Put the brakes on

Watch a representative from Ehlers, the city’s contracted financial advising firm, who gets paid to help cities borrow money, defend Minnetrista’s weak debt profile from Standard & Poors in this video from Monday night’s council meeting, rationalizing that because everyone else does it, it really isn’t a big deal. Well, of course a firm specializing in debt issuance would see it that way.

S&P Debt RatingMinnetrista’s debt service is 18.6% of total government fund expenditures and that is high, according to Standard & Poors which isn’t a firm specializing in debt issuance. They specialize in evaluating the credit worthiness of organizations. Perhaps we should heed the assessment from S&P rather than go along with the don’t worry be happy advice from our debt issuance firm.

debt growthBecause a city can just take the money out of constituents’ pockets it carries an obligation to make sure it manages debt responsibly. Even the Ehlers rep estimated Minnetrista would need to almost cut its debt service in half (reduce it to 10%) to change the S&P rating. Minnetrista needs to put the brakes on. Apparently so do a lot of other Minnesota cities.

Monday night’s discussion centered around refinancing some G.O. bonds and the city’s ratings relative to receiving favorable bids. Having a AA++ rating is a good thing and the city’s finances are strong partly because our residents are relatively affluent which translates into what they call a “high tax capacity” (there is plenty more to take) and there are funds stashed away in “special” funds that aren’t being used. But bond ratings are not the point here. Saddling future generations with debt that keeps growing is the point.

The eight page Standard & Poors rating wasn’t in our council packet or available to the public prior to the meeting.  I had to request a copy of the rating assessment to review prior to the meeting and asked that it be provided to the council. They had planned to hand it out during the council meeting. If residents would like a copy they can call city hall.

 

Preliminary tax levy increased 5.87% and 2040 Comp Plan to come back for study

Monday was a long night for the city council with a full and challenging agenda. Unfortunately for Minnetrista taxpayers the council chose to adopt (4 to 1) the highest increase (5.87%) presented by staff for the 2020 preliminary tax levy, despite having hundreds of thousands of dollars that have been sitting in unused special funds for years with no foreseeable liabilities against them. We continue to raise taxes and debt special fundswhile cannibalizing our fund reserves, all the while having access to these public funds which, in my opinion, belong in our general fund reserves to give an accurate view of the city’s balance sheet. If the city needs to buy trees we can budget for them. If the city needs to purchase additional emergency sirens we can budget for them. Setting up “special funds” keeps this money out of the public’s view and, more importantly, out of the general fund and gives a distorted view of the city’s finances, which is used to justify tax increases year after year.

The preliminary levy increase may be lowered before the final levy adoption in December but it cannot increase any higher. December 2, 2019 was the date set last night for public comment on the 2020 final levy adoption. You’ll hear some council members defend their votes citing that the preliminary increase was reduced last year before the final levy was adopted. What you won’t be told is that it was done without cutting a single penny of spending and irresponsibly dipping into our general fund reserves.

The city’s 2040 Comprehensive Plan was on the agenda for final approval Monday night. I had some serious concerns about it noted here having to do with private wells, GreenStep Cities, inaccurate numbers projecting future water demand, and making commitments to revise or adopt future ordinances without the council having access to the wording of these ordinances. Council agreed to bring the plan back to a work session in October for discussion.

 

Rubber Stamp rides again

RUBBER STAMP RIDES AGAIN. Apparently Minnetrista council members are fine voting to update city policy without knowing what the updates are. In a 4-1 vote last night that’s exactly what happened. rubber stampUnder the consent agenda at our council meeting was an item updating the city’s Post-Issuance Debt Compliance Policy. In the policy/backgrounder (pg 30) provided there was nothing summarizing what was being updated and council was not given the changes in any form where we could see what, exactly, was being changed. Call me crazy but I said I couldn’t vote to approve updates without knowing what they are. The Mayor felt otherwise and indicated that as long as the finance director and city attorney had read it, that should be enough for council. I was cut off when I attempted to remind the council that approving city policy is the council’s job, not the job of city staff. Apparently not in Minnetrista.

Minnetrista preliminary tax increase highest of all surrounding cities

I attended the League of Women Voters city council candidate forum at Minnetrista city hall Thursday night. Once the video is available I’ll post it and give a recap. For now just wanted to post some information city council candidate Elroy Balgaard shared that night on the surrounding communities and how their preliminary tax levy changes compare to Minnetrista’s.2019 surrounding cities preliminary leviesThis information didn’t go over well with the incumbents who asserted these communities can’t be compared but it should be noted that the city of Orono is quite comparable to Minnetrista in size and growth yet their increase is 40% lower than Minnetrista’s. Yes, there’s always a chance preliminary tax levies may come down before they are adopted in December but I’d be shocked if Minnetrista’s increase came down to even Wayzata’s at 4.29%.

Minnetrista grew 2.5% last year. Why do we need a 6.01% budget increase to pay for that?

Even though there will be a public hearing on December 3, the Minnetrista final 2019 tax levy will most likely, given history, be adopted without change that same evening and the public hearing is not likely to influence that. Sort of makes one wonder what the point is of having a public hearing.

“A Drop in the Bucket”?

“A DROP IN THE BUCKET”? The Minnetrista City Administrator thinks an estimate, provided by a frequently used engineering vendor, that is more than 60% higher than it should be is just “a drop in the bucket” when considering the total cost of a potential water project ($2.3M) in Hunters Crest.

At the September 17, 2018 council meeting a resident, structural engineer, addressed the council with concern over what he considered a “ridiculously high” estimate on conducting soil and water level testing on a preferred site in Hunters Crest. The two options by the city’s preferred vendor are below:

estimate.jpg

The gentleman addressing the council during the “Persons to be Heard” portion of the meeting contacted a soils engineer that indicated an overly generous estimate for this work shouldn’t be more than $6,000.

bucketPerhaps a $4K-$5K overcharge to the city is a “drop in the bucket” to our city administrator who isn’t a taxpayer in Minnetrista. Multiply these “drops” that will accumulate as this water project is designed and built. Hmm, what’s 60% of $2.3M?

Here is the video from the September 17th meeting cued up to the comment: City of Minnetrista 9/17/18 Council Meeting

June 14, 2018

IF AND WHEN MINNETRISTA NEEDS ANOTHER WATER TOWER. A year ago we were told we desperately needed a new water tower in the southwest corner for fire suppression in the Hunters Crest area. We were told the hydrants there were only putting out 500 gallons per minute (gpm) which wasn’t sufficient and water tanker trucks were still needed for fire calls there. Turns out that’s not true. I requested we have the hydrants tested for flow rates and the report we received actually shows flow rates there of 1000-1200 gpm. So it appears the urgency is no longer an emergency. Don’t expect the urgency to go away though…there are millions of dollars at stake here and we will still see a frantic push to buy land and build a tower anyway. You’ll hear that we urgently need it for future population growth but the historically exaggerated population numbers used (see pop growth chart), even if accepted as accurate, show that need isn’t until 2030 if (and that’s a big if) that growth materializes.

If those inflated population numbers don’t materialize after the city purchases revenue bonds (which are normally paid back with user fees) it will be all Minnetrista taxpayers left holding the bag. We need to make sure, before spending millions on a huge infrastructure project like this, that we are making decisions based on accurate, factual information and not on overblown predictions that may never materialize. We can’t let vendors pressure the city to line their pockets and cause Minnetrista to take on growth just to pay off debt.

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