Tom Steward

Tom Steward is the bureau chief of Watchdog.org's Minnesota Bureau, a project of the Franklin Center for Government and Public Integrity. He is an investigative reporter focused on waste, fraud and abuse in government and has previously worked for WCCO-TV (CBS) and KSTP-TV (ABC) in the Twin Cities. Follow Tom on Facebook and Twitter.

Victoria’s Not-So-Secret Reverse Referendum

Posted by: Tom Steward Updated: May 22, 2014 - 12:31 PM

Not many taxpayers know about it. “There’s the option of the reverse referendum, if the voters really don’t want it,” said Joel Michael, staff coordinator for the nonpartisan research department at the Minnesota House of Representatives.

Fewer still actually invoke it. “Issues of this nature that commit the residents of the city to long-term debt should be voted on by the residents,” said Larry Gubbe, an engineer who signed a reverse referendum petition pending in Victoria.

When citizens do, local officials can circumvent it by turning to another form of bonding, adding hundreds of thousands of dollars to a project’s cost, while putting the onus on guess who?

“For those that are going to ostracize me, they’re going to ostracize me anyway, so I don’t really care. I’m more than comfortable in saying I think I did the right thing,” said Tom Funk, a health care executive who organized the Victoria referendum drive.

Taxpayers who obtain signatures from 5 percent of voters in the previous general election can force a reverse referendum on spending projects funded with capital improvement bonds. 

In the suburb of Victoria, almost 350 citizens—far more than the 235 needed--recently backed a citywide vote on a proposed $5.6 million new city hall and library, plus a public works building. Yet the August 12 referendum may never happen.

“If anyone wants to sign that petition feel free, but know full well at least my vote is, we’re going to go forward,” said Victoria Mayor Tom O’Connor at the April 28 City Council meeting. “And I’m going to vote to adopt the more expensive financing vehicle because some residents either didn’t understand what they were signing or they were misled or people have another agenda.”

The more expensive financing with lease revenue bonds would cost an estimated $660,000 more.

“In the old days, you had to have a referendum no matter what. Now, we have this out, that now you can do it, provided people don’t ask for a (reverse) referendum,” said Michael, the legislative researcher. “And there’s this third option that if your HRA (Housing and Redevelopment Authority) issues the bonds and leases the facility to the EDA (Economic Development Authority), then you don’t have to have a referendum at all. Of course, the cost is always higher with that option.”

At the same time, seven city residents have filed three civil lawsuits in Carver County Court, alleging violations of the state’s open meetings law by Mayor Tom O’Connor and City Council members James Crowley, Lani Basa and Tom Strigel. The city has posted a file of documents on its website related to the building project, including bids, terms of the land transfer, financing and more.

“It’s a legal matter and, as usual, I can’t really say anything about it other than I think that we’re going to be absolved in the future,” said Mayor O’Connor. “… As is typical in these things, we’re not going to say anything until we get a chance to get through it and to prepare our case and, at the appropriate time, we’ll have something to say.”

Alan Kildow, partner in charge of the Minneapolis office of DLA Piper, a global law firm, represents residents pro bono. Whatever the outcome, the state agency that monitors the Minnesota Opening Meeting Law encourages citizen involvement.

“Sometimes the public isn’t as active because they don’t necessarily understand what the law says or even that we exist to help them get their questions answered,” said Stacie Christensen, administrator of the Information Policy Analysis Division (IPAD). “So I definitely think it’s encouraging to see folks take it to a level where they can actually remedy a situation.”

A heads-up: It could be SRO at the May 27 Victoria City Council meeting.

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