A portion of advice from Warren Buffett — be fearful when others are greedy — seems apropos for the Mankato City Council.
Yes, the area has seen some unprecedented growth that is the envy of other Minnesota cities. Mankato had the lowest unemployment rate, the lowest cost of doing business, the lowest city tax rate and the fastest growth in gross domestic product. Retail sales per capita were 50 percent higher than the next best city. And growth is expected to continue for this year with at least $128 million in privately financed construction.
The city's finances are solid and the city has modernized many public facilities, including the police station, fire halls, sewer plants and roads.
In the past 20 years, the city has grown eastward and various developments have filled in along Madison Avenue. And City Manager Pat Hentges says the city is well-positioned for orderly growth into areas already set up with water, sewer and streets.
But now is not the time to get cocky.
As the city prepares to update its strategic plan, Hentges is advising restraint. He’s cautioning against any development that attempts to leapfrog past existing infrastructure, advocating taking off the rose-colored glasses when looking at a multi-million-dollar sports and recreation complex, and recommending waiting for final disposition of the $31 million civic center expansion.
Part of the dull work of city administration involves the necessary but unglamorous work of repairing and updating infrastructure such as roads, parks and the flood-control system. And continued state aid is not such a sure thing anymore, if it ever was.
Developers may be looking to build in hot spots a half mile or more beyond current city limits. This can be an expensive proposition if no city utilities are there.
Hentges is right on the money, so to speak. Future federal grants and allotments are up in the air. Money we used to “count on” may be drying up. The state is wrestling with ways to fund roads, handle our aging population and build or repair infrastructure in the state.
The taxing strategies of Minnesota drive the elderly with money out of the state when we need them the most. The ones left behind will need care that the state will pick up. Consequently, we could see a drop in Local Government Aid or bonding or other state funding to cities.
Last month, the U.S. Census Bureau released data showing that in 2012 there were 34 state governments that outspent their revenue. Census analysts cited the shrinking size of federal grants a big factor in states’ inability to craft balanced budgets.
Mankato should be proud of past success. But much of the recent stability was based on the fragile diversity of agriculture, which has seen a good run in past years. And while the designation as a Metropolitan Statistical Area has helped with some government funding, even those outlays are not a given. The growth of retail prospers only when disposable income is freed up.
Yes, plan for growth, but let's be careful to not get ahead of ourselves. Rather than find ways to spend, let’s focus on what state and local governments can do to make it easy for business to thrive, hire and grow. It may even be time to look at reducing property taxes rather than playing “catch up” to the old funding ways, especially since the new reality was actually working pretty well.
And by all means, the city shouldn’t be silent about its great past success and promising future. The city and others can benefit from this growth. Just don’t be greedy about it.