Minneapolis mayor, City Council clash on homeless shelter funding
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The Minneapolis City Council is launching an inquiry into the city administration’s financial reporting practices following a dispute over funding for a homeless shelter.
The City Council recently voted to give $1.5 million to Agate, a homeless shelter in downtown Minneapolis. The council directed the city to move money out of several other departments’ funds and reallocate it for the shelter, which said it would have to close unless it secured funding for renovations.
Council members said the money would come out of projected budget surpluses, based on financial reports from city staff. But last week, Mayor Jacob Frey told the council the money isn’t there.
“While the intent is commendable, this funding decision lacked proper vetting and was based on point-in-time budget projections, which is completely irresponsible,” Frey wrote in a letter to the council. “Quarterly budget projections are just a snapshot in time. They do not represent an actual surplus.”
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Frey said the budget projections don’t indicate funds that are ready to spend. Instead, he said, the money will have to come out of other departments and city projects, including its human resources budget and a planned renovation to North Commons Park on the city’s north side.
The city council passed a resolution 10-3 Wednesday asking for further financial reporting in response. Supporters of the resolution said the mayor’s claims don’t line up with the budget reports they used in their decision making.
Council member Emily Koski co-authored the resolution.
“We have the capacity to spend $1.5 million on an emergency without putting the overall financial stability of the city at risk,” Koski said. “The city's financial budget situation has been skewed and twisted to tell a different story, and it's our responsibility now to get that story straight.”
City financial officer Dushani Dye told the council that there is no issue with the budget statements. In a statement, she said the projected budget surplus council members saw in reports can’t be used for funding, seconding Frey’s message to the council.
Several council members accused Mayor Frey of imposing budget cuts as retaliation for the council’s decision to fund Agate, questioning the necessity of cutting the North Commons funding.
“Now, all of a sudden the north side is affected, and now all of a sudden the sky is falling — that feels like political games to me,” Council member Jeremiah Ellison said.
In his letter to the council, Frey said financial reports don’t reflect all the money the city will need to spend before the year is up, like hiring, contractor dollars and other anticipated costs.
Council member Linea Palmisano voted against the financial reporting resolution. She had also voted against the Agate funding. Palmisano said council members didn’t do their due diligence in consulting financial staff before voting to move the money.
“We don’t understand yet what the impacts will be,” Palmisano said. “This is a bad approach.”
Other council members said they’re committed to saving both the shelter and the park project.
Agate has secured the rest of the funds it needs from a private donor to make the needed repairs to its shelter. The 42-bed shelter and 95-bed board and lodge program will still need to close Oct. 9 for repairs; Agate officials say it could be a year before the building is ready to reopen.