By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
W hether the inspection sweeps will be a boon or a curse to the residents of the North Side is a subject of legitimate debate. But there is little doubt about another matter: The city stands to reap a windfall for its troubles. Consider the math. As of August 2, inspectors were averaging one citation for each property inspected. (This doesn't mean that every North Side property received a citation; many properties received multiple citations while others received none). In the two-and-a-half months since the sweeps began, according to the city, 8,533 of the 20,378 violations have been corrected. Because a first citation is the equivalent of a traffic warning, the city doesn't stand to collect any revenue from those citations. However, that leaves some 11,845 open cases. If just 5,000 of those violations aren't resolved within the allocated time period (which can run from 3 to 60 days), the city will be able to charge property owners with both a re-inspection fee ($100) and an administrative fine ($200).
Put another way, those 5,000 citations would produce about $1.5 million. Under a scenario in which compliance at the time of re-inspection remains at 50 percent—the rate inspector Middleton observed in the Jordan neighborhood—that total would rise to about $3 million.
Deputy Director of Inspections JoAnn Velde says she doubts the city will be issuing nearly that many fines. She notes that volunteer organizations have been helping out some low-income homeowners with repairs and that low-interest loans are available to others. She acknowledges, however, that the 2004 ordinance that created the administrative fine for housing violations also has made it quicker, easier, and more lucrative for the city to collect. In the past, Velde says, violators were sent to court, where their cases were a low priority, sometimes taking up to two months to be heard.
"It's been a very effective enforcement tool," Velde says of the new protocol. "A lot of cities have gone to administrative fines because the criminal process was a revolving door and the fines were usually pretty low. For some property owners, [paying fines] had just become a cost of doing business."
There are other advantages to the new approach. One provision doubles the fine each time a re-inspection reveals that a property has not been brought into compliance, maxing out at $2,000. Additionally, when housing code violations went to court, the city only collected 75 percent of the fine. Using administrative citation, the city can keep it all. And even if the property goes into foreclosure, the city will take its due by appending the bill to the property tax.
In the context of the $1.3 billion Minneapolis city budget, of course, $1.5 million—or even $3 million—is a trifle. Still, it is emblematic of how much more aggressive the city has become about non-tax revenue collection in recent years. The Department of Regulatory Services' five-year business plan refers to the adoption of an "activity based costing financial model" as a top priority.
As department head Rocco Forte puts it, "We're looking at wherever we're spending a lot of time, so we can collect money." One recent example: the city's annual permitting fees for vacant and boarded buildings, which will climb from $400 a year to $2,000. According to Director of Inspections Henry Reimer, there are currently about 300 buildings in the program, meaning the city stands to boost its annual take from roughly $120,000 a year to about $600,000.
Residential rental license fees will also go up next month, from $39 for the first unit to $50 for the first unit. That will effectively shift more of the overall financial burden away from the owners of large apartment complexes to the owners of two- and four-unit buildings. Reimer defends the change on the grounds that smaller rental buildings tend to consume a disproportionate share of city resources.
According to last year's city budget, revenues from fines and forfeitures increased from $7.7 million in 2002 to $10.6 million in 2005. During the same period, license and permit revenues jumped from $21.3 million to $25.8 million. (According to the city's 2006 General Fund Financial Plan, revenues from fines and forfeitures were expected to be 22 percent greater than the budgeted 2005 figure; by percentage, that makees the hike the highest of the eight revenue categories listed in the plan.)
Meanwhile, the Minneapolis Police Department has ramped up traffic enforcement. In 2004, the MPD doubled its traffic unit from 11 to 24 officers. And in 2005, the department introduced its Stop on Red program, installing cameras at 12 busy intersections and issuing tickets to the registered owner of any vehicle found to run a red light. Before a Hennepin County judge ruled that the photo cop violated state law in March (a decision the city is currently appealing), the one officer overseeing the photo cop issued some 26,000 tickets. That was more than a regular traffic cop could write in a lifetime, MPD spokesman Greg Reinhardt conceded at the time. It also added approximately $1 million to the city coffers.
Interim police chief Tim Dolan now plans to add another 10 officers to the traffic division next year. Reinhardt, who says he cannot provide comparative data sets on the revenue produced by the ticket writing over the years, maintains that none of this amounts to a money grab.