Answering city budget questions

Budget Breakdown // Part 3

Part 2:
Four factors that contribute to property tax increases
Part 1:
Coping with property tax pain

As property taxes have been on the rise in Minneapolis, property owners have asked more and more questions about how the city spends its money.

As part of its ongoing Budget Breakdown series, the Journal has been exploring some questions posed frequently by readers.

When we asked readers what they wanted to know, the volume of thoughtful questions surprised us. We took the time to answer some of the most common, but we also hope to continue answering more of your questions in future articles.

Here are a few.

Does the Target Center bring profits to the city?

The answer to that question is very difficult to explain, but the short answer is no.

Currently, the city is planning to spend roughly $12 million a year to maintain, operate and pay off debt at the Target Center. The city purchased the arena in 1995 using $80 million in bonds that it plans to pay off by 2025.  

The city still has $56 million in remaining Target Center debt. This year the city will pay $3.7 million toward that debt. Next year it will pay $5 million. Annual debt payments on the arena over the next 15 years are scheduled to range from $4.5 million to nearly $7 million.

The city will be spending $5 million to $6.5 million annually on capital improvements to the Target Center under an agreement with the Timberwolves to keep the facility up-to-date.

The city also spends up to $1.5 million a year for AEG to operate the facility.

In direct revenue to the city, the Target Center only generates $1.27 million annually. It does generate revenue that cannot be easily measured as well. For instance, visitors pay for parking in city lots and they spend money at local businesses that generate a sales tax, a small portion of which goes to the city.

According to the city, in Target Center’s 21-year history it has generated $150 million in sales, income and liquor tax. But only $30 million of those taxes went to the city.

Carol Becker, an elected member of the city’s Board of Estimation and Taxation, doesn’t believe Minneapolis should be on the hook for paying for the Target Center. Though technically no property taxes go to the arena, about $8.4 million in tax- increment financing (TIF) goes to the stadium. Becker says that money could be used to lower property taxes or increase services.

She also notes that the Timberwolves pay no rent and no property taxes. The Lynx pay AEG rent to play in the facility.

Becker supports the basic premise of a plan introduced by St. Paul Mayor Chris Coleman this year. That is, sending the Timberwolves to play in the Xcel Energy Center and have the a statewide revenue source to pay for sports facilities.

She does not, however, support Coleman’s proposal to raise money by imposing a 2-cent fee to alcohol sold in bars across the state. Becker says that tax would be regressive and hit lower-income residents harder.

How much money do City Council members make?

Each City Council member earns an $80,000 annual salary plus a benefits package that totals $23,672.

How much a council member does to earn that money depends on the member. Elizabeth Glidden (8th Ward) for example, said she often works more than 60 or 70 hours a week during busy stretches.

She attends a slew of community events on nights and weekends. She spends extra time doing reading and research. She says work has a tendency to follow her wherever she goes; constituents will see her out and about and want to talk city business — an experience she welcomes.

Glidden, 43, spent nine years combined getting her bachelor’s degree, a law degree and a master’s degree in public policy. She has 11 years experience as an attorney, and before she ran for city council she was a partner in a small law firm.

But Glidden said she wouldn’t trade her election certificate for a high-paying law job.

“I know that I will look back in time and say this is one of the greatest opportunities of my life,” she said. “You get to be involved in really understanding what are the day-to-day issues that people face, and try to be part of the solutions as you are part of city government.”

Across the river, St. Paul City Council members had a $57,000 annual salary in 2010, according to data from the Pioneer Press.

What is the size of a City Council member’s staff?

Each City Council member has two full time employees on staff. One is a policy aide and one is an associate.

The city spends $3.1 million on salaries and benefits for 13 City Council members and 26 full-time employees to support them. That’s an average of $240,000 per council office.

Pat Scott served on the Minneapolis City Council for two terms, representing Ward 7 from 1990 through 1997. Council offices back then each had two staff members, much like today. However, since Scott left office, the city has launched its 311 service in order to help address residents’ concerns.

The city will spend $3.2 million on 311 services this year. In 2010, the 311 services handled more than 400,000 calls and e-mails.

Scott, a Kenwood resident, said she figured that when the 311 service launched in 2006, it would allow the size of the City Council to shrink, since 311 was handling what had been handled by council staff.

Scott’s idea? She says the City Council may be too big. At 13 elected members, it ranks larger than some comparable cities. St. Paul has seven members. Portland has four. Seattle has nine.

But it’s not the largest. Many cities have more than 13. Milwaukee has 15; Madison has 20 and Chicago has a whopping 50.

Besides a way to save on city expenses, Scott says that too many elected officials make it more difficult for the council to make sound policy decisions.

“The more cooks in the kitchen, the more chance there is that the wrong spice goes in the soup,” she said.

Council President Barb Johnson said the city has cut four positions from the council since she was elected 13 years ago.

There is no longer a secretary in the lobby. Visitors are required to call council offices from a phone in order to meet for appointment.

The city also has cut a third staffer from her office as well as two caucus aides that worked on policy.

As for reducing the size of the council, Johnson said the city would suffer as a result. Since it has a healthy 13 full-time members, Johnson said the City Council has enough time to participate in a lot of regional boards where policy decisions affect Minneapolis. St. Paul City Council members are part-time and earn $57,000 a year.

Johnson used the example of Council Member Robert Lilligren (6th Ward). Since he is full time, he has the time to sit on the Met Council’s Transportation Advisory Board where decisions affect transportation in Minneapolis.

“He is an expert on transportation and knows where every penny goes,” she said.

Who are the highest paid city employees?

Steven Bosacker is the highest paid city employee. As city coordinator, he is in charge of a $1.36 billion budget and 3,387 employees.

In 2010, H.B. Fuller Company, an adhesives manufacturer headquartered in St. Paul, reported almost identical revenue and employee numbers as the city of Minneapolis — $1.36 billion and 3,300, respectively.

That company’s CEO had a $5.6 million compensation package in 2010. Bosacker had a $150,000 salary.

Bosacker laughed when told of the H.B. Fuller CEO’s compensation, but said he’s happy to work in his public sector job because of the exciting atmosphere.

Bosacker has 30 years of public policy experience and a master’s degree in public administration from the University of Massachusetts. He was chief of staff for former Gov. Jesse Ventura as well as former U.S. Congressman Tim Penny and served as executive director of the University of Minnesota Board of Regents.

“I have been fortunate to have jobs that are genuinely both interesting and thrilling every day,” he said. “In this particular job, when you get to be part of building a city like Minneapolis, it doesn’t get much better than that.”

Bosacker did, however, mention the limitations of comparing his job with that of a CEO. He said the city coordinator shares some of the executive responsibilities with other officials, but also must respond to a 13-person elected body that represents over 380,000 residents.

What is the Civil Rights Department? How much does it cost? What purpose does it serve?

The birth of the city’s Department of Civil Rights can be traced back as far as 1946, when then-Mayor Hubert H. Humphrey established the Mayor’s Fair Employment Practices Commission to assure that all Minneapolis residents had equal access to jobs.

In 1967, the city passed the Minneapolis Civil Rights Ordinance, which in turn led to the creation of the Department of Civil Rights. The department was charged with enforcing the new ordinance.

Today, the department has a $2.1 million annual budget. It employs 19 people and investigated 350 complaints in 2010.

The department has three units. The Contract Compliance Unit is tasked with monitoring construction employment, prevailing wage payments and affirmative action plans for companies that the city contracts with.

The Civilian Police Review Authority investigates complaints of police misconduct and educates the Minneapolis Police Department on its rights and responsibilities.

Finally, the Complaint Investigations Unit investigates complaints of illegal discrimination based on “race, color, creed, religion, sexual orientation, disability, age, marital status and with regard to public assistance.”

That includes employment, home sales and leases, professional organization, lending, public accommodation, public service and educational institutions.

In 2009, Mayor R.T. Rybak proposed eliminating the Complaint Investigations Unit and allowing the state to handle the investigations. He backed off that proposal amidst complaints from community organizations and city council members. He also expressed doubt that the state could handle the duties.

Rybak said in a recent interview that he still believes that the state should be handling complaints, but said he’s not entertaining the idea for handing over the duties because he believes the state has adequate funding to handle the responsibilities.  

Peter Wagenius, the mayor’s policy director, says that it may, at some point, make sense to turn over some civil rights work to the state, but in the big budget picture, it won’t affect much. The city’s general fund is $392 million. Eliminating the department would trim about $2 million from that total.

“Maybe at some point in the future the city will merge. But whether it happens or not, it’s not going to make that much of a difference,” Wagenius said.

Reach  Nick Halter at [email protected]

Top paid city employees (annual salary)

Steven Bosacker, city coordinator, $150,774

Timothy Dolan, police chief, $148,421

Timothy Giles, director of employee services, $147,608

Steven Kotke, public works administrator, $146,728

Jeffrey Johnson, executive director of Minneapolis Convention Center, $145,047

Susan Segal, city attorney, $142,228

Otto Doll, chief information officer, $140,146

Michael Christenson, director of community planning and economic development, $138,809

Charles Lutz, deputy director of community planning and economic development, $133,340

Rocco Forte (has since retired), director of regulatory services, $131,972