Monthly Archives: November 2006

Public officials & their love affair with new stadiums—this one’s going to court


On Oct. 25, a citizens’ group filed a lawsuit in Hennepin County District Court asking the Court to prohibit the construction of a football stadium planned to be built on Nicollet Island. DeLaSalle High School wants to close off one-half of historic Grove Street and build a football stadium on park land which is adjacent to the school and owned by the Minneapolis Park and Recreation Board. Read more here Pulse of the Twin Cities

Comments on MPRB financials and the recommended 2007 budget

from Shawne Fitzgerald…

Per the 2005 MPRB Audit, the MPRB Park Operating Enterprise Fund realized a net profit of $490,643 on gross revenues (sales) of $11,228,317. The Enterprise activities in this fund are Park Refectories/concessions, Parade, parking, Colombia Manor, Nicollet Island Inn, the golf courses and refectories, boats & related, and recreation. Another $550,000 gross revenue in Rental and Commissions is shown in the General Fund – net income was not provided in the audit. So, after struggling with commercialization and privatization projects for 5 years, the MPRB net revenues were $1 million or less in 2005.
The MPRB has a major obligation in the Enterprise area – debt service on the $14 million bonds sold for Fort Snelling Neiman (including tennis center, golf course, athletic fields and the 201 Building). Annual debt service is just over $1 million – there’s about 15 more years to pay off the bonds. In 2006, the MPRB purchased the Edison Youth Hockey Arena (despite chronic losses at Parade Ice Arena and with MPS hs teams being reduced from 6 to 2) – this mortgage so it is another longterm obligation. MPRB enterprise activities, as presently structured, are unlikely to generate funds for MPRB’s core operations.

The Superintendent’s proposed 2007 budget would radically change MPRB enterprise efforts by opening parkland to developers with site and type of business to be chosen by the developer. Staff will “iss[ue] a request for proposals for additional concessionaires.” Staff explained that they seek proposals to build concessions (businesses), that they will ‘see what is out there.’ Revenue from this initiative is not included in the 2007 budget.

The MPRB proposes to build a miniature golf course in Northeast Park adjacent to Lupient Water Park so both facilities will use the same entrance and security. Anticipated revenue is $100,000 – gross or net was not stated. Capital costs were not included. No market study, community/needs assessment, or business plan was included.

The MPRB proposes to site about 20 food service carts throughout the system. It was mentioned that MPRB would own the carts – no capital budget was included. Anticipated revenue: $50,000 – gross or net was not stated. No market study, community/needs assessment, or business plan was included.

The MPRB proposes to sell merchandise from the MPRB website. Anticipated revenue: $30,000 – gross or net was not stated. Again, no market study, community/needs assessment, capital budget or business plan was included.

The MPRB will issue an rfp allowing a promoter willing to give the MPRB $50,000 use of parkland for a new major event. No details provided.

Sale of 201 Building at Fort Snelling Neiman. Liens against this property were settled for $945,000 in 2006 – MPRB borrowed from Internal Services Fund for payoff and the money is to be repaid by May 2007. The MPRB has spent about $3 million on this property. The site has been listed for sale since summer – turns out the MPRB does not have clear title to the entire parcel, the federal government owns a piece of it. Staff is projecting $4 million from the sale.

MPRB and Minneapolis Parks Foundation

The MPRB has organized the Minneapolis Parks Foundation, a 501(c)3 nonprofit corporation. The initial Board was recruited by MPRB staff – subsequent directors are appointed by the Foundation Board. There is no membership – the public cannot influence the Foundation. MPRB Commissioners have no control of the Foundation including how Foundation funds are spent. In 2007, the MPRB budget proposes to provide the Foundation with part time staff to fundraise for the Foundation.

MPRB and Park Dedication Fee

Enabling legislation passed in 2005 would allow the City and MPRB to charge a $3,000 per unit park dedication fee on new construction. This is incredibly regressive as the cost would be passed on to owners or tenants. Rolled into a 30 year mortgage, the actual cost of the fee more than doubles with interest. Since the upper income residential market is facing a glut, this fee would be assessed on projects in middle- and working-class neighborhoods for the foreseeable future. It’s unbelievable that DFL and Green elected officials would actually consider doing this.

Key Areas Not Addressed

Trees – Reeling from the Dutch Elm crisis with the ash borer expected to take out 25% of our urban forest, the Minneapolis Tree Advisory Committee recommended a 2007 increase of $4 million for stump removal, replanting, and proactive planting now before the ash trees are lost. Trees were the number one priority listed by citizens returning MPRB comprehensive plan survey. Funding for the urban forest to remain pretty much flat – not even enough to deal with the stump removal backlog.

Self Insurance Fund – Except for health insurance, the MPRB is self-insured. At 12/31/05, balance in the self insurance fund was a negative-$2.8 million with about $8 million in outstanding liabilities – most of this for workers comp. Typically, a government self insurance fund has a reserve equal to liabilities. The MPRB budget proposes to leave self insurance underfunded in 2007.

Underfunding self insurance is a concern for by the end of 2005, the MPRB had exhausted its reserves. Total fund balances were $5 million with $3.4 million in Park Grant and Dedicated Revenue Fund (restricted dollars). Otherwise, there was $1.5 million in the general fund and $197,000 in internal services fund (and almost half of this small fund was used in 2006 to pay the lien settlement at the 201 Building.)

Superintendent's Recommended 2007 Budget

The Superintendent’s Recommended 2007 Budget can be viewed by following this link Superintendent’s Recommended 2007 Budget to the Park Board website. The link to the 39 page .pdf file can be found near the bottom of the page. Or obtain it directly from the linked attachment below.

A Public Hearing to make comments on the budget will be held at the Minneapolis Park and Recreation Board headquarters building on Wednesday December 6th.

uploaded11-15-06 Superintendents Proposed Budget for 2007.pdf

Awaiting the Superintendent's Budget for 2007

During the past month the MPRB has been having budget discussions. When entities that have been funded by taxes have their budgets cut they often go looking for easy money rather than making the tough decisions that might offend some constituent group.

Many folks seem to forget that just like the rest of us government also has had its budgets affected by higher fuel costs, health care costs and heating bills. The MPRB alone has to heat 49 recreation centers, fuel a fleet of trucks and police cars and insure their workers ( as well as having to insure all their property, employees for workman’s comp etc…). Their health insurance alone has a cap of a 12% increase in year 1, 18% in year 2 and no cap in year 3….with the new plan for 2007-2010 . Maybe it is time to start making some hard choices.

The Superintendent will be announcing his proposed 2007 budget at the 11-15-2006 Wednesday meeting. With a shortage of over $2,000,000 ( they keep changing the figure with each new document they print so do not hold me to this exact number) in their Workman’s Comp fund ( based on pending litigation) and the Minneapolis Tree Commission asking them to budget about $4,000,000 more per year for the Forestry department they have some tough decisions to make. Their legal budget alone for 2005 was to be $200,000 per old budget documents but the lawsuit at the Fort Snelling 201 building alone was $400,000 in legal fees that year.

With the legal battle over DeLaSalle heating up, and the estimated need for $400,000 per year operating expenses for the East Phillips Community Center looming on the horizon I am hoping that there are some real plans to start dealing with the shortages. I am however afraid that they are just planning on being saved by the newly elected DFL majority in state government and keeping their fingers crossed that in 2008 there will be an LGA pot of gold at the end of the rainbow.