Fiscal Responsibility

What does it mean “To provide quality public services in a fiscally responsible manner while preserving the city’s open space character”.   This is the Commitment to the Community, taken from the City of Lake Elmo website.  Here is the link to the Vision Statement and Goals page, which should serve as a benchmark for what we should expect from the city and its leaders.  http://www.lakeelmo.org/government/vision-statement-goals

In addition to financial transactions (budgets, spending, etc.), fiscal responsibility also involves managing financial risk to the city which in some cases can be more costly to taxpayers than excessive spending.

Image courtesy of SheelaMohan@FreeDigitalPhotos.net

• Lake Elmo Approves Preliminary Tax Levy. At its 9/18/2018 meeting, the city council approved the 2019 budget and an increase of 2% to the preliminary tax levy.  https://www.hometownsource.com/stillwater_gazette/lake-elmo-approves-preliminary-tax-levy-increase/article_3fdd34be-c027-11e8-9817-23ace990520a.html
• 3M Settlement Money Won’t Come Until 2020. According to the schedule released by the Minnesota Pollution Control Agency, clean water projects won’t be started until at least 2020. https://www.twincities.com/2018/09/17/3m-settlement-money-paid-in-2018-wont-flow-into-projects-until-2020/
• How Can Lake Elmo Use the State’s $850 million Settlement with 3M ? Community members gathered on April 12, 2018 to learn how the city can use the settlement to clean the region’s water and natural resources of PFC’s. https://www.hometownsource.com/stillwater_gazette/free/concerned-frustrated-with-m-water-pollution-work-groups-will-decide/article_a88283a8-470e-11e8-aeee-5f456312d276.html
• City Council (by a 3-2 vote) Approves 21.9% Increase to the Tax Levy for 2018. Higher costs for staffing and increases to the city’s debt payments were the two main factors contributing to the increase. The comparison to 2017 was also affected by the council’s decision in 2016 to use one time cash reserve funds to lower the the 2017 levy below the 2016 level. https://www.hometownsource.com/stillwater_gazette/news/government/lake-elmo-approves-percent-increase-to-tax-levy-for/article_16b9fc38-e5ea-11e7-9725-9b028e740af0.html
• Lake Elmo Preliminary Tax Levy Shows 23% Increase in City Taxes. The preliminary levy was approved by the city council on September 19 with the public hearing scheduled for December 5 at 7pm. This Stillwater Gazette article by Alicia Lebens provides excellent detail and background on the levy.  http://stillwatergazette.com/2017/10/04/lake-elmo-preliminary-levy-shows-23-percent-increase-in-city-taxes-public-hearing-is-dec-5/
• Budget Mistakes Impact Shakopee Public Schools:  An audit revealed a $4.5 million discrepancy caused by “inaccurate budget assumptions and omissions”.  This is an example of what might have been in Lake Elmo.  http://kstp.com/news/shakopee-public-schools-budget-mistakes-teachers-jobs/4424651/
• Lake Elmo City Council Kills Erosion Study: After authorizing a no wake-erosion study in December for the shorelines of the major lakes in Lake Elmo, the city council reversed course and voted unanimously at its first meeting of 2017 to cancel the study. The potential costs had increased to $41,500 and was brought back to the council for further direction by the city administrator. http://stillwatergazette.com/2017/01/17/lake-elmo-kills-erosion-study/
• Split Council Approves Capital Improvement Plan (CIP): Ignoring the recommendations of the Parks Commission and city staff, the council majority (Fliflet, Smith, and Lundgren) chose to accept the recommendation of the finance committee (chaired by council member Fliflet) in approving the city’s CIP for 2017-2021. http://stillwatergazette.com/2016/12/30/lake-elmo-council-argues-over-use-of-funds-for-parks-and-trails/
• Split Council Authorizes Erosion Study: City council members Fliflet, Smith, and Lundgren voted to spend up to $30,000 on an erosion study for the shorelines of the major lakes in Lake Elmo in the hopes that it will end neighborhood fighting.  Quote from council member Smith: “This is such a contentious issue……..the only way to put this to bed is to have a study done”.  Some residents pointed to other concerns they felt were more pressing, such as millfoil.  http://stillwatergazette.com/2016/12/19/split-council-authorizes-erosion-study-for-major-lakes-in-lake-elmo/
• The city’s preliminary tax levy, reflecting a decrease of 1%, was passed by the city council with a 3-2 vote. Excerpt: the majority of the city council has decided to use $50,000 to lower the general fund levy.  These funds will come from the city’s cash reserves, yet the $13 million revenue discrepancy in the city’s pro forma has not yet been reconciled by the Finance Committee. The article contains quotes and perspective from both Mayor Pearson and Council member Fliflet. http://stillwatergazette.com/2016/10/04/city-taxes-will-decrease-for-many-in-lake-elmo/
• Insurance deductible rockets to $200,000. The LMC Insurance Trust found that incivility on the city council was too much of a risk and…… led to high staff turnover, long and unproductive meetings, dysfunction between council members and city staff and trouble working with other government agencies. http://stillwatergazette.com/2016/09/08/lake-elmo-insurance-deductible-rockets-to-200000/
• Lake Elmo deductible could up 500 times the current level!  Assistant Director of LMC Insurance Trust is quoted: “As you know, there has been a tremendous amount of turnover here in Lake Elmo…..To us, that is a strong indication that the environment created by the council affects city hall and the employees’ ability to get their jobs done. It’s also a red flag for potential claims.” http://stillwatergazette.com/2016/08/22/lake-elmo-deductible-could-go-up-500-times-current-level/
• City Council at odds over $13 million! Regardless of what you call it, the city council needs to resolve the revenue assumptions in the pro formas. They project cash flows for the sewer and water funds. Where is the urgency from council member Fliflet, who chairs the Finance Committee? http://www.twincities.com/2016/07/22/lake-elmo-city-council-at-odds-over-13-million/
• Was the council majority decision in January, 2016 to opt out of ongoing discussions about the Gold Line bus rapid transit premature? The Pioneer Press editorial board certainly thought so as did Mayor Pearson and council member Bloyer, but they were out voted by the council majority (Fliflet, Smith, Lundgren). Mayor Pearson said the council acted without waiting for results of a study that’s under way. “It’s unfortunate we won’t be able to keep looking at the potential benefits.”  Here’s the link to the Editorial Board commentary: http://www.twincities.com/2016/01/11/east-metro-a-bump-in-the-busway-pioneer-press-editorial/
• “I don’t have any conclusive evidence that Mr. Bloyer did these things……By saying this in the resolution, the council is making an admission on behalf of the city and I am concerned about the city’s liability in potential litigation related to the release of the data.”  This is a quote from city attorney Sonsalla…….Why would council member Fliflet (and council members Smith and Lundgren) expose the city to future liability by continuing to ignore the recommendations of the city attorney regarding the restrictions on council member Bloyer?   Read the entire Stillwater Gazette article:  http://stillwatergazette.com/2016/08/13/bloyer-censure-remains-but-restrictions-now-designated-voluntary/
  
• What is the cost to the city of having to defend lawsuits?   Former city administrator suit alleges: “His tenure with the city was complicated by significant dysfunction within the city”: http://www.startribune.com/former-lake-elmo-administrator-sues-city-ex-city-council-member-for-defamation/389752661/
• “ASK THE DIFFICULT QUESTIONS”…..here is a link to Letters to the Editor in the 7/24/2016 edition of the Pioneer Press. Good to know that residents and the business community of Lake Elmo are not the only ones advocating for fiscal responsibility! And questioning the motives of why council member Bloyer was censured.  http://www.twincities.com/2016/07/24/pioneer-press-letters-to-the-editor-for-july-24-2016/
• After already costing taxpayers $13,000 with council meetings actually getting longer, council majority (Fliflet, Smith, and Lundgren) votes to extend the contract of the Parliamentarian  http://stillwatergazette.com/2016/05/10/lake-elmo-renews-contract-with-parliamentarian/
• Incivility Could Cost Lake Elmo its Insurance Coverage    http://stillwatergazette.com/2015/10/20/incivility-could-cost-lake-elmo-insurance-coverage/
• Council Majority (Fliflet, Smith, and Lundgren) Stops New Development. David Siegel, executive director of the Builders Association of the Twin Cities, predicted the city will regret the council’s vote. “A moratorium matters a lot,” Siegel said. “There are a whole lot of unintended consequences, including lower home prices, slowed growth for years to come and possible legal liability.”  http://www.twincities.com/2015/07/09/in-another-political-spat-lake-elmo-freezes-new-home-construction/
• How much does employee turnover cost an organization?  Estimates vary depending on the salary and role of the employee but it is generally accepted by the Society for Human Resource Management (SHRM) that the financial cost to an organization of replacing an effective employee is between 20-40% of that person’s compensation. Based on that range, a very conservative estimate would be the high rate of employee turnover since the beginning of 2015 has cost Lake Elmo and the taxpayers over $120,000. And this does not include the costs of replacing the 50 years of organizational knowledge and experience that walked out the door.  http://www.inc.com/suzanne-lucas/why-employee-turnover-is-so-costly.html