MN Hospitality Advocate

Minneapolis City Council Deals with Fire Inspection Issues

Posted in City Council, Restaurant Issues, Uncategorized by hospitalityminnesota on May 24, 2010

I just returned from a meeting at Minneapolis City Hall in which the city’s Fire Department was grilled about inspection procedures and in which a new system sharing the inspection duty with the Department of Regulatory Services is the recommended model. I was at the hearing because about six months ago, the City of Minneapolis Fire Department instituted a new hood cleaning permit fee. The fee, a minimum of $130 each time a hood is cleaned, is charged to the hood cleaning company, which then passes along the fee to the restaurant operator.

The issue, as raised by the Fire Department, is that some of the cleaning companies aren’t doing an adequate job. The inspection fee was established to require the cleaning companies to take digital pictures of each cleaning job and provide those in order for the permit to be validated. We understand the issue. Our problem is that restaurants are now facing a minimum $130 cleaning permit fee in Minneapolis each time they have a hood cleaned. This amounts to a disincentive to hood cleaning.

Our approach would suggest a different strategy – have the fire department conduct periodic inspections of work done by the cleaning companies (they license them and know who they are, after all). Eliminate the $130 per cleaning fee and instead, charge a penalty of the cleaning company if the work completed is inadequate.

We have been working behind the scenes with various Minneapolis City Council members to try and achieve these changes, or at least, gain a reconsideration of the current ordinance. But in the midst of this effort, Heidi’s Restaurant in Minneapolis went up in flames due to what is reported as a hood fire, and in another tragic incident, members of a family were killed when the apartment in which they were staying went up in flames, also destroying a bar below. These two incidents have cast huge attention on the work of the Fire Department and getting changes to our hood cleaning permit fees, which are a projected $200,000 or more revenue generator for the department, is proving difficult.

Nonetheless, we continue to work the system. It appears there will be a more comprehensive review of the city’s fire codes in 2011. That might provide an opportunity for change. But we can’t wait that long. The hood cleaning permit fee is slated for review after one year of implementation, and we’ll be on hand seeking to eliminate (or at a minimum reduce) the fees.

We express our appreciation with the Minneapolis Area Chamber of Commerce for working with us on this important issue. If you have a relationship with any Minneapolis council members, now is the time to talk to them about this onerous fee and its impact on your business.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

Can Hospitality Escape this Session Without a Tax Increase?

Posted in Elections, General Advocacy, Restaurant Issues, State Laws, Uncategorized by hospitalityminnesota on May 14, 2010

Given the tremendous budget pressure the legislature has faced throughout the session, now amplified by the unallotment ruling of the Supreme Court, to escape this legislative session without a tax increase would be a major industry accomplishment. With just days to go and a major gap before them, several legislative leaders brought forward the idea of a liquor tax.

Our folks on the inside suggest that this is not likely to happen this year for a couple of reasons. First because Governor Pawlenty has been resolute in his opposition to tax increases. Second, because we believe DFL leadership has liquor in its sights for the coming legislative session next year, when the state faces again a huge budget shortfall and a new governor sits at the State house.

So, though it’s still too early to bring out the cheering squad, we are cautiously optimistic that we escape this session without any statewide lodging, liquor, food or beverage taxes. If we do avoid a tax consider that a tremendous victory for our industry.

What about the impact of this session regarding other areas of operation? Thus far, we’ve managed to fend off virtually all harmful legislation, and to modify those we haven’t defeated, such as ignition interlocks. We’ll be sure to provide an industry wrap up outlining the impacts of the session overall.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

What the Unallotment Ruling Means

Posted in Uncategorized by hospitalityminnesota on May 5, 2010

The Minnesota Supreme Court in a 4-3 decision today ruled that Governor Pawlenty crossed a constitutional line into legislative turf when he used his unallotment authority to unilaterally cut spending by $2.7 billion last July to balance the state’s budget. While the court ruled on only one specific instance of unallotment, the general consensus is that the application of the ruling is much broader, calling into the question all of the Governor’s unallotment decisions.

With just a few weeks left in the session, the legislature and Governor must now agree on a course of action. The legislature could simply ratify the cuts Pawlenty made, thereby making “legal” his previous action. The legislature could ratify some of the Governor’s unallotments, such as the $1.5 billion education shift, and then argue over other cuts to achieve a balanced budget as mandated by law. The legislature could reject all of the Governor’s actions, creating a situation in which the full deficit must be addressed with new cuts or revenue streams (and it seems unlikely that Pawlenty would support any tax increase). This ruling will likely throw this session into many late nights over the next few weeks.

To read more about the unallotments, check out the Minnesota Public Radio NewsCut Blog or MPR NewsQ.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

Vikings Day at the Minnesota Legislature

Posted in Uncategorized by hospitalityminnesota on May 5, 2010

We began today with an early morning hearing on the Minnesota Vikings multi-purpose stadium before Chairman Rep. Gene Pelowski and the House State and Local Government Operations Reform, Technology and Elections Committee (known as Gov Ops). Last night, the stadium bill passed out of the Gov Ops Local Government Division, but with substantial changes.

The new taxes that were initially proposed to fund the stadium were removed from the bill, and an alternative version that captured revenue from existing Minneapolis taxes instead became the focus of the funding. The bill under consideration this morning takes entertainment, lodging and sales taxes that were first applied in Minneapolis to pay off the Minneapolis Convention Center (MCC) bonds, which generate approximately $50 million per year, and shifts a portion of them to pay off football stadium bonds ten years from now, when the MCC debt is retired. For the first 10 years, the Minnesota Vikings contribution to the project would be used to pay the debt service.

The vote was close, but ultimately it failed in Gov Ops by a 10-9 vote. The bill thus remains in the Gov Ops Committee and it appears unlikely it will get another hearing this session. At the same time, a similiar bill was heard before the Senate State and Local Government Operations and Oversight Committee, chaired by Senator Ann Rest.

John Luke, General Manager of the Hilton Hotel Minneapolis, was among those to testify in support of the bill on behalf  of Hospitality Minnesota and its three Associations. The City of Minneapolis expressed concerns with the bill, as it has designs on the funds that will become available once the MCC bonds are retired. The city would like to use the money for convention center renovation, capital improvements, the Target Center and perhaps other projects.

With the stadium action over the past few days, it appears the issue will not be resolved this session. It will have to be resolved next session as the Vikings lease at the Metrodome expires and they will not re-sign there.

As these two hearings were being conducted, the Minnesota Supreme Court handed down a ruling regarding Governor Palwenty’s unallottment last year of $2.7 billion. The court ruled 4-3 that the Governor had overstepped his authority with regard to one particular unallotment, which calls into question the legality of the remaining unallottments. More in my next post.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota