Brooklyn Center’s City Council plans to take a close look at the city’s capital improvement plan as budget plans for 2021 and beyond move forward.
With many Americans out of work due to the COVID-19 pandemic, the council said it wants to explore ways to reduce the tax burden for Brooklyn Center. The council and the city’s Financial Commission discussed the plan during a July 20 work session.
The capital improvement plan is a 15-year planning document where cities plan out their significant capital outlays in public utilities, street improvement, park and trail improvements, and building maintenance, among other projects. The document is a flexible and non binding. Projects in the plans are generally funded by bonding, utility fees, special assessments, franchise fees, property taxes, and federal and state aid, or a combination of funding sources.
Total costs for Brooklyn Center’s Capital Improvement Plan in 2021, if fully implemented, would total $38 million. The city and its taxpayers do not bear the entire costs of the plan. For instance, while the overall cost for reconstruction in the Brooklyn Boulevard corridor is $18 million, those costs are spread among many funding sources including $6.6 million in federal funds.
Brooklyn Boulevard reconstruction from Bass Lake Road to Interstate 94 represents $14.4 million of the city’s budgeted $16.9 million spending from the Capital Improvement Fund. Also budgeted are $3.5 million in municipal state aid road work, $4.5 million in spending from the Street Reconstruction Fund, $1.7 million from the Special Assessment Fund.
A total of $12.1 million in utility project spending is budgeted for in the plan.
The city is budgeting for $15.2 million in debt issuance over the next two years to fund capital projects in the plan. Taxes collected by the city for its debt service levy would pay for these loans. The debt service levy represents approximately 5% of the city’s overall levy.
With the debt issuance, the debt service levy would be projected to increase at .15% of the total levy in 2021 and 1.4% in 2022.
Curt Boganey, city manager, generally cautioned the council against habitually delaying capital projects in an effort to obtain short-term savings. Often, delayed projects become more expensive in the long run and do not save money for taxpayers, he said. If the council wants to lower taxes, it could consider either delaying some projects to a later period, or it can keep all of its capital projects in its plan and reduce operating costs elsewhere, he said.
“I’ve seen cities that have decided not to do capital projects as a way of saving money,” Boganey said. “I’ve seen city councils that have failed to invest and maintain infrastructure in order to keep taxes low. Cities that do that on a regular basis find that they wind up costing the taxpayers a lot more in the long run.”
The council came to a consensus that it wanted to view projects in more detail and consider delaying less important projects until the final impact of the COVID-19 outbreak on the city’s financial situation comes more sharply into focus. That is, if the city is considering an infrastructure project, city staff will provide the council with a detailed update on the existing conditions and the urgency in the timing for potential replacement before approving a project.
This is contrast with the budgeting process in recent years. Previously, the council has provided city staff member with a figure for a total levy that it finds acceptable, and city staff bring back a budget and levy proposal based on that number.
Mayor Mike Elliott said the council needs to examine projects in more detail and make fiscally prudent decisions that could save money on tax bills during a time of crisis. “I’d like to see some analysis on what it would cost perhaps to postpone some of these projects a year or two, and to really have some numbers, not pontification to support the decision,” he said.
Councilmember Marquita Butler concurred, saying the city has not yet seen the full financial implications of the pandemic.
While Councilmember Dan Ryan said that during a normal recession, he would not be interested in delaying projects, it was prudent to look at that possibility this year. He asked the council to remember that the debt service levy represents only a small portion of the city’s total levy.
The financial recommendations made by city staff in past have been sound, Councilmember April Graves said, but it makes sense to take a closer look at projects this year.
Councilmember Kris Lawrence-Anderson said that she was hesitant to consider delaying projects, but that she was willing to take a closer look at the projects moving forward.
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