With the Neighborhood Revitalization Program (NRP) perhaps heading into financially leaner times, at least one neighborhood is locked in a contract dispute with the city over control of its money.
At a minimum, the flap reflects the ongoing mistrust some neighborhood and NRP leaders have for the city. At the worst, neighborhood leaders see the contract language as a city loophole to redirect NRP money to other priorities.
The Lyndale Neighborhood Development Corp. (LNDC) needed new contracts for a half-dozen NRP Phase I programs. One example is a $173,935.52 blighted properties effort. It is a revolving loan program wherein loans paid back are then sent to new projects. The current unexpended balance is $24,863.22
The city’s proposed language states: "All unexpended program income shall revert to the City upon termination of the contract," following applicable laws, ordinances and statutes.
To some at LNDC, that meant the city wanted the bucks that the neighborhood wants to re-lend.
"We are concerned about the city wanting to get our dollars," said LNDC Executive Coordinator Norma Pietz. The contract "doesn’t say anything about those dollars being able to continue to be used by the neighborhood."
City Hall officials said the new contract language doesn’t change current practice but makes the lines of authority clear.
City Finance Director Pat Born said the city must review how public funds are spent. The Council traditionally reviews neighborhood requests to modify their NRP plans.
"We are capable of dealing with these modifications in a fairly routine manner," Born said. "I don’t think the neighborhood organizations should be too concerned about that."
From the city’s perspective, however, it cannot sign over the appropriation authority to the neighborhood indefinitely, "however well intentioned," Born said.
NRP Executive Director Bob Miller said he would not sign any contract with the language the city proposed.
Miller said some neighborhoods might be afraid to fight over the contract language because it would delay their program.
"This is an interesting way of blackmailing them [neighborhood groups]," Miller said. "In effect, what you do is you say, if you object to this, we will hold your contract."
"I don’t think the city is blackmailing anybody or acting outside the bounds of how we normally act," he said. "I think we are being appropriately careful about what these contracts say because they involve public funds."
Mayor R.T. Rybak said his goal "is not to change the dollars that neighborhoods think they have coming."
Pietz said she would be happy with language that acknowledges city control but preserves neighborhood involvement.
"Why can’t we have stated in the contract that the program income will revert to the city – to be reserved for the respective neighborhood to use as approved NRP programs?" she asked. "It is like they do not want any wording in there that says it still will stay with the neighborhood."
Cara Letofsky, outgoing LNDC executive director, said with the cuts to NRP Phase II, neighborhood groups would feel more at ease knowing they could continue with Phase I revolving loan programs, and modify them, without worrying about losing the money if they rewrite contracts.