City Council members on Monday begrudgingly approved an additional $188,075 for the Missoula Art Museum’s Downtown Art Park to cover cost overruns and a fundraising shortfall.
In the future, however, the council must be “extra careful” when it “enters into agreements with organizations that are well-meaning, have excellent projects for the community, but for some reason or another cannot execute on their aspirations,” said Ward 4 Councilman John DiBari.
“I’m hopeful that we can learn a lesson from this and be thoughtful and careful about how we craft agreements with organizations with which we partner in the future,” he said.
Council president Bryan von Lossberg agreed, citing a two-part failure – first, in not having an agreement that clearly specified the project’s “boundaries, conditions or consequences” should the conditions not be met.
Secondly, he said, “we needed better project management.”
The Art Park stretches between the Missoula Art Museum and Adventure Cycling, across Pine Street, and was envisioned as a community gathering place featuring outdoor art curated by the MAM, trees and resting places in the urban core, and traffic calming on a busy street.
In 2016, the park was approved by council members at a cost of $668,000. Then came the first round of cost increases, which took the price tag to $900,000, an amount also approved by the council.
Now, more than a year after the park’s opening, council members were presented with another $188,075 surprise – this one caused by a combination of cost overruns and a failure to reach a private fundraising goal.
While other city construction projects have a single manager whose job it is to oversee work and keep it within budget, the Art Park’s construction was managed by a committee.
That approach did not work, council members and the city’s chief administrative officer agreed Monday.
On future projects, von Lossberg said, “we’ll have an opportunity to course correct.”
And while all council members present ultimately agreed to pay the outstanding debt, that vote came only after they deadlocked on the question of where the money should come from.
The plan eventually approved wraps costs for the Art Park into a $3.6 million limited tax general obligation bond, the bulk of which will finance a new police evidence building on Catlin Street.
But first, DiBari offered an amendment requiring that the $188,075 discrepancy be paid out of the city’s general fund – to avoid the extra $87,419 in interest associated with adding that amount to the bond.
“It is in our best interests to go head and pay the overrun out of cash reserves,” DiBari said. “That’s what our cash reserve account is for. And it would then obviate the need to finance that over 20 years, which also costs us additional funding.”
Von Lossberg provided the counterargument, saying the council was “stuck with a couple of choices that are both bad choices.”
“Were the amendment to pass, that’s going to come out of our reserves,” he said. “If we were at our reserve target percentage, I’d be inclined to support it. We’re not at the target and that’s been a discussion over several years – the importance of showing progress toward reaching that target.”
“I think it’s a more prudent decision to keep it as is,” von Lossberg said. “But I understand the intent of the amendment and I appreciate it.”
Added Councilwoman Heather Harp: “I think this is a very decent amendment, However, I think from a fiduciary perspective, there’s something to be said in terms of making sure we have capital reserves. And since we’ve had some trouble recently, I think it’s prudent we keep those capital reserves.”
In the end, four council members joined DiBari in voting against adding the Art Park overruns to the general obligation bond – Mirtha Becerra, Julie Armstrong, Stacie Anderson and Michelle Cares.
Four others voted with von Lossberg – Jordan Hess, Heather Harp, Heidi West and Gwen Jones.
Council members Julie Merritt and Jesse Ramos were absent.
With the vote 4-4, Mayor John Engen broke the tie, voting against taking the money from the city’s general fund reserves. “We need to keep our fund balance whole,” he said.
Just one member of the public commented on the issue. Former councilman Jerry Ballas first complained about the agenda’s wording, which listed a public hearing on the general obligation bond but said nothing about what the money was for.
“It looks like the council is trying to hide something from the public,” he said.
As for the Art Park’s financing, Ballas – an architect who worked on a number of public projects over the years – asked why no one was being held accountable for the cost overruns or the fundraising shortfall.
Why was the contract open-ended? he asked.
In the end, Ballas said, it is the City Council’s responsibility – and failure.
“You, the City Council, are ultimately the ones responsible for the error, and the mayor as the leader of the City Council, he also is responsible,” he said. “So, thanks for overrunning the project and spending money that should have come back to the city taxpayer in some shape or form.”
Laura Millin, executive director of the Missoula Art Museum, attended Monday night’s meeting but did not provide an explanation for the discrepancy during either of the opportunities for public comment.