The St. Cloud Regional Airport is banking on a recently announced $750,000 federal grant to land an airline at the airport that’s been virtually deserted since Delta terminated service in and out of St. Cloud in late 2009. Despite a $5 million makeover of the terminal two years ago, St. Cloud’s airport has mostly sat idle as the city desperately seeks new commercial airline partners. St. Cloud received $750,000 in federal stimulus funding to assist with a portion of the renovation, but the project has thus far amounted to a passenger boarding bridge to nowhere.

The latest federal subsidy comes under the little-known Small Community Air Service Development Program (SCASDP), which provides temporary help to small airports to attract and maintain local air service through marketing and revenue guarantees. St. Cloud officials said the taxpayer gift would go a long way toward courting a new carrier, mostly by offsetting the financial risks involved with getting new service off the ground. In other words, the federal government is subsidizing the airport so the airport can subsidize the airlines. “One hundred percent of it will go towards what we call a minimum revenue guarantee. It’s really putting a pot of money somewhere set aside that in the event that airline loses money or has some start up costs or whatever it might be that they’re able to pull from that and make themselves whole,” airport director Bill Towle told the St. Cloud Times.

While increasing St. Cloud’s chances of attracting air service, analysis by the Freedom Foundation of Minnesota suggests the program fails to deliver for communities more often than not. In fact, a federal audit found that half of SCASDP grants failed to meet their objectives or failed to continue to provide air service capable of competing in the marketplace after the subsidies dried up.

Federal auditors have consistently raised questions about the overall lack of effectiveness of the $20 million per year FAA program. An Office of Inspector General 2008 audit revealed that just 30 percent of subsidy recipients were successful in achieving and sustaining their desired results for at least one year. The 40-page report concluded that “70 percent of the grants in our review failed to fully achieve their objectives. Specifically, 50 percent of the grants were unable to achieve any of their articulated grant objectives or were unable to sustain grant benefits beyond the grant horizon.”

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The Minnesota chapter of a national civil liberties legal group is going to court to fight for the property rights of a Winona man who’s got other battles on his hands:  He’s currently serving as a U.S. advisor in war-torn Afghanistan. The Institute for Justice (IJ) will ask a Minnesota District Court in Winona to strike down a city ordinance prohibiting Ethan Dean, now on his fifth tour of duty in the Mideast, and three other homeowners from renting out their property.

“This is a law that started in Winona and has spread to other cities in Minnesota and what we need to do is stop this trend before it goes any further,” said Anthony Sanders, staff attorney with IJ’s Minnesota chapter. “The right to rent out your home is a fundamental property right, a traditional and accepted use of your property and Winona is trampling on that.”

The Freedom Foundation of Minnesota reported earlier this year on Dean’s campaign on the home front against the controversial Winona ordinance known locally as the “30 percent rule.” Dean says the ordinance is a double whammy.  By restricting rental properties to only 30 percent of houses per block, it deprives homeowners of rental income. Without a rental permit, houses are also less appealing to prospective buyers. Dean says the ordinance has cost him more than one opportunity to sell his $139,000 house, located in a prime rental area in this college town.

“I don’t really understand how someone believes they have the right to tell someone else how and what they can do with their home, but it is a strange world at times, I guess,” Dean told FFM at the time. City officials view the measure as a way to preserve the single family character of city neighborhoods particularly near Winona State University by regulating the number of houses rented mainly to college students. Complaints over student parties, vandalism and absentee landlords led to the imposition of the ordinance in 2005.

“It’s not ideal, but it’s working right now and it’s helping to address our problem of density of rental properties around the downtown core area and Winona State,” city council member Debbie White told FFM earlier this year. “We’ve been losing residences and homes and trying to keep a balance in our neighborhoods.”

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Controversial card check drive by AFSCME and SEIU aims for governor’s executive order

Thousands of licensed Minnesota day care providers may soon become unionized at the stroke of Governor Dayton’s pen via executive order as an increasingly contentious, yet largely unknown, organizing campaign apparently nears an end, according to opponents.

The effort to organize the approximately 12,000 licensed home-based daycare providers goes back at least five years.  The American Federation of State, County and Municipal Employees (AFSCME) and Service Employees International Union (SEIU) appear to be working in different counties throughout the state to form two separate unions:  Child Care Providers Together-AFSCMEand SEIU-Kids First.  The unions have patterned the drive after similar campaigns in other states that targeted providers with clients that receive state childcare subsidies.

The process does not involve a secret ballot or a vote, but rather a controversial method called card check. Organizers go door-to-door to childcare providers on the job asking them to sign cards that give the union collective bargaining rights.  The unions set out to collect signatures of more than half of the available providers or approximately 3,000 signed cards apiece. After the cards are certified, it is believed Governor Dayton will be asked to sign an executive order designating AFSCME and SEIU as collective bargaining units to negotiate with the state. In addition to personal contributions made by influential union leaders, AFSCME and SEIU PACs contributed  $14,000 to Dayton’s 2010 gubernatorial campaign.

“Just about everybody we have spoken to has said they were not told by signing that card they were supporting a union,” said Jennifer Parrish, a Rochester provider who’s leading opposition to the union. “The main theme seems to be people are being told they can sign up for more information or be put on a mailing list.”

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A $3.6 million Broadband Access Project that the Freedom Foundation of Minnesota first flagged in a 2009 investigative report has done nothing to close the digital divide in underserved Twin Cities neighborhoods, according to a recent report on KSTP-TV.

The University of Minnesota project, which received $2.8 million in federal stimulus funds and $800,000 in local matching funds, was highlighted by FFM in an October 2009 Accountability Alert. In their application for stimulus funding, the University of Minnesota made the bold claim that it will “close the Digital Divide in four Twin Cities poverty zones.” Eleven computer labs in Minneapolis and St. Paul intended for use by “underserved populations” were upgraded and expanded.

The project description states, “the University of Minnesota is uniquely qualified to carry out this project. The Urban Research and Outreach/Engagement Center, Office for Business and Community Development, and Extension Services have decades of combined experience in public engagement, broadband and Internet training, and development of computer curricula for public audiences.”

The KSTP-TV investigation, however, showed that the targeted underserved populations are more underserved than ever with fewer people using the computer labs after the infusion of millions of federal taxpayer dollars than before, according to reports filed with the federal government.

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Funding from federal stimulus to Exxon leads to banner income in 2009 despite recession

The Minneapolis-based nonprofit Center for Energy and Environment (CEE) has marketed residential energy conservation programs under the slogan, “Save Energy, Save Money!” However, according to tax records on file with the Minnesota Attorney General, helping utility customers save energy and money on their monthly bills also pays off for CEE, one of Minnesota’s biggest energy efficiency nonprofit organizations.

“We’ve been remarkably successful beyond our wildest dreams,” Sheldon Strom, CEE president  told the Freedom Foundation of Minnesota (FFM). “We were struggling for quite awhile and all of a sudden every program we were working on turned to gold. We’re trying to enjoy it while we can.”

Total compensation for the five highest paid CEE employees ranged from a high of $275,323 for the president to $175,003 for the director of indoor air quality. By comparison, the governor of the State of Minnesota gets paid $120,303 and the state’s Commerce Commissioner, who oversees some CEE projects, earns $108,400.

CEE officials said compensation amounts are competitive with going rates and not at odds with the nonprofit’s stated mission to make the most efficient use of both natural and economic resources.

“Our highly compensated staff are exceptional,” Strom said. “We didn’t just make up these numbers. We had a big accounting firm do a salary survey. They’re the ones that said these salaries are in the ballpark.”

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It appears that 2011 will continue to be another challenging year for many looking to sell their home, particularly given a glut of inventory sure to be on the market from an increase in foreclosures. That’s just the latest hurdle, however, for a Minnesota man who says a controversial city rental ordinance not only restricts his property rights, but also his ability to sell his three bedroom house.

Ethan Dean recently wrapped up his fourth tour of duty as a U.S. advisor in Iraq, but soon he’ll be carrying on the battle from his new post in Afghanistan—his battle, that is, with the City of Winona, Minnesota.

Dean’s campaign on the home front involves a controversial city ordinance that he says has cost him the opportunity to sell his $139,900 house that’s located in a prime location near Winona State University.

The conflict involves the so-called “30 percent rule” that limits the number of rental properties to 30 percent of residences per block in this college community.  Home owners who live on blocks above the 30 percent cutoff are not only prevented from renting their property, but also in effect from selling to buyers looking to invest in rental housing for college students.

“If it weren’t for the 30 percent rule, I’d have sold my house two years ago,” Dean emailed  from Iraq recently.  “There are many in town, some elderly who need the money from their house sale for medical issues. They are being punished for being Winona residents more than anyone.”

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No Commercial Flights, But Airport Still Hoping to Land More Federal Funds

St. Cloud Regional Airport (STC) touts lots of amenities on its website—a café, ATM, free wi-fi, free parking and a $5 million completely renovated terminal whose capacity went up dramatically from 30 to 200 travelers. There’s also a new $750,000 passenger boarding bridge secured with federal stimulus funds to keep travelers out of the elements while catching a flight.  One asset, however, the newly renovated airport notably lacks—commercial flights and passengers.

“We’re here to serve the public and serve them well and have adequate facilities,” Bill Towle, airport director, told the Freedom Foundation of Minnesota. “I would say the airport is a utility and we need adequate facilities to serve the public.”

Currently, an average of about one charter flight a month with 130 or so passengers uses the eerily empty 9,000 square foot glass-fronted facility.  Potential passengers checking the airport’s website are notified there’s “no commercial air service” available. Delta Connection flights between St. Cloud and Minneapolis were grounded at the end of 2009 due to weak customer demand. Both national rental car agencies pulled out of their airport offices months ago.

By then, it was too late. $3.125 million in federal aviation grants from user fees on fuel and tickets, $1.131 million in state airport funds, and $767,000 in local sales taxes were already spent on what’s in danger of becoming a terminal project in more ways than one.

“One thing we did not see is that Delta was going to pull out of here.  That was an absolute shock,” Towle said. ”We might not have done this improvement if we knew they were going to be gone.”

Soon the six Transportation Security Administration (TSA) baggage screeners based in St. Cloud will also depart, along with their high-tech, high-cost equipment. Assigned to other airports in the region for several months, the screeners have been offered jobs elsewhere.

“There’s no commercial flights, so there’s no need for screening,” said Luis Casanova, TSA spokesman.  “We’re pulling our screeners out in November and at some point, the equipment will be moved, too.”

Not so long ago, federal, state, and local transportation planners envisioned the St. Cloud facility as a tier-two “reliever airport” to ease air traffic congestion into Minneapolis-St. Paul International Airport, setting in motion the $5 million terminal upgrade and other spending for infrastructure improvements.

Officials forecast 25,000 or more commercial passengers would fly through STC in 2010 with a steady increase in traffic in future years, according to the project’s 2006 master plan.  Without Delta, however, about 1,000 passengers have boarded a handful of Sun Country charter flights to a Nevada casino resort this year.

“We got all those numbers approved by the FAA. The likely growth if we continued even as a status quo put us at 26-27,000 enplanements a year,” Towle said.

The controversy refocuses attention on the FAA’s Airport Improvement Program, which some critics say too often results in misplaced priorities and aviation funding. In the last decade, St. Cloud Regional Airport has received more than $24 million in FAA airport improvement grants, including funding for the terminal project, according to OMB Watch, an online database that tracks government spending.  Another national watchdog group indicates the St. Cloud airport received clearance for the terminal expansion despite the project’s low ranking of 35 out of 100 on the FAA’s own priority ratings scale.  The FAA states the rating “is the first evaluation factor and serves to categorize airport development in accordance with agency goals and objectives.”

Meantime, St. Cloud officials have launched an unusual campaign to attract another carrier, approaching local businesses for travel pledges in hopes of demonstrating significant local demand for air travel. With results falling short of the goal so far, the effort may depend on whether the city proves successful in obtaining a more familiar revenue stream–another $500,000 federal grant now under consideration at the FAA.

“Some of the ways we’d use that grant money would be to offset costs from start up of service,” Towle said.  “Additionally, if there’s any losses at the beginning maybe we could help reduce the cost of those losses…and maybe also help with marketing.”

Despite a shortage of commercial flights out of STC, there’s no shortage in requests for federal dollars.  Senator Al Franken’s website lists a $500,000 earmark request for improved runway lighting for the St. Cloud Regional Airport, while Senator Amy Klobuchar’s website lists a $1,000,000 earmark request for the same project.

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It’s tough enough to sell a house with home sales in the Twin Cities undergoing the biggest decline in the country, down 42 percent in July year to year. Yet some local governments make it even tougher for homeowners by imposing some of the country’s most onerous before-sale residential inspection ordinances, adding to the cost and red tape of buying and selling a house at the worst possible time.

Currently, fourteen metro-area municipalities have so-called “point-of-sale” ordinances in place, requiring home sellers to pay for a city inspection prior to selling their property. (In some cases, the ordinances are referred to as “time-of-sale” and “truth in housing” inspections.) In fact, in many cases, sellers are required to pay for the inspection before being permitted to put their home up for sale. These inspections are in addition to, not in lieu of, the private inspections for which home buyers routinely pay $300 or more.

That’s because, as several cities readily admit, these ordinances are not intended to help the buyer or seller. They are intended to help the city.

On its website, the City of Richfield states “inspections are not for the benefit of buyer or seller, but are a community effort to maintain the quality of Richfield’s houses and neighborhoods.” Common code violations cited by Richfield inspectors include bare wood, peeling paint, missing or deteriorated window glazing, and clogged gutters.

The laws require sellers to undergo a comprehensive city inspection for potential code violations at an initial cost that varies from $50 to $200, often before allowing the property to go on the market.

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Local governments in Minnesota have already spent at least $729,000 of taxpayer money this year to lobby policymakers in Washington, DC.

If federal lobbying records are any indication, Minnesota’s local governments are increasingly turning to our nation’s capital in search of funding for local programs. A Freedom Foundation of Minnesota analysis of Lobbying Disclosure Act filings finds that Minnesota’s local governments and their associations spent at least $5.217 million lobbying the federal government from 2006 through the first half of 2010.[i] Annual lobbying expenditures have risen each year and are on pace to set a new record in 2010, with at least $729,000 spent the first half of the year.

So far in 2010, the biggest spenders have been the City of Minneapolis ($90,000), the City of Moorhead ($80,000), and Scott County ($60,000).

Overall, the biggest spenders since 2006 have been Scott County ($815,000), the City of Moorhead ($620,000), Hennepin County ($405,000), the North Metro Mayors Coalition ($375,000), and the Anoka County Regional Railroad Authority ($369,000).

“I do believe that given the multitude of issues at the federal level that directly impact the cost of county government that it is important the county have a voice and be heard,” said Gary Shelton, Scott County Administrator. “I also believe it has been money well spent.”

The controversial practice of using taxpayer money to lobby for additional taxpayer money is nothing new in Minnesota. In fact, local governments and their associations are required to report lobbying expenditures to the Office of the State Auditor (OSA), which prepares an annual report on local government lobbying activities. However, the state law requiring local governments to report lobbying expenditures to the OSA does not apply to federal lobbying.

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Vice President Joe Biden met with state and local government officials from across the country last year to provide guidance on spending federal stimulus funds. Biden implored local leaders to focus on only essential infrastructure needs that will put people back to work and to avoid frivolous projects: “No swimming pools! No tennis courts! No golf courses! No Frisbee parks!”

Since then, dozens of Minnesota cities and counties have taken advantage of a little known stimulus bond program, borrowing $684 million for projects that include municipal swimming pools, a multi-million dollar golf course renovation and a new mega-community center, a Freedom Foundation of Minnesota analysis shows.

The Build America Bonds program offers a substantial subsidy by the federal government to help cover interest payments and entice local governments to borrow money, making it the fastest growing portion of the municipal bond market.

While most of the 65 bonding projects across Minnesota appear to be public improvement projects for roads and basic infrastructure, concerns have been expressed that Build America Bonds could encourage borrowing for unessential government projects, as well.

The City of Plainview approved borrowing $1.5 million through Build America Bonds for renovations to its municipal swimming pool. The City of Coon Rapids leveraged Build America Bonds for a $4.23 million facelift to the city-owned Bunker Hills golf course. Despite a budget crunch, St. Paul Mayor Chris Coleman pitched using Build America Bonds to help fund $24 million in projects.  The construction work includes installing a new $7.2 million swimming pool with a “lazy river”at Como Park, renovations to the Highland Park swimming pool, and building a 36,000 square foot community center.

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More than 100 staff members appointed by three Minnesota congressmen who serve as chairman or ranking member on powerful House committees appear to be exempt from a key requirement in the controversial health care reform bill recently passed by Congress and signed into law.

Now that most of twelve California wind turbines retrofitted for Minnesota winters are finally operational, several cities have acknowledged to the Freedom Foundation of Minnesota that the $5 million project may be more suited for generating PR—both good and bad—than producing significant quantities of power.

The wind power project involves utilities in eleven cities scattered across the state from the metro area to East Grand Forks in a consortium called the Minnesota Municipal Power Agency (MMPA). Each of the eleven member cities received one turbine, and the twelfth was given to the MMPA owned and operated Faribault Energy Park in Faribault. It was supposed to be a step toward meeting the state renewable energy mandate that requires 25 percent of Minnesota’s power be from renewable energy sources by 2025.

It turns out, however, the twelve wind derricks will produce power for perhaps several hundred homes, hardly making a dent in the MMPA’s 57,000 household and business customers.

“They’re basically for public relations, educational purposes. They’re just not feasible for any significant amount of electrical generation,” said Dan Voss, Municipal Utilities Director for the City of Anoka.

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Does the government’s power of eminent domain include seizing the rights to the wind that wafts over your property? That’s the controversial question swirling around an 8 megawatt wind farm proposed by the southern Minnesota city of New Ulm and opposed by several farmers in rural Lafayette Township who refuse to grant their “wind rights” to the city utility.

“This is merely an evolution of principles that have been evolving since the sovereign rights of eminent domain were determined to exist,” according to Hugh Nierengarten, New Ulm City Attorney.

“Eminent domain is basically like a nuclear bomb,” said Clete Goblirsch, a farmer who refuses to sign an easement. “The repercussions would be long lasting and widespread, not just for us, but for the wind industry.”

While public utilities have fairly broad powers to use government authority to force property owners to sell to meet their needs, the New Ulm plan involves an unprecedented move to expand eminent domain authority to include the seizure of air space on private property for power generation.

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Minnesota has declined to make public its list of recommended projects for the first round of broadband stimulus funding until Washington announces the lucky recipients beginning in early November.   Sure, many other states have released their prioritized lists of applicants for a $7.2 billion jackpot.  And sure, the secretive nature of the process seems at odds with the high level of transparency that was promised to accompany the even higher level of stimulus funding.

A cursory review by the Freedom Foundation of Minnesota of the projects under consideration, however, indicates there’s plenty of reasons to avoid public scrutiny.  

Leading the list of dubious projects is a $5.2 million proposal by the city of Minneapolis to provide laptops or iPod Touches to “underserved” residents, courtesy of taxpayers.  Of course, many taxpayers would no doubt appreciate receiving an iPod Touch themselves and there’s no indication of how handing out iPods and laptops would help create or save jobs, or spur economic recovery. 

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