The Blog from City Hall

Here’s a Star Tribune story from today’s paper that is meaningful to those of us in the government business in Minnesota:

State budget gap ‘likely to grow’

By PAT DOYLE, Star Tribune

January 30, 2008

State Economist Tom Stinson said Tuesday that a predicted $373 million state government budget gap is “likely to grow” because early indications are that future revenues will be less than predicted in November.

While Stinson cautioned that the state won’t be able to make a good prediction until it releases its new economic forecast in late February, he added, “Almost certainly we’re going to have less in the forecast than we had in November. And the question really is, just how much?”

Stinson made his remarks at a talk sponsored by Minnesota Council of Nonprofits in St. Paul. He pointed to slumping housing starts in the fourth quarter of 2007 and other measures in describing a state economy less healthy than the national economy.

He said Global Insight, the firm the state uses in putting together economic forecasts, was less optimistic in its January outlook than it had been in its November forecast. Even after the Federal Reserve cut a key interest rate by three-fourths of a percentage point to stimulate the economy, Global “reiterated their pessimistic outlook,” Stinson said.

Gov. Tim Pawlenty’s office did not respond immediately to the remarks. But in response to a Stinson assertion earlier this month that the state is in a recession, Pawlenty said Stinson “tends to be a bit on the pessimistic side of things,” according to Minnesota Public Radio.

Sen. Tarryl Clark, DFL-St. Cloud, the assistant majority leader, said Tuesday that Democrats would reconsider advocating tax breaks, targeted use of state bonds and other measures to build projects quickly and create jobs that in turn produce tax revenue. “What we’ll be looking to do is have the projects get going sooner than we would have,” she said.

Stinson expressed skepticism that such plans would work. He said bond money provides no significant stimulus to an ailing economy because little of it is spent in the first year, when an infusion of money is needed to jump-start the economy.

“There really isn’t a lot that state governments can do in terms of stimulus,” he said.

The next economic forecast will be released Feb. 28, though Stinson said some better hints might emerge after December sales tax revenue — including holiday spending — and some January income tax figures become available in a few days.

He noted that while Minnesota’s December unemployment rate of 4.9 percent was slightly lower than the national rate, “The problem is that, historically, Minnesota hasn’t done just a little bit better than the U.S., Minnesota’s done a lot better than the U.S.”

Loss of construction jobs in Minnesota appears worse than elsewhere in the nation, he said, and the state ranks 36th in job growth.

Pat Doyle • 651-222-1210

© 2008 Star Tribune. All rights reserved.

http://www.startribune.com/local/14856826.html

When the economy sours for the state government in an election year, it usually means some kind of trickle down unhappiness for those of us in city government. If the state government decides that it must pull back state financial support from cities in order to improve its own financial condition, the legislature will likely look for some way to make cities like Eden Prairie (i.e. - cities that receive very little, if any, state financial assistance) feel some kind of financial pain too out of a misplaced feeling of “fairness”. This has never made much sense to me, but people do strange things sometimes in the interest of fairness.

The state legislature still has a couple of weeks before it goes back into session. Get ready. It’s not looking too good right now.

Let me begin my blog today by telling everyone reading this that I am not a financial genius or wizard. I don’t give stock tips. I do not make investment decisions for the City. Now, with that clearly understood, I’m going to try to explain the U.S. economy….

Not really. But I will try to explain one aspect of the recent financial market turmoil and its impact on the City of Eden Prairie.

MBIA and AMBAC are two insurance companies that offered insurance in the bond markets that allowed lower credit risks to offer their bonds with better credit ratings. The purpose of the insurance was to allow the party issuing the bonds to issue them at a lower interest rate than they would have been able to sell their bonds without insurance. Like many financial institutions during the past five years, it seems that MBIA and AMBAC involved themselves in risks associated with the mortgage markets, and now they are in trouble. Here’s a link to a good article on the issue at CNN/Money: http://money.cnn.com/2008/01/28/markets/bond_insurers/?postversion=2008012812

The City of Eden Prairie does not buy bond insurance when it issues municipal bonds. We don’t have to. The City has the best bond rating available from Moody’s Investor Services: the coveted Aaa rating. The triple A rating is a result of a combination of steady political leadership, competent staff leadership and a strong local economy. Our local taxpayers benefit from the triple A rating in many ways - one of them being that we don’t have to buy bond insurance to get the best interest rates when we sell our bonds.

Another benefit from the triple A rating is that we are not mixed up in the turmoil surrounding MBIA and AMBAC right now. In fact, the general market turmoil is making municipal bonds a very good investment right now. Here’s another link from CNN that talks about that: http://money.cnn.com/magazines/fortune/fortune_archive/2008/02/04/103006904/index.htm

Tomorrow (Saturday, January 26) the City is hosting an Open House event at the Community Center. The Open House starts at 8:00 am and warps up around Noon. You will be able to tour the new fitness center, which is up and operational right now, and get a preview of the rest of the facility. Also, if you’re interested, you can enjoy open skating tomorrow at the Community Center from 1:30-3:30 pm for just $1.00.

So if you haven’t seen the new fitness center yet, or caught a glimpse of what the Community Center is turning into, check it out. We’re very proud of it.

At our City Council meeting last night the Council had a brief discussion about the proposed Art Center. I recommended the Council ask the City’s Arts & Culture Commission to study the concept in more detail and report back to the Council within 60 days. The Council unanimously approved that recommendation.

The Arts & Culture Commission will study the immediate and long term capital needs of the building. For example, we know that the building will require additional parking spots if we are going to develop it into a public art center. How many spots will we need and how much will it cost? We want to know that.

The commission will also study different options for the new art center. Will the City hire new fulltime staff to run the place? Maybe parttime staff would be OK? Maybe we can contract the management of it to a non-profit arts group? The City operates an Outdoor Center and a Senior Center using two different operational models. Perhaps one of those models would be a good fit for the art center? We want to know this too.

The proposed gift of this building to the City to serve as a public art center is a wonderfully gracious act. The best thing that we can do as a city government is to make sure that we know what we’re going to do with this gracious gift after we receive it. That’s the best way that we can honor the gift and the giver.

Department Directors and I (and my trusty assistant Lorene) met with City Council on Saturday morning, January 19, for our annual Council Planning Session. The purpose of the planning session was to have some conversation on some City foundational issues, such as our vision, mission, key objectives and core beliefs. We also planned to talk about the future of the new Budget Advisory Commission and to review the policy direction of the City’s new Comprehensive Land Use Guide Plan.

As we reviewed the City’s existing vision, mission, key objectives and core beliefs, I asked the Council to affirm the existing statements, or to suggest amending them. We had good a good discussion and affirmed the existing vision, mission and key objectives. As for our core beliefs, we added a new one that says we will “honor our natural and cultural heritage.” We have a reference to fostering respect for the past in our mission statement, but had no connection to that statement in our statement of core beliefs. We also amended another one that originally said that we believe in “the value of public service, both paid and voluntary.” The new version says we believe in “the value of public and community service, both paid and voluntary.” The addition of the word “community” is meant to emphasize the City Council’s appreciation and value of people who do community service in Eden Prairie in non-profits, youth athletic associations, churches, etc. The value of community service is very important to city government. If we did not have people in the community willing to serve their fellow citizens in these important roles and functions, city government would probably need to be bigger and broader than it is today.

We also had a good discussion about the City’s newest citizen advisory commission: the Budget Advisory Commission (BAC). The Council reached consensus on a couple of issues related to the BAC. I am drafting a statement to share with BAC members about the direction of their commission, but I need to review it with Council Members first before I share it with everyone reading this blog. No sneak peak on this one.

The final thing we accomplished on Saturday was to review some of the fundamental changes that we are going to see in our upcoming comprehensive guide plan. The guide plan is getting an update this year. That happens every ten years. The new guide plan contains new direction for the City in several key areas. We’ve been talking with the Council and the Planning Commission about these new directions for the past couple of years, but we wanted to make double and triple sure that the new guide plan reflects the Council’s wishes because we are getting awfully close to asking them to approve the final document. The Council affirmed for us that the guide plan is heading in the right direction. It gets its final review by the Planning Commission on January 28 and its first review by the Council at the February 12 Council meeting.

All in all, a pretty good planning session.

At our 2008 State of the City event last night Mayor Phil Young made a very special announcement. The owners of this building, the Sampson family, have offered to give the building and land to the City for use as a community arts center.

The building is located at 7650 Equitable Drive. The building was built in the mid 1990’s by Mr. Roger Sampson. Mr. Sampson was a successful businessman who built the building as a place to create art. Mr. Sampson passed away a short time ago. His wife and his children wish to donate the building to the City so that it can be an arts center for the community like it was for their family.

This is a very exciting development for Eden Prairie. An arts center has been a community amenity that Eden Prairie city leaders have been wanting for many years. I think the time for an Eden Prairie Arts Center may be here. The City Council will talk more about this development at their January 22 Council meeting to discuss what comes next.

Very exciting!

It’s time once again for the annual State of the City address. Last year the City joined the School District and the Chamber of Commerce for a joint State of the City event. It was very well received, so we’re going to do that again this year. The event is scheduled for Thursday (tomorrow), January 17 in the Garden Room in Eden Prairie City Center. The event starts at 4pm with a social hour followed by the start of the presentations at 5pm. We expect the event to wrap up by 6pm. The City is videotaping the event and will broadcast the tape on EPTV-16 starting next week. You can find the EPTV-16 program schedule by clicking on this link: EPTV-16 Program Schedule

Eden Prairie had a pretty good year last year. The State of the City is good. So if you can’t join us in person for the big event, you’re always welcome to watch us on EPTV-16. I think you’ll enjoy it.

WCCO did a pretty good story comparing community centers to YMCA’s to private fitness centers in the Twin Cities. The story uses the Eden Prairie Community Center as one of the examples. You can read the text of the story and see the video of the story at this link: WCCO.com

I think our Community Center looks good. Read the story carefully though. If you look at the rates for the Maple Grove Community Center you need to add to their Community Center’s rates the Lifetime Fitness rates in order to get a fair comparison to our Community Center rates. They note that in the story, which I appreciated, but you still need to do your own math.

The Community Center opened its fitness center area on January 2. It is spectacular. Come visit. Come join. You’ll be glad you did!

Mayor Young, Council Member Aho and I joined a group of 20+ other members of the Eden Prairie Chamber of Commerce Business Leaders Roundtable on Friday at the Hilton Garden Inn for a meeting with 3rd District Congressman Jim Ramstad. We had a good meeting with the Congressman. He covered five topics in detail that he felt were going to consume most of Congress’s available time and attention in 2008: economy, health care costs. transportation, education and the war in Iraq.

Congressman Ramstad talked about the success of the Bush tax cuts that he credits with 52 consecutive months of job growth in the United States - the longest streak of of consistent job growth in American history. But he wondered in the job growth numbers from the 4th quarter of 2007 is a sign that the streak may be coming to an end. He voted in favor of another one year fix of the AMT, but believes a permanent fix for the AMT is necessary. He also talked about the proposal to make the Bush tax cuts permanent (they expire in 2010), but understands that will mean a potential $2.5 trillion hit to the U.S. Treasury and wondered how the federal government would deal with that.

When discussing health care, Congressman Ramstad said that he favored the S-CHIP bills that came out of Congress this fall and credited Governor Pawlenty as one of the most innovative governors in America when it came to expanding and managing S-CHIP funded programs in Minnesota. He also shared his five suggestions for improving health care in the U.S.: cover the uninsured through refundable tax credits and vouchers; allow association health plans; implement medical liability reform; expand health savings accounts; and allow for the re-importation of pharmaceutical drugs from Canada.

The congressman said he would fight for earmarks for such transportation projects as highway 610, 494-169 interchange, Southwest LRT, and highway 212 because money is needed for those projects and because the projects have merit.

Congressman Ramstad said that the President and Congress should not become a national School Board and substitute its collective judgment for the judgment of locally elected school boards. He said the federal government should fully fund its 1976 commitment to pay for 40% of local special education costs. The federal government current funds about 18% of special ed costs.

Finally, Congressman Ramstad described the war in Iraq as the “800 pound gorilla in the room”. He was one of only 17 Republicans in the House to vote against the President’s “surge” plan. He acknowledged the reported success of the surge in reducing the overall level of violence in Baghdad, but wondered if the surge had just disbursed the bad guys into the hinterlands to lay low until the U.S. departed. He also offered some criticism of the Iraqi government for not making much political progress on the 18 benchmarks adopted by the U.S. Congress. So far, the Iraqi central government has only made substantial progress of 8 of the 18 benchmarks.

Congressman Ramstad is a great guy to have breakfast with. He is informative, but listens well too. He will be tough to replace.

The biggest news in Eden Prairie today happens to be the recent media attention to the Eden Prairie School District’s decision to investigate and suspend students at the high school for photographic evidence on Facebook which allegedly showed the students consuming or in close proximity to “illegal substances”. You can read more information about the story in both today’s Star Tribune (front page above the fold) and Eden Prairie News.

There are multiple points of view on a subject like this. I won’t get into it because I don’t know all the facts. But one aspect of the issue that I will touch on is that it has exposed the different thresholds used by the City and School District when it comes to dispensing consequences for alleged violations of law and/or policy.

School Districts are authorized in Minnesota to establish policies for student behavior. Compliance with these policies earn students the privilege of participating in extracurricular activities, such as sports, arts, etc. Noncompliance with these policies earn students revocation of their extracurricular privileges or even suspensions from school itself, depending the magnitude of the noncompliance. School Districts can establish their own protocol for establishing these policies, including the rules of evidence used to judge whether a violation has occurred. In this case, the fact that students could be identified in photographs on Facebook with what appears to be alcoholic beverages is sufficient evidence to revoke a student’s extracurricular privileges.

So a question we’ve already received at City Hall related to this matter is this one: Is the City planning to prosecute these students for “minor consumption” violations? For those of you who aren’t familiar with the term “minor consumption”, it is the common term for the misdemeanor when a person under the age of 21 is in possession of or has consumed alcoholic beverages.

The threshold of evidence required to prosecute a person in the court system is different than the threshold used by the School District to revoke a student’s extracurricular activities privileges for the same or similar violations. The court’s threshold is more rigorous. The courts would not accept a prosecution for minor consumption if the only evidence was photographs from the internet. The courts would require additional evidence that proved the underage person actually consumed the alcohol, such as a reliable eyewitness or a police-administered Breathalyzer test. A photograph is not sufficient evidence to prosecute a minor for minor consumption in Minnesota. Whether it ought to be (or not) is an entirely different question.

The rules of evidence are important. The rules are different for schools compared to cities. The rules are different when the consequence is the suspension of a student’s extracurricular activities than they are for suspending a student’s liberty (i.e. - doing some court ordered community service time) or taking a student’s property (i.e. - paying a fine). And if you look at the issue from the perspective of the seriousness of each system’s respective consquences, we might have substanital agreement that the different evidence threshhholds are indeed appropriate.

The City Council kicked off a new year at last night’s Council meeting. The first meeting of the year is always reserved for organizational issues, such as selecting the City’s official bank, newspaper of record and appointing Council Members to assignments with external organizations where they will represent the City.

For example, Council Member Duckstad will continue to represent the City on the Joint City-School Facilities Task Force. Council Member Nelson will continue to represent the City on the Board of Directors of the Eden Prairie Foundation. Council Member Aho will continue to represent the City on the I-494 Corridor Commission and the Southwest Cable TV Commission. Council Member Butcher will continue to represent the City on the League of Minnesota Cities Insurance Trust Board of Directors. She will also continue to represent the City at the Suburban Rate Authority and in her role as the Acting Mayor when the Mayor is absent from an official meeting or function. As for Mayor Young, he will continue to represent the City to the National League of Cities, the Association of Metropolitan Municipalities and the Municipal Legislative Commission. He will also chair the City’s Housing & Redevelopment Authority.

Minnesota State Law designates the Mayor of every incorporated city to be the City’s official “Weed Inspector” for the purposes of determining when the condition of a property is not in compliance with a community’s standards for the height of the grass or the composition of its other plant life. Most cities, except for the very small ones, typically appoint a member of City staff to be the “assistant weed inspector” to handle the dirty work of this task. We did that last night. Our assistant weed inspector: Mr. Jeff Cordes. He’s a good one too.

Pictured in the photo is the Eden Prairie City Council, L-R: Jon Duckstad, Kathy Nelson, Mayor Phil Young, Sherry Butcher and Brad Aho.

There were two good stories written by Star Tribune report Matt McKinney in yesterday’s (Sunday, January 6) Star Tribune about Supervalu. For those of you who don’t know, Supervalu calls Eden Prairie it’s corporate home. They have a beautiful corporate headquarters on the lake front of Bryant Lake. They have been busy these past two years in building their business lines, most recently through the acquisition of the Albertson’s chain. The two stories discuss Supervalu’s drive for quality products and how they research their store design. They’re quick reads. Here are the links:

A store always under renovation

Picky about peas

What is that occasional pink stuff in your toilet, shower, pet’s dish or in your teen aged son’s bathroom sink? It’s most likely a bacteria called Serratia marcescens bacteria.That’s a lab dish full of it in the photo to the left.

Each year, a few customers call the City of

Eden Prairie ’s Water Utility to ask about a slimy pink substance that sometimes forms in moist areas around their homes. They most frequently observe it in toilet bowls, on surfaces in shower stalls and bathtub enclosures, on tiles, in sinks, and in pet water dishes. A red or pink pigmented bacteria known as Serratia marcescens is the most common cause of the pink “stuff”.

Serratia bacteria are common inhabitants of our environment and can be found in many places, including human and animal feces, dust, soil, and in surface waters. The bacteria will grow in any moist location where phosphorous containing materials or fatty substances accumulate. Sources of these substances include soap residues in bathing areas, feces in toilets, soap and food residues in pet water dishes. Many times, the pinkish film appears during and after new construction or remodeling activities. Others have indicated the pink “stuff” occurs during a time of year that their windows are open for the majority of the day.

These airborne bacteria can come from any number of naturally occurring sources, and the condition can be further aggravated if customers remove the chlorine from their water by way of an activated carbon filter. In recent years, the popularity of home water filtration systems has grown tremendously, and the presence of Serratia has appeared more and more frequently in homes which remove the chlorine disinfection from the water supply. Serratia can also grow in tap water in locations such as toilets in guest bathrooms where the water is left standing long enough for the chlorine residual disinfectant to dissipate. Serratia will not survive in chlorinated drinking water. The public water supply in Eden Prairie contains just enough chlorine to provide safe, disinfected drinking water at your tap, and when left standing in an open container for as little as 30 minutes, our tap water looses its chlorine disinfectant into the atmosphere.

Serratia marsescensis not known to cause any waterborne diseases. Members of the Serratia genus were once known as harmless organisms that produced a characteristic red pigment. More recently, Serratia marcescens has been found to be pathogenic to a very small percentage of people, having been identified as a cause of urinary tract infections, wound infections, and pneumonia in hospital environments.

Once established, the organism usually cannot be eliminated entirely. However, periodic and thorough cleaning of the surfaces where the pink slime occurs, followed by disinfection with chlorine bleach is the best way to control it.

To clean pet water dishes, bathroom and kitchen surfaces

? Scrub the surfaces where phosphorous and fatty substances or the bacteria accumulate with a brush and a household cleanser.

? Then disinfect the surfaces where the slime has formed with a strong chlorine bleach solution.

? Leave the disinfectant solution on the affected surface(s) for 10-20 minutes before thoroughly rinsing away with clean water.

? Use care with abrasives to avoid scratching the fixtures, which will make them even more susceptible to the bacteria.

To control pink “stuff” in toilets

? Clean the bowl thoroughly and spray chlorine bleach into the bowl and under the bowl rim.

? Add carefully ¼ cup of bleach to the toilet tank and stir it up.

? Let the bleach stand for 15-20 minutes.

? After 15-20 minutes, flush the toilet a couple of times to rinse the disinfectant out of the tank and the bowl.

? The bleach should not be left in the toilet tank for prolonged periods; it will damage the rubber valves and seals inside.

? Whenever a pink film starts to reappear, repeat the cleaning and disinfection process.

Cleaning and flushing with chlorine will not eliminate the problem, but will help to control these bacteria. Keep bathtubs and sinks wiped down and dry to avoid this problem. Using a cleaning solution that contains chlorine will help curtail the onset of the bacteria.

If you have any questions about this bacteria, please contact the City of Eden Prairie Water Plant office at (952) 294-8530.

The City of Shorewood is out of the municipal liquor business. In 2007 three of the five members of the Shorewood City Council examined the future of the City’s municipal liquor operations and decided it was not a lucrative enough venture for the City to continue to be involved in. Laurie Blake has a story in today’s Star Tribune. You can see the story by clicking on this link: “Municipal liquor sales: No business for a city?”

The decision about staying in (or getting out of) a municipal liquor operation can be a difficult one. Or, for some, it can be an easy one. Some people believe a City should control the distribution of liquor in a community because they believe it will be more controlled under the non-profit management of a city government than under the for-profit management of a private business owner. Others believe a city should not be engaged in any sort of retails sales operation, liquor included. The middle ground is typically occupied by people who feel it is a bit off target for a city to be in the liquor business, but they like the idea that liquor profits are used, primarily, to fund improvements to public streets, trails, parks, police cars, fire trucks, etc. that would ordinarily be funded by property taxes.

The numbers included in Blake’s story are interesting. The first number is total sales from 2005 and the second is the 2005 net profit from liquor sales in 2005. The source of the data is the State Auditor’s Office:

Metro Area City Sales Net profits

Anoka $3,189,297 $182,058

Apple Valley $6,405,618 $555,748

Brooklyn Center $4,610,091 $182,910

Columbia Heights $6,713,932 $228,532

Eden Prairie $10,023,770 $1,096,673

Edina $10,752,724 $1,003,411

Farmington $3,441,312 $267,924

Fridley $5,283,229 $375,866

Lakeville $11,481,091 $1,149,155

Lexington $2,598,458 $171,981

Mound $2,134,980 $-118,780

Richfield $10,016,562 $619,639

Robbinsdale $2,011,139 $13,652

Rogers $2,851,190 $137,880

Savage $5,749,755 $438,991

Shorewood $2,035,480 $46,792

Spring Lake Park $2,527,828 $25,129

St. Anthony $5,298,404 $269,061

St. Francis $1,717,092 $156,434

Watertown $22,195 -$69,215

Wayzata $3,101,217 $218,624

In 2005, Shorewood sold $2,035,480 in beer, wine and liquor in order to generate $46,792 for the City’s General Fund. That’s a 2.3% profit margin. Eden Prairie, by contrast, had 2005 sales of $10,023,770 and generated $1,096,673 - a profit margin of 11%, one of the highest municipal liquor profit margins in the metro area. Eden Prairie plugs its annual liquor profits right into our Capital Improvement Fund. From there it is distributed by the City Council to pay for many different kinds of public projects, such as road improvements, park improvements, new trail construction and improvements to public buildings and facilities. If the City did not have the annual municipal liquor profits, we would need to tax our property taxpayers for a like amount of revenue; or, reduce the number of road improvements, park improvements, etc. that we try to accomplish on an annual basis. It’s a tough choice.

The tough choice for municipal liquor belongs to the City Council. It takes a simple majority vote of a City Council to give up a City’s municipal liquor operations. And once you’re out, you’re out. Can’t go back again. Because it is a public-driven choice by a community’s elected officials, the City asked Eden Prairie residents in the City’s 2006 Quality of Life Survey what they thought about the City’s municipal liquor operations. Here’s what we asked them:

Do you favor of oppose the City continuing to operate its municipal liquor stores?

84% said they “favor”

9% said they “oppose”

7% said they were “Don’t know/Refused to answer”

The 9% who said they opposed the City’s continued operation of its municipal liquor stores were asked an additional follow-up question that went like this:

Do you still oppose the continued operation of the municipal liquor stores if closing the liquor stores would result in a $1,000,000 loss of revenue for the city?

50% responded they would still oppose the City’s operation of municipal liquor stores, even if it meant a financial loss for the City.

47% changed their minds after hearing the additional information about the loss of revenue if the City got out of its municipal liquor operations.

3% did not answer or did not have an opinion.

Staying in the municipal liquor business is a tough choice, even if the profits are good, and even if those profits go to a benevolent end. It’s one of the areas of city government where elected officials face the dilemma that something that is beneficial for the community may be in conflict with their personal philosophy of life, business or politics. Think being a member of a City Council is easy? Think about the arguments for and against the municipal liquor issue. It can be a tough choice.