During the past 12 years, Mayor R.T. Rybak and the Minneapolis City Council have been justly proud of taking action that righted the city's financial ship. Millions of dollars of debt have been repaid. A long-overdue resolution of the city's police and fire pensions was accomplished. A nationally recognized five-year financial planning process was put in place. The city negotiated more responsibly when seeking development.
Unfortunately, shortsighted decisions over the past 18 months have jeopardized that hard-earned progress. Most Minneapolitans are sadly unaware of the significant future consequences of these decisions.
• In June, the council approved the dedication of property tax revenues from new developments along Nicollet Avenue to a new streetcar line. Those revenues will no longer be available to fund police or fire protection or street repair. It would appear that, for the foreseeable future, property tax revenue from any new developments on Nicollet, Hennepin or Central Avenues will be used for streetcars rather than for basic city services. None of these revenues will go through the city's budget or capital improvement process.
• In July, the council approved in concept a publicly financed $42 million parking ramp for the Ryan development adjacent to the new Vikings stadium. The city has a long history of losing money on parking ramps. The city could end up holding the bag for shortfalls if the parking revenues are inadequate.
As a part of the same proposal, the city is dedicating up to $23 million for "the Yard." A park in this location has never been in the long-term plan for the Minneapolis Park and Recreation Board. Meanwhile, critical park priorities, including the Grand Rounds Bicycle Trail and the Upper River Plan, are not funded.
• The council is now considering placing on the November ballot the creation of a municipal electric utility. The public may be asked to vote on granting the city this authority without any information, since the feasibility study will not be completed until February. If the charter amendment is placed on the ballot and is approved, the new mayor and City Council will be consumed with this issue in 2014. The city of Boulder, Colo., is currently in litigation over a similar attempt; the legal bill has reached $3.3 million.
The decision with the biggest impact on the city's financial future was last year's extension of the half-cent sales tax for an additional 30 years to help pay for the new Minnesota Vikings stadium. That extension represented the biggest financial opportunity for the city in a generation. Other cities have used their sales tax revenues to reduce property taxes, end or reduce reliance on state aid, or direct revenues to other urgent city needs. That critical policy discussion never took place.
These decisions have several things in common. First, in each case, the tough choices are avoided. There was no need to create a "value capture district" for streetcar funding. The proper course would have been to submit the cost of a streetcar line as a part of the city's capital improvement process. Similarly, funding for "the Yard" could be submitted to the Park Board's capital process. Bypassing the normal budget processes allows the council to commit to the funding without telling us which priorities will be displaced.
