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Thursday, May 24, 2018
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MOSI financial woes prompts county scrutiny

TAMPA — The discussion late Wednesday at the Hillsborough County Commission meeting concerned health and sanitary code violations at the Museum of Science and Industry’s restaurant.

But the conversation soon turned to the museum’s financial problems, which are a greater concern to commissioners and likely will spur a restructuring of the county’s contract with MOSI.

Inspectors from the Florida Department of Business and Professional Regulation closed the MOSI Cafe briefly in January after observing filthy conditions, including mold and grease build-up on cooking equipment and a soft drink dispenser. A follow-up inspection on March 12 showed many of the same unsanitary conditions, plus dead roaches and rodent droppings.

“When you read this, it’s pretty damning,” Commissioner Al Higginbotham said, holding up the Health Department inspection reports in his office after the meeting.

But MOSI, one of the Tampa area’s premier museums, has bigger problems than a dirty restaurant. The museum was unable to pay back $250,000 of a $450,000 loan from the county in November 2012. Then in August, with the $250,000 still unpaid, the museum asked county administrators for another $250,000 loan.

Adding to the financial stress was the poor performance of last year’s “Monsters of the Sea’’ exhibit.

The county owns the museum building and property, and a commissioner sits on MOSI’s board of directors. So the red ink discovered last year set off alarms with county administrators, who insisted on looking more closely at the museum’s books.

“Taking a look, we saw they were struggling; they were having cash-flow issues,” said Tom Fesler, the county’s director of business and support services.

In December, the county authorized MOSI to borrow up to $700,000, but the loan came with conditions. The museum has to provide monthly financial statements to the county, and county officials must sign off on any long-term borrowing from private sector lenders, Fesler said.

The county also brought in a consultant to study the museum’s operations.

“We’re having the consultant look at the entire business model from top to bottom,” said County Administrator Mike Merrill after the meeting. “They’ll be looking at what could be done differently to shore up the finances at MOSI and make it self-sufficient down the road.”

The consultant is expected to finish the study in late April or early May. Depending on what it says, commissioners are poised to make major changes in the county’s relationship with the museum.

During the discussion Wednesday, Higginbotham asked County Attorney Chip Fletcher to look at possible changes to the county’s contract with MOSI, based on the consultant’s report.

“It’s healthy to review these agreements,” Fletcher replied.

Higginbotham said he decided to put the restaurant’s health violations on the commission agenda because MOSI officials had concealed the problems. Commissioner Mark Sharpe, who sits on the MOSI board of directors, was unaware of the failed Health Department inspections. Merrill said he found out about the restaurant’s problems Tuesday.

Though the financial problems and the restaurant violations are separate, taken together they reflect a management problem, some commissioners said.

“The broader conversation out there was about more than the restaurant,” Sharpe said. “That’s one of the ongoing issues – management.”

Witold “Wit” Ostrenko, MOSI’s president and chief executive officer, was out of the country and could not be reached for comment. The museum was represented at the commission meeting by Molly Demeulenaere, MOSI’s vice president of growth and development.

Demeulenaere told commissioners that all but four of the restaurant’s health violations had been fixed. The outstanding violations are being handled by outside contractors, Demeulenaere said, and the pest control company has been fired.

“After being in the building since 1995, this is the first time we’ve had a problem with pests,” she said. “We’re extremely embarrassed.”

Demeulenaere did not address the financial concerns.

The Museum of Science and Industry started out as a county department with Ostrenko as director. In 1995, he convinced county commissioners to make MOSI a separate nonprofit museum, which would enable it to raise money for endowments.

The county agreed to help the new museum accomplish its goals by maintaining the building and property and paying debt service on bonds for major improvements. The museum would pay operations costs and handle minor maintenance.

The county owns 70 acres surrounding MOSI that can be used for the museum’s expansion, but only with the county’s approval.

MOSI’s 2011 filing with the Internal Revenue Service, the most recent one available, showed total revenues of $10.14 million and expenses of $9.6 million. Ostrenko’s annual salary was $200,000, according to the IRS filing.

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