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StarTribune: A revitalization plan for Downtown Chaska

StarTribune:  A revitalization plan for Downtown Chaska


A not-so-good prediction

From the September 2, 2009 Chaska Herald:

Podhradsky said that he foresaw the city’s tax rate remaining at a constant 22.2 percent for at least the next five years after the increase.

Two tax increases in two years, yet we’re still facing a deficit over the next five years.  Time to get real about the structural issues in the budget.

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.

More radio silence

Tonight, the Chaska City Council, Chaska Planning Commission, Chaska Parks Commission and Chaska Heritage Preservation Committee will be having a joint meeting at the Chaska Community Center to discuss the initial findings from the Downtown Master Plan process.  (A public forum will take place in January, but tonight’s meeting is an open meeting under Minnesota statute.)

How was this communicated to residents?

Front page of the city website?  Nope.

A note in the City Council section of the website?  Nope.

The City Hall Bulletin?  Nope.  It lists that the normal meeting of the Planning Commission is canceled, but nothing about this meeting.

An announcement on its Facebook page?  Nope.

The only place this meeting is communicated is buried deep in the staff report and in the other business section of the minutes from the 12/6 City Council meeting.

When will City Hall begin to take seriously its responsibility to communicate with residents and make the people part of the process?

City Council approves more paid personal leave time for city employees

At Monday’s Chaska City Council meeting, the Council approved changes to the paid personal leave (PPL) policy for all city union and non-union employees.  The changes were approved on a 3-1 vote, with Councilor Gino Businaro voting no, and Mayor Mark Windschitl absent due to illness.

These changes provide employees with additional paid personal leave, designed (per City Administrator Matt Podhradsky) to bring Chaska in line with the average of a peer group of 30 cities.

The changes would give an employee an average of about three more days of paid personal leave per year over the first 20 years of employment.

Below is a table showing the breakdown of the new plan versus the current plan.  City employees are also expected (assuming the preliminary levy is approved at the December 20 City Council meeting) to get pay raises of 1.5% in 2011.

   Days of Paid Personal Leave
Years of Service Current Plan New Plan Difference
0 15 18 3
1 15 18 3
2 15 18 3
3 15 18 3
4 15 18 3
5 15 18 3
6 20 22 2
7 20 22 2
8 20 22 2
9 20 22 2
10 20 22 2
11 21 23 2
12 22 24 2
13 23 25 2
14 24 26 2
15 25 27 2
16 25 28 3
17 25 29 4
18 25 30 5
19 25 31 6
20 30 31 1
TOTAL 435 492 57

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.

    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.

    Brick City Blog Endorsements

    State House District 34A:  Leanne Pouliot Kunze

    Frequent readers of this blog know that I’m a big fan of Leanne’s.  The two posts linked below give you key reasons to understand why I am so enthusiastic about her campaign for the State House.

    I’m Voting for Leanne Pouliot Kunze

    Do You Know Leanne Pouliot Kunze?

    State Senate District 34:  Laura Helmer

    Laura Helmer would be a terrific addition to the State Senate.  A moderate, pro-business Democrat, Helmer intends to start a bi-partisan small business caucus in the Senate — putting actions to her words.  The election of Helmer (and Kunze) would give this area responsible, solutions-focused representation in the Legisalture — a welcome change from the partisan games we’ve seen from Julianne Ortman.

    Carver County Commissioner District 3:  Randy Maluchnik

    There are certainly some valid critiques one could make of the current incumbents on the Carver County Board.  The septic system situation at the Waconia Ballroom has certainly been handled poorly.  Depending on which property tax metrics you use, you could make the argument that Carver County is somewhat overtaxed.

    That said, Jay Swenson (and the challengers in the other districts) have been light on specific changes they would make.  It’s easy to point out things that may have gone wrong in the past, but it’s far more difficult to indicate specifically how you would accomplish what you say you’re going to do.

    Randy Maluchnik has been a solid Commissioner.  He has good relations across the County.  He (and the rest of the board) have seemed to get the message on keeping a closer eye on the tax levy, as the county has reduced the levy for 2011.  Importantly, Maluchnik has also rejected the call to make the board a partisan body.  We don’t need partisan politics infecting our county and local affairs.  He deserves re-election.

    Chaska City Council:  No Endorsements

    As I don’t live in Ward 1 or Ward 3, I’m not going to give a formal endorsement.  However, a few thoughts on the races here.  As I noted about a month ago, the challengers in these races have the burden of proof.  There are decisions made and actions taken by this Council that could provide a platform for making such a case.  Based on what I’ve seen, though, the challengers have not made their case (and granted, not living in the Wards in question, I may not be aware of all the campaign activity). 

    I’m particularly hopeful that Gino Businaro will push for increased financial discipline on the city’s part should he be re-elected next week.  His “no” vote on the city budget last year was appropriate, and he should not be afraid to vote “no” again.

    Math matters

    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.

    Show your work, part 2

    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.

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