Table for Thirteen

The Mckinsey Report: Curtailing the power of the Minneapolis City Council

When staffers from the private consulting firm McKinsey & Company embarked upon the company's pro bono study of how to reorganize the economic-development process in the City of Minneapolis, they noticed a rare phenomenon. "When we looked at major cities across the country," McKinsey director Jack Dempsey told a community meeting in south Minneapolis earlier this month, "Minneapolis was the only one that had both a weak-mayor system and no city manager."

In other words, the city's elected council members are allowed to operate with unprecedented power and freedom, amid an often wasteful and chaotic bureaucracy.

McKinsey's report to the city, delivered in mid-June, recommends that the city reorganize its economic-development process by essentially merging the planning and economic-development departments, giving neighborhood groups more input into citywide development, and simplifying the bureaucratic maze developers currently face. Housing and job creation were identified as the top priorities, with new departments that would be accountable for meeting and measuring progress toward specific goals in each area.

All the language about goal-setting, consensual decision-making, and an orderly process for planning and development adds up to one significant thing: The revamp that McKinsey recommends would constrain the flexibility--and thus the power--of individual council members to manipulate the system in order to unilaterally deliver projects for their wards.

Reaction to the report from the 13 council members has been mostly favorable so far, an attitude no doubt motivated by recent events. Former Mayor Sharon Sayles Belton, ex-council president Jackie Cherryhomes, and former council member Joan Campbell were all defeated at the polls last fall, in large part owing to their association with large, unpopular development projects. Former Eighth Ward council member Brian Herron is in prison for bribery, while Third Ward council member Joe Biernat is under indictment for alleged corruption involving a local plumbers' union.

"There are seven new council members who were elected because people want a change," says 12th Ward council member Scott Benson. "That's what the McKinsey report is about. It is hard to imagine anyone being opposed to the concepts they have put out."

Adds council member Gary Schiff, of the Ninth Ward: "McKinsey definitely de-politicizes the process and strengthens policy. If that means it weakens city council, then I welcome that."

Council members point out that they are already taking a more consensual and less parochial view of citywide development. Sixth Ward council member Dean Zimmermann recently delayed an Avenue of the Arts project in his district so that a development in a neighboring ward could be completed. In the past, individual council members have been able to routinely circumvent the normal planning and development process by requesting so-called special council permits. But a special council-permit request by Tenth Ward council member Dan Niziolek was recently denied by his colleagues--the first time in recent memory that has occurred. (For more on special council permits, see "Hey Joe!" in the June 19 issue of City Pages, available online at www.citypages.com/archive.) Council members credit Mayor R.T. Rybak's diplomatic approach. The Second Ward's Paul Zerby says he was "very impressed" with the way Rybak organized small groups of council members and city staff in a setting away from the media to solicit opinions about the 2002 budget (which ended up passing unanimously).

Rybak says he wants similar input regarding the shaping and implementation of what McKinsey has proposed. "This is not a concentration of power but a clarification of authority, and that's a huge difference," the mayor argues. "The only person who loses power in this is the person who profits from chaos, who can go out and hire lobbyists for exorbitant fees to navigate a broken system. Those people should be upset by what we're doing. This idea that somehow the system only works if an elected official reaches deep down into the bureaucracy and fiddles with the daily operation of the city has got to go."

Steve Minn, a former council member who now works as a developer, is in a position to look at the process from both sides. He believes that the biggest potential flaw in McKinsey's proposals is the "one-stop shop" concept of having a city employee act as a point person who helps a developer shepherd a project through the system. Successfully facilitating a project the way McKinsey envisions, Minn argues, "requires a huge range of skills, and people who have them in the private sector are paid handsomely for their efforts--much more than the city can afford." If the city employee isn't up to the task, he says, a frustrated developer is liable to call on a council member to cut through the red tape: "Jackie Cherryhomes was a powerful force who got projects for the Fifth Ward not just because she was council president, but because she could pick up the phone and tell developers how to get things done."

That's why Minn, Rybak, and many others who have read the McKinsey report believe that one of its most vital reforms is the creation of a "development cycle" for proposed projects. Under this system, developments would not be considered on an individual, piecemeal basis, but would be competing against each other for a finite amount of city resources. "To be approved, a project would have to be more than just a good thing; it would have to be better than the others that are being proposed," Rybak says.

Adds Minn: "If you put a development cycle in place, projects get approved on their own merit, because even a strong council member isn't going to be able to bamboozle the rest of the council to get something passed."

Minn believes the development cycle is also needed for the inevitable time in the future when the council's thirst for consensus and reform isn't so acute. "Right now there's a honeymoon, and the council is enraptured with fixing the budget," he says. "But when the chips are down and somebody's project gets approved and somebody's doesn't, that freshman class is going to get petulant."

And that's when the potential for politics at the expense of sound policy comes into play. Even now, admits the Second Ward's Zerby, "there's a tendency that if I am going to back you for projects in your ward, then when I come forward in my ward for something my neighborhood wants, I want your backing. This sort of logrolling isn't healthy, but that's politics."

City staffers are still studying the details and potential ramifications of the McKinsey report. (Among the many questions is the issue of whether some of the proposed changes might require the approval of the state legislature or an amendment to the city charter. Additionally, the potential changes in job descriptions and duties suggested by the reorganization will have to be negotiated with more than a dozen different labor unions.) The council has planned to address the McKinsey reforms at a community-development committee meeting on August 26 and a ways-and-means committee meeting two weeks later. Then there would be a final vote by the entire council.

After that, the hard work begins. Realistically, says Deputy Mayor David Fey, "We're looking at getting the policy framework in place by year's end--saying, 'Yes, we are going to move in this direction.' But it is going to take all of next year and a lot of work at the department level to figure out how to migrate the organization from where it is now to where we want it to be."

That said, there's evidence that McKinsey has already made an difference in the way the city operates. The 12th Ward's Scott Benson reports that the one-stop-shop concept is already being used, with positive results, for a Kowalski's grocery store in his district.

And Rybak, ever enthusiastic, says, "The spirit of pulling these groups together is already under way at city hall, and it would be very hard to put that genie back in the bottle. There is, in my mind, an overwhelming consensus that we can't have duplicative services and departments that run counter to each other. In that case, the victory has already been won."

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