Budget thoughts

When there’s trouble I am not slow. It’s up, up, up and away I go! (to make good policy in a city I know)

On Think Twice, former members of the Locally Grown triumvirate (or perhaps that’s members of the former triumvirate) were chatting about their top city issues – including the City budget.  To cherry pick a few ideas – the budget should reflect citizen priorities and the City should present better, clearer budget information.

Priorities: The budget should reflect citizen priorities, but in practice it’s not so simple.  First, we need to determine what the collective priorities are (see my post on the community survey) and then we still have to make  decisions about spending as a result of them.  The two-pronged solution is gather lots of community input as we make policies like the Comprehensive Plan, Comprehensive Economic Development Plan and all the other plans, then work to implement them incrementally + work harder to engage citizens on an on-going basis to gather more input and check our work.

Some of our costs are driven by regulations and external factors over which we have no control or no direct control – the unfunded mandate problem.  Two issues in the news lately where this matters: stormwater and election costs.

Clearer budget information: Yes, this is a biggie and not just for the public, but for the Council, too.  Council action and the subsequent media reporting (newspaper, radio and this blog) works one budget decision at a time (“The Council voted to spend…”) and we often get bogged down in the details rather than the bigger picture – policy to the rescue.

For the Council, the big challenge ought to be developing sound policy to guide decisions, then using those policies to guide decisions.  Take the recent Safety Center financing – ideally, we would have thought carefully (and transparently) about what kinds of debt the city would issue, what type of debt would be issued for what type of project, what limits on debt or debt service costs, etc.  I believe Council members had their own well-thought out capital spending policies in their heads, but that’s not the same as a publicly available policy adopted by Council action.

If we pointed to a capital facilities policy that stated essential facilities (we could even itemize these) will be financed without a referendum where there is demonstrated need because (1) elected decision-makers are best situated to make the determination of need, (2) have critical information for determining the scope and timing of the project in the context of the city’s finances, (3) to insulate essential services from political will (with the safeguard that elected officials must stand for re-election), and (4) provide certainty and control for the project, then I believe the decision would have been much less of a surprise. It might also have helped focus on the policy problem of what issues should be put to referendum before we are trying to get a specific project underway.  Maybe the policy debate would have lead to a conclusion that we should put ALL facilities to a referendum or only those over some number of millions of dollars.  Or, perhaps recreational facilities require a referendum to issue bonds.  The policy could include guidelines for what might be financed via the EDA or HRA (with input from those bodies).

Over on Locally Grown, there’s discussion about utility franchise fees – Northfield already has a cable franchise fee, but we have considered adopting an additional franchise fee for electric and gas utilities for right-of-way access to be dedicated to street improvements.  Policy documents would be the place to establish and explain what revenue sources are available to the City (and by what authority – typically state statute), what additional taxes or fees are (or could be) adopted and what the revenue would be used for (if it is to be restricted).

In this larger context, a utility franchise fee could be evaluated as one tool to choose to put in the toolbox.  One of the charges to our ad hoc finance task force was to research how we could diversify revenue and they brought the utility franchise fee option to us.  Whether this fee is a good idea should consider the (possibly competing) goals of diversifying revenue to reduce reliance on property taxes and local government aid, equity and fairness (who will this fee affect and is that fair), ensuring transparency about the fee (obviously, we charge the utility which will pass along the cost to its rate payers) and the relationship of the proposed fee to the designated projects, etc.

Putting policies to paper or bytes also helps explain the tools we have to use for City work, provides a framework for Council and staff to act coherently, and gives citizens a yardstick by which to measure the Council’s performance – did we do what we said we’d do and do the policies reflect your priorities?  Transparency and accountability, in other words.