In the campaign piece mailed on his behalf by Highland Sanitation, Bob Cardinal claims to be a "fiscal conservative." I thought it would be interesting to compare that claim to what happened to the city tax levy when he was mayor.

Since Cardinal took office in late 1999 and he was replaced at the start of 2006, that means he was Mayor when the levy was set for the years of 2000 through 2006 (since of course the 2006 levy was finalized in December 2005). For 2012, I'm using the maximum levy that we approved in September; the final levy we set in December could be lower.

Here's what the levies were, and the percentage change each year over the previous year:

Year	Levy	Increase
1999	$8,986,925	-0.01%
2000	$9,167,607	2.01%
2001	$9,842,953	7.37%
2002	$10,238,175	4.02%
2003	$11,855,546	15.80%
2004	$12,679,422	6.95%
2005	$13,434,640	5.96%
2006	$14,106,370	5.00%
2007	$15,546,450	10.21%
2008	$15,546,450	0.00%
2009	$15,876,235	2.12%
2010	$16,670,046	5.00%
2011	$17,503,454	5.00%
2012	$17,853,523	2.00%

I've highlighted the years when Cardinal was mayor in red, and the years that I've been on the council in blue. (In between were the two budgets that Rebecca Cave voted for.) A person could reasonably debate whether we should attach 2000 to Cardinal's record, since the budget should have been nearly set at the time he took office. Depending on if you include 2000, the average tax levy increase during Cardinal's leadership was either 6.7% or 7.5% per year – about twice as large as the 3.5% average increase during my time in office.

Here's a graph to visualize the percentage increases each year (again, with red for Cardinal's tenure and blue for mine):



Whether or not Cardinal voted for one levy or another, he was Mayor across that period of massive increases. Perhaps he didn't like one or more of them, but then where was his leadership on the City Council? Would he have the political skill to influence the direction of the council in the future, or would he just serve as an ineffectual “contrasting view” to reflexively vote against everything?

I've worked hard to play a leading part in each levy and budget, though I haven't gotten everything I wanted. I haven't merely voted aye or nay, but actively shaped what was in each levy and budget passed in my term – and I think that's what citizens should expect of any elected representative. With that in mind, I think it's fair to compare my record of fiscal responsibility with what was done, with or without his participation, when Cardinal had a voice and a vote on the council.

Labels: Bob Cardinal, campaign 2011, finance

Posted by John Nephew on 10/01/2011 11:30:00 AM Email to a Friend | Permalink | Comments
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Last week's Maplewood Review included an informative article about our mid-September decision on the 2012 maximum levy and related draft budget.

Labels: finance, media

Posted by John Nephew on 9/28/2011 03:38:00 PM Email to a Friend | Permalink | Comments
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I wanted to flag another article in last week's Maplewood Review, about the plan we approved to lease space in the community center for a Subway franchise, replacing the current snack bar.  It seems like a great way to improve the selection of snacks and meals available to Community Center members (and anyone else who comes in off the street), and help the city's bottom line.  We will receive rent and also a percentage of sales.

Labels: finance, media

Posted by John Nephew on 7/27/2011 01:32:00 PM Email to a Friend | Permalink | Comments
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Some great news for public safety in the East Metro came out of the bonding bill passed in the special session last night.  Section 12, Subd. 3, includes:

16.26 16.27 Subd. 3.East Metro Fire Safety Training Center 3,000,000 16.28For a grant to the city of Maplewood 16.29to acquire land, prepare a site including 16.30environmental work, predesign, design, and 16.31construct the East Metro Regional Public 16.32Safety Training Facility in Ramsey County, 16.33within the city of Maplewood.

Many thanks and congratulations to chief authors Leon Lillie and Chuck Wiger for their hard work on this, as well as Nora Slawik and other supportive legislators (I hear through the grapevine that Rep. Hausman and Sen. Langseth were especially helpful), and of course, Governor Dayton.  And of course we can't fail to mention Chief Lukin for championing this, the many other East Metro fire chiefs and departments who supported it, the city staff who helped develop the plan and move it forward, and Ramsey County (particularly Commissioner Reinhardt) for supporting the plan and contributing environmental clean-up funds.

Labels: finance, public safety

Posted by John Nephew on 7/20/2011 07:59:00 AM Email to a Friend | Permalink | Comments
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At last night's council meeting, we approved the sale of bonds for various 2011 construction projects. Last year our bond rating was upgraded, and I was pleased to see that we maintained that high rating this year.  (Last year Standard & Poor's rated us "AA+," and this year it's Moody's rating us with their equivalent rank, "Aa1".)  Only one rung of the credit quality ladder is higher.

The bond sale had a combined true interest rate of 3.1805%.  In comparison, last year we issued "Build America Bonds" (something made possible by the stimulus bill), which after rebate were comparable to an interest rate of 3.0222%.  In 2009, our bonds were at approximately 3.4%.

It's worth noting that the 2011 bonding has a longer duration of 20 years versus our usual 15 years.  This is related to the 20-year assessment schedule for the Shores project in Gladstone.  As is usually the case, a lot of our bonding is tied to specific obligations of individual property owners through special assessments; as those assessments are paid over time, those payments rather than taxes from the city at large will be used to repay the bonds.

Labels: development, finance

Posted by John Nephew on 5/10/2011 03:59:00 PM Email to a Friend | Permalink | Comments
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This week's Maplewood Review includes a couple of city-related articles I'd like to call attention to.

"Maplewood's insurance deductible drops to norm" covers the recent LMCIT decision to restore normal coverage terms to Maplewood, something I'd say is an important sign of the progress we've made as a city during my time in office.

"Bergeron memorial dedicated in Maplewood" describes last Sunday's dedication of the Fallen Officer Memorial, and includes some very nice photographs by the Review's staff photographer, Linda Baumeister.

Lastly, though it's from an earlier issue, I wanted to call attention to the announcement of an essay contest from the Maplewood Human Rights Commission. Share the word with any elementary, middle school, and high school students you know!

Labels: events, finance, media, public safety

Posted by John Nephew on 5/05/2011 10:23:00 AM Email to a Friend | Permalink | Comments
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One of the reasons I ran for the Maplewood City Council four years ago was the blinkered incompetence of the previous city council majority and the utterly unqualified crony that they installed as city manager, with whose assistance they turned city government into a vehicle for pursuing their own personal vendettas.  This cost taxpayers dearly, as a series of illegal firings racked up big legal expenses, out-of-court settlements, and court judgements.  Much of the actual dollars were paid by our insurer, the League of Minnesota Cities Insurance Trust -- which means that taxpayers all over the state picked up the tab for the old regime's malice and incompetence.

It was not without consequences for Maplewood, however.  We came close to losing our coverage, and our insurance policy was renewed only with special conditions setting a much higher deductible than usual.  Last year we saw our deductible lowered, in recognition of the city's return to responsible governance.  The latest good news on tonight's agenda is that this year we are looking at another improvement, which should return us to the state of insurance normalcy we enjoyed before our former mayor and her pals took over city hall.

Labels: council politics, finance

Posted by John Nephew on 4/25/2011 08:49:00 AM Email to a Friend | Permalink | Comments
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The Municipal Legislative Commission (of which Maplewood is a member) has launched a website, PropertyTaxFairness.com, as part of a campaign to build awareness of the disparity in property taxes between homeowners in the Metro area and outstate Minnesota.  Citing a report from the Minnesota Department of Revenue, the press release announcing the website notes that "Twin Cities metro area homeowners paid a 39% higher share of their income to property taxes than their Greater Minnesota counterparts. This is a comparison of homeowners that have the same income whether they live in the metro area or Greater Minnesota."

With big changes being contemplated to the state programs and formulas affecting local government finance (such as Market Value Homestead Credit and Local Government Aid), the MLC hopes that the end result will be a system that is more equitable in distributing the burden of property taxes across the state.

Labels: finance, media

Posted by John Nephew on 4/21/2011 08:08:00 AM Email to a Friend | Permalink | Comments
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In case you haven't been keeping an eye on the NSWMA website, you might be interested to know that their PR hacks and lawyer-lobbyists have put out some fresh propaganda, a web page devoted to their spin on Maplewood.  (In case it vanishes or is edited at some point, here's a printed-to-PDF version for posterity.)  I believe a couple of the e-mails I received yesterday were already repeating its talking points.

A lot of their focus is on the city budget. Let me share a few thoughts in that regard.

First, trash hauling is mandated by the law in Maplewood. You must hire a hauler for weekly pickup, and you can only hire one licensed by the city government.  I guess it's not actually a tax, because you are handing the cash to one of that NSWMA lawyer's clients, not a government employee.  Still, as an elected official, I feel some duty to try and make sure that, if we are requiring residents to buy a specific service from a limited list of private corporations, those services should be delivered efficiently and our residents should be charged as little as possible.

Isn't that just basic "good government"? To do otherwise -- as the NSWMA demands -- seems, dare I say, kinda corrupt.

Second, let's do some back-of-the-envelope math. A White Bear Lake 30-gallon container costs $9.25 per month, including the recycling charge. The average rate reported to the city by our licensed haulers for this size container is $13.87 per month, plus residents pay $2.22 for recycling separately. (This also doesn't include fuel surcharges or any other fees that haulers routinely slip into Maplewood bills, or the lower rate that WBL seniors get.) So call it a difference of $6.84 per month, or $82.08 per year. For a sense of scale, I believe the median Maplewood house pays about $740 this year in city property taxes.

Imagine I told you that it appears there is a service you are required to buy, and a small change in procurement method (hauling contracts bid competitively by neighborhood/zone rather than by individual house) would bring operational efficiencies and market forces such that you could save the equivalent of 11% of your annual city taxes, with no reduction of service.  Wouldn't it be crazy not to look into that, especially in these times when we so often hear about the financial challenges our residents face?

Third, the talking points also discuss some dollar figures concerning the hearing and the possibility of hiring a consultant to manage the planning process if we go forward. One thing to keep in mind is that the numbers provided to us were "not-to-exceed" figures, estimates from staff made without actual proposals for the services.  Another thing to consider is that the proposed funding source is not property taxes, but a grant that can only be used for waste reduction/education/technical assistance, etc.

As for the complexity of the whole process and the need to consider hiring expert consultants in the first place — for that, I believe you can thank the NSWMA and their kin, who helped write so much extra trouble and expense into the law, and now pay their own attorney to attend every meeting we hold and make sure that it is followed in all its needlessly-bureaucratic, pointlessly-complex, protective-of-status-quo-business-interests-over-consumer-interests glory.

Fourth, their web page also tries to stir fear of future costs to adminster an organized collection plan, if one is adopted. That seems dramatically overblown. Administration of our recycling program, which is more intensive (it involves a lot of work with respect to outreach to multifamily dwellings, producing and distributing educational materials, etc.) accounts for a fraction of a single city employee's time.  Relative to the likely savings to Maplewood's 14,882 households, that seems like a great return on investment, without even considering that we might be using some dedicated waste-reduction/management funding source (like the aforementioned grant) instead of property taxes to pay for it, and that we would be reducing other adminstrative expenses we already have in relation to trash (such as licensing the haulers, enforcing the mandatory collection law, etc.).

A final thought: It's kind of nice to be characterized as budget-slashers for a change (they spend a lot of time discussing our "tough cuts in municipal programs"). Usually we get told that we're out-of-control spenders who haven't fired half the city staff like we should every year. Just to be cast as a different kind of demonized public servant is refreshing, even if the effort taken as a whole is a little weak. (In Maplewood, we are accustomed to some pretty over-the-top demonizing in our local political tradition, so elected officials like me have developed high standards.)

But just as a tip for whichever intern was given the job of hashing that piece together: It feels to me like it creates some cognitive dissonance. I mean, if we're obviously frugal on one hand, and then you pose it as a mystery that we'd supposedly be growing the city budget and increasing costs to residents, doesn't that just raise questions? You have to be careful about accidentally stimulating critical thinking, rather than just pushing emotional buttons, when you're writing a manipulative, slanted piece like that. Readers may reflect on whether the people you're speaking for, who profit richly from the current situation at our residents' expense, might not be telling the whole story. And surely you wouldn't want that!

Labels: finance, organized collection

Posted by John Nephew on 3/23/2011 09:36:00 AM Email to a Friend | Permalink | Comments
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Apparently interesting things happen on the weekends in legislative tax committees.

Today the House Tax Committee was finishing their omnibus bill, and the last amendment made was to repeal the metropolitan fiscal disparities program. The amendment was proposed by DFL Rep. Ann Lenczewski of Bloomington, and adopted on a 12-10 vote.

Fiscal disparities is a program that redistributes property taxes generated by commercial properties.  Cities pay in based on their commercial tax base, and then get paid back according to another formula. Maplewood has a strong commercial tax base (around the Maplewood Mall, for a conspicuous example) so we pay a lot in and get less back.

The Metro Council has a map that shows the top 20 contributors, including Maplewood.  Another map shows the top 20 recipients.

The fiscal disparities formula has been in need of some attention and reform for a long time.  I've griped about it myself, as I'm sure have the mayors and councilmembers of many similarly situated metro suburbs.  (Rep. Lenczewski is a former Bloomington councilmember, and they too are a big net contributor — #1 last year, in fact.)  However, just dropping it all at once is a pretty shocking change.

It might actually be a windfall for Maplewood.  Pair it with the proposed elimination of the Market Value Homestead Credit program (to be replaced with a class rate reduction for qualifying homes), and it seems theoretically possible that the 2012 levy certified by the city would actually represent the taxes that would be received by Maplewood to pay for our city government.

For cities that are big net recipients of fiscal disparities, it could be a harsh blow to their finances.  Further complicating things, the disparities figures affect calculation of local government aid, for the cities that still receive it.  So the change would ripple out to affect outstate communities, presumably by shifting some of their LGA to metro suburbs.

Lenczewski is a savvy politician and probably one of the most knowledgeable legislators in the state on tax issues.  Given her Bloomington council background, I'll bet she does want to see fiscal disparities reform.  But it's also possible that she's playing Eris and, in this radical form, the repeal is her golden apple, rolling into the middle of the House floor.  Yesterday I linked to an article about the politics in the tax bill.  This new amendment has the potential to pit one suburb against another, as well as to pull in the outstate cities with even bigger dollar reductions in LGA than looked to be the case a day ago, and thereby turn the local interests of some House Republican caucus members against each other.

Of course, we don't know what a final bill that passes either chamber will look like, nor whether it will be greeted by a veto pen at the governor's desk.  And it's way to soon to seriously think Maplewood is going to see a windfall from this, and if we did I wouldn't trust that it wouldn't be taken away by another bill the next year.  But in the completely rearranged political landscape we have in the state this year, who knows what might happen?

Labels: finance

Posted by John Nephew on 3/19/2011 11:35:00 PM Email to a Friend | Permalink | Comments
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In "The suburbs versus the cities," Paul Demko of Politics in Minnesota unpacks the political undercurrents of the Minnesota House Republican bill cutting aid to Minnesota cities.  Worth reading.

Labels: finance, media

Posted by John Nephew on 3/18/2011 02:31:00 PM Email to a Friend | Permalink | Comments
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The Property and Local Tax Dvision of the Minnesota Houses of Representatives posted a spreadsheet late last night with their Division Report, including their proposed changes to property tax aids and credits.  It appears that the House Republicans propose a complete elimination of Local Government Aid for all Metro suburbs by fiscal 2013, and all cities of the first class (i.e., Minneapolis, Saint Paul, and Duluth) will have zero LGA by 2015.

Maplewood has not received LGA in years, so this won't have a direct impact on us.  It is likely to be very painful for some of our neighbor cities, however.

The proposal also includes cuts to Market Value Homestead Credit (which Maplewood receives in theory, though it was unallotted or otherwise eliminated in recent years) in 2011, and a complete elimination of the program thereafter.  The plan seems to involve a change to how property taxes are calculated, designed to reduce the taxes paid by properties that now receive MVHC, although there would still be a net reduction in the amount of property tax relief being provided.  It would mean that the levy figure we set each year would no longer include hundreds of thousands of dollars that the state promises to pay Maplewood on behalf of homeowners, but then doesn't.

I don't have a really clear picture right now of exactly how this would impact Maplewood.  In our specific situation, where we receive no LGA and have made the assumption that we would receive no MVHC, it might all have little impact to some positive effect for our city finances (if it means that we'll actually receive more of the money in our levy).  But for a great many Minnesota cities, it would be painful and disruptive.  And for homeowners state-wide who now receive the homestead credit (which basically means homes under $400,000 in value -- here's a primer from the LMC with more detailed info), it is likely to result in an increase in their property tax bill when the MVHC line goes away.

Labels: finance

Posted by John Nephew on 3/12/2011 12:41:00 PM Email to a Friend | Permalink | Comments
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I didn't get a chance to write about it yet, but at our special budget meeting on December 6th the Maplewood City Council approved the final levy and budget for 2011.

Mayor Rossbach and I voted to reduce the levy increase by $122,000, because in our view we had included this money in the preliminary levy specifically for some unknowns in employee costs, particularly in terms of cost-of-living increases and health insurance expenses.  When we set the preliminary levy in September, we didn't know what the final numbers would be, or even if the employee contracts would be finalized by the time the final levy was set.  (Happily, they were.)  However, our motion failed on a 3-2 vote.  The argument on the other side was that there is still a long list of unknowns and potential expenses, and if we don't have adequate reserves in our fund balance we could face serious mid-year budget cuts and a need for a bigger increase in the 2012 levy.

My first choice was to leave that money in taxpayer pockets, but after my motion to amend the levy amount failed I did still vote for the final levy with its 5% increase (Rossbach was the only vote against).  I do see the value in replenishing our reserves, which have been depleted in the past several years as we've seen declining revenues; and the money is standing by for unexpected needs, not being allocated to any ongoing increase in operating expenses.

As has been explained time and again, the levy increase isn't funding an expansion of city government.  On the contrary, we have reduced the number of city employees, negotiated zero percent COLAs for staff salaries in 2011 (as well as 0% salary increases for the council, mayor, and city manager), etc.  But we have lost other revenue sources -- not only the oft-discussed Market Value Homestead Credit, but things like interest income.  The city gets two big lumps of revenue each year, from the semi-annual property tax payments, and it used to be that the interest on that money, as it sat waiting to be paid out for city operating costs, added up to hundreds of thousands of dollars each year -- dollars that then did not need to be raised via property tax.  But not in today's interest rate environment.

For more on the budget and levy meeting, check out the article in last week's Maplewood Review.

Labels: finance, media

Posted by John Nephew on 12/20/2010 08:36:00 AM Email to a Friend | Permalink | Comments
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While I was away, our City Council unanimously approved a joint powers agreement with our neighboring city of North Saint Paul to provide shared recreation programming for both cities.  (Were I here, I would have voted in favor as well.)  We had taken some small steps in this direction this past summer, with Maplewood providing lifeguards for North Saint Paul's beach on Silver Lake.  City officials from both cities should be commended for the work they put into this.

Local newspapers have covered the agreement: the Maplewood Review published an article after the North Saint Paul City Council signed off last month, and the Star Tribune followed its earlier and more detailed article with a short piece after our Council's action on Monday.

I expect this will be only the beginning of such programs among cities, as we try to stretch our dollars further in maintaining services for our residents.  Shared services are worth looking into at any time, but the state's fiscal crisis and the resulting cuts of funds to cities make it a matter of urgency today.

Labels: finance, media, parks

Posted by John Nephew on 12/16/2010 06:33:00 AM Email to a Friend | Permalink | Comments
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It's very good news that tonight's special budget meeting agenda includes two-year contracts for all seven of the city employee bargaining units.  All of the units have agreed to 0% cost-of-living adjustments for 2011, in light of the state of the economy, declining revenues and state cuts, and the recent low rate of inflation.  The two-year contracts include a COLA of 1% for 2012, which I think is a good trade-off for the certainty of having agreements in place and knowing that we won't have to spend months on contract negotiations again next year only to see a higher COLA than that.  The employees are getting that 1% increase, but they're also accepting the risk that inflation might spike over the next two year period.

There are a lot of other details about the agreement that are important but take a lot more explanation.  In particular, changes to health care insurance coverage that were part of the package in the last round of contracts have paid big dividends to the city (and the employees) in holding down the growth in our health insurance costs.  A few more tweaks should be approved to help continue to keep a lid on those costs while maintaining quality health care for our employees.

After the strained state of labor-management relations in Maplewood just a few years ago, the smooth process in this round of contract negotiations is a welcome change, with all the contracts settled before we set our final levy and approve the 2011 budget, and no contracts going to arbitration.  And given the details of the contracts (such as that 0% COLA), I think it's fair to say that the comity in city hall hasn't short-changed the taxpayers one bit.

Labels: finance, process

Posted by John Nephew on 12/06/2010 08:50:00 AM Email to a Friend | Permalink | Comments
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If you find the calculation of property taxes confusing, you're not alone.  Whether your local government increases or cuts its tax levy, your property taxes may increase or decrease because of completely different factors, such as how much your home's value changed in comparison to other properties in the city.

I came across this video primer on how it works.

Labels: finance, media, video

Posted by John Nephew on 12/05/2010 04:01:00 PM Email to a Friend | Permalink | Comments
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Earlier this year, Maplewood updated its stormwater ordinance.  One change was to ban the use of coal tar sealants.

An item on this week's consent agenda (item G14), which passed without any fanfare, was to authorize city staff to submit an Environmental Assistance Grant application.  Because we adopted the coal tar ban in our ordinance, we are eligible to apply for a grant of up to $100,000 to help manage stormwater sediments contaminated with polycyclic aromatic hydrocarbons (PAHs).  The total funding for these grants is limited, and I don't know how many cities have taken the steps to be eligible or how much competition there will be for the available dollars.  Also, I should note that we are not certain that we will apply for the grant this year; it depends on the results of tests being done on Wicklander's Pond in the city hall campus, and whether those results indicate high PAH levels in its sediment.

We're sure to see more on the topic of stormwater pond dredging and management in the coming years.  We've made massive investments in stormwater management in recent years, responding to federal and state clean water mandates.  Just as roads start to need reinvestment in repairs and rebuilding when they reach a certain age, so too will we begin to face expenses related to the aging of our stormwater management infrastructure.

Labels: environment, finance

Posted by John Nephew on 10/27/2010 10:29:00 AM Email to a Friend | Permalink | Comments
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In "Maplewood council approves preliminary budget and levy," the Maplewood Review's Derrick Knutson's reports on the council's decision earlier this month to set the maximum levy increase at 5%.

We can reduce this figure as we get closer to a final city budget for 2011, but since we are now past September 15th, it can't be set higher.

Labels: finance, media, process

Posted by John Nephew on 9/30/2010 10:50:00 AM Email to a Friend | Permalink | Comments
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Maplewood staff has set up a handy web page with links to the streaming video archives of all the workshops and meetings we've had this year concerning the 2011 budget.

Labels: finance, video

Posted by John Nephew on 9/23/2010 07:37:00 AM Email to a Friend | Permalink | Comments
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Last week I received a letter from a constituent on the topic of the proposed 2011 levy. This is the response I sent:

Thank you for your thoughtful letter dated September 7th. I wanted to respond with some additional information and thoughts about our proposed levy and budget for 2011.

Let me start with your comment that “the city budget should need to be adjusted only for inflation plus population growth.” As a rule of thumb, I agree with this. Circumstances may require a larger increase one year and allow a lower increase or even a decrease in another, but in the long run a city that consistently grows its budget more than inflation and population growth combined is heading for a financial disaster.

If we use your method to guide us, we would need to look back to 2009 in setting the 2011 budget, just to account for how long it takes to get statistics (2009 population estimates were released in mid-July 2010, for example), and the fact that we have to work out the 2011 levy and budget starting in early to middle 2010.

The Met Council's 2008 population estimate for Maplewood was 36,717†; for 2009 (the most recent estimate, released in July), it rose to 37,755††, an increase of 2.83%. According to the Bureau of Labor Statistics†††, the CPI for all of 2009 was 2.7%. Combine those numbers, whether you use simple addition (2.83% + 2.7% = 5.53% increase) or multiplication (1.0283 x 1.027 = 1.0560641, or a 5.61% increase), and you get a number greater than 5%. It would appear that we propose a levy increase about 10% less than the “population growth and inflation” method says we should.

Even with the proposed 5% levy increase, we are making cuts to most city departments. The total money from the General Fund to all city departments combined will be slightly lower in 2011 than 2010. There are two big factors at play:

• The loss of money from the state (Market Value Homestead Credit).
• The need to levy more for the Debt Service Fund, to make payments on the city's bonds.

You've probably heard about “unallotment.” Maplewood didn't have any Local Government Aid left to take away, so instead Governor Pawlenty's unallotments have taken away all of our Market Value Homestead Credit. This is a property tax relief program. In theory, a homeowner gets a lower tax bill than our levy would indicate, and the state promises to pay the difference. What has happened in practice is that homeowners get the credit, but then the state doesn't ever actually pay us, due to their own financial problems. In 2011, this lost MVHC is expected to be about $575,000. Our levy for city operations is planned to increase $550,101 – not actually enough to cover the shortfall.

Since joining the city council in 2008, I have argued for leveling off and then reducing our city's debt, which is mostly related to road construction projects. I believe we should try to have more of a “pay as we go” approach, partly so that we have more budget flexibility in tough economic times like this. We did in fact reduce the city's debt by 3.7% in 2009. However, this shift in long-term planning (as reflected in the latest 5-year Capital Improvement Plan) takes time to have an effect. In the short term, in order to budget for future payments on existing bonds, the debt portion of the city levy is proposed to increase by $333,401, or 9.2%.

You write that we need to “hold the line on increases” in bargaining with city employee unions. We — the City Council and City Manager — agree. The draft budget and proposed levy already assume 0% cost of living increases for all city employees. The city council led the way late last year by canceling the biennial city council salary increase set by ordinance, and also by declining to give City Manager Antonen a salary increase or cost of living adjustment at his annual review earlier this year despite his good evaluation.

The final levy, which can be lower but not higher than the maximum number set in September, will be set in December. We'll continue to look for places to cut and save in the meantime. I encourage you to download the various budget documents and presentations from the city website, watch the budget workshops in the coming months (as well as the archived video recordings of the ones earlier this year, which you can find on the city website), and let the council know your thoughts and ideas as we move forward.

In the meantime, I hope I have at least given you an idea of how we got where we are, and why I think that 5% is not so bad a starting point in the circumstances.

Sincerely,
John Nephew, Councilmember

†Source: www.metrocouncil.org/metroarea/2008PopulationEstimates.xls
††Source: www.metrocouncil.org/metroarea/2009PopulationEstimates.xls
†††Source: www.bls.gov/news.release/archives/cpi_01152010.htm

Labels: finance

Posted by John Nephew on 9/20/2010 07:42:00 PM Email to a Friend | Permalink | Comments
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