Before the advent of the Neighborhood Revitalization Program (NRP) in 1990, neighborhood groups in Minneapolis generally lacked one crucial element: money. But since the inception of the 20-year experiment in civic bureaucracy aimed at moving dollars and decision-making powers from city hall to the citizens, millions of public dollars have flowed into small neighborhood organizations to pay for home-improvement loans, tree plantings, park upgrades, and myriad other projects.
While many continue to trumpet the virtues of the innovative program, the cash windfalls have created an entirely new set of conflicts. Most famously, the People of Phillips neighborhood association collapsed in 1998 in the wake of a state audit that detailed widespread financial mismanagement of NRP funds. This past fall the state auditor's office recommended the return of nearly $600,000 that the Northside Economic Development Council, which was set up to manage NRP funds for the Near North and Willard-Hay neighborhoods, had either improperly spent or was unable to account for.
And for the past year, the Central Neighborhood Improvement Association (CNIA) has been dogged by controversy. Neighborhood meetings in Central--which is bounded by I-35W, Lake Street, Chicago Avenue, and 38th Street in south Minneapolis--have at times become contentious affairs. The association itself, meanwhile, is scrambling for money to keep operating. These days a single paid employee, executive director John Ruffin, mans the CNIA's headquarters in the Sabathani Community Center on East 38th Street--and he might soon have to move if the organization follows through on plans to relocate to a cheaper space.
In April CNIA board president Zachary Metoyer issued a statement announcing that more than $110,000 in city and private foundation funds couldn't be accounted for on the organization's books. That prompted NRP executive director Bob Miller to request a state audit of the group's finances covering the period from October 2000 to the present. In a May 1 letter Miller informed Metoyer that while money for existing contracts in Central will continue to flow to the CNIA, any additional expenditures will require NRP approval.
Many in Central see the current fiscal confusion as the lingering fallout of last year's contentious CNIA board election. Amid tensions between middle-class and lower-income residents, a new, largely minority slate of directors was elected in May of 2000. While incoming board president Metoyer touted the diversity of the new directors, others complained that Metoyer and his allies had managed to pack the meeting with supporters. The new board abruptly fired then-executive director Jana Metge, who responded by suing them. (For more on the origins of the CNIA rift, see "Guilt by Association," published in City Pages June 14, 2000.)
Without directly pointing a finger, Metoyer has strongly implied that the CNIA's financial troubles are the fault of the previous board. In his April statement, he asserted that the "current board never had access to the missing funds." In an earlier draft of the statement, Metoyer wrote that the money may have been "embezzled." (That document, which was supplied to City Pages by the NRP, bears Metoyer's signature and a notary's seal. Miller says it was given to him by someone not connected with the CNIA. Metoyer says that version was never intended for publication and was revised after consultation with an attorney.)
Miller questions whether any money is actually missing. He theorizes that the CNIA is facing some bookkeeping troubles and speculates that the group may have temporarily redirected city money that had been earmarked for specific projects, and used the funds to cover general operating expenses, intending to replenish the funds when other anticipated income, such as private grants, came through. (While Miller says that there's nothing uncommon or illegal about such fund transfers, they can--as in the current circumstance--create confusion, and they can become a problem if the anticipated funding doesn't materialize.)
Given Metoyer's April announcement, Miller says, he had no choice but to order an audit. "I'm not going to sit here and have an organization say that they believe that $110,000 is missing and then say that they're not responsible for it," asserts the NRP chief. But, Miller adds, he's more concerned with the way the CNIA appears to be operating now. He notes that the organization has been using an ever-increasing percentage of its budget for administrative costs, rather than for the implementation of actual programs in the neighborhood. According to NRP figures in 1998, 22 percent of CNIA expenditures went for administration; by 2000 that figure had climbed to 41 percent. And from January through March of this year, no money at all was spent on neighborhood programs.
Metoyer acknowledges that project work has slowed down but counters, "I'm very confident that everything that's happened since we took office is definitely in order."
Past fiscal management in Central has not always been above reproach: In 1997 the Minnesota Attorney General's Office fined the CNIA $1,000 for failing to file timely financial reports with the state for five consecutive years and for not being properly registered as a nonprofit. But there's no question that the current rancor has had a financial impact like nothing the group has felt before. One past benefactor, the James Ford Bell Foundation, no longer provides money to the association. (Bell Foundation spokeswoman Connie Hilliard declined to discuss the matter.) The McKnight Foundation, which has also helped CNIA in the past, has turned down the neighborhood group's most recent requests for money. Program officer Dan Bartholomay won't disclose how much money the group sought but says that from his perspective, it's too difficult to sort out the politics in Central at the moment: "If you think of it from an investment standpoint, you want to have some sense that the money is going to be spent on what it's requested for."