East Twin Cities

By Mayor Anne Burt

Private and public businesses must be creative and deliberate in their financial planning to diversify revenue streams. We are always looking for ways to expand our reach and results beyond the basic funding of our property taxes and other annual revenue sources. However, like the economy, opportunities to pursue alternative revenue sources ebb and flow, and can be quite challenging to compete for and administer. Over my time as mayor, the city has been actively and strategically pursuing opportunities for local, state and federal grants. I would like to summarize some of the good results we have recently achieved.

From 2020-2022, the city was awarded approximately $28.9 million in grants. Approximately $22 million of the grant awards are coming from the state's 3M settlement fund for addressing PFAS in our water. 

In 2022, we also received nearly $850,000 for phase one of Lake Road improvements (converting from four lanes to three lanes west of Pioneer Drive) and have been awarded another $2 million for phase 2 of the work in 2024 (new pavement and converting from four lanes and three lanes east of Pioneer Drive).

In addition to road projects, grant money is supporting initiatives such as highway safety, public safety equipment and personnel, affordable housing, park and trail improvements, recycling, water efficiency, wetlands and wildlife restoration among other things. To date, we've spent approximately $20.8 million of the $28.9 awarded over the past three years. Some of the program timelines and projects remain active.

We are thoughtful about pursuing grants since some are too complicated or require too much time to apply for or implement. Others we pass on because we don't feel we have a strong case for being awarded the grant. In addition, some grants require the city to match the amount of the grant to complete a project and we want to limit the city's level of support to avoid financial commitments that continue beyond the grant availability.

How grants impact property taxes

One-time non-property tax revenue - like grants - can allow for initiatives that the annual revenue sources will not support. However, grants do not completely supplant traditional funding sources like the tax levy, which typically supports longer-term cost and annual initiatives. For this year's budget, our property tax rate decreased 11.5% because of strong property valuation growth compared to expenditure levels. We enjoy the fifth-lowest tax rate among our 20 most comparable metro area cities. 

CARES Act funding

In addition to the grant amounts listed above, we also received federal non-grant funding in recent years. In 2020, we received $5.3 million in local government emergency relief money through the Coronavirus Aid, Relief and Economic Security (CARES) Act to prepare and prevent the spread of the COVID-19 virus. We used these funds primarily for public safety costs and to invest in a number health-related improvements at City Hall and other city buildings.

American Rescue Plan Act funding

In 2021, the U.S. Congress passed the American Rescue Plan (ARP) Act, a $1.9 trillion economic stimulus that was provided to accelerate the country's recovery from the COVID-19 pandemic. We received $6.01 million from the ARP stimulus that is paying for the city's share of water and sewer infrastructure improvements.

Cooperative agreements

We also use cooperative agreements to support programs and initiatives. These agreements are similar to grants, but our cooperative agreement partners often work more closely with us to complete projects than our grant partners. For example, in 2022, the city was reimbursed more than $100,000 by the South Washington (approximately $87,000) and Ramsey-Washington (approximately $17,000) Watershed Districts to enhance our street sweeping program.

Strengthening our search and competition for grant funding can go a long way in helping us leverage funding and furthering our mission. I'm proud of how we have actively pursued non-property tax revenue opportunities to support many important programs and services that may not be able to pay for in other ways. 

Original source can be found here.