Photo credit: Ben Krut
A recent audit of operations, concessions and events at the Mitchell Park Horticultural Conservatory, commonly known as the “Domes,” reveals non-standard accounting or questionable management practices among all parties ostensibly in control of the facility. The audit’s pointed title is: “The Domes should evaluate its current admission practices, increase its monitoring of contracts and establish stronger controls, policies and procedures in order to position itself for success in the future.”
The 79-page audit was released by Milwaukee County’s independently elected Comptroller Scott B. Manske in mid-December. The Milwaukee County Board of Supervisors formally requested the audit, which makes 19 recommendations to improve operations, income generation and accountability.
Located in Mitchell Park on Milwaukee’s southwest side, the popular Domes attraction comprises three massive display gardens under beehive-shaped glass—the Tropical Dome, Desert Dome and Floral Show Dome. The complex also has a $14 million greenhouse facility with about 65,000 square feet, including the multi-use Annex used for the weekly Winter Farmers Market and special events. The greenhouses (which also serve other county parks) were completed in 2014 and funded by the Wisconsin Department of Transportation.
Operated by the Milwaukee County Department of Parks, Recreation and Culture, the conservatory engages with two partners. The non-profit Friends of the Domes “provides educational, cultural, recreational and scientific programs and operates its membership program” and the Domes’ gift shop. Zilli Hospitality Group, a Waukesha-based private catering business, provides food and beverage services. Zilli is also the booking agent for Domes’ weddings and other events.
The audit recommends “increased oversight and contract monitoring efforts…by Parks to ensure [that] the requirements of current agreements with Friends of the Domes (Friends) and Zilli Hospitality Group (Zilli’s) are met.”
Compliance Issues
On Sept. 14, 2008, the County Parks entered into a 10-year contract with Zilli’s as the Domes’ exclusive caterer. The initial agreement expired Monday, Dec. 31, 2018, but the County Board authorized the parks to enter into a new agreement with Zilli’s. The audit “found Zilli’s to be noncompliant with the contract in a variety of areas.” Although Zilli’s 2008 contract does not authorize them to collect room rental and set-up fees or to issue refunds and credits, “the current Domes rental permit directs patrons to Zilli’s for payments.”
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Milwaukee County was shorted more than $20,000, because “a lack of monitoring and reporting led to errors in credits and refunds by the County… In 2016, after a sudden temporary closure of the Domes to make repairs, many clients cancel[led]…events scheduled in the venue. Efforts were made to relocate clients to other facilities,” but many cancellations occurred. Review of refunds and credits “clearly showed two separate systems operating simultaneously at the Domes: one by the Parks Department and one by Zilli’s.”
Parks issued 33 room rental refunds totaling $51,243. “Zilli’s issued credits against the room rental fees, and in some cases, without a clear reason stated, but in all cases without written authorization from Parks,” the audit says. Consequently, “Parks issued both full and partial refunds to clients whose events were still held, totaling $20,976. Zilli’s provided reimbursement of $650, which resulted in a net revenue loss of $20,326 for Parks.”
The audit states: “The agreement with Parks and Zilli’s is very basic and does not require Zilli’s to provide any documentation to verify a majority of the provisions; Parks currently has no financial data to verify food and bar [sales]…nor is Zilli’s required to submit proof of local licenses, including liquor licenses. Parks staff indicated that they do not ask for proof of sales [for which Zilli’s pays an 8% commission to Parks] or audited financial statements from Zilli’s. Parks just take their word that the sales [figures] are correct. Parks did not have on file the contractually required certificate of liability insurance.”
Zilli’s also provides catering at other Milwaukee County facilities, including Boerner Botanical Gardens, the Charles Allis Museum, Greenfield Park, the Milwaukee County Zoo, South Shore Park, Trimborn Farm and Villa Terrace Decorative Arts Museum.
The Friends Partnership
On Feb. 4, 2010, the Parks and the Friends entered into their current agreement to help ensure “the continued success and growth of the Domes.” The agreement remains in effect until terminated upon one-year written notice by either party or by mutual consent. Paid staff and volunteers perform various routine services, including conducting about five special events annually that serve as fundraisers, with proceeds underwriting improvements to the Domes.
Among concerns the audit cited, “During 2014-2017, it appears that Parks and the Domes failed to monitor key provisions and conditions of the agreement, the Friends retained funds owed to Milwaukee County, and the Friends failed to provide required documents.” Auditors recommend that Parks “clarify the role of Friends in relation to County staff reporting…[and] formally approve amendments to the agreement when provisions and conditions are changed.”
Assessing Fees and Attendance
After analyzing attendance and fee-related data during 2014-’17, the auditors found that “82.3% of all revenue at the Domes was from admission fees, which has limited the Domes’ ability to generate additional revenue without changes to admission policies and fees.” During that same period, the Domes and Annex generated approximately $2,966,000 in revenue. Expenses were nearly $6,448,000 during the same time period, “after adjusting for the centralization of Park Service Division fees.” Since the conservatory is “not a self-funded entity, the Domes has a continuous need to evaluate current and potential revenue sources to increase revenue,” the audit states.
One audit recommendation calls for Parks to “review its attendance practices and establish a benchmark for free vs. paid admissions.” Also, since data sets did not match, “the system for tracking attendance needs attention.” Additionally, the audit says, “Domes operations would benefit from comprehensive written policies and procedures along with increased monitoring of sales tax issues, including payments” related to Domes staff, Zilli’s and the Friends. The audit concludes that, “to make informed management decisions and possibly increase revenues, the Domes must first improve tracking of revenues including revenue from attendance at events.”
Stakes remain high for all parties involved with Domes’ operations, with problematic implications for each. Some county officials have begun advocating for “new governance” of the Domes. One option would be to have the facility function as an independent unit within county government rather than as part of the Parks Department. The Friends have also publicly expressed interest in governing the Domes.
Zilli’s contract is currently being renegotiated; a draft released in 2018 indicated Zilli would control rentals of Domes facilities for up to 20 years (a 10-year contract with two five-year extensions). The pending contract, which covers multiple county park facilities, says: “Except for standard default provisions, [there is] no right in the County to terminate prior to end of term, including during any extensions.” Thus, the contract would allow Zilli to opt out, but not the county, without facing steep penalties.
Milwaukee County Executive Chris Abele enthusiastically promotes ever-increasing privatization of Milwaukee County facilities and services. Speaking at a December 2018 forum about public-private partnerships, he said that, when services are privatized, “it’s never been in a place where we’re doing something incredibly well and consistently providing value. It’s usually because we’re not.” Abele also acknowledged that some privatized contracts are “sub-optimum,” even when managed by well-intended people. “Even with a well-designed contract… most people in government are not as sophisticated about contract maintenance and oversight as folks in the private sector… Guaranteeing that it is always going to be a sort of rosy outcome; it is impossible for an elected [official] to do.”
The audit will reportedly be on the agenda of the County Board Finance and Audit Committee meeting starting at 9 a.m. on Thursday, Jan. 31, in the Milwaukee County Courthouse, Room 203R. The Audits Division staff will conduct a six-month follow-up.
