The following commentary by Shawn FitzGerald appeared on the e-democracy forums on Setember 21, 2008:
NICOLLET ISLAND PAVILION, MPRB FINANCIAL STATEMENTS
Regarding Scott Russell’s story about the private use of the Nicollet
Island Pavilion at the TC Daily Planet.
Nicollet Island: Cash cow or public park?
I posted a comment to Mr. Russell’s article that I would like to share
with this list (below.) Park Board staff proclaims that the contract
with the private vendor, Mintahoe, is a good deal for the public because
Mintahoe has spent over $1 million for remodeling and furnishing the
Pavilion. The million dollars may be true – but there is no way for
citizens to verify this for what Mintahoe, a private for-profit
corporation, has spent is not public information. Knowing the building,
I couldn’t see where $1 million in permanent improvements could have
been spent. Public funds were used to rehab the Pavilion, a historic
building, in the 1980s. So, I put in a data practices request to the
Park Board and learned that the book value of the 2002-2003 rehab was
about $408,000.
My best guess is that the Park Board invested about a quarter of a
million in the building to get Mintahoe into the Pavilion and that
Mintahoe invested something less. These costs were primarily to
winterize the building – an insulated roof (MPRB), asbestos abatement
(MPRB), a new boiler and new doors and windows (Mintahoe). A lot of
electrical work was done including adding something like 40-50 new
circuits. These might help out a caterer/event center but they are not
really needed for the Pavilion’s public purposes: picnic shelter, rest
rooms, drinking fountain.
MPRB staff also claimed that the Pavilion generated $400,000 a year for
the Park Board. Liz W. of Park Watch left a comment rebutting this – and
Liz is correct. For example, in 2007, the Park Board shows net income
$271,352 from “Nicollet Island.” It’s not clear if this is Pavilion
income alone or Pavilion and Nicollet Island Inn income. Whatever, this
money does not go to our neighborhood parks or forestry for the
Enterprise Fund surpluses are dedicated to paying for Ft Snelling
Neiman. Debt service at Ft Snelling Neiman is just over $1 million a
year and in 2007, the MPRB Enterprise Fund operations had a net surplus
(profit) of about $750,000. Not enough to cover debt service at Ft
Snelling Neiman but a very good year for enterprise operations. The MPRB
2007 Audited Financial Statements have been recently posted.
Park Board Enterprise operations have increased net income (profit) by
$350,000 since 2004. If the MPRB increases enterprise operations by
another 50% – with higher user fees, more bar/restaurants in the parks,
more rentals, and especially the lucrative parking operatons and vending
machines, MPRB net profits from earned income enterprises might actually
cover debt service at Ft Snelling Nieman.
(Upcoming: the MPRB contract with Coca Cola recently expired so the Park
Board may put out an rfp for another beverage vending machine contract.
The vending machines generate a good net profit for the MPRB – in the
low six figures. Yet, Commissioners are increasingly talking about their
desire to help reduce childhood obesity. This objective has sometimes
been the reason behind a policy or operations decisions. Soda pop is a
well-recognized contributor to childhood and teen obesity. At the same
time, the soda pop income is needed to make payments on the Ft Snelling
Neiman bonds. Will the Park Board go back to telling kids to drink free
water in the parks – and so fight childhood obesity? Or will the
lucrative vending machine income lead the Park Board to continue
offering empty calories that contribute to childhood obesity? Stay tuned
– the Coca Cola contract expired in August.)
If 500 athletes, unduplicated count, use the ball and soccer fields out
at Neiman, then the seasonal cost per athlete is over $2,000. If 1000
athletes are using those fields, then the cost drops to $1000+ per
athlete per season. I wonder how this compares to busy fields like those
at Pearl and Bryn Mawr. Or what the per athlete cost is for soccer,
football, all varieties of baseball, and hockey. For reasons I don’t
understand, these costs and other program costs are never discussed in
detail at Park Board meetings.
Sorry for meandering. Here is my comment on Mr. Russell’s story:
Saying that Mintahoe has invested $1 million at the Nicollet Island
Pavilion overstates the public benefit of Pavilion improvements.
Per Data Practices Request AAA135 — Nicollet Island Pavilion Book Value:
“The Nicollet Island Pavilion was renovated and the amount of the
renovation was capitalized on 12/31/2003. This improvement was
capitalized in the enterprise fund which records fixed assets as well as
straight line depreciation.” The remodeling was valued at $470,766 and
annual depreciation expense is $15,692. Book value of the Pavilion at
the end of 2007 was $407,997. The Pavilion is not worth $1 million more
because of Mintahoe expenditures.
I don’t know what improvements were capitalized but in 2002, the MPRB
and its roofing contractor applied for $252,641 in building and
remodeling permits at the Pavilion. See Minneapolis PropertyInfo db, 40
Power Street, 2002 Inspections Permits.
The Park Board also expanded one parking lot and built another for
Mintahoe. This work is not reflected in the city permit database. The
budget for Pavilion parking lot work was $110,700. Additionally, the
Park Board spent $25,228 to contract with a consultant to manage the
Pavilion improvements.
Shawne FitzGerald
Volunteer researcher for Park Watch
sf-Powderhorn
