In the coming years, the City of Minnetonka will have to tackle many complex issues. Patch asked this year’s City Council and mayoral candidates about how they’d handle some of the major issues facing the district.
Today’s question is:
- What, if anything, would you remove from the city’s budget? What, if anything, would you add?
I can understand that the way the question was stated was to attempt to get at each candidates understanding of the city budget. However, the important part of the city budget is not what dollar amount any one person would remove or add, but the thorough process that is used to develop the city’s budget. The key reason that the city has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association for almost 30 years in a row and has a Aaa bond rating (only 3% of the cities in Minnesota have as high of a rating) is the process that we use in developing the budget and how we have structured the funding of city services to provide efficiency, stability and transparency. To understand the answer to what should be added or removed from the budget you need to have a basic understanding of both the process and the structure of the budget. The following is my attempt at a brief explanation of each:
The budget is developed over about a nine month period with two major segments. The first segment done during the first half of the process is development of a five year Capital Improvement Plan (CIP). The CIP identifies all of the capital expenditures that are anticipated for the next five years, with more detail obviously in the first year of the CIP. It identifies funds needed for such items as street repair and replacement, building repair and upgrades, trail and park improvements, equipment and technology needs and fire, police and operations & maintenance equipment. It also identifies the potential funding sources, justification or need for the expenditure, increase or decrease in operating expenses if the expenditure is made etc. Each department director works with their staff to prepare their section of the CIP, they the city manager and department heads work together to better balance the needs identified in the CIP with anticipated funding levels and prioritize the expenditures for inclusion in the CIP to be presented to the City Council. Staff then reviews the CIP in detail with the city council in a work session, obtains feedback from all council members and then adjusts the CIP to reflect that feedback and presents that document at a formal council meeting for adoption after any input from the general public.
The second segment is then developing the formal budget for the city, which incorporates the funding needs of the approved Capital Improvement Plan plus the overall operating costs needed to run the city. Other than the CIP costs the largest component of the city’s operating budget is staff salaries. The preparation of the operating budget at the staff level is very similar to the above development of the CIP. Once these are presented and fully discussed with the city council at a work session. The council integrates the information provided into the structure of the budget, which results in a proposed preliminary tax levy.
Structure of the budget
Many cities in Minnesota do a typical five year CIP and line item budget review, but they typically structure their budget around operational expenses and handle larger capital expenditures different than the city of Minnetonka does. They wait until they need the funds for major expenditures such as fire trucks which can run $1 million plus and road reconstruction project that can run several million dollars and then issue municipal bonds to fund that work. While this provides some stability since they are spreading out the payments over 15, 25 or 30 years, the interest expenses for bonding can double the cost to the citizens. Minnetonka rarely bonds for capital improvements, but takes a long term view of cash flow needs, works with dedicated fund balances to accumulate funds over time so when we need to invest in those major capital expenses we can pay for them in cash and avoid all of the costs associated with issuance of municipal bonds and the interest expense. Our resulting low level of bonded indebtedness is the major reason we can get a Aaa bond rating which means that when we do need to issue bonds we get a very favorable interest rate.
While we do pay attention to individual line items, especially as it relates to number of city employees most of the focus in our budget deliberations is on the status of the various fund balances and if they are on target to meet our future goals.
I listened carefully to the Council’s discussion of the budget and the Housing and Redevelopment Authority (HRA) levy at the Special Study Session. I believe the budget process is approached carefully by our City Manager and I would have directly addressed any areas of concern with her. I support the final decision to retain the HRA levy based upon anticipated future funding of development around the light rail stations. I believe the City will qualify for matched/leveraged funding if these HRA levy funds are budgeted now. The entire affordable housing directive in Minnetonka has struggled without leadership. The future plans around the light rail stations may be the City’s opportunity to energize the discussions around affordable housing. I am a frugal person by nature and so I will carefully review any additions to City services. In a dream world, I would add more funding for purchasing of open spaces and for developing trails and bike paths. I would also dream of increasing financial support for our community music and arts.
At Large Seat A
We are currently examining two housing programs to see if they continue to match what the market desires. I would only add programs if I was certain that any new program offered real value for our citizens.
The City budget is well run and provides for needed services. I would like the City to be in a position to acquire and maintain more land for parks, trails and other recreational activities. The Lone Park walking trail could be made bicycle friendly on the Minnetonka side to match the connection to the Eden Prairie trail.
At Large Seat B
Minnetonka has always lived within its means, and has maintained comparable property levy rates to our neighboring cities. Three quarters of every city property tax dollar directly supports public safety and streets. Most of the remainder directly supports parks, trails and related services, which the Minnetonka community survey shows residents highly value.
At the same time, our city has consistently ranked among the top five highest-ranked communities in the Metropolitan area for the last 14 years. As your city council member, I will ensure that residents continue to receive good value for their tax dollar, and that the services funded by the city are both needed and delivered with the highest quality.
I’m running for Minnetonka City Council because I want to bring a common sense approach to non-essential spending. We cannot keep funding non-essential government services by increasing taxes. Taxes will not keep up with the pace of growth for both essential and non-essential services.
As stated yesterday, if elected I promise to bring the energy to tackle our budget challenges. City leaders recently cited that this year’s tax increases were partly the result of a growing pension program. We cannot keep increasing taxes while refusing to deal with pension programs and non-essential government spending. We must find a better equilibrium.