Revenue Rank: 24
Form of Government: Mayor-Council
Mayor: Sharon Sayles Belton (took office 1994)
City Council: 13 members, elected by ward
FINANCIAL MANAGEMENT: A-
Politicians in this city are careful not to write budgets in stone. They give finance officers admirable latitude in deciding how to manage public money. This faith is accompanied by an unusually high level of training for finance officers. And it seems to pay off. The city gets triple-A ratings from all three bond services, and it has received the Government Finance Officers Certificate for Excellence in Financial Reporting for much of the past 30 years.
Divorcing politics even further from management, Minneapolis has a tradition of making rational long-term financial plans that extend past election cycles. Investment and debt policies are also oriented toward preserving solid fiscal standing for the long run. Although it doesn’t have a formal rainy day fund, Minneapolis should be all right in case of a sudden economic downturn. Its undesignated, unreserved GAAP balance has fluctuated between 8.8 percent and 9.5 percent between 1995 and 1998.
Two minor negative notes: Some of the city’s enterprise funds regularly overspend their budgets, and contract management could be better.
HUMAN RESOURCES: B
Reform has been a byword here. Four teams are currently working to streamline staffing, improve recruiting, create human resources action plans for each city department and speed service delivery.
Such efforts should help to alleviate some of the problems that stem from Minneapolis’ diffuse power structure, which places much of the HR responsibility in the agencies. Of course, giving power to departments helps to ensure broader participation in decision making. But it also has slowed the decision process down and led to some inconsistencies between departments. Historically, for example, different departments have had different norms about acceptable employee behavior. As part of its reform, Minneapolis is now making efforts to establish a more consistent disciplinary policy.
The city does a superior job in work force planning. This is fortunate, because some 21 percent of city staffers are ready to retire or will retire by 2004. “We call it the Y2K of HR,” says the city’s human resources director. In addition, training in Minneapolis is particularly strong; the training budget has gone up about 50 percent in the past few years.
Perhaps the biggest weakness here is in rewarding employees for superior performance. True merit-based raises are next to impossible to give out, unless an employee is promoted. Even performance appraisals aren’t required for all employees, although about 65 percent of the total work force has received them.
INFORMATION TECHNOLOGY: A-
Strategic IT planning is about as good here as anywhere in the country, and consistent standards are in place for almost all information technology.
The human resources information system can be set up to send out notifications automatically whenever a personnel evaluation has been scheduled, send a copy of the performance evaluation to be completed and then store the results. This is a major breakthrough in the use of IT for human resources. It’s a new system, so it’s not in general use throughout the city bureaucracy yet. But it has enormous potential.
Minneapolis relies on a data warehouse to capture and accumulate useful information. Although the warehouse doesn’t help managers create their own reports, as ideally it should, the city knows that’s a weakness and is working on it. At the same time, IT officials are trying to improve the utility of the city’s budgeting system.
The Minneapolis Web site is short on transactional utility, “but that’s going to be rolling off really fast,” promises the city’s CIO, Don Saelens.
CAPITAL MANAGEMENT: B+
This city’s commitment to long-range planning is evident in the way it takes care of its capital assets. A long-term analysis of future needs drives much of the decision making. A citizen advisory group — “ambassadors in the neighborhoods” — takes the lead. This has succeeded in de-politicizing the program to a large degree. Unfortunately, the capital plan doesn’t include neighborhood revitalization efforts and other community development projects.
The weakness is in Minneapolis’ approach to maintenance. The autonomy and turf-protection of individual agencies has led to a system with very little consistency in the way maintenance funding has been allocated. But the funding is generally adequate, so the inconsistencies haven’t led to serious breakdowns in maintenance of important assets.
MANAGING FOR RESULTS: B-
Minneapolis faces many obstacles in its effort to move toward managing for results. Not only is there resistance from some long-term employees in this strong-labor city, but the diffuse power structure can make it difficult to move forward. As one manager says, “with the mayor and full-time council, it’s like having 14 bosses.” Given all that, Minneapolis is doing a magnificent job at making progress in this area.
The city has completed an entity-wide strategic plan, which will drive goals, priorities, business plans and the annual budget. The development of the so-called Minneapolis Plan included views of citizens, businesses, special interests and a host of other stakeholders. City departments still need to be brought in.
After years of experimentation, the city last April inaugurated a new enterprise-wide performance measurement system, linked to its strategic plan. It’s a good start, although still somewhat short on outcome measures. How much impact the system will have is still unknown. But since a previous effort at measuring performance had little effect, city leaders are well aware of the pitfalls here.
AVERAGE GRADE: B+
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