NRP feud could cost neighborhoods money ?? or not

Legislator says city ruling will suck money from neighborhood programs; city leaders dispute costs and decry 'shameful' legislative amendment

At its best, Minneapolis' Neighborhood Revitalization Program (NRP) gets people active in their community, builds bridges between residents and their elected officials, and empowers neighborhood groups by giving them money to plan local improvements.

At its worst, NRP devolves into one more political forum to battle over power and money.

As money dries up in NRP's second decade, some program leaders could use revitalization themselves. They are throwing elbows, heaving brickbats and seemingly trying to outmaneuver each other in ways at odds with the program's ideals of community building and cooperation.

The current tension centers on an October 2003 Minneapolis City Attorney opinion that stripped NRP staff of some administrative work, giving it to city staff.

Such a bureaucratic dust-up might make even activists' eyes glaze over -- except for the money. NRP staff said the city's opinion means unnecessary costs for neighborhoods at a time when they will receive millions less in NRP Phase II.

NRP Policy Board Chair Joe Mullery called the city's legal interpretation "questionable" and said he saw it as part of the "city trying to make money off of NRP."

Mullery, who is also is a state representative from North Minneapolis, tried to change the law at the Legislature -- earning the ire of city officials who said the 11th-hour proposal blindsided them. They say an intra-city squabble is the last thing Minneapolis needs if it wants to sell its agenda at an increasingly hostile Legislature.

City Council President Paul Ostrow (1st Ward) called it "nothing short of shameful" that NRP leaders did not give city leaders notice. "It was not accidental that we were not notified. It was intentional," he said.

The city also said the NRP-backed changes could have cost Minneapolis taxpayers -- and city's already stressed budget -- millions of dollars.

The flap builds on a history of tension between city and NRP officials over how the program works and who controls the money.

Will neighborhoods lose out?

Bob Miller, NRP executive director, said for years his staff has administered neighborhood program contracts -- for such things as block clubs or afterschool programs -- without problems.

His staff would continue to help neighborhood groups plan and evaluate their programs, but the city's legal opinion means they can't review and approve invoices and help with nuts-and-bolts program operation. Shifting those duties to city staff will increase neighborhood charges 38 percent -- from $52 an hour to $72 an hour, he said.

Lee Sheehy, executive director of the city department of Community Planning and Economic Development, said NRP is not a separate unit of government and can't legally administer programs. Regardless of past practice, NRP administration violates state laws, he said.

Will the neighborhoods get socked with huge bills?

Despite Miller's claims, no one knows. No one has hard numbers.

Sheehy said NRP might have lower hourly costs because its staff is not unionized -- but if city staff could do the work more efficiently, it could mean no new costs and possibly, savings.

"From the outset, I have told Mr. Miller I would be happy to look at cost-effective ways to deliver services," he said. "He needs to present the evidence."

Miller said the new system would be less efficient because his staff is more familiar with the neighborhood programs than city staff.

Yet there is no written analysis of the problem, which has not been discussed by the NRP Policy Board (the program's governing authority, made up of city, county, schools, parks, library, state and neighborhood representatives).

Battle stations

Mullery, a House Tax Committee member, added an amendment to the tax bill to fix what he saw as the flawed city legal opinion. It allowed NRP staff to do what they had done for years, which he considered a minor change.

Mullery added his amendment April 19 without getting approval from the NRP Policy Board, which met later that evening to discuss the matter. (He said it was his last chance to add to the omnibus tax bill before it passed out of committee.)

Mayor R.T. Rybak, Ostrow and other Councilmembers quickly mounted an offensive to block the amendment, saying it could add millions of dollars in unbudgeted costs. (Under one interpretation, the bill could have required the city to fund NRP at the original standard of $20 million a year, well beyond the city's current capacity, they said.)

In a letter sent by the mayor and all 13 Councilmembers to the city's legislative delegation, they wrote: "We would have alerted you to our concerns earlier, but no one from the city was notified of these proposals."

The legislation, they said, "may have an immediate and long-term impact on our capacity to deliver essential city services."

Mullery said he did not intend to increase the city's costs and would have added language to address the city's concerns. He ended up pulling the amendment, however.

The Council's Intergovernmental Relations Committee later grilled Miller about his role in pushing Mullery's amendment.

Councilmember Barret Lane (13th Ward) said he did not have enough information to know whether the city attorney's opinion would add administrative costs to neighborhood groups.

"For a group [NRP] that has been verbally and actively committed to process and openness and discussion … to have [the amendment] happen in this way, whatever the merits of these proposals might be, really raised a deep level of concern with me."

Excuses, excuses

Try to untangle the chain of events leading to the legislative meltdown, and the story gets murky and the fingers start pointing.

Mullery said he was not trying to pass the law without letting the city know. He said Miller informed city staff weeks in advance.

City leaders said Miller told staff Mullery was thinking about a bill, but they did not get the specifics until a few days before the policy board meeting -- and received no indication Mullery would add it to the tax omnibus bill.

Ostrow said for such a significant proposal, NRP staff should have notified city leaders personally.

Mullery said city leaders got advance notice in their NRP Policy Board packets. "They never called me," he said.

Miller said more notice wouldn't have made a difference. "No matter what, they [city leaders] would have fought it," he said.

Hennepin County Commissioner Peter McLaughlin, an NRP Policy Board member, faulted the city for going into "overdrive" to fight the Mullery amendment. He is concerned about neighborhoods paying higher administrative costs to the city, and Mullery was trying to fix it, he said.

"People got themselves into their forts and battle stations and decided to stay there rather than work it out," he said.

Cam Gordon, an NRP Policy Board neighborhood representative, said he would have preferred more information on the problems.

Gordon joined the board two years ago and is surprised by the deep divisions that exist. "What I would like to see is less of a wrestling match and more of a dance," he said.

List of grievances

NRP began in the early 1990s, designed to funnel $20 million a year for 20 years into city neighborhoods. Recent state law changes have cut property taxes that support NRP, reducing projected Phase II funding from $180 million to $86 million, or by more than 50 percent.

Even in flusher times, however, city and some NRP officials have been at odds.

Ask people the tension's root cause and they give a variety of answers.

Byron Laher, an NRP board member for 10 years, calls it a healthy tension, to be expected when directing such large sums of money. "Democracy is not neat," he said.

Linden Hills resident Debbie Evans, a neighborhood NRP Policy Board representative, said the tension comes from the feeling some city leaders aren't committed to NRP's ideal of neighborhood control.

In the last three years, NRP "set-asides" -- which reduce neighborhood-level control -- have created several flash points between city priorities and neighborhood-driven programs.

City leaders pushed through a $16 million NRP affordable housing set-aside, a $4 million commercial corridor set-aside and a $200,000 a year set-aside for the Youth Coordinating Board (YCB).

(Budget cuts have since reduced the set-asides. The Affordable Housing program is now at $9.7 million, and the commercial corridor fund and YCB fund have been eliminated.)

The city and NRP leadership have sometimes switched sides over set-asides. This year, for example, the NRP Policy Board approved an American Indian set-aside that the city's Ostrow said needed more neighborhood input.

City Finance staff said that totaling the NRP funding cuts, new set-asides and other costs, neighborhood groups would receive less than one-third of what was originally budgeted for NRP Phase II.

Ostrow said past NRP Policy Boards had faced tough issues; and had good debates as two legitimate views clashed to find "a delicate balance."

NRP appropriately pushed the city to rethink city services and respond better to neighborhood interests, he said. The city pushed neighborhoods and NRP to address key city goals, such as affordable housing.

The Mullery proposal was fundamentally different from past disagreements because city leaders were cut out of the loop, Ostrow said.

Working it out

Miller will have his chance to make a case for a more efficient NRP when he presents his five-year business plan to the Council later this summer.

City and NRP staffs also have worked on a lengthy agreement to define the role each plays.

Page one, point one, under the heading "Purpose" reads: "Continue to improve the working relationship between the City and NRP."