Taxes or Tree Fund?

tree fundI’m going to go out on a limb here and assume the city’s *preliminary tax levy is not the most riveting topic of conversation at your dinner table. But what if you knew that you and your fellow Minnetrista taxpayers had socked away hundreds of thousands of dollars in an account, money that has been sitting there for years without any liabilities against it and none foreseeable, that could lower your city property taxes? Would that get your attention? It got mine.

Every year we’re given options from staff to increase the city’s budget. We are a growing city and that’s fine but increasing the city’s budget doesn’t necessarily have to translate into raising YOUR taxes. Growth should be providing the necessary dollars to keep city services humming along. This year the preliminary tax levy options from staff are a 5.87% increase or a 4.22% increase. The growth in the city’s market valuation from new construction this past year has only been 2.5%

So why, one may ask, if we’ve only grown by 2.5%, do we need to increase the city’s budget by more than that? At our Work session Monday night all council members except one indicated support for the higher 5.87% increase.

If you ask why they’ll say roads are the reason. Keep in mind we increased our roads budget 36% last year and 40% the year before. If we adopt the higher preliminary tax levy it would increase the road budget another 26% in 2020. These are extraordinary increases when our growth is in the lower single digits.

Anyone that doesn’t go along with the highest increase is accused of “kicking the can down the road” and doesn’t care about Minnetrista’s infrastructure. That’s an interesting statement given the fact our own city engineer’s report, rating Minnetrista’s roads, shows the vast majority of them are in “good-excellent” condition.

I argued we could choose the lower, 4.2% increase, which would still increase our road fund by 10.5% and add another $75K to the road fund by taking $75,000 out of the “Tree Fund,” (referenced above) which has a balance of over $367K in it, to achieve the same results to our Road Fund as the higher levy increase without placing the burden on the taxpayer. The answer was a resounding No.

Council is poised to adopt the 5.87% increase at our September 3 council meeting.

*Preliminary tax levy is set by September 30 and taxpayers are sent notices estimating next year’s taxes based on this. The actual tax levy adopted for 2020 may be lower but cannot exceed the preliminary tax levy.

2 thoughts on “Taxes or Tree Fund?

  1. Many well intentioned things have unintended consequences and tying up capital in a fund without any foreseeable purpose skews the city’s financial balance sheet. I believe the tree fund dollars should all go back into the city’s reserves so we can have a more transparent view of our finances. If we need to purchase trees we should just budget for them out of the general fund.

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  2. In response to many of your questions regarding the “Tree Fund,” this is a fund developers pay into whenever they remove trees (and don’t replace them) from a development site in the city. So we continue to receive funds into the “Tree Fund” but because of the abundance of trees in Minnetrista there are few warranted, legitimate opportunities to spend the funds on trees. This fund was created by the city council and the rules governing it can be amended by the city council at any time.

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