The hidden cost of donations

Park and Rec Department considers a service charge on donations

NEW ULM - The New Ulm Parking and Recreation Commission was hesitant to approve proposed service charges on donations, during Monday’s commission meeting.

Park and Rec. Director Joey Schugel presented a proposed policy change that would place a service fee of up to 10% on some donations that incur greater staff time or maintenance expense.

"Not every donation is the same," Schugel said. "Some can be very time-consuming."

Many of the items donated to the park system, included park benches, picnic tables, shelters and trees can cost the parks department in terms of extra maintenance cost or staff time.

Schugel emphasized this service charge would not make the department money, but would cover some of the additional expenses.

Parks commissioner Jim Jensen immediately raised concerns that a service charge might dissuade some donors if they knew a service charge was added to their donations.

Commissioner Anne Earl said she had the same reaction to the service charge. She was worried some donors would reluctant to pay a fee on top of a donation. In addition, she was not sure how the department would determine which donations to charge and at what cost.

"This would only be charged upfront if deemed reasonable," Schugel said. "It is not something we would come back to a donor for within a few years."

Earl said she had worked for organizations that charged a fee for donations, but the fee was built into the price. She said she would be comfortable updating the policy if the service fee was a line item.

Schugel said the fee could be included as a line item.

"The goal of this was to be transparent so staff isn't coming up with an increase that is in the policy already," Schugel said.

Commissioner Greig Glover asked how the donation process works.

Schugel said donors typically come to Park and Recreation with a donation idea. As an example, he used a hypothetical bench donated to Nehls Park.

First, the parks department would determine if the bench needed a concrete pad and determine which type of commercial-grade bench the donor wanted. Parks staff would price out the cost of the bench and concrete pad, which can change with every bench project. The donors would receive a quote before moving forward with the donation.

Commissioner Jenson said the parks department had a great reputation and received many donations. He wasn't sure if the service charge was worth hurting potential donations.

Commissioner Glover asked how much donations were costing the parks department.

Schugel said he did not know the exact cost, but said recently the department was receiving more donations for memorial than before.

Commissioner Earl said she saw the issue from both sides. She understood some people might resent being asked to pay extra after giving a donation, but at the same time some donations are costing the city more money in the long run and the extra line item expense might be needed.

The commissioners made no official decision on the policy changes, but commission chairman Kurt Johnson asked staff bring back a revised version of the policy for review at a future meeting.