Post Election Thoughts for Bemidji

Thank you. Thank you. I've been elected to city council. Thanks to everyone for their support and votes. I'm pretty excited about that, but have to say that the budget challenges and the changes coming at the state and federal levels could make the job a bit more difficult. Or at least a bit different.

State Capitol

Local Government Aid
2011 is a budget year and Minnesota has a huge hole to fill. One of the talking points for the top of the Republican ticket was eliminating LGA. I understand that there will be changes to LGA. Let's hope our legislators can keep the formula fair for Bemidji. If we lose substantially more LGA, there will be property tax increases.

Headwaters Science Center

Bonding Bill (aka Jobs Bill)
Bonding for infrastructure and capital investments is done in even numbered years and our next large bonding bill will come in 2012. I will be interested to see if this legislature proposes a small bonding bill, which is a common practice and would have almost certainly been the case with a DFL controlled legislature. The bonding bill is usually considered one way to jump-start jobs in the state. There is a backlog of projects from 2010 that are "shovel ready," but were vetoed by Governor Pawlenty. One of them is $475,000 in planning money for a new Headwaters Science Center.

Transportation funding
With the defeat of Congressman Jim Oberstar, we have practically been cut off at the knees with regard to ever getting federal transportation projects in northern MN. According to this article in The Pioneer, Chip Cravaack does not support many of the airport, trail, and alternative transportation (rail) projects that are Oberstar's legacy and have benefited northern Minnesota and the Bemidji area.

Airport Groundbreaking 2010

Our airport has been expanded thanks in a great part to Jim Oberstar. Our state has a fantastic system of trails partly because of Oberstar. The city of Bemidji has requested federal funding to build a bike/pedestrian/snowmobile bridge over TH 197. Now, if it is built, it will likely be without federal money.

Trail advocate, the late Terry McGaughey and Congressman Jim Oberstar at 2009 Paul Bunyan Trail Ride reception.

There is even talk that Safe Routes to School funding and Transportation Enhancement funding could disappear.  Safe Routes provides funding to improve the safety of children walking to school with investments like sidewalks, signage, and new crosswalks. TE funding is for multi-modal connections. Bemidji has received TE funding to pave the East West Trail and the West Lake Bemidji Trail.

The Active Living partnership may have to rethink their plans, which currently rely heavily on both of these funding streams to move their agenda forward and increase recreation opportunities in our community.

January will bring a new city council, a new majority party at the state capitol and a new face in the 8th Congressional District. In the words of Bob Dylan, "the times, they are a' changin'." It remains to be seen how these changes will affect the city.

 

Weekly Bits from the City Newsletter 3-05-10

 (Governor Pawlenty)

 City finance director Ron Eischens, outlines the need for LGA (Local Government Aid) in this week's city newsletter.  He and the Mayor will deliver the city's case to the Governor during Bemidji Day at the Capitol on Tuesday. According to Eischens, "Compared to all cities in Minnesota, Bemidji’s tax rate is below the average and also lower than similar sized cities. Bemidji’s spending per capita is also below similar sized cities."

He also outlines the major capital improvements that the city has made in the last ten years and explains (again) that 43 percent of Bemidji's property base is non taxable.

The newsletter also has a list of upcoming meetings, updates from department heads, and meeting agendas for the BREC advisory board, the Park and Trails Commission, and the Heritage Preservation Commission, which all meet this week. (The agenda for the Joint Planning Board, which meets on Wednesday at 6:00 pm is not included in the newsletter, but can be found here. I'll have a separate post on that tomorrow.)

Recipe for a Budget Fix: Cut 10%

A little less here and a bit less there, pretty soon you've got a recipe for a budget reduction, right?  Unfortunately, it is going to take more that a bit here and there to find  $600,000 that is expected to be cut from the City's 2010 budget.  Word is that City department heads have been asked to recommend cuts of 10% on their budgets. Not sure if there was any mention of revenue enhancements--street light fee, anyone?

This exercise is going on all over the state as cities and counties scramble to prepare for the state aid cuts that will be coming out of the state capitol. The Association of MN Counties has put together a budget balancing recipe with a list of a nearly a dozen ideas and presented it to the legislature according to this story in the Pioneer Press.

Minnesota counties would give up all their state aid in exchange for authority to levy a half-cent sales tax.

The State Patrol would be cut in half, and county sheriffs and city police departments would patrol the highways.

Counties would take over plowing and maintaining all state highways, except for freeways.

Those are among a package of 10 cost-saving proposals that the Association of Minnesota Counties outlined at a Capitol press conference today.

They would also combine county planning and zoning with cities and townships and ask for home rule charter authority (the ability to make laws, much like the city can do now).

Can you help identify the ingredients for a palatable solution to our budget dilemma? What are your priorities? What DON'T you want cut? What are you willing to have LESS of?

Personally, I would like solutions found that don't include laying off staff. I also don't want park maintenance to take a big hit. I would be willing to have less salt on the streets and shorter service hours at city hall. I would also like to be able to pay my city utility bill online. I would be willing to sell the residential refuse route and the equipment that goes with it. Maybe we should delay the planned quality neighborhood initiative study and the $48,000 consultant contract that goes with it.

What do you want for your tax dollars? Call the council, or log in to the comment section on the city website and let them know what is important to you.

Like Trying to Stop a Toyota

Governor Pawlenty has proposed cutting LGA (local government aid) to cities by $250 million, including cuts to Bemidji of $581,323 in 2010 and $302,000 in 2011. That means we have to make immediate reductions to the city budget. But putting the brakes on the city’s budget is like trying to stop a Toyota. The tax levy has already been set and can’t be changed, so budget adjustments must come in the form of efficiencies, service reductions, layoffs, fee increases, or. . . ?

Got any good ideas? The city will need all the help they can get to reduce this year’s budget because all the low hanging fruit was picked last year.

Pawlenty’s proposed cuts come on top of the $485,688 LGA reduction that the city has already incorporated into the 2010 budget. While Pawlenty’s cuts aren’t yet law and some legislators have said that LGA cuts in the final budget won’t be that high, it is pretty much universally agreed that cities will be hitting another pothole on the road to balancing the state’s biannual budget. (The League of Minnesota Cities (LMC) provided insight into the preliminary 2010 budget and its impact on cities in their February 19, 2010 webinar.)

If past practice prevails, suggestions for cutting the budget will come from within. The city manager and department heads will put together their ideas for reductions to be presented to the council. Likewise, council members will probably have their own individual preferences for how to reduce the budget (as they did in 2009). Is this time-worn process of developing budget reductions—within the confines of city hall—the best way to carve out the cuts? Will it be fair to employees? Will it result in solutions that the community wants?

Last year’s LGA unallotment by the governor resulted in “out of the box” thinking by some cities. Spring Lake Park, MN implemented some creative strategies to reduce their budget that were the result of employee input and had community support. Each employee group was given a choice –whether they would be willing to take two weeks off without pay or make the decision to have someone in the group laid off. The choice was theirs to make. A variety of solutions emerged that included unpaid leave and the layoff of two part-time employees. City hall was closed for two weeks; once in August during the State Fair and for one week between Christmas and New Years. They didn’t receive any negative feedback from the community.

It’s time for Bemidji to broaden the process and get community buy-in by not only asking employees for solutions, but the community too.

What could community engagement look like? Listening sessions with council members? A community survey? How about asking for comments online? The legislature created a website for constituents to opt in with ideas and preferences for how to redesign state government. Bemidji residents can comment online at the city’s website.

It will take everyone on the Toyota team to get Toyota back on track. Engaging the entire Bemidji community in finding solutions to Bemidji’s budget makes sense too.

Why Are You Picking on Bemidji, Gov. Pawlenty?

A war of words between the City of Bemidji and Tim Pawlenty continued with more comments on the Governor's radio show Friday morning.

The exchange began last week when the Governor blasted Bemidji for raising the levy to offset the Governor's LGA cuts. The Mayor's response in The Pioneer and the Star Tribune corrected inaccuracies in Pawlenty's comments and explained the increase. But that didn't stop Pawlenty from going on the attack again today, complaining that "50% of the City's budget is from state aid."

Here are the facts from the City's Truth in Taxation Report:

Sources of funds: Taxes 32%, fines, licenses, interest 32%, State aid 36%
(There are more details and comparisons with other comparable cities in the report.)

I can't explain the LGA formula. I'm not sure who can. But I have always considered our role as a regional center as one reason that Bemidji should benefit from LGA. We serve the region as a government, healthcare, education and retail center. The negative side of that is that 43% of the property in the city is non-taxable. The positive side is that our community remits a lot of sales and income tax dollars to the state. LGA is one way the state compensates our community for our regional role.

Successful greater Minnesota communities like Bemidji are important assets for the state. In tough economic times the Governor should be supporting communities, not disparaging them.

Budget Cuts -- How Cities are Coping

The governor cut it last year and he plans to cut it even more in 2010-2011. No, not his hair. Everybody's talking about LGA (Local Government Aid), but can anyone really explain it? Why do some cities get it and others don't? Why do cities need it?

LGA goes to cities with a low tax base. In Bemidji, only about 49% of the properties in the city are taxable. With 51% tax-exempt, we thank LGA for parks, police, libraries, fire protection....

The Coalition of Greater Minnesota Cities and the city of St. Paul launched a website earlier this year to explain LGA and encourage support for it. Their site ThankLGA.org, provides "LGA Basics," tracks media reports and offers a place for citizens to "tell your story."

The most interesting page on the site is perhaps the "City Stories" where Mayors and Finance Directors from cities across the state explain what they have done to respond to cuts already made and what they will do if additional cuts are made.

It also lists the amount cities stand to lose. Here are the figures for Bemidji
2008 LGA Unallotment: $241,303
Governor’s Proposed 2009 LGA Cut: $320,922
Governor’s Proposed 2010 LGA Cut: $670,141

City officials are asked to "provide a few examples of what services in your city are equivalent to the 2009 LGA reduction." Bemidji's answer:
* Nearly 6 police officer positions
* The city’s entire capital equipment purchases
* Nearly 50% of the city’s parks and library budget
* 9% of the city’s public safety budget

How will the City make up this reduction? Remember the Street light fee idea? That fee would have been assessed on all properties--including the tax-exempt properties. Think the idea might come back?