The following posting is from Council Member Paul Ostrow, First Ward, City
of Minneapolis:
I have read with interest the recent postings regarding our current
financial situation and budget issues. I agree with Councilmember Lane that
we need to be very thoughtful in addressing these issues. We are not yet in
a state of financial crisis. However, there are structural imbalances
between current demands on our resources and available resources. Now is
the perfect time for us to engage in long term planning and wherever
possible to redesign services.
For the first time, we have a budget report not just for the coming year but
for the next five years. This is due to a resolution which I authored
during last year's budget debate which requires these projections. The
resolution also calls for the maintenance of a constant tax rate. It also
gives priority to filling the infrastructure gap, addressing structural
deficits in the internal service funds, reducing interest payments on
capital projects and maintaining our previous commitment to finance the
public safety initiative.
Good financial stewardship in my view is one of our most important
obligations as public officials. This means that we must resist
year-to-year budget solutions and choose instead the path that will lead to
the most benefit to the taxpayer over the long haul. I am the first to
admit that this is not easy, especially when all of us feel strongly about
many things we want accomplished for our constituents.
I am below providing a copy of the budget resolution. As stated in the
whereas clause, the resolution is important because it requires us to think
long term and to budget long term. We can then focus on the real challenges
before us in the shaping of our priorities and redesign of government
services. That challenge cannot be successfully met unless we actively
engage citizens in the setting of those priorities. Your comments on what
we should keep doing, what we should stop doing and what we should do
differently would be most welcome.
Establishing a long-term revenue policy for the City of Minneapolis
Whereas, the citizens of Minneapolis are better served when the
Council and Mayor establish long-term policies for the financial, social and
economic health of the City of Minneapolis; and
Whereas, the City's commitments to filling the infrastructure gap,
addressing structural deficits in the internal service funds, public safety
funding, and reduction of interest payments on capital projects are critical
to the long-term financial, social and economic health of Minneapolis; and
Whereas these commitments should not be sacrificed for short-term
budgetary considerations with no long-term benefit; and
Whereas, long-term financial and program planning is difficult, if
not impossible, in the absence of a coherent and consistent policy on
budgeting and taxation; and
Whereas municipal government should have clearly stated limits on
growth in the size or scope of government;
Now, Therefore, Be It Resolved By The City Council of The City of
Minneapolis:
That it shall be the policy and clearly stated goal of the City
Council to maintain a constant tax rate and to avoid increases in the
property tax rate and to first fund our commitments to filling the
infrastructure gap, addressing structural deficits in the internal service
funds, public safety funding, and reduction of interest payments on capital
projects, notwithstanding the Mayor's authority, as expressed in the City's
Charter.
Be It Further Resolved that the City Council directs the Finance
Director and the Budget Director to prepare and maintain annual and
five-year budget projections and further to assume in those projections the
following:
a) A property tax rate at the level in the 2000 Budget;
b) Maintenance of current and projected levels of commitments to
the infrastructure gap, internal service and work-out plan, and pay-as-you
go capital;
c) Reasonable projections on the growth of the property tax base
(from the City Assessor);
d) Additional cost (or savings) from identified decision packages;
and
e) Additional cost (or savings) from budgetary amendments.
Be It Further Resolved that the City Council directs the Finance
Director and the Budget Director to report quarterly to the Ways &
Means/Budget Committee to present these projections.
Be It Further Resolved that the Finance Director and the Budget
Director report annually to a mid-year meeting of the City Council, acting
as a Committee of the Whole, to present these projections.
Be It Further Resolved that beginning with the budget deliberations
for the 2001 budget, all licenses and fees for services shall be subject to
review on an annual basis and shall be established through the budget
process. Cost Savings or increased cost in delivering fee-based services
shall be the determining factor in establishing license costs and fees.
Passed December 9, 1999. J. Cherryhomes, President of Council.
Approved December 14, 1999. S. Sayles Belton, Mayor.
Attest: M. Keefe, City Clerk
Just this morning our Committe of the Whole received a report on the demands
on our resources for the next ten years assuming no change in service
levels. These projections were understated because the workout plan for the
large deficit in our internal service funds has yet to be incorporated into
these projections. The projections show that over the next five years,
increases in spending (based on current commitments) will result in a budget
five years from now that is at least $100 million dollars higher than today.
If we capture growth in our property tax revenue base we can raise
approximately 40 million dollars over that peroid of time. As a result,
even assuming no new services or initiatives and without even addressing the
large deficits in the internal service funds, we are looking at a structural
deficit in excess of 60 million dollars by the year 2005. This cannot
continue. Now is the perfect time to chart a course for the next five years
that will responsibly put our fiscal house in order.
