The Free Press, Mankato, MN

Local News

November 22, 2009

Getting the numbers on neighborhood revitalization

NORTH MANKATO — North Mankato city officials and residents are getting another look at the price and profitability of the city’s neighborhood revitalization efforts after a citizen asked for a more complete accounting of labor costs.

“I just want them to be honest and tell the citizens of North Mankato what they’re doing and what it’s costing,” said Brian Cain, who requested details on a couple of neighborhood revitalization projects.

Cain, a Deerwood Court resident, now has his numbers — which show that about 1,848 hours of city labor time went into the most recent project involving the relocation of a house at 925 Nicollet Avenue to make room for an expansion of the library. Rather than demolishing the well-preserved house, the city bought and demolished a dilapidated and extremely undersized house on Garfield Avenue — making room for the relocation of the Nicollet Avenue house.

Cain criticized the revitalization program, done through the North Mankato Port Authority with the Public Works Department doing most of the work to prepare relocated houses for resale.

“The Port Authority has become the customer; the Public Works Department is the contractor,” Cain said.

But his biggest criticism at the Nov. 2 meeting was that the city reported the cost of that and similar projects without including any accounting for labor expenses.

“The practice is not only misleading but leaves the impression of outright deception,” Cain told the council.

After receiving the revised cost estimates, including labor, Cain wonders if all the costs of the project were included. But even as they are, the estimates reinforce his concerns, he said.

The 1,848 hours of city labor spent on the project works out to 46 40-hour weeks — nearly a full-time employee for a year — and has salary and benefit costs of $49,695 attached to it. A previous project moving a nonconforming house in an industrial area to the corner of Pierce Avenue and Center Street involved more than $30,000 in labor costs.

In summarizing expenses of those projects and others done by the city, city officials previously listed the amount paid for purchasing property and materials. When the resale of the moved and refurbished home was added back, the projects often essentially broke even or even made a small “profit.”

City Administrator Wendell Sande said the cost estimates included only out-of-pocket costs because the city workers would be paid their salaries regardless of whether they were doing the revitalization work or other municipal projects. No additional wages were paid to do the work on the homes, Sande said.

Sande also said it’s important to factor in the value of an improved neighborhood. In each case, inferior housing was replaced by a home that enhanced the value of neighboring properties.

Cain said people can debate the value of municipal projects aimed at neighborhood revitalization — but only if the real cost of the work is known.

“It’s easy to get people to jump on and support the project when you tell them it’s making money,” he said.

Cain’s request for the labor costs also prompted staff to complete a calculation previously sought by Councilman Bill Schindle, who wondered last year if North Mankato would have been financially better off demolishing the house next to the library — or offering it for $1 to any private contractor willing to move it.

The net cost of demolishing the house would have been $6,509, compared to the net cost of $38,693 for moving it to Garfield Avenue. Offering the house for $1, assuming someone would have taken the offer, would have brought a net cost to the city of $3,611 — primarily for demolishing the foundation and filling the basement to make way for the library expansion.

Those figures don’t factor in the value associated with replacing the broken down house on Garfield, which was assessed at less than $50,000, with a relocated home that’s assessed at $142,000.

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