Prior Lake officials defend tax hike

Stung by the tone of an election campaign accusing them of needlessly imposing tax increases in the teeth of a recession, council members and senior staff in Prior Lake are using their own access to television to fight back.

In a Monday night meeting that was billed as a briefing for council members, but took on the flavor of a campaign commercial, council members argued that they are drastically cutting expenses amid tumultuous times for them as well.

They claimed to have the lowest taxes of any their neighbors -- a claim disputed by the Citizens League. But they also offered a revealing peek into the innards of city government, illustrating growing demands for service even as the ability to cover those costs is crumbling.

They admitted to having badly underestimated the implosion in the housing market, and they depicted a marked falloff in city workers and services. They disputed one candidate's claim that a dip into reserves could help prevent a tax hike.

"Well, guess what?" said Council Member Ken Hedberg, the most acidic of those who spoke. "We're not trying to squirrel money away for no purpose."

The exercise seemed to have been triggered by the aggressive stance in last week's televised campaign forum of mayoral candidate Mike Myser, a onetime corporate executive now taking care of his father, who has dementia.

Myser faces Council Member Steve Millar, who seeks to shift to the mayor's chair, while several candidates are seeking the seat held by Council Member Warren Erickson. During the debate, the two incumbents sought gamely to defend their records, but the fast-moving format did not allow anything approaching the kind of detail the council was able to go into Monday night.

Myser claimed he was able to swing by the office of the city's finance director, scan some reports and work out exactly what needs to be done to prevent a tax hike -- including the use of reserves.

Financial hits

During Monday night's meeting, which can be viewed online on the city's website, City Manager Frank Boyles took the council through a three-year period of financial jolts that have included more than $300,000 in state aid cuts and what he called "aggressive" spending reductions: $425,000 in 2008, $700,000 in 2009, with another $1 million needed for 2010.

He conceded that some of the cuts are really postponements, but he depicted a city whose staffing numbers have dwindled through layoffs, furloughs and other measures even as demands for service are rising.

The number of parks is expected to rise to 51 by next year, from 37 in 2004. The number of park acres will nearly double, from 569 to 1,004, over the same period.

The list of cuts to services is long, he said: The length of the Lakefront Days festival will be cut in half unless other funds can be found; no more hanging plants downtown ("very labor-intensive"); no infield maintenance; delays in plowing trails in winter; fewer concerts in parks, and fewer city newsletters, from six to four per year.

More than one council member made the point that the city's tax rate is the lowest of any city in Scott County. One reason is that Prior Lake has the highest-valued homes of any major suburb in the south metro. That enables the council to raise a lot of revenue without imposing a high property tax rate.

The most widely followed city-to-city comparison is that of the Citizens League, which ranks Prior Lake as having a relatively high tax burden: 29^th highest out of 117, a rank lower than Savage (four), but higher than Shakopee (71) or most other Scott County cities and townships.

Mayor Jack Haugen defended tax hikes in recent years as coming in lower than inflation, and he said that city spending can be deceptive. Previous councils, for example, "saved" money by underinvesting in water capacity, but residents lost a fortune in landscaping materials when a drought led to a total ban on watering, he said.

Haugen decided against running for reelection, and all three candidates to replace him now have websites: Troy Presler seeks to continue Haugen's legacy (troypresler.com), Millar depicts himself as a maverick who is now unfairly considered the establishment (voteforsteve.typepad.com), and Myser speaks for the always-vocal contingent in Prior Lake of exasperated fiscal hawks (www.mikemyser.com).

David Peterson • 952-882-9023