2009 Budge/Levy and Council Update

The City Council approved the City budget and levy tonight. The 2009 levy is 53.937%, down 5.9 points from 59.886% this year. That is a 10% decrease in City property taxes in one year. In 2003 Isanti's levy was at 77.75%. We have reduced the rate by nearly 24 points or 31%in just a few years. Another way to look at it is if we had not gotten control of City spending and succeeded in Fiscal discipline and spending your City property taxes would be a third higher than they are today.

When I ran for Mayor in 2006 I had promised to lower our levy rate to 55% in three years - we exceeded that goal in just two years. We are again the only community in the region to have achieved this feat.

I updated the Council tonight about all the work we are doing in the Finance Committee to plan for the expected LGA cuts and the issues arising from non-payment of property taxes and assessments. We will be presenting the plan to the Council in the next few months after all the information is in and we have the States decision on LGA cuts. These are not problems to be feared but challenges to be conquered.

We have placed Isanti in as good a position as can be had in these difficult times. Our liquor store fund has a healthy cash balance that will help our 2009 budget. The 3-2 split decision to not build a new liquor store has been proven right. I was against building the new store for many reasons including the fact it would have wiped out the cash balance in the fund and cost the City over a $100,000 in revenue each year for roughly 10 years as the debt for the store would be paid down.

The City has built up a nearly $600,000 capital replacement budget in the last few years as well. Isanti had not reserved funds in this way in the past - another component of our Long Term Financial Plan. This along with a healthy general fund balance will allow us to weather the difficult economic conditions we face. We continue to look for greater efficiencies in City operations to ensure the greatest value for our Taxpayers. Case in point tonight is that we paid off an existing bonded debt early because we would save $37,000 doing so and we had the cash available.

We have had to make tough decisions and we will continue to do so. I know I sound like a broken record but fiscal discipline is key to our success and we must continue to follow our plan. The City can not take on new large amounts of debt or new structural cost. The Council will also have to trim cost in several areas but again this will be in the plan we will present to the Council.

The Council voted to pave 3rd Avenue along the Soccer Fields in 2009. The City pulled a letter of credit from the bank of a failed developer to pay roughly half of this project cost. If we did not move forward with this project these funds would have had to be refunded back - use it or lose it. There are several details to still be worked out but by mid summer this road should be paved.

The Council approved applying for $552k in Neighborhood Stabilization Funds that are used to buy foreclosed properties. We have been working on this project for a few weeks and much of the background information was developed as a part of our foreclosure program in Isanti. Central Minnesota Housing Partnership will be assisting the City in writing and administrating the grant. Many of the details are not decided yet but we will be recommending that the funds be used for down payment assistance. I have talked with local banks and Realtors and all agree this is the best use of these funds.