In my last column, I revealed internal City Hall emails that showed the mayor collaborating with consultants to push them toward a predetermined conclusion, while maintaining the fiction that no collaboration was taking place and that the consultant’s recommendations were objective. The issue, of course, was the library. The mayor wanted to build a new one at a specific location downtown—the old Muffler Clinic site, owned by A & L Development. Months before the consultant’s report was issued, the emails showed the mayor and consultants putting their heads together to determine how best to sell the mayor’s favored location.
 At the city council meeting of June 15, 2015, City Councilor Joel Sipress raised the issue publicly. Sipress is not generally confrontational, but he is a firm believer in process, and he was clearly unhappy.
“Last year, at the request of administration, this council approved a contract with a firm known as MSR, a contract for over $50,000, to study options for addressing deficiencies at our main library branch,” Sipress said. “There’s been a news report in the local media that indicates that while that process was ongoing, while the consultant was doing their work … that the city administration had already reached its own conclusion regarding its preferred option, and that that decision in some ways may have shaded that process in the direction of the administration’s preferred option. I find that report to be very concerning….I’m concerned that that process may have been tainted.”
The only thing I would have changed in Sipress’s statement was the amount we paid the consultants. The correct amount was $62,596, including $3,580 for a slide show.
Sipress concluded his remarks by directing two questions to Chief Administrative Officer Dave Montgomery. “If the city administration had already identified a preferred option, what was the purpose of asking the city council to spend over $50,000 on a consultant? And what assurances can administration give us that in other similar situations where this council hires consultants looking for objective, expert, outside information, that the process isn’t being shaded in similar ways?”
I know how I would have preferred Montgomery to react. But instead of doing the right thing—apologizing profusely and promising never to do it again—he emphatically denied everything.

“First off, I reject the first premise,” said red-faced Mr. Montgomery, “—that we had already made our decision. The mayor was very clear about one of the areas he was looking at, and acknowledged as much, that he thought that there was one of the sites that would make a very interesting library location.”
Listening to this, if you didn’t know better, you might think Montgomery was telling the truth. In fact, the first time the mayor mentioned his preferred site publicly was on March 2, 2015, in his State of the City Address—but the emails showed him collaborating with the consultants privately for at least five months prior to that. To be fair, he may have been trying to help them come to a more objective decision.
“We did want [the consultants] to go out and look through the downtown area to see if there were other sites that would meet the parameters of what we were looking at,” continued the CAO. “But we made no specific conclusion on that site. We did acknowledge that that was a site we had looked at, as one of the sites. So I don’t accept that we had already made up our minds. We did have [them] look at other sites, and there aren’t that many sites in downtown Duluth, when you get right down to it, that meet all the criteria. So I think it was perfectly valid. I think the consultant did good work, and I think we got good information from it.”
There was only one problem: The consultants weren’t supposed to be looking at sites. Their charge was to study the existing library and decide whether it made more sense to renovate it or build a new one. Nowhere in MSR’s contract were they asked to look for potential sites for a new library. But according to Montgomery (and those pesky emails), they had been looking at new sites all along. Today, eleven months after the city council approved the contract, was the first time anybody had mentioned that little tidbit—which begs the question: How much secret work does the administration have other consultants doing?
Sadly, Mr. Sipress was the only councilor with the spine to call out the administration on the issue. Most of the others sat by silently. Councilor Howie Hanson, who is often combative, actually defended the administration, saying, “Just to add to the words of Mr. Montgomery, Mr. Sipress, I myself did present an option, upon the request of a local property owner, to have his property potentially looked at as a possible site also…. So my understanding is that there was no intent to drive any particular future site one way or the other, that it was clearly an open process.”
So, because a developer had approached Mr. Hanson looking to make his own killing, Hanson found it perfectly acceptable for the administration to play the council like chumps and waste taxpayer money by meddling in a process that was supposed to be objective. For a guy who habitually jumped on the administration over lesser matters, this seemed an odd position to take.
Two days later, Hanson revealed the reason for his mealy-mouthed comments, when he declared his candidacy for mayor. Even a combative city councilor knows you don’t get elected mayor of Duluth by calling people out.

Julsrud takes responsibility

Something that has always bothered me about city government is how rare it is that anyone takes responsibility for poor decisions. We saw this with the Great Lakes Aquarium. When the aquarium opened in 2000, to great fanfare, people were tumbling over each other to take the credit. The newspapers published fawning articles about the chief players in the effort. Mayor Gary Doty basked in the spotlight, saying that the aquarium would change everything. “By the power of an almost mystical vision,” crooned head fish tank booster Nick Smith in the pages of Lake Superior Magazine, “I get to look out my window and see the Great Lakes Aquarium.”
When the aquarium failed, a year later, suddenly no one was responsible—it was the economy’s fault, or the consultant’s fault, or 9/11’s fault, or anybody’s fault but the people who did it. The influential businessmen who pushed the project to fruition suddenly had pressing business elsewhere. City councilors who had been boasting about their votes on the aquarium went eerily silent. The Duluth News Tribune, instead of publishing editorials cheering the project on, suddenly started wondering how it had happened. Mayor Doty said, “We can point fingers, or we can look ahead to the future. I hope we’ll look ahead.”
And so it has remained to this day. While everyone recognizes that the aquarium has been a great financial drain on the city, you could search for a month and not find anyone willing to take a shred of responsibility. It was a project built by nobody.
Until now, the same has been true of Spirit Mountain. As I have written before, starting in 2008, Spirit Mountain embarked on a building spree that wiped out its capital maintenance fund, piled up millions of dollars of debt on the city, and led to years of operational shortfalls at the ski hill. Far from expressing any reservations about the crazy building and debt accumulation, the city administration, city council and local media cheered wildly every step of the way.
The myth that Spirit Mountain was succeeding persisted until June of 2014, when I published an article showing that Spirit Mountain was, in fact, failing miserably. This was a huge surprise to everybody. Today, the problem has grown so glaring that not even Spirit Mountain’s most fervent boosters can deny it.
But, just as with the aquarium, you would be hard-pressed to find anyone willing to take responsibility. City councilors who nodded like bobble-heads whenever Spirit Mountain asked for anything—more money, more credit, more amusement park rides—overnight began expressing grave concerns about the ski hill, without ever expressing any regret about their own role in creating the problem.
At the city council’s Committee of the Whole meeting on June 1, 2015, Spirit Mountain Executive Director Brandy Ream made clear that things weren’t looking much better. Although she had made some progress with cutting expenses and improving operational efficiency, Spirit Mountain only had enough ready cash on hand to see them through the next thirty days. They were operating “week to week,” and even “one day of rain really throws us off for revenue that’s coming in.” There was not even enough money on hand to upgrade their computer servers. On top of that, they were experiencing difficulties with a motor on one of the ski lifts. Ream thought it was “a very likely possibility” that Spirit Mountain would have to return to the city for more money before year’s end. And so it went.
The big surprise of the evening came when Councilor Jennifer Julsrud made her comments.
“I personally take responsibility for the financial state of affairs at Spirit Mountain, because I was one of the councilors that voted to build the Grand Chalet,” said Julsrud. I heard audible clunks as people’s jaws hit the floor in astonishment. “In retrospect, I wish we had put that $7 million into renovating the existing building, and now we have two buildings [to maintain]. I take responsibility for it.”
Back in 2012, of course, present-day Councilors Fosle, Gardner, Krug and Larson had also voted for the new chalet, but today they just stared at Julsrud like she was an alien species. They couldn’t understand why she was talking that way.
All in all, it was a very refreshing experience.

Spirit Mountain Nordic Center

Not that the building spree at Spirit Mountain has stopped. On the contrary, it continues at full speed. Currently a $7 million pipeline is being constructed, which will draw water from the St. Louis River for snowmaking and eliminate the need for the ski hill to use city water. The savings that I have heard people say this project will produce have ranged from $40,000 to $140,000 annually—which tells me that nobody really has any idea.
The water line project is being funded by state bonds ($3.4 million), city bonds ($2.3 million), and various grants from other agencies. The city bonds will be paid back by the mayor’s so-called half-and-half taxes (half-percent taxes on restaurant meals and hotel stays in the city) that are earmarked for recreation projects in the St. Louis River Corridor.
Another project being planned is a new Nordic Center, which will consist of a network of new cross-country ski trails at the base of the mountain, along with a staging area near the Grand Avenue Chalet. The trails will be lighted, and they will be serviced by snowmaking. The current estimate of the cost to build 3.3 kilometers of trail is $1.5 million—$1 million from the half-and-half tax, $250,000 from state and federal grants, and $250,000 from private funds raised by the Duluth Cross-country Ski Club (DXC).
At the Parks Commission meeting of May 13, 2015, consultant Gary Larson explained to commissioners that, once the Nordic Center was built, DXC would make it their primary location in Duluth for races, lessons and other activities. Spirit Mountain would manage and groom the trails, and they would also be responsible for capital maintenance (pipes, lights, etc.). Trail users would be required to purchase a pass, and Spirit Mountain would keep the revenue from that.
Considering that Spirit Mountain only has thirty days’ of cash in the bank, the idea of piling yet more maintenance responsibilities onto the ski hill might seem a little foolish. But nobody seems to think so.
“All of these things have just come together so beautifully right now,” Larson enthused to the Parks Commission, “—the updated water system at Spirit Mountain, the chalet at the bottom, the available resources for doing a project like this, and the support from the city.” The 3.3 kilometers of trail are just the beginning; the overall plan calls for a Phase Two, which would add another 1.7 kilometers of trail to the system.
Director of Public Administration Jim Filby Williams told commissioners that the Nordic Center “must not be a net drain on [Spirit Mountain’s] operating finances….The assurance that we’ve given to Spirit Mountain is that if you commit to move forward with this, the city and DXC will commit to exhausting all of our efforts to concentrate activities to make this at least a break-even proposition….If the administration is not persuaded that this will be a break-even or better proposition for Spirit Mountain, we will not support it.”
It’s nice to know that people are thinking about breaking even—but we always hear that. Before every project, we hear how awesome it will be. And if the project fails, as they frequently do, nobody seems to learn anything. We just bop right along to the next totally awesome thing. Sure, there were problems before, but this project is different. Look at all the people who want it!
The Parks Commission unanimously approved the conceptual plans for the Nordic Center. On June 15, the city council approved the plans as well. The administration is now in the process of applying for state and federal grants. A development agreement is expected to come before the council in September.