[Mpls] City budget

[Dennis Plante]

>From: "Rybak, R.T." <R.T.Rybak at ci.minneapolis.mn.us>
>To: "Mpls Forum" <mpls at mnforum.org>
>Subject: [Mpls] City budget
>Date: Tue, 22 Jun 2004 11:34:18 -0500
>
>
>	I want to put this morning's news regarding the police five year
>plan into context.
>
>	I do not want to cut positions in the police department.  I want
>to add positions, especially by hiring new recurits who relect the
>makeup of the city.
>	But when I, or anyone else, says simply they want spend more in
>one area, make sure you ask us where we will cut....because a city that
>has built up debt for far too long needs to keep coming to terms with
>some very uncomfortable financial reality.  That's what I will be doing
>between now and early August when I present my budget.  I'm wide open to
>ideas...we need all the brainpower we can get right now.
>
>	We have dramatically fewer resources because of a number of
>factors, including long term debt, massive state aid cuts, rapidly
>rising health care, pension funds that are gobbling up huge chunks of
>the budget and a recession that has decreased the value of commercial
>property.
>	 While all this has happened, the state passed a property tax
>redistribution that shifted the burden from commercial property onto
>residential.  This, plus the commercial value drop above, has meant big
>increases in property tax on homes, making it much harder to raise
>property taxes on already overburdened homeowners.  The phase out of
>limited market value makes it even more difficult to raise property
>taxes.
>
>	The bad news is that because of these factors above we don't
>have as much discretionary money.  The good news is that all the work we
>have done on long term planning is giving us a clearer picture of the
>challenge, and starting to give us some tools to use to get out of the
>hole. Unlike three years ago, we now have a five year financial
>framework passed by the mayor and council designed to work us out of the
>hole dug by years of debt and, based on those numbers we now have every
>department in the city required to develop a five year budget and five
>year business plan.
>	The police budget you read about in the paper this morning, or
>the Health Department presention yesterday some of you may have seen on
>cable, are parts of that process.  The department heads were to build
>their long term strategies around the numbers in the five year financial
>direction.  The results aren't pretty, as you can see in the police plan
>and the health department plan.....but they are the first step we need
>to understand the implications.  You will continue to see these very
>stark picutres as each business plan comes forward but it is much better
>for the public to learn about the implications in a very public way, see
>what it means over a long period of time...instead of having it sprung
>on people in each budget.
>
>   I was also very pleased the most significant part of the police budget
>had to do with deployment issues: how do we use officers more
>effectively because, no matter how much money we have, we are safer if
>the officer is spending more time on the street.   As that business plan
>is presented...it comes before Executive Committee and Public Safety
>tomorrow--- it will be very helpful to have input from citizens about
>these ideas, and other input about things not in the plan that could be
>added.
>
>	 I also want to make it clear we aren't just accepting the
>situations. I'm working almost exclusvively on budgets issues, as are
>the people in our budget office, and many other parts of the city...and
>that work will come out in August when I present my budget.
>
>  Here are a couple things we are doing to address the long term
>structural issues that are hurting our financial situation.
>
>	First, on health care, when we saw forecasts of these costs
>going up 20% percent for years to come, we worked with our unions to
>restructure the system to lead to significant savings.
>	Second on pensions, we are about to appoint a high level
>advisory group with deep background in this area to develop some key
>recommendations for restructuring. This is going to require cooperation
>with our pensioneers, and the legislature.  You will be hearing more
>about this in coming times.
>	Third, on the long term debt that I referenced above, one of the
>key drivers is the Internal Service Fund, which the five year financial
>direction attempts to pay off.
>
>	These, and a number of other initiatives were received very well
>by the bond ratings agencies we met with a couple months back...and I'm
>pleased to say that they continued to keep the city's ratings, a
>significant achievement in these times.
>
>	With that context, I'm very interested in hearing thoughts about
>how we should address all this.   No idea to too out there...we need all
>the creative thinking we can get.
>
>R.T. Rybak
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>
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