Mayor: Citizen participation too scattershot

As NRP limps into Phase II, Rybak's Aug. 14 budget address to set new vision for civic engagement

This year, the city of Minneapolis will spend approximately $9 million to engage residents in policymaking and problem-solving -- including direct support for neighborhood organizations, neighborhood policing efforts and community meetings to discuss road projects, according

to a city analysis.

The city spreads those millions of dollars for public participation among numerous city agencies and programs --including the Neighborhood Revitalization Program (NRP), public works, regulatory services, the Minneapolis Community Development Agency and planning.

When Mayor R.T. Rybak releases his budget Aug. 14, he will describe a vision for a more unified public involvement program, said Deputy Mayor David Fey.

The current system is "chaotic and uncoordinated," Fey said. "When times were flusher, we could sort of live with that. Now that resources are limited, everyone agrees that we need to tighten that system up and make it work more efficiently."

The mayor is not tipping his cards on how citizen participation would be overhauled, but NRP may be central to that discussion.

Launched in 1991, NRP gave neighborhoods clout. It has been a significant piece of the city's civic engagement effort. NRP was to be a $20-million-a-year, 20-year program, giving neighborhood groups money to plan projects and hire staff, based on resident priorities.

Its funding is uncertain; even under the most optimistic scenario from 2003 to 2008, NRP would have half the funding it had in the past.

Further, the city is merging its economic development and planning agencies into the department of Community Planning and Economic Development (CPED). The new mega-agency could take on a larger role in the city's citizen participation effort, but how that fits with NRP is up in the air.

Some, including the mayor, have criticized NRP for not being more inclusive and for not having done more for affordable housing. NRP backers respond that the city never gave neighborhoods an affordable housing mandate and defend its inclusiveness, saying it has done more than any other city program to engage citizens.

The mayor is looking for change, shifting the NRP focus from direct spending -- which is being cut -- to a greater but more indirect role influencing the city's priorities.

He wants to reframe the debate, he said, from one that says "The city is broken, so we have to put a few dollars over here so neighborhoods can try to chart their own course," to "Neighborhoods have dollars to chart their course -- but in addition, communities have the ability to influence the larger, citywide spending decisions."

NRP funding takes shape

NRP citizen participation spending-- either direct administrative funds to neighborhoods or by NRP's own staff and contractors -- totals $3.2 million of the $9.4 million the city said it would spend on citizen participation in 2003. (The $3.2 million does not include NRP spending on neighborhood projects.)

NRP does not receive money from the city's annual budget. It depends on excess funds from the Common Project, city-backed developments that spin off property tax revenue after the city pays the project's annual debt.

State tax changes have cut commercial and industrial property taxes, reducing Common Project revenue -- and shrinking available NRP money.

City Councilmember Barret Lane (13th Ward) has proposed an ordinance giving NRP first call on Common Project spending after debt payments and administrative costs.

NRP Phase II would get approximately $90 million if city Common Project forecasts run true. Instead of the $20 million a year, NRP would hit lean times in 2003-2008, fluctuating between an estimated $4.9 million and $9.3 million a year.

Lane notes NRP funds could fluctuate with no set promise of support. "No one is going to be able to say, you have X dollars, and you can plan on that," Lane said. "We are guaranteeing a source, we are not guaranteeing [an amount]."

NRP Executive Director Bob Miller said fluctuations can be smoothed with a reserve fund, but less money is the big issue.

"[Neighborhoods] will have to be more selective in what they support," he said. "It will mean more leveraging of funds."

The NRP Policy Board voted 8-1 July 21 to support Lane's plan but said the city should guarantee $11 million per year using federal Community Development Block Grants and other funds.

City leaders don't appear ready to shift that much discretionary spending.

"It is doubtful we can deliver on the $11 million," Rybak said.

The NRP fix has caused tension with the MCDA, which does city economic development. Because NRP gets the first $20 million of Common Project dollars, the MCDA would get nothing until 2009, according to projections.

To provide cash for non-neighborhood economic development, Lane has proposed a second plan to free up $3.3 million annually for the next six years. His plan borrows money from the Hilton Fund -- a reserve from the sale of the city's interest in the Downtown hotel -- using a 2009 loan repayment from Brookfield Properties on Gaviidae Commons to repay the Hilton Fund. (Although Brookfield has defaulted on two previous city loans, city finance officials say solid assets back the 2009 repayment.)

New role for neighborhoods

The mayor also said he wants NRP more engaged in city budget making.

He cited the Capital Long-range Improvement Committee (CLIC), a 33-member citizen committee appointed by councilmembers and the mayor to advise the city on building and road projects.

"Their recommendations will be the cornerstone of my budget for capital spending," Rybak said. "That is not connected in any way to NRP, and that is a mistake."

Similarly, Rybak said block clubs are doing great work and can influence public safety spending. "[They] are in no way connected up to NRP. And that is a mistake, too," he said.

Some tie the core of NRP's success to the money neighborhoods direct. Councilmember Robert Lilligren (8th Ward), said available cash is what brought so many people to the table.

It "created a lot of interest, a lot of neighborhood identity," he said.

Miller agreed and said if city leaders think large numbers of residents will turn out to engage in broad policy discussions as they have for NRP, "they are crazy."

"There will be policy wonks and there will be residents and advocates who will be happy to do it," Miller said. "That is because they get paid for it or they have a special interest in it. But it will not be the mom and pop down the street; it is not going to be the normal everyday resident who gets involved in that."

Fey agrees. "If the task at hand is to advise the city about policy or budget choices, it does attract a different group of people than if the task at hand is deciding how to spend $20,000 in your neighborhood," he said.

But he said it is not all-or-nothing for neighborhoods. "The mayor has also said consistently that it is important to preserve some discretionary funding for neighborhoods," he said. "This is not about eliminating that kind of activity," it is about adding to it.

Housing overhaul?

Rybak has said neighborhoods have done a good job of directing public safety dollars but repeatedly called NRP's housing performance "a mixed bag."

"We need to hold the program accountable," he said, referring to building affordable housing.

Such comments rankle people such as Lane, who say NRP shouldn't be criticized for not solving the affordable housing crisis any more than for not landing someone on the moon -- the city never told it to accomplish either goal.

State law requires that 52.5 percent of the city's NRP dollars go to housing, not necessarily affordable housing. The mayor said while affordable housing was not part of the original NRP goals, times have changed.

Rybak would restrict how neighborhoods could spend NRP dollars. In the program's first decade, neighborhoods spent housing funds on everything from forgivable home improvement loans in CARAG to support for new construction, such as East Village in Elliot Park.

"The mayor believes the city needs to make sure those NRP dollars spent on housing are being used strategically to address the most critical housing issues -- which have to do with affordability," Fey said. "We will be clear with neighborhoods about what our affordable housing goals are and look to them to bring us proposals about how to help accomplish those goals in their neighborhood."

The city's affordable housing goals target assistance to families at 30 percent and 50 percent of metro median income, Fey said, or up to $26,850 a year for a single person or $38,350 a year for a family of four.

Miller said he is not concerned about neighborhoods' willingness to invest in affordable housing.

"I think that is exactly what they have done," he said. "They have done it in what makes the most sense, to continue to reinvest in improving the existing housing stock, making it viable. That is the most affordable housing stock there is. It is a lot more affordable than new construction."

Policy makers earlier split off $16 million from NRP for a citywide affordable housing fund, and $4 million for a commercial corridor fund --meaning less discretionary funds for neighborhoods.

Given the funding shortfall, Miller said, some on the NRP Policy Board -- which includes representatives from Hennepin County, the Minneapolis Library Board, the Minneapolis Park and Recreation Board and neighborhood groups -- are talking about whether the housing and commercial-corridor funds should be cut.

Even so, some are proposing new funds to compete with NRP. Councilmember Dan Niziolek (10th Ward) has discussed transfering $1 million from Target Center taxes to pay for police. That effectively reduces NRP funds by the same amount.

What role for the new mega-agency?

The City Council's Community Development Committee recently held a public hearing on the ordinance creating CPED, and questions about its role in community engagement were front and center.

The ordinance said CPED will "facilitate the city's public engagement and citizen participation functions, including maintaining relationships with neighborhood organizations, business associations and other public, private and nonprofit community groups."

MCDA Executive Director Lee Sheehy said the language merely codified programs run by the MCDA -- and soon CPED. Others asked the committee to delay action on the language until evening public hearings were held.

Debbie Evans of Linden Hills, an alternate on the NRP Policy Board, said NRP had shown the most success in garnering citizen participation. The City Council's public hearing -- at 1:30 p.m. on a weekday -- "was the antithesis of NRP."

"To vote on it before citizen input is premature," she said.

The Community Development Committee approved the ordinance 4-1, with Lilligren voting no. The full council will vote on it Friday, Aug. 8.

The Ways and Means and Community Development Committee held a joint public hearing on Lane's NRP financing plan. They have delayed action, at the mayor's request, until he delivers his budget address.