Eden Prairie wants to give taxpayers a break

To cushion Eden Prairie property taxpayers against the extra $1 million it will cost to operate the expanded community center next year, city council members plan to collect less money for capital improvements for at least the next two years.

In continuing discussions about the city's 2008-09 budget, which must be finalized by December, four council members said Tuesday that they will vote to collect between $250,000 and $500,000 less for capital improvements in 2008 and 2009 while the city adjusts to the higher community center costs. The exact amount of the reduction was not settled.

Mayor Phil Young said a temporary drop in the city's annual $1 million capital improvement levy is in order, especially because the city will soon receive $3.5 million from the sale of land at Hwy. 212 and Prairie Center Drive to Presbyterian Homes for a new senior housing complex. "I think it's appropriate to give the taxpayers a little break," Young said.

The council is considering spending roughly $41 million next year, up 4.8 percent, or about $1.9 million, from 2007. The owner of a $374,800 median-priced Eden Prairie home would pay $1,082 in city property taxes next year -- up $9 from 2007.

Young and council members Brad Aho and Jon Duckstad have been studying the budget for ways to reduce spending.

All three of them ran for office as tax-conscious candidates with Republican Party endorsement.

Eden Prairie is a high-tax city, Young said. "On a per-capita basis we still lead our peers in taxation. And I would like to change that. If we can make gradual progress toward that, I would be happy."

Young said he would like to replace the car allowance for city employees with mileage reimbursement and reduce the city's heritage preservation position to half time.

He, Aho and Duckstad also plan to use their majority position on the five-member council to eliminate the city's Somali immigrant liaison position. They have said it is not a service a city should provide.

Aho and Duckstad also favored city staff salary increases below those given in most neighboring suburbs. "I don't think we have to be at the top to have and hold good employees," Duckstad said.

Young declined to join them, however, saying he is satisfied that Eden Prairie salaries are in the mid-range of comparable cities. He endorsed City Manager Scott Neal's recommendation to give the staff 3 percent raises in 2008 and 2009.

When property taxes are going up by only 9 percent, it's not the time to give city employees a below-market wage increase, Neal told council members. A $9 increase in taxes for the median priced house is considerably less than other years when tax increases ranged from $84 in 2002 to $65 in 2006 to $36 last year, Neal said. "I think $9 is a reasonable number."

Eden Prairie is able to hold the tax increase low because "we now have the fourth-largest tax capacity in the state -- behind only Minneapolis, St. Paul and Bloomington," Neal said.

Council Member Sherry Butcher opposed a reduction in the capital improvement levy. She said it is shortsighted and unwise to discontinue the city's longstanding pay-as-you-go practice of putting away money every year for road, trail, building and other maintenance needs.

Butcher said residents wanted the community center expansion -- they approved it by referendum and expected to pay more to operate it. Offsetting that cost by collecting less for capital improvements is like telling people "you are going to get a fabulous community center but you aren't going to have to pay for it," Butcher said.

But Aho said the community center operating costs are higher than anyone expected, and other new capital projects should be postponed as a result. He said his hope is that public costs will come down as the center generates more revenue.

Council Member Kathy Nelson said she is willing to accept a temporary reduction in capital improvement spending. But she opposed the elimination of the Somali liaison position.

"It's the kind of service that this community still needs to have," she said. With such a large number of Somali immigrants living in Eden Prairie -- as many as 5,000 by city estimates -- "it makes sense that somebody speaks Somali within the city," Nelson said.

Young said that he would be willing to contribute some city funds toward the position if other units of government or private groups also contributed.

The council will vote Nov. 13 on which human services contracts to continue next year.

Laurie Blake • 612-673-1711

Laurie Blake • lblake@startribune.com