Money cut, but disparity study will continue in Minneapolis

The Minneapolis City Council's decision to cut money for a $300,000 disparity study from Mayor Betsy Hodges' budget won't prevent officials from launching the project, the city's civil rights director said Tuesday.

The planned study, which will look at the success of minority and women-owned firms in winning contracts, was part of a package of cuts tentatively approved Monday by the council. The 7-6 vote, which also targeted spending on the convention center, home ownership and clean energy programs, would allow the city to reduce a proposed tax levy increase from 2.4 percent to 2.2 percent. The budget for the disparity study was sliced in half, to $150,000.

Civil Rights Director Velma Korbel said that is still enough money to begin the work next year, because the study is likely to take up to two years. Finishing it would be dependent on the council approving the rest of the money during next year's budget cycle. That process could be more or less contentious than this year's budgeting, which prompted debate between council members on how the city should tackle problems with racial disparities.

At Monday's budget subcommittee meeting, council members debated the necessity of the study, which would update a similar one completed in 2010 that cost $500,000. Some council members said the plan, along with other proposed spending on a new Office of Equitable Outcomes, amounted to more talk than action.

"We know there's a problem," Council Member Jacob Frey said. "There's a very serious problem we need to deal with now. I'm not convinced that we need to study anymore. We need to act."

Others said that the study was a legal requirement, not an option.

Council Member Elizabeth Glidden said the studies are the proof the city needs to maintain long-standing programs that require city contractors and vendors to attempt to work with minority and women-owned businesses. Without it, she said, the city could face lawsuits.

Korbel said Minneapolis' program has never been challenged, but legal battles have been waged in other cities.

Since the first study, Minneapolis has set goals for its work with minority and women-owned firms and is showing signs of improvement, she said. Officials aren't sure how much progress the city has made in diversifying the companies with which it makes direct purchases. Korbel said that's because the city doesn't have the right technology, though it is in the process of buying it.

The previous study was done by a Texas-based economic consulting firm. Korbel said the city would accept bids for the new work, which is expected to take less time to complete.

"We have to have specific and concrete data to back up our program," she said. "And this is what this study does."