Union negations have been ongoing in the City of Isanti. We were able to settle with the Public Works Union but unfortunately the Police Union has rejected the contract proposed by the City after months of negotiation. We were notified today that the Union is filing for mediation. I am personally very disappointed in this outcome that a contract that asked for no concessions from the Police Union but offered 3% pay increases per year, an excellent health plan, the start of a shift differential and a number of smaller City concessions did not pass a union vote.
The City, state and country are heading into incredibly difficult financial times and to have a contract that still offers more to our officers than they currently have rejected is difficult to understand.
Our excellent health plan is incredibly expensive for the City but we feel it is important to maintain a high level of benefits for our employees but it comes at a cost. Unfortunately the proposal the Union made to the City was to average four communities Police Officer pay rates.
The communities proposed were North Branch, Cambridge, St Francis and Princeton. I asked that we should then take a look at the populations and tax bases of each community and then adjust the rates as a percentage compared to Isanti. North Branch's tax capacity is $9,068,153, Cambridge is $7,040,025, St. Francis is $5,755,259 and Princeton is $3,425,349. These figures are based on League of Minnesota Cities information for 2007, the most recent information provided. Isanti's tax capacity is $3,438,930.
Oddly enough Princeton's pay rates are less than Isanti's and our tax bases are virtually equal and St Francis does not provide a health care plan instead they give a cash payment for the officers to purchase their own health care. This payment is less than what it cost the City of Isanti to provide health care.
The 2008 top pay rates provided to us show North Branch at $28.44 per hour, Cambridge at $26.31, St. Francis at $27.99 and Princeton is $24.02. Isanti's proposed rate would have been $26.39. Cambridge just settled and Princeton and St Francis were also tentative settlement agreements. These are new numbers not from years old contracts.
Even if you accept out of hand the premise that we should be compared to these cities we are above Princeton and Cambridge whose tax base is double ours. We are less than St Francis and North Branch whose populations and tax bases are quite larger than our own.
The Isanti police department is stable, officers are not fleeing for higher paid jobs in the metro nor do we lack high numbers of qualified applicants for police positions. I know this as we just hired a new police officer.
I wish we could offer more than a 3% pay increase per year but financially this would put us on a course that would do harm to the City and department. We have grown our department over the years, renovated the former City Hall to a modern police station so our officers no longer had to work out of a former hair salon, and finalized the third purchase of a new Dodge Police car as requested by the officers. The new police information system the city purchased last year has improved our policing tools. We need to be fiscally responsible so our Police Department can continue to grow and serve our City. It does no one any good to expand cost at such rate they can not be sustained.
We have a good department and I want to make sure it last for generations. It is difficult to not be able to do everything that is requested by our fine officers but Isanti's tax revenues are already in a shortfall position. I serve on the finance committee and we are already struggling with a roughly $140,000 short fall in property tax revenue. These are property taxes that are not being paid and we have no idea when they might get paid. This is unfortunately only the beginning.
We should all know by now that the national and state economy is suffering. The state will be releasing a deficit projection believed to be over a billion dollars. When the state needs to balance its budget it often does it on the backs of cities, counties and school districts as it did in 2003. Isanti has a 21% cut in Local Government Aid last year and I fear there will be more of the same. This coupled with the mortgage crisis and its affect on property taxes; I will be compared to scrooge or the grinch when I have to constantly talk about fiscal discipline.
The way out is to build our commercial tax base. We have had brilliant success in 2007 and this year looks to be strong as well. We need to continue this growth by keeping taxes and fees fair to attract more businesses. It roughly takes two years to start receiving the full tax revenue from new businesses when it is new construction. Just as a new homes first year tax bill is often just the lot tax it is the same with a business.
Property taxes are incredibly regressive. No matter your income, you pay the same rate, rich or poor. Property taxes hurt lower income families the most of all. High taxes and the hidden tax of increased valuations are running some families out of their homes. This is just one of my motivations, and perhaps the one I take to heart the most, to make the City live within its means.
We have a plan for success....we need to follow it....
