Chaska facing $400,000 deficit in 2012

The Chaska Herald reported on Monday’s City Council Work Session, at which City Administrator Matt Podhradsky unveiled the updated five-year financial forecast.

The forecast projects a deficit of over $400,ooo for 2012, and higher deficits in the remaining years of the forecast.   On the good news side of the ledger, the projected 2012 deficit is smaller than the 2011 deficit of $650,000 which was closed using a tax rate increase and deferrals of equipment purchases.  Also, TIF District No. 4 closes in 2014-15, which will free up funding for the Street Reconstruction Program.

While the 2012 deficit should be relatively easy to resolve, the City is going to have to get serious about addressing the long-term structural issues in the budget, as I pointed out when the 2011 budget was finalized.  You can’t put off equipment purchases forever, and there is substantial activity ahead — whether it’s the Downtown Master Plan, renovation of Athletic Park, and the maintenance required at the Chaska Community Center (such as the planned replacement of the ice making systems). 

While the City has been quite successful in obtaining grant money to supplement critical projects, we can’t assume such funding is going to remain available — especially given the fact that the federal and state budgets are going to be crimped for the forseeable future.  And while there are signs that development activity may be beginning to come back to life, we can’t expect a building boom comparable to what we saw in the last decade.

Residents of the City would be well served if the Mayor and Council would make moves to eliminate some of the structural issues in the budget starting in 2012 instead of waiting for more severe measures down the road.

Radio silence continues

Updated below (3/22).

Despite now having a full-time employee devoted to city communications, the City of Chaska continues to underwhelm with its ability to get information out of City Hall and to its residents.  Let’s look at a couple of examples:

• Downtown Master Plan:  For weeks before the February 16 Open House, the city was claiming it was going to get information on its website regarding the plan and in particular, the three Catalyst Sites.  We’re now nearly five weeks after the Open House, and nothing is posted as of yet.
• Facebook:  The city heralded its Facebook account when it opened a year ago.  The page now hasn’t been updated in six months.
• Agendas and Minutes:  Getting agendas and minutes for the City Council and Commissions on to the webpage continues to somehow be a difficult challenge in 2011.  Council agendas are routinely posted very late in the day on the Friday before the meeting.  This is a very poor way to allow people to know what is coming up in front of the Council.  There’s no reason that a preliminary agenda can’t be posted a week in advance, and then updated to a final agenda on Friday.  As for the Commissions, only the Planning Commission has its documents regularly posted to the site.  None of the other Commissions show any activity on the website in 2011, and the Heritage Preservation and Parks Commissions show little activity in the second half of 2010.  The names of the Commissioners haven’t been updated to reflect the new appointments.  This is basic stuff that just isn’t happening.

Who at City Hall is going to begin to take this seriously?  Compare what Chaska is doing to what Chanhassen is doing on the web and on Facebook.  They have a webpage that is clean with a list of recent updates on the right side of the page and has a repository of agendas and minutes that goes back over a decade.  Their Facebook page is updated 2-3 times per week with community links and important updates.

It’s not difficult or expensive to have a clean, easy-to-navigate, and easy-to-update web site today.  (This blog, for instance is built on software that is free.)  It wouldn’t be difficult for the City of Chaska to have a web presence that reflects that — it just takes a little effort.

The city is approaching a major event in the next few days — serious flooding of the Minnesota River that will precipitate the closure of MN-41 and MN-101 between our area and Shakopee.  How is the city going to keep residents informed?  Last year, they used Facebook reasonably effectively to do so.  This year?  Well, we know there’s nothing on Facebook and there’s no current river status on the Chaska city website, either.

Again, compare how Chaska is communicating here versus what is happening in Carver.  Carver’s Mayor, Greg Osterdyk, is providing frequent updates on his blog.  The city website has updates on the front page and a whole special section as well.

The City of Chaska does so many things well — if only they could get it together on their communications.

[UPDATE, 3/22]:  The city is now reposting the Carver County Flood Updates on the front page of the website.  Also, a link to the Athletic Park Webcam has been posted.

Carver Sandbagging — Wed. March 16

Sandbagging Volunteers Needed Wednesday March 16th : Greg Osterdyk, Mayor of Carver, Minnesota.

Former Chaska mayor joins Met Council | Chaska Herald

Former Chaska mayor joins Met Council | Chaska Herald.

Two additional thoughts

Two other thoughts as we head into the holidays:

• One more note on the idea of a pay freeze for city employees.  If retention of employees is a concern (and the Council is certainly correct to be concerned), then the time to take an action like a pay freeze is when everyone else is doing it.  By waiting now until 2012 (or beyond) to take any action, the City risks being something of an outlier compared to the private sector and other governmental bodies, who have been making these moves in 2009/2010/2011 and have already taken those savings.  Additionally, making such a move earlier allows you to get savings across the entire five-year planning period.
• A good discussion has broken out at the Chaska Herald site regarding the Athletic Park proposals.  I think what proposals like this and the Downtown Master Plan point to is the need for Chaska to have a published Economic and/or Community Development Strategy.  Here’s a link to such a strategy for the city of Tracy, California.  This is the sort of document that the city needs to create and make available.  It clearly delineates a handful of key goals, one to three strategies for achieving those goals, specific actions the city will take, and how the city will measure progress.  Master Plans and Concept Plans get us part of the way, but what we really need are specific actions and measures to make clear exactly what the priorities are and to hold public officials (elected and city staff) accountable for making progress.

I hope everyone has a very Happy Holiday season!

Kicking the can down the road

Last night, the City Council voted 5-0 to approve an increase in the property tax rate designed to keep the 2011 tax levy at the same level as 2010.  

Much of the Council’s discussion related to the issue of personnel costs, which have been budgeted to increase 1.5% in 2011.  Unfortunately, much of that discussion involved setting up strawmen (that critics were demanding drastic cuts in salary or personnel numbers) and knocking them down.

The city’s budget does nothing to address the long-term financial issues that this city faces.  Even with the tax increase, 2012 and the rest of the five-year planning period still projects to have serious deficits that are going to have to be addressed either by further tax increase and/or spending cuts.  Holding out hope that development is going to ride to the rescue in 2011 — which the Council seems to be counting on — is a pretty thin strand to grasp.  While we all hope that the economy is poised to truly turn around, the stark reality is that the last two economic recoveries have taken far longer than historical post-WWII trend to produce a return to “normal”.

The Council seemingly hasn’t learned from recent experience with the Street Reconstruction Program or Water Rates.  Kicking the can down the road doesn’t work.  With those programs, the Council waited and waited, then was forced to make dramatic changes (a tax increase for the former and a near-doubling of rates for the latter).   Thanks to the inaction of the Council to start addressing these structural issues with the 2011 budget, we’re potentially facing a much larger mess in 2012 and beyond.

When roughly 70% of the city general fund budget goes to personnel costs, you’re going to have to go there to get savings.  Everyone appreciates that Chaska has, by and large, excellent city staff who are smart, versatile, and dedicated.  But reality is reality.  You can’t just wave away (as Mayor Mark Windschitl did) the fact that private sector workers have seen dismal labor market conditions and homeowners are experiencing declining property values.  A one-year pay freeze for city employees would not be out of line given the current situation, and in fact, that would be far better than what many employees of other government agencies have been receiving.

It’s critical that Chaska’s financial house get put into order sooner rather than later.  In January, the city will unveil the results of the Downtown Master Plan.   First looks  for some of the ideas on critical downtown blocks were given to the Chaska Herald last week.  These ideas look promising, but they are not going to be free.  If revitalization of downtown is as important as everyone says it is, then money is going to have to be freed up for these efforts.  We’ve got to have the rest of the budget in line in order to be able to effectively address downtown (realizing that said funds will come from multiple sources).  Otherwise, all the hard work (and the $83,000 in consulting fees) will go up on the shelf, not to be used.

Truth in Taxation tonight

The Truth in Taxation meeting to discuss the city’s proposed increase in the property tax rate is tonight.  The General Fund presentation is online, while details for the other funds have not been posted.  A final vote on the city budget will be at the December 20 City Council meeting.

In September, the City Council approved a preliminary levy equal to that of last year, which effectively means that property taxes will be raised 6.7% to offset a similar decline in property valuations in 2011. 

Under the preliminary levy, the median homeowner in Chaska would see a decline in property taxes of $1 versus a decline of $30 if the tax rate were to stay the same.

Additionally, the plan called for the following cuts:

Do not hire a budget analyst and heavy equipment operator as originally planned

Delay purchases of a new siren for northern Chaska and additional snow removal equipment

Reduce the sealcoat and overlay portion of the street reconstruction programThe cuts and the tax hikes represent a combined $639,000, offsetting increases in personnel (1.5%) and operating expenses (2%).

Unfortunately, the City Council has not gone further and addressed additional expenses that should be looked at.  I would propose these additional measures, with the savings going to reduce the tax rate:

• A one-year pay freeze for city employees.  This would be entirely appropriate, given the continued budget problems and the dismal conditions in the larger labor market — as most families have seen their wages frozen (or worse) in the current economy.  Many other cities have already taken this step.  Councilor Gino Businaro has been pushing for this, and we shall see if he votes against the budget again because it is not included.
• Elimination of the downtown flower program and begin a transition away from city subsidies for “Concerts in the Park”, Taste of Chaska, and River City Days.  These are excellent opportunities for the Chaska business community to step up.  The goal should be for the city to eventually not have to subsidize these events at all, but the transition should happen over a three-year timeframe to allow organizations to fundraise to fill the void.
• Voluntary pay cuts from the Mayor and Council:  Under Chaska statute, changes to the pay for the Mayor and Council wouldn’t take impact until 2013.  However, nothing prevents the Mayor and Council from voluntarily cutting their pay.  A 10% (or more) cut would be a sign of good faith, even if it wouldn’t have significant budget impact.

Decision time on the city budget

The Chaska City Council held a worksession on Monday, November 15 to discuss the final city budget.  As you may recall, the Council approved in September a preliminary levy equal to that of last year, which effectively means that property taxes will be raised 6.7% to offset a similar decline in property valuations in 2011. 

Under the preliminary levy, the median homeowner in Chaska would see a decline in property taxes of $1 versus a decline of $30 if the tax rate were to stay the same.

Additionally, the plan called for the following cuts:

Do not hire a budget analyst and heavy equipment operator as originally planned

Delay purchases of a new siren for northern Chaska and additional snow removal equipment

Reduce the sealcoat and overlay portion of the street reconstruction program

The cuts and the tax hikes represent a combined $639,000, offsetting increases in personnel (1.5%) and operating expenses (2%).

As part of that meeting, the council also reviewed City Administrator Matt Podhradsky’s recommendations regarding cuts should the Council choose to keep the tax rate steady instead of increasing it.  Councilor Greg Boe had asked for this view last month (long after it had been called for by some members of the community).

These cuts include:

• Reduced or delayed expenditures for the street reconstruction program
• Eliminate the downtown flower program
• Eliminate the “Concerts in the Park”
• Reduced support for the Fireman’s Park beach and outdoor ice rinks
• Eliminate free services (such as police coverage, sanitation, and port-a-potties) for events like Taste of Chaska and River City Days

Chaska Herald coverage of the worksession indicates that the Council was likely to stick with the preliminary levy.

What’s not on the table for cuts, based on the preliminary levy and Podhradsky’s stable tax rate scenario:

• City employee salaries:  slated for 1.5% increase.  Some union contracts (including the police contracts) have already been approved by the Council at that rate.
• Cuts to core city services:  police, fire, etc.

What’s your take?  Should we make these cuts, or increase taxes?  Should the things that are off the table be on the table?

Moving away from the election…

… let’s talk about other things going on in Chaska.

The city’s “Truth in Taxation” hearing will be on December 6.  The City Council and City Administrator will be having work sessions on the budget before the November 15 Council meeting, and on November 29.  Will they make public the no-increase-in-the-tax-rate scenario?  One certainly hopes so.

The Downtown Master Planning project is approaching the finish line.  We’re expecting a public open house in December, and the city is working with the Downtown Business Council to develop new sign regulations.

Business comings and goings:

• Anytime Fitness and Verizon Wireless are now open in Jonathan Square and Chaska Commons, respectively. 
• Seen some construction activity in the former Cold Stone Creamery location as well.  Something new coming?
• Cuzzy’s Brick House has a new menu.  Haven’t tried it yet, but it’s supposed to be much larger and more diverse.
• Chaska Liquor will be opening soon in the Chaska Gateway development (Audubon and CR-61)
• MGM Liquor Warehouse has taken over Aurora Wine & Spirits in Chaska Commons
• Farewell to thee, Gas Depot.

Election Recap

I know it’s nearly a week late, but some family medical issues have kept me from posting over recent days. 

Let’s review the results of the election:

State Senate District 34:  Julianne Ortman (63.5%) defeats Laura Helmer (30.3%) and Tim Biros (6.2%)

State House District 34A:  Ernie Leidiger (65.1%) defeats Leanne Pouliot Kunze (34.9%)

The DFL candidates were facing a stiff tide.  Helmer and Kunze ran probably the best races the DFL has put up in this area in a while, but achieved similar results to previous cycles.

Chaska Mayor:  Mark Windschitl (96.0%) unopposed

Hopefully, we’ll have a race in 2012.  Contested elections are a good thing.

Chaska City Council Ward 1:  Scott Millard (57.9%) defeats Gino Businaro (41.6%)

For the first time since 2002, a Chaska City Council incumbent goes down to defeat.  Interesting that Businaro is the one to pay for the Council’s perceived unwillingness to listen to the people, as Businaro has been the closest thing to a “voice of dissent” on the current Council.   It will be interesting to see what Millard brings to the Council, as his candidate forum appearance gave little insight.

Chaska City Council Ward 3:  Chris Schulz (71.7%) defeats Charles Stech (27.9%)

Stech seemed to have ideas, but for some reason got very little traction in his campaign.  Schulz has grown quite a bit in the last year.  He was confident and in command at the candidate forum.  It will be interesting to see if that command carries over the council meetings over the next term.

Carver County Commissioner District 3:  Randy Maluchnik (52.7%) defeats Jay Swenson (47.1%)

A close race that came down to the last precinct.    Strong performance by Swenson in Victoria was not enough to overcome Maluchnik’s advantages in the Chaska portion of the district.