December 29, 2010 - Recent actions by the Minneapolis Mayor and City Council point to a rocky future for dedicated neighborhood funds. On December 14, as part of the approval process for the 2011 Budget, the City Council adopted a Staff Direction indicating that the City intends to go to the State Legislature to eliminate the Neighborhood Revitalization Program (NRP) Policy Board and program and secure City control of NRP funds that have been committed to neighborhoods but are not yet spent.

"But that is no reason to stop reaching out to residents and business people to establish your neighborhood priorities and try to address them," NRP Director Bob Miller said. "Tough economic times demand creative ways of meeting needs and preserving the quality of life for residents in Minneapolis. The ability to leverage neighborhood resourcefulness, whether by money or individual volunteerism, is the legacy of NRP. Neighborhood organizations should continue working on and approving their Phase II Neighborhood Action Plans and contracting their NRP monies as their plans intended."

What Happened at the City Council Dec. 13?

"We will not have made the tough choice, we will have made the easiest decision, which is to take from where the lowest voter turnout is, rather than doing the hard work of looking at everything with its ramifications," Minneapolis Second Ward City Council Member Cam Gordon said as debate on the City's 2011 Budget went past midnight and into the early morning hours of Dec. 14.

Ways and Means Committee Chair 13th Ward Council Member Betsy Hodges had just characterized anything less than passing the budget proposed by Mayor RT Rybak and amended by a resolution sponsored by Rybak, Hodges and Council President Barbara Johnson (4th Ward) as "having the City Council avoid tough choices." The midnight debate followed more than five hours of testimony, mostly from people who wanted their property taxes decreased. They and many other residents were expressing their concern about the level of increase in the City portion of the proposed property tax statements that were sent out in November.

The Budget initially proposed by Mayor Rybak in August called for a 7.5% average increase in residential property taxes. The Mayor had adjusted the budget proposal downward since then but the 6.5% increase that was still required and announced to the public in November was still too much. The amendment proposed to the Ways and Means Budget Committee and to the entire Council on December 13 reduced the average increase to 4.7%. In addition to proposing one time actions that reduced the property tax increase, the amendment proposed a Staff Direction that would limit neighborhood NRP Phase II expenditures to only 50% of the allocation that the City Council had previously approved on June 18. The City also included in the Staff Direction the requirement to pursue legislation that would end NRP and transfer any unspent NRP funds to the City.

Council Members Cam Gordon and Robert Lilligren voiced strong opposition to the proposed Staff Directive and pointed out repeatedly that it would have no impact whatsoever on the 2011 budget. Their words and arguments fell on deaf ears and the Staff Direction was eventually adopted with only Lilligren, Gordon, Hofstede and Reich opposing the proposed amendment. Gordon and Lilligren continued their opposition by voting against the budget. Council Member Meg Tuthill did as well, but her reason was that she did not feel that it went far enough in giving property tax relief. The budget passed 10-3.

Council Member Hodges counted 52 of 75 speakers asking for reduced taxes, and said their immediate need won out over any concern she would have for neighborhood organizations.

Only three of those speakers, however, suggested targeting neighborhood NRP funds. Most spoke passionately about the need for the City to completely reexamine its spending priorities and get control of both current and future expenditures.

Their messages fell into two categories: "look at everything, there are lots of ways to save money without touching essential services" or "you're taxing me out of my house, I'll have to move and lose money when and if I can sell."

Of the nearly two dozen speakers whose messages supported NRP, several talked about seeing their own taxes increase, and wanting to see the city look at other ways to offset the anticipated cuts to local government aid which will make the situation worse. They emphasized that NRP-funded initiatives in their respective neighborhoods leveraged several times the tax dollar investment; homeowners fixed up their homes, grant makers and other government jurisdictions contributed to bricks and mortar and infrastructure improvements.

"It's not just cosmetic. We saw a reduction in crime," one said. Several made the point that NRP dollars were often used to help pay for police services, park equipment, and school buildings, saving the city and other jurisdictions budget funds. "Not to mention, all the volunteer hours." Some neighbors went further, offering to help the council find long- term solutions to annual tax shortfalls. The Mayor's budget, while cutting some essential services to bring it to the 4.7% increase mark, included other increases, new initiatives that could be debated, and other commitments that might be renegotiated. It appeared to be long on short-term fixes but short on long-term change.

In the end, the testimony from all the present residents had little impact. The Council adopted the budget with the 4.7% increase and the Staff Direction to end NRP and initiate efforts to take control of NRP's remaining neighborhood funds.

As most people are well aware, funding of NRP ended in 2009. NRP is sunsetting, and the Director of NRP had been working with the Director of the new Neighborhood and Community Relations department of the City on a plan to transition NRP activities into the new department. The NRP Policy Board approved the plan resulting from their cooperative effort, after incorporating comments and suggestions received from the public, on September 27.

A legal opinion established that the funds remaining in the program have to be spent under the same type of structure as the original program. How that would be preserved in the new department was still being worked out. But all that changed as the NRP Policy Board saw the budget action as a breach of their good faith, and contrary to the City's own adopted principles of community engagement.

Response to Council Action

After the Minneapolis City Council's budget action Dec. 13-14, the NRP Policy Board enacted the resolution (see below) that speaks for itself - ending all cooperation with the new department.

NRP Director Bob Miller emphasized that neighborhoods should continue deliberating on their plans at 100 percent of their Phase II allocation. Those plans will go through the Policy Board and then to the City Council, where they will then be reduced if the Council or Legislature has not revised its stance by that time.

Preparing for what they suspected would be the outcome of the City's budget session, representatives from more than 50 neighborhood organizations hosted a meeting with Minneapolis legislators at Corcoran Park on Sunday, December 12. Nine of the 17 State Senators and State Representatives and sixty-five residents braved extremely difficult conditions to get there after the fifth worst snowstorm in Minneapolis history. Some of the officials present said they would not carry any legislation ending NRP, and expressed frustration that the City's legislative agenda is typically set without consulting them; when they might have ideas and insights on what could fly with their legislative colleagues.

The Minneapolis legislators also said they have been inundated by emails from tax protesters. They suggested that people call them instead or as well (contact information is listed below), with ideas for true long- term solutions to the city's cash woes. While the current state of affairs may be the result of local responses to unfortunate previous state actions, the keys to getting back on track also require creativity and political will at the state level, much like the recently enacted Legacy Amendment or the initial enabling legislation that started the award-winning, internationally acclaimed NRP.

NRP Policy Board Resolution Dec. 20, 2010

Whereas, the Minneapolis City Council acted on Tuesday December 14, 2010 to adopt a Staff Direction as part of the 2011 Budget process that had no impact on the 2011 property tax revenues for the City of Minneapolis but will significantly and adversely affect Minneapolis taxpayers and neighborhood residents by eliminating their access to 50% of their Phase II neighborhood NRP allocations for improvements to their neighborhood; and

Whereas, the Minneapolis City Council adopted, on December 7, 2007, seven Minneapolis Core Principles of Community Engagement and violated every one of them with the processes used to adopt this Staff Direction that dramatically and adversely affects the taxpayers and residents of Minneapolis; and

Whereas, the Staff Direction adopted December 14, 2010 by the Minneapolis City Council directs City staff to seek legislation at the state level consolidating neighborhood programs and eliminating the Joint Powers Board that governs NRP without consultation with the Policy Board or the other government participants in the Agreement; and
Whereas, the Staff Direction indicates that promised funds for neighborhoods from the Consolidated Tax Increment Financing District allowed by state statute and created by the City in 2010 will be studied to determine the impact of reducing this commitment by 50%; and

Whereas, the NRP Policy Board acted in good faith and in the interests of good and cost effective government to support the "NRP and NCR: Collaboration, Cooperation and Consolidation Plan" and adopted that plan on September 27, 2010; and

Whereas, NRP and the NRP staff have completed action on every item that was assigned as their responsibility in this plan with a target date of December 2010 and the City and Neighborhood and Community Relations department (NCR) have not yet completed the actions for which they were responsible that were targeted for completion before October 2010; and

Whereas, the Staff Direction adopted by the Minneapolis City Council reduces funding for neighborhood organizations and com- promises the integrity of the NRP program and therefore violates two of the four principles of the "NRP and NCR: Collaboration, Cooperation and Consolidation Plan" ("Maximize funding for neighborhood organizations" and "Maintain the integrity of both the NRP and NCR programs");

Therefore,M Be It Resolved, that the Minneapolis City Council and Mayor have violated the principles supporting the NRP and NCR: Collaboration, Cooperation and Consolidation Plan approved by the Policy Board on September 27, 2010 and that the support for that plan is hereby rescinded;

Be It Resolved, that because the Mayor and City Council are failing to honor commitments that they made on December 7, 2007 to "fund Phase II Neighborhood Action Plans at no less than 70 percent of their approved April 19, 2004 allocations" and on June 18, 2010 to "increase the amount available to 100% for approved Phase II Neighborhood Action Plans" and are not acting in good faith, in accordance with the Minneapolis Core Principles of Community Engagement adopted by the City Council on December 7, 2007, or in a manner that protects neighborhood NRP activity, the NRP Director shall end all collaboration efforts with the NCR and NCEC, effective immediately upon adoption of this resolution;

Be It Resolved, that the NRP Director is instructed to end all detailing of NRP staff to the NCR effective immediately upon adoption of this resolution and is prohibited from initiating any new detailing without the express consent of this Board;

Be It Resolved, that the NRP Director pursue options for the benefit of NRP and provide a report to the Policy Board at its January 24, 2011 meeting.


Contact Information for Minneapolis Legislative Delegation

Minnesota House of Representatives:
58A Joe Mullery (651-296-4262) 387 SOB rep.joe.mullery@house.mn
58B Bobby Joe Champion (651-296-8659) 329 SOB rep.bobby.champion@house.mn
59A Diane Loeffler (651-296-4219) 335 SOB rep.diane.loeffler@house.mn
59B Phyllis Kahn (651-296-4257) 353 SOB rep.phyllis.kahn@house.mn
60A Marion Greene (651-297-9001) 273 SOB rep.marion.greene.house.mn
60B Frank Hornstein (651-296-9281) 213 SOB rep.frank.hornstein@house.mn
61A Karen Clark (651-296-0294) 277 SOB rep.karen.clark@house.mn
61B Jeff Hayden (651-296-7152) 389 SOB rep.jeff.hayden@house.mn
62A Jim Davnie (651-296-0173) 215 SOB rep.jim.davnie@house.mn
62B Jean Wagenius (651-296-4200) 251 SOB rep.jean.wagenius@house.mn
63A Paul Thissen (651-296-5375) 267 SOB rep.paul.thissen@house.mn

Minnesota Senate:
58 Linda Higgins (651-296-9246) 328 Capitol sen.linda.higgins.senate.mn
59 Lawrence J. Pogemiller (651-296-7809) 235 Capitol (Use Mail Form for email)
60 D. Scott Dibble (651-296-4191) 111 Capitol sen.scott.dibble@senate.mn
61 Linda Berglin (651-296-4261) 309 Capitol (Use Mail Form for email)
62 Patricia Torres Ray (651-296-4274) 124 Capitol sen.patricia.torres.ray@senate.mn
63 Kenneth S. Kelash (651-297-8061) 320 Capitol sen.kenneth.kelash@senate.mn

SOB = State Office Building, 100 Rev. Dr. Martin Luther King Blvd., St. Paul, MN 55155
Capitol is at 75 Rev. Dr. Martin Luther King Blvd.,St. Paul, MN 55155
Email forms and other legislature information are available at www.senate.leg.state.mn.us and www.house.leg.state.mn.us



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