11-10-1986 Council Packet - Laserfiche WebLink

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"Any community that finds itself consistently above this 20 to 24 percent range should take a close look at its debt service costs," Carlson recommended. "There may be good reasons why a well -managed city would be above this range but those reasons should be well understood by community leaders." The debt service requirements are naturally higher in growing communities, Carlson noted. "Most of the growing suburbs were above 30 percent in debt service," he said. "Even discounting unusual cases like Arden Hills, we see a pattern here." Minneapolis and St. Paul ranked first and second in 1985 current expenditures per capita. "The high cost of city government in these urban centers is natural," Carlson commented. "Minneapolis and St. Paul are centers of employment, commerce and entertainment. There are extra demands on streets, uti- lities and law enforcement." Minneapolis also ranked first in total expenditures, which include cap'.tal outlays. St. Paul ranked fifth in total expenditures per capita. "Three outer suburbs --Medina, Eden r irie and Waconia--are ahead of St. Paul in total expenditures per capita," Carlson stated. "Eden Prairie spent $475 per resident on capital improvements last year. Medina spent $440, and Waconia spent $414. Change is coming quickly to these communities." "In the final analysis," Carlson commented, "metropoli.!.ari municipalities reflect metropolitan conditions. The Twin Cities area has a low unemployment rate, a d;.verse economic 1 , and robust retail sales. Unless these conditions change, there is little cause for concern about the financial health of these communities." "It is essential," Carlson continued, "that the suburbs with substantial debt continue to grow. Elected officials in these communities should pay close attention to property value and retail sales statistics, which should begin to rise along with population if they have not alrea,';•" Carlson said that statistics from the state demog _-)i :- show that 17 metro cities lost population L-tween 1982 and 1985. "None of these losses was severe," Carlson noted. "The biggest percentage drop was 2.1 percent in Osseo -- but that was only 60 residents out of a population of 2,900," he stated. "Some of the inner suburbs are showing very slight losses, probably as children born in the 60's grow up and leave their family homes," Carlson observed. "These suburbs have paid off most of the debt they took on during their growth years." Carlson said that Brooklyn Center, C-ystal, St. Anthonv, Anoka and Golden Valley all show population losses. "Among these cities," he said, "the debt service is 11 percent of current revenues or less. Crystal's debt service is 4 percent." The metropolitan centers of Minneapolis and St. Paul also show stable populatoin and below average debt service, according to Carlson. "St. Paul's debt service is less than 15 percent of current revenues," he said. "Minneapolis is below 12 percent." # # # # # # # # # # - 3 -