Eden Prairie's hidden 6% tax increase

Residents give little thought to city roads...unless they have potholes, that is. Few realize that cities generally don't pay for the original construction of neighborhood roads--those are usually paid for by developers (and passed as price of a new home). Fewer still think about how those roads will be replaced when they are at the end of their useful life.

Cities usually pay for the rebuild of neighborhood roads in two ways. One way is to "specially assess" the properties in the neighborhood. This can be an unexpected (and expensive) shock to residents when its their turn, with residents commonly having to pay $7,000-$10,000 (usually over 10 years) to have their road rebuilt.

Other cities consider the cost of road reconstruction to be a city-wide burden. These cities generally use the ad valorem property tax to have everyone pay a little bit every year towards the construction of certain roads. 

Eden Prairie faced the issue a few summers back as the city decided that historical sources of funds for road reconstruction were inadequate because the city wanted about $2.5 million/year in funds dedicated to roads alone.  The city didn't like the special assessment route, presumably because that was certain to upset neighborhoods when it was their turn to pay.  The city also didn't like the idea of adding a new cost to the ad valorem property tax, as this would (by the city's own numbers) have led to a 6% annual increase in taxes for this line item alone!

So, what did the city do?  The city created a brand new fee--a franchise fee for utilities such as Xcel energy---to charge the utility for the right to have power lines under and adjacent to city roads and rights-of-way.  This avoided the need to special assess and avoided having residents get tax statements showing a healthy increase in taxes from one year to the next.

And at the public hearing in the summer in which this was passed..no one complained? Wait a second? Why didn't Xcel energy complain? After all, it was going to be assessed a "fee" for every property which received electricity from it? To the tune of over $2 million every year...

The answer is obvious---and certainly was well known to the city as it discussed this fee. Xcel energy didn't complain because it had no intention of paying the franchise fee---it simply passed this cost on to every customer it had in Eden Prairie. Don't believe me? Look at your utility bill. There is a line item for "frachsise fee" which didn't exist four years ago. So, contrary to the talking points by the city council at the public hearing...residents really did feel a bite because of this new city spending.

So, the franchise fee is being assessed upon the very same residents who otherwise would have been asked to pay the 6% tax increase. Only this way, most residents probably didn't realize what happened. And the city council can avoid telling people that they raised taxes by 6%.  The only economic downside to residents is that a franchise fee on a utility bill can't be written off on your taxes, but property taxes can be.

Good government?  You answer that question.

Dick Proops and the Budget Advisory Commission

Eden Prairie's Budget Advisory Commission was established in March of 2007.  Dick Proops was a charter member.  He was great at it---always prepared, did his homework, understood that city staff would filter some information from him.  He was dogged in his fight for the taxpayer. Sure, that could get uncomfortable at times, but that's what the job was.

BAC members were initially set to for three year terms from April of the year of their appointment through March.  This was changed to match our budget cycle so that members were appointed effective January of each year. And, terms were changed so that they were four year terms.

City policy is that after a commission member serves two full terms that they need a unanimous vote of the council to be reappointed to a third term. I generally agree with this, for after as much as 8 years (2 full 3 year terms and up to 2 years of a partial term) maybe it's time to give someone else a chance.

This policy was abused in 2010 to remove Dick from the BAC.  City Staff took the position that he had served two full terms between March of 2007 and December of 2010. They did so because during the re-alignment of the commission cycle Dick was assigned a 2-year term so that we would stagger the terms of commission members. Thus, they argued, he had served one term of 1.6 years and a second term of 2 years. 

It was outrageous. And unfair. And clearly intended to get rid of Dick.  Staff knew that Dick couldn't get a unanimous vote on the council. 

I thus made a motion, seconded by Jon Duckstad, to clarify that those who served on the BAC from March of 2007 until it was re-aligned to a calendar year basis had not served a full term on the commision. I needed three votes to pass this motion and permit Dick to continue on the BAC.  The only possible vote was Brad Aho and he wouldn't do it. He voted against the motion which would have allowed Dick another term on the BAC. 

Brad Aho is taking credit for my idea

Yesterday's Eden Prairie News included an election commentary by Aho in which he stated that he "initiated" the Budget Advisory Commission. As a city commission can only be created by an act of the city council, which requires 3 votes, Aho must have been trying to claim that the BAC was his idea, or that he championed it.

In fact, the BAC was my idea. I first raised it at a March 2005 city council meeting. I didn't have the votes to pass it, so it languished until after the 2006 elections, when Jon Duckstad joined the council.
I raised the issue at council meetings in January and February of 2007. I made the motion which created the BAC in March of 2007; Duckstad seconded the motion. Sure, Aho voted for it; but that hardly qualifies as "initiating."

Aho no more "initiated" the BAC than Al Gore invented the internet.

Indeed the only motion regarding the BAC which Aho made was the motion in February of 2011 (after Jon and I left the council) to neuter the BAC. For some reason he didn't mention that in his commentary.

worried about his job

From: Scott Neal

Sent: Monday, March 22, 2010 11:17 AM

To: Young, Philip J.

Subject: RE: Re:

 

Phil -

I feel like the position that I'm in is more complicated than you do.  I'd

like to talk with you more about it personally rather than email, if that's

possible.  I would use that time to respond to your specific points, but I'd

also like to talk about my future here.

Are you available for coffee before work on Wednesday morning?

Scott

Regrettable, but not terminal

The MN GOP had a bad couple of days. Certainly in the media.  While I have several thoughts about that I'm just going to share an anecdote which may reveal how i feel about these issues and whether they are or should be politically career-ending.

A few years back I had a business meeting with the former chair of the state DFL party. He had then recently lost a primary election for an open congressional seat.  I was struck by how bitter he was; and that he'd reveal that bitterness to someone he had just met.  He had terrible things to say about the man who ultimately won the race (and who still holds that seat).  He further complained that the Strib wouldn't cover many of this man's alleged transgressions, including an affair with a staffer and a police call to his house due to what he described as excessive child discipline.  I took from this man's statements, although he didn't come right out and say it, that his campaign had been trying to get the Strib to cover these issues.   (There were certain other issues which the STrib had to cover about this candidate because they were public record, and quite embarassing).

I had previously assumed from watching this congressional race that the Strib handled this candidate with kid gloves.  It was still surprising to hear this from withing the DFL party. 

This exchange confirmed my belief that the Strib plays favorites.  But it also taught me that political damage can often be overcome.

A unanimous Eden Prairie budget

Just a few random thoughts on the passage of the Eden Prairie budget.

In 2005, Ron Case introduced using the budget stabilization fund to reconcile the budget.  He still votes for doing so, but somehow gets away with criticizing others who do likewise. He is both for it and against it at the same time, and no one calls him on it. Amazing. 

I was disappointed that it passed unanimously. I thought one council member would have done something to hold the budget flat. What exactly is the average compensation package for Eden Prairie employees?  I bet it's north of $75,000, excluding pension.

Which leads me to my final thought. Has council member Aho voted against the council majority on any issue of substance this year? I honestly don't know the answer to that question; but i have a hunch.

breakfast with Gary

I had breakfast with my friend Gary today.  I've known Gary for almost ten years but our routine of having breakfasts together began about 18 months ago.  Since then, he emails and texts me and we get together every six weeks or so.  He's been a good friend, forcing me to engage and interact even when I didn't want to.  He's done it just right--not too pushy but enough so that i'll feel bad if I blow him off. 

There's rarely an agenda for our meetings, although recently that's changed a little bit. But, one thing remains true-i always leave our meetings with a smile on my face. 

I'm an introvert by nature and not-at-all easy to engage. But, I'm grateful that Gary has put up with my bs.  Everyone needs a friend like him.