Minneapolis City Council members are at odds with city staff and Mayor Jacob Frey over a decision to allocate city money to a grant for a downtown shelter and transitional home and how it could ultimately impact city projects and staffing.
On Wednesday, a downtown Agate Housing shelter and transitional home received an anonymous $1.5 million match donation that unlocked a $1.5 million grant to keep Agate’s 137-bed shelter at 510 S. 8th St. from closing permanently. The match came less than a week after the council approved the grant, which pulls funds from city departments that have had surplus budgets for at least five years. Passage was not unanimous; councilors Linea Palmisano, Michael Rainville and LaTrisha Vetaw voted no because of concerns over process and where the money would come from.
City staffers are warning the council that such budget decisions have potential consequences.
Saray Garnett-Hochuli, deputy city operations officer, sent the council an email Wednesday about the “anticipated consequences” of the grant approval being based on a second quarter report projection rather than the year-end budget. A budget surplus is not recognized until books are closed at year end and all revenues and expenses are recognized, she said.
“There was no discussion with the Office of Public Service as to the impacts this would have on our departments,” she wrote.
Most notably, funding for the $35 million North Commons Park rebuild will be cut by approximately $350,000, which Garnett-Hochuli says will have multiple impacts on the project.
In response to claims by city staff and Frey that the decision was based on premature budget data, councilors brought forward a legislative directive to investigate city “financial discrepancies.”
“Following this decision, the Mayor announced that the savings data was inaccurate, calling into question his own Administration’s financial reporting, and provided a list of arbitrary budget cuts he plans to institute in retaliation. The cuts were announced in an informal, matter-of-fact email to Council Members yesterday afternoon,” reads a joint email by council vice president Aisha Chughtai and council member Emily Koski.
This all came out before a 4 p.m. deadline for Frey to decide whether he would veto the grant. Ultimately, he decided to neither sign nor veto the legislative file, letting it pass his 4 p.m. Thursday deadline, which means the grant ultimately passed. This was also how a council-lead change to how the Minneapolis police contract would be funded passed in July.
In a Thursday letter to the City Council, Frey scolded the governing body, saying councilors did not consult city experts before making a decision that could impact city budgets. He called the intent of the grant “commendable” but said the funding decision “lacked proper vetting and was based on point-in-time budget projections, which is completely irresponsible.”
As an alternative to cutting money from North Commons, the city could lay off staff, he said in his letter. He also said surplus dollars are often used to offset tax increases in future budget cycles.
Ultimately, the mayor implied that councilors’ distrust of him had bled into work the body should be doing in conjunction with city staff.
“We have financial experts at the city, and they are not the mayor, and they are not the council … we need to stop pretending like we are the experts at the expense of those who actually are,” Frey wrote. “It causes problems not just for this body or administration, but for every administration and council to come, every city staff member to come, and every resident of Minneapolis.”
Winter Keefer
Winter Keefer is MinnPost’s Metro reporter. Follow her on Twitter or email her at wkeefer@minnpost.com.
