Foresta area,
which experienced the loss of 13 private and NPS houses in a 1991 Wildfire.

Merced and Mariposa in-town sites have municipal utility systems that can provide fire
flow and utility service for extension costs only. No system upgrades are required.

Rural Mariposa sites do not have fire flow mandates and the dispersion of structures on
2.5 to 5 acre sites reduce the catastrophic fire risk of dense housing.

Housing cost comparisons to Merced are irrelevant to the El Portal situation. Unlike El
Portal, which is in the Sierra Mountain range, Merced is in the San Joaquin Valley, with
extremely flat terrain and easily excavated soils.  House construction is far less
complicated than on the El Portal site and logistics, including mobilization and materials
deliveries are simpler. Finally, the comparison is irrelevant because the commute to
Yosemite is impractical, with a one-way travel time to Yosemite Valley of approximately
2 hours.

  
, 

Mariposa comparisons are more relevant in that the one-way commute time to Yosemite
Valley is approximately 1 hour. However, Mariposa sites typically do not have the
granite subsurface character, steep slopes and tight sites of El Portal.

11

43

 
APPENDIX 4
Page 15 of 34

Unusual Site Condition Costs:
Typical houses in Mariposa,  Merced and probably the referenced construction by Bureau
of Indian Affairs, U.S. Department of the Interior, the U.S. Department of Housing and
Urban Development and the U.S. Army Corps of Engineers are slab on grade.

By contrast, El Portal sites, in order to utilize steep sites and maximize housing density,
needed stepped foundations. A past NPS effort to use a slab on grade foundation in El
Portal resulted in extensive site leveling, construction of a $56,000 retaining wall and
subsequent drainage problems and inefficient land usage. Repeating slab on grade
construction would have greatly reduced the number of housing sites within the
administrative site.

The net difference between the typical slab on grade foundation and El Portal stepped
foundations was approximately $69,000 per house, not including the extraordinary site
leveling costs.  Considering past El Portal slab on grade experience, the net cost
difference is negligible, but the loss of housing density is significant.

The steep slopes and evidence of past landslides in El Portal necessitated construction of
berms to protect the existing and new housing sites from potential mudflow damage. Cost
of the berms was averaged at $2,500 per new house, even though the berms protect the
entire housing area.

By comparison, Mariposa and Merced developers do not build in areas subject to
landslides.  In this case, the entire El Portal residential site was determined by
geotechincal engineers to be at risk, with no option but to construct berms.

Site Utilities:
Mariposa and Merced builders will typically pay for extension of utilities, but not for
major upgrades to the basic system.  In-town fire protection is adequate without
development of improvements to the municipal system. Rural Mariposa houses will
typically have no fire flow protection provided by the builder.

By contrast, the El Portal municipal system was incapable of providing the additional
demand without significant improvements. Based on past fire losses in the area, the
improvements were considered prudent and necessary, to a cost of $26,262 per new house,
but actually also providing protection for existing houses and NPS maintenance facilities.

Open Space and Recreation Facilities:
Mariposa builders do not contribute any costs to open space or recreation facility
development. The Mariposa Recreation District manages recreation lands and no burden
is placed on builders to expand or manage recreation lands or set aside any property for
open space.

By contrast, the El Portal community had no safe facilities for recreation except for tennis
courts. The closest sanctioned ballfields and soccer fields were 40 miles away. Providing
facilities is within NPS and standard community planning policy.

12

44

 


APPENDIX 4
Page 16 of 34

The recreation facilities resulted in an increase of $32,789 per new house, although the
benefits will serve all residents and the public.

Enhancements:
As acknowledged in the Draft Report, the General Accounting Office "recommended that
Park Service officials...develop a plan to close the differences between rental income and
maintenance casts." The NPS recognized that as owners in perpetuity, it is cost effective
to provide durable, safe and energy efficient housing, with low maintenance requirements.
In contrast, builders typically build for low initial capital costs, not life-cycle costs.

For example, past NPS experience in El Portal with asphalt shingles, the standard for
Mariposa, has shown that 20 year shingles only last 10-15 years in the heat and
temperature changes typical in El Portal. For approximately twice the cost of asphalt
shingles, the concrete tile roofs will last 4-5 times longer and provide improved fire
resistance.

The roofing material cost difference is approximately $6,000 per house according to R.S.
Means Building Construction Cost Data and the El Portal contractor's Schedule of Values.
The replacement cost of asphalt shingles after 10-15 years is approximately $11,000,
including materials and labor.

Similarly, wood siding lasts less than 10 years. At approximately twice the cost, the
stucco finish is projected to have triple the life of wood, with improved fire resistance.

The stucco cost difference is approximately $8,000 per house according to R.S. Means
Building Construction Cost Data and the El Portal contractor's Schedule of Values. The
replacement cost of wood siding after 10 years is approximately $7,000, including
materials and labor.

Finally, landscaping, which is not included in basic Mariposa and Merced home costs, is
critical for fire protection and erosion control. Recent wildfires in Mariposa reinforced
the importance of fire resistive landscaping. Houses with native grasses and no fire
breaks burned, while adjacent landscaped properties survived. Considerable effort and
detail was made in the El Portal landscape planning to build on past fire  experience in the
area. Also, being a steeply sloped area, erosion control and runoff management was
critical in the landscaping.

Landscaping costs were approximately $10,000 per house.

Conclusion:
Conditions between El Portal and Mariposa and Merced differ significantly in site
conditions, land-use requirements, infrastructure responsibilities, recreation costs,
remoteness, Archeological constraints, making comparison of costs for housing extremely
difficult and generally unanchored in similarity.

Modifying Table 5 in the Draft Special Report (Assignment No. W-IN-NPS-001-96) to

13

45

 
o

APPENDIX 4
Page 17 of 34

identify additional costs associated with El Portal housing over private Mariposa housing,
results in an adjusted cost of $236,298, not including landscaping and durability and
energy efficiency improvements. [See DSC response for "Adjusted" details]

Including the adjusted specialized Federal Costs to the report's "estimated ...private sector
construction costs, including design,  planning, infrastructure, supervision, and profit" the
range would be from $338,298 to $486,298.

The report identified Yosemite cost range from $425,000 to $681,000, which would carry
a difference of $86,702 to $194,702. That difference can be attributed to the list of
enhancements not accounted for in the above table, but included in the design for
durability, energy efficiency and responsible community development.



14

46

 
Photos 1A and lB

  



APPENDIX 4
Page 18 of 34

Typical Mariposa construction featuring a flat site, slab on grade foundation, hardboard
siding, asphalt shingles, no Landscaping, energy inefficient cooling with roof-top
maintenance. House cost is $135,000, not including land, access, water and septic.



16

47

 
Photos 2A and 2B





APPENDIX 4
Page 19 of 34

48

 
  
. 

                              APPENDIX 4
                            Page 20 of 34
Photos3Aand3B

Mariposa construction featuring a sloped site, stepped foundation, plywood T1-11 siding,
asphalt shingles, inefficient cooling system, no landscaping, individual propane service.
House cost is $135,000, not including land, access, water and septic. Five acre site allowed

20

49

 
  



APPENDIX 4
Page 21 of 34

Photos 4A and 4B

El Portal construction featuring stepped foundation, stucco finish, tile roof, zero lot line
setback, landscaping (not completed), attached garage and maintainable HVAC. Note fire
resistive construction.



22

50

 


APPENDIX 4
Page 22 of 34

Photos 5A and 5B

24

51

 
52

 
APPENDIX 4
Page 24 of 34

Resource-sensitivity costs include those attributable to the very
tight building envelopes provided to the contractor (absolute
minimum tree removal on a heavily wooded site) , designs which are
compatible with the existing architectural character of the area,
and an archeological survey of the site prior to construction.
These requirements at Grand Canyon National Park apply to non-NPS
builders as well as to the NPS.  In the private sector, there is
seldom a building envelope requirement and the site is cleared
and flattened prior to construction.  This gives the contractor
freedom of movement across the entire site.  Strictly confining
the contractor's activity to protect the park's resources incurs
a cost which is difficult to quantify.  Constructing designs
which are compatible with existing architectural character means
wood siding, timbers, and keeping the massing at an intimate
scale.  Compared to a mass-produced box house, this is more
expensive.  Conducting an archeological survey of the site
ensures the resources of the park are not destroyed by
construction.  This added about $40,000 to the cost of the 23
homes discussed in the report.

53

 
   I
. 

APPENDIX 4
Page 25 of 34

Unusual Site Conditions at Grand Canyon means excavation in rock.
Virtually 100% of excavation (for utility trenches, foundations,
and even some roadwork) was in limestone.  This type of
excavation requires special, expensive equipment.
was used by the Grand Canyon contractor and has proven to be the
most effective way to trench in this area.  These trenchers cost
about $1,000,000 to buy and rent for at least $300 per hour.

The federal procurement process is also partly to blame.  The
contract documents for this project include 108 sheets of
drawings and 2 volumes of specifications.  There is a cost
associated with understanding this complexity.  The contractor is
required to submit for advanced approval hundreds of items he
proposes to use in the project.  He is required to submit weekly
payroll reports to the government. There are numerous other
reporting requirements.  None of these requirements apply to
private sector developers.  Although we have no quantification of
these costs, there can be no doubt that they exist.

54

 
APPENDIX 4
Page 26 of 34

55

 


APPENDIX 4
Page 27 of 34

United States Department of the Interior

NATIONAL PARK SERVICE
DENVER SERVICE CENTER
12795 W. ALAMEDA PARKWAY

                      P.0. BOX 25287
IN REPLY REFER TO             DENVER, COLORADO 80225-0287

F4217 (DSC-D)

Memorandum

To:      Director, National Park Service

Reference:   Yosemite and Grand Canyon, Employee Housing, YOSE 504 and GRCA 143

Subject:    Review Comments, Draft Special Report, Cost of Construction of
      Employee Housing at Grand Canyon and Yosemite
      National Park Service, September 1996

We have reviewed the subject draft report and provide the following response. We do not concur
with a
majority of the findings. Specifically, we believe there are extraordinary cost issues related to
construction in national parks that are still not acknowledged by the Inspector General.

1. Planning, design and construction costs for the private sector are not comparable to the
National Park
Service. The specific comparative locations do not reflect conditions in either park. The report
compares
housing at Yosemite National Park to privately constructed housing located in Merced,
California, and
housing at Grand Canyon National Park to privately constructed housing in Flagstaff, Arizona. In
both
cases, the construction of the park housing was compared to a traditional "urban-style" housing
development where a private developer can build on well-graded lots, with little vegetation and
within
close proximity to established utility systems.

Planning, design and construction costs for other federal agencies are not comparable to the
National
Park Service. The per unit housing cost of $105,000 for Corps of Engineers, 220 multi-family
housing
units supports the benefits in the economy of scale for the construction of large scale housing
projects.

2. We do not concur with the costs identified as "Specialized Federal Expenses" listed in Table 5.
Specifically, the increased costs per house for Yosemite NP should be $236,298 rather than
$94,493.

Revised Table 5 Specialized Federal Expenses
    For Yosemite National Park

                   Original        Adjusted
Description              Table 5 Costs     Table 5 Costs

Davis Bacon Wages            $64,559       $64,559

Buy American Act            o        0

Archeological Studies           o        17,230

Threatened and
Endangered Species Act          o        0

Remote Location             17,766        17,766
                     . .

56

 
          APPENDIX 4
        Page 28 of 34

2

Unusual Site Conditions           5,976      71,500

Requirements of Small
Business Administration
Minority Program            0        0

Americans with
Disabilities Act               2,592        2,592

Fire Suppression              3,600        3,600

Site Utilities              0        26,262

We agree with the extraordinary costs identified for related Davis-Bacon Wage rates, the Buy
American
Act, remote location, requirements of Small Business Administration Minority Business
Enterprise
Program, the American with Disabilities Act, and fire suppression. Other "extraordinary" costs
that need
to be considered include:

compliance documentation as required by the National Environmental Policy Act (NEPA) which
is
not required by a private sector builder.

3. Labeling construction materials as "enhancements" is incorrect and misleading. Most of the
materials
are either mandated by legislative action or are NPS mission-related.

_Durable and "high quality " construction materials, Although some of these materials are not
commonly used in traditional track, "private-owned, " single family houses, the National Park
Service has experience that supports the use of heavy duty materials for the highly transient

57

 

             APPENDIX 4
        Page 29 of 34

3

population that typically rents these units. The use of durable, maintenance-free products
minimizes recurring maintenance costs (labor, materials, etc.). Declining base budgets and
limited FTE's influence decisions related to durability and maintenance. Although the Park
Service did not provide written documentation in the form of life cycle costs to support the use of
these materials, there was documented discussion with park maintenance staff regarding
historical use, and recurring maintenance on specific issues (e.g. exterior siding, flooring, doors,
plumbing, windows, and electrical wiring). Their knowledge of labor costs and material life were
used to make collective decisions on the use of these items.

     y efficient materials, systems and appliances. The use of energy efficient products
are mandated through the Energy Conservation Standards for New Federal Residences (1 O
CFR 435). All new federal housing, such as that at Grand Canyon and Yosemite National Parks
must meet or exceed the energy performance standards established in this regulation. Life cycle
cost Information regarding the selection of heating and lighting systems were provided to the
OIG during preparation of the audit.

mandated to provide a portion of housing for disabled employees. The units are designed in
accordance with minimum requirements outlined in the Uniform Federal Accessibility Standards
and with the Americans with Disabilities Act.

  
58

 
          APPENDIX 4
        Page 30 of 34

4

Infrastructure costs for 23 homes          $1,352,722
Construction of 23 homes             $4,479,735
Planning, design & full-time construction supervision  $1,949,805
Total cost, 23 homes              $7,782,262

Average home cost, Grand Canyon NP    $ 338,359

6. The OIG report statement that the Park Service has basically completed its housing
construction at
the Yosemite NP is not accurate. The Park Service has not completed the housing at El Portal; it
has
only completed that portion of the Line Item construction program funded to date. There remains
five
single family homes at Rancheria Flats and multi-family housing for 108-employees to be
constructed.
This is identified as the proposed action (Alternative E) in the Addendum to the Yosemite Valley
Housing
Plan, Draft Supplement to the Final Impact Statement for the 1980 General Management Plan.

7. The OIG report statement related to the "two 40-unit dorms" is misleading. The 1991, 1992
and 1993
Park Service budget requests included the cost of the proposed facilities, based on the employee
numbers and housing types considered appropriate during the mid-1980's. At that time, planners
estimated there would be a need to house 96 employees and two dorms were proposed. A formal
housing study initiated by the park and DSC in 1991 assessed current and project employee
numbers,
housing needs and additional sites beyond El Portal (including Foresta and Wawona). The study
indicated that the dormitory housing proposed earlier was not consistent with the employee
population at
Yosemite NP. Single occupancy studios were proposed in lieu of the dormitory units late in
1992, after
submission for the FY93 program.

8. The OIG report notes that as of January 1996 the Park Service has not requested funding to
construct the studio apartments. The park is preparing to release the "Addendum to the Yosemite
Valley
Housing Plan, Draft Supplement to the Final Impact Statement for the 1980 General
Management Plan"
for public review later this fall. The Park Service will request additional funding for housing at
Yosemite
NP upon concurrence of the number and type of units needed once the impact statement is
approved
through the NEPA planning process.

In conclusion, we appreciate the opportunity to review and comment on the report. In line with
the OIG's
recommendations, staff at both Grand Canyon and Yosemite national parks have entered into
discussions with private developers regarding the opportunities for design, build and operation of
housing
units for Park Service staff.

The Denver Service Center recognizes the importance of the report's recommendations as the
National
Park Service faces reduced staffing levels and construction budgets. The National Park Service,
and the
Denver Service Center in particular, have taken major steps to streamline the planning and
design
process wherever possible, and commits to providing parks with quality, cost effective products.
There
are, however, certain issues that influence the construction cost of all facilities that are
constructed within
the boundaries of national parks that are inherent to mission mandated and legislatively driven
requirements. /


59

 
Attachment 4

APPENDIX 4
Page 31 of 34

Comments on IG report on Housing Construction Costs at Yosemite and
Grand Canyon National Parks

Page 7.

Page 10.

Regarding the rescission of OMB Circular A-18, the appropriate
provisions WERE incorporated into Circular A-45.  Circular A-45,
therefore,  also provides policies and administrative guidance
respecting  construction  of federally-owned housing,  not just
policies and guidance on rental rates as stated in the auditor's
report and as stated in the IG's report, A-45 does not specify a
limit on construction costs.  Circular A-18 did not impose such a
limitation.

We would also like the reader to understand that with the cost
limitation in place, the Service was unable to construct quality
housing units; therefore, we found that trailers could be purchased
instead.  While at the time that may have been a reasonable
compromise,  trailers have proven to be extremely costly to
maintain,  are expensive for the tenants to heat and cool and
generally are not desired living units.  The Secretary of the
Interior recognized this and since his tenure began, has made it
one of his personal goals to help eliminate the trailers from the
parks.

While the auditor's state that we have emphasized the environmental
and quality aspects of planning, designing and constructing housing
over the cost aspects, we believe it is important to also recognize
the negative results of a cost limitation.

Page 10.



We repeat the Service's position as provided to the auditors in our

60

 
APPENDIX 4
Page 32 of 34



comments dated June 14, 1996, to their preliminary draft special
report.  Housing is not viewed as an inducement or collateral
compensation for NPS employees.

Page 27. -  Recommendation

The IG's recommendation to review the strategy that the parks,
particularly Grand Canyon and Yosemite National Parks, have for
meeting their employee housing needs to ensure that housing is
designed and constructed in a cost-effective manner, fails to
recognize what the Service has done over the last 2 years to help
accomplish this.

In response to the 1993 and 1994 General Accounting Office (GAO)
reports, the Service has worked with the National Park Foundation
and supported Secretary Babbitt's desire to have the Foundation as
partner in improving NPS employee housing, particularly outside of
park boundaries where the Service does not have legal authority to
conduct business.

Not all attempts resulted in successful avenues for the Service.
For example,  Fannie Mae was not willing to develop a financing
program specifically for NPS employees, but only to help promote
existing opportunities.

The Service began developing an in-house needs assessment review of
housing needs in 1994, with a kick-off session with approximately
36 park areas in February 1995.  Process is ongoing and will be
completed in all park areas in 1997.

In July 1995, we began working with the BIA to amend their contract
to have independent,  non-biased,  consistent and more thorough
studies done at four park sites.  Final reports are expected within
the next month.  The process will be analyzed for potential
Servicewide merit; however, we are developing the framework for the
next phase of housing studies to be conducted in 1997.  The housing
studies will include a cost estimate for repair and rehabilitation
for better documentation on backlog of need.

During congressional hearings on our Appropriations Bill for FY
1996, the Service went on record opposing the 10 percent limitation
on rental increases.  In April 1996, the limitation was lifted. If
this had not been accomplished, any changes to the rent setting
process/formula which would result in a rental increase would be
all but negated for NPS due to the 10 percent limitation on rental
increases.  Further, any improvement we are making in the condition
of housing as a result of recent appropriated funds were not
realized in rental receipts as long as the 10 percent cap was in
place.

In an effort to develop strategies for improved planning, design
and construction of employee housing to replace trailer units
throughout the Service, in 1994 we began to develop a catalog of
Standardized Housing Designs.  This catalog presents prototypical

61

 
APPENDIX 4
Page 33 of 34

plans recommended for use in constructing new housing for the
National Park Service.  It is intended to be used as a tool for the
parks, professional support groups within the Service and private
A&E firms to make housing choices and to guide planning and site
development for housing.

This selection of prototypical (standardized) housing plans can be
flexibly adapted to unique programmatic, cultural, climatic and
physical site constraints of park locations. They will accommodate
pre-manufactured or site-built construction technologies.  They
employ  time  and  cost-efficient  methodologies  for selecting,
adapting and documenting housing designs that will better serve
park funding and scheduling constraints.

Final documents include construction  drawing,  (on disk) for
architectural,   structural,   mechanical   and   electrical.
Specifications (on disk) including Division l-General Requirements
and a user's guide for document adaptation that will allow the
process to be time and cost-efficient.

The Service is committed to this cost-effective concept and has
geared funding criteria for FY 1997 and beyond around the use of
these designs.

Another recommendation by the GAO which the Park Service has acted
upon is the Legislative Package on Housing.  During the past 12
months, congressional hearings have been held on numerous pieces of
legislation  crafted to give  the Park Service a variety of
authorities to expand the alternatives available for construction
and repair of employee housing and to rely on the private-sector to
finance or supply housing, to the maximum extent possible, in order
to reduce the need for Federal appropriations for new construction
and ongoing maintenance and operation.

Some versions of the legislation recognize the need for the Service
to review criteria under which housing is provided to employees,
and to eliminate unnecessary housing.  To address this, as stated
earlier, we have begun to lay the groundwork for additional studies
to be conducted at each park site.  Phase I studies should be
underway during FY 1997.

On October 3, 1996, the Senate passed and sent to the President for
signature, legislation, "to develop where necessary, an adequate
supply of quality housing units for field employees of the National
Park Service within a reasonable time frame."

The House had previously passed similar language on
September 17, 1996.

The bill contains provisions that would require the Service to
conduct a series of studies intended to help improve the management
of the employee housing program. It also grants considerable new
authorities  such as expanding the alternatives  available for

62

 
APPENDIX 4
Page 34 of 34

construction and repair of  essential government  housing,  and
relying on the private-sector to finance or supply housing, to the
maximum extent possible,  in order to reduce the need for Federal
appropriations.

These are similar authorities to those Congress gave DOD in 1996.
The DOD has turned to private industry to help speed up their
$30 billion initiative to improve military housing.

63

 
APPENDIX 5

STATUS OF SPECIAL REPORT RECOMMENDATION

Finding/
Recommendation
Reference      Status         Action Required
   1      Unresolved.     Reconsider the recommendation in
                 the context of further review of the
                 issue, and provide an action plan that
                 includes target dates and titles of
                 officials responsible for
                 implementation.

64

 


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