$2.7M in NRP funds comes back too late for some

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Minneapolis neighborhoods are set to receive $2.7 million back from the city, but for some it’s too little, too late.

The Minneapolis City Council approved a resolution Friday to free up 21 percent of the $12.68 million in unused Neighborhood Revitalization Program funds that were frozen in December in an attempt to soften property tax increases in the city’s 2011 budget.

NRP was established in 1989 to allocate funds from increased property tax revenues for community planning. It allows neighborhoods to prioritize how they want to spend the money.

The decision on how to redistribute the freed funds now goes to the NRP policy board in the coming weeks. Jack Whitehurst, a NRP staff member, said one possible scenario is to redistribute the unfrozen money so that all neighborhoods will retain at least 66 percent of their funds.

Although Ward 6 Councilman Robert Lilligren said the unfreezing was “good news” for neighborhood organizations, some have already felt the effects of the suspended funds.

The Southeast Como Improvement Association, which receives a large portion of its funding from NRP, was forced to move to a smaller office in March as a result of the freeze.

James De Sota, neighborhood director for SECIA, said the freed funds won’t have much of an impact on the organization’s day-to-day operations.  As a result of the estimated $110,000 that SECIA lost in the freeze, they won’t be able to support many programs they otherwise would have, he said.

“That’s part of the struggle that we have,” De Sota said.

Meanwhile, legislation that would force the city to unfreeze the rest of the funds could reach the state Senate floor as early as Wednesday.

Sen. Ken Kelash, DFL-Minneapolis, a member of the NRP policy board, said his proposal would allow the program to go forward as originally planned, adding that the neighborhoods most affected by the freeze are the poorest in the city.

“Neighborhoods can’t function with the uncertainty that’s being caused by this,” Kelash said. “It’s a matter of fairness.”

Because each of the city’s 87 neighborhoods is on a different schedule, some stand to lose more. Those that haven’t contracted any of their funds could lose half of the money, said David Rubedor, director of the city’s Neighborhood and Community Relations Department.

The city intended to freeze half of the unused NRP funds for 2012 and 2013 in December, which amounted to $10 million. But it overshot its estimates because some contracts were still in the works, resulting in $12.68 million being frozen, Rubedor said.

Rubedor said that after the plan was first introduced at a committee meeting in December, neighborhoods rushed in to file more than $3 million in new contracts before the city council could make the freeze official just days later. That made pinning down the number all the more difficult.

“It was the staff’s best guess to get to that number,” Rubedor said.

Rubedor said the $10 million that was frozen by the council will be redirected into the Community Participation Program, which provides funding support to all neighborhood organizations.

Without the program in place, Rubedor said some neighborhood organizations would run out of NRP funds in 2012 and 2013.