News from Minneapolis Mayor R.T. Rybak - July 1, 2004
1. Upcoming Budget Outlook
Remember going back to school in the Fall as a kid and having your teacher ask you to write an essay about "How I spent my summer vacation?"
If I did that this Fall the essay would start with something like: "I sat in a room filled with spreadsheets for hours at a time...and I actually liked it." My past two weeks, and the next month or so will be dominated by the meetings that lead up to presenting the budget. Please join me for that presentation on August 12, 4:00 p.m., in the City Council Chambers.
Those meetings in the rooms filled with spreadsheets can be difficult, because we face some significant financial challenges, but I still feel hopeful because we are making progress is getting the city on good financial footing.....and we are finding ways to get more done for less.
We have dramatically fewer resources because of a number of factors, including long term debt, massive state aid cuts, rapidly rising health care costs, 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 plan that shifted the tax burden from commercial property onto residential property. This, plus the drop in commercial property value mentioned above, has meant big increases in property taxes on homes. The phase out of limited market value (another State Legislative decision) has also increased the tax burden on homeowners.
The bad news is that because of these factors we don't have nearly 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 City Council which is designed to work us out of the hole dug by years of debt prior to my election and then, based on those numbers, I now require every department in the city to develop five year budgets and five year business plans.
The Police Department budget or Health Department budget that you may have read about in the paper are parts of that process. The heads of City Departments 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 detailed implications of these big picture financial realities. You will continue to see these very stark pictures as each department 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 that the most significant part of the Police budget proposal 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 our officers are spending more time on the street. But the reality is that to meet the challenges of the five year financial direction without cutting Police, Fire or Public Works the City would have to cut 92% of the 2004 funding levels to all other departments in the general fund. These departments are Assessor, City Attorney, City Council Offices, City Clerk/Elections, Civil Rights, Mayor's Office, Health, Community Planning & Economic Development (CPED), Human Resources, Finance, City Coordinator, and Inter-Governmental Relations. The impact on the ability of Police, Fire and Public Works to operate without these other functions intact makes this an infeasible position. Similarly, we could decide to cut 2004 funding levels of all those other departments by 50% and would end up still having to cut $15 million from Police, Fire and Public Works.
I also want to make it clear we aren't just accepting these situations. I'm working almost exclusively on budget issues, as are the people in our Finance Office, the City Department Heads and many others...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 pensioners, and the Legislature. You will be hearing more about this in coming months.
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 maintain the city's current ratings, a significant achievement in these tough times.
Within that context, I'm very interested in hearing thoughts about how we should address these budget projections. We will continue to need all the creative thinking we can get.
2. MOSAIC and the premier of "Cedar and Lake"
Minneapolis MOSAIC, our summertime celebration of arts and culture hasdrawn crowds to a variety of events last month and continues through this month. One event in particular that I wanted to invite you to is the Minnesota Orchestra's Sommerfest/Marshall Field's "Day of Music", which will be held at Orchestra Hall at 1111 Nicollet Mall beginning at noon on Friday, July 9th. Around the clock - until noon on Saturday the 10th - a variety of live music will be presented, including classical, folk, bluegrass, pop, rock, jazz, world, and family music. Of special significance within the day's lineup of music is theworld premier of the MOSAIC commissioned work " Cedar and Lake", by composer Cary John Franklin. "Cedar and Lake" will be premiered at 6:00 pm on July 9th. The entire "Day of Music" event, including the premier of the MOSAIC commissioned "Cedar and Lake", is FREE and open to the public. Hope to see you there!
Published Jul. 1, 2004