Program Operations Options Moved Forward

NRP Policy Board Moves Two Phase II Program Operation Options Forward
Neighborhoods Retain Control of Funds as Most Significant Elements
of Five Proposals are Merged into Two New Hybrid Options

MINNEAPOLIS, Feb. 28 – NRP Policy Board members today condensed five previously outlined program operation proposals into two new hybrid options. The Board determined the new options were ready to be developed in greater detail so they could be presented to the public in the coming weeks for further review and comments. The new options were developed based on feedback the Policy Board received from residents and neighborhood organizations regarding the original proposals.

The two new options guarantee both neighborhood decision-making authority and a pool of funds for affordable housing. Both new approaches could use some form of "hold back" mechanism at the neighborhood level to assure that the 52.5 percent housing mandate is met for the program.

The first option allocates the same percentage of NRP funds to the neighborhoods in Phase II as they received in Phase I (i.e. 82 percent of the overall program budget). The remaining 18 percent would be allocated to an Affordable Housing Fund and a Commercial Corridor Matching Grant Fund.

The second option allocates all of the Phase II funds to the neighborhoods and adjusts each neighborhood’s allocation by the amount it was over or under its Phase I median. The funds that remain after the adjustment would be used to establish an Affordable Housing Projects fund. The amount of money available for neighborhoods to invest through their Action Plans varies significantly between the two options. Under option 1 neighborhoods would have about $123 million and under option 2 they would have about $138 million.

Minneapolis City Council President and NRP Policy Board Chair Jackie Cherryhomes expressed her approval of the two new options. "I think that by moving these two options forward for fleshing out we can get to a place where we meet the needs of some of our more needy citizens and at the same time assure that the Neighborhood Action Plans remain the basis for the distribution of NRP funds."

Besides the dollar amounts, one of the biggest differences between the two new options is the way in which the reserve allocation is used to address City-Wide priorities. In the first option 75% of the reserve amount would be used for affordable housing and 25% would be used for commercial corridors. In the second option the entire pool would be used for affordable housing projects. The two new options will be more clearly defined by a program operations work team before they are presented to the public for comment. The Policy Board will meet again on March 27. The overall budget for Phase II is approximately $150 million. Phase II begins in 2001 and continues until 2009.

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