A shift from City Hall to regional government

City Hall sends one of its more respected leaders to the Metropolitan Council this month.

That's Patrick Born, who usually goes by the title of chief financial officer although the city charter gives his duties about five separate titles. He'll step in as the top administrator at the Metro Council, making him the equivalent of a city manager for the council's part-time voting members.

Born started at City Hall at a time of financial disarray, and the challenges kept on coming all through his 10 years on the job.

City Hall was just starting to wake up to the problem of its insolvent internal service funds when Born arrived in 2001, the last year when Sharon Sayles Belton was mayor and Jackie Cherryhomes was council president.

These dull-sounding internal accounts had racked up tens of millions in losses because departments weren't paying the full costs of technology and vehicles they used, nor the legal liabilities they incurred. A plan to restore one of the funds to solvency was in place when Born arrived, and his staff developed two more such plans.

Departments were charged the full freight of expenses they incurred, and the city's general fund was tapped for as much as $26 million annually to offset past deficits.

That's money that couldn't be used for cops, firefighters or street repairs. But the good news is that two of the three funds now are in the black and a third is close, meaning the drag on the general fund is easing.

Born and others on the finance staff get some of the credit. They were aided in getting the attention of policymakers when Moody's lowered the city's bond rating shortly after Born arrived. But Born's style helped, too.

"He and his staff have always been very willing to teach," said former Council Member Barret Lane.

"I learned a lot from Pat over the time when I was with the city, and I'm very grateful."

Lane and R.T. Rybak, then starting his first term as mayor, were receptive to other ideas such as five-year budgeting. That long-term look into the future helps the city foresee tradeoffs, such as looming financial problems and the property tax increases required to deal with them absent budget cuts. That's one reason that under Rybak the city's debt load has decreased, after big-ticket spending for the downtown library and the convention center expansion, meaning money that would have gone to paying off bonds can be used for basic services or to meet escalating pension payments.

Born also played a role in developing a plan to head off an unsustainable drain on the city's parking fund. A variety of factors contributed: Parking income softened downtown during the recession in the early part of the last decade, some new ramps didn't pull their weight financially, and about $10 million in parking revenue was being siphoned off annually for the general fund and other uses. Some ramps were sold, and the drain on the fund was trimmed to $5 million per year.

An example of the challenges that kept coming at the city financially during Born's tenure was the big 2003 slice in state aid -- plus another such whack that's in its fourth year as the state struggles to balance its budget. Meanwhile, costs from pension funds, even though closed to new members, continued to zoom up, especially after investment losses during the 2008-09 financial meltdown.

Born has been a major player in the city strategy of seeking administrative consolidation of those pension funds with state-run funds, coupled with a city lawsuit, now being appealed, that alleged that police and fire pension funds were padding the compensation base that's used for calculating pensions. A lower-court ruling has saved the city millions but also earned Born and others the enmity of pensioners and their widows. But as validation for Born's and others' efforts, the city's top credit rating was restored last year.

This was all atop the normal duties that the Finance Department handled, such as paying employees and bills, overseeing cash collections and handling other routine accounting, all with 15 percent fewer people as finance staff shared in the budget cuts.

Through it all, Lane said, with Born's patience and precision, "He's been a rock." The city will need to find someone else to bring that steadiness as it continues to deal with pension costs and state aid cuts, a shrinking tax base, signs of property taxpayer revolt over continued higher bills, and a projected free fall in the city's convention center fund.

This reporter first met Born when he was a little-known fiscal analyst for the Minnesota Senate more than 30 years ago. He later served as the state's financial management director before taking a 20-year detour into the private sector, where he specialized in public finance.

Born said last week that, as he moves to an agency with a portfolio covering such topics as transit, sewage, airports, parks and land planning, he expects to be dealing with some of the same challenges he faced during the post-financial meltdown period that buffeted City Hall.

The job of regional administrator over 3,700 employees and a $760 million budget also is something of a personal challenge for the 59-year-old Minneapolitan as he shifts beyond the familiar milieu of financial management into broader administrative duties.

"A lot of people who have jobs like mine would like to think they can be the general manager," he admitted last week.

Now he's getting the chance to find out.

Under the wire

You may be trying to square the city's purchase and continuing investment in Target Center with the prohibition in the city charter against spending more than $10 million to finance a professional sports facility without voter approval.

But voters didn't pass that charter amendment until 1997, two years after the city bought Target Center to keep the Timberwolves from leaving town, selling $62.4 million in bonds to finance the deal.

It is the position of the city attorney's office that spending to fulfill agreements the city made as part of that pre-existing purchase deal is exempt from the charter limit. Currently, the city is projected to spend $80.7 million, including interest, through 2025 to finish paying for the arena. The city's legal office also notes that the source for this funding -- property taxes from re-formation of expired development districts -- was legislatively authorized, which overrides the charter.

The City Council also has committed to spending $50 million over the next 10 years on the arena, mainly to repair or replace basic building systems, ranging from flagpoles to food preparation equipment. Again, that's considered by city attorneys to be fulfilling commitments made under the purchase deal to keep the arena in decent shape.

Steve Brandt • 612-673-4438