An Open Letter to the Mayor and City Council of Prior Lake
On Monday, September 28, the Prior Lake City Council will take up the question of the 2016 tax levy. The city manager has proposed an 11.5 percent tax increase, following the 10 percent tax levy hike of last year. If approved, it would mean a 23 percent levy increase in just two years. We also understand that Lloyd Erbaugh, who chairs the City’s Economic Development Advisory Committee, has called for a 16 percent increase, representing a 28 percent increase in just two years. Moreover, in a recent letter to the editor, the Chair of the Parks Advisory Committee appealed for more tax dollars while claiming that “our city is crumbling.”
Citizens for Accountable Government believe that it’s time for a reality check.
The argument that a big increase is needed to catch up with growth and inflation doesn’t hold water, especially when the inflation rate has been almost zero and growth has been at a minimum. The newest argument that the increase is needed to improve “aging infrastructure” is equally questionable, especially when almost half the $1.2 million tax increase is for additional debt service, presumably caused by this year’s excessive spending.
Let’s revisit that point. This year’s city budget calls for total revenue of $ 26 million, but spends $ 31.6 million. Spending $ 5.6 million more than income is a problem, and solving that problem by burning $ 3.3 million of the city’s reserves and more borrowing, is a poor solution. The 2015 budget includes $4.3 million for debt service, and a 12 percent increase is proposed in 2016. Overall, The CIP the council just approved on a 3 to 2 vote calls for spending more than the city’s income, again, next year.
Proponents of the increase like to talk about deferred needs and refer to “kicking the can down the road” if taxes aren’t raised to meet those needs. Citizens for Accountable Government calls it “kicking the can down the road” when city hall spends more than it should and mortgages the city’s future with ever increasing debt service.
We reject claims that “our city is crumbling,” just as we rejected last year’s empty threat that there might not be enough money to keep the library open if city hall didn’t get its ten percent levy increase. All of this new spending is about growth and development, not immediate need.
We agree that we have some crumbling streets, but unfortunately when city hall spends hundreds of thousands of dollars to buy the most expensive custom designed street lights that money can buy, or pays 30 % over market value for dilapidated houses that the city doesn’t have a use for, or spends $100,000 to $200,000 for roadside digital displays, or pays consultants thousands and thousands to study and restudy the same old issues, there can be no money left to fix those crumbling streets.
It’s all about priorities.
It’s also about project management and accountability. When city hall promotes a new project like the Hwy 13/150th street intersection that is supposed to cost Prior Lake $1.7 million, but the cost skyrockets to $ 3.8 million once the project is underway, that’s another $ 2.1 million that isn’t available to fix aging infrastructure. Keep in mind, that $ 2.1 million increase isn’t due to inflation, or some natural catastrophe. It’s the result of conscious decisions and poor management oversight at city hall.
First, we cannot support a proposed budget that begins with the city manager advising his staff by memo, before public deliberation by the council, or input from taxpayers at the truth- in- taxation hearing, that the bottom line is going to be his proposed tax levy increase. If that’s “the bottom line” why bother with council debate or the scam of a truth-in-taxation hearing.
Second, we acknowledge and appreciate that the tax levy has been relatively flat, but it should be when there is little or no inflation. More important, be aware that Citizens for Accountable Government is not opposed to a levy increase, and would support it, if the increase was based on a definitive plan that clearly addresses community needs instead of community frills; that places higher priority on the needs of current residents and taxpayers, instead of what developers and consultants want; that stops pushing costly projects that are intended to accelerate growth, as we’ve seen with the Rolling Oaks and Stemmer Ridge projects; and that balances spending with revenue instead of burning reserves and borrowing.
We respectfully recommend the council consider these comments as it makes its determination. We would, also, recommend the council reexamine the city’s growth plans and revise its comprehensive plan accordingly.
Citizens for Accountable Government