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Parks and wreck: How a ‘historic’ funding deal sums up the long-troubled relationship between Minneapolis and its parks board

It was the proposed referendum that drove the deal, which had been negotiated out of the public eye over the last five months.

The Park Board is looking for funding to update and renovate neighborhood parks and recreation centers.
MinnPost photo by Peter Callaghan

When it came time for her to vote, the president of the Minneapolis Park & Recreation Board wanted to make clear where she stood.

“HELL, yes,” said Liz Wielinski after her name was called.

And with that, the board was unanimous in endorsing a 20-year deal with the city of Minneapolis to provide money to repair and restore 157 neighborhood parks and facilities.

If the City Council follows next month — something that is likely but not yet a certainty — the park board will stop work on a voter referendum that would have sought an annual increase in property taxes to cover the price of the initiative, which it had dubbed “Closing The Gap.”

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The moniker referred to the difference between the money available from current resources and what a park staff analysis argues is needed, and the referendum would have raised about $15 million a year. The funding deal with the city would give the parks somewhat less — about $10.5 million — but would include a $1.5 million appropriation at the end of this year to allow parks staff to get started on projects sooner. The city had already been giving $2.5 million a year to the parks for capital projects.

The deal would also require the city to support a park board request for a $3 million increase in the size of its regular property tax levy, something that is set by the Minneapolis Board of Estimate and Taxation.

“This is an amazingly historic agreement,” said parks Commissioner Anita Tabb before last week’s board vote.

Council Member Lisa Goodman negotiated the proposed agreement along with Council President Barbara Johnson, Wielinski and parks Superintendent Jayne Miller. Goodman said that while she has worked on many large projects while on the council, this one is different.

“This one for me has the most historic significance because what it does is to say — despite the fact we have this odd form of shared governance — we actually are moving forward toward the same goal,” Goodman said.

History colors the issue

Part of what would make the funding deal historic is the history of discord between the city and the park board. David C. Smith, author of “City of Parks: The Story of Minneapolis Parks,” said the very creation of the park board is a result of that tension. Parks supporters had gone to the state Capitol for help only after the City Council had refused to place a parks referendum before voters.

The legislation that created the park board in 1883 was passed, in fact, over the objections of the city. “People wanted the city to create parks and it didn’t happen, so they went to the state Legislature,” Smith said.

Smith said there has always been some envy on the part of city elected officials who don’t have control over popular park assets yet are required to help pay for them. That has led to tension among officials from both sides.

Part of that is because the Minneapolis Park & Recreation Board doesn’t actually have much say over its financial resources. Its property tax levy is set by the Board of Estimate and Taxation, and its share of the city’s local government aid payments is subject to City Council approval. Even its most recent source of revenue — the park dedication fee — comes via joint action of the City Council and the park board.

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And the referendum process itself would have likely required the City Council to place it on the ballot, something the Minneapolis city attorney says it can’t do under state law (lawyers for the park board argue that it can).

As recently as 2009, a campaign led by then-Council Member Paul Ostrow sought to replace the park board with an advisory commissioner. Control over the parks and their funding would have been consolidated with the council and the city coordinator.

While that effort fizzled, it left some scars. “When we started on the board, six or seven years ago, think about where we were with the city,” Tabb said before the vote. “They were ready to close the park board down.”

Added the board’s longest-serving member, Annie Young: “It puts a smile on my face to finally, after all these years — we can really say we’re working side-by-side with the city.”

Motivation for talks

It was the referendum — and the strong possibility that parks-loving Minneapolitans would support it — that drove the deal, which had been negotiated out of the public eye over the last five months. The council members that led the charge were concerned that the ballot measure would make it more difficult for the city to raise its own levy.

If a referendum were to pass, the city’s finance staff estimated that the levy increase for 2017 alone — combining the city’s expected request plus the parks’ — would be 8.5 percent. Other governments, such as Hennepin County and Minneapolis Public Schools, with property tax funding could add to that.

Goodman recalled walking into Barbara Johnson’s City Hall office after the council heard a report on the proposed referendum. Her message was the need for a different method to restore the neighborhood parks. “The allocation of resources can never be a popularity contest,” Goodman said this week. If it was, sewers would never get funded, she said. “And we can’t have major decisions on spending be by referendum. I don’t need my constituents to order me to fund parks.”

The referendum was on the minds of council members last week when they first discussed a possible deal with the parks. Several admitted to fears of what a successful ballot measure would do to property taxes and residents’ subsequent appetite for increases in the city’s regular levy, not to mention special requests for multimillion-dollar road repair backlogs.

Those fears echoed the feelings that led Mayor Sharon Sayles Belton to reach a similar deal for parks funding in 2000, an agreement that was scuttled after R.T. Rybak became mayor in 2002.

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MinnPost photo by Peter Callaghan
It was the referendum — and the strong possibility that parks-loving Minneapolitans would support it — that drove the deal between the Park Board and the City Council.

“If we go off on a referendum here and a referendum there, that is a really challenging way to govern,” Barbara Johnson said. The estimated 5 percent levy increase for the parks referendum plus whatever the city might impose “is more than I could swallow.”

Goodman thinks there will be enough votes to pass whatever comes before the council next month. The council’s Ways and Means Committee will take a look at the suggested revenue sources, and the park board and the council will then have to approve identical resolutions.

The details

As outlined by the joint resolution, the agreement gives the park board a guarantee of funding and gives both governments a way out of the deal, should circumstances, or politics, change. 

Here’s what’s in it:

  • The deal guarantees at least $10.5 million a year in capital money that will be used to update and renovate neighborhood parks and recreation centers only (in other words: not the five golf courses or the regional parks that are part of the Met  Council’s system of Regional Parks and Trails).

  • The board, not the City Council, will decide how the money will be spent.

  • Both governments will support a request of the Minneapolis Board of Estimate and Taxation to increase the park board’s regular levy from $52.6 million to $55.6 million to provide additional operating money.

  • The city will give the park board $1.5 million in startup funds by New Year’s Eve.

  • The two governments will review the arrangement every five years to decide if the amount should be adjusted.

  • The council can declare the existence of an “unanticipated critical need” or an “exigent economic event” and reduce the amount in any given year, but if such a reduction happens for three consecutive years the board can back out of the deal and seek a levy increase via referendum.

  • The park board will continue to get its share of the city’s local government aid for each of the 20 years covered by the agreement.

  • Park Superintendent Miller will release a plan for how the board will spend the first five years of the payments before the council votes on the plan.

Skepticism from some

Leading the list of those asking questions about the details is Minneapolis Mayor Betsy Hodges, who seemed taken by surprise last week when the news of the deal broke in the Star Tribune. On Tuesday, she expressed her concerns when she vetoed the resolution that Wielinski so emphatically voted for. (The city charter requires the mayor to approve or veto park board actions, even if such vetoes tend to draw unanimous overrides as a show of board independence.)

It was Hodges’ second veto on the issue, having vetoed the previous board resolution that sought to place the referendum on the ballot. The earlier veto was mostly technical: Hodges wanted more clarity on what would happen if the annual levy produced more than the $15 million a year expected by the board.

The second veto was more political, and seemed aimed at the City Council more than the board, since the Johnson-Goodman plan must pass both bodies with identical language.

“I expect the board will override this veto, as it did my veto of the January resolution related to the proposed referendum language,” Hodges wrote. “However, as I emphasized then, I am committed to working in cooperation with you, the park board and the City Council to find a real solution to reinvest in our parks and our streets. My door remains open.”

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The veto letter went at great length to detail the mayor’s belief that the funding plan isn’t “real.”

“While some of the sources cited may eventually result in real money, it is clear to me that as a package, this list presents more questions than answers,” Hodges wrote. “It is our responsibility to taxpayers of Minneapolis to ensure that we are not making promises we cannot keep.”

The mayor also complained about the process that forced her to pass judgment on the park board resolution less than 24 hours after the deal was made public. “I am concerned that the lack of public notice and hurried timeline reflects the fact there is currently no real money identified to pay for this proposal,” she wrote. And Hodges said any discussion of additional money for parks renovation must be conducted amid a broader debate over the city’s overalls needs.

The park board has already placed a veto override on its April 6 agenda, and park board members last week urged parks supporters to lobby Hodges to support the Johnson-Goodman plan.

Liz Wielinski

“This is her chance to get behind something that serves One Minneapolis,” Wielinski said, referring to a Hodges campaign theme. “Call the mayor and say this is your chance to be something and be part of something big.”

It appears that parks supporters have expected conflict with the mayor for some time. Park board Commissioner Brad Bourn last year posted on Facebook that he had been polled on the parks issues. “One of the questions is who do you like more, Mayor Betsy Hodges or the Minneapolis Park and Recreation Board,” Bourn wrote. “Seems like whoever paid for the survey may be more interested in whether they can win a PR fight with the mayor more than they are working with her on infrastructure issues.”

Yet Hodges is hardly the only Minneapolis official with concerns about the plan. Council Member Lisa Bender objected to considering parks funding outside the council’s regular budget process, which begins in late summer with the mayor’s budget speech and ends with adoption in December. Once the council knows its spending amount, it asks the Board of Estimate and Taxation to approve the property tax levy to pay for it.

“We are able to make difficult decisions as to how much we give our parks versus our roads, versus our fire department,” Bender said. Responding to the parks proposal midyear prevents the council from making those policy choices. Bender also questioned the sources of money for the plan, and said it was likely guaranteeing the parks money off the top would lead to spending cuts elsewhere in the budget or tax increases.

Ways and Means Committee Chair John Quincy has also said he thinks the parks plan should be part of the regular budget process. “Filling the gap for neighborhood parks funding will require some combination of tax levy increases, use of budgetary savings and reductions in investments and service levels in other areas that the city has made,” Quincy wrote in his newsletter to residents of his ward. He specifically cited a public works report that the city needs $30 million just to maintain its streets in fair condition.

“The park board proposal needs to be weighed against the additional needs in public works and other departments, as happens every year through the budget process,” Quincy wrote.

‘Some from here, some from there’

Ostrow said nothing has happened since 2009 to convince him that his proposal to consolidate city government to create clear lines of authority for the parks was unwarranted.

He points to the way the funding deal came together as an example of the problem. “I may have had the wrong solution, but the dysfunction between the park board and the city has become more clear,” Ostrow said. “There is no end of challenges presented by what was, I’m sure, a well-intentioned proposal to get parks rebuilt.”

And like the mayor and some on the council, Ostrow wondered where the money was going to come from. He said the council has spent hours of emotional debate in search of a few thousand dollars for favored spending areas. But now some are saying millions can be found? And he questioned whether the council has authority to simply give city dollars to another government entity.

City Council President Barb Johnson
MinnPost photo by Karen Boros
City Council President Barb Johnson

At the City Council’s Committee of the Whole meeting last week, Johnson spoke to the funding questions, saying they city was facing lower pension obligations than estimated, a change in how the state will cover repayment of city library bonds that predate the county-city library merger, the pending decertification of some tax increment financing districts and some fund balances that are in excess of what is needed. “I think potentially, some from here and some from there, that we can come up with a viable financing plan for capital improvements in our parks,” she said.

This week Johnson said the city will know more about its financial position once it receives the fourth-quarter report. But she is confident it will show large fund balances, well in excess of the 17 percent cushion required by bond rating agencies.

She said the the city could save between $1 million and $3 million a year alone in library debt service that the state will pick up. The pension funding savings could produce up to $7 million, Johnson said.

For her part, Hodges listed reasons why those projections are not reliable enough to count on for budgeting purposes. 

Johnson said she and Goodman are set to meet with Hodges later this week to talk about the plan and the finances. While she is facing a tight timeline — one driven by the need for the board to return to the referendum plan if the city deal fails — Johnson said she expects an ordinance to be ready for the council’s April 1 meeting and be voted on at its April 15 meeting.

Seven council votes is the necessary majority. Should Hodges exercise her veto authority, it would take nine vote to override.

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