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Truth in Taxation tonight

December 6, 2010 by seanolsen 0 Comments

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.
    Chaska, City Administrator, City Council, Mayor, Taxes
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    Decision time on the city budget

    November 18, 2010 by seanolsen 0 Comments

    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?

    Chaska, City Council, Mayor, Taxes
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    Math matters

    September 16, 2010 by seanolsen 2 Comments

    During Monday’s City Council meeting, City Administrator Matt Podhradsky was asked by Ward 2 Councilor Greg Boe what the median property tax would be if the tax rate were not increased.

    Let’s review the scenario in question.  In 2010, the median home value in Chaska was $216,216.  For 2011, they are anticipating a decrease in market value of 7.4%.  As such, the new median home value will be $200,216.  The current tax rate is 0.2189, and the new proposed tax rate is 0.2335.

    Firing up the handy-dandy Brick City Blog calculator, we see that the property tax on the median home in 2010 is $473.  For 2011 — using the reduced market value and the increased rate — the proposed property tax on the median home is $467, a reduction of $6.

    When asked by Boe what the property tax would be if the rate were not increased, Podhradsky answered it would be about $10 less, or $457.  But, that’s not correct.  In fact, if you multiply $200,216 by 0.2189, you get $438.

    I’m not attempting to imply that Podhradsky was trying to shade the truth here.  He was speaking off the top of his head.

    But people following the discussion (and those who read the Chaska Herald article that also re-prints the bad number) should be clear on what the true impact of this proposal is.  It’s not the difference between a $6 reduction in tax and a $16 reduction — it’s the difference between $6 and $35 for a $200,000 home.  And the more your home is worth, the bigger that gap gets.

    The tax rate increase will result in $300,000 more in revenue for the city than if they had left the rate where it was.  In these tough economic times, raising a regressive tax like the property tax should be the last resort.  It should be incumbent on the Council and staff to produce a budget scenario that includes no tax rate increase so that Chaska residents can weigh the trade-offs that would have to be made.

    [UPDATE 9/20]:  After reviewing my analysis and bringing it to the attention of the City Administrator, the Chaska Herald will be running a correction in this week’s paper.

    Chaska, City Administrator, City Council, Taxes
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    Show your work, part 2

    September 9, 2010 by seanolsen 0 Comments

    Remember all the talk we’ve heard in recent years about how the city of Chaska was going to do a better job of communicating with residents?

    The city of Chanhassen will be approving their preliminary tax levy on Monday, September 13 — the same day Chaska will be doing the same thing. Chanhassen has a 129-page document online showing their proposed budget including line-by-line detail. They evaluated three scenarios (a small increase, a no change scenario, and a small decrease). It’s been available on their website since August 18. The agenda and all the supporting documentation for their council meeting was posted by yesterday (some pieces were available last week).

    Here’s the link to their budget document.

    Here in Chaska, none of the above information has been posted. Trumpeting the fact that you signed up for Facebook is worse than irrelevant if you aren’t going to make the effort to truly communicate with people about the things that really matter.

    Chaska, City Administrator, City Council, Mayor, Taxes
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    The 2011 city budget: Show us your work

    September 3, 2010 by seanolsen 0 Comments

    Earlier in the week, the Chaska City Council held a worksession to discuss the 2011 city budget.  Facing a significant deficit, City Administrator Matt Podhradsky laid out his plan:

    • Raise the property tax rate by 6.6% from 0.2189 to 0.2335.  The increase in the tax rate is designed to offset the 6.6% reduction in property values, leaving the city with the same tax levy as 2010 ($4.88 million)
    • 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 spending reductions total $639,000, offsetting expected increases in other areas of the budget, such as personnel (up 1.5%) and operating costs (up 2%).

    The Council will set the preliminary levy at their meeting on September 13.  The preliminary levy serves as the maximum limit for local taxation in 2011.  Approval of the final levy takes place in December.  At that time, the Council can choose to reduce the levy if it so desires.

    What the City needs to do between now and September 13 is to “show their work” on the budget.  Let’s see the figures that lead them to believe that a tax increase is the best way to deal with the budget.  If the tax rate weren’t increased, what else would have to be cut to bring the budget in balance?  City officials should show us what the tradeoffs would be, and let the people have their say.

    2010 Election, Chaska, City Administrator, City Council, Mayor, Taxes
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    Rhetoric and reality: Picking a new City Administrator

    November 26, 2008 by seanolsen 0 Comments

    During the recent campaign, we heard much from all of the candidates running for City Council and Mayor about the need for the city to do a better job of communicating with residents.  The election was held, and Mayor Gary Van Eyll was re-elected along with Greg Boe and Rick Ford being added to the Council.

    The first big issue on the plate for the city following the election was the selection of a new city administrator.  The process was somewhat troubling from the start — as the city hired former City Administrator Dave Pokorney to lead the process up.

    Pokorney narrowed the field down to five semi-finalists:  four outsiders and interim City Administrator Matt Podhradsky.  The five semi-finalists were revealed in a closed session of the City Council — with only their names and scant background given to the Chaska Herald.  Additionally, they announced to the Herald that a meet-and-greet would be held that Saturday (two days after the paper’s publication) — the Saturday before Thanksgiving.  No details were placed on the city’s website.  Even the Herald didn’t have anything about the meet-and-greet session until late on Friday.

    Does this sound like a serious attempt at the “improved communication” we were promised?  Scheduling a session near a holiday with no proactive attempt by the city to communicate it to residents?  It’s not serious at all.  If I proposed communicating a major change at my company in such a manner, I would be laughed out of the building.  It wouldn’t be considered credible.

    So turnout at the Saturday meet-and-greet session turned out to be “sparse” per the Herald’s account of the event.  What a shock!  To make matters worse, the Council followed up the session by perhaps violating Minnesota’s Open Meetings Act in a closed meeting where they narrowed the field down to two finalists — Podhradsky and Dayton City Administrator Samantha Orduno.

    The Council then componded things by holding another little-publicized special meeting Monday night to ratify the selection of Podhradsky on a 4-1 vote — with the soon-to-be-departed Jay Rohe the dissenting vote.  Again, public presence and comment was lacking.

    This isn’t meant to be a knock on Podhradsky, whose experience here makes him a worthy candidate.  I can’t honestly say which of the five would have been the best selection.  But there’s something that isn’t right about the process.

    The selection of the new City Administrator is a key decision for the Council.  The Administrator is responsible for the day-to-day workings of Chaska’s government.  So, the Mayor and Council set up a process to pick a new Administrator that seemed uniquely intended to limit public opinion on the decision.  Sure, they may allow comments at the December 1 Council meeting.  But will that change anything?  It certainly hasn’t in the past.

    Even if the Council is making the right decision, it needs to be aware of the process it is following.  Residents don’t approve of elected leaders who feel they know better and don’t need to listen to input.  It’s well past time for the Mayor and Council to start following through on their commitment to communicate with residents.

    Chaska, City Administrator, City Council, Mayor
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