Community Engagement – Track 3 Work Process
On May 25, 2007, the City Council directed staff to prepare background information for Track 3 of the Work Plan for Community Engagement System Improvements and Related NRP Decisions to "Determine the Focus, Funding and Governance of NRP Program and Action Plan Activities after 2009."
Track 3 Work Process
Neighborhood Revitalization Program (NRP) beginnings and structure
Resident Participation and Inclusiveness
NRP Investments and Accomplishments
2009 and Afterward
Tax Policy Considerations
The City Coordinator Steven Bosacker convened a staff
Steering Committee comprising the following:
Jack Kryst (Development Finance Director)
Gene Ranieri (Governmental Relations Director)
Bob Miller (NRP Director) and
David Fey (CPED)
The Support Team to the staff Steering Committee include:
Bob Cooper (Development Finance)
Jeff Schneider (CPED)
Jennifer Lastoka (Community Engagement Coordinator)
Karen Lowery Wagner (IGR)
Jack Whitehurst (NRP) and
Joe Horan (NRP)
This group assembled and prepared the attached materials based on the review of a substantial number of supporting and historical documents.
Neighborhood Revitalization Program (NRP) Beginnings and Structure
The creation of the Neighborhood Revitalization Program (NRP) can be traced to the Neighborhood Housing and Economic Development Task Force established by the Mayor and City Council in 1987 in response to a complex set of demographic, social and economic concerns not the least of which was neighborhood decline. In 1988, the Task Force recommended the concept of a 20-year neighborhood revitalization plan. Ongoing work by subsequent advisory committees culminated in legislative actions in 1990 that provided authority for the City to establish the Neighborhood Revitalization Program. This was quickly followed by City adoption of the NRP Ordinance (Chapter 419).
Minnesota Statute 469.1831 (the NRP Law) [PDF]
Laws of Minnesota 1990 Chapter 604, Article VII, Section 29 (the NRP Special Law) [PDF]
City Ordinance Title 16, Chapter 419 (the NRP Ordinance) [PDF]
The NRP Policy Board held its first meeting in March 1990 and the first neighborhoods were selected to begin their NRP planning in February 1991. The last piece of the basic governance structure, a joint powers agreement among the five participating governmental jurisdictions (City, County, School District, Park and Library Boards) was fully executed in February 1992. Although there were a number of subsequent State legislative and City clarifying actions, the basic framework of a 20-year program supported by Common Project revenues (almost exclusively tax increment revenues), limited to $20 million a year (if available) through 2009, remained unchanged.
Chronology of Key Events [PDF]
(historical context; the legal, financial and programmatic frameworks; and program evaluations)
NRP Governance Structure [PDF]
NRP Process [PDF]
Several documents, including the State statute, City ordinances (1990 and 2001) and the joint powers agreement, contain language describing the goals of the NRP. There are similarities and differences in both the number and aims of the goals expressed in these documents.
A review of these goals is recommended as it underscores the differences in how the program goals were understood from varying timeframes and viewpoints.
Several evaluations of the NRP were completed between 1992 and 2005 including one by Rutgers University (done in three phases); two by the Design Center for the American Urban Landscape; two by the University of Minnesota; one each by the Kennedy School of Government, and Kim Vohs and Al Anderson (housing programs only); and a TEAMWORKS study commissioned by the NRP Policy Board with funding provided by the City and other governmental and foundation partners. This last study was by far the most comprehensive. Four of these studies measured the NRP’s impact on residential participation and inclusiveness, and additional information is provided by the 2001 Minneapolis Resident Satisfaction Survey.
Program Funding -
1) Amendments to the NRP Ordinance were adopted in August 2003 to prioritize how reduced revenues of the Common Project were to be spent:
a) Debt service and outstanding contractual obligations;
b) Tax Increment district administrative costs;
c) Reservation of funds for Phase II NRP; and
d) City general development purposes.
2) At the same time, recognizing the lack of resources for City discretionary development, the City Council adopted and the NRP Policy Board concurred with a resolution to allow the Minneapolis Community Development Agency (later the Community Planning and Economic Development department) to borrow from the Legacy Fund for the City’s discretionary development needs and repay those borrowed funds with revenues from the Common Project generated specifically from the Gaviidae project.
City Resolution 2003R-404 (Discretionary Developmental Funding Plan) [PDF]
3) The NRP Policy Board determined Phase II Neighborhood Action Plan allocations and established plan expenditure limits based on City projections of reduced funding.
However, Common Project revenues continued to decline, and current (October 2007) estimates are that the NRP’s total revenues will be $297.2 million, a 26 percent reduction of the original expectation.
A significant consequence of this reduced level of resources is that the total amount now estimated to be available for Phase II Neighborhood Action Plans is less than the total amount allocated to those plans. In April 2004, based on the latest available City projections, the NRP Policy Board adopted Phase II plan allocations totaling approximately $41.8 million. Current anticipated revenue is $12.6 million short of that amount. At that time, the Policy Board recognized the volatility of tax increment collections and the uncertainty of long-range revenue projections, and limited spending in each Neighborhood Action Plan to 70 percent of the plan allocation for the first three years after plan approval. The October 2007 projections anticipate sufficient revenue to fund Phase II plans at this 70 percent limit.
The City’s statutory obligation to capitalize the NRP ceases at the end of 2009 with a final 2009 transfer from the Common Project estimated at $17 million, or 23.2 percent of the total Phase II allocation. This transfer will be completed in 2010 at the close of the City’s 2009 final accounting.
Overview of NRP Funding [PDF]
Total non-contracted program income held by the City (or third-party vendors on behalf of the City) is approximately $10.8 million. Additional detail on program income can be found in the Overview of NRP Funding.
Unspent NRP balances as of October 2007 total approximately $35.7 million. Note that these balances predominantly comprise funds committed to approved Phase I and Phase II Neighborhood Action Plans, and that $4.2 million represents the City-held portion of the $10.8 million program income mentioned above.
To date, the City Council has approved the use of almost $275 million of NRP funds. Approximately 80 percent of these funds have been allocated through Neighborhood Action Plans. Through these plans, NRP funds have been invested in housing, economic development, parks and recreation, human services, community building activities, crime prevention and safety, schools and libraries, environmental initiatives, transportation and infrastructure, and neighborhood administrative support.
NRP Investments Summary [PDF]
It is important to note that while the City’s funding obligation ceases after 2009, absent any Council or legislative action to the contrary, there will be significant contractual, programmatic, and financial obligations remaining for both the NRP and the City for an indeterminate number of years past that date. The NRP statute and City ordinances are silent about the length of time that the program may exist and the length of the time period permitted to conclude the development and implementation of Neighborhood Action Plans. As noted earlier, approximately $17 million of Phase II funding will not be received by the NRP until after 2009; $10.8 million in program income is available for re-contracting; program income will continue to be generated; and 35 Phase II Neighborhood Action Plans are yet to be approved for funding.
These funds (as well as current unspent balances from Phase I and II plans) continue to be NRP funds and must be disposed of consistent with NRP law. Until expended, they are also City funds and are subject to City contracting, accounting and reporting requirements.
Proceeding Without Change
Regardless of the nature or funding of a post-2009 NRP, the considerations mentioned above apply. In the absence of change, one can presume an eventual reduction in administrative staff and cost for both the NRP and the City as Phase I and Phase II neighborhood contracts are implemented and the program’s capitalization is exhausted. However, given the number of Neighborhood Action Plans yet to be fully implemented, the number of Plans yet to be approved and the success and growth of NRP’s revenue-producing revolving loan programs, NRP’s work in closing-out the program and related City administrative support will take a number of years.
Any approach to a modified program starts with recognition of the same need to manage the continuing obligations of the current program as described above, and additionally must consider certain key questions, the answers to which inform the issues of funding, governance, and the role of other governmental units:
• What are the needs of the City in 2010 and forward, and how might a continuation of the NRP in some form help to address them?
• At what level are the State and the NRP joint-powers partners interested in providing public funding to NRP after 2009 to address current needs?
The answers to these questions will direct the conversation to more detailed questions regarding governance, funding sources, program goals and structure. A summary of responses from recent Minneapolis Resident Surveys may provide useful guidance for this discussion of current community needs.
Until specific recommendations are made it is not possible to fully assess the possible tax policy considerations except to note that:
1. legislative changes that extend the duration and permissible uses of the pre-1979 tax increment financing districts would reduce the total tax base available for general property tax purposes;
2. this reduction would be offset by deferred LGA and Fiscal Disparities consequences until such time as decertification did occur; and
3. recommendations that require new General Fund support would either compete with current General Fund services or require new levy.
Consideration of tax policy consequences would, as directed, be referred to the Ways & Means/Budget committee.
Last updated Sep. 27, 2011