The City of Minneapolis Intensifies its Revenue Collections
As the nation heads into tough economic times, government is adjusting by tightening the screws on captive property owners. A recent report by the Minnesota state auditor shows that between 1998 and 2007 revenues received from local property taxes in the state’s 855 cities rose by 98% while aid from the state and federal governments declined as a percentage of city revenues. Property taxes accounted for 32% of those revenues in 2007 compared with 23% in 1998.
R. T. Rybak has announced his intention to seek a third term
as Mayor of Minneapolis. “We have been through a lot
mayor said. “We survived them all and came out better, and we
are going to do that again.”
I don’t think the spirit of the times shows that the city of Minneapolis is in any mood to cooperate with its business and property owners. We are far from being in the same boat. The particular regime in office - City Council members as well as the mayor - shows a continuing desire to scapegoat business owners for crime in or near their properties. Rental-property owners, bar owners, convenience-store owners, and others have been targeted by city inspections and police and, in some cases, been forced to close.
The new theory of Minneapolis governance is that property owners can control the behavior of their customers whereas the city police have little or no control over criminals. It’s a convenient excuse for officials who have little understanding of or regard for activities undertaken by legitimate businesses in the city.
I want to concentrate, however, on the city’s strenuous attempt to increase revenues through fees, taxes, and other means.
Recently, I had my sidewalk shoveled involuntarily by a city crew. If the city’s sidewalk inspections department finds that a sidewalk has not been shoveled down to the concrete within four hours after snow has stopped falling, the city crew will remove the snow at a cost of $3.00 per linear foot and a fine of $102 will be issued.
Ordinance 445.20 states: “The person having the care, custody or control of any building or lot (except one- and two-family dwellings) adjoining, abutting or bordering on any street located within the city shall, within the first four hours of daytime after the ceasing to fall of any snow,cause the snow and or ice to be removed from the sidewalk adjoining said building or lot.”
The owners of one- or two family dwelling has twenty-four hours to remove the snow and ice.
Ordinance 445.30 states: “Any person who violates, disobeys, omits, or neglects, or refuses to comply with any of the provisions of this chapter shall be in violation of this Code and guilty of a petty misdemeanor, and each and every hour after the expiration of said four-hour daytime period ... that the snow shall remain on such sidewalk, shall be deemed to be a separate violation of this Code.”
I read this paragraph to mean that if, say, a person leaves a sidewalk unshoveled for a week’s time, the city could issue 164 misdemeanor citations (seven days times 24 hours in a day less 4 hours) and collect fines totaling $17,136. The fact that the city rarely enforces this draconian ordinance is taken as a sign of forbearance and consideration for city residents. It may also be that the city lacks sufficient staff to enforce its many ordinances. Our salvation lies in the hope that this will continue.
Normally, the sidewalk inspector sends a letter to the property owner where snow or ice have been observed on a sidewalk saying that a city crew will clear the sidewalk if the condition is not corrected soon. However, city staff interprets this to mean that a single letter covers the property for the entire winter season. If there have been four or five separate snow falls, the property owner is required to monitor the situation continuously to be sure that sidewalks are cleared within the four-hour period.
What if a resident of Minneapolis wants to take a vacation during the winter? Maybe visit grandmother up in Fergus Falls over the weekend? He or she had better hire a contractor to make sure that the sidewalk is shoveled within four hours after each snow fall. In short, we are being made to serve city government for purposes which exceed reasonable expectations or public needs.
Who is it that insists, when the temperature is below zero, homeowners or rental-property owners need to shovel their sidewalks immediately and risk exposure to the cold? The city does not plow its side streets immediately down to the asphalt. It should not surprise anyone, however, that city government holds its citizens and property owners to much higher standards of performance than it holds itself.
I also am involved with appeals of my property taxes. The city’s tax assessor has decided that a vacant, unbuildable lot which I bought from the city itself for $5,000 three years ago is now worth $30,000. This increase has apparently taken place in a period of generally declining property values.
In another case, the city has assessed my apartment building for $100,000 more than what an independent appraiser said the building was worth. When I called the assessor, he disregarded the appraisal, saying that the city has its own way of determining property values.
I had no alternative but to appeal the assessment; and I went straight to tax court. The County Attorney, who is handling the appeal, has made a motion to throw my case out of court because I had failed to comply with a legal requirement to send cost and revenue information to the tax assessor so he could estimate the building’s economic value. But the law also requires that, to dismiss the case, the property owner needed to know of the legal requirement. I did not.
Promptly upon learning this requirement, I called the city assessor to ask what information he needed. No, he said, my four most recent tax returns were not good enough. I needed to send him around ten separate items which included blueprint for the building and copies of leases for all tenants in the past four years - around thirty persons in all. I could not gather this information quickly enough so the county will soon make a move in tax court to dismiss my appeal. It counted on obstruction by the city assessor to keep me from complying with the law. Determining the right assessed value is evidently of secondary concern.
The problem is that property values are, in fact, rapidly declining in a period of housing bust, yet the city wants to base its assessed values to an extent on conditions in an earlier time, using legal maneuvers and trickery to divert the process from considering real values. Since property values have been successfully challenged in the downtown area, the burden of property taxes in the city have been thrown out to the neighborhoods. As always, the politically unorganized and underfinanced get the shaft.
What should the city do? Look at what General Motors and Chrysler have been asked to do after they received money from the government. Besides slashing payrolls, they are being asked to renegotiate their union contracts and even slash “legacy costs”. The City of Minneapolis should do likewise in its period of hard times, not force local businesses to bridge the revenue gap and perhaps go out of business. That would be foolish in the long run.
Instead, while I was watching a hearing of the Minneapolis City Council on the local-government channel on cable television, a city employee was arguing in favor of a proposal to extend the $6,000 annual fee for vacant buildings to commercial properties. To enforce this proposed new ordinance, the city should hire five more inspectors. Such a change in city ordinances, he said, would more than pay for the cost of the additional employees. He did not speculate with respect to the likely impact on businesses in the city. It were as if they were mere carcasses brought to a proposed feast at City Hall.
No doubt, the city of Minneapolis will go to the state legislature to ask for increased local aids. Normally, I would support such a request. However, if the city intends to use this money from the state to hire more inspectors (because they more than pay for themselves in collected fines and fees) and enforce its overly burdensome ordinances on the books, then I would prefer that the state deny the city’s request. Perhaps reason can be restored when money is withheld from enforcing unreasonable ordinances. If the City Council cannot be persuaded to act responsibly, the state holds a financial lever to defeat its purposes. Starve them into submission if nothing else works.
The best thing would be for the city to eliminate all unnecessary functions. I would start with scaling back activities by the Inspections department, including Sidewalk inspections. I would also propose closing down the Problem Properties unit and reevaluating monies going to neighborhood organizations, block clubs, and other agencies of quasi-government. The city needs to strip down to the bone, like the rest of us. That’s what we do during Depressions. We pull together.
Then, Mayor Rybak, you can say “we” with a clear conscience. That term is inappropriate where a predatory relationship is maintained with city residents and businesses. We’re not pickings for you on a food chain.