2009 City Budget Address
Mayor R.T. Rybak
Thursday, August 14, 2008
Minneapolis City Government is a $1.4 billion operation that employs more than 4,000 people. We have a direct impact every day on every block within 60 square miles, above and below ground. We have a direct impact every day on the lives of the 385,000 people who live here, and the one million people who visit here every week.
This is a very large and very complex operation, but sometimes those of us who work here every day need to stand back and recognize that the mission of Minneapolis city government is really pretty simple: we provide the services people can’t – or don’t want to – do on their own. Government is about what we share with our neighbors, and city government is about sharing the most basic things we do in everyday life:
- When the snow falls we don’t need help getting it off our own sidewalks. But we work together to get snow off our streets. That’s where Minneapolis snow plows come in.
- When you are making dinner you don’t need anyone’s help to put the scraps in the garbage. But instead of each of us bringing that garbage to the dump, we do it together. That’s where Minneapolis’ garbage hauling comes in.
- If you burn your toast, you don’t need anyone's help to get the burnt bread out of the toaster. But if a fire starts in your house, that’s when Minneapolis firefighters come in.
For the past 150 years Minneapolis residents and their elected officials have been making tough choices about what services city government should provide. Those choices have been harder in these past six years as we have faced serious financial challenges, but we have made those decisions by:
- Providing a good return on taxpayers’ investment
- Producing results we can prove and measure
- Always looking to the future
We have shown that in tough times, tough minded leaders can make tough decisions that deliver results. We have also shown: If we do our job right, some of the best results we deliver won’t be seen until tomorrow.
We have redefined what it means to have government accountable for results. Performing under pressure we have focused our resources, measured our progress and grounded our decisions with a focus on results.
We have demanded strong management, and demanded results. We don’t just look at results once a year, at budget time or annual reviews. Three years ago we made a decision to launch Results Minneapolis. Now every week we bring a different manager before a tough minded panel that holds them accountable for their performance. Many of the initiatives and priorities in this budget are a direct result of the strategic work done every week in Results Minneapolis.
Strong fiscal management and a focus on results have helped get Minneapolis back on strong financial footing, and laid the groundwork for us to take aggressive action to improve public safety and grow our economy. The budget I deliver today will continue that work, and also step up to a new challenge to deliver results today, and tomorrow, with Minneapolis’ infrastructure.
Before getting to that new challenge, let me spend a few minutes outlining the results we have delivered in those three key areas:
- Strong, focused fiscal management that gets results
- Making Minneapolis a safe place to call home and
- Building a strong economy that works for everyone
Strong, focused fiscal management that gets results
While the decisions in this year’s budget are difficult, there are nothing compared with what we faced in 2002 and 2003. Back then the city’s soaring debt was draining the money we needed for basic services like police and fire and road repair. The post 9/11 recession led to a sharp drop in the value of downtown office towers, which, in turn, put a heavier burden on residential property tax payers. The Federal government passed on deep cuts, such as money to put more police on the street. The State government went into its own budget crisis and in turn slashed $37 million a year in aid to the city - almost one tenth of our general fund.
We tackled these financial challenges head on. We laid out a five year financial plan that imposed tough fiscal discipline. Everyone had to give something and I have to admit there were days when it seemed no one was happy. We had to be tough managers, and deliver a lot of bad news. We asked employees to limit their pay increases and we asked city residents for more in property taxes. We all shared the sacrifice.
Because of our fiscal discipline, we have now paid off $88 million in debt, which means that every year we have millions more to spend on basic services like police and fire. We have also made sure that every single budget I have delivered has not only been balanced, it has been balanced out for five years. In other words, we have not only shown where we will find the resources to support a new staff position or a new initiative, we have also shown where we will find the money to sustain it into the future.
Our long term planning allowed our managers to make more strategic plans, especially with staffing. It also exposed challenges early enough to allow us to act before they became bigger problems.
That’s why six years ago we began sounding the alarm about the city’s exploding and poorly-structured pension debt. Like a family with ballooning credit card bills, our long term plans showed that if we didn’t attack the pension debt it would eat up more of the discretionary money we needed for basic services. In each budget over these six years we made tough sacrifices to pay down the city’s pension debt.
But we can’t fix this budget situation alone. For the past four years we have tried to persuade the legislature to reform our broken pension funds that are needlessly costing taxpayers million of dollars. Unlike the pension covering most of our employees, the way that police and fire pension funds are set up, when it comes to money management, Minneapolis taxpayers have all of the down side and the funds have all the up side.
For example, in 2002 after the fire pension fund leaders lost money in the stock market, Minneapolis taxpayers had to pay $13 million to fill the hole in their budget. Earlier this year, the members of this same pension were given a benefit increase without the funds to pay for it - at city taxpayers’ expense.
Another example: after the tragic bridge collapse last year, the overtime paid to just three police officers increased police pension costs for all retirees by nearly a million dollars. That’s ridiculous. The legislature must fix this.
This year alone, our closed fund pension obligations total $22 million, which is more money than is generated by the entire proposed property tax increase.
We know that pension reform is possible. In 2007, we worked with the legislature to reduce our payments to MERF, another closed pension fund, from $33 million to $4 million in just one year – with no negative impact on retirees.
The current situation must change. We can and will give what is due to the retirees who worked hard for this city. But we must also protect the people who pay taxes every day.
Results based management, five year balanced budgets, pension reform: this is the wonky side of government, but it’s also the part we need to master to have the resources to deliver the basic services our residents need.
Making Minneapolis a safe place to call home
The most basic of those public services is public safety. And our number one goal is to make Minneapolis a safe place to call home. We’ve put our money where our mouth is. The most significant budget change we have made during these past six years has been to shift more money into public safety. This year we will invest $210 million to maintain the public safety gains made in the last two years, including more than half our general fund budget. Of this amount, $134 million will go just to the police department - $6.5 million more than last year.
In 2005 and 2006, Minneapolis like many other cities saw an upsurge in violent crime, especially among youth. We responded with a comprehensive strategy that:
- Grew a larger, more visible police force. This budget provides 880 officers, which means we have used local funds to replace all the officers that had been supported with state and federal funds.
- Implemented new public safety technology that put more eyes on the street.
- Added staff to our 911 system.
- Invested in community prosecutors who helped arrests stick in court.
- Enforced high standards for property, especially in our most challenged neighborhoods.
Tougher enforcement was important, but we knew we could not arrest crime away, especially given the challenges we faced of violence involving youth. So we:
- Re-instituted the Juvenile Unit in the police department,
- Funded community based youth violence prevention initiatives,
- Worked with our partners to open the Juvenile Supervision Center, to not only hold kids accountable, but also connect them with services so they can get on the right track, and
- Tied it all together with the Blueprint to Prevent Youth Violence, a multi-year action plan that is based on extensive community engagement and best practices research, and lays out 34 recommendations we are beginning to implement.
These investments got results. So far this year, violent crime in our City is down 25% from where it was two years ago, and trending down in every part of the city. Some of our biggest gains have been where our trouble has been the deepest, on the Northside, where violent crime is down 32% compared to two years ago. Most encouraging, juvenile violent crime is down 46% compared to two years ago. This means that two years ago almost half the violent crimes in the city were committed by young people; today that has fallen to 25%.
Minneapolis is a safer city today than it was a year ago, which was safer than the year before that - but still not safe enough. That’s why this budget maintains our core investments in public safety. In addition, I am proposing two new investments to keep us moving in the right direction.
First, this budget includes $8.3 million to support our Youth Violence Prevention Initiative, $525,000 of which is new money. We should all be extremely proud of the Blueprint to Prevent Youth Violence, which is already receiving national recognition for its comprehensive, strategic approach. We supported this work in 2008 by funding micro-grants to prevent youth violence and a new position in the Health Department to coordinate this work. I urge you to support the continuation and expansion of this important initiative.
Tuesday night we received more good news when the Minneapolis School Board approved a new contract for the Minneapolis Police to provide liaisons in our schools. This effort will put us in a new partnership with our schools, our teachers and our students to develop safe places for our young people to learn, with deeper trust between our young people and those we hire to protect them.
Another significant new public safety investment in this budget is $280,000 in the Criminal Division of the City Attorney’s office. Arrests are up in the city, and that’s a very good thing, but it has put a burden on our already hardworking city attorney’s office. The investment I propose in this budget will improve our ability to prosecute criminals committing street level crimes like drug dealing and prostitution.
Growing an economy that works for everyone
A second area of focus is growing an economy that works for everyone. For Minneapolis, this has been about making investments in people and an environment where opportunity and innovation are fostered. We focused on sustained, long term investments, not quick fixes. We set measurable goals and we got results.
We begin with people because if you have a talented, educated workforce innovation flourishes and companies can grow. Our people-focused strategy has targeted two areas of greatest need: under employment and future employment.
To address these areas, this budget provides $1.5 million in 2009 in continued support for efforts to close the employment gap by providing training to potential employees and placing hard to employ people into good-paying jobs.
Overall, this budget provides $9.9 million for job training and placement, including general fund dollars as well as grants from the state and federal government. Our goal is to help Minneapolis residents get and keep a job that can support a middle class life. This investment supports an employment and training network that works with community-based providers to create jobs for those most in need.
In our work to attack unemployment and underemployment, we kept a focus on our city’s largest job sector and growth area – health care – by launching HealthForce to work with MNSCU and local health care organizations to determine where employees are needed, and then filling that job pipeline with students from schools like the Roosevelt High School Health Careers Magnet and Minneapolis Community and Technical College.
I’d like to point out that some of the most important work we do to build the workforce for tomorrow is through the Minneapolis Promise, which we created to galvanize the community to connect with Minneapolis’ youth and help them prepare for a productive future. The Minneapolis Promise is delivering outstanding results:
- In just three years 2,700 students have used College and Career Centers, now in every Minneapolis High School, to learn about college and careers, and get the advice they need to accomplish their goals.
- In the last two years, Step Up placed more than 3,800 youth in high quality summer jobs at some of Minneapolis’ best companies and institutions. Thank you to all the businesses in Minneapolis who hire Step Up interns every summer.
- The Power of You at Minneapolis Community and Technical College, and the University of Minnesota’s Founders Free Tuition Program helped hundreds of youth break down the financial barriers to college. The Power of You helped 480 Minneapolis high school graduates enroll at MCTC, and the Founders Free Tuition Program has helped 320 Minneapolis graduates enroll at the University of Minnesota. This means that 723 public high school graduates have seen the financial obstacles to college disappear.
Beyond connecting people to jobs and preparing future workers, we need to grow the economy by supporting entrepreneurs and small business owners, who are responsible for half of all new jobs created. This budget supports this economic growth with more than $4.8 million dollars of business financing tools that provide:
- market-rate loans for job creation,
- low-interest loans to purchase equipment or make building improvements,
- loans to purchase and rehabilitate small commercial and industrial properties, and
- alternative financing loans with no interest to business owners whose religious beliefs restrict them from receiving traditional interest-based financing.
Our community like many across the state and country has been rocked by the foreclosure crisis. Minneapolis responded to this crisis early with a comprehensive housing strategy that addresses the full continuum of housing needs, including the Northside Home Fund, which brings the city together with partners from the state and non profit communities to bring stability to the hardest hit neighborhoods. This budget also includes an additional $5 million for homeownership, market-building and other housing strategies that help our neighborhoods address the negative affects of the foreclosure crisis.
More help is on the way. Congress has passed, and the President has signed, the American Housing Rescue and Foreclosure Prevention Act. This will provide crucial resources to Minneapolis and other cities across the state for affordable housing and strategies to address the impacts of foreclosures on communities. Staff from CPED and Regulatory Services, and our non profit partners, is working on strategies for how we can use these dollars in Minneapolis. When we know more details about this legislation, I will submit a supplemental housing budget.
In the meantime, the budget I submit today includes $10 million for the Affordable Housing Trust Fund. This has funded groundbreaking work throughout the city and as the foreclosure crisis continues, we face ongoing needs for creating affordable housing. But like everything else we are doing, we need to sharpen our focus and demand results, so in the coming year I want to see the Trust Fund deployed more strategically to:
- Directly link to helping victims of foreclosure,
- Address vacant and foreclosed properties, and to
- Reinforce other city development goals like reenergizing commercial corridors.
- Strong focused fiscal management that gets results.
- Making Minneapolis a safe place to call home and.
- Building a strong economy that works for everyone.
In each of these areas we have:
- Provided a good return on taxpayers’ investment,
- Produced results we can prove and measure, and
- Looked to the future.
But there are other areas of the city where challenges are building. One of them is our parks, where a serious maintenance issue is growing. This challenge falls mostly on the Minneapolis Park Board, which, we know, is independent of the city. However parks are critical to the city and we need to help our partners find solutions. That’s why I have proposed allocating $2.5 million over five years to help the Park Board address capital needs. This is in addition to the $13.4 million already in the five-year capital budget for Parks, and doubles what had this year.
Another growing challenge sits squarely on our shoulders, and it is our transportation infrastructure.
Infrastructure Acceleration Program
As I stood in front you last year to deliver the city budget, I said that our investment in basic city infrastructure had fallen behind. Our city, our state and our nation have not invested as we must in roads, bridges and transit – and our lack of investment has serious consequences. I say this standing in a city recovering from a tragic bridge collapse that was not an act of God, but a failure of Man.
Many of us have been critical-and rightly so-of the lack of investment in infrastructure by the state and federal government. But it is also important to hold ourselves to the same high standards, and I have to say honestly to you that we are failing in our duty to pass on to the next generation the strong infrastructure we inherited.
In the face of reduced state funding and mounting pension obligations, we needed to prioritize investment of resources into public safety, at the direct expense of other basic services. Almost no other area of the city has felt this pain more than our city infrastructure. While city general fund spending over the last five years for police grew 30 percent, spending for public works grew only 10 percent.
As a result, too many of our streets, bike trails and light poles are in disrepair and we cannot wait any longer. We have to act, and we have to act now, otherwise the problems will get even worse – and more expensive to solve. This generation of Minneapolis leaders, who have done so much to address long term debt and get our financial house in order, need to demonstrate that unmet infrastructure needs are also a debt that cannot be passed on to our kids.
Today I am proposing the Infrastructure Acceleration Program, a $27.5 million investment of $5.5 million each year to address the unacceptable backlog of unmet infrastructure needs. This money will supplement the existing Capital Program, which spends $105 million this year and $495 million over the next five years. While our current five-year capital program addresses some of our city’s infrastructure needs, that investment is not keeping up with the demand for improvements and we need to accelerate our infrastructure improvements. Applying information from Results Minneapolis, the Infrastructure Acceleration Program I am recommending has four components, the park infrastructure I just mentioned and three transportation components:
- Street and parkway improvement
- Bike trail maintenance
- Traffic and street light pole repair
Street and Parkway Improvement
For too long, too many of our streets have deteriorated, threatening safety and hurting our quality of life. In fact, according to our Results Minneapolis pavement condition index, of the more than 200 arterial streets maintained by the city of Minneapolis, many are in disrepair and need to be resurfaced, others are in even more serious condition and require complete reconstruction, and some are in good condition and do not require attention at this time. To best address these various needs, we need a targeted approach.
The Accelerated Infrastructure Program I am proposing will add $19.25 million ($3.85 annually) to our arterial street and parkway repaving. Over the course of this five-year program:
- We will completely resurface 43 additional miles of arterial streets and parkways – half of all those that require resurfacing – extending the life of these streets by 10-15 years.
- We will seal coat the cracks and potholes in all 26 miles of our arterial streets that only require prevention rather than more intensive – and expensive – resurfacing.
Combined, this investment means that over the next five years, we will address more than one third of all city-maintained arterial streets, protecting them from further degradation.
This accelerated investment is in addition to the $105 million already in our extensive five year capital program, for projects such as the complete reconstruction of heavily-damaged streets like Chicago or Second Avenues.
Only because of our commitment to Results Minneapolis could this type of targeted, surgical improvement be accomplished. The data from our pavement condition index allows us to specifically identify the type of repair that different streets need and target resources to where they are needed most.
Bike trail maintenance
The second component of the Infrastructure Acceleration Program addresses the bike paths maintained by the city. Of the more than 120 miles of bike trails and lanes in Minneapolis, this accelerated program includes $500,000 ($100,000 annually) to ensure that the three off-street bike trails managed directly by the city are maintained. These include:
- University Avenue NE
- Hiawatha Avenue
- Midtown Greenway
These efforts involve not only top-notch snow and ice removal, but also seal coating and resurfacing. Without this accelerated program, we would not have had the resources to adequately maintain these paths - an unacceptable situation in the #2 bike city in America.
In addition, through the capital program, I am proposing more than $8.5 million for added bike trails along 18 th Avenue NE, the University of Minnesota Trail Phase III, Riverlake Greenway and to the Hiawatha extension, and planning money for the proposed 26 th Street North bikeway. I will also work to leverage additional funding to begin a pilot program for bike boulevards along other city streets.
Traffic and street light pole repair
The third component of the Infrastructure Acceleration Program addresses traffic and street light poles. Currently, 900 street and traffic light poles on our arterial streets and parkways are in structurally poor condition and must be replaced. Another 4,200 poles along arterial streets and parkways are in structurally good condition, but are beginning to show wear and are at risk for corrosion. If we don't maintain these soon, the risk that they will corrode and need to be removed only increases over time.
The Infrastructure Acceleration Program I propose will direct $5.25 million over five years to:
- Remove and replace all 900 street and traffic light poles along our arterial streets and parkways that are in structurally poor condition, and
- Repair and repaint nearly 3,800 arterial street and parkways poles at risk for corrosion.
Streets, Bike trails, traffic and street lights: taken altogether, this $27.5 million Infrastructure Acceleration Program to our existing capital investment plan represents the smartest, most responsible investment in our transportation infrastructure we can make at this time. It will make our streets safer, our commercial corridors more accessible, and our city more navigable. I urge you to support it fully.
I am proposing to fund this infrastructure investment using be the Hilton Fund, a resource we’ve used in the past for economic development, but I believe should now be used for rebuilding the common ground public infrastructure we all share. The need to invest in transportation infrastructure requires us to act and act now.
Details matter when you build a great city, so we need to repave the streets, fill the potholes, replace the broken traffic lights and smooth out cracks in the bike trails. But we also need big visions, and it’s important to remember that these improvements in our infrastructure will compliment the work we’ve done on Access Minneapolis, our ten year transportation plan.
Access Minneapolis set out to redefine the way we move around the city and for the first time give an advantage to mass transit, the bike and pedestrians. Some questioned why we would create such a bold plan without the funds to immediately implement. But look at what these bold plans made possible in just the past year, because Access Minneapolis was in place:
- Convince state officials to include transit capacity on the new I-35W bridge,
- Understand the implications of Central Corridor alignments through the University of Minnesota,
- Secured money to start MARQ2, the project to remake Marquette and Second into transit corridors,
- Convert Hennepin and First Avenues into two-ways, and
- Put bikes back onto Nicollet Mall, taking many buses off.
Having a long term plan made it possible to turn our visions into reality, which is why we will continue to plan for street car development in Minneapolis, and push for some form of rail transit on the Midtown Greenway. It’s also why we will launch a bike share program next year, which will lessen congestion and improve air quality by giving everyone from office workers to visitors to residents an alternative, fun way to get around.
As gas prices soar and our climate crisis gets worse, America desperately needs to find new ways to get around, so we should be proud that Minneapolis is leading the region in innovative transit planning. We also are working with our partners on visions that in just a few years will make Minneapolis the hub of a dramatically improved metropolitan transit network. Light rail transit will link our two downtowns, the University, the airport and the southwest and northwest suburbs. Bus rapid transit will link the heart of downtown with stations along I-35W south to Lakeville and Cedar Avenue in Dakota County.
This is becoming one of the most exciting periods in Minneapolis history, in large part because we are focused on delivering today, but also taking care of tomorrow, because we have big visions, but also because we get results on the details that make them a reality.
It’s fitting that we should spend so much time laying the groundwork for the future because that’s what’s been happening for 150 years in Minneapolis: a tiny village by a waterfall develops flour mills, but just when things get good a deadly explosion destroys it all. Only three years later the mills were back better than ever, Minneapolis became the milling capital of the world, and spawned great companies like General Mills, Pillsbury, and later growing companies like Thrivent and Target.
Our founders saw extraordinary natural amenities in the countryside beyond the city limits so they bought up what became the Chain of Lakes and Minnehaha Creek and made them part of the country’s best urban park system that puts green space within six blocks of every resident.
Civic leaders in the Sixties and Seventies saw downtowns dying around the country and took bold steps to make downtown Minneapolis one of America’s most dynamic center cities. Leaders two decades ago laid the groundwork for the renaissance we now see on the riverfront.
Some of our work – like the transportation plan of Access Minneapolis – can be transformative. But much of the best work we do will be more subtle: a safer neighborhood, a rebuilt street, clean drinking water, a summer job for tomorrow’s leader, a balanced budget that doesn’t pass on debt to our kids.
Each of these actions, in their own way, help us deliver results today, but also know that some of the best results we deliver won’t be seen until tomorrow. In that way, a generation that stands on the shoulders of giants can leave a legacy of its own.
Last updated Sep. 27, 2011