First levy increase since 2012?! I don’t think so

Laker Dec 21 ArticleI blogged about the misuse of statistics back in October and how omitting information, leaving out something significant that, if known, would lead the reader/listener to a different conclusion from what was presented, could manipulate residents. Well, today our favorite local newspaper, The Laker, has been manipulated. But don’t blame the reporter. She was only reporting what she had read on the city’s slide presented at the December 2 public hearing on the 2020 levy increase which said:

“General Fund levy has not been increased since 2012 and had decreased from 2010 before that”

Somehow the reporter got the idea, from the statement above, that the tax levy in Minnetrista hadn’t gone up in eight years. Hmm, I wonder if residents in Minnetrista think the same thing. Anyone familiar with Minnetrista’s tax levy history knows there has been a tax levy increase almost every year since 2012 and we got another whopper 5.66% increase this year.

The byline in the December 21 story on page 18 states “Final levy close to that submitted in September, first increase since 2012” (Emphasis added). Oops, someone actually printed what they were told, and in a very public way. It’s always been okay to mislead people as long as it was done quietly, but headlines advertising the deception are another matter. The reporter was quickly contacted by the city and told to correct the online story and reminded that she should have run the story by the city.

How would a regular citizen interpret this slide?General Fun levy has not increased

Note also how the slide says “Staff is proposing an option reducing the net preliminary tax levy increase….” instead of the reality of staff proposing a 5.66% increase, which, by the way, was adopted on a 4-1 vote (Bruce dissenting).

So what was missing from this slide and why did the reporter need to correct the story? First, there are several funds, other than the “general fund,” included in the tax levy. There is a debt fund, a road maintenance fund, and a CIP levy that, in addition to the general fund levy, comprise the taxable levy. Most people don’t know that and the only reason this statement was on this slide is to take advantage of the fact that most people don’t know that.

Bottom line is the city of Minnetrista wants more of your money but they want you to hand it over without complaining. To do that requires manipulation of the facts and they are very good at that.

 

5.66% Increase in Minnetrista’s final tax levy for 2020

Minnetrista’s city council passed the final 2020 tax levy Monday night, increasing the levy 5.66% from the previous year, on a 4-1 vote. At our work session prior to the meeting I asked the council to consider using the unanticipated higher revenue from the city’s building permits to off-set the levy increase but the answer was a unanimous no. Despite a 43% general fund reserve (healthy by any standard) the council chose to apply the savings to the general fund reserve increasing it to 47%. I was the dissenting vote on the motion to pass the levy increase.

There are other reasons I dissented. Minnetrista has a backwards budgeting process where staff essentially submits a budget to the council and the council usually approves it without much modification. Generally we are given two or three budget options with varying increases (I’ve never seen an option without an increase that is far above our growth rate even considering inflation) and the council chooses one of the options as the preliminary tax levy in September and then adopts the final levy in December, which may vary slightly when year end projections are more certain.

In the private sector, as in many cities throughout the country, the budgeting process is different and begins with submitting the prior year’s budget and then justifying the increases, line by line, before adoption. That has not been the process in Minnetrista and there has been considerable resistance to the idea that it should be. How else can the council responsibly vote to support a tax levy if it doesn’t know what the justifications are behind all the increases? I’d like to see a budget committee comprised of two council members established to do this.

The budgeting process in Minnetrista needs to start out assuming every line-item increase, which isn’t just inflationary, needs justification. Until that happens I will be voting no, as I have in the past, on the city’s tax levy.

 

Minnetrista: $$$ Vote Tuesday!

You wouldn’t buy a car from merely reading the manufacturer’s ads would you? If you live in Minnetrista in either the Mound Westonka or Watertown school district there is a very important vote on Tuesday: $Millions of dollars in school referendums that will impact you and your community for the next decade and beyond. I urge everyone to get information from sources other than the school districts promoting the referendums.  These referendums are intentionally held in non-election years counting on low voter turnouts. Here is where you can vote on Tuesday, November 5:

WhereToVote

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.

 

Misuse of statistics manipulate Minnetrista

“There are three types of lies – lies, damn lies, and statistics.” – Benjamin Disrael

Local governments want more of your money but they want you to hand it over without a fight so they pull out statistics to convince taxpayers to open their wallets. Here are just a few things to look for to see if you’re being manipulated by the numbers.

dwarf_PNG76Omissions: Leaving out something significant that, if known, would lead the reader to a different conclusion from the data presented:

  1. When a city, in an attempt to waylay fears of a tax increase, says their tax rate has stayed the same or is lower than it was before but neglects to reveal that your property valuation has increased substantially and, therefore, the amount you pay is going up.
  2. When the city tells you residents are willing to accept a property tax increase for road maintenance without telling you that 64% of Minnetrista residents indicated they opposed any property tax increase for roads in the community survey (see below).

Using percentages from a small sample size: When a survey uses an insignificant sample size, percentages will always be misleading:

Minnetrista’s community survey asks respondents if they would favor or oppose an increase in property taxes for city street repair/maintenance and 64% said they’d oppose an increase. A very small number (128 people out of 7,000 city residents) indicated they’d favor an increase. That subset of respondents (128 people) was questioned to see how much more they’d be willing to pay. When they indicated various amounts ($5-$30/mo) it was then repeated over and over again that, according to the community survey, the majority of people (which was actually just 118 people: 92% of the 128) are willing to accept an increase in their city property taxes for roads, when, in fact, 64% surveyed said they were opposed. Starting to get the picture of how this works?

Faulty polling: How questions are phrased can influence responses dramatically. A deceptive polling strategy is to precede a question with a narrative designed to prejudice the response or to omit (see above) important data qualifiers. The examples below use a combination of both omission and faulty polling strategies:

  1. Minnetrista’s community survey precedes a question (#49) about whether or not the city should build a gun range saying “there is an unfinished gun range” and “if finished” it would be used by residents. Communicating something as “unfinished” implies that it has been started (which it has not) but not completed and influences a positive response since people generally are averse to leaving things “unfinished”. The truth of the matter is there is empty space with nothing in it that could be built out as a gun range. This survey question also omitted the fact there would be significant, ongoing annual operational and maintenance costs that will increase residents’ taxes over and above the build out costs. Had that been revealed and the phrasing less biased, the responses would likely have been much different. Even so there was little support to use tax dollars to fund the build out, and one would assume no support for tax dollars to fund the maintenance (if they had been aware of it).
  2. This one is my favorite: This survey question precedes another (74) regarding the approval rating of the Mayor and Council with a question that reveals the majority of respondents know “very little” to “nothing at all” about the work of the Mayor and Council but then goes on to ask if they approve or disapprove of the job the Mayor and Council are doing. Remember that next time you hear about the council’s 80% approval rating. Apparently ignorance is bliss.

Community surveys are merely vehicles designed to justify tax increases and reelect incumbents that support them.

Additional $375 annual check to Watertown Schools? VOTE Nov. 5

That’s how much more someone with a $500K market valuation will pay annually if the revenue referendums proposed by Watertown School District pass in November:

watertown bond referendum

Westonka Schools also have a revenue referendum increasing school spending coming up for a vote November 5 as well. A $500K property would see an annual increase of approximately $121 in that district if it passes.

Both referendums provide for annual inflationary increases for the next ten years.

Watertown School District Voting:watertown voting

Westonka School District Voting:

westonka voting

More information on both school districts’ referendums:

Watertown School District’s referendums

Westonka School District referendum

 

 

 

 

 

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.