Financial policies

I have been more than a wee bit frustrated by the way the budget and financial decision-making has happened thus far.   I want to make – want the Council to make – decisions which are principled, defensible (rationally, not just legally), and support citizen priorities.  One tool we could/should use to help us here would be a set of well-thought out, formally adopted, and completely public budget policies.  Like these:

What’s so great about Policy?  If the Council could, perhaps with some expert guidance from our new Ad Hoc Financial Workgroup, develop financial policies, we would not have to make each decision starting from zero.

For example, if we had a policy on the use of fund balance, the staff and the Council would have guidelines for when and how the City could use fund balance for operating expenses.  Then, when it is time to balance the budget, Council and staff would know if the pool of available dollars included using fund balance, how much, and for what purposes.  For those of us who are not finance wizards (that would be the entire Council), we would have some frame of reference for assessing the numbers brought forward by staff.

Policy is really not such a difficult idea – it’s developing strategies to guide the City’s typical actions.  There will always be particular situations which challenge the policy because they don’t quite fit, but for our routine decision-making we could use some help.

28 thoughts on “Financial policies

  1. It’s interesting to me how very different the expression of budget policy is in the three cities you list. But on a quick look , #11 from the first section of Little Rock’s list very much interests me.

    It expresses the sort of comparison analysis, or cost benefit evaluation which I think we need to do much more of… and for two reasons:
    1. it directs the cost of delivering a service to residents to be evaluated for the most efficient way to accomplish that , and then
    2. allows staff required to be reduced , if necessary,to accomplish that same most efficient delivery.

    It seems sometimes as if ‘City Hall’ is loathe to divest itself of any staff, except at the most minimal levels, i.e. the salary of the Welcome Center Coordinator. That salary was in the 33K range, if I remember correctly and yet the services provided were of a large benefit to the community, and more specifically greatly important to the one-tenth of the community that is Latino, so it seems as if the value of the service TO the community was not assessed against the minimal salary savings.

    How could that be compared to the almost Non-existant ‘Community Development’ of the past two years and the relative salary of that very highly paid dept head; same with the EDA Director’s position?
    I don’t know how those two highly compensated jobs could justify their salary and benefits re: the need and output from their departments during this economic climate.
    But the refrain from some councilors is that we cannot afford to lose some employees; their intrinsic value is too high.

    In the above comparison the value to the community in the number of people their jobs actually touch seems quite disparate, at least on the surface. In different, more fluid economic times, the two highly paid dept heads may oversee actions which affect basically the entire community, but in difficult times development projects are mostly on hold, and it is basic needs that the City must meet for its residents.

    This is the kind of UNDERLYING philosophical policy that I never hear the Council discuss. Certainly the underlying values of a community are the basis of a meaningful policy discussion.

  2. Ms Summa
    Ms Buckheit

    Jobs do not have intrinsic value. They have value only to the extent that they provide products and services. If they had intrinsic value, then people could justifiably be paid for doing nothing at all.

    I have no opinion on the community development and EDA departments. I have done a little research on the costs of a couple other city departments. They are based on a quick examination of Northfield’s proposed 2011 budget as compared to Faribault’s proposed 2011 budget. So, FYI:

    Northfield has about 80 employees. Faribault has about 120 employees. Faribault does not have an HR major line item in their general fund budget. The city administrator’s office handles HR functions in Faribault and those costs are included in their Administration line item. Faribault has a ‘legal services’ major line item that Northfield does not have. The Northfield “Administration'” major line item includes the “majority” of legal fees. So I have included all the legal services costs from Faribault in this administrative cost comparison. On the other hand, Northfield has a seperate major line item for City Clerk, while Faribault’s city clerk costs are included in their Administration line item. So the Northfield ‘City Clerk’ major line item is included in this comparison of administrative costs.

    Northfield Administration line item: $448,000
    Northfield Human Resources line item: $285,000
    Northfield City Clerk line item: $128,000
    Northfield Legal Services line item: $0 (included in Admin)

    Total Northfield ‘Administrative’: $861,000

    Faribault Administration line item: $375,000
    Faribault Human Resources line item: $0 (included in Admin)
    Faribault City Clerk line item: $ $0 (included in Admin)
    Faribault Legal Services line item: $210,000

    Total Faribault ‘Administrative’: $585,000

    Why the heck Northfield is paying $276,000 a year more for administration than Faribault; a city that has nearly twice as many full time residents? (I will also mention that Rice County has 380 employees. They have one HR employee and their total budget for HR is $190,000). I realize that Northfield HR also handles ‘risk management’. However since insurance is handled by the League of City’s Trust, I doubt that much employee time is taken up with managing risk.

    Regarding the proposed library budgets:

    Northfield Total Library: $927,000
    Northfield Library Payroll: $773,000
    Faribault Total Library: $860,000
    Faribault Library Payroll: $566,000

    Even though Faribault has many more full time residents, I can understand that Northfield values its library more and hence the bigger budget. But why are payroll costs 80% of total library budget in Northfield, as opposed to 65% in Faribault? What do taxpayers using the library in Northfield value the most- a large selection of books and media, or a large staff?

    Regarding the proposed IT budgets:

    Northfield: $321,000
    Faribault: $338,000

    Once again, why does Northfield have virtually the same IT budget as a much larger city?

    • Mr Siemers, I think we should do some additional comparison to Faribault and Red Wing, Hutchinson, and the other cities we use to measure ourselves against in other ways. It would be very useful to know not just the numbers you provide but what differences are there in terms of services provided, service levels, etc. among these cities as well as how those cities are working to cut expenses.

  3. Ms. Buckheit, I agree that additional comparisons would be useful.

    The new interim administrator, with similar experience in Faribault, should be able able to tell if the comparisons are appropriate. I believe he has been forwarded the figures.

    Still, I think Kiffi’s comments should be considered. I agree that the council seems to have the attitude that city jobs do have intrinsic value. It seemed telling that the only time any passion was displayed by the Council at Monday’s meeting was in defense of ‘peoples jobs’. I heard no similar passion in defense of taxpayers’ money.

    Let me state the obvious: City government does not exist for the benefit of city employees. I think staffing and salaries should be examined very carefully before any budget is finalized.

    • At our worksession following the budget forum, we discussed setting the preliminary tax levy. Setting the preliminary with some increase was said to give the Council “flexibility” in how we dealt with the loss of LGA and Market Value Homestead credit aid. I advocated for not increasing the levy because we are working with taxpayers’ money and we can’t ask them – that is, you, to take it on faith that we’ll try and make needed reductions, but give us a safety net if we don’t do a great job.

      The other piece I have brought up several times when staff and Council discuss “customer service” is to remind folks that taxpayers are the bosses, rather than the customers.

      Thanks for your comments and for the reminder about taxpayer money.

  4. Ms. Buckheit, I did a little investigation into Hutchinson’s 2010 General Fund Budget:

    Administration: $381,883 (includes HR and the city clerk duty)
    Legal: $230,000

    Total Administrative: $611,883

    Total Northfield Administrative: $861,000

    To be fair, there is also one FTE in the Hutchinson Finance Department described as a “Payroll Benefits Specialist”, wages and benefits not specified. I assume those responsibilities are handled in Northfield’s HR. If so, that would reduce the $250,000 difference between the cities by, say, $75,000.

    On the other hand, Hutchinson’s legal department includes a full time city attorney with the following responsibility:

    “The Hutchinson City Attorney’s Office represents the City and advises and represents the City Council officials in
    all legal matters. The City Attorney provides legal services on a wide-range of topics to the 14 city departments and
    the 13 boards and commissions of the city. The City Attorney also serves as general counsel to Hutchinson’s
    regional hospital, Hutchinson Area Health Care, including its nursing home, Burns Manor, and its clinic in Dassel,
    Minnesota, as well as serving as general counsel for the Hutchinson Utilities Commission, the City’s natural gas and
    electric provider. In addition, the City Attorney’s Office prosecutes ordinance violations, petty misdemeanor,
    misdemeanor and some gross misdemeanor crimes that occur within the City of Hutchinson. The City Attorney’s
    Office may provide to a limited extent information to the general public regarding City ordinances and resolutions,
    however, the City Attorney’s Office cannot provide legal advice or recommendations to private citizens.”

    This would seem to be a more extensive set of legal responsibilities than are handled by Northfield Administration, which pays for a “majority of general legal and prosecution fees”.

    Hutchinson IT budget: $205,000
    Northfield 2010 IT budget: $$325,378

    I would not recommend using Red Wing’s budget in any comparison. With 17,000 full time residents, their general fund budget is 17 million. (Faribault with 25, 000 full time residents has a general fund of 13 million, Hutchinson, with 13, 000 residents has a general fund budget of 8 million). Red Wing, in almost every area seems to spend money like it is going out of style. I have no idea what their story is, but it seem like they’ve got money to burn.

  5. Councilor Buckheit
    Mr. Siemers

    Wm: your comment re: Red Wing NOT being an applicable comparison is a very apt one. Red Wing is always used as a ‘comp’for Northfield, based on population; That is just about the only valid comp between the two cities.

    Although the population is actually smaller (is it ? or isn’t it, revolves around students) there is little comparison. There is a major utility there… a nuclear power plant… and the revenues to the city from that facility affect taxes and just about everything else with that city’s finances.

    Just a quick look at the physical attributes of Red Wing will tell you they are not a comp for NF. For one, they have a huge industrial district on the Mississippi, rail and river shipping.
    Additionally,they function as much more of a regional center and are a longer drive from the Twin Cities.
    Just those two, for starters, completely knock the comparison apart.

    Using Red Wing is NOT an appropriate choice for comparison, but it is always included in those charts , I believe simply for population numbers. So, IMO, just one more use of what I called “specious” information from staff to Council.
    I want the Council to point out useless information, and ask the Staff for relevant information, AND analysis of same, which is the Staff’s job as “professionals”.
    The Councilors can then determine the strength of the staff analysis.

    I also , having seen it several times while doing the League observing, have heard what happens when Councilors question the Staff. It is an erratic process: what reaction that brings depends on who does it when, and about what !
    That can be a daunting position to take, but one that must be taken in order to act as an elected citizen representative.

    I will continue to thank you, Councilor Buckheit, for often stepping into those troubled waters.

  6. Kiffi, Ms. Buckheit:

    I have had an ongoing discussion by email with Mayor Rossing regarding administrative costs in Northfield as compared with Faribault. I enlarged the comparison to include all line items that could possibly impact total administrative costs. So legal services, finance, planning and zoning, mayor and council, and even election (since some city clerk duties include elections) line were included. I did this to avoid the ‘apples to oranges’ response since all administrative costs generally end up in one of these categories.

    Northfield has a population of 19,000 (including 5000 college students)

    Northfield’s Administrative Budget:

    Mayor and Council: 123,652
    Administration: 448,352 (Includes the ‘majority’ of legal services)
    Human Resources: 285,285
    City Clerk: 128,391
    Legal Services 0
    Elections: 25,000
    Finance: 385,849
    Planning: 174,960

    Total: 1,571,137

    Faribault has a population of 24,000 and 120 employees.

    Faribault’s total Administrative budget:

    Mayor and Council: 165,000
    City Administrator: 375,000 (Includes HR and City Clerk)
    HR 0
    City Clerk 0
    Elections: 0
    Finance: 600.000
    Legal Services: 210,000
    Planning: 187,000

    Total: 1,537,000

    Less than Northfield: $34,000

    Interestingly Faribault’s parks and recreation budget is 3 times as much as Northfield. Faribault’s street budget is over twice Northfield’s.

    Owatonna has a population of 24,000 and has 131 employees.

    Owatonna’s Administrative Budget

    Mayor and Council: 195,000
    City Administrator: 233,000
    Human Resources: 0 (Under City Administrator)
    City Clerk: 0 (Under City Administrator)
    Legal Services: 237,000 (Includes City Prosecutor and City Attorney)
    Elections: 42,000
    Finance: 359,000
    Planning: 149,000

    Total: 1,215,000

    Less than Northfield: $356,000

    Hutchinson has a population of 14,000 and has 105 employees

    Mayor and Council: 56,000
    City Administrator: 376,000
    Human Resources: 0 (Under City Administrator)
    City Clerk: 0 (Under City Administrator)
    Legal Services: 136,000 (Includes City Attorney)
    Elections: 4,000
    Finance: 512,000 (Includes billing for city gas and electric and city event center)
    Planning: 138,000

    Total: 1,222,000

    Less than Northfield: $349,000

    • Thanks for all your homework, Mr Siemers. I’ve been impressed at the number of people who have been checking Northfield’s financial reports and providing the results of their explorations – your comparisons are new information for me and I appreciate the intelligence.

      Has Mayor Rossing provided her perspective on what actions Northfield might consider taking?

      Again, I’d like to know what Faribault, Owatonna, etc. provide in terms of service and facilities as well as simply what they spend. In order to determine what costs Northfield might reduce, we also need to know what service level reductions are acceptable plus how we deliver services and what alternatives there may be for service delivery and increasing efficiency.

      In addition to costs, it’s also necessary to know the revenue numbers. Kiffi has pointed out how Red Wing is very different because of its power plant – what other distinctions should be drawn? Unlike Kiffi, I think Red Wing and the other cities can be useful for comparison as long as we understand the relevant similarities and differences. There’s no city that will map to Northfield 100% so we need to look at the bigger picture of how other cities provide service.

      • Ms Buckheit:

        The items compared are “general government” expenses. I’m not sure what facilities are associated with the expenses, but the services have got to be very much the same among the cities. All cities have HR, finance departments, legal costs, etc. By combining them it becomes more difficult to make the argument that, for example, Northfield’s Administrative line item can not be compared to City X because of this or that local variation in specific budget line items. It is the total of these general government costs that are being compared. And its hard to hide from the total. Personally I think the extent of services that all cities provide within this total are pretty much the same.

        The quality of that service probably varies. But how does one measure that? Are the citizens of the cities that spend less, less satisfied with their services? Or are they more satisfied because their city is spending less. Should we simply accept that because we spend more, that our citizens are more satisfied? How many citizens are directly impacted by these kind of internal general government costs anyway?

        Why not bring our spending in line, and then compare how we are delivering these services vis a vis the other cities?

        • Mr Siemers, my comments about comparing services and service levels was more directed at parks and public works than administration. Still, I am reluctant to take just the budget totals and assume that it makes sense to get our expenses “in line” – not because I don’t want to bring Northfield’s costs down, but because I am thinking about the interplay between what we do, how we do it and how much it costs. Faribault and the other cities do things cheaper and I’d like to bring the total price of government down, but still look hard at how we allocate those dollars within Northfield.

          I would love to do outcome based budgeting or zero based budgeting where rather than simply trim away at the status quo we could determine how much we have to spend and then build the people and service structure that best serves our needs at that price so the budget ceiling rather than the current organization of city hall would drive our discussion.

  7. Betsey… I would agree that Red Wing could be useful IF there was some analysis of some of the most basic numbers for comparative evaluation , i.e. large revenue sources (the power plant) which are in addition to property tax revenues, intergovernmental aid, etc.
    Given NO analysis from the staff presenting the comparisons, I think they should be more closely associated on the most basic issues, of which revenue IN would be, IMO, the MOST basic.

    Sorry if I was not being clear enough.

    I also would like to thank Mr. Siemers for all this research; I only wish he would have brought it to the Council’s Public Hearing on the Budget.

  8. This is some of the most valuable discussion on Northfield’s “General Government” category spending that I have encountered. I will be sure to bring the attention of other interested citizens to it.

    I did some consulting work in Red Wing many years ago. In addition to the income they received for storing spent nuclear fuel (as it was described to me) they have a substantial Port Authority. The significant income generated from this Port Authority is used to supplement City spending on, as I learned, a project by project basis.

    As for the population comparison, I’ve had a couple of “experts” offer advice on Northfield’s population. A professional demographer contracted by the City of Northfield about ten years ago said that we should subtract out the college students and and add back the residents off at college (basically Northfield High School graduates returning for the summer break) giving us a population of about 14,500. A market analyst from the University of Minnesota said that as consumers of a typical “basket” of goods, the college students should be counted as one-third of the typical resident, once again resulting in a population of about 14,500.

    I would have to agree that comparing us to communities of 18,000 to 24,000 doesn’t make sense. (However, it makes a little more sense than using a theoretical future population of 30,000 for decision-making.) Stillwater is 15,143, Rosemont is 14,619, and Robbinsdale is 14,123. However, perhaps we want to get out of the metro area. New Ulm is 13,594, Fergus Falls is 13,471, and Brainerd is 13,178. It might be interesting to see salary comparisons for comparable positions with these cities too.

    Mr. Siemers has performed a great service for Northfielders. Perhaps he might take it one more step by doing a “dollars of general government (or administration) per citizen” comparison between these cities for us.

  9. Ross…I’ll do a little more checking. Thanks for the population data. I got started on this after the Monday night meeting, the figures on administration and HR ($765,000) seemed, from the perspective of private business, seemed very high. 7.5% of the total 10 million general fund expenditures. Realizing that private business is probably not a good comparison, I needed to look at other cities…

    Ms Buckheit…
    Regarding who is responsible for explaining the difference in these budgets. Let me offer a simple, and probably simplistic, analogy. Say there is a business with 4 identical factories within 100 miles of each other making identical widgets. One factory spends 25% more (say $350,000) on administrative functions than the other three. There may be very good reasons for the difference: More regulatory oversight, higher prevailing wages, more union disputes, etc. But who would be responsible for explaining the difference, the owners of the business, or the manager of the higher cost factory?

    If the owners got an explanation, would they accept one like, “We do a better job of administration than the other factories” or “We have good people doing administration at our factory” or “Our administration is different than their administration”? No, the owners would say, “You prove to us what you are doing with that $350,000, and why you have to do it when the other three managers don’t”.

    • Mr Siemers – I agree with you. My only concern is that by focusing on the dollar amount alone, we haven’t addressed the more radical question of how do we restructure Northfield’s government to provide effective service for less money. I don’t believe we can just keep cutting bits from the current organization and manner of operation, but need to look to more fundamental shifts in how we do business to be able to sustain a smaller government operation which works well. It is Mr Madigan’s job to figure that out, but the Council’s job to say here’s all the money you have to spend and to emphasize that “business as usual” is not sufficient.

      I keep hammering away at this because I am frustrated with the current direction of the Council which presumes the way we’ve organized our operations is ok and we just need to incrementally reduce all department budgets.

  10. This is a lot to ask… too much to ask one person … but IF a coalition of councilors could INSIST that the salaries of the depat heads who are almost inactive because of the economy, be considered as excess, pure and simple.

    I agree, Betsey, that to build a budget the way you have described, from essentially the bottom up, could be done… it would have to be a slow reorganization of that process… let’s say with a goal for 2012. And yes, that would be a better way.

    But what does that mean for now? We can’t just go on in the way we have because it is too difficult to change.
    (Are there twelve-step programs for “cities” ?)

    I was so disappointed when, at the public budget meeting last Monday the Mayor lashed out at the audience when there was some laughter, nervous laughter it sounded like to me, from the back of the audience and the Mayor was truly angry, saying “It’s people’s jobs we’re talking about here…”
    Well, it was the Welcome Center Coordinator’s job that was eliminated at the budget cuts the middle of May, and I also remember the Mayor asking you all, the councilors, to support those cuts without questions or ‘line items’ because it had to be done.

    I know that you and others have said repeatedly that you think that was done based on insufficient information from the staff, and you tried to correct it, but the hypocrisy at the top levels is there, and it is seemingly impossible to challenge on principle, i.e., there is less quantifiable justification for some of the big dept head jobs than there is for that WCC job that provided a measurable service to a large portion of the community.

    So… I know I’m preaching to the choir on that one, but WHY is it not possible to say that NO job has sufficient value at a time like this, if it is not directly serving a community need?

    Why was it so important to say in Mr. Walinski’s reorganization chart, that none of the “key” big jobs were lost?
    What is so “key” about those jobs now?

  11. Ms Buckheit…Maybe Mr. Walinski’s plan to reorganize the departments would be a place to start. That would save, as I understand it, $150,000 a year. This figure seems low perhaps because of the number of jobs that remain after the reorganization, or the amount of severance worked into the restructuring. I think, and I believe most citizens would agree, that severance packages, should approximate what is given to people laid off from private employers.

    Anyway…the cities I have looked at do not have separate HR departments (and department heads). Nor do they have separate city clerk positions. Both functions are usually supervised directly by the city administrator.

  12. Mr. Siemers –

    Have you read the details of the Walinski Reorganization Plan in the Council Packet? If so, perhaps you can tell me how the Walinski Plan will save taxpayers money. Or perhaps you can tell me how it will increase government responsiveness.

    Here is my analysis of the proposal. Right now, we have three Department Heads, Jody Gunderson, Kathy Gehler-Hesse, and Melissa Reeder, who each have between one or two people reporting to them. Mr. Walinski has proposed promoting these three people to Division Heads and increasing the number of people reporting to them (from what I can see) to between two and six people.

    When Mr. Walinski proposed this Plan, he called it a cost-savings measure, saying the total savings would be “approximately $125,000 to $150,000”. However, as noted in his memo, this reorganization requires a one-time expenditure of $90,000 to redo the offices of the newly created Division Heads. This remodeling cost would substantially reduce the total cost savings, at least in the first year. Mr. Walinski also acknowledged in response to a question by a Councilor that it would not be unusual to give substantial raises to people being promoted from Department Heads to Division Heads but that “you wouldn’t have to give them raises”. Any salary and/or compensation increases would reduce the cost savings in the first year and all future years.

    As several Councilors began wondering about the ultimate cost-savings of this Plan, the justification seemed to change. Mayor Rossing discussed the proposal on KYMN saying it was going to increase efficiency and make the City more responsive to the citizens. I have trouble understanding how creating a brand new, additional layer of bureaucracy between the people in the field and the central leadership will increase efficiency and responsiveness. Generally, when people are pursuing greater efficiency and responsiveness they flatten, not fatten, the organization.

    Personally, I think this Reorganization Plan is just increasing the complexity of structure and being used to add a spin of cost-cutting to what is really just the recognition of Brian O’Connell’s retirement. It seems that the Community Development Director is retiring, the Economic Development Director is being given his job, and the Economic Development Director is going be replaced, at least initially, with consultants. It should be noted, however, that we gave the Community Development Director a “buy-out” that is about the same as his total annual compensation for one year and this could also be considered a cost of this Reorganization Plan.

    To complete the arithmetic, we have a predicted savings of “approximately $125,000 to $150,000”. We’ll split it and say $137,500. Subtract the $90,000 to redo the offices, the $160,000 for the buy-out, and let’s say those six-figure compensation packages are bumped up approximately 20%, or a total of $60,000. Perhaps there will be some cost savings in a future year, but in the near-term, this “cost-savings plan” will increase the cost the taxpayers by $172,500.

    • Hey Ross…
      I had not read Mr Walinsky’s proposal…just thought it might be a starting point. Your description does not make it sound like it will save much money nor add much efficency.

  13. Mr. Siemers,

    Thanks for all the hard work. How do the figures compare on a per capita basis? Wouldn’t that make for a better comparison?

    • David…
      Per capita would give some further comparison. I’m just not sure what to use as the population of Northfield. Anyway, once a number is picked, it’s pretty easy to plug in on the spread sheet.

      One more interesting statistic:

      Faribault’s administration department handles general administration matters, HR, and city clerk responsibilities. Total personnel costs are budgeted for $322,000 in 2011. In 2010 the budget for Northfield’s personnel costs for administration, HR and city clerk was $595,000. (2011 detail is not yet available, but looks to be about $525,000). This is just personnel, not services, not legal fees, not supplies…
      On its face this seems to be a big difference. Maybe Mr. Madigan could explain how Faribault does it.

  14. Excellent work William. It is nice to have someone digging into city costs. I have two comments.
    While it may be “nice” and convenient to have a city employee doing a job function, it many times may not be economically sound to do so. Things such as HR functions can be essentially subcontracted out as needed. William talked about larger cities having a HR department smaller than Northfield’s and doing the job satisfactorily. Our school district has an HR department about the size of the city, but handles about 10 times as many invididuals, multiple unions, etc. Same with the city hospital.

    I can bring this down to a personal level for me. It would be “nice” and convenient for my construction company to have a plumber on our staff. We could get things done exactly when we need it, make miscellaneous repairs, etc. But it is economically impossible for me to do that as I could not keep the plumber productive full time 52 weeks per year. So we subcontract out that work and only purchase exactly what we need for our jobs.

    My second comment pertains to Local Government Aid (LGA). To me, LGA to cities is like economic heroin….cities have great difficulty cutting themselves off it. During the late 1990’s as the state was raking in boatloads of money, they ratcheted up LGA payments to cities. Most cities, including Northfield, handled this extra generous LGA payments in a very poor fashion. Instead of essentially using it as one time money each year the extra large LGA arrived, they built it into their budget by expanding personnel and departmetns. I remember Senator Neuville giving a presentation to the City Council at the time and cautioning them not to build it into the budget….but that is what was done.

    It is high time people in Northfield took a hard look at what City Hall is paying people and what jobs are being done. Hopefully this budget review will encourage that. Should we have liquor store managers compensated at over $100,000 per year? Do you think the private liquor stores this size in the area pay this way? Does a city like Northfield need a full time economic director and a full time community development director? Why does the city do a massive ‘buyout’ of an at will employee (Community Development Director), but other at will employees are terminated (Building Official)?

    • I appreciate all digging you all are doing into Northfield’s finances – I’ll be passing this all along to Mr Madigan and Kathleen McBride.

      Ray, I was poking around on the State Auditor’s website and found a report on LGA and municipal spending from 2003 – generally, that report supports your claim about LGA as drug – certainly cities receiving more LGA spent more on both essential and non-essential services; obviously, Northfield has used LGA as regular and reliable income. See the report at

      I’d like to see the state legislature think hard about LGA and how it is distributed, but then make changes deliberately and with advance notice to cities. The 11th hour unallotment is acting in bad faith.

      • Betsey,

        I don’t view the 11th hour unallotment of LGA as being in bad faith. The cities had no right to expect that the money was going to keep coming.

        Sound money management would suggest that we take a look at the revenue side to see how stable our revenue sources are and budget accordingly. Even if the LGA cuts are unfair, there isn’t much the City can do about that revenue source.

        The numbers put together by William would suggest that Northfield is spending a relatively large amount of money for personnel. If those positions were originally funded with LGA, they may have to leave with LGA.

  15. Betsey, I agree with your comment about LGA and its distribution. Over the many years LGA has been around it seems to get tweaked by the legislature every year. It essentially creates ‘winners’ by who won elections, not what cities may actually need some assistance.

    That said, I tend to believe that we would have a stronger Minnesota is we simply go rid of LGA. We might need to replace it with some type of grant program where cities would actually have to prove they need some assistance and carefully outline their plan to use the grant, and how they will survive when the grant ends, as all grants should end. LGA has created a monster of a program where it is viewed as an entitlement by cities.

    Today in the Strib we see Mayor Rybak outlining a plan to eliminate police and fire jobs because of LGA cuts. I’m sure I could find a planner, pest control officer, second layer of human rights officer, etc to cut way before police and fire. But that is what gets the attention and is what pounds the drum for more LGA. This nonsense has to stop now.

  16. Dave, et al… I did the math on the per capita expenditure re: total admin budgets, using the adjusted population figure for NF.

    My Calculator tells me this…
    Admin $$ spent per person:
    Northfield – $ 83.46
    Stillwater – $ 73.81
    Anoka – $ 64.90
    Faribault – $ 54.23
    Owatonna- $ 40.34

    Having done that, I’m not sure how important the comparison is?
    .Does it mean we pay too big salaries?
    .Does it mean we are not efficient in using $$?
    .Does it mean the cost of ‘running the city’ is too high from an admin POV?
    .Does it mean the services delivered, under the admin, are too extensive?

    All I can say for certain is that it is obvious that given the numbers used, the cost of ‘administering’ the City of Northfield is significantly higher than that of the other cities NF uses for comparison.

    What do y’all think?

  17. William –

    The Minnesota Taxpayers’ Association categorizes Northfield along with “Cities Outside All Metropolitan Areas, Population 10,000 to 20,000”. Here are those 14 cities:
    Albert Lea, Bemidji, Brainerd, Fairmont, Fergus Falls, Hutchinson, Marshall, New Ulm, North Mankato, Northfield, Red Wing, St. Peter, Wilmar, and Worthington.

    I think it’s a concept worth considering,


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