Tonight City staff will present the City Manager’s proposed City Budget for 2006-2007 to the City Council. The Council receives the budget in a Workshop session, which is helpful because it allows for a little give-and-take between Council and staff about what exactly is in and out of the proposed budget.
I can’t say the word “proposed” often enough in connection with the budget. It is my proposal based on the contributions of City staff. The Council has not commented on this budget proposal yet. They just got it for the first time on Friday. The Council saw an early version of a proposed budget at the Council Workshop on August 2, but this version is quite different from that one. That version contained everything requested by City staff and conservative estimates of projected revenues. The proposed budget the Council will discuss tonight is one with some of the staff requests removed and some of the revenues more accurately forecasted.
A budget is a succinct statement of philosophy. Here are some features from the budget that I have proposed to the Council:
Property Taxes - They’re unpopular, but they’re necessary to make things work in City government. My challenge is to try to keep our annual property tax growth minimized. My proposed budget has an increase in our property tax levy of 4.3% in 2006 and 4.0% in 2007. This compares to the State’s measure of government revenue growth called the “Implicit Price Deflator” (which is sort of like a measure of inflation) which is equal to 5.1% growth in 2005. If your City’s rate of tax growth is below the IPD, that’s supposed to be a good thing for taxpayers.
Operations - For the most part, City services will be in 2006 and 2007 what they were in 2005. Very little change with a few exceptions. We are ramping up the operations of our Fire Department with the opening of a new fire station and recruitment of new fire fighters to work in it. We are preparing to launch a new rental housing inspection program that will require owners of rental units to purchase a license from the city. The license revenue will be spent on the City’s new program. It funds itself. Finally, I am proposing that we ramp down the social services functions of the City. This includes both the personnel that provide those services and the grants the City provides to local social services groups and agencies.
Capital Improvements - One of the new features in this year’s budget is a new and stronger commitment to funding capital improvements for the community. These capital improvements include the City’s office facilities, buildings, parks, trails, Community Center, etc. Any building or facility owned by the City. We have a plan to maintain and improve our physical assets so the Eden Prairie citizens can enjoy them long into the future.
New Revenues - In addition to the new revenue from the rental property licenses, the budget includes a new Street Lighting Utility. We are still looking at the exact methodology to collect this money, but we want to better connect the City’s street lighting costs with a new revenue source. This might be a charge on your quarterly utility bill or it might be a franchise fee on your electric bill. Either way, it will be small. Probably $2.00-$3.00 per month for a household. The City will use the money to pay its street lighting electricity bill, which is about $750,000 per year.
The Council discusses my budget proposal tonight. The Council is not going to approve or disapprove the budget tonight. That comes later. The Council must set our maximum possible tax levy at the September 6, 2005, Council meeting, so they must soon settle into a comfort zone for how much they are comfortable taxing citizens for next year. The final approval of the budget does not occur until December, so there’s lots of time to work out the details.
We’ll need every minute of that time to get it right.