The Beltrami Neighborhood Council hosted a meeting at HeadFlyer Brewing in October 2022 about merging with three other northeast Minneapolis neighborhood associations. (Photo courtesy of the Beltrami Neighborhood Council/The Minnesota Star Tribune)

Minneapolis' neighborhood associations are worried about dwindling financial support — to the point that several may merge to survive.

Greatly diminished since their glory days of having hundreds of thousands of dollars to spend on improving their own slices of the city, Minneapolis' 70 neighborhood associations are slated to receive just $10,000 each in base funding next year.

The first neighborhood associations to consider pooling their resources at a loss of some neighborhood identity include Shingle Creek and Cleveland; Seward and Longfellow; Kingfield and Lyndale; Logan Park, Northeast Park, Beltrami and St. Anthony East, according to the city of Minneapolis. Stevens Square and Phillips West initiated the process but ultimately opted against it.

"It is clear that the City's strategy is to slowly starve organizations like [the Nokomis East Neighborhood Association's] until they merge and dramatically decrease the number of these neighborhood organizations," the Nokomis East association said in a statement. "[The city] will sorely miss the programming and resources these neighborhood organizations provide, but they won't know it yet until they are gone."

As the city invests in a new government structure that concentrates power under a "strong mayor" at the top of City Hall, advocates of neighborhood associations want to make sure money is being spent on reaches of government closest to Minneapolis residents.

"This [Neighborhood and Community Relations] department is woefully underfunded … we're nickel-and-diming it," warned Council Member Lisa Goodman of the "abandonment of neighborhood groups" during an October budget meeting. "It would be to our council members' disadvantage to allow that to happen in this new government structure."

For more than 30 years, neighborhood associations provided an avenue for Minneapolis residents to organize with their neighbors, participate in local development and forward constituent concerns to City Hall. They were powerful in the 1990s and 2000s, buoyed by a commitment from the state Legislature to fund neighborhood improvement projects at a rate of $20 million a year for 20 years via a multijurisdictional Tax Increment Funding (TIF) effort. Joining the city were Hennepin County and the school, park and library boards, according to Karen Moe, interim director of Minneapolis' Neighborhood and Community Relations Department.

In the so-called Neighborhood Revitalization Program's heyday, each neighborhood group determined how best to spend its money so long as most of it went to housing, per state law. Some built shopping centers and grocery stores. Others splurged on neighborhood parks and crime prevention. The underpinning philosophy was that residents were best equipped to decide the future of their own communities.

With time, the TIF district sunset and funding commitments from the county and various boards ended. Money for the city's neighborhood associations shrank dramatically from $20 million a year to the $4 million Minneapolis chose to continue contributing.

Base funding for each association is being cut in half from $20,000 in 2022 to a proposed $10,000 next year — not enough to pay for bare necessities, several groups have complained.

"The fact that the City of Minneapolis has significantly decreased its funding for neighborhood organizations at a time when it has increased its rhetoric about engaging underrepresented groups demonstrates that the City and its Department of Neighborhood and Community Relations do not take broad community engagement seriously," said Michael Jon Olson, director of the Seward Neighborhood Group, in a statement representing only himself.

Despite shrinking funds, neighborhood associations say they are responding to more resident needs than ever in these years of turmoil.

They organize community gardens, trash pickup and public safety walking clubs, host meetings with homeless encampment residents, broadcast city communications about opportunities to participate in local government and mediate contention between developers and residents.

In 2020 and 2021, neighborhood associations performed more than 224,000 volunteer hours for an estimated value to the city of $6,555,000, Moe said.

"Every year there's an incredible amount of volunteer time invested in our communities through these organizations," she said.

Consolidating associations comes with its own concerns. Though the city is offering grants to ease the administrative lift of combining neighborhood associations, it's no easy decision, said Pat Vogel of the Logan Park Neighborhood Association. Residents are concerned about larger neighborhood groups dominating others and about the loss of access per resident within the bigger organizations, she said.

The lowered funding has coincided with concerns about the diversity of neighborhood association boards and the equitable distribution of public funds. Research from the University of Minnesota's Center for Urban and Regional Affairs showed past neighborhood groups were commonly composed of older white homeowners who set agendas promoting their own interests.

In recent years, the city has de-emphasized funding expensive capital improvement projects in favor of challenging neighborhood associations to include more residents than have traditionally had a voice in local governance.

The city's Equitable Engagement Fund offers extra money to lower-income neighborhoods with more renters, people of color, people with disabilities and immigrants to increase outreach to these communities.

Many neighborhood associations embrace that mission, said Jessica Focht-Perlberg of the Southeast Como Improvement Association. But real engagement with diverse constituents on important matters requires long-term sustainable funding — not less, she said.

The diminished funding "is actually a huge barrier to having an ethnically diverse board, as we have a lot of immigrants in our neighborhood who are working their butts off to take care of their families, sometimes working multiple jobs," said David Ingold of the East Phillips Improvement Coalition. The money for his organization is tight. It spends $3,500 on city-mandated insurance, $2,000 on utilities, internet and security for its studio office, and $4,800 on rent, leaving essentially nothing for staff.

The mayor's recommended budget is $1.66 billion in 2023 and $1.71 billion in 2024. The tax levy increase for 2023 will be 6.5% and is predicted to be 6.2% for 2024.

There will be a public hearing on the budget at 6 p.m. Dec. 6, in room 317 of City Hall.

Correction: Previous versions of this story misattributed a statement by Michael Jon Olson, whose last name was misspelled. They were not an official statement of the Seward Neighborhood Group, which he serves as director.