FFM Bulletin 7/15/08

City Spotlight: Minneapolis to purchase $50,000 drinking fountains

Later this week, Minneapolis Mayor R.T. Rybak will unveil concepts for ten new "public art drinking fountains" to be installed throughout the city. The fountains, which were designed by a local artist group, are intended to increase demand for city water. Of course, the unveiling of new water fountains would seem a bit mundane if not for the accompanying price tag of $50,000 per fountain. As far as we know, these fountains just dispense water, not purified spring water from the pristine French alps.

The average cost of standard park drinking fountains is approximately $6,000 each, so presumably the "public art" portion of these new fountains adds about $44,000 in value. Funding for the fountains will come from property taxes and water fees. According to the Star Tribune, Mayor Rybak described his half-million dollar water fountain project as "an out-of-the-box method for promoting flagging city water consumption." And, in the sense that spending more than 8 times the going rate for water fountains is outside the box, he's right.

Unfortunately the city's outside-the-box approach to water service doesn't end with artistic drinking fountains. The city will also award a $180,000 contract for a marketing firm to promote city water use and an additional $50,000 to encourage surrounding suburbs to use city water.

So for a grand total of $730,000, Minneapolis residents get ten new drinking fountains and a reminder to drink water. And suburbs get to hear proposals on why they should consume more Minneapolis water, despite its currently foul smell.

At a time when a record number of Minneapolis homes sit vacant, inviting crime into the community, and police warn that pickpockets are targeting seniors, it's hard to imagine how water fountains and PR campaigns became a top priority.


Minneapolis Park Board finds "goldmine" to help address budget shortfall

If the City of Minneapolis is throwing away money on drinking fountains, it looks like they'll make up for it with tent rentals. Earlier this month, the Minneapolis Park & Recreation Board - which is facing a $1 million budget deficit - announced that its tent rental rates for large events are increasing... 20,000%. Last Fall, the fee for a outdoor large event in Minneapolis was $50. This Fall, it will cost $10,000.

Minneapolis Parks Superintendant Jon Gurban, in originally proposing the price hike to the Park Board, made a thinly veiled reference to the upcoming Republican National Convention, suggesting that the high demand for event space surrounding the convention represented a "goldmine" for the city. Gurban apparently decided his original explanation was too subtle, later stating: "We always like taking some fun pokes at the Republicans."

Of course, as the Parks Superintendent is a nonpartisan position, it didn't take long for Gurban to change his tune and offer a more nuanced and balanced rationale for the tent rental rates. He later explained that, after researching park fees in other large cities, "we found out that we were grossly underpricing the park system... It really is kind of a square-footage fee as much as anything." It's worth noting that the price for smaller tents will remain at approximately $50, which means that if this is truly a square footage calculation, the large tents must be 200 times larger than the small ones.

Of course, the bigger issue is the manner in which the Park Board is attempting to cover its budget shortfall. Instead of addressing their financial situation in a meaningful way, they are banking on a convention that comes to town every 116 years to solve their problems.


Municipal golf operations losing money

Minnesota cities are spending a lot of their time (and your money) on golf. According to the most recent data from the Minnesota Office of the State Auditor (OSA), 42 municipalities in the state own and operate at least one golf course. In 2006, the most recent year for which data is available, only 5 of those cities broke even or turned a profit, while 37 lost money on golf operations. In fact, combining all municipal golf operations in the state, total net losses in 2006 exceeded $2.3 million.

The biggest money losers (based on net income):

. Moorhead: ($570,940)
. Buffalo: ($554,151)
. Chaska: ($389,861)
. New Prague: ($283,749)
. Renville: ($202,692)

Unfortunately, 2006 was not an anomaly. Municipal golf course operations have been costing Minnesota taxpayers for years. Take for example the City of Moorhead, which holds the dubious distinction of having the least profitable municipal golf operation in the entire state. Between 2002 and 2006, Moorhead's two golf courses reported negative net income of $1,968,212, or approximately $393,000 in losses per year. For a city of 32,000 residents, that's a difficult loss to absorb. It's not likely that Moorhead's golf operations will become profitable anytime soon. The city has not turned an operational profit in at least five years, and its taxpayers will be paying off golf course bonds until the year 2021. In addition, the city is dedicating more staff to its unprofitable golf courses. Between 1997 and 2005, Moorhead had 3.5 full-time equivalent (FTE) city employees dedicated to golf operations. In 2006, the year in which Moorhead reported negative net revenue in excess of $570,000, that number more than doubled to 7.58. For a city that seems intent on throwing good money after bad, that's par for the course.

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