HomeMy WebLinkAboutCouncil Information Memorandum 11-22-1995NOVEMBER 22, 1995
UPCOMING MEETINGS AND EVENTS ....
1. COUNCIL MEETING SCHEDULE FOR NOVEMBER:
NOVEMBER 27 7:00 P.M.
NOVEMBER 29 7:00 P.M.
DECEMBER 5 7:00 P.M.
SPECIAL COUNCIL MEETING
City Council Chambers
(Housing, Open Space, and
Recreation Issues)
TRUTH IN TAXATION BUDGET
HEARING
City Council Chambers
REGULAR COUNCIL MEETING
City Council Chambers
2. THANKSGIVING HOLIDAY THURSDAY, FRIDAY, NOVEMBER 23-24. City
offices closed.
3. PLANNING COMMISSION TUESDAY, NOVEMBER 28, 7:00 P.M., Council
Chambers.
4. CHARTER COMMISSION ANNUAL MEETING, MONDAY, DECEMBER 4,
7:00 P.M., Public Safety Training Room. Agenda is attached. (M-4)
S. CITY EMPLOYEES HOLIDAY LUNCHEON, MONDAY, DECEMBER 18, 11:00
A.M. - 1:00 P.M, Radisson Hotel. City offices will be closed during this time.
6. TWINWEST DECEMBER EVENTS. Attached are notifications of the December
TwinWest Coffee Break Sessions. (M-6)
a. Weekly Building Permit Report for Commercial/Industrial/Public and Use Types. (I-
la).
2. ELECTION RECOUNT
a. A recount was held on Monday, November 20 in the School District 279 Bond
Referendum. Five Plymouth Precincts were involved. Here are the results:
Pet.l
Yes No
Pct. 13
Yes No
Pct. 15
Yes No
Pct. 16
Yes I No
Pct. 20
Yes I No
Total
Yes No
Nov. 7 Count 91 54
122 69
71 27
263 1 245
201 18
567 413
Nov. 20 Recount 91 54
F 122 69 1
71 1 27 1
263 1 245
1 20 1 1-8—T-567
413
Several small differences in votes were found in the paper ballot precincts of Maple
Grove/Brooklyn Park. However, it did not change the outcome of the election. Our
optical scan recount results were identical to Election Day.
3. JUDITH MARTIN PROPERTY
a. Staff report from Public Works Director Fred Moore concerning storm water treatment
pond drainage corrections made in the Sugar Hills 2nd Addition. (I -3a)
4. NEWS ARTICLES. RELEASES, PUBLICATIONS, ETC.
a. News release from U -S West regarding the new area code for Minnesota. (I -4a)
b. Announcement from McCombs Frank Roos Associates, Inc. that Dan Parks has
returned to work in the Water Resources Department. (I -4b)
c. November 17 Star Tribune news story on the Prudential staff cuts in Plymouth. (I -4c)
d. Memo from Communications Coordinator Helen LaFave about the development of a
City guide for residents. (I -4d)
e. News release from Northwest Community Television announcing a special program
about CEAP, CROSS, NEAR, and PRISM volunteer programs. (I -4e)
5. CITIZEN COMMUNICATIONS POLICY - CORRESPONDENCE
A status report on all correspondence is attached.
6. CORRESPONDENCE
a. Letter to Public Works Director Fred Moore from City of Medicine Lake Mayor Tom
Schrader concerning South Shore Drive. (I -6a)
Dwight Johnson
City Manager
m -a
Annual Meeting
Plymouth Charter Commission
December 4, 1995
I. Call to Order
II. Election of Officers
III. Approval of Minutes (May 9, 1995)
IV. Approve Annual Report to Judge Burke
V. Other Business
A. Potential Charter Issues
1. Election Reporting Requirements
2. Other Issues
VI. Report on Filling Charter Commission Vacancy (Todd Wirth's seat)
VII. Set Date for 1996 Annual Meeting
VIII. Adjourn
Coffee Breaks - December
GOLDEN VALLEY — Tuesday, December 5
Mail Boxes, Etc., 8014 Olson Memorial Hwy, (Golden Valley Shopping
Center, Highway 55 and Winnetka Avenue)
MAIL BOXES E"TC.® Mail Boxes Etc. has all the support services your business needs, from packing
IN and shipping to providing a business address for mail and package receiving, to
being your one-stop source for copies, faxes, office supplies and more.
ST. LOUIS PARK — Wednesday, December 6
The Prudential, 600 South Highway 169, Suite 1000, (Interchange Tower,
T h e P r u d e n t i a l
10th Floor; NW corner of Highways 169 and 394)
*,J Prudential Preferred Financial Services: A Division of The Prudential
Insurance Company of America.
WAYZATA — Friday, December 8
Anchor Bank, 1055 East Wayzata Boulevard, (Located at 101 North and
Old Wayzata Blvd., -one block south of 394 off the 101 North exit)
ANCHOR BANK N.n. Looking to grow your business? What a coincidence, so are we. A full service
community bank with offices in Wayzata, Plymouth and Eden Prairie.
CRYSTAUNEW HOPE — Wednesday, December 13
Cardell Floral, 2740 North Douglas Drive, (Located in Lamplighter
O p o Square on the corner of Douglas Drive and Medicine Lake Road)
t=/oral
Make a lasting impression wth your customers and friends! Say it with
flowers from Cardell.
HOPKINS — Friday, December 15
I N N#, Sisinni Mainstreet Bakery, 922 Mainstreet, (Located on the corner of 10th
S,5
Mainstreet
and Mainstreet; the old RLK Associates location)
Bakery Specializing in fresh baked European breads, pastries, cheesecake and tortes
and offering a wide array of deli items.
PLYMOUTH — Tuesday, December 19
Jewelry World Company, LTD., 4190 Vinewood Lane North, (Located in
`RrwAeco<<0 the Rockford Road Plaza Shopping Center at 494 & Rockford Road next
to Rainbow Foods and just across from Target Greatland)
JEWELRY WORLD COMPANY LTD. jewelry World Co., LTD. offers all TwinWest members the largest selection of
fine upscale jewelry pieces, loose diamonds, gems, and gold fashion selection,
"DIAMOND AND GOLD BROKERS" along with expert fine jewelry repair and custom design service.
MINNETONKA — Wednesday, December 20
Borders Book Shop, 1501 Plymouth Road, (In Bonaventure by the Leeann
Chin Restaurant and across from Ridgedale Shopping Center)
BBOOK SHOP'
orers Introducing our corporate gift program. Call 595-0687 for details.
Coffees Breaks run from 7:30-9:00 a.m. with no reservations!
® OFFICIAL CITY MEETINGS
November 1995
revised 11/22/95
1
2 3
4
October
S M T W T F S
7:30 PM HUMAN RIGHTS
COMML4SION - Pub. Safety
Training Room
City Center Counter Open for
Absentee Voting - I- 3 p.m.
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31
5
6
7
18
9
11
City Center Counter Open to
CITY ELECTION -
5:00 PM ELECTION
7:00 PM PRAC - Council
Veteran's Day (obsi
7p.m. -Absentee Voting
Polls open 7:00 a.m. -
CANVAS MEETING
Chambers
City Center Offi
8:00 p.m.
12
13
14
15
16 17
18
7:00 PM HRA - Council
7:00 PM SUB -COMM. ON DOWN-
TOWN PLYMOUTH, Council
Chamber -
5:30 PM SPECIAL CLOSED
COUNCIL MEETING: City Mgr
Annual Evaluation, Pub. Safety
7reQ Rm
7:00 PM PACT - Hadley Lake
Conf. Rm. (Lower
7:00 PM ENV. QUALITY COMM. -
Pub. Safety Trng Rm
19
20
21
22
25
Thanksgiving - City Offices Thanksgiving Holiday -City
QQPf CUUNGIL
Closed Cengt" Offices Closed
30
26
27
28
29
7:00 PM SPECIAL COUN-
CIL MEETING: Housing,
Open Space & Recreation
Issues, Council Chambers
7:00 PM Truth in Taxation
Budget Hearing - Council
Chambers
December
1
S MT WT F ]231
3 4 5 6 7 8
17 is 19 20 21 22
24 25 26 27 28 29
31
7:00 PM PLANNING CO-
MMISSION - Bass Lake
Conf. Rm Lower Level
revised 11/22/95
® OFFICIAL CITY MEETINGS
December 1995
revised 11/22/95
DATE: NOVEMBER 22, 1995
TO: DWIGHT JOHNSON, CITY) MANAGER
FROM: CARLYS SCHANSBERG,'DATA CONTROL/INSPECTION
CLERK
SUBJECT: BUILDING PERMIT ISSUED REPORT FOR
COMMERCIAL/INDUSTRIAL/PUBLIC & CHURCH USE TYPES
NOVEMBER 16, 1995 THROUGH NOVEMBER 21, 1995
Permit #69237 was issued to Thomas Moorse for a tenant finish (Petsmart) at 4190
Vinewood Lane North, valuation $1,000,000.00.
Permit #69591 was issued to Eden Trace Corporation for Deluxe Diecutting at 13021
16th Avenue North, valuation $549,000.00.
Permit #70288 was issued to Welsh Construction for a tenant finish (Appliance Parts)
at 14105 13th Avenue North, valuation $58,750.00.
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DATE: November 17, 1995
TO: Dwight Johnson, City Manager
FROM: Fred G. Moore, Director of Public Works
SUBJECT: JUDY MARTIN PROPERTY
STORM WATER TREATMENT POND DRAINAGE CORRECTIONS
On October 3, 1995 the City Council approved five drainage corrections associated
with the storm water treatment pond for the Sugar Hills 2nd Addition which is located
on the Judy Martin property. Two of these items were the responsibility of the
developer or their contractor since they were associated with the initial pond
construction. These involve correcting the seepage around the outlet pipe and raising
the height of the berm at the southeast corner of the pond.
The other three items were to be done by the City. They were channel the outflow of
the pond to the nearby wetland by constructing a shallow ditch with berms along the
edge, rip -rap the constructed drainage way and drain the trapped water located in the
trees between the pond and the wetland.
All of this work was completed on November 2 and November 3. I had the contractor
working for the developer do that portion of the corrections which were the City's
responsibility. The cost to the City for this correction work was $784.
MARTIN.DOC
NEWS RELEASE
FROM THE NIINNESOTA TELECOMMUNICATIONS INDUSTRY
RELEASE DATE: November 1, 1995
CONTACTS: Mary Hisley, U S WEST Communications
612-663-5992
Kathryn Cassidy, Minnesota Telephone Association
612-291-7311
NEW AREA CODES — LIKE THE 320 AREA CODE BEING ADDED IN
MINNESOTA NEXT MARCH — REQUIRE BUSINESSES TO MAKE
CRITICAL EQUIPMENT CHANGES, BUT MANY HAVE NOT
The Telecommunications Industry And The FCC
Launch Area Code Awareness Campaign Telling Businesses:
"Don't Get Stuck In The Middle"
MINNEAPOLIS — The nightmare of a patient awaiting a
transplant is a hospital telephone system that cannot connect to a
service working against the clock to transport donor organs. A
businessperson's nightmare is a telephone system that cannot connect
to that important customer in another city.
New area codes — such as the one being added in Minnesota on
March 17, 1996 — use "2" through "9" as the middle digit (instead of
110" or "1" as has been typical in the past). Some telephone equipment
must be upgraded or reprogrammed before it will recognize and
complete calls to the new area codes. Such equipment may include
telephone switching equipment (often called PBX equipment) widely -
used by businesses, hospitals, and other multi -line facilities to place
and receive phone calls, electronic telephone sets and auto -dial
systems.
Many businesses and organizations that need to upgrade or
reprogram their telephone equipment have not done so. The result:
they may not be able to reach regions with new area codes, including
Atlanta, Chicago, Vancouver, Miami, Houston and other areas.
-more-
Minnesota Area Code Awareness News Release
Page 3
The Minnesota telecommunications industry is encouraging all
business owners to call the test number to ensure that their telephone
systems can call the new area codes. The specific upgrade required
will depend entirely on the telephone system. For this reason, owners
of PBXs and similar private systems should consult their equipment
providers to determine their particular needs.
Minnesota is running out of telephone numbers in the region
now served by the 612 area code. To resolve the problem, the 612
area code region — the middle section of Minnesota — will be split
into two different area codes:
• The 612 area code will be kept by the Minneapolis -St.
Paul metropolitan local -calling area plus fifteen cities that
border on the local calling area. (Those cities are
Almelund, Becker, Enfield, Glendorado-Santiago,
Goodhue, Lake City, Montrose, New Germany, Princeton,
Red Wing, Taylors Falls, Wabasha, Watertown, Waverly, and
White Rock.)
• With few exceptions, all other cities formerly served by
the 612 area code will have the new 320 area code.
The 320 area code will be added on March 17, 1996. That will
be the beginning of a six-month transition period during which callers
will be able to use either the 320 or 612 area code to complete a call.
After September 15. 1996, use of the 320 area code will become
mandatory.
Other area codes in the state — 218 serving roughly the
northern third of Minnesota and 507 serving the southern quarter of
the state — are not faced with the same problem. The need to add a
new area code exists solely in the 612 area.
Minnesota Area Code Awareness News Release (�
Page 2
By the end of 1996, there will be 23 of these new area codes in
use in North America - 15 will be added by the end of 1995, with
another eight scheduled for 1996. Furthermore, private telephone
equipment owners must upgrade or reprogram their equipment in
order to complete calls to the new toll-free "888" area codes that will
be in operation by March 1, 1996.
To create awareness of the national and international
implications of the change, the telecommunications industry —
including local exchange carriers, long distance companies,
equipment manufacturing companies, state utility commissions, the
United States Telephone Association and the Federal Communications
Commission (FCC) — has launched a campaign, "Don't Get Stuck in the
Middle," targeting businesses and organizations using PBX systems,
key systems, or other types of programmable telephone equipment.
An important element of the campaign is to encourage telephone
equipment owners to call a test number to determine whether their
equipment can complete calls to the new area codes.
Wednesday, November 1, is designated National Area Code Day
— Take The Test. Owners of business telephone systems and other
consumers are encouraged to call the test number: 1-281-792-9999.
If the call does not go through, callers should then call the Area Code
Hotline at 1-800-218-6436, to report the difficulty. Telephone
customers in Minnesota who experience difficulties may also call the
U S WEST Area Code service center at 1-800-441-5516.
New area codes came about when the 144 original area code
numbers — those with a "0" or " 1 " as the middle digit — were
depleted. Industry experts point to tremendous growth in the use of
fax machines, pagers, cellular phones, modems and other
telecommunications services as the reason behind the increased
demand for additional telephone numbers
-more-
McCombs Frank Roos Associates, Inc.
15050 23rd Avenue North, Plymouth, Minnesota 55447-4739
November 15, 1995
Mayor Teirney and City Council
c/o Ms. Laurie Ahrens, Clerk
City of Plymouth
3400 Plymouth Boulevard
Plymouth, Minnesota 55447
Dear Mayor Teirney and City Council:
Telephone
�'� Engineers
612/476-6010 , a Planners
612/476-8532 FAX Surveyors
We are pleased to announce that Daniel Parks, P.E. has returned to McCombs Frank Roos
Associates, Inc. (MFRA) to manage the Water Resources Department. Dan has spent the
last five years working extensively for communities and watershed management
organizations addressing natural and water resources issues. His experience and expertise
will compliment and enhance our existing staff.
Minnesota Statutes now require that all municipalities prepare local water management
plans which conform to district watershed plans. The local plan can address issues such
as, watershed cost sharing on municipal stormwater projects. Dan's experience with the
Minnehaha Creek Watershed District (MCWD) provides an in-depth knowledge of the
District's programs and "Water Resources Plan". This expertise could assist your city in
addressing local water resource needs and water management plan preparation.
MFRA has been providing professional planning, engineering, and surveying services to
communities in the MCWD for 30 years. When convenient, we would like ap
opportunity to meet with you or your staff to discuss your water resource needs.
If you have questions or need any additional information, please feel free to contact us.
Very truly yours,
McCombs Frank Roos Associates, Inc.
r
Jeffrey., J. Roos, P.E.
An Equal Opportunity Employer
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,
PRUDENTIAL from Al
Prudential plans to lay off 525
at regional center in Plymouth
Also in the past few weeks,
IBM Corp. and Burlington North-
ern Santa Fe Railroad announced
sizable work -force reductions.
And AT&T Corp. on Wednesday
said it is offering severance pack-
ages to almost 78,000 managers,
including about 500 in the Twin
Cities.
There also are concerns that
First Bank System will cut 1,000
or more jobs if it is successful in
its bid to buy First Interstate Ban-
corp of California.
Prudential, the nation's largest
insurance company, also said it
will close five of its regional mar-
keting offices as part of an over-
haul of its insurance businesses.
The move comes one day after
the company introduced a
sweeping reorganization plan to
improve the focus of its business-
es and cut expenses by $800 mil-
lion.
The company said the five re-
gional marketing offices that will
be closed are in Fort Washington,
Pa.; Jacksonville, Fla.; Boston;
• STAR TRIBUNE • PAGE
Oak Brook, Ill., and Wooc
Hills, Calif.
Warner said' Prudential
several marketing employe
the Twin Cities, but their futi
unclear.
M E M O R A N D U M
DATE:
November 20, 1995
TO:
Dwight Johnson, City Councilmembers and
Councilmembers-Elect
FROM:
Helen LaFave, Communications Coordinator
RE:
DEVELOPMENT OF CITY GUIDE FOR
RESIDENTS
CC:
Kathy Lueckert
ti ��
I am preparing to reprint a guide to city programs, policies and
regulations for citizens. The goal of the booklet is to highlight city
information that is important for all citizens to know. Because of your
contact with citizens, I would like you to review the attached list of topics
that I plan to cover in the booklet. It would be helpful if you could let me
know if there are other items that you regularly hear questions about that I
should address in the booklet. I need any suggestions you may have by
Wednesday, November 29. 1 am circulating this same list to department
and division heads as well as other key staff.
The booklet will be mailed to all Plymouth residents (I am hoping for an
early February mailing date) and distributed to new residents throughout
the year via our new resident packets. Keep in mind that while we will not
be able to detail all regulations, programs, etc., the booklet can alert
citizens to their existence, give an overview and direct them to the
appropriate department in order to obtain complete information.
We budget incrementally for this project (i.e., part of the cost one year,
part the next). We have sufficient funds in the community handbook
reserve fund to cover printing and mailing costs. I will be advertising for
bids on the project later this month and hope to have Council award
printing in late December or early January.
If you have changes for changes to the list, call me at 509-5090 by
Wednesday, November 29.
Thanks for your help.
Community Guide - Organization of Material ka
Welcome to the Community Guide.
0 Purpose is a to give an overview of city services/programs and where to call for
more information.
0 Looking for info on a specific topic, check the index
Plymouth History
0 Brief description of Plymouth's beginning as a community.
Plymouth Today
(Facts and figures about Plymouth)
0 Current population
0 Size
0 City services (list of services such as police/fire protection, street maintenance,
development oversight, etc.) provided by your property tax dollars
Distribution of property tax dollars
City Government
0 Description of Council/Manager form of government
0 Role of City Charter
0 List of Current Councilmembers with voice mail/phone numbers
0 Ward Map
0 Council meetings (when typically held/shown on cable television)
0 Plymouth Forum
0 Role of citizen advisory commissions
0 List of key city staff
0 List of departmental phone numbers
0 24 Hour Message Center
Voting
0 Registration
0 Eligibility
0 Absentee Voting
The Basics
0 Sprinkling/Outdoor Water Use Restrictions
0 Snowplowing
0 Building Permits
0 Fence Permits Z
0 Sump Pumps
0 Malfunctioning street lights
0 Phosphorus -free ordinance
0 Noise ordinance
0 Homestead Filing
Keeping Informed
0 Plymouth Newsletter
0 Recreation Program Catalogue
0 Cable Channel 37
0 Cable Channel 12 (News and Northwest Cities program)
Public Safety
0 Emergencies
0 Neighborhood Watch Program
0 Operation Identification
0 Police Explorers
0 Police Reserves
0 McGruff Houses
0 Interested in becoming a firefighter?
0 Fire prevention workshops available to community organizations and
neighborhood watch groups
0 Tours of Police Department/Fire Stations
0 Parking Restrictions - Year-round and during snowplowing
0 Animal Control (Regulations/Lost pets)
0 Curfew hours
0 Burglar/Fire alarm permits
0 Snowmobiling regulations
0 Crime Tip Line
0 National Night Out
Opportunities
0 City Volunteer program
0 Call for list of clubs and organizations
0 Care for a park/traiI
Licenses
0 Drivers Licenses (location of Registars, County Service Centers, Emissions
Testing)
0 Licenses issued by city
Library
0 Plymouth Library Location/Hours
Parks and Recreation
0 Plymouth parks/trails
0 Park regulations
0 Recreation/Recreation Booklet
0 List park locations by type
Recycling
0 Weekly curbside service
0 Recycling Drop -Off Center
0 Yard Waste Disposal
0 Recycling Information Line
Public Transit
0 Plymouth Metrolink
0 Plymouth Dial -A -Ride
Utilities
0 List of who to call for electric service, gas service, telephone service, water and
sewer, cable television
0 Note to call city for list of refuse haulers licensed in Plymouth
0 Discount water and sewer rates available to seniors
NORTHWEST
COMMUNITY
TELEVISION
6900 Winnetka Avenue North
Brooklyn Park, MN 55428
(612) 533-89.96;
For Immediate Release 11/20/95 For More Information Contact
Tom Hayes at 533-8196
NOVEMBER T.V. SPECIAL FEATURES
VOLUNTEERS FROM LEAP, CROSS, NEAR, AND PRISM
We all know that social service agencies such as CEAP, CROSS,
NEAR, and PRISM provide valuable services to the northwest
suburban area. But do you know what services are provided and who
helps provide those services? CEAP, CROSS, NEAR, and PRISM
volunteers do!
This month's Cable 12 Special, "Helping Hands", focuses on the
services provided by CEAP, CROSS, NEAR, and PRISM as seen through
the eyes of their volunteers. "Helping Hands" features a
volunteer from each of the four agencies, profiling each -
volunteer at "work".
"Helping Hands" is playing on Channel 12 Sunday, November 26,
at 7p.m., and replays Monday, November 27, at 9a.m. and ilp.m.,
Tuesday, November 28, at 7p.m., and Wednesday, November 29, at
9a.m. and lip.m.
- 30 -
Cable 12 is a service of Northwest Community Television, an
independent, nonprofit organization which manages public access
and local origination operations in the northwest suburbs of
Minneapolis. The service area includes 57,000 homes in Brooklyn
Center, Brooklyn Park, Corcoran, Crystal, Golden Valley, Hanover,
Maple Grove, Medicine Lake, New Hope, Osseo, Plymouth,
Robbinsdale, and Rogers.
Brooklyn Center • Brooklyn Park ^ Corcoran • Crystal • Golden Valley • Hanover • Maple Grove • Medicine Lake • New Hope • Osseo • Plymouth • Robbinsdale • Rogers
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Darren A. DeMatthew
Civic Center/Ice Arena
12/30/94
1/3/95
1/13/95
1/4/95
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Gerdes
Darren A. DeMatthew
Pub. Safety Concerns
12/30/94
1/3/95
1/13/95
1/12/95
3
Moore
Darren A. DeMatthew
Transportation
12/30/94
1/3/95
1/13/95
1/4/95
4
Blank
Gordon Hanson
Community garden plots
1/3/95
1/3/95
1/17/95
1/4/95
5
Moore
Dr. Robert May
19th Avenue - Traffic speed
1/9/95
1/9/95
1/23/95
1/23/95
6
Blank
Vivian Starr
Bike path - Lk Camelot/ NW Blvd
1/9/95
1/9/95
1/23/95
1/17/95
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Hurlburt
Mark Denis/DennisHolmquist
Wetlands Ord/11115 O. Rockfd Road
1/17/95
1/19/95
2/1/95
2/1/95
8
Moore
Randy Meyer
Fleet vehicles - petro product./service
1/19/95
1/19/95
2/1/95
2/1/95
8-B
Moore
Randy Meyer
Additional issues - fleet vehicles
2/27/95
2/27/95
3/20/95 (r)
3/23/95
10
Hurlburt
Nancy Cree
Wetlands Ord/NW Plymouth
2/6/95
2/8/95
2/15/95
2/9/95
11
Johnson
Larry Dowell, TwinWest Chamber
LMC referendum levies
2/9/95
2/9/95
2/16/95
2/13/95
12
City Attorney
Brian Knox
Access to Gleason Lake
2/21/95 (PF)
2/21/95
3/7/95
3/7/95
13
Moore
Steven Chase
Alley Abandonment
3/1/95
3/1/95
3/15/95
3/17/95
14
Moore
Peter Flint/Janice Symchych
Peony Lane Alignment
3/22/95
3/23/95
3/29/95
3/29/95
15
Moore
William Rademacher
Peony Lane Alignment
3/23/95
3/23/95
3/30/95
3/29/95
16
Moore
R. D. Taylor
Water & Sewer Assessments
4/18/95
4/18/95
4/25/95
5/12/95
17
Hahn
R. D. Taylor
Asmt Deferral/Green Acres
4/18/95
4/18/95
4/25/95
4/25/95
18
Blank
Steve Meyer
Tree Removal Assessment
4/18/95
4/18/95
4/25/95
4/18/95
19
Lueckert
Stan Stevens
Train Noise/Whistle
4/19/95
4/19/95
4/26/95
4/21/95
20
Blank
Kerry Anderson
Recreation Center/Community Pool
4/26/95
4/26/95
5/2/95
5/4/95
21
Moore
Bradley Kalin
Schmidt Lake Road
5/5/95
5/8/95
5/15/95
5/23/95
22
Moore
Julie Hoyme
Watering restrictions
5/8/95
5/15/95
5/25/95
5/23/95
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Blank
George Wilson
Fertilizer - Parkers Lake
5/15/95
5/15/95
5/22/95
5/17/95
24
Hurlburt
H.B. Hayden
Letter of Credit requirements
5/15/95
5/15/95
5/25/95
5/23/95
25
Hahn
Mary Jo Asmus
Property Market Value Review
5/18/95
5/19/95
5/30/95
5/23/95
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Blank
Steven Bernhardt
Ice Arena
5/24/95
5/25/95
6/2/95
5/26/95
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Moore
Harry Stark
1994 Street Reconstruction Program
5/29/95
6/2/95
6/12/95
6/6/95
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Moore
Carl Hedberg
Opening of Xenium Lane
5/5/95
6/6/95
6/16/95
7/3/95
29
Hahn
Robert Peterson
Sump pump ordinance
5/29/95
6/6/95
6/16/95
6/8/95
30
Gerdes
Andrew Mackenzie
Speeding violation
7/6/95
7/15/95
7/24/95
7/17/95
31
Blank
George Wilson
Sidewalk/Trail - Carlson Parkway
8/2/95
8/3/95
8/14/95
8/15/95
32
Moore
Kerry Anderson
Highway 55 access
8/8/95
8/8/95
8/18/85
9/6/95
33
Moore
Robert S. Peterson
Sealcoating of Streets in Kingswood
8/14/95
8/14/95
8/24/95
9/6/95
34
Moore
Wayne Fadden
Traffic Signal at Co. Rd 6 & Hwy 101
8/18/95
8/21/95
9/1/95
8/21/95
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Moore
Althea Blommel
French Drain on 44th Avenue N.
1-8/30/95
8/30/95
9/13/95
9/27/95
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Patrick McDonald
Amberwoods Park
9/6/95
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37
Hurlburt
Daryl Tesch
South Shore Drive Trailer Park
9/6/95
9/6/95
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38
Moore
Ellen Feuling
Drainage Problems on Weston La.
8/23/95
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Joseph Michaels
Open Space parcel east of Zachary La.
9/20/95
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40
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Vincent J. Bonacci
Concerns about soccer Referee
9/21/95
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Cathy Newsom
Concerns about soccer Referee
9/19/95
9/26/95
10/10/95
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42
Hurlburt
David G. Roston
"No Parking" Signs in Trenton Ponds
9/26/95
9/29/95
10/13/95
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43
Gerdes
George W. Sheets
Parking Ticket at Rockford Road Plaza
10/3/95
10/4/95
10/18/95
1015195
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Moore
Althea Blommel
French Drain on 44th Avenue N.
10/23/95
10/24/95
11/7/95
11/16/95
45
Moore
Greg Engel
Speeding traffic at Peony Lane & 19th
10/30/95
10/31/95
11/13/95
11/16/95
46
Gerdes
Leo Benz
Traffic Citation
11/3/95
11/3/95
11/17/95
11/13/95_
47
Hurlburt
Carl Robinson
Development Concerns at N.W. Blvd. &
37th
11/3/95
11/3/95
11/17/95
11/8/95
48
Gerdes
Marsha Upson
Crime Problems in Sunny Acres
11/6/95
11/8/95
11/22/95
11/16/95
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lHurlburt
I George Wilson
I Plymouth Towne Square Concerns
11/13/95
11/14/95
11/28/95
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City of Medicine Lake
10609 South Share Drive • Medicine Lake, Minneso
November 17, 1995
Fred Moore
Director of Public Works
City of Plymouth
3400 Plymouth Blvd.
Plymouth, MN 55447
Subject: South Shore Drive
Dear Fred,
1 • (612) 542-9701
At our November 6th Council Meeting we reviewed your request to
establish an all way stop at the intersection of Peninsula Road,
South Shore Drive and 15th Avenue. It was the consensus of the
Council to take a wait and see approach.
A concern were the ice patches that would develop on South Shore
Drive. We do have that problem at the Peninsula Road stop sign and
did have that problem at the railroad stop signs a few years ago.
The residents and Councilmembers at the Council meeting felt that
the humps were doing there job in reducing the speed. Some of the
residents indicated that they only exit the City going south to 55
instead of east to 169 since the speed humps have been installed.
We would suggest that these speed humps have taken care of the
concerns of the your citizens and have discouraged any cut threw
traffic that had been using this roadway.
I would be happy to review the option of stop signs in the future if
you still feel there is a need.
Yours truly,
Tom Schrader
Mayor
cc: Dwight D. Johnson, City Manager
Medicine Lake City Council
PLYMOUTH CITY COUNCIL
SPECIAL COUNCIL MEETING
MONDAY, NOVEMBER 27, 1995
7:00 P.M.
City Council Chambers
I. Open Space Negotiations (15 minutes)
II. Discuss Recreational Sports Facilities Report
III. Discuss Draft Housing Goals Agreement (1 hour)
PLYMOUTH CITY COUNCIL
TRUTH IN TAXATION HEARING
WEDNESDAY, NOVEMBER 29, 1995
7:00 P.M.
City Council Chambers
Agenda Number:
TO: Dwight Johnson, City Manager
FROM: Anne H� lburt, Community Development Director
SUBJECT: Draft Housing Goals Agreement, Metropolitan Livable Communities Act
DATE: November 21, 1995 for Special City Council Meeting
of November 27, 1995
1. PROPOSED ACTION:
No Council action is requested at the November 27 Special Meeting.
On November 27, the Council will review and discuss a draft of the housing goals agreement
required for communities participating in the Metropolitan Livable Communities Act (MLCA).
Based on discussion at the special meeting, the agreement will be revised for the December 5
City Council meeting, for further discussion and approval for submission to the Metropolitan
Council by the December 8, 1995 deadline.
The Metropolitan Council must hold a public hearing and adopt the goals by January 15, 1996.
After the goals have been established, the next step will be for the City to prepare an action
plan to meeting the goals by June 30, 1996.
2. DISCUSSION:
Prior to passage of the Livable Communities Act, the City of Plymouth began working on a
housing agreement with the Metropolitan Council as part of the Elm Creek Cluster Planning
process. That draft agreement included goals in the same areas as required for the MLCA:
affordability, life -cycle housing and density. The draft agreement for the MLCA is based on
the Elm Creek draft.
The Metropolitan Council issued a simplified, one-page model agreement for the MLCA that it
recommended communities adopt (see copy attached). Many cities have adopted this type of
an agreement with a few minor changes or additions. We do not recommend that Plymouth
use this agreement because it does not contain sufficient explanation of the city index, goals or
current housing conditions. Therefore, we have significantly expanded the agreement to
incorporate much of the language that had been negotiated in the draft Elm Creek agreement.
Maple Grove's housing agreement took this same approach.
The draft agreement is attached. The numerical goals are explained in the text and
summarized on the chart, Exhibit A, attached to the agreement. I will explain and answer
questions about the draft at the November 27 special Council meeting.
Also attached is some background data that is referenced in the report. Most of this
information was compiled using the City's geographic -information system (GIS.)
ATTACHMENTS:
1. Metropolitan Council Model Housing Goals Agreement
2. Draft Housing Goals Agreement
3. Background Data
a) Value of Homesteaded Units by Year Built
b) New Housing Units by Type, 1990-1995
c) New Rental Housing, 1990-1995
d) Vacant/ Ag Land in the MUSA, Availability for Development
e) Land Available for Development in the MUSA by Land Use Guide Plan Classification
f) Estimated 1995 Residential Density
g) Sample of Recent Development Projects, Residential Density
cd\plan\staffrep\cc\ 1 1-271ca.doc
DRAFT
HOUSING GOALS AGREEMENT
METROPOLITAN LIVABLE COMMUNITIES ACT
PRINCIPLES
The city of Plymouth supports:
1. A balanced housing supply, with housing available for people at all income levels.
2. The accommodation of all racial and ethnic groups in the purchase, sale, rental and
location of housing within the community.
3. A variety of housing types for people in all stages of the life -cycle.
4. A community of well-maintained housing and neighborhoods, including ownership
and rental housing.
5. Housing development that respects the natural environment of the community while
striving to accommodate the need for a variety of housing types and costs.
6. The availability of a full range of services and facilities for its residents, and the
improvement of access to and linkage between housing and employment.
GOALS
To carry out the above housing principles, the City of Plymouth agrees to use benchmark
indicators for communities of similar location and stage of development as affordable and
life -cycle housing goals for the period 1996 to 2010, and to make its best efforts, given
market conditions and resource availability, to remain within or make progress toward
these benchmarks.
To achieve the above goals, the City of Plymouth elects to participate in the Metropolitan
Livable Communities Act Local Housing Incentives Program, and will prepare and submit
a plan to the Metropolitan Council by June 30, 1996, indicating the actions it will take to
carry out the above goals.
CERTIFICATION
Mayor Date
CITY INDEX BENCHMARK
GOAL
Affordability
Ownership
42%
69-77%
Rental
15%
3541%
Life -Cycle
Type (Non -single family
detached)
39%
34-35%
Owner/renter Mix
71/29%
(72-75) /
(25-28)%
Density
Single -Family Detached
1.8/acre
1.9-2.4/acre
Multifamily
8/acre
10-11/acre
To achieve the above goals, the City of Plymouth elects to participate in the Metropolitan
Livable Communities Act Local Housing Incentives Program, and will prepare and submit
a plan to the Metropolitan Council by June 30, 1996, indicating the actions it will take to
carry out the above goals.
CERTIFICATION
Mayor Date
City of Plymouth
Draft Housing Goals Agreement
11/21/95 Page 1
DRAFT
CITY OF PLYMOUTH
HOUSING GOALS AGREEMENT
METROPOLITAN LIVABLE COMMUNITIES ACT
PRINCIPLES
The City of Plymouth supports:
1. A balanced housing supply, with housing available for people at all income levels.
ORPFZ
2. The accommodation of all racial and ethnic groups in the purchase, sale, rental and location of housing
within the community.
3. A variety of housing types for people in all stages of the life -cycle.
4. A community of well-maintained housing and neighborhoods, including ownership and rental housing.
5. Housing development that respects the natural environment of the community while striving to
accommodate the need for a variety of housing types and costs.
6. The availability of a full range of services and facilities for its residents, and the improvement of access to
and linkage between housing, transportation and employment.
GOALS
In 1996, the City of Plymouth will revise the Housing Element of its Comprehensive Plan. As part of the
planning process, the City will assess the housing needs of the community and identify specific actions needed
to achieve the goals identified by the Plan. The goals set forth in this agreement, as shown on Exhibit A,
attached, will be refined and adjusted as necessary before the City submits the Housing Element to the
Metropolitan Council for its review pursuant to the Metropolitan Land Planning Act and to fulfill the
requirements for an action plan pursuant to the Livable Communities Act. In further developing its goals to
carry out the above housing principles, the City of Plymouth agrees to continue to consider the benchmark
indicators for communities of similar location and stage of development and to make its best efforts, given
market conditions and resource availability, to remain within or make progress toward these benchmarks.
A: Affordability:
1. Rental Units: Plymouth will work toward expanding the share of its rental housing affordable
to low and moderate income families. Plymouth will work to make 35 percent of its new rental
housing affordable to families earning no more than 50 percent of the regional median income. In
addition, a significant portion of these new rental units should be affordable to very low income
households.
The limited availability of land for development will be a significant barrier to constructing new,
affordable rental housing in Plymouth. Another significant barrier is the economic and tax climate
that makes new construction of any new rental housing very difficult. Since 1990, it is estimated that
only 8 percent of new housing built in Plymouth is rented, even though vacancy rates are very low.
City of Plymouth
Draft Housing Goals Agreement
11/21/95 Page 2
1 10
Of the new units built since 1990, about 26 percent are affordable at 50 percent of median income.
All of these units are in Plymouth Towne Square, a senior housing project owned and subsidized by
the Plymouth Housing and Redevelopment Authority (HRA.) An additional 31 percent of the new
units are affordable between 50 and 60 percent of median income. These units include units at
Plymouth Towne Square and a 64 -unit tax -credit project for families, Lakeview Commons. A total of
57 percent of new rental units built since 1990 in Plymouth are affordable at the 60 percent of median
income level or less.
In addition to new construction, the expansion of affordable rental housing may be accomplished
through additional section 8 existing housing certificates or vouchers, or other creative efforts by the
City to make existing rental housing in Plymouth more affordable. Recently, the City conditioned its
approval of the refinancing of a City revenue bond issue, in exchange for a guarantee of affordable
rent levels within the complex. In this project, 21 units are guaranteed to be affordable to renters
below 60 percent of median income during the 40 -year life of the bond sale. This an example of local
efforts that can increase the number of affordable units without building new ones. Recognizing that
rent levels are high, the HRA has also pursued and gained HUD approval for "exception rents" for
its section 8 program, which has made more Plymouth housing accessible for program participants.
The City and its HRA will continue to explore ways to expand affordable housing through use of its
CDBG funds and other programs.
2. Owner Occupied:
There are severe limitations for construction of new affordable ownership housing construction in
Plymouth. Recent experience of the City has been that only 8 percent of new housing built in the
1990's is considered affordable at 1995 values. The City's goal is to increase the construction of
new affordable units from 8 percent to 21 percent, which is equivalent to the percent of the city's
owner -occupied housing that was built in the 1980s which is affordable today.
In 1994 according to Metropolitan Council data, 42 percent of Plymouth's homesteaded housing was
valued at $115,000 or less. This is in contrast to the benchmarks of 69 percent for all developing
area suburbs and 77 percent for all communities in the Northwest Minneapolis planning sector. In
1995, based on the City's own data, 33 percent of the City's housing was valued less than $118,000,
the Metropolitan Council's housing affordability benchmark value for 1995.
Plymouth has a smaller proportion of affordable owner occupied housing than other Northwest
planning sector communities for a number of reasons. According to Metropolitan Council data, only
26 percent of Plymouth's owner occupied housing was built before 1970, compared to 46 percent in
the sector as a whole and 36 percent for developing communities. Of the Plymouth housing built
before 1970, 58 percent is affordable in 1995. Of the housing built since 1970, however, only 25
percent is affordable. Affordability is strongly related to the age of the housing stock.
Recent changes in the housing market have also influenced the housing affordability statistics for
Plymouth. Of the units built in the 1970's, 40 percent are affordable (valued less than $118,000) in
1995. Of the units built in the 1980's, 21 percent are affordable in 1995. Of the units built in the
1990's, only 8 percent are affordable. There were no significant changes in the city's planning and
zoning practices since the 1970's that would account for this reduction in affordability. (New
environmental regulations adopted in 1995 have not come fully into effect.) Density and lot size
requirements are similar, and the City has increased the use of Planned Unit Development to provide
development flexibility. There has, however, been an escalation of land prices and a surge in demand
City of Plymouth
Draft Housing Goals Agreement
11/21/95 Page 3
for larger, more expensive ($148,000 and above) single family homes. The strong market for
existing housing in the City has meant that the values of existing units have been steadily increasing.
For example, increases in residential values from 1994 to 1995 were in the 4 to 9 percent range, with
an average increase of about 5 percent. In Minneapolis, the average appreciation in residential values
was near zero.
Plymouth will do what it can to influence housing costs, recognizing that since 1991 only
approximately 40 percent of new construction ownership housing in the region has sold for $115,000
or less, a level affordable to households at approximately 80 percent of regional median income.
Because land costs in Plymouth make single family detached homes at this cost almost impossible to
develop, most of the new affordable ownership units will be attached housing, i.e., townhomes and
condominiums built at higher density to reduce per unit costs.
The limited availability of land for development will be a significant barrier to constructing new,
affordable housing in Plymouth. There is currently about 1,100 acres of vacant land planned for
residential uses within the City's urban service area. Of that, about 875 acres (80 percent) has
already been subdivided or has been approved for development. Only about 225 acres remain, of
which about 60 acres (one fourth) is wetland or floodplain. And, the remaining property is in small
tracts (average less than 2.5 acres of upland in size) that are not attractive to larger -scale developers.
In addition to new construction, an important element of the City 's affordable ownership housing
efforts will be to encourage retention of its existing supply of affordable housing, as this housing will
be impossible to replace. The City, through its HRA, has also implemented programs to make
existing housing more affordable, such as providing subsidies to first time buyers to bring purchase
prices to within an affordable range. As of September 1, 1995, Plymouth had assisted 167 low -and -
moderate income households with its home rehabilitation loan program and 55 households with its
First Time Homebuyer program.
B: Life -Cycle:
1. Diversity: Plymouth currently has substantial diversification in its housing stock. It
recognizes that the new construction housing market and increasing life -cycle housing demands may
mean continued development of multifamily housing, especially townhomes and condominiums. For
the period 1996 through 2010, the City will make every effort to maintain the non -single family
detached share of its housing as at least 34 percent of its housing stock, the level of diversification
found in developing suburbs and suburbs in Plymouth's geographic area. If necessary to
accommodate this diversification, Plymouth may make land use and/or zoning changes to ensure that
there is enough land for continued multifamily housing development.
As noted above, most of the vacant land within Plymouth's urban service area has already been
subdivided or received development approvals. A review of approved lots and developments
indicates that about 43 percent of the units currently approved, but not yet built, are multiple family
units. And, of the vacant land that does not yet have development approvals, over half of the
property is planned to allow dwellings other than single family detached units.
2. Owner/Renter Mix: The City cannot directly control whether housing is rented or sold to an
owner -occupant. The City will work to maintain an owner/renter mix of 75/25 percent, through its
land use controls, approvals process and participation in housing development programs.
City of Plymouth
Draft Housing Goals Agreement
11/21/95 Page 4
Significant rental housing does exist in Plymouth, most of it built at a time when tax laws were more
favorable to construction of rental properties. Very few rental units have been built in Plymouth
since 1990 (283 units of a total of 3,666 units, or about 8 percent.) The City has recently approved
development projects for rental housing, including a market -rate rental project (200+ units) which
has not been built due to factors outside of the City's control.
Preserving the quality of the existing rental housing stock in Plymouth is a top priority. The City's
housing maintenance code and the active Plymouth Apartment Managers Association are evidence of
the City's commitment.
C: Density:
Plymouth will establish density goals for new development that attempt to equal or exceed the current
gross density of development: approximately 2 units per acre of upland for single family
development and 10 units per acre of upland for multiple family development, These goals recognize
the amount of wetlands, shorelands and wetland buffers that affect the remaining property to be
developed in Plymouth. Detailed policies and regulations needed to achieve the goals will be
developed as part of the Housing Element and the Zoning Ordinance revisions that are planned for
early 1996.
The Metropolitan Council has estimated the density of single family detached units in Plymouth at 1.8
units per acre, including road rights-of-way but excluding wetlands. Comparable data from the City's
own GIS is not available, because we exclude rights-of-way from the residential land use category.
However, by estimating the amount of road rights-of-way within residential areas, we have estimated
the density to be about 1.99 units per acre, based on an estimate of the amount of road rights-of-way
within residential areas. Because of the large number of wetlands in the City, the gross density
(including wetlands) is less; about 1.86 units per acre. Comparable data is not available from other
cities included in calculating the benchmark, but it appears that based on City data Plymouth is within
the benchmark. Similarly, the Metropolitan Council estimates the multiple family density in Plymouth
at 8 units per acres. The City GIS data shows the density to be about 10.75 units per acre. Again,
this is within the benchmark range of 10 to 11 units per acre.
Plymouth recognizes that it may be desirable to increase densities in some areas to reduce land cost
for new construction, to use public services more efficiently, to increase the feasibility of transit, and
to generally promote compact and efficient development. Plymouth also recognizes that increasing
protection of natural resources, particularly wetlands, may require limiting the intensity of
development in sensitive areas. Efficient use of the land must be balanced with environmental
protection.
Increased environmental protection is one factor that has led to a decrease in density of new
residential development in Plymouth in recent years. Another factor is that as Plymouth's land has
been consumed for development, sites with more wetlands or difficult soil conditions that were
initially skipped over are now being developed. Data from a sample of recent single family, multiple
family, and mixed residential developments approved in the last several years shows that the net
densities of these developments has been less than the city-wide averages: 1.84 units per net single
family acre and 6.79 units per net multiple family acre.
Of the available, vacant land within the urban service area, fully one-third of the area is wetland or
floodplain. It is also divided into small tracts, making efficient subdivision more difficult. The City
City of Plymouth
Draft Housing Goals Agreement
11/21/95 Page 5
adopted a wetland buffer ordinance in early 1995, and all new developments will be required to
comply with these new restrictions. Increasing densities, or even maintaining the current city-wide
average will be very difficult as these remaining sites are developed.
To achieve the goals set forth in Exhibit A, attached, the City of Plymouth will make its best efforts to
increase the availability of affordable and life -cycles housing and maintain the level of diversity of housing
types already present in the community. However, the City cannot control the housing market in Plymouth
and can only produce small amounts of housing through its HRA. It can, however, influence housing
production and can proactively work to achieve its goals through its use of official controls, public service
requirements, local approvals process and the use of available housing assistance programs.
The City of Plymouth recognizes that the new housing contemplated in this agreement will occur on land yet
to be developed. The supply of vacant land in Plymouth is limited by the MUSA boundary. There has been
no decision by either the City of Plymouth or the Metropolitan Council on the extent, timing or location of
any MUSA expansion, nor does this agreement imply that such an expansion will take place.
The City of Plymouth elects to participate in the Metropolitan Livable Communities Act Local Housing
Incentives Program, and will prepare and submit a plan to the Metropolitan Council by June 30, 1996,
indicating the actions it will take to carry out the above goals.
CERTIFICATION
Mayor Date
City of Plymouth
Draft Housing Goals Agreement
11/21/95 Page 6
Affordability
Ownership (80% of median)
Rental (50% of median)
Life -Cycle
Type (Non -single family
detached)
Owner/ renter mix
Density
Single -Family Detached
Multifamily
cd\p1an\memos\5059\hsgagree.doc
Exhibit A
Metropolitan Livable Communities Act
Proposed Benchmarks and Goals
City of Plymouth
METRO
METRO
PLYMOUTH
PLYMOUTH
PLYMOUTH
COUNCIL
COUNCIL
DATA
1990 TO 1995
GOAL FOR NEW
CITY INDEX
BENCHMARK,
ALL
DEVELOPMENT
DEVELOPMENT,
FOR
NORTHWEST
HOUSING
TREND
1996-2010
PLYMOUTH
SUBURBS
(1995)
42% 67-77%
33%
8%
21%
15% 35-41%
*
25.8%
35%
39%
34-35%
*
25%
34%
74/26%
(72-75) /
(25/28) %
*
92/8%
75/25%
1.8/ acre 1.9-2.4/acre
1.99/ acre
1.84**
2/acre
8/acre 10-11/acre
10.75 acre
6.79**
10/acre
* No new comparable data available
** Estimate based on sample of projects
HSGVAL.XLS
Affordability of Homesteaded Units by Year Built
100% T
90%
` 80%
m 70% T
C 60% ❑ $118,000+
4-50%
o lj
40%0-$117,999
■ 0-5117,999
cC°ii 30%
a 20%
10%
0%
Pre- 1950- 1960- 1970- 1980- 1990-
1950 1959 1969 1979 1989 1995
Year Built
Homestead Units by Value and Year Built
3500
3000
+0� 2500 I
C
2000
1500
1000
z
500
OEM
Ln
rn
rn
LO
rn
rn
cp
rn
rn
n
m
a
-
Ln
o
M
oo
m
in
rn
rn
ca
o
Year
r
co
6
m
m
Page 1
-V $148,000 +
$118,000-147,999
$69,501-117,999
0-$69,500
Value
E
HSGVAL.XLS
City of Plymouth
1995 Assessed Value, Homesteaded Property by Year Built
Total 560 4% 4491 29% 3428 22% 7023 45% 15502 100%
Summary
Percentages: All Homestead Units in City
"Affordable" Units
Other Units All Homestead Units
Year Built
0-$117,999
Pct.
$69,501-
Pct.
$118,000 -
Pct.
Pre -1950
506
3%
96
Year Built
0-$69,500
Pct.
117,999
Pct.
147,999
Pct.
$148,000+
Pct.
Total
Pct.
Pre -1950
147
1 %
359
2%
50
0%
46
0%
602
4%
1950-1959
28
0%
689
4%
141
1%
59
0%
917
6%
1960-1969
6
0%
813
5%
678
4%
502
3%
1999
13%
1970-1979
292
2%
1374
9%
1039
7%
1488
10%
4193
27%
1980-1989
75
0%
1075
7%
1236
8%
3022
19%
5408
35%
1990-1995
12
0%
181
1%
284
2%
1906
12%
2383
15%
Total 560 4% 4491 29% 3428 22% 7023 45% 15502 100%
Summary
Percentages: All Homestead Units in City
"Affordable" Units
Other Units All Homestead Units
Year Built
0-$117,999
Pct.
$118,000+
Pct.
Total
Pct.
Pre -1950
506
3%
96
1 %
602
4%
1950-1959
717
5%
200
1%
917
6%
1960-1969
819
5%
1180
8%
1999
13%
1970-1979
1666
11%
2527
16%
4193
27%
1980-1989
1150
7%
4258
27%
5408
35%
1990-1995
193
1%
2190
14%
2383
15%
Total
5051
33%
10451
67%
15502
100%
Percentages: All Homestead Units built by Decade
'Affordable" Units
Other Units
All Homestead Units
Year Built
0-$117,999 Pct.
$118,000+
Pct.
Total
Pct.
Pre -1950
506
84%
96
16%
602
100%
1950-1959
717
78%
200
22%
917
100%
1960-1969
819
41%
1180
59%
1999
100%
1970-1979
1666
40%
2527
60%
4193
100%
1980-1989
1150
21%
4258
79%
5408
100%
1990-1995
193
8%
2190
92%
2383
100%
Total
5051
33%
10451
67%
15502
100%
Page 1
hsg type
City of Plymouth
New Housing Units by Type, 1990-1995
Total 2752 914 3666
75.1% 24.9% 100.0%
New Housing Units by Type, 1990-1995
Page 1
Single
Multiple
Year
Family
Family
Total
1990
386
220
606
1991
439
58
497
1992
631
196
827
1993
675
62
737
1994
376
269
645
1995
245
109
354
Total 2752 914 3666
75.1% 24.9% 100.0%
New Housing Units by Type, 1990-1995
Page 1
new rental
City of Plymouth
New Rental Housing, 1990-1995
Project
Affordable
Affordable
at 50% of
at 60% of >60% of
Median
Median Median
Total
Plymouth Towne Square
73
24
97
Lakeview Commons
64
64
Fernbrook Townhomes
72
72
Lancaster Park
50
50
73
88
122
283
25.8%
31.1%
43.1%
100.0%
New Rental Housing, 1990-1995
Affordable at
50% of Median
26%
>60% of Median
43%
Affordable at
60% of Median
31%
Page 1
City of Plymouth
Vacant/ Ag Land in MUSA
Availability for Development
All Vacant/ Ag Land in MUSA
Land not Available for Development
Residential Approved Projects/
Lots of Record
Approved commercial/ Industrial
Projects
Other Unbuildable Land Area
Subtotal
Land Available for Development
All Vacant/Ag Land in MUSA
Wetland
Acres
21%
Floodplain
(not incl.
wetlands)
2%
Upland
Acres
77%
Sheet6
Floodplain
Total Land (not incl. Upland
Area Wetland Acres wetlands) Acres
2119.88 436.13 52.12 1631.63
875.36 183.73 10.03 681.6
128.91
62.18
8.55
18.87
0
2.03
120.36
41.28
1066.45
211.15
12.06
843.24
1053.43
224.98
40.06
788.39
Page 1
Land Available for Development
Wetland
Acres
21%
Floodplain
(not incl.
wetlands)
4%
Upland
Acres
75%
Il
land by LUGP
City of Plymouth Land Use Inventory, 1995
Land Available for Development in MUSA
Total Floodplain
Land Use Guide Plan
Land
(not incl.
Wetland
Upland
Classification
Area
wetlands)
Acres
Acres
%
Commercial
498.37
10.78
60.06
427.53
48.5%
Industrial
312.23
16.22
19.84
276.17
31.3%
Residential
228.51
12.84
47.06
168.61
19.1%
Other
10.13
0.22
0.73
9.18
1.0%
Total 1049.24 40.06 127.69 881.49 100%
73
Residential Land Available in the MUSA
6%
■ Floodplain (not incl.
wetlands)
■ Wetland Acres
O Upland Acres
Page 1
Land Available for Development in the MUSA
500
450
400
3
TTn
350
300
s•
50
Upland Acres
a
250
I ,
■ Wetland Acres
■ Floodplain (not incl. wetlands)
200
150
100
50
0
Commercial Industrial Residential Other
Land Use Guide Plan Designation
73
Residential Land Available in the MUSA
6%
■ Floodplain (not incl.
wetlands)
■ Wetland Acres
O Upland Acres
Page 1
existing density
City of Plymouth Land Use Inventory, 1995
Estimated 1995 Density
Area of City in ROW: 18.2%
Percent of Single Family: 13.0%
Percent of Multfamily: 6.5%
Net Density- land area excludes wetlands, includes ROW
Gross Density-- land area includes wetlands, includes ROW
Page 1
Minus
Equals
Estimated
Estimated
Land Area
Wetland
Upland
Add
Net Land
1/2/1995
Net
Gross
Land Use
(Acres)
Acres
Acres
ROW Est.
Area
Units
Density
Density
Single Family
SFD
6558.59
483.06
6075.53
MHP
5.78
0.00
5.78
6564.37
483.06
6081.31
790.57
6871.88
13,650
1.99
1.86
Multifamily
DUP
14.33
1.52
12.81
TWIN
22.62
0.32
22.30
TH
178.19
1.03
177.16
CONDO
215.87
32.59
183.28
MFR
404.95
40.60
364.35
835.96
76.06
759.90
49.39
809.29
8,700
10.75
9.83
All Residential Uses
7400.33
559.12
6841.21
839.96
768117
22,350
2.91
2.71
Area of City in ROW: 18.2%
Percent of Single Family: 13.0%
Percent of Multfamily: 6.5%
Net Density- land area excludes wetlands, includes ROW
Gross Density-- land area includes wetlands, includes ROW
Page 1
density examples
City of Plymouth
Sample of Recent Development Projects
Residential Density
Westbranch 87
Number of Units
149
106.7
10.57
96.13
Density
1.55
Soo Line East 132
Single
Multiple
116.63
Gross
94.03
1.90
2.36
Rockford Glen 52
Project Name
Family
Family Total Units
Acres
Wetland
Net Upland
Gross* Net**
Savannah
46
515
46
40.89
6.53
34.36
1.12
1.34
Autumn Hills
50
579.65
50
40.30
6.59
33.71
1.24
1.48
Forster Preserve
22
22
10.86
2.7
8.16
2.03
2.70
Heather Run
127
127
82.84
16.42
66.42
1.53
1.91
Soo Line West
118
118
71.78
17
54.78
1.64
2.15
Single Family Only
363
363
246.67
49.24
197.43
1.47
1.84
Harrison Place on Bass Creek
60
60
22.7
9.4
13.30
2.64
4.51
Parkers Lake-- Rottlund Villas
108
108
11.77
0
11.77
9.18
9.18
Lakeview Commons
64
64
4.84
0
4.84
13.22
13.22
Plymouth Towne Square
99
99
5.44
0
5.44
18.20
18.20
French Ridge
70
70
28.70
5
23.70
2.44
2.95
Multi Family Only
401
401
73.45
14.40
59.05
5.46
6.79
Westbranch 87
62
149
106.7
10.57
96.13
1.40
1.55
Soo Line East 132
90
222
116.63
22.6
94.03
1.90
2.36
Rockford Glen 52
92
144
36.20
8.72
27.48
3.98
5.24
Mixed 271
244
515
259.53
41.89
217.64
1.98
2.37
Overall 634
645.00
1279.00
579.65
105.53
474.12
2.21
2.70
*Gross Acreage includes all land area including road rights of way, wetlands, buffers, parks, open space, etc.
** Net Acreage includes all land area except wetlands.
Page 1
Agenda Number:
TO: Dwight Johnson, City Manager
FROM: Eric Blank, Director of Parks and Recreation
SUBJECT: OPEN SPACE UPDATE
DATE: November 20, 1995, for Council Meeting of November 27
Outlined below in Chart I are the details laid out with regards to the acquisition of three of the four
open space sites. The City Attorney and I worked specifically on acquiring these three parcels as our
first priority because of their imminent threat of being developed. You should note that both the
Mission Partners and the Hardenbergh parcels were acquired with the owners making substantial
contributions via tax write offs as part of the sale of the property. The purchase price on the Olsen
property was higher than the appraised value because the City and School District had purchased the
adjoining property to her for $17,500 per acre, and she was being offered more than $20,000 per acre
from developers at the time we began negotiations. The total cost for the first three sites was within
the parameters we had set for the total acquisition of the three parcels. Negotiations went somewhat
easy because there was only one owner involved in each parcel.
CHART I
Open Space
Land Acquisition Update
Bond Revenue Proceeds
Land acquired to date:
$2,200,000
Name
Appraised Value
Purchase Price
Mission Partners
$650,000
$300,000
($25,048/acre)
26 acres
$200,000 net cost with sale to
Park District.
Mrs. Hardenbergh
993,000
$843,350
($43,000/acre)
23 acres
Mrs. Olsen
$387,00
$470,000
26 acres
($11,000/acre plus home
Peony Lane road project paid
value of. $68,000)
$145,000 for home and 3
acres of land.
Est. misc. costs: attorney,
NA
$12,000
appraisals, closing, wetland
delineation, etc.
I TOTAL 11,g5_,350
Estimated fund balance 11/27/95 $674,650
° able from the prods of the bonds atethe sites
t sc conclusion
remaining money avail still a number of wood
If there is any acquisition Program, there are
our open space acq acquisition at a later date*
throughout Plymouth which could be considered for
FB/np
Attachment
enc\memos\dw,ght\openspac.doc
WUMMI VOT-MMITUMOV 1�
Contact: Seitzer
PIN: 3611822320010
Parcel Area: 6.09 ac.
Total Protected Area: 3.71 ac.
Wetland Area: 2.59 ac.
Buffer Area: 1.12 ac.
Contact:
Stewart
PIN:
3611822320012
Parcel Area:
6.05 ac.
Total Protected Area:
3.80 ac.
Wetland Area:
3.18 ac.
Buffer Area:
.62 ac.
Contact: Stewart
PIN: 3611822330009
Parcel Area: 13.42 ac.
Total Protected Area: 11.71 ac.
Wetland Area: 10.35 ac.
Buffer Area: 1.36 ac.
Contact:
Johnson Brothers
PIN:
3611822330007
Parcel Area:
21.63 ac.
Total Protected Area:
15.35 ac.
Wetland Area:
13.07 ac.
Buffer Area:
2.28 ac.
0.29 ACRES---,
0.31 ACRES
0.49 ACRES
0.16 ACRES
-0.83 ACRES
--0.31 ACRES
--0.71 ACRES
0.74
�l
1
� x
2.59 ACRES
l SEITZER
� PARCEL AREA aoo ACRES
�
3.18 ACRES
STEWERT
/ PARCEL AREA a05 ACRES
\
k
/ 10.35 ACRES
STEWERT
PARCEL AREA 13.42 ACRES
1
�
I
13.07 ACRES
JOHNSON BROS.
1.54 ACRES PARCEL AREA M.0 ACRES
1
^J
CITY oc PLwoul"
..
-0.83 ACRES
--0.31 ACRES
--0.71 ACRES
0.74
SPORTS AND RECREATION FACILITIES
NOVEMBER 27, 1995
1. Summary of Report from Sports Facilities Committee -Needs
2. Status of possible partnerships
a. Private health/fitness clubs
b. School District 284
c. Swim Club
3. Overall Financial Background: Revenues available
4. Facilities Options/Financial Scenarios
5. Ballot question -Framing the issue for the voters
6. Timetable/Next Steps
EXECUTIVE SUMMARY
In January, 1995, the Mayor and Council appointed a committee to review the
recreational sports facility needs of the City of Plymouth. Task force members were
selected from the Council, Park and Recreation Advisory Commission, School Districts
281 and 284, and City staff.
The charge of this task force was to examine the future growth of youth and adult
recreational sport programs in the City of Plymouth. The task force was to determine
whether or not plans for existing facilities would meet projected future growth, and if
not, what additional facilities would be necessary to meet said growth. The committee
met with all of the youth sport athletic associations in the community and discussed and
reviewed their current and future projected needs. The committee also reviewed all the
existing facilities within the community and the potential for expansions and upgrades
on existing facilities. After completing its report, the task force was charged to submit
their document to the Park and Recreation Advisory Commission for their further
review and comment., Following analysis of the extensive data and information
gathered from interviewing the 14 athletic associations, and by reviewing Park and
Recreation staff technical information, the task force condensed the issues down to the
following eight issues:
• projected growth of all youth activities as the City of Plymouth continues to grow,
specifically the five to 11 age group.
• the extreme shortage of indoor ice time for ice hockey and figure skating.
• the continued demand for indoor gym space for youth basketball, soccer and adult
volleyball and basketball.
• lack of adequate facilities for girls' fast pitch softball.
• lack of available pool time for competitive swimming at the club and high school
level, as well as the lack of any leisure swimming pool facilities.
• the growth of indoor soccer now and in the future will provide a real challenge.
• developing fair and equitable fee schedules for use of City and school district
facilities.
• developing appropriate maintenance levels of school district facilities such as
baseball and softball fields.
The base report further explains the content of each of these issues and lists possible
solutions to each.
-4-
Plymouth Sports Facilities Review Committee
Ten Year Needs Projections
NOTE: These figures don't include the extensive sports programs at our two local high
schools and two junior high schools.
* Soccer field numbers are based on full size 80 x 120 yard equivalent, even though many
are actually half (50 x 80 yard) or quarter (35 x 55 yard) size for younger age groups.
This also accounts for the relatively high number of teams per field.
** This includes youth and adult teams. (Adults 3 -on -3 league teams were counted as .5
teams. Only winter teams were counted, since that is the time of greatest usage
(November through March).
*** Plymouth teams play at Wayzata High School Arena (a six month facility) and New
Hope Arena (a year-round facility), and at other metro arenas where they can pick up
additional hours
-1I-
1995
2005
Fields/Courts
Anticipated
Felds/Rinks/
Additional
1995
/Rinks
Teams per
Growth in
2005
Courts
Felds/Courts/
Program
Teams
(L=lighted)
Feld/Rink/Court
10 Years
Teams
(L=lighted)
Rinks Needed
Youth
Baseball/Softball
146
34 (7L)
4.3
36%
199
46 (9L)
12 (2L)
60-75' Bases
Youth Baseball
(90' Bases)
38
9 (4L)
4.2
36%
52
12 (6L)
3 (2L)
Youth Summer
Soccer
166
*16.5 (8.5L)
10.0
31%
218
*21.5 (11L)
5 (2.5L)
Youth Fall
Soccer
121
*17.5 (8L)
6.9
27%
154
*22.5 (12L)
4 (4L)
Football
28
5 (2L)
5.6
28%
36
7 (3L)
2 (1L)
Basketball
**157
17
9.2
25%
**196
21
4
Hockey
52
11 outdoor
4.7 outdoor
33%
69
15 outdoor
4 outdoor
***2 indoor
26,indoor
3 + indoor
2indoor
Adult Softball
167
4.5 fields
37
20%
200
5.5
1 1L
NOTE: These figures don't include the extensive sports programs at our two local high
schools and two junior high schools.
* Soccer field numbers are based on full size 80 x 120 yard equivalent, even though many
are actually half (50 x 80 yard) or quarter (35 x 55 yard) size for younger age groups.
This also accounts for the relatively high number of teams per field.
** This includes youth and adult teams. (Adults 3 -on -3 league teams were counted as .5
teams. Only winter teams were counted, since that is the time of greatest usage
(November through March).
*** Plymouth teams play at Wayzata High School Arena (a six month facility) and New
Hope Arena (a year-round facility), and at other metro arenas where they can pick up
additional hours
-1I-
TIME LINE OF DEVELOPMENT
Based on the Committee's review of existing needs and future needs, we have
developed a time line for phasing of developments. The facilities that are scheduled for
one to two years in timing are based on the idea that there is an existing shortage at this
time for the existing number of participants. For this reason the City should take
positive steps as quickly as possible to bring facilities up to meet the needs of current
users. Facilities proposed for the two to three year window of opportunity are based on
taking care of some existing needs such as providing practice time, developing facilities
at relatively low costs such as renovating existing facilities, and finally, developing
facilities with multi-purpose usage in mind. Facilities scheduled for the three to five
year window are specifically intended to meet growth of participation in both indoor
and outdoor sports and to acquire property in northwest Plymouth before prices
skyrocket. The development of the 10th playfield in the five to 10 year window should
be phased in with the development of the property outside the MUSA area of
Plymouth. The new Elm Creek Playfield/Wayzata High School will open in the fall of
1997. This will add a large gymnasium, two baseball fields, four softball fields, ten
tennis courts, five soccer fields, three outdoor basketball courts and an outdoor hockey
rink.
Immediate needs (1-2 years)
• (2) ice rinks
• (1) gym (excluding new Wayzata High School
• (2) pools (one competition, one recreational at central location)
Short term needs (2-3 years)
• redevelop old Wayzata High School sports fields
• buy land/redevelop Greenwood School sports fields
• build multi-purpose field house
Intermediate needs (3-5 years)
• develop Ess property (494 & Schmidt Lake Road)
• buy land for 10th playfield (Co. Rd. 47 & Vicksburg Lane)
• build gym independent of any school
Lona term needs (5-10 years)
• develop 10th playfield
-15-
COST ESMIATE
Facility
ot Et.
Cit
School Dist.*
Other**
Total
Build two sheets of ice[!$4!50000'7000
$3 600000
$350000
$550 000
$4500000
Build 3 ms
30 000
$2 600 000
$400,000
$3,000,000
50 meter pool and
leisure pool
$5,0001000
$1,500,000
$11500,000
$2,000,000
$5,000,000
Redevelop old
Wayzata high school
$150,000
$150,000
$150,000
Buy land/redevelop
Greenwood School
$350,000
$200,000
$150,000
$350,000
Field house
$21000,000
$1,8001000
$200,000
$2,0002000
Develop Ess property
$8007000
$800,000
$8007000
Buy land for 10th
playfield (50 ac)
$17,000/acre
Develop 10th playfld.
$850,000
$2,500,000
$850,000
$2,500,000
$850,000
$2,500,000
Total
$19,150,000
$13,850,000
$2,750,000
$2,550,000
$19,150-000
*Wayzata and/or Robbinsdale School District
**Represents grants, associations, and other cities.
-19-
Is -
November 13, 1995
(To all franchised health/fitness clubs in metro area offering fitness equipment, pools,
and gym areas: US Swim and Fitness, Northwest, Flagship, Life Time, YMCA, David
Crockett)
Dear
The City of Plymouth would like to determine whether or not there is interest by
private health clubs in joining with the City of Plymouth in a partnership to jointly
develop certain recreational facilities in the near future in Plymouth.
The City is interested in constructing the following:
• Ice arena with two indoor sheets of ice with room for 800 spectators.
• Swimming facilities to include a 25 meter competition pool, a large state of the
art leisure pool, a small outdoor pool, and a diving well.
• A gymnasium at least equal in size to those normally found in Junior High
Schools.
• A possible senior citizens center with a large meeting space, a craft room, and
kitchen facilities.
We would welcome construction of such facilities with a major private health club
facility on City owned land located near 36th Avenue and Plymouth Boulevard in our
developing Downtown Plymouth area. We anticipate the possibility of a cooperative
venture with a private health club that offers, at a minimum, a major fitness equipment
area, swimming facilities, and at least two gyms. Our goal is to have the complex
done before October 1, 1996. We estimate that a total facility, including public and
private club areas, would be between 200,000 and 250,000 square feet in size.
Enclosed is a general location map and a site plan for this project.
We have identified the following characteristics of a joint venture that we would
consider either necessary or desirable for a successful joint venture:
1. The private club would construct all City facilities listed above as well as its
own privately owned facilities.
2. The City would contract with the club and pay a fair cost to the club for the
items to be owned by the City.
3. All construction of City facilities would be subject to public bidding laws.
4. The City would own and operate the ice facilities and the senior center, if built.
The Club would own or lease all other facilities and operate them, including all
of the pools, at no financial cost to the City.
5. All residents of Plymouth would have access to all facilities, including the
private club facilities, on a daily fee basis. In addition the club may have normal
membership plans.
6. The Club would be responsible for all marketing of the entire facility.
7. The City would assist with construction of the necessary parking facilities and
provide the land for the entire facility.
8. The funding sources for the City portion of the facilities would be subject to a
public referendum that would be held in early 1996.
The City will be considering a plan to construct some or all of the items mentioned
earlier in the near future. If you would have any interest in pursuing a joint venture for
immediate construction according to the eight conditions noted above, I request that
you contact me at 509-5051 within the next two weeks. I would be happy to talk to
you further about any aspect of this letter of inquiry.
Thank you for your time and consideration.
Sincerely,
Dwight D. Johnson
City Manager
cc: Joy Tierney, Mayor
Chuck Lymangood, Council member, at large
Carole Helliwell, Council member, at large
David Anderson, Council member, Ward 1
Tim Wold, Council member, Ward 2
Nick Granath, Council member, Ward 3
John Edson, Council member, Ward 4
Eric Blank, Park and Recreation Director
7-
1. School District 284.
a. $1,500,000 was earmarked for pool facilities in new high school
bond referendum.
b. School Board has written a letter to the City offering to consider
a joint project with the City.
c. Final commitment of funds for a joint project may depend upon:
1. Overall bids for high school project being within an acceptable
range. The fourth major bid package for the new high school will
be opened in mid-December.
2. Final decisions on use of old Wayzata Senior High as a middle
school.
d. Implementation of recently approved City TIF plan to return to the school
districts some excess levy referendum money accumulating in City TIF funds
provided funds are used for some community sports/recreation purpose would
significantly alleviate School Districts concerns about c.1. above.
2. Swim Club.
a. Swim Club originally proposed to raise $2 million and construct and
operate a pool complex if the City donated the land. Swim Club desires
a 50 meter competition pool.
b. Swim Club has apparently not been successful in raising significant funds,
and acknowledges that it cannot build a 50 meter pool.
c. Swim Club may still desire some usage arrangement with any competition
pool that District 284 and/or Life Time Fitness may develop.
Page 1
a
COMMUNITY IMPROVEMENT
FUND
BALANCES OF
SPECIAL
BEGINNING
MATURING
ASSESSMENT
INTEREST
ENDING
YEAR
BALANCE
BOND FUNDS
COLLECTIONS
501
EXPENDITURES
BALANCE
1994
1,469,334
7,172,300
923,623
194,712
9,759,969
1995
9,759,969
42,000
739,380
487,998
1,250,000
9,779,347
1996
9,779,347
75,000
330,206
488,967
10,673,521
1997
10,673,521
203,406
533,676
11,410,603
1998
11,410,603
200,000
190,002
570,530
12,371,135
1999
12,371,135
171,474
618,557
13,161,166
2000
13,161,166
104,434
658,058
13,923,658
2001
13,923,658
40,196
696,183
14,660,037
2002
14,660,037
31,570
733,002
15,424,609
Page 1
a
Page 1
COMMUNITY IMPROVEMENT
FUND
BALANCES OF
SPECIAL
BEGINNING
MATURING
ASSESSMENT
INTEREST
ENDING
YEAR
BALANCE
BOND FUNDS
COLLECTIONS
@ 51/1)
EXPENDITURES
BALANCE
1994
1,469,334
7,172,300
923,623
194,712
9,759,969
1995
9,759,969
42,000
739,380
487,998
1,250,000
9,779,347
1996
9,779,347
75,000
330,206
488,967
5,000,000
5,673,521
1997
5,673,521
203,406
283,676
6,160,603
1998
6,160,603
200,000
190,002
308,030
6,858,635
1999
6,858,635
171,474
342,932
7,373,041
2000
7,373,041
104,434
368,652
7,846,127
2001
7,846,127
40,196
392,306
8,278,629
2002
8,278,629
31,570
413,931
8,724,131
Page 1
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: January 12, 1995
TO: Mayor and City Council
FROM: Dwight D. Johnson, City Manager
SUBJECT: Financial Planning for Future Capital Needs
BACKGROUND: At the January 3, 1995 study session, Council members requested
that staff explore future capital needs in relation to present and future available capital
funds. The immediate issue relates to alternative concepts for improving the City
Council Chambers. However, interest in accelerating our trail development was
expressed at our budget work sessions last August and the work of the Open Space
subcommittee also requires a long range view of our capital financing.
ASSUMPTIONS: The City's capital financing plans are quite diverse and
complicated. Many of the items noted below need further study. themselves.
However, staff believes that the following simplifying assumptions are reasonable
within the big picture context of this memorandum.
• Capital Improvement Program. It is assumed that the approved CIP is fully funded
through 1998 from existing revenue sources.
• Road Improvements. Road improvements not in the CIP, including signals, bridges
and other related projects, will be funded by available MSA and TIF funds, and
will not absorb funding from other sources.
• Street Reconstruction. It is assumed that current funding sources for the street
reconstruction program are adequate for the next ten years; however, beyond 2005,
additional resources may be necessary. The projections beyond 2005 will require
further review.
• Water and Sewer Improvements. Any water and sewer improvements will be
funded by the Utility Trunk Fund or other utility reserve funds.
• Surface Water Management Projects, including future water quality projects, will
be funded from the Stormwater Utility Fund and/or a future surface water utility
fee.
• Parks. The completion of the City's planned park system and much of the
currently planned trail system can eventually be funded through present and future
park dedication fees.
• Reserves. It is assumed that it would be financially risky to spend all of the
undesignated funds in a short period of time. Staff believes that it would be wise to
reserve about $5 million of the Community Improvement Fund for unknown future
needs or opportunities as well as $1 million of the Project Administration Fund,
which helped fund our wetland studies in 1994 and will be funding our Northwest
Plymouth and Thoroughfare Guide Plan Studies in 1995.
• Council Chambers. The scenario shown below does not provide for the larger
Council Chamber lobby expansion alternative.
AVAILABLE SOURCES OF FUNDS: The following chart shows the estimated
available balances from all undesignated City funds.
Community Improvement Fund
(CIF)
Project Administration Fund
Permanent Improvement Revolving
Cable TV Reserve Fund
Projected
Balance
2,700,000
2,900,000
750,000
510.000
Proposed
Reserve
5,000,000
1,000,000
Available
Balances
7,700,000
1,900,000
750,000
510.000
16,860,000 6,000,000 10,860,000
POSSIBLE FUTURE PROJECTS AND UNDESIGNATED BALANCES
With these assumptions in place, it is now possible to analyze future projects and
undesignated balances. This chart below shows only one of many possible scenarios
and much more work needs to be done on this long range planning effort. With the
exception of the Cable TV Fund, any of the funds could be used for any of the listed
projects. We have attempted to show by the arrangement of the chart how some funds
could reasonably be aligned with certain projects or groups of projects. We are not
sure if Cable TV funds could be used for unrelated purposes without further review of
our franchise agreement and other documents.
Project
Cost
Available Balances
Trail Construction (unfunded)
$1,000,000
Bond Issue or CIF $7,700,000
Open Space acquisition
$3,000,000
It
Swimming Pool
$3,000,000
it
Ice Arena
$3,000,000
to
Field House
$1,750,000
of
Gym Spaces
$1,000,000
to
Senior Center
$1,500,000
"
Subtotal
$14,250,000
$7,700,000 with no bond issues
f\.
l2
Fourth Fire Station $1,900,000
Council Chambers project $510,000
Replacement of existing
facilities and equipment $750,000
Project Administration Fund
$1,900,000
Cable TV Funds $510,000
Permanent Improvement Revolving
Fund $750,000
Municipal Golf Course ? (Might repay its capital costs with fees)
Totals $17,410,000 $10,860,000 with no bond issues.
CO1V. MTMS: The projects shown are not a part of any approved plans. The staff
does not represent that all of the projects will necessarily be needed in the future, but
rather presents a list of projects that have a reasonable possibility of being needed at
some future date. The cost estimates are only staff estimates based upon similar
projects in other cities.
This brief analysis seems to show that some bonding might be needed sooner or later if
the City decides that most of the projects will be needed at some point. Both the
project list and the assumptions in this memorandum should be discussed with the
Council in more detail at future study sessions. The chart is simply intended to give
the Council the best currently available perspective orahe immediate financial issues at
hand relating to the Council Chambers renovation and the Open Space Committee
recommendations.
FUTPROJ.XLS
POSSIBLE FUTURE PROJECTS AND UNDESIGNATED FUND BALANCE
Original Projection
Available Funding Source
Project
Cost
I and Balances
Trail Construction
$1,000,000
Bond or CIF, $7,700,000
Open Space Acquisition
$3,000,000
Bond or CIF, $7,700,000
Swimming Pool
$3,000,000
Bond or CIF, $7,700,000
Ice Arena
$3,000,000
jBond or CIF, $7,700,000
Field House
$1,750,000
jBond or CIF, $7,700,000
Gym Spaces
$1,000,000
Bond or CIF, $7,700,000
Senior Center
$1,500,000
Bond or CIF, $7,700,000
Subtotal
$14,250,000
IS7,700,000 with no bond issues
Fourth Fire Station
$1,900,000
Project Administration, $1,900,000
Council Chambers
$510,000
CATV Fund, $510,000
Replace equip/facilities
$750,000
PIR Fund, $750,000
Municipal Golf Course
Might repay capital with fees
Total
$17,410,000
$10,860,000 with no bond issues
POSSIBLE FUTURE PROJECTS AND UNDESIGNATED FUND BALANCE
Option 3—$2,000,000 bond is for open space and trails, plus $1,000,000 from OF
Funding Sources
Project
Cost
and Balances
Swimming Pool
$3,000,000
Bond or CIF, $6,700,000
Ice Arena
$3,000,000
Bond or CIF, $6,700,000
Field House
$1,750,000
Bond or CIF, $6,700,000
Gym Spaces
$1,000,000
Bond or CIF, $6,700,000
Senior Center
$1,500,000
Bond or CIF, $6,700,000
Subtotal
$10,250,000
$6,700,000 with no bond issues
Fourth Fire Station
$1,900,000
Project Administration, $1,900,000
Council Chambers
$510,000
CATV Fund, $510,000
Replace equip/facilities
$750,000
PIR Fund, $750,000
Municipal Golf Course
Might repay capital with fees
Total
$13,410,000
$9,860,000 with no bond issues
Page 1
13
FACILITIES
OPTIONS
ITEM
City Project Only
City with
City with Private
District 284
Club and Dist. 284
One indoor ice sheet*
2,500,000
2,250,000
2,250,000
Outdoor practice sheet
500,000
500,000
500,000
Second indoor sheet
1,250,000
1,250,000
Competition Pool
3,800,000
X
Leisure Pool
3,300,000
1,500,000
Outdoor Pool
X
Diving Well
X
City gymnasium
500,000
Community Room
400,000
Parking, site work
650,000
650,000
650,000
TOTAL COST
6,950,000
8,450,000 **
7,050,000
"X" denotes construction by private fitness club
* Net City cost after contributions and
grants
**Includes $1,500,000 from School District
POSSIBLE BALLOT QUESTION
"Shall the City of Plymouth be authorized to spend
up to $5,000,000 from existing funds in the Community
Improvement Fund, which will be combined with other
existing funds, for the purpose of designing, constructing,
and equipping an indoor ice arena, swimming pools, other
indoor recreational facilities, and related site
improvements?"
Ib
TIMETABLE FOR SPORTS AND RECREATION FACILITIES
November 27: Joint Meeting of City Council and Park and Recreation
Commission to review available information.
December 5: City Council accepts report of Sports Facilities Task Force.
City Council directs staff to prepare resolutions for a referendum.
City Council approves resolution authorizing the return of certain
excess levy referendum funds in TIF districts to School
Districts 281 and 284 for community sports/recreation
purposes.
City Council accepts funds and approves agreement for design of
ice facilities.
City Council approves resolutions requesting final committments
from School District 284, 281, and City of Wayzata
December 19: City Council adopts referendum resolution setting an election date.
February 6: Special election.
February -
April: Design of facilities, approval of plans, and bidding.
May 1: Construction begins.
December 1: Facilities Open.
CITY OF PL YMO UTH
1996 PROPOSED BUDGET
TRUTH IN TAXATION HEARING
November 29, 1995
Spey
City and HRA
12%
City of Plymouth
1996 Budget City Taxes as Percent of Average Tax Bill
Robbinsdale School District
County
31%
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
ESTIMATE OF RESIDENTIAL PROPERTY TAX
$1669800 HOME
Residential Homestead Taxes Pa able
Actual 1995 Est. 1996
Market Value $ 158,600 $ 166,800
1995 Percentages:
1st $72,000 of MV X 1.0% 720
Balance of MV X 2.0 % 1 732
r1996 Percentages:
1st $72,000 of MV X 1.0% 720
Balance of MV X 2.0 % T 1.896
Total Tax Capacity 1 2,452 1 2,616
Tax Capacity Rate* I 15.84% 1 14.89%
Tax 1 $388.40 1 $389.52
*Includes HRA
SCHOOL DISTRICT
HOPKINS - 270
OSSEO - 279
ROBBINSDALE - 281
WAYZATA - 284
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
COMPARISON OF TAX BURDEN ON AVERAGE HOME
$166,800 - 1996
$158,600 - 1995
CITY
TAXES
SCHOOL
TAXES
COUNTY
TAXES
OTHER
TAXES
TOTAL
% CHANGE
1995
1996
1995
1996
1995
1996
1995
1996
1995
1996
$ 388
$ 390
$1 841
$1J48
$ 918
$ 997
$ 138
$ 146
$3,285
$3,281
6.7
$ 388
$ 390
$1,720
$19749
$ 918
$ 997
$ 138
$ 146
$3,164
$3,282
3.9
$ 388
$ 390
$1 648
$1 690
$ 918
$ 997
$ 138
$ 146
$3P092
$3P223
4.4
$ 388
$ 390
$1,538
$1,888
$ 918
$ 997
$ 138
$ 186
$2,982
$3,461
16.20
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
THE BOTTOM LINE
CITY TAXES ON SELECTED HOMES
INCREASE/
HOUSE VALUE
PROPOSED
DECREASE
1995/1996
1995
1996
OVER 1995
$80,000 / $ 84,100
$ 139
$ 143
$+4
$158,600 / $166,800
$ 388
$ 390
$ +2
$200,000 / $210,000
$ 520
$ 518
$ -2
$250,000/ $262,000
$ 678
$ 673
$ -5
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
CITY TAX ON $166,800 HOMES
FOR SELECTED CITIES
* Includes HRA, Storm Sewer Taxing Districts, and Economic Development Authorities
1996 PROPOSED
$ MORE
TAX RATE *
1996
(LESS)
TAX
THAN PLYMOUTH
BROOKLYN PARK
31.96
$836.07
$446.55
BROOKLYN CENTER
30.22
790.56
401.04
GOLDEN VALLEY
27.36
715.74
326.22
CRYSTAL
26.88
703.18
313.66
RICHFIELD
26.76
700.04
310.52
MAPLE GROVE
24.01
628.10
238.58
NEW HOPE
23.80
622.61
233.09
EDEN PRAIRIE
23.72
620.52
231.00
BLOOMINGTON
21.83
571.07
181.55
ST. LOUIS PARK
20.03
523.98
134.46
MINNETONKA
19.43
508.29
118.77
EDINA16.30
426.41
36.89
:.......... 1�#9............................g.Z
::....::::::::.::::::::.:::.::::::.:::::.
* Includes HRA, Storm Sewer Taxing Districts, and Economic Development Authorities
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
MARKET VALUE TRENDS
COMMERCIAL & INDUSTRIAL
New Construction 8,695,800 19,696,200
Commercial & Industrial Land (1,941,800) 4,960,400
Commercial & Industrial Loss/Appreciation (7,879,700) 6,469,600
($1,125,700) $31,126,200
TOTAL GROWTH $206,120,800 $272,315,400
Payable
Payable
1995
1996
RESIDENTIAL
New Construction
$111,038,200
$115,485,800
Residential Appreciation
57,230,100
39,796,700
Residential Land
38,978,200
85,906,700
$207,246,500
$241,189,200
COMMERCIAL & INDUSTRIAL
New Construction 8,695,800 19,696,200
Commercial & Industrial Land (1,941,800) 4,960,400
Commercial & Industrial Loss/Appreciation (7,879,700) 6,469,600
($1,125,700) $31,126,200
TOTAL GROWTH $206,120,800 $272,315,400
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
TAX CAPACITY COMPARISONS
Total
Residential
%
Comm/Ind
%
$75,787,798
$39,333,345
52%
$36,454,633
48%
$69,982,582
$34,876,686
50%
$35,105,896
50%
$66,675,327
$30,929,590
46%
$34,745,737
54%
$66,535,540
$28,0569516
42%
$38,479,024
57%
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
MARKET SEGMENT COMPARISON
Payable
Payable
1995
1996
% CHANGE
RESIDENTIAL $2,317,175,400
$2,558,394,600
10.4
APARTMENTS 163,322,400
168,033,500
2.9
COMMERCIAL 6600696,100
687,081,200
4_0
$3,1419193,900
$3,413,509,300
8.7%
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
MAJOR OPERATING FUNDS
1995
1996
GENERAL FUND
$13,485,012
$139957,624
RECREATION FUND
8099917
793,228
HRA
19713,319
19493,094
WATER FUND
297619000
3,031,800
SEWER FUND
49593,810
4,912,548
SOLID WASTE FUND
583,750
6029400
CENTRAL EQUIPMENT FUND
19471,270
19524,340
RISK MANAGEMENT FUND
556,302
5619936
WATER RESOURCES
-------
2249281
DESIGN ENGINEERING
240,000
244,800
EMPLOYEE BENEFIT FUND
1,054,910
1,086,552
INFORMATION TECHNOLOGY
------
8709450
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
REVENUES
• Tax Abatements -- value losses are decreasing
compared to prior years, estimate "exposure"
at $130,000 in 1996.
• HACA -- legislative action reduces HACA by
$78,590 for one year. Loss will be absorbed by
Street Reconstruction Fund.
• Building Permit Revenue -- 1996 budget assumes
3% increase despite recent fee increase. Lower
estimate contemplates a slow -down of building
activity as City develops.
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
Fiscal Disparities
• Significant drop in value of commercial and
industrial properties in 1993 and 1994 artificially
deflated impact of fiscal disparties in 1995.
• Significant negative change between 1995 and
1996 ($2,327,000) in net impact on tax capacity
is equivalent to $350,213 in tax revenue.
• 1994 and 1996 more accurate reflection of fiscal
disparities.
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
11
REPLENISHING RESERVE FUNDS
• Major reserve funds have had significant "draws"
in recent months
• Building Reserve contributed $1,000,000 to City
Center Expansion, balance now $508,000
• Computer Reserve will contribute $600,000 to
fund computer upgrades
• Reserve funds important to funding replacement
equipment and addresssing emergency needs
• 1996 budget adjusts rates to user departments to
begin replenishing reserve funds
• Use of 1995 surplus for one-time infusion of dollars
into these funds
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
Use of Projected 1995 Surplus
• Revenue and expenditure projections indicate a
1995 budget surplus of $385,000
• Use funds to mitigate impact of tax increase and
replenish reserve funds
• Recommendations
$200,000 -- offset future tax abatements
$ 85,000 -- lease purchase payments on dump truck
$100,000 -- replenish Building Reserve and Computer
Reserve
1996 General Fund Department Budgets
Percent of Total
Finance
Parks and
Recreation
r anon
PublicS afet Y
><r':
:..
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v:nv�•II:^ • �?•}..h.
w •.6n:{f.`{;i:. ?»::•}v•}4:iii;•v.•v.: }:i.:i::i _
iii:
,,:.'�i•'viii}.::i:;rM1{v:•.x
i•}A?:v
•�..v 4v.. .n•?.{.:} .•. >`>r'ii t:'. ii::iiiiiji,'.
'
�::
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v?i'{::.:..•:.}r.Y r..v.}}ii::F: •: x�:. i.':.'?•: r;:r': r..:::'�::
.
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Community
`"
Development
P
•
Legal Services
General
Goverment
Other
General Goverment
$786,260
6%
Public Works
Legal Services
330,300
2%
Cann nity Development
1,092,296
8%
Parks and Recreation
2,046,912
15%
Finance
959,191
7%
Public Safety
5,528,527
40%
Public Works
2,613,874
19%
Other
600,264
4%
Total
$13,957,624
100%
City of Plymouth
1996 General Fund Budget Category of Expenditure
.........................
Contractual Services
......................................
...............................................
........................................................
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ials/Su lies
Personnel -Benefits
:.;:.;...
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Personnel - Salaries
1996
Personnel - Salaries
$6,856,671
49%
Personnel - Benefits
1,511,552
11%
Materials/Supplies
1,035,009
7°%
Contractual Services
4,164,105
30%
Capital Equipment
390,287
3%
Total
$13,957,624
100%
1996 General Fund Budget Revenue Categories
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P Y
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2
Pr �
Permits
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'` ,{ rSS,r,rr,vSx ;S+ SSSSS......SSSSSSSSSSS`SSSS#S#SSSSSSSS.`',":SSS
ss#sssss>z>SsSSSSS>sssss§sssxsssssszzSSssSz License Fees 113,930 1 °k
zzzszzz#zz #z #zzzzzzzs€zzzszzzs # €ssr€.€....zszzzzsss{sss€ssz€ssssss€sszzzzzzz;
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gUse of Money/Property100 2°k
License Fees 334
Charges for Services 771,480 6%
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Misc. Revenues 100,000 1%
Transfers In 435,770 3%
Total $13,957,624 100%
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
PERSONNEL REQUESTS FOR 1996
New Full Time Tax Supported Positions
Police Officer*
Assistant Engineer
Accounting Technician
Park Maintenance Worker
New Non -Tax Supported Positions:
Water Maintenance Worker
*Partially funded by Federal Grant
% General Fund Amount
100
$ 21,839
50
30,568
40
15,019
100
26.750
$ 94,176
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
GENERAL FUND REVENUES
Revenue Changes
• Increased property tax revenue due primarily to community growth
• Permit revenue assumes 3 % increase in fees, but also assumes slowing of
building activity
• Street light revenue will decrease
1995
1996
Difference
Property Taxes
$ 9,680,812
$ 10,088,294
$ 407,482
License Fees
116,10
113,930
(2,170)
Permits
1,367,600
1,410,250
42,650
Fines & Forfeitures
509,40
516,750
7,350
Use of Money & Property
343,40
334,100
(9,300)
Intergovernmental
153,00
187,050
34,050
Charges for Services
792,30
771,480
(20, 820)
Transfers
422,40
435,770
13,370
Other Revenues
100,00
100,000
--
Revenue Changes
• Increased property tax revenue due primarily to community growth
• Permit revenue assumes 3 % increase in fees, but also assumes slowing of
building activity
• Street light revenue will decrease
CITY OF PLYMOUTH
1996 PROPOSED BUDGET
GENERAL FUND BUDGETS
Expenditures Changes
• Legal Services --Reduction based on experience during first year
• Park & Recreation --Maintenance worker, new equipment
• Public Safety -- Police Officer, new equipment
• Public Works -- Assistant Engineer, new equipment, increases in
contractual services
1995
1995
Difference
General Government
$ 729,606
$ 786,260
56,564
Legal Services
350,000
330,300
(19,700)
Community Development
1,075,855
1,092,298
16,443
Park & Recreation
1,867,856
2,046,912
179,056
Finance
972,227
959,191
(13,036)
Public Safety
5,316,703
5,528,527
211,824
Public Works
2,511,484
2,613,874
102,390
Other
637,379
600,264
(37,115)
Expenditures Changes
• Legal Services --Reduction based on experience during first year
• Park & Recreation --Maintenance worker, new equipment
• Public Safety -- Police Officer, new equipment
• Public Works -- Assistant Engineer, new equipment, increases in
contractual services
CITY OF PLYMOUTH
AVERAGE HOME VALUE AND TAX RATE
1993-1996
1993 1994 1995 1996
Home Value 147,300 152,500 158,600 166,800
Tax Rate 18.04 16.67 15.84 14.89
Tax Rate
20.00
18.00
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1993 1994 1995 1996
Home Taxes
CITY OF PLYMOUTH
HOME TAXES
1993-1996
1993 1994 1995 1996
401.57 388.41 388.40 389.52
Home Taxes
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#zt a ;z;:s ;N; .; ;zzs;xz;t rs .xzsz;; r::: ;;;z#nz;z;i;z; stz;;tttttsstsssssssstttsssssssrszsssttss 3#tts„sssf N .t zs„s sttssstttsssctszst,
365.00 ###s. ##;;;#z;zaz Nzz�zszzszzzsfz zx;cszs;� :z;:zs ks�zszzszzs#ss#ss;zz�;zzz; ;;zzzszzzzztsz;zzz;tttttsssussztstsszrttttsttss#tss :z� „i%�z#zzs�,`Sz, � zxzsssssszssssszs#ss
sssNz;;z�;;� z;zff u;�s;;xzs;� :s;; N :f#;;#rz.s'�#zzzzzzz�zzzzzzzzzzzzz#zzzz;zzzzzzzzzzzztstszzstzsstztststz�Nssszsxtss�strzzszz�zr�, �sz::s��: �zzszzzssszszzzsszszs�s
# ###s;�zz;wzz# kx;{�szz�^^�sxs�!t�i�::rxNzzz N �;z�r���zz�zzz;z�z;zszzzzzzzzzzz;zszt ;trtt ;z�zxsxzstk�rszx :tt;stz�szz zszuzN�zz :z`fss� NZNrzs�szzzszzss;zzssszzz�
�;;s{ ###`s:%#x# s#^� z#zz#s,, ,r{s ,f,::: ^s�;✓,�l:'sz��zz##�,z:::..::.::.:..sz,ssss,,, .,�,,,:#,,::s�y::,:::z :::s�,:N�:,r � z�:�zz,zsz �N,,::,:,,:::
360.00
1993 1994 1995 1996
Page 1
City of Plymouth
GENERAL FUND SUMMARY OF REVENUE
FOR YEAR
1996
FUND 101
1996
1993
1994
1995
1995
Continued
1996
Actual
Actual
Adopted
Estmtd
Service
Manager's
Revenue
Revenue
Revenue
Revenue
Revenue
Revenue
TAXES REC - GEN FUND PURPOSE
401.00
Current Ad Valorem
9,134,265
9,403,853
10,105,812
10,105,812
10,145,294
10,138,294
Less: Canc. & Abatements
(699,718)
(356,927)
(375,000)
(275,000)
0
0
Delinquent Taxes
(100,000)
(50,000)
(50,000)
(50,000)
(50,000)
(50,000)
---------------
...............
...............
---------------
...............
.-----...------
**TOTAL TAXES REC - GEN FUND
8,334,547
8,996,926
9,680,812
9,780,812
10,095,294
10,088,294
LICENSE FEES
411.00
Auto service station
1,980
1,430
2,100
1,650
1,700
1,700
412.00
Cigarettes
900
1,590
900
1,000
1,030
1,030
413.00
3.2 malt liquor
7,063
8,254
7,300
7,300
7,520
7,520
414.00
Off sale liquor
2,840
3,300
2,900
3,000
3,100
3,100
415.00
Dog
14,140
12,751
14,000
12,200
12,560
12,560
416.00
Garbage removal
2,162
2,791
2,300
3,320
3,400
3,400
424.00
Other licenses
13,037
4,183
9,300
4,200
4,320
4,320
425.00
On sale liquor
80,241
78,033
77,300
78,000
80,300
80,300
...............
-----....--.---
...............
...............
...............
....-----------
**TOTAL LICENSE FEES
122,363
112,332
116,100
110,670
113,930
113,930
PERMITS
431.00
Building
690,602
795,909
680,000
700,000
700,000
700,000
433.00
Plumbing
127,578
146,772
125,000
113,000
114,000
114,000
434.00
Htg vent & air conditioning
63,485
112,080
62,000
84,000
85,000
85,000
436.00
Sign & billboard
3,626
4,938
3,800
4,200
4,300
4,300
437.00
1 Plan checking
1 433,540 1
483,633 1
408,000 1
420,000 1
420,000 1
420,000
Page 1
Page 2
City of Plymouth
GENERAL
FUND SUMMARY OF REVENUE
FOR YEAR 1996
FUND 101
1996
1993
1994
1995
1995
Continued
1996
Actual
Actual
Adopted
Estmtd
Service
Manager's
Revenue
Revenue
Revenue
Revenue
Revenue
Revenue
439.00 Other
16,730
23,584
16,800
20,000
20,000
20,000
439.01 Alarm permits
79,800
62,255
72,000
65,000
66,950
66,950
...............
...............
...............
...............
...............
...............
**TOTAL PERMITS
1,415,361
1,629,171
1,367,600
1,406,200
1,410,250
1,410,250
FINES AND FORFEITURES
451.00 Court fines,costs,fees
419,391
373,408
504,400
499,000
511,500
511,500
452.00 Impounding fees (dogs)
5,831
4,233
5,000
5,100
5,250
5,250
...............
...............
...............
...............
...............
...............
**TOTAL FINES & FORFEITURES
425,222
377,641
509,400
504,100
516,750
516,750
USE OF MONEY AND PROPERTY
460.00 Int on special assessments
3,299
3,420
3,400
4,000
4,100
4,100
461.00 Int earned on investments
314,410
297,857
340,000
325,000
330,000
330,000
...............
...............
...............
...............
...............
...............
**TOTAL USE OF MONEY & PROP
317,709
301,277
343,400
329,000
334,100
334,100
INTERGOVERNMENTAL REVENUES
470.00 Pres. Primary Aid
0
0
0
0
471.00 Redistricting Aid
0
0
0
0
473.00 MSA Maintenance
53,325
52,770
54,400
54,870
56,500
56,500
507.00 Civil Defense Grant
8,000
14,314
8,000
8,000
8,200
8,200
510.00 Tree Grant
16,621
0
0
0
0
0
510.01 Cable Grant
0
0
0
0
0
511.00 School Liason
34,312
65,000
67,000
65,975
67,450
67,450
512.01 jPolice Cadet Grant
1,416
12,741
4,000
4,000 1
9,900
9,900
Page 2
Page 3
City of Plymouth
GENERAL FUND SUMMARY OF REVENUE
FOR YEAR
1996
FUND 101
1996
1993
1994
1995
1995
Continued
1996
Actual
Actual
Adopted
Estmtd
Service
Manager's
Revenue
Revenue
Revenue
Revenue
Revenue
Revenue
510.02
Hazardous Mat'lGrant
0
23161
19,600
19,600
20,000
20,000
510.03
Cop Ahead Grant
0
25,000
25,000
25,000
---------------
---------------
...............
...............
...............
...............
**TOTALINTERGOVERNMENTAL
REVENUES
113,674
167,986
153,000
177,445
187,050
187,050
CHARGES FOR CURRENT SERVICES
482.00
Accident reports
6,202
5,980
6,300
6,300
6,490
6,490
483.00
Zoning charges
7,224
10,478
7,000
8,500
8,500
8,500
484.00
Platting fees
21,937
40,191
20,000
26,000
25,000
25,000
485.00
Spec assess searches
4,314
2,339
2,000
2,300
2,400
2,400
487.00
Police services
4,246
3,252
4,000
3,600
3,700
3,700
488.00
Towing fees
6,730
6,427
6,300
6,400
6,590
6,590
489.00
Tree assessments
31,721
7,712
5,000
6,000
6,200
6,200
490.00
Other services
17,460
20,921
12,600
15,000
15,000
15,000
490.01
Rec. Rental Fees
1,780
3,055
2,100
5,000
5,200
5,200
491.00
Street lighting
348,883
373,999
431,000
387,156
422,000
422,000
492.00
Weed assessments
5,160
2,820
16,000
5,000
5,000
5,000
498.00
Newsletter advertisements
0
0
0
0
6,200
6,200
497.00
Protective insp. fee
0
39,785
52,000
40,000
41,200
41,200
500.00
Engineering services
174,824
184,471
125,000
125,000
115,000
115,000
500.04
Engineering admin fees
0
87,400
103,000
103,000
103,000
103,000
..............
...............
...............
---------------
...............
...............
**TOTAL CHARGES FOR SERVICES
630,481
788,830
792,300
739,256
771,480
771,480
TRANSFERS RECEIVED FROM
Page 3
Page 4
City of Plymouth
GENERAL FUND SUMMARY OF REVENUE
FOR YEAR 1996
FUND 101
1996
1993
1994
1995
1995
Continued
1996
Actual
Actual
Adopted
Estmtd
Service
Manager's
Revenue
Revenue
Revenue
Revenue
Revenue
Revenue
501.01
Water and sewer
70,600
72,700
74,900
74,900
77,150
77,150
501.03
Park Dedication Fund
34,700
35,700
0
0
0
0
501.04
Police State Aid
240,000
240,000
230,000
230,000
250,000
250,000
501.06
Solid Waste Fund
25,900
26,700
27,500
27,500
28,320
28,320
501.07
Transit Fund
80,000
80,000
80,000
80,000
70,000
70,000
501.08
Park Replacement Fund
0
0
0
0
501.09
Drug Abuse Forfeitures
10,000
10,000
10,000
10,000
10,300
10,300
501.11
DARE Reimbrsmt - STA
3,000
1,500
1,500
1,500
--------------
...............
...............
...............
...............
...............
**TOTAL
CONTRIB RECVD FROM
461,200
468,100
422,400
422,400
435,770
435,770
OTHER REVENUES
553.00
Miscellaneous
124,376
146,991
100,000
100,000
100,000
100,000
...............
..........--...
...............
---------------
...............
...............
**TOTAL OTHER REVENUES
124,376
146,991
100,000
100,000
100,000
100,000
FUND TOTAL
1 11,944,933
12,989,254
13,485,012
13,569,883
13,964,624
13,957,624
Page 4
Page 5
City of Plymouth
GENERAL FUND
BUDGET
FOR YEAR 1996
SUMMARY OF EXPENDITURES
1996
1996
1993
1994
1995
1995
Continued
Increased
1996
Actual
Actual
Adopted
Estmtd
Service
Service
Mgrs
Expdtrs
Expdtrs
Budget
Expdtrs
Budget
Budget
Budget
GENERAL GOVERNMENT
101
City Council
60,355
75,828
83,005
80,901
81,501
0
78,897
102
Administration
287,884
273,899
317,777
311,676
311,436
700
311,436
103
Communications
160,532
161,156
192,443
183,337
189,958
2,000
189,958
104
Elections
33,920
51,354
41,290
46,057
63,333
0
63,333
105
Human Resources
65,954
77,430
118,892
107,725
137,636
20.550
142,636
**TOTAL GENERAL GOVERNMENT
608,645
639,667
753,407
729,696
783,864
23,250
786,260
LEGAL
110
Legal Services
349,767
319,922
350,000
350,000
325,000
0
330,300
**TOTAL LEGAL
349,767
319,922
350,000
350,000
325,000
0
330,300
COMMUNITY DEVELOPMENT
118
Administration & Support
0
0
0
0
150,964
2,000
152,964
119
Inspections/Fire
129,110
153,199
171,710
164,816
144,640
0
144,640
120
Planning
267,212
332,986
405,764
387,122
370,561
131,155
376,436
121
Inspections/Protective
48,707
54,022
74,185
61,343
74,969
3,000
74,969
122
Inspections/Construction
389,955
413,759
424,197
428,278
351,789
0
343,289
**TOTAL COMMUNITY DEVELOPMENT
634,984
953,966 1
1,075,855 1
1,041,559 1
1,092,923
136,155
1,092,298
Page 5
Page 6
City of Plymouth
GENERAL FUND BUDGET
FOR YEAR
1996
SUMMARY OF EXPENDITURES
1996
1996
1993
1994
1995
1995
Continued
Increased
1996
Actual
Actual
Adopted
Estmtd
Service
Service
Mgrs
Expdtrs
Expdtrs
Buduet
Expdtrs
Budget
Budget
Budget
PARK & RECREATION
123
Park & Rec Administration
166,945
176,747
179,353
172,665
290,790
15,131
290,790
124
Park Maintenance
1,285,685
1,389,504
1,016,144
1,012,052
615,167
100,506
688,864
125
Forestry
249,250
272,555
301,109
300,203
311,158
47,240
336,738
126
Trail Maintenance
0
0
93,900
93,900
151,307
84,000
151,307
127
Athletic Field Maintenance
0
0
277,350
277,377
472,648
59,500
472,648
128
Ice Rink Maintenance
0
_
0
0
0
106,565
0
106,565
**TOTAL PARK & RECREATION
1,701,880
1,838,806
1,867,856
1,856,197
1,947,635
306,377
2,046,912
FINANCE
130
Finance
516,775
536,509
604,583
598,513
542,666
56,560
557,685
131
Assessing
312,560
312,201
367,644
369,895
401,506
43,696
401,506
**TOTAL FINANCE
829,335
848,710
972,227
968,408
944,172
100,256
959,191
PUBLIC SAFETY
155
Community Service
0
0
35,304
35,784
251,526
0
251,526
156
Patrol
0
5,004
471,665
474,552
2,587,317
80,341
2,638,135
157
Public Education
0
0
45,250
59,456
89,974
5,030
89,974
158
Investigations0
0
122,772
122,772
713,895
66,793
715,195
159
Traffic Enforcement
0
0 1
119,400
118,320
115,240
8,378
115,240
Page 6
Page 7
City of Plymouth
GENERAL FUND BUDGET
FOR YEAR 1996
SUMMARY OF EXPENDITURES
1996
1996
1993
1994
1995
1995
Continued
Increased
1996
Actual
Actual
Adopted
Estmtd
Service
Service
Mgrs
Ex dtrs
Expdtrs
Budeet
E aku
Buduet
Budnet
Budget
160
Administration & Records
3,755,100
4,122,005
3,648,588
3,658,641 1
820,185
86,656
820,185
161
Emergency Management
7,391
4,125
13,500
13,500
13,700
18,000
13,700
163
Fire
702,285
767,885
860,224
849,575
867,802
55,535
884,572
**TOTAL PUBLIC SAFETY
4,464,776
4,899,019
5,316,703
5,332,600
5,459,639
320,733
5,528,527
PUBLIC WORKS
168
Street Cleaning
0
0
76,975
75,049
139,257
5,300
144,257
169
Snow/ice Control
0
0
255,475
222,646
455,821
21,950
456,471
171
Engineering
315,226
300,371
363,102
358,740
367,239
84,748
411,787
172
Street
1,459,586
1,415,386
1,242,657
1,242,708
967,508
39,800
959,638
173
Drainage Maintenance
0
0
55,575
55,575
133,321
4,800
133,321
175
Street & Traffic Lights
418,870
434,561
517,700
469,977
508,400
0
508,400
**TOTAL PUBLIC WORKS
2,193,682
2,150,318
2,511,484
2,424,695
2,571,546
156,598
2,613,874
OTHER
188
Volunteer Coordinator
0
22,698
29,490
28,767
31,076
0
31,076
189
Community Services
299,391
326,398
389,700
398,292
423,731
0
422,931
190
Other
67,109
0
218,189
54,344
84,067
0
146,257
**TOTAL OTHER
366,500
349,096
637,379
481,403
538,874
0
600,264
TOTAL GENERAL FUND
11,349,569 1
11,999,504
13,484,911 1
13,184,558
13,663,651
1,043,369 1
13,957,624
Page 7
MARTHA ROBERTSON
Senator, District 45
125 State Office Building
100 Constitution Avenue
St. Paul, MN 55155-1206
(612)296-4314
Home:
2000 Indian Road West
Minnetonka, Minnesota 55305
November 15, 1995
Joy Tierney
17915 20th Avenue North
Plymouth, MN 55447
Dear Joy,
Senate
State of Minnesota
As the federal government debates the national budget, we in the state legislature are focusing on
ways to adjust the state's budget. With an impending budget crisis on both fronts, the State of
Minnesota must adjust its resources accordingly.
The recently released BrandUWeber report is a bi-partisan plan to reduce state spending and
counter the state's budget deficit. I believe this is a step in the right direction and encourage you
as a concerned and informed citizen to stay abreast of the progress. For this reason, I am
enclosing a copy of the BrandUWeber report for your reviewal.
Please call on me with any questions or comments you may have.
Sincerely,
Martha Robertson
State Senator
Enclosure
MR/jb
1Lli
Ree_ir/ed Paper COMMITTEES: Education (K-12 Finance) • Family Services • Judiciary • Metropolitan and Local
35% Post- Government
Consumer Fiber SERVING: Golden Valley • Medicine Lake • Minnetonka • Plymouth • Wayzata
November 13, 1995
TO: REPUBLICAN SENATORS
RE: BRANDL/WEBER REPORT BASICS
BASICS OF BRANDL/WEBER REPORT
Minnesota is facing a $2.5 billion ($8.3 billion accummulative) budget gap by year 2001
because of the widening distance between spending and revenue systems. This is a problem
too large to be solved with new management applications. Instead, government must be
reformed around the components of:
COMPETITION
COMMUNITY
CONCENTRATION
Accounts for 1/3 of the total state budget. Three times more money is spent per student unit
(adjusted for inflaltion) than was spent on the previous generation. Education reform will be
suggested to include:
VOUCHERS for low income students
LIFT CHARTER SCHOOL CAPS
OFFER MORE CHOICE to local schools and boards
EXPAND FLEXIBLE learning options.
Shift dollars to students
Allow local college presidents more decision-making authority
Hold institutions accountable for results
Create an educational market place and the consumer will determine which schools will
succeed
Target aid to people and communities in need
Require voter approval to increase property taxes (non -school)
Levy future property tax increases on market value
Require more competitive contracting of local government services
Give more autonomy to sentencing guideline commission
Expand use of private vendors
Use local jails for short sentences
Focus dollars on prevention
HEALTH CARE
pool the state's buying power and require providers to bid to provide services to people
with disabilities and the elderly
Streamline regulations and focus instead on outcomes
Give consumers incentives to pursue healthy conduct
Take the consumer's ability to pay in account when providing services to people with
disabilities or elderly
MARTHA ROBERTSON
Senator, District 45
125 State Office Building
100 Constitution Avenue
St. Paul, MN 55155-1206
(612) 296-4314
Home:
2000 Indian Road West
Minnetonka, Minnesota 55305
November 15, 1995
Joy Tierney
17915 20th Avenue North
Plymouth, MN 55447
Dear Joy,
Senate
State of Minnesota
As the federal government debates the national budget, we in the state legislature are focusing on
ways to adjust the state's budget. With an impending budget crisis on both fronts, the State of
Minnesota must adjust its resources accordingly.
The recently released Brandl/Weber report is a bi-partisan plan to reduce state spending and
counter the state's budget deficit. I believe this is a step in the right direction and encourage you
as a concerned and informed citizen to stay abreast of the progress. For this reason, I am
enclosing a copy of the Brandl/Weber report for your reviewal.
Please call on me with any questions or comments you may have.
Sincerely,
Martha Robertson
State Senator
Enclosure
MR/jb
Re. ydeA PaperCOMMITTEES: Education (K-12 Finance) - Family Services - Judiciary - Metropolitan and Local
3.5% Nsv Government
Gm Fil— SERVING: Golden Valley - Medicine Lake - Minnetonka - Plymouth - Wayzata
November 13, 1995
TO: REPUBLICAN SENATORS
RE: BRANDL/WEBER REPORT BASICS
BASICS OF BRANDL/WEBER REPORT
Minnesota is facing a $2.5 billion ($8.3 billion accummulative) budget gap by year 2001
because of the widening distance between spending and revenue systems. This is a problem
too large to be solved with new management applications. Instead, government must be
reformed around the components of:
COMPETITION
COMMUNITY
e
CONCENTRATION
Accounts for 1/3 of the total state budget. Three times more money is spent per student unit
(adjusted for inflaltion) than was spent on the previous generation. Education reform will be
suggested to include:
VOUCHERS for low income students
LIFT CHARTER SCHOOL CAPS
OFFER MORE CHOICE to local schools and boards
EXPAND FLEXIBLE learning options.
Shift dollars to students
Allow local college presidents more decision-making authority
Hold institutions accountable for results
Create an educational market place and the consumer will determine which schools will
succeed
Target aid to people and communities in need
Require voter approval to increase property taxes (non -school)
Levy future property tax increases on market value
Require more competitive contracting of local government services
Give more autonomy to sentencing guideline commission
Expand use of private vendors
Use local jails for short sentences
Focus dollars on prevention
HEALTH CARE
Pool the state's buying power and require providers to bid to provide services to people
with disabilities and the elderly
Streamline regulations and focus instead on outcomes
Give consumers incentives to pursue healthy conduct
Take the consumer's ability to pay in account when providing services to people with
disabilities or elderly
An Agenda for Reform
1 Report Summary
5 Elements of Reform
17 Strategies for Change
ederal budget cuts, increased demand for services
and slower economic growth are converging to
produce a cumulative fiscal gap of more than $8
billion in Minnesota by 2001. By that year, state and local
governments could face an annual shortfall of over $2.5
billion — a sum that far exceeds the combined current
state spending on community colleges, prisons, nursing
home care and special education.
A gap of this magnitude cannot be addressed merely
through better management or belt tightening. It requires
fundamental changes in the way Minnesota delivers tax-
payers' services.
Report Summary
Prepared by former state legislator John Brandl and
former Congressman V'm Weber at the request of Gover-
nor Arne H. Carlson, An Agenda for Reform offers an
overall structure for change, plus specific approaches in
each of the major government spending areas. Our central
conclusion is that in the future, government in Minnesota
cannot meet its responsibilities without reforms as sweep-
ing as, and similar to, the "perestroika" that has been nec-
essary in the formerly communist countries. Reforms are
based on achieving results through competition, encourag-
ing communities and concentrating spending on people
most in need.
Competition in the private sector leads to improved ser-
vices and reduced costs. But government responsibilities
are usually carried out by monopoly government bureaus.
In addition, where communities have been providing ser-
vices, the results have usually been superior to govern-
ment programs and the costs much lower. Government
should institute reforms to offer consumers of government
service choices and to carry out more of its work through
families, churches and other voluntary organizations.
As budgets tighten, concentrating spending on areas and
individuals most in need will become more critical. Cur-
rently, much government spending is distributed in an al-
most random fashion. For example, state spending for
higher education lowers tuition for all, including the most
wealthy. Focusing aid would permit the state to meet le-
gitimate responsibilities fairly and with less money.
A new global budget framework is recommended to allow
policy -makers and public administrators to set budgets
An Agenda for Reform 1
based on realistic projections of available resources. Un-
der the framework, overall spending targets would be set
for each of the next four years based on projections of rev-
enue growth. Spending estimates would be determined
based on spending for each program area assuming cur-
rent laws. Current policy choices reflected in adopted bud-
gets are respected. Across-the-board cuts would be made
in each program area to reach overall spending targets.
Debate on priorities for funding among program areas
should occur only after Minnesota institutes serious and
far-reaching reform and restructuring.
An Agenda for Reform offers 39 specific recommenda-
tions.
General Principles
■ A target should be set for spending and targets should
be established for all major expenditure areas.
■ Eligibility for government benefits should be limited to
the most needy.
■ Funds should go to citizens, not bureaucracies.
■ Expand choices for government officials.
■ Enable families and communities to provide some ser-
vices.
Global Budgeting
■ Minnesota should adopt a global approach to budgeting.
■ The state should establish the total spending targets for
each of the next four years based on projected revenue
growth without tax changes.
K-12 Education
■ Permit low-income parents to receive education vouch-
ers that could be used at private and parochial schools.
■ Permit low-income parents to use education vouchers
for independent learning or home schooling.
2 An Agenda for Reform
■ Do not allow school districts to deny use of facilities to
nonpublic school students.
■ Allow students to enroll in any school district, with no
restrictions on open enrollment.
■ Do not weaken or limit the post -secondary enrollment
options program.
■ Remove the cap on the number of the charter schools
and amend legislation to encourage development of char-
ter schools.
B Give credit to students who meet standards regardlt;s
of where learning takes place.
■ Allow low-income 11th -graders to establish accounts
for career preparation programs.
■ Allow school sites to make decisions about manage-
ment and funding.
■ Allow school boards to convert schools to charter
schools.
■ Expand authority of school boards to purchase instruc-
tional services and authority of teachers to market ser-
vices.
■ Establish a comprehensive, user-friendly program to
provide information to students and parents about all the
schools, programs and options available to them
■ Establish a mechanism to monitor and report on school
performance.
Post -Secondary Education
■ Radically change the way state funds for higher educa-
tion are appropriated by giving more to students and less
to institutions.
■ Governing boards should set standards for institutions.
■ Give college and university presidents more authority.
Criminal Justice
■ Keep the courts focused on necessary cases by using di-
version, jail screening, an infractions bureau and victim -
offender mediation.
■ Restore the independence of the Sentencing Guidelines
Commission.
■ Incarcerate in county facilities those offenders with
short sentences.
■ Authorize the Department of Corrections to contract
with private vendors for incarceration and institutional
programming for medium -security male inmates in
nonpublic facilities.
■ Authorize the Department of Corrections to contract
with private vendors for incarceration and institutional
programming for low -security male inmates in public fa-
cilities.
■ Create mechanisms to lower prison per diem costs.
Property Taxes and Local
Government Aid
■ Concentrate the state's property tax relief on needy
people, not local governments.
■ Target aid to local governments at governments in need.
■ Require local governments to pass a referendum before
increasing noneducation-related property taxes.
■ Require future property tax increases to be levied on
market value.
■ Create a new form of government — the village — to
foster local competitive contracting.
■ Establish deadlines for government to submit their ser-
vices to competitive bid.
Health Care
■ Pool the state's buying power and require providers to
bid to provide services to elderly people or people with
disabilities.
■ Streamline regulations and focus instead on outcomes.
■ Give consumers incentives to pursue healthy conduct.
■ Take the consumers' ability to pay into account when
providing services to elderly people or people with dis-
abilities.
An Agenda for Reform 3
he policy challenges facing Minnesota are unprec-
edented. Beginning immediately and mounting
over the next several years, Minnesota must cope
with fiscal deficits of massive proportions.
To address this pending fiscal crisis, we have prepared an
agenda for major reform at the request of Governor Arne
H. Carlson. Fundamental changes are proposed in the way
Minnesota delivers taxpayers' services. The key principles
for reform are competition, community and concentration.
Government spending primarily benefits students, the eld-
erly and the disabled. We will continue to see a bulge in
Elements of Reform
these populations, which will put immense stress on our
budget Additionally, the Minnesota corrections budget
has dramatically increased as incarceration rates have
climbed. Prison construction costs are consuming an in-
creasing portion of the state's capital budget.
The demographic problem is aggravated by the slowing
growth of the economy. While Minnesota has enjoyed one
of the highest rates of growth outside the Sun Belt for
many years, spending demands on government are grow-
ing faster. Over the next six years expenditure demands ex-
ceed prospective state and local tax revenues by $5.1
billion.
This prospective shortfall would be sufficient to force a re-
thinking of public policy in Minnesota, but the coming
cutback in federal aid will make the crisis even more
acute. Preliminary analysis of federal plans adds $3.2 bil-
lion to the projected gap.
We believe that the current debate in Washington is quali-
tatively different than past debates, and that Minnesota
would be foolish not to assume that federal funds to the
states will be curtailed even further in the coming years.
In Washington, the debate has narrowed to the relative
merits of balancing the budget in nine versus seven years.
Both parties appear committed to budget balance and that
forecloses the possibility of substantial increases in funds
to the states for the foreseeable future. Minnesota should
plan for an era of increased state responsibilities and de-
creased federal funds.
An Agenda for Reform 5
Over the next six years the anticipated federal cuts would
add $3.2 billion to Minnesota state and local deficits. Not
only will state and local governments have to contend
with an aggregate shortfall of about $8 billion over the
next six years, but by the year 2001, state and local gov-
ernments in Minnesota could be facing an annual shortfall
of $2.5 billion. This immense sum exceeds combined cur-
rent annual state spending on community colleges, pris-
ons, nursing home care and special education. Of course,
abandoning such crucially important state responsibilities
as these is no solution. In order to meet these responsibili-
ties we must find ways of doing more for less.
in forecasting the future, we have assumed that current tax
laws continue unchanged. Increases in sales and income
tax revenues will occur as a result of economic growth
just as property tax revenues change to reflect increases in
valuations, but this report assumes that the option of rais-
ing tax rates is not available.
An assumption of no tax increases is the only possible
way for Minnesota to approach its current crisis for two
basic reasons.
First, any plan based on tax increases is almost sure to be
frustrated by a tax -weary public. Legislators facing elec-
tion are not likely to support large tax increases in this po-
litical climate. Virtually all recent political evidence
concludes that the debate is between the current level of
taxation and lower taxes. To bet Minnesota's future on any
other calculation would be foolhardy.
Second, we are convinced that a tax -neutral approach is
the only way the political will can be summoned to make
the needed policy innovations.
This is no time for timidity in the public policy arena. The
public is saying "no new taxes," but demanding improve-
ments in the quality of services delivered by government
at all levels. This apparent conflict between the public's
unwillingness to pay higher taxes and their demand for
improved services marks the central rationale for radical
restructuring rather than a more traditional approach to
budget management.
Both the political left and the right are challenged by the
current environment. Traditional liberals wish for a return
to a day when taxes could simply be raised and revenues
spent and a grateful electorate would respond by re-elect-
ing the responsible public officials. Conservatives, on the
other hand, would like to believe that the public's concern
extends only to opposition to taxes, and that spending cuts
6 An Agenda for Reform
can be enacted without regard to the quality of public ser-
vices.
But the public is saying they want better and cheaper gov-
ernment.
The Governor asked us to create a bipartisan agenda and
we have done so. DFLers, who traditionally attribute ma-
jor responsibilities to government and who want govern-
ment to focus on the disadvantaged, will see those
commitments reflected in our recommendations. Republi-
cans, who have long wanted less government bureaucracy
and more emphasis on individual choice, market forces,
and voluntary institutions, will notice that our recommen-
dations include those means of carrying out government's
responsibilities.
The public understands that, when confronted with a
problem of this magnitude, there are two paths available to
policy makers: coping through better management of
government's current programs or improving through f in-
damental restructuring.
The management approach is attractive, though in differ-
ent ways, to both political parties. It is characterized by
improved administration, better motivation of employees,
reorganization of existing agencies, decentralization of
functions and simple budget cuts.
Certainly there is much to be said for more efficient man-
agement. However, improved management of current ar-
rangements will not generate the results we need.
Federal Cuts Will Increase State and Local
Revenue -Spending Gap
(in billions)
$25.2
$23.7
T� f22.7
$21. f21. Revenues with
-••921.8 Fed"Cuts
$20.11
520.
'"izo.�
'999.9
0.1
1996 1997
199a 1909 2000 2001
Source: Minnesota Department of Finance
The time has come to reconsider in the most fundamental
ways how government in Minnesota meets its responsi-
bilities to the people.
In discussing the necessary restructuring we have tried to
use words that convey a true sense of the historic chal-
lenge and opportunity before us.
We have called our task Madisonian, because President
James Madison, the principal designer of our federal sys-
tem, addressed the basic relationship between the people
and their government.
We have used the word "perestroika" because the restruc-
turing of Eastern European economies shows the limita-
tions of the "management" approach to reform. No one
today would argue that any revolution in management
could have made Eastern Europe competitive with the
West.
Nothing in this report should be taken as an indictment of
the. motivations or competencies either of the people who
have written public policy in Minnesota or of those who
have administered it.
In fact, it is precisely Minnesota's tradition of excellence
and innovation in public policy that make us optimistic
that our state can look upon our current challenges as an
opportunity. Just as Minnesota led the nation in building
networks to provide services in such areas as vocational
education and mental health, today we can lead the nation
Cumulative Fiscal Gap
including Federal Budget Cuts
1996 to 2001
$8.3
Billion
$2.5 billion
$5.8 deficit
Billion
3 2.2 billion
$3.6 deficit
Billion
51.8 $1.6 billion
deficit
Billion 0
$0.5 $1.3 billion
$0.1 Billion deft
Billion
1996 1997 1998 1999 20DO 2001
By 2001, the annual gap is projected to be $2.5 billion
with a cumulative gap of $8.3 billion over six years for
state and local governments.
Source: Minnesota Department of Finance
in restructuring public services to achieve superior results
at reduced cost.
Minnesota is entering a period of serious fiscal difficul-
ties. In this report we will explain why and recommend a
course of action that we believe to be necessary if our
state is to thrive in the future.
The Problem
The coming challenge to government emerges from the
following five facts, assumptions and projections:
■ The vast bulk of government spending in Minnesota
goes to a handful of items widely regarded to be appropri-
ate governmental responsibilities. Education, health and
human services claim most of the money. Most of the rest
is devoted to property tax relief (in the form of state aid to
local governments and to property taxpayers) and criminal
justice.
■ The economy of the state — from which tax revenues
come — is growing more slowly than are the needs of
people on whom some of the major state expenditures are
focused. For example, spending for medical care is con-
centrated on elderly and disabled people, and the number
of Minnesotans over age 85 is projected to grow five times
as fast as the general population.
■ The people of Minnesota are not prepared to have a
greater proportion of their income devoted to state and lo-
cal taxes.
■ The federal government will cut back considerably in
its aid to the state.
■ The results of government spending are not good
enough. Despite large increases in state government
spending in the past several decades — for example, infla-
tion-adjusted spending per public school student nearly
tripled between 1960 and 1990 — adult and youth literacy
rates are dropping and juvenile crime rates are skyrocket-
ing. Evidence suggests American young people are unpre-
pared for the workforce and could be contributing to the
slower economic growth we are now experiencing.
Minnesota, therefore, has a two-part budget problem:
An Agenda for Reform 7
■ For many years to come, state and local governments
will face huge and growing imbalances between spending
demands and available revenues.
■ The major programs to which government budgets are
devoted produce unsatisfactory results.
In the past, Minnesota has often dealt with budget difficul-
ties by raising taxes and reducing spending. This time the
problem will not be solved by raising taxes; the citizenry
has made it clear that government is to get by without tak-
ing a larger share of people's income. There is no practical
possibility that the public sector will receive sizable bud-
get increases in the foreseeable future.
The budget problem also will not be solved by merely cut-
ting spending; the state's main services are of critical im-
portance. Those advocating an increase for their favorite
cause, whether it is education, health care, corrections or
property tax relief, must know that more money can only
come from other spending areas. Trading health for edu-
cation will not solve Minnesota's problems.
The solution lies in finding ways to improve results while
spending less. Americans, including Minnesotans, have
come to see the government as unresponsive and ineffi-
cient in the extreme. Solving Minnesota's budget prob-
lems involves identifying and responding to the reasons
for this situation.
improving Government
Management is Not the
/answer
A management proponent would say the solution lies in
finding successful "benchmark" solutions for govern-
ment's tasks; stressing outcomes, not inputs; introducing
total quality management; mandating higher standards;
decentralizing authority; forming cooperative ventures
with other units of government and the private sector, urg-
ing public employees to think of clients as customers;
eliminating waste; and so on.
We do not claim these proposals are without value. But all
come down to exhorting people in government to do
things differently.
Exhortation is not policy. It is not systematic. It is ignored
with impunity. Urging people in government to manage
8 An Agenda for Reform
better will not work for the same reasons that manage-
ment changes alone could not improve the East German
automobile industry, the Soviet food delivery system, or
steel -making in communist Poland.
Could one of the management approaches just mentioned,
or any other attempt to improve management, have turned
around those hapless communist efforts? The answer is,
no.
Countries behind the Iron Curtain attempted to produce
goods and services in bureaus. A bureaucracy consists of
government giving a franchise to an agency it owns, then
bestowing money on it along with a set of rules the
agency is to follow. Bureaus receive funding regardless of
their effectiveness.
Recipients of a bureaucracy's services can do little to in-
fluence the quality of services. Bureaus lack built-in in-
centives to improve and lack penalties for failure. They
are subject to no systematic discipline that would foster
productivity.
Minnesota government tries to teach children, tend roads
and heal people by means of the bureaucracies we know
as school districts, the highway department and state hos-
pitals. But the lesson of our time, from both the inad-
equate performance of government in this country and in
more spectacular fashion from the colossal failure of the
communist regimes, is the inherent inefficiency of bureau-
cracies.
State Government General Fund
Spending Categories
Percent of Total — Fiscal Year 1996-97
K-12 Education 31.7'x°
Health and 27.4%
Human Services
Local Aids and ® 13.2%
Credits
Higher Education ®11.8%
Criminal Justice 04.8%
Other
Note: Other includes environment, natural resources, economic
development, transportation and state government.
Source: Minnesota Department of Finance
Sheltered by its monopoly status, the East German bu-
reaucracy that made Trabant automobiles could take its
clientele for granted, secure in the knowledge that it
would continue to receive its government appropriations.
The cars were junk. Correspondingly, much of what
American government does yields little in the way of re-
sults.
There is no more reason to expect monopoly bureaus to
give rise to good education in Minnesota than there was to
expect them to create good cars in East Germany. In bu-
reaus the usual government policies — creating exclusive
franchises, spending money, issuing mandates, exhorting
people to work harder, installing the latest management
fads — are condemned to have but fleeting effect.
Our point is not to criticize public servants. In fact, many
government employees are well -motivated, highly compe-
tent people. However, like their counterparts in private
employment, government employees often advance their
own interests at the expense of the public good. Govern-
ment employees are interested in their jobs, their incomes,
their raises, their advancement, their pensions, their secu-
rity in the workplace. These interests are represented at
the Legislature, effectively, by wealthy and powerful orga-
nizations, which are themselves private. These interests
are legitimate. But they are not public interests. It makes
no difference that they do not take the form of a business
corporation. They are private interests.
Private economic interests sometimes conflict with the
public interest on matters of pay, accountability, assign-
ment of personnel, on whether to introduce innovations
that could accomplish more work at lower expense, and
on whether the interests of the government employees
themselves are to be put first, as opposed to the students,
patients and citizens of the state.
It makes no more sense to expect that employees of state
government or of school districts are always watching out
for the public interest than it does to assume that those
working at 3M or Cargill are doing so. Commercial orga-
nizations and the people in them can be selfishly devoted
to their own advancement at the expense of those they are
expected to serve.
They can also be conspicuously devoted to serving their
customers' needs — if they are subject to competition that
elicits such devotion.
Government organizations and the people in them can be
entirely devoted to serving the public. They can also be
self-serving, putting the convenience of the organization
and its employees ahead of the interest and needs of the
citizens. There are no dependable constraints preventing
bureaucracies from satisfying the interests of their em-
ployees rather than those of their clients. When it comes
to producing goods and services, government's failure and
the source of Minnesota's budget problem lies in the at-
tempt to tum over important societal responsibilities to bu-
reaucracies.
Bureaucracies, whether Minnesota's school districts,
highway department or state hospitals on the one hand, or
the USSR's food delivery system on the other, cannot be
managed to the point of regularly yielding innovations and
efficiencies sufficient to accomplish better results at less
cost. Likewise the solution does not lie in finding "smart"
ways to root out waste, fraud and mismanagement.
Minnesota's budget problem is not a management prob-
lem in the sense that little can be expected from imposing
a new management technique or from exhorting public
managers to do better. Rather, the challenge is to devise
arrangements within which people will dependably and
consistently be inclined to seek efficiencies and manage-
ment improvements.
The Need for Fundamental
Reform
The only way to spend smarter is to get rid of the bureau-
cratic system, to undertake a "perestroika," a fundamental
reform of government. The needed reform rests on a basic
premise: while government has important responsibilities,
they need not be carried out by monopoly government bu-
reaus.
A service is public if it accomplishes a public purpose;
whether those producing the service receive a paycheck
from the government or not is irrelevant. When Minnesota
state government helps a student get an education at
Gustavus Adolphus College in St. Peter, or provides fund-
ing for a patient at the Mayo Clinic in Rochester, the pub-
lic welfare is advanced as much as if the spending had
gone to Worthington Community College or the Hennepin
County Medical Center.
Elected bodies should concentrate on funding and arrang-
ing services, not on producing services exclusively
through government-owned agencies.
An Agenda for Reform 9
The question of governance is, how can a free people
regularly and dependably accomplish public purposes? If
exhorting government to manage better cannot be counted
on to have significant effect, how can public responsibili-
ties be met?
In undertaking Minnesota's "perestroika," there are only
two broadly effective instruments available to policymak-
ers wishing simultaneously to cut costs and improve qual-
ity. These instruments are competition and community.
Competition
Competition is the main way a free people hold one an-
other accountable. As James Madison put it, "Ambition
must be made to counter ambition.... This policy of sup-
plying, by opposite and rival interests, the defect of better
human motives, might be traced through the whole system
of human affairs, private as well as public.... The con-
stant aim is to divide and arrange the several offices in
such a manner as that each may be a check on the other."
The founders did not expect that government would one
day come to consist largely of huge monopoly bureaus.
Contemporary government bureaucracies do not reflect
the admonition of the founders "to divide and arrange the
several offices." They are not subject to competition; they
are not arranged "in such a manner as though each may be
a check on the other."
In government's production of services, the crucial ele-
ment of competition is usually missing. The consumers of
government services rarely have the option of choice and
government bureaus lack both the incentive and the legal
means to innovatively provide greater value to their "cus-
tomers."
In American private business, competition is the indis-
pensable engine of innovation, the instigator of efficiency,
the main instrument by which society checks private inter-
ests.
In the private sector, reductions in cost are viewed as a
sign of progress. In government, cutting costs is almost al-
ways viewed in negative terms, such as "Draconian;'
"hard-hearted" and "cruel."
But we make no particular claim for privatization. Private
monopolies can be as self-serving as public monopolies.
In both private and public realms, competition is funda-
mental. When citizen -consumers have the choice between
10 An Agenda for Reform
competing suppliers, then those individuals possess the
power that holds the suppliers accountable.
Suppliers, whether private firms or public schools, will try
to attain monopoly status. When they succeed, account-
ability is lost; power flows from individual citizens to the
monopoly suppliers.
A major responsibility of government is to ensure that pri-
vate firms are subject to competition. But contemporary
American government -- national, state and local —
lacks adequate institutionalized protection for the society
from the self-interested behavior of the people who affect,
make and carry out public policy. In present day Minne-
sota, most government money is spent on large monopoly
bureaus that are not subject to competitive stimulation.
We propose to take away bureaus' monopolies and let
people choose for themselves which service producers —
starting with the schools, the largest spending item — are
best for them Competition puts power in the hands of in-
dividual citizens, not bureaucracies. The vast majority of
government services could be improved by the use of
competition.
It will take a sea change in the attitudes of even our best
public officials to fully embrace competition because for
so long the elimination of "wasteful competition" was
viewed as one of the first principles of good public policy.
In the future, competition must be viewed not as a prob-
lem, but as one of our most powerful tools.
Projected Growth in Population
and Personal Income
Five-year average —1995 to 2000
Total Population ®0.5%
Population Age 85+ 2.9%
Personal Income ® 2.1%
Source: Minnesota Planning
Community
"Community" is a principle more difficult to use in public
policy, but potentially even more powerful.
A community is an organization, membership in which
ordinarily draws people to work for the welfare of others.
Whether in a family, a religious organization, an ethnic af-
filiation or a civic association, the ties that bind a commu-
nity together are usually far stronger than any that
government engenders.
The key characteristics of communities are that they form
voluntarily and are bound by common values. For this
reason, communities can be thought of as potential re-
sources at a time when additional public funding is not
available.
Occasionally a government school or other bureau is a
community, in the sense that those served feel at home
there and workers spontaneously seek the benefit of their
clients. But these cases are increasingly uncommon. For
most of us, only family and religion hold our ultimate loy-
alties; few other affiliations consistently do so.
Where communities have been providing services, such as
in education and health care, the results have usually been
superior to government programs, and at lower cost.
Consequently, government should carry out much of its
work through communities. For example, an existing
Minnesota program provides public funds to families in
Health and Human Services Will Consume
More of State Government Budget
K-12 Education 31.7%
i 30.d%
Higher Education I106%
Health and Human Services i 27.d%
132.1 %
Local Aids and Credits13.2%
112%
Criminal Justice �a.8%
s.1 x
All Other �11.1x
10.7%
0 1996.1997 O 2000.2001
Source: Minnesota Department of Finance
order that their infirm loved ones can be cared for at home
rather than in a government institution. We need more like
it.
Families, churches and other voluntary organizations are
the most vibrant communities and, although policymakers
and public administrators will voice support and sympa-
thy for these nongovernmental entities, public policy often
has treated them with indifference at best and hostility at
worst. In the future they must be viewed as indispensable
allies. Communities inspire us to do good for others and it
may be that no amount of government funding can make
up for an absence of strong communities. It may also be
that only in healthy communities can we grow to be con-
cerned for the welfare of the greater society. If govern-
ment helps citizens meet educational, health and social
needs through communities, the communities themselves
are strengthened. Thus a Minnesota, strapped for money,
which turns to its natural communities may find both its
spiritual and its fiscal health enhanced.
Competition and community are the elements of
Minnesota's needed reform. They are the only dependable
ways to accomplish public purposes. Government pro-
grams not embodying competition and community should
be expected to fail.
Fully embracing competition and community will be diffi-
cult for the public policy world, because they require us to
throw off the top-down command -and -control model that
has dominated public policy for so long. Although compe-
tition will certainly result in lower costs and improved ser-
vices, from a traditional public policy perspective the
process is messy and unpredictable. And while communi-
ties offer tremendous untapped resources to apply to
society's problems, they can never be quite as accountable
as a government employee.
One philosopher wrote of America's quest for a "moral
equivalent of war," a cause so compelling as to induce in
us persistent motivation to work for the good of the whole
of society. But in our rebellious times, even war is not the
moral equivalent of war. Though we wish otherwise, only
very rarely and fleetingly are we drawn to work for the
benefit of all. For the production of goods and services,
reforming government means meeting its responsibilities
using competition and natural communities of mutual ob-
ligation.
An Agenda for Reform 11
Concentration
Finally, we believe that running through all our policy de-
cisions should be a commitment to concentration of re-
sources in areas of greatest need. This is not so much high
principle as simple common sense, but common sense
that has far too often not been applied in the allocation of
dollars through public policy in Minnesota.
We propose that reform in Minnesota include the concen-
tration of public spending on those people most in need.
Much government spending is almost randomly distrib-
uted; some is even directed away from the disadvantaged.
For example, Minnesota's current aid to cities would be
nearly as fairly distributed if it were strewn over the state
from an airplane. As our local aid programs grew, some-
thing of a tradition arose in the Legislature, not to vote for
a tax bill until cities in one's own district get additional
funds. The current programs foster logrolling, which has
contributed to wasteful expansion. Aid must be targeted to
where it is needed.
Another example, state spending on higher education, is
actually regressive, because it lowers tuition for all includ-
ing the most wealthy (who attend college in higher
numbers than the poor). Countless other programs are
similarly haphazard.
In general, government should aid needy individuals di-
rectly rather than send money to an organization to help
the individual.
For example, property tax relief is better granted directly
to strapped taxpayers than to the cities in which they live.
Assistance to higher education is better given to students
directly than to the colleges and universities they attend.
There are two reasons for this: Individual recipients be-
come monitors; they impose discipline on cities by decid-
ing in referenda whether they wish to pay higher property
taxes, and on higher education institutions by deciding
whether this college or that better meets their needs. Also,
money granted by the state to individuals can be focused
better on those who need it, than can funds granted to bu-
reaus, cities or colleges.
While public policy involves far more than the redistribu-
tion of resources, certainly in times of serious fiscal con-
straint the principle of concentration of resources where
most needed should be applied more rigorously. Focusing
12 An Agenda for Reform
aid would permit the state to meet legitimate responsibili-
ties fairly and with less money.
General Principles
Meeting government's responsibilities by introducing
competition, encouraging communities and concentrating
public spending on the needy has clear implications for all
government spending in Minnesota. whether financed lo-
cally, at the state level or by the federal government. The
recommendations for reform contained in this report do
not distinguish among sources of funds for state activities.
The principles are germaine to all state services, regard-
less of source of funding. Following are some of the gen-
eral policies that would result from a government intent
on giving its citizens value for money.
Recommendation: A target should be set for spend-
ing and targets should be established for all major
expenditure areas. The citizens, Governor and Legisla-
ture have already determined that taxes as a fraction of in-
come will decline slightly in the coming years. Now we
need to stipulate for each major spending area — K-12
education, higher education, health care, state aid to local
government, prisons — how much of our tax revenues we
will allocate to each.
Recommendation: Eligibility for government ben-
efits should be limited to the most needy. Budgets
will be extremely tight even if we undertake sweeping re-
forms. Rich people will have to pay higher college tuition
if we are serious about providing financial aid to poor
people. Only those cities that are especially needy should
get aid from the state.
Recommendation: Funds should go to citizens, not
bureaucracies. Parents, students, and patients would use
the money at whichever school, college or hospital they
choose. They decide what is best for them, whether the in-
stitution is owned by government or not.
Recommendation: Expand choices for govemment
officials. Where government officials, not individual citi-
zens, make spending decisions, it is imperative that the of-
ficials have choices. The arrangement under which, for
example, school boards buy services only from schools
they own, is a conflict of interest. In general, public offi-
cials need choice as much as citizens do.
Recommendation: Enable families and communi-
ties to provide some services. Enabling, and where
necessary, funding citizens to receive social and educa-
tional services from family members, churches and other
communities is not only responsive to people's wishes, it
is also cost-effective.
Government programs that do not embody the principles
of competition, community and concentration are bound
to fail. Conversely, a government which honors these prin-
ciples will succeed. Such policies offer the best chance to
balance the budget, improve the quality of public service
and accomplish both in a just manner.
Global Budgeting
State governments often contrast themselves favorably
with the federal government by noting that states do not
engage in deficit spending. This is accurate as far as it
goes but, in fact, the state of Minnesota has for decades
engaged in a similar exercise which one might think of as
"deficit committing" Policy commitments made in one
year have carried budgetary "tails" that committed the
state to increased expenditures in subsequent years.
In the 1960s and 1970s this practice caused few problems
because Minnesota was experiencing a relatively high rate
of economic growth. Revenue growth could be counted
on to outpace growth in expenditures, except in times of
recession, which the Legislature usually dealt with by
raising taxes.
But in the 1980s the slowing of the national economy be-
gan to create chronic state deficit commitment problems
The Magnitude of the Gap
(in billions)
1996-97 1998-99 2000-01 Cumulative
Anticipated
federal cuts $0.4
$1.0 $1.8 $3.2
State shortfall $0.0
$0.8 $1.1 $1.9
Local shortfall $0.1
$1.3 $1.8 $3.2
Total
$8.3
Between now and 2001, federal, state and local revenues
will fall $8.3 billion short of current spending demands.
Source: Minnesota Department of Finance
as revenue growth failed to keep pace with spending
growth. This problem reached serious proportions in 1991
when the Governor and Legislature were forced to enact a
package of tax and spending changes totaling $2 billion.
In part, this situation arose because Minnesota's budget,
like those of most other states and the federal government,
was essentially "agency driven" Government agencies
would base their requests on caseload changes, previously
enacted policy changes and inflation and submit their rec-
ommendations to legislators accordingly. Legislators, in
turn, would usually simply add to this "baseline" their
own preferences and the result would be an increased ap-
propriation. This was all made possible by a seemingly
endless revenue stream
As fiscal realities have tightened, governments across the
country have tried to adjust their budget processes to these
changing realities. In Minnesota, Governor Carlson has
tried to change this process by seeking long term fiscal
discipline. The Governor and Legislature also passed into
law the Price of Government legislation which commits
the state to a gradually declining share of total state in-
come dedicated to taxes and effectively caps overall state
revenues for the next four years.
Minnesota is facing a new era of constraints. Demo-
graphic and economic changes are overrunning the old
way of budgeting. Deficit commitments must be replaced
with a new system based on realistic projections of re-
source availability. Policy -makers and public administra-
tors must have the means to plan ahead. Such a system of
stipulating a spending plan ahead of time is usually re-
ferred to as "global budgeting."
Overall targets are meaningful only if accompanied by
specific program -by -program targets that are both realistic
and enforceable. We are convinced that to meet our twin
goals of controlling cost and maintaining quality, it is im-
perative to enact such a system now.
Recommendation: Minnesota should adopt a glo-
bal approach to budgeting. Minnesota's new budget
framework should be based on the following principles:
■ The global budget should cover all general fund spend-
ing with program targets that balance the budget for the
next two biennia.
■ Targets should be established for all major expenditure
programs — K-12 education, post -secondary education,
An Agenda for Reform 13
property tax aids and credits, health care and family sup-
port, criminal justice and all other general fund activities.
■ Program targets should be expressed as a percentage of
available revenue.
■ The cash flow account and budget reserve should be
fully funded.
The benefits of such an approach to citizens, elected offi-
cials, policy -makers and administrators in the months and
years ahead are clear. We are entering an era marked by
change, uncertainty and slower growth in resources. Glo-
bal budgets will provide Minnesota a higher degree of
public resources predictability. Long-term fiscal planning
will facilitate the creativity and policy innovation neces-
sary to maintain and enhance quality.
But the immediate challenge to our policy -makers in de-
vising and implementing this structure should not be un-
derestimated.
Continuing current laws and policies would require an 8.4
percent increase in revenues for the 1998-1999 biennium
and another 10.1 percent increase in 2000-01. But the pro-
jected increase in revenues without a legislated tax in-
crease during the same period is 3.9 percent and 8.8
percent respectively. This leaves the Legislature and the
Governor with a gap of $1.9 billion.
If all state programs were growing at an even pace, this
problem would be difficult, but at least straightforward.
But the problem is complicated by the fact that spending
is growing at dramatically different rates in different pro-
gram areas.
Estimates of federal reductions have changed as the na-
tional debate advances. In July, the projection of $3.2 bil-
lion in reductions included $1.9 billion in Medicaid alone.
The program implication for Medicaid is now estimated
to range from $2 billion to $3 billion. The balance of state
and local federal impact is still estimated to total $1.3 bil-
lion between 1996 and 2001.
The biggest part of the problem is health care spending.
While overall spending is estimated to grow at a rate of
8.4 percent in 1998-99 and 10.1 percent in 2000-01,
health care spending is projected to grow by 23 percent
during the 1998-99 biennium and another 23 percent in
2000-01. During the same period of time, higher educa-
tion is projected to grow by 0.8 and 6.9 percent respectively.
14 An Agenda for Reform
The projected federal changes in Medicaid will reduce, by
more than half, the rate of increases in federal support.
Establishment of block grants is intended to convert the
individual entitlement into more flexible funds. Signifi-
cant funding reductions will pose major program restruc-
turing challenges at the same time state support must be
constrained.
Clearly, trying to manage state spending increases within
available revenues would be vastly more difficult in some
areas (most notably health care) than in others. Equally
clear, this problem will easily absorb our policy -makers in
an intense debate over state priorities.
As we have tried to make clear in this report, we believe
the federal and state fiscal challenge facing Minnesota
citizens and lawmakers is of genuinely historic dimen-
sions. Virtually every area of government policy must be
reviewed and significant policy reforms enacted to assure
that Minnesota can continue to perform its core functions
with excellence in an era of resource constraints.
We cannot emphasize too strongly that it is to this task of
reform and restructuring - perestroika - that we believe
policy -makers must apply themselves most assiduously. It
is highly desirable that the budgetary framework within
which these policy changes take place be established as
early as possible and that the debate over that framework
be kept separate from the debate over the reforms them-
selves. Toward that end we recommend the following ap-
proach to Minnesota's first global budget.
Brandl-Weber Global Budget
Recommended Share of State Budget
Brandl-Weber
Actual Global Budget
Budget Recommendations
1996-1997 1998-99 2000-01
Education
31.7%
30.5%
30.4%
Property tax aids
13.2
12.3
11.2
and credits
Higher education
11.8
10.9
10.6
Health care
18.2
20.6
22.6
Family support
2.8
3.1
3.1
Criminal justice
4.8
5.0
5.1
All other spending
17.5
17.6
17.0
100% 100% 100%
Source: Minnesota Department of Finance
Recommendation: The state should establish the
total spending targets for each of the next four
years based on projected revenue growth without
tax changes. Projected spending should be based on a
calculation of what would be spent in each program area
if current law and policies remain in place. Program tar-
gets should be established after across-the-board reduc-
tions to reach the overall spending target.
We believe Minnesotan's values are reflected in current
program budgets. For that reason, in approaching the glo-
bal budget framework, we have chosen to respect the pri-
orities established by the Governor and Legislature
Our global budget recommendations envision cuts from
current budget projections amounting to $811.5 million in
K-12 education
Property tax aids and credits
Higher education
Health care
Family support
Criminal justice
All other spending
Total spending
Available resources*
Balance/(Deficit)
Cumulative Gap
1998-99 and $1,156.8 million in 2000-01. The reductions
affect every spending area, but take into account the de-
mographic pressures that will be occurring over the next
four years.
In future years, as reforms are enacted and their implica-
tions assessed, there will and should occur a lively debate
in Minnesota over these priorities. That debate should oc-
cur within a global budgeting framework and after serious
and far-reaching reform and restructuring of Minnesota
government occurs.
We turn now to showing specifically how Minnesota gov-
ernment can live within its means and, in each of the ma-
jor areas of expenditure, get more for the taxpayers'
money.
Current Budget vs. Global Budget
(in millions)
Actual
Budget
1996-97
$5,777.9
2,406.9
2,144.1
3,314.4
512.6
869.2
3,194.5
$18,219.6
18,219.6
0.0
0.0
Future Budget Based
on Current Commitments
1998-99
2000-01
Estimate
Estimate
$6,020.5
$6,606.9
2,430.4
2,428.6
2,160.7
21309.1
4,076.5
4,908.0
591.2
671.5
991.8
1,107.5
3,478.0 3,721.9
$19,749.1 $21,753.5
18,937.6 20,596.7
(811.5) (1,156.8)
($811.5) ($1,968.3)
$5,773.1 ($247.4) $6,255.6
2,330.5
Brandl-Weber
Global Budget Recommendation
2,071.9
1988-89 2000-01
1998-99
Reductions 2000-01 Reductions
Proposed
from Proposed from
Budget
Estimate Budget Estimate
$5,773.1 ($247.4) $6,255.6
2,330.5
(99.9)
2,299.5
2,071.9
(88.8)
2,186.3
3,909.0
(167.5)
4,647.0
566.9
(24.3)
635.8
951.1
(40.7)
1,048.5
3,335.1
(142.9)
3,524.0
$18,937.6 ($811.5) $20,596.7
18,937.6 20,596.7
0.0 0.0
*Resources shown exclude current $554 million budget reserve and cash flow account authorized in the 1996.97 budget. The global budget
recommendation maintains this level of reserves.
Source: Minnesota Department of Finance
($351.3)
(129.1)
(122.8)
(261.0)
(35.7)
(59.0)
(197.9)
($1,156.8)
An Agenda for Reform 15
0 ne of the greatest challenges facing Minnesota is
to meet citizens' needs while living within our
means as a state. If we do not take action, we
will be left with an $8.3 billion gaping hole between gov-
ernment spending and tax revenues.
To live within these new fiscal realities, we cannot raise
taxes or simply cut government spending. We must funda-
mentally reform the way government does business. Three
systematic and broadly effective principles will make pub-
lic policy work: competition, community and concentra-
tion.
Strategies for Change
Based on these three principles, the following recommen-
dations address government reform in the areas of kinder-
garten through 12th -grade education, higher education,
criminal justice, property tax reform and health care.
K-12 Education
K-12 education, by far the largest item of expenditure for
state and local government in Minnesota, provides the
best illustration of the impossibility of accomplishing vital
public purposes by merely spending ever more money on
the existing bureaucratic system. In this section, we will
see how limited the financing for K-12 education will be
in the coming years, consider why schools are not good
enough, and recommend the most promising ways to im-
prove the quality of schooling in the state when finances
will be very tight.
In defining the challenges now facing K-12 education in
Minnesota, it is useful to consider what the situation will
be in the year 2001, given the budget constraint facing the
state and the fact that the school-age population will in-
crease by about 5,000 pupils per year from now to then.
Under the global budget, per -student revenue from state
and local sources would increase from $5,972 in the
1996-97 biennium to $6,404 in 2000-01, an increase of
7.2 percent, only half the estimated rate of inflation over
the same period. There will not be mere money available
for K-12 education unless funds are diverted from higher
education, local government aids, health care or correc-
tions.
An Agenda for Reform 17
Educators are unaccustomed to slow growth in revenues
over an extended period of time. From 1960 to 1990, the
amount spent per public school student in Minnesota
nearly tripled after adjusting for inflation. Almost three
times the educational resources are spent on students to-
day, compared to the amount spent on their parents when
they were in school. Not only is it possible that real per
student funding will drop in the coming years, but a larger
fraction of the students now entering our schools come
poorly prepared, with less educational assistance at home,
and thus in greater need of the benefits of school.
Achievement gaps
Even though the education budget almost tripled from
1960 to 1990 on a per student basis, the system failed to
achieve a corresponding improvement in educational out-
comes. Minnesotans have long viewed our education sys-
tem with smugness, pointing to our high graduation rates
and to standardized test scores somewhat above the na-
tional average.
A closer look at how we are doing should give us pause.
For example, two-thirds of Minneapolis students achieve
at below national average rates. A survey this year of
10th- and 11th -graders in Minnesota found that 30 percent
could not pass a basic reading test consisting of answering
straightforward questions about newspaper articles the
students had read.
In 1992, national tests found only 37 percent of Minnesota
eighth -graders "proficient" in math operations with frac-
tions, decimals, percents and basic geometry.
Improving performance
During the period in which educational expenditures were
rising rapidly, much was learned about how to improve
educational effectiveness. Educators and parents know,
and researchers have corroborated, that successful schools
are characterized by strong leadership, an orderly environ-
ment, the teaching of basic skills, high expectations of stu-
dents, homework regularly assigned and accomplished, a
substantial part of the students' day spent on academic
work, systematic monitoring of students' progress, and a
sense on the part of students, teachers and parents that
their school is a community.
These findings are not surprising, and one might have
thought that they would quickly have been adopted in
18 An Agenda for Reform
schools as soon as administrators and teachers became
aware of them. One might expect, for example, that school
boards and principals would be creating more orderly en-
vironments and having teachers to assign homework and
hold children to higher standards.
Unfortunately, evidence of their effectiveness and urging
their use have not led to widespread adoption of those basic
practices. Although many of them have even been partially
implemented, obviously they have had inadequate effect.
By and large, the continually increasing fluids being spent
on education have not been dedicated to uses known to
have beneficial effect. Rather, the money is mostly being
devoted to higher teacher salaries and lower class sizes,
neither of which has been found to be strongly related to
student achievement. In the current arrangement, fiinding
is in no way dependent on accomplishment of mission.
The adults in the school bureaucracy receive their salaries
and pensions (having lobbied the Legislature hard for
them) regardless of what the children learn. In the school
system it is only the children, not the adults, who are at
risk when inadequate education occurs.
In the Post -World War II era, teachers have attained a
comfortable standard of living (which could hardly be
held against them) and the pupil -to -teacher ratio in Min-
nesota has dropped from 23.3 in 1966 to 17.3 in 1994.
Meanwhile, the education level of Minnesota youngsters
has become a matter of grave concern.
In recent decades, the schools have taken on a variety of
functions not previously their responsibility — for ex-
ample, social services and public safety. It might be ar-
gued that the costs of education are distorted and
exaggerated by including money spent on those items.
But those efforts and their contribution to the almost tri-
pling of real per student expenditures in 30 years have not
been sufficient to overcome the social problems at which
they were directed. The efforts have not improved educa-
tion outcomes. Current social, political and educational
arrangements do not accomplish satisfactory education of
our children.
Given the fiscal prospects of the state, there is no reason-
able possibility for the foreseeable future that the schools
as currently organized could receive enough additional
money to produce substantial improvements. Even if
schools were to maintain the modest 0.6 percent real per
pupil spending growth rate of the early 1990s, they would
face a $1.7 billion cumulative five-year deficit from 1997
to 2001 under current law revenues. Returning to the 1.8
percent annual real per pupil spending growth recorded
from 1984 to 1994 would produce a five-year deficit of
$3.9 billion.
Given the state's fiscal constraints, government must learn
to do better with less. The education system has grown
accustomed to large budget increases per student, but for a
long while to come the state will have great difficulty
merely keeping real expenditures per student constant.
Budget increases have not typically yielded corresponding
improvements in elementary and secondary educational out-
comes in the past. If education in Minnesota is to im-
prove in the future, neither large amounts of additional
money nor exhorting educators to do better will be what
does it.
Effective approaches
Of course we wish Minnesota schools would use the most
effective curricula and teaching techniques. But it is not
for policy -makers in St. Paul to stipulate what those
should be. The task of policy-making is to devise arrange-
ments that allow and encourage teachers and administra-
tors to adopt the most effective approaches.
That is why the most promising policy for improving
schooling for all children in Minnesota is opening to fami-
lies a broad range of educational choices. This would have
the two -fold advantage of fostering the innovation and ef-
ficiency that comes with competition, and as well en-
abling families to find the educational community in
which their children do well. While we believe that even-
tually such a policy should apply to all children, some of
the recommendations we offer would apply only to chil-
dren of low-income families; that is, those most in need of
radical change in their schooling.
The very act of choosing a school heightens parent expec-
tations and creates parental and school accountability. We
are impressed with the evidence that where a school de-
velops a sense of community, education improves. That is,
where the children feel cherished, and the parents and
teachers participate actively in the school's activities, the
children tend to flourish educationally. And it appears that
community -schools, particularly those operated by reli-
gious organizations, are often especially effective in edu-
cating disadvantaged youngsters, presumably providing
support sometimes lacking at home. We think it prudent,
where religious institutions accomplish public good — for
example, providing better, cheaper education — that con-
stitutional ways be sought for government to fund them.
Traditionally, constructing a budget for K-12 education, as
in other areas, has begun by noting the number of students
to be schooled, then estimating the cost of producing the
schooling. As we have emphasized above, Minnesota is
now in a position of having rather to start with a fixed
amount of money available for the education of children.
The new budgeting task is to find and implement policies
that will foster quality education with that sum.
To help Minnesota meet the dual challenges of quality
and cost, three major changes are needed: expanded
choices for students; expanded choices for schools and
districts; and an increased emphasis on useful informa-
tion about schools and independent evaluation of school
performance, both for parents and policy -makers.
Expanding choice for students
A decade ago, Minnesota became a leader among the
states in education policy, challenging the traditional mo-
nopoly bureau model by opening up choice for students
within the K-12 system Session by session since then, the
Legislature has been gradually expanding this policy of
challenging the system by expanding choices. It is time
now to extend this policy by offering students even more
choices and expanding those choices beyond the tradi-
tional definition of public education.
Recommendation: Permit low-income parents to
receive education vouchers that could be used at
private and parochial schools. We propose a voucher
program that would permit low-income parents to receive
certificates that they could use for the education of their
children at private and parochial schools. Minnesota has a
long tradition of taking advantage of the strengths of pri-
vate sector nonprofit organizations to accomplish public
goals — we finance students to go to private colleges and
we allow families to spend public dollars for church -oper-
ated child care, social services and nursing homes. Ten per-
cent of Minnesota children already attend nonpublic
schools. The question now is, why would we deny low-in-
come students the same opportunity when so many are
struggling and falling behind in public schools?
The Milwaukee voucher experiment has demonstrated that
it is precisely the students who are having the greatest
difficulty who are choosing nonpublic schools. Those who
are doing well in public schools have no reason to change.
An Agenda for Reform 19
Private voucher schools may actually do the public system
a favor by relieving then of some of their lowest achiev-
ing, most expensive students. In Minnesota, they can
provide new capacity for fast-growing districts like Min-
neapolis and St. Paul that face space shortages.
Opponents are concerned that a voucher program drains
money rrom the public schools. It is true that some may
have to adjust staffing and programs because of lost rev-
enue, but all enterprises in society must do this when their
business drops, unless they redefine how they carry on
business. The number of voucher students transferring out
of the public schools in the near future is likely to range
from a low of 2,000 to a high of 30,000. This is less than 5
percent of public enrollment, a drop far smaller than the
200,000 student loss school districts experienced at the
end of the baby boom period. Total public enrollment is
growing by 23,000 from this year to 2001. This growth
may be greater than the number of students participating
in the voucher program.
Many nonpublic schools are strong in nurturing character,
discipline and values, above and beyond any particular
religious doctrine. Parents need support in choosing that
kind of education; perhaps as they do so, we will spend
less later on drug abuse, dropout prevention and criminal
justice programs.
We propose that Minnesota establish a statewide educa-
tional voucher program that gives every child eligible
for a free or reduced -price school lunch the funding to
choose a nonpublic school that meets their needs, provid-
ing the school joins the program and has space available.
The eligible group includes an estimated 230,000 public
students and 20,000 nonpublic students from households
with incomes below 185 percent of the poverty level. This
is 28 percent of 831,000 public students and 21 percent of
95,000 nonpublic students. The upper-income limit is
$28,028 for a family of four, and $18,556 for a single par-
ent with one child.
The program will be fiscally neutral, and may generate
savings in the long run. The commissioner of the Depart-
ment of Children, Families and Learning would be given
the authority to phase in the voucher amounts in the early
years in order to guarantee fiscal neutrality. The voucher
amounts would gradually be brought up to 90 percent of
state average general education revenues per student.
The voucher could be used to cover the cost of tuition and
fees at a private or parochial school. The maximum
amount of the voucher would be adjusted for grade level,
just as regular school funding is. For example, a voucher
for a 12th -grader would be higher than the amount allowed
Brandl-Weber Voucher Proposal at a Glance
Who qualifies for
Low-income students. Generally, students who qualify for the free or reduced -price school
education vouchers?
lunch program also would qualify for the voucher program. For a family of four, the upper
income limit would be about $28,000.
How many students
About 230,000 or 28 percent of public school students and 20,000 or 21 percent of
qualify?
nonpublic students would qualify, but it is likely that less than 30,000 of current public
school students would actually use them to attend nonpublic schools.
How much will vouchers
Vouchers for new private school students will be about $940 for kindergarten, $1,900 for
be in 1997?
elementary grades and $2,300 for secondary grades. Vouchers for students currently
enrolled in private schools will be $375 for elementary levels and $460 for secondary
students.
What will happen in the
Over the next several years, voucher amounts will gradually increase until they reach 90
future?
percent of the state's funding per student. At that level, vouchers for all private school
students would then be about $1,700 for kindergarten, $3,400 for elementary grades and
$4,150 for secondary levels.
Will home school
Yes, if they meet income eligibility limits. New home school students could receive
students be eligible for
vouchers for $470 for kindergarten, $940 for elementary grades, and $1,150 for
vouchers?
secondary levels. Children already in home schooling would get the same voucher
amounts as students currently enrolled in private schools — $375 for elementary grades,
$460 for secondary levels and $190 for kindergarten.
20 An Agenda for Reform
for a sixth -grader. A separate reimbursement mechanism
would give families a choice of transportation.
In order to achieve fiscal neutrality from the outset, we ex-
pect the maximum voucher for students newly transfer-
ring into nonpublic schools initially to be set at 50 percent
of state average general revenue per public school student
— about $2,300 for secondary, $1,900 for elementary and
$940 for kindergarten students. At this stage, scholarships
or family support may often be needed as supplements to
the voucher to cover the cost of tuition. It is important that
the voucher amount be raised as quickly as possible to
fully support tuition at average -priced private schools and
to stimulate expansion of nonpublic schools. We propose
that the maximum voucher eventually be raised to 90 per-
cent of the state average per pupil general revenue amount
— $4,150 for secondary students and $3,400 for elemen-
tary and $1,700 for kindergarten using fiscal 1997 formu-
las. Once the program is fully implemented, schools
would have to accept the voucher as full payment; schol-
arships could still be used, but no charges could be made
by schools to parents other than customary fees.
It is only fair to give low-income students already attend-
ing nonpublic schools the opportunity to be in the pro-
gram. Unfortunately, the only way that fiscal neutrality
can be achieved is by starting these students out with a
lower voucher. We propose 10 percent of the state average
general revenue per student — about $460 for secondary
students and $375 for elementary students — gradually
raising their voucher to the 90 percent level over a period
of five to 10 years. Since the voucher cost and the aver-
age cost structure of nonpublic schools is lower than that
of public schools, each student transferring to a nonpublic
school generates savings. It is those savings that pay for the
vouchers for existing nonpublic students. Thus, participat-
ing nonpublic schools will have a strong incentive to open
up as many positions as possible for new voucher students.
All types of nonpublic schools could participate, provid-
ing they meet current state nonpublic school laws and sev-
eral additional requirements. They would have to make a
minimum number of positions available to new voucher
students. Oversubscribed schools would have to select
voucher students by lottery; they could not "cream" only
the top students.
Under our proposal, special education students would
have to be provided for and current discrimination laws
would have to be met. These laws allow nonpublic schools
to have admissions criteria. Participating schools would
not be required to use any particular curriculum or instruc-
tional method, but would be expected to make a commit-
ment to the state graduation standards when they go into
effect. Like public schools, they would be expected to re-
port to parents and the public on student achievement.
Vouchers would be issued by the state and financed within
the present state general education revenue system, mean-
ing that they would be funded almost exclusively with
state dollars. No state categorical revenues, levy revenues
or compensatory aids would go into the voucher formula.
Recommendation: Permit low-income parents to
use an education voucher for independent learning
or home schooling. We propose one additional type of
voucher for independent learning. The rich array of educa-
tional resources available through computer networks,
multimedia and distance learning technology will soon
make it possible for children to learn as much or more at
home as in school. Home school is the fastest growing
educational option in Minnesota, increasing from 2,900
students in 1990 to 9,200 in 1994. Some parents are form-
ing neighborhood clusters and support networks that pro-
vide training, technical assistance, evaluation and
accreditation from certified teachers. This proposal is con-
sistent with our commitment to invest more in families
and less in costly institutions.
As a starting point for discussion, we propose that a
voucher set at 25 percent of statewide average general
revenue be made available to children from low-income
families newly choosing independent learning. This
would represent, in fiscal year 1997, about $1,150 for sec-
ondary students, $940 for elementary students and $470
for kindergarteners. Existing low-income home school
families could receive a 10 percent voucher at the outset,
which could be raised over time to the 25 percent maxi-
mum. The Commissioner of the Department of Children,
Families and Learning would be given the authority to
prorate vouchers or cap eligibility to keep the program fis-
cally neutral.
The child's home school would have to meet standards
currently in state law for home schools, including annual
standardized achievement testing in major subject areas
arranged in cooperation with local school superintendents,
unless the school is accredited or taught or supervised by
a licensed teacher. The voucher would promote higher
quality in independent learning, giving more families the
ability to purchase learning technology and technical as-
sistance from accrediting networks.
An Agenda for Reform 21
Recommendation: Do not allow school districts to
deny use of facilities to nonpublic school stu-
dents. We envision public school buildings being around-
the-clock community learning centers open to a variety of
learning and cultural activities and serving all kinds of
people. Some already are. One implication is that it no
longer makes sense for public schools to shut out
nonpublic students who need particular classes, services
or extracurricular activities.
Fortunately, cooperation is already a tradition in some
parts of rural Minnesota. Small towns understand the real-
ity of limited resources and the importance of a unified
community. One hundred and seventy-seven districts al-
ready take some advantage of proportional "shared time"
aid available under current law. To expand on this author-
ity, we propose that public school districts no longer be
permitted to deny timely and reasonable requests of par-
ents of nonpublic school children for enrollment in
classes or extracurricular activities not otherwise avail-
able.
Recommendation: Allow students to enroll in any
school district, with no restrictions on open enroll-
ment Under Minnesota's pioneering open enrollment
law, students are allowed to choose a school outside their
district. Yet a number of districts are now closed to stu-
dents from other districts; they cite a need to reserve avail-
able space for present and future students who reside in
the district. To fully achieve the intent of open enrollment,
students should be able to enroll in any district, taking to
their school of choice the funds provided for them by
local and state sources, including referendum income.
Recommendation: Do not weaken or limit the post-
secondary enrollment options program. One of the
most popular of Minnesota's choice programs allows the
state's high school juniors and seniors to take courses at
post -secondary institutions at taxpayer expense. Some dis-
tricts that have lost students — and the financing that
comes with them — to nearby colleges have urged the
Legislature to place additional conditions on this choice
option. These pressures to weaken or limit the postsec-
ondary enrollment options program should be resisted and
students should continue to be allowed to, in effect, finish
high school while in college. We can no longer afford to
keep students in high school who are ready to move on.
Recommendation: Remove the cap on the number
of charter schools and amend legislation to en-
courage development of charter schools. Minnesota
was the first state in the country to allow teachers, parents
22 An Agenda for Reform
and others to start new public schools that are autono-
mous, site -managed and less regulated. Beyond having to
attract students, these public schools offer a different form
of accountability. In exchange for their independence and
fewer regulations, they must agree to a term -specific per-
formance contract with a sponsoring school district or the
state board of education. To allow school choice to expand
even fiuther, the charter school law should be amended to
remove the current cap on the number of schools that may
be authorized; to permit additional types of organizations
to sponsor schools; and to make the per -student financing
for each charter school equal to what is available to a stu-
dent in each student's resident district.
Recommendation: Give credit to students who
meet standards regardless of where learning takes
place. Expanded choices in Minnesota are taking place
within a growing emphasis on results that students are ex-
pected to achieve as they progress toward graduation.
Consistent with that policy change, all students who can
meet the state -established outcomes should be provided
credit, regardless of where or how their learning actually
took place. For example, students who learn a language in
a foreign country or a summer program should not be de-
nied credit and be required to take courses in school. This
is a wasteful use of limited resources.
Recommendation: Allow low-income 11th -graders
to establish accounts for career preparation pro-
grams. We propose allowing low-income high school
juniors preparing for technical careers to stretch their final
two years of high school funding to one or two years be-
yond high school. Those meeting academic benchmarks
and accepted into state -approved youth apprenticeship
and work -based learning programs could receive an ac-
count from their school district valued at two years worth
of educational funding.
Students could combine their education accounts with
matching funds from employers, scholarships, training
programs and job earnings to finance a three-year or four-
year integrated program of academics, technical courses
and part-time work with a participating employer in their
chosen occupation. Based on an approved Individual Edu-
cation/Training Plan developed with the help of parents,
employers and school counselors, they could choose the
best available courses and training from their local school,
colleges, employers and other sources.
Several dozen youth apprenticeship and work -based
learning programs are operating or being developed in
Minnesota by local business -education partnerships, re -
sponding to Minnesota industries' need for more skilled
employees, and to the need of young people for new op-
tions. Our proposal would motivate more low-income
youth to participate by enabling them to shape their own
program and guaranteeing them seamless financial sup-
port beyond high school. The program would be fiscally
neutral for the state education budget.
Expanding choice for schools and
districts
Beyond the benefits to students who choose another
school, expanded choice offers both challenges and op-
portunities to all public schools. But to fully seize these
opportunities, the state should allow both districts and
schools the flexibility to adapt and improve to meet the
challenges of expanded competition. School districts have
asked for a level playing field. Our proposals give them
several options to achieve just that.
Currently, schools and boards of education are limited by
state and federal mandates. Districts are required to "pur-
chase" learning services, in effect, only from the schools
they own. To enable both school boards and individual
schools to improve the learning program they offer, they
need choice too.
Recommendation: Allow school sites to make deci-
sions about management and funding. All individual
public school sites should be given the authority, so long
promised, to make their own decisions about how they
will meet the state's outcome requirements; and to secure
their noninstructional services, such as transportation,
food services, accounting and so forth, from whatever
source they decide will provide the best service for the
money.
Recommendation: Allow school boards to convert
schools to charter schools. All public school districts
should have the authority to convert any existing school to
charter status, with the resulting autonomy and flexibility
to decide how to best meet the state's outcome require-
ments and other aspects of its operations. Finance formu-
las should be adjusted to make sure that schools do not
lose ground when they convert.
Recommendation: Expand authority of school
boards to purchase instructional services and au-
thority of teachers to market services. School boards
should be authorized to purchase both instructional and
noninstructional services from whatever organization they
choose and provide financial incentives aimed at achiev-
ing results. Groups of teachers and other professionals
should be given clear authority to form learning enter-
prises and market their services to schools, and to reinvest
savings in their classrooms. For example, a group of sci-
ence teachers could form a cooperative and negotiate a
performance contract with a school or a district. If they
delivered under budget, they could put the savings into
new lab equipment or other classroom needs. Further-
more, school boards should be authorized to develop and
offer education programs in locations outside their tradi-
tional boundaries.
Providing information and monitoring
perfomance
Recommendation: Establish a comprehensive,
user-friendly program to provide information to
students and parents about all the schools, pro-
grams and options available to them. Increased com-
petition will offer schools a significant incentive for
improving student performance. However, the state also
has an obligation to make sure parents, schools and dis-
tricts all have the information they need to make appropri-
ate choices.
Recommendation: Establish a mechanism to
monitor and report on school performance. The
state's movement toward new forms of accountability
based on outcomes will require increased monitoring and
reporting on school performance. As the number and di-
versity of school choices grows, this information will be
of importance not only to parents, but also to policymak-
ers. To ensure maximum objectivity and credibility, moni-
toring, evaluating and reporting on school performance
should be transferred to an independent agency outside
the K-12 system. This effort could be funded from the
current state education budget or directly by schools.
The purpose is clear. The state is committed to making
schools as well as students accountable for performance.
This is essential if we are to have high standards. Only
when schools are accountable for student performance
will standards be taken seriously.
We must also commit ourselves to tying funding to perfor-
mance. Public education in Minnesota is a $6 billion an-
nual enterprise. We simply can no longer afford to put
dollars into schools or classrooms that do not deliver the
best possible results for the money.
An Agenda for Reform 23
Through choice and performance-based contracts, incen-
tives can be created to save money and reinvest in improv-
ing our children's learning.
Post -Secondary Education
Minnesotans have a long tradition of supporting high
quality colleges and universities and offering wide access
to them. But both the quality and access to post -second-
ary education could now be in peril.
For nearly a decade, higher education's share of the state
budget has been shrinking, while health care, K-12 educa-
tion and corrections have claimed an increasing share of
public resources. In 1987, the state spent about 50 percent
more on post -secondary education than health care. In
1995, Minnesota will have spent almost 60 percent more
on health care than on post -secondary education. Tuition
rates at higher education institutions have risen faster than
the rate of inflation.
Both of these trends — the intensifying competition for
public resources and the increasing reliance on private
resources to finance higher education — show no sign of
abating. Our projection for the 2000-01 biennium shows
post -secondary education receiving $2.19 billion, com-
pared with the $2.14 billion it receives in the current bien-
nium This translates to an increase of 2 percent over four
years To educators anticipating an increase in high
school graduates, this will come as shocking news, which
is another reminder that Minnesotans have not yet ab-
sorbed the implications of the coming fiscal crisis. How
then, under these conditions, can Minnesota sustain its
historical commitment to quality and access?
From 1984 to 1994, total state appropriations to Min-
nesota's public post -secondary institutions grew by an
inflation-adjusted 9 percent, which was nearly 40 percent
more than the 6.5 percent increase in total student enroll-
ment (in full -year -equivalents). But real tuition income
increased 46 percent, more than five times as fast as
either appropriations or enrollment. Real tuition rates
increased 41 percent at the University of Minnesota Twin
Cities and 32 percent at state universities.
These tuition increases were partly the result of an explicit
policy decision in the early 1980s. In 1983, the Governor
and Legislature, faced with minor fiscal difficulty, chose
to set tuition at 33 percent (on average) of the cost of pub-
lic education. Tuition rose, but appropriations for student
24 An Agenda for Reform
aid were increased and the state grants program was rede-
signed under a policy called "shared responsibility." Law-
makers set the expectation that all students shoulder 50
percent of their higher education costs; the state and fed-
eral governments would contribute up to 100 percent of
the remaining share, according to the student's family fi-
nancial situation.
Over the past decade, Minnesota has consistently sup-
ported financial assistance for needy students even when
appropriations to public colleges and universities were cut
during the recession of the early 1990s. In spite of this
pattern of investment, the percentage of public resources
targeted directly to students remains small. In the current
biennium, 10 percent of the post -secondary budget sup-
ports grants and work-study for needy students, while 90
percent goes to the governing boards of the two public
higher education systems. There is evidence that the cost
of tuition is keeping some people from enrolling in post-
secondary education.
Minnesota has more public institutions per capita than
most states its size. Many of these institutions are ineffi-
ciently sized and located in geographic areas of the state
that are facing declining or slow population growth. Nine-
teen of the state's 66 public campuses are located in the
region stretching from St. Cloud through the Twin Cities
to Rochester, a region that will produce 75 percent of all
high school graduates by the year 2009.
The state's current pattern of investment in post -secondary
education does not provide adequate incentives for
colleges and universities to deliver education services in
Students Pay a Greater Share of Education Costs
Percent Change since 1ga4
47.5
369X/: Tuition
32.494•'•
Jam•
27.1 Yy".
20294
19.2% 19.3%
17.1 16.0%
12.6%
10.3 10.79
13.0%
5 11.4% System Appropriations 9.1% e.e%
� 4.4%
1964 1965 1966 1967 1986 1969 1990 1991 1992 1993 1994
Note All figures have been adjusted for inflation to 1984 dollars.
Source: Minnesota Department of Finance
an efficient manner that responds effectively to the needs
and demands of the citizen -consumers. The Governor's
and Legislature's recent decision to tie a portion of col-
leges' and universities' appropriations to performance out-
comes is a step in the right direction. But this kind of
marginal change in budgeting practice is not radical
enough. Nor does it concentrate public resources in the
hands of citizens who are least able to afford an invest-
ment in post -secondary education from their own private
resources.
A powerful answer to the twin challenges of providing
quality post -secondary education and focusing public re-
sources on needy citizens lies in creating a market for
Minnesota's higher education institutions. Instead of let-
ting legislative bodies or public system governing boards
— government bureaus — make most of the decisions
about how state funds are invested in post -secondary edu-
cation, the majority of public funds should be put directly
into the hands of citizens looking for education and train-
ing. This would shift the decision-making power about
program needs and campus location from central bureau-
cracies to local campuses serving individual consumers,
and thereby strengthen the ability of public colleges and
universities to compete.
Recommendation: Radically change the way state
funds for higher education are appropriated by giv-
ing more to students and less to institutions. Begin-
ning with the 1998-99 biennial budget, we propose, as
does the Citizens League, that the current practice of allo-
cating 90 percent of the state's appropriation to institu-
tions and 10 percent to students be nearly inverted.
Specifically:
■ Reserve 30 percent of appropriations for direct institu-
tional support in the form of block grants to the two public
higher education systems.
■ Place 60 percent of appropriations directly in the hands
of citizens seeking education and training. A portion of
this amount would provide Minnesotans lifetime learning
grants. Not limited to public institutions, these grants
could be used to pay costs of post -secondary education or
training. The rest of the appropriation would be budgeted
for grants to needy students to help pay tuition and ex-
penses. The two types of aid — learning grants and need -
based grants — should be thought of as replacing the bulk
of the current state appropriations to institutions.
■ Allocate 10 percent of the post -secondary education
budget for basic and applied research and for statewide
programs such as the MINTTEX interlibrary loan system
and telecommunications grants.
The Minnesota State Colleges and Universities now de-
rive 65 percent of their operating revenue from direct state
appropriations, which the MnSCU board of trustees con-
trols centrally; state appropriations make up 28 percent of
the University of Minnesota's operating budget. With our
recommendations, the total amount of public resources
granted directly to the two governing boards would de-
cline by two-thirds. This would radically affect the role of
system governing boards and central administrations. The
boards would need to continue to focus on quality assur-
ance issues and may have to provide transitional assis-
tance to some institutions. But, these recommendations
would also remove colleges and universities, particularly
Minnesota State Colleges and Universities, from the pro-
tection of a central administration that has been able to
guarantee that sufficient funds go to sustain even the most
inefficient campuses.
While there is no guarantee that all colleges and universi-
ties will survive in this new competitive post -secondary
education marketplace, state institutions must be able to
compete fairly with other providers by removing the
handicaps of current state administrative and regulatory
structures and policies. This is particularly true in the case
of Minnesota State Colleges and Universities which, un-
like the University of Minnesota, are not constitutionally
independent of the state.
To ensure that public colleges and universities can re-
spond to market forces while at the same time ensuring
that statewide public interests are served, we recommend
that the roles and responsibilities of governing boards and
campus presidents be redesigned.
Recommendation: Governing boards should set
standards for institutions. Governing boards should
articulate statewide post -secondary education goals and
objectives and set standards of academic and manage-
ment performance for the institutions under their gover-
nance. The chancellor should exercise strong fiscal
oversight through auditing and must be able to hold presi-
dents accountable for their actions.
Recommendation: Give college and university
presidents more authority. Presidents must have the
authority to make and be accountable for management
decisions affecting academic programs and financial
operations, including the authority to set tuition rates and
admissions standards.
An Agenda for Reform 25
The demand for post -secondary education is increasing at
a time when the government is less able and the public
less willing to fund it. Without radically changing the way
in which it finances and delivers post -secondary educa-
tion, Minnesota will end up with a weak and unresponsive
system with too many campuses delivering insufficient
programs to fewer and fewer students. By nurturing com-
petition and targeting public resources to the most needy,
Minnesota can create the conditions that will nurture a vi-
tal post -secondary education system ready to respond to
the needs of its citizens, businesses and industries. Noth-
ing less than an entrepreneurial spirit is required for our
colleges and universities to compete with the growing
number of private vendors delivering education using new
electronic information technology. If traditional higher
education does not provide what students need, it is clear
that nontraditional providers will.
Criminal Justice
Criminal justice spending in Minnesota has been rising at
the rate of 13 percent annually from fiscal years 1986 to
1996 and could reach $810 million by fiscal year 2001. At
this rate, criminal justice spending threatens to crowd out
other important programs in the state budget, assuming as
we do, that we do not wish to raise taxes. If policies do
not change, the funds projected to be available for crimi-
nal justice in 2000-01 will not be enough to cover the ex-
pense for future offenders.
Unless we find other ways to cope with about 750 addi-
tional future inmates, costs for imprisonment in 2000-01
would have to be taken from one or more of the other ma-
jor spending areas. Likewise, if appropriate alternatives to
prison can be found for nonviolent inmates, the state
would be able to avoid building one of the two new pris-
ons planned in the near future. The funds instead could be
devoted to education, health and crime prevention and re-
lieve the budget pressures accordingly.
Our recommendations aim to protect Minnesotans, punish
violent criminals, concentrate funding on crime preven-
tion programs and rein in escalating costs. We believe that
the concepts of competition and community could further
decrease costs for the criminal justice system.
Our proposals focus primarily on state expenditures for
the criminal justice system, including public defender,
courts, community services and corrections. We do not fo-
26 An Agenda for Reform
cus on spending at the local level, but the proposals will
reduce costs at both state and local levels of government.
The forces driving budget increases include a growing
population of potentially dangerous juveniles and public
perception of worsening crime, translated into ever more
stringent state crime laws, judicial rulings and local deci-
sions.
Individuals in the 10- to 24 -year-old age group accounted
for only 20 percent of the population in 1990, but over 50
percent of total arrests and almost 70 percent of serious
crime arrests. An already strained juvenile justice system
faces a rising juvenile population in the next several years
through the year 2000.
The public's decreasing tolerance for criminal behavior
and the perception that crime has spun out of control led
to development of a series of stringent crime bills. From
1965 to 1994, the state criminal code has increased from
32 pages to 156 pages. New policies, rulings and laws
have broadened the list of behaviors defined as criminal,
dramatically increased the amount of time offenders serve
in prison and expanded the responsibilities of criminal
justice professionals.
Minnesota actually has a relatively low rate of violent
crime compared to other states, ranking 37th in the nation.
We lock up our offenders for longer periods of time. A na-
tional comparison shows that offenders in Minnesota
serve more time in prison than in 34 other states. The
comparison includes sentences served for murder, man-
slaughter, rape, robbery, assault, burglary and drug of-
fenses.
The state's criminal justice system is inefficiently orga-
nized. Funding for local entities is fragmented, making
coordination and consistency nearly impossible. Today we
have a distorted situation in which the locally funded
components of the system — law enforcement and pros-
ecution — determine what the state -funded components
— courts, public defense, probation and convections —
are obligated to process and pay.
Once a prison or jail is built, recurring operating expenses
are inevitable. Minnesota spends about $200 million each
year to operate 4,600 prison beds. Local governments also
spend large sums to operate the 5,200 jail beds in the
state. Expanding the capacity of prisons or jails not only
carries an enormous one-time capital expense, but also in-
creases future recurring operating expenses. For example,
the new 800 -bed prison planned for Braham in the year
2000 is estimated to have a one-time capital expense of
$100 million, plus the debt cost and recurring operating
costs of at least $30 million per year. Jails face similar
costs. All of Minnesota's prisons are over capacity, and fu-
ture inmate projections show a budget shortfall that will
continue well into the next century. Continuing to build
prisons and jails will come at the expense of other govern-
ment functions — educating youth or caring for the eld-
erly — and is not an acceptable solution.
Alternatives to prisons and jails can reduce the number of
inmates and the need to build additional institutions.
These options can be accomplished at a lower cost with-
out adversely affecting public safety. The following rec-
ommendations apply the ideas of competition, community
and concentration to the criminal justice system. They
range from the pretrial stage of the criminal justice pro-
cess to sentencing policy and incarceration.
Recommendation: Keep the courts focused on
necessary cases by using diversion, jail screening,
an infractions bureau and victim -offender media-
tion.
■ Encourage the use and expansion of diversion programs
for both adult and juvenile nonviolent offenders. Such
programs allow for a contract between the offender and
sanctioning entity for community service or payment of a
fine. In particular, keeping juveniles out of the criminal
justice system makes them less likely to be part of it as
adults.
■ Use jail screening statewide to determine which offend-
ers should be incarcerated prior to a pretrial hearing. This
proposal would open up jail space for those offenders who
should not be released.
■ Build on efforts in progress to create an infractions bu-
reau that would use civil sanctions instead of incarceration
for less serious offenses. This would save both time and
administrative costs for the court system.
■ Introduce victim -offender mediation for cases involving
nonviolent juvenile and adult offenders. For appropriate
cases, mediation enables offenders to assume responsibil-
ity and make restitution for their offenses.
Recommendation: Restore independence of the
Sentencing Guidelines Commission. The Sentencing
Guidelines Commission is responsible for determining ap-
propriate sanctions for criminal offenses. The commission
is a group of experts who represent the entire criminal jus-
tice system. Since 1984, the commission has been re-
quired to submit proposed sentencing modifications to the
Legislature for review prior to enactment. This has had the
effect of curtailing the commission's independence from
the political arena. The practical result has been that legis-
lators, legitimately responding to their constituents con-
cems and fearing the "soft on crime" label, have ratcheted
up prison time for criminal sentences. These increases of-
ten occur without due consideration of financial resources,
the long-term cost of a rapidly growing prison system and
the availability of less costly ways of punishing criminals.
Potential savings in this area are substantial. In 1995, the
commission proposed modifications that, without com-
promising public safety, would modify the sentencing
guidelines to further differentiate serious and violent of-
fenders from nonviolent drug and property offenders. The
commission also recommended that more nonviolent of-
fenders be held accountable for their crimes through local
punishments including jail and workhouse time. These
proposals are designed to help ensure that prison space is
available in the future to keep more violent offenders in-
carcerated in state institutions for their full term of impris-
onment. These proposals are currently being modified and
refined by the commission.
The commission acknowledges that its proposal will not
succeed without adequate state funding to offset the addi-
tional local costs that will result as nonviolent offenders
are supervised at the county level. If enacted, the
commission's modifications would have a major cost im-
pact, saving a total of $75 million by 2001.
Recommendation: Incarcerate in county facilities
those offenders with short sentences. Under current
law, offenders who are sentenced to less than one year
serve their sentences in county jails. However, judges of-
ten give credit for time served in county jails while an of-
fender is awaiting trial. The result is that many offenders
actually serve less than one year in the state prison sys-
tem.
It is estimated that the cost to the state prison system to
house inmates serving less than one year would be $105
million from 1997 to 2001. It would cost counties $79
million to house these same offenders, assuming jail space
for them is available. We recommend creating new state -
funded jail alternatives using private and nonprofit com-
munity-based providers. Local officials would have the
option of diverting nonfelony offenders to this alternative
at no cost to them. If this option was applied to 30 percent
An Agenda for Reform 27
of gross misdemeanor cases, and to 60 percent of misde-
meanor cases, counties would save $11 million.
The result would be to use expensive, limited prison and
jail space for felons to serve their sentences. Nonfelons
would be subject to alternative community-based sanc-
tions where private vendors would contract with the coun-
ties for the administration of the program After paying
the full cost of the jail alternative, the net savings to the
state budget would amount to $72 million.
Recommendation: Authorize the Department of
Corrections to contract with private vendors for in-
carceration and institutional programming for me-
dium -security male inmates in nonpublic facilities.
Under this proposal, the Legislature would authorize the
commissioner of corrections to solicit competitive bids
from private vendors to house and provide programming
for inmates. Private vendors would have to ensure the cost
to the state is less than it would be if the state directly pro-
vided the service. We recommend that the number of in-
mates to be served under the proposal not exceed 500; that
participating inmates be selected by the commissioner;
that inmates be housed in facilities provided or owned by
the contractor, not the state; and that the corrections com-
missioner could impose additional conditions. Assuming a
cost per day of $54 under competitive bids, savings from
this proposal would total $25 million between 1997 and
2001.
Recommendation: Authorize the Department of
Corrections to contract with private vendors for in-
carceration and institutional programming for low -
security male inmates in public facilities. Similar to
the proposal for medium -security inmates, this proposal
would allow the commissioner of corrections to seek
competitive bids from private vendors for the manage-
ment and operation of a state-owned correctional facility
for 300 low -security male inmates. Assuming a cost per
day of $45, savings from this proposal would total $4.3
between 1997 and 2001.
Recommendation: Create mechanisms to lower
prison per diem costs. Recognizing that lowering
prison operating costs will require difficult policy choices,
efforts must continue to reduce these costs. Reducing the
per diem cost of managing 4,600 inmates by one dollar
has the potential of saving $1.6 million annually.
Collectively, the recommendations add up to savings of
about $177 million. If they were implemented beginning
in the 1996 legislative session, we could avoid construc-
28 An Agenda for Reform
tion of a $100 million 800 -bed close security corrections
facility now on the drawing board. Adding the debt sav-
ings from such a decision, the savings grow to $214 mil-
lion.
The alternative to fundamental reform in this area is that
many court services will become unavailable, cases will
become backlogged, probation caseloads will increase, of-
fenders may not be adequately supervised and prisons will
be overcrowded to potentially dangerous levels. In short,
needed services will be substantially curtailed and public
safety will be put at risk.
The reasonable conclusion is that the criminal justice sys-
tem can and must change. While fundamental change
must occur, we must assure that those persons who
present the greatest threat to communities are strictly su-
pervised and punished. We must reduce costs for both
state and local governments or the growth of the criminal
justice system will crowd out some of our most important
prevention -related programs.
Property Taxes and Local
Government Aid
The current fiscal arrangement between our state and local
governments was put in place 25 years ago. At that time,
property taxes paid to local governments were rising rap-
idly. Taxpayers and local governments banded together,
seeking help from the state.
In response, state government instituted a sales tax and
greatly increased the income tax. Much of the new rev-
enue from those taxes was allocated as aid to local gov-
ernments. Local aid was intended to make some property
taxes unnecessary, and to provide individual homeowners
relief from property taxes actually paid.
Known as the "Minnesota Miracle," Minnesota's local aid
was acclaimed for meeting government's responsibilities
without unduly burdening its citizens with property taxes,
the most unpopular source of government revenues.
Now, the Minnesota Miracle has run its course and must
be replaced with a different relationship between state and
local governments. In 1995, these aids constitute 13 per-
cent of the state's general fund budget and are the third
largest expenditure, after education and health. Three
problems exist with the current system.
First, the state cannot afford it. Over the past 25 years, the
average annual increase in state aids for property tax relief
has been 5 percent. Our projections indicate that by 2001,
$100 million less than at present will be available from
state government for relief of local property taxes. In the
future, the state will not have the money to continue even
current levels of relief for cities and property taxpayers.
The haphazard allocation of funds is a second failing of
the current system. Money is spread across the state, not
concentrated on those cities or taxpayers especially in
need. As noted in the recent splendid Citizens League re-
port, Building a Legacy of Better Value, of the billion dol-
lars annually allocated in property tax relief, only $150
million goes to needy individuals through the so-called
circuit breaker program The program sends checks to
people based on their income and the amount of property
taxes they pay.
A few years ago, a distinguished group of national ex-
perts studied our state's system and concluded that the al-
location to cities is almost random. That is, those cities
most in need — with little property to tax, or with espe-
cially serious crime or poverty — were barely more likely
to receive as much state aid as did many more prosperous
cities. The current program is wasteful; a more fair distri-
bution could be achieved with less money.
The third failing of the current arrangement is the perverse
incentives it contains. Though designed to give relief from
property taxes, it tends to push taxes upward. Local gov-
ernments, finding some of their bills paid by the state, tend
to spend more. This " flypaper effect" occurs when state
aid sticks to local government rather than being passed on
in the form of lower property taxes.
A more complex but equally perverse incentive is brought
about by the property tax classification system under
which different "classifications" of property — owner oc-
cupied, rental, farm, commercial -industrial — are taxed at
widely different rates. Those paying low rates can support
overall increases in property taxes knowing that others
will bear the brunt of them.
Over the years, the distorted incentives have yielded rising
income and sales taxes. These taxes have risen, in part to
cover the cost of "property tax relief," but after adjusting
for inflation, property taxes are higher now than they were
25 years ago.
The coming fiscal crisis provides an opportunity to make
a virtue of necessity. A smaller property tax relief system
will not only be more affordable but it can be designed to
be fairer and to have more sensible incentives.
Recommendation: Concentrate the state's property
tax relief should be concentrated on needy people,
not local governments. A major share of the funds now
devoted to local government aid and to the homestead and
agricultural credit should be transferred into direct relief
to needy property taxpayers through the circuit breaker
program.
Recommendation: Target aid to local governments
at governments in need. Almost all local governments
now get aid. In the future, aid should be directed to a
smaller number of cities, especially to those that are in
need. Professor Helen Ladd's study of several years ago
and the recent Commission on Reform and Efficiency
have shown how to target local government aid.
Recommendation: Require local governments to
pass a referendum before increasing noneduca-
tion-related property taxes. Minnesota is committed to
collecting a fixed or declining fraction of personal income
in state and local taxes. But, since the property tax is local,
the total amount collected is determined not at the Capitol,
but in hundreds of city council meetings all over the state.
Thus, there is no guarantee that the overall tax limit for
the state will be met.
To deal with this situation, we propose that local govern-
ments be required to pass a referendum before increasing
noneducation-related property tax rates. An exception
should be made in order to maintain a constant levy in
municipalities where market values are declining.
Recommendation: Require future property tax in-
creases to be levied on market value. Since the
present classification system is both unfair and contains an
incentive to push up property taxes, it should be replaced.
The Governor and Legislature should consider requiring
that any future property tax increases be levied on market
value, rather than using present classifications.
Recommendation: Create a new form of govern-
ment — the village — to foster local competitive
contracting. Cities are the most efficient level of govern-
ment; many already engage in much contracting for ser-
vices. All local governments will need to become more
efficient in the trying times ahead. To gain the efficiencies
of local competitive contracting, we propose creation by
the Legislature of a new form of government, to be called
An Agenda for Reform 29
a village (since technically Minnesota no longer has any
villages).
The new villages, to be formed by vote of the electorate of
any municipality, would have no employees except those
hired to administer elections and those hired to administer
the contracts through which all of the services provided by
the village would be delivered.
Recommendation: Establish deadlines for govern-
ments to submit their services to competitive bid.
We also propose that the Governor and Legislature estab-
lish deadlines for governments to submit a set portion of
their services and products to competitive bid. For ex-
ample, the Metropolitan Council could be required by
1998 to have submitted 30 percent of its activities to com-
petitive bidding. Public employees now producing public
services should be welcome to submit bids. Given their
expertise we expect that they would frequently win the
contracts.
Ultimately, we want to shift the power from bureaucracies
back to the people. Give the people the tools and they will
be more creative and more effective than centralized gov-
ernment.
Health Care
The challenge facing Minnesota's publicly funded health
care system is simple and dramatic. Without change,
spending for health care would consume every additional
dollar in the state's budget, eliminating increased financ-
ing for K-12 education, corrections, post -secondary edu-
cation, local aid and other vital state programs. Health and
human services funding is the fastest growing part of the
budget now, and is second only to K-12 education in total
funding.
If Minnesota is to live within its means, we recommend
that the state raise the health care budget from $3.3 billion
to $4.6 billion in 2000-01. An increase of $1.3 billion
would seem to be immense, but meanwhile the numbers
of people eligible for state -financed health care, especially
the elderly and people with disabilities, are growing rap-
idly. The result is that the $4.6 billion available at the tum
of the century would only be sufficient to cover the cur-
rent levels of spending per person. In inflation-adjusted
dollars, this is a huge cut.
30 An Agenda for Reform
In part, health care spending growth is being driven by
larger demographic changes in the population. But spend-
ing also is being driven by Minnesota's generous eligibil-
ity and service standards. For example, Minnesota's
spending on elderly people exceeds the national average
by 59 percent. The state spends 63 percent more than the
national average on people with disabilities. While this
may speak well of our public mindedness, the state cannot
afford to sustain such programs in their current form.
Moreover, federal support, which has long subsidized
state efforts, is waning. While cost estimates are inexact
until Congress acts, the state is likely to receive between
$2 billion to $3 billion less health aid from the federal
government during 1996-2001 than had been anticipated.
This represents a potential reduction of at least 24 percent
by 2000-2001 from current demands. The federal cuts
make the need for reform more urgent. There is no alter-
native to comprehensive reform.
The challenge
The challenge facing Minnesota, then, is how to slow the
growth of health care spending and yet provide improved
services for those who need them most. As in other areas,
we propose organizing public health care reforms around
the three basic principles of competition, community, and
concentration. Applying these principles would transform
the way in which Minnesota tax dollars are spent through
the state's three key health care programs, Medical Assis-
tance (Minnesota's Medicaid program), General Assis-
tance Medical Care and MinnesotaCare.
As in so many other areas, Minnesota's publicly funded
health care system is driven largely by providers and insti-
tutions. That is, providers and health care institutions are
reimbursed largely on a fee-for-service basis. The state
sets prices for certain services and reimburses providers,
as long as prices are within reasonable limits.
The state acts as the funder, the regulator, and often, for
people with disabilities, is the service provider. In ex-
change for public health care money, private providers are
required to undergo extensive licensing requirements and
comprehensive, often prescriptive, regulatory oversight. In
addition, because of the fee-for-service model, consumers
largely do not have incentives to help reduce costs.
Revenue constraint
The first step to creating a new publicly funded health
care service system is to begin budgeting with the as-
sumption that revenues will be constrained. That is, the
state should cap health care spending at a certain level.
This cap would determine how much money is available
for services. Setting a limit on the amount to be spent
would turn on its head the current system, which now
guarantees that certain services are provided and then at-
tempts to pay for them.
Recommendation: Pool the state's buying power
and require providers to bid to provide services to
people with disabilities and the elderly.
The best way to create greater competition in publicly
funded health care services is to give individuals more
choices and greater control. Under the new model, the
state would give individuals greater choices by setting up
a large buying pool of consumers. It would work not un-
like the way in which state employees can now choose
from a menu of health plans.
The state would use this large money pool to entice pro-
viders to bid plans to provide services to elderly people
and people with disabilities. Consumers could choose
from a range of options. For example, one plan might of-
fer a better prescription drug benefit. Another plan might
offer more in-home nursing services. A third plan might
offer more day -training hours for the disabled. The plan a
consumer would select would depend on his or her par-
ticular needs. The point is to use the purchasing power of
the state to help reduce costs and expand the menu of
choices. Both public and private providers would be re-
quired to bid competitively. In this new system, funding
would follow individuals' choices, not institutions.
Further, the state would allocate resources based on the
needs of groups of individuals. For example, elderly
people who require only occasional in-home nursing care
would be funded at one level. Another group, such as
adults with developmental disabilities who require day -
training services but not residence care, might be funded
at another level. The idea is to assign a predetermined cost
to consumers with similar health care concerns and then
allow providers to bid on services they are best positioned
to deliver. An emergency pool would be established for
people whose care costs exceed those expected by the
state.
Recommendation: Streamline regulations and fo-
cus instead on outcomes.
The state also would help control costs and encourage
competition through some deregulation. Today, the choice
of providers is limited in part because of the prescriptive
licensing requirements and heavy regulation. Too often,
the state regulates the procedures of providers but does
little to ensure good results. For example, greater value is
put on documentation of care than on client satisfaction.
The new message to providers will be: we care less about
the means by which you ensure good results and more
about the results themselves. We will focus less on proce-
dures and more on outcomes.
Recommendation: Give consumers incentives to
pursue healthy conduct.
The other way to keep costs down is to give consumers a
more direct financial stake in ensuring good health. One
way, for example, is to give consumers a rebate check if
they pursue healthy activities, like quitting smoking. An-
other option is to establish Medical Savings Accounts,
which would allow consumers to retain a portion of their
health care allocation if it were not spent during the year.
The overriding point is to make consumers partners in
cost containment by offering incentives to pursue healthy
conduct, whether through a cash rebate or a credit in a
savings account. We strongly encourage the Legislature to
experiment with Medical Savings Accounts by proposing
a pilot program for Minnesotans.
We believe that, under this reformed model, new provid-
ers will emerge from the community. For example, the
Veterans of Foreign Wars might decide to establish a
health care network with area hospitals or nursing homes
to provide care to elderly veterans. Lutheran Social Ser-
vices or Catholic Charities might very well come forward
to provide expanded services to people with disabilities.
Once many of the excessive licensing and regulatory bar-
riers are removed, communities will feel free to enter the
market. Consequently, health care reform, we believe, will
lead to a greater range and diversity of providers, creating
more options for consumers and helping to ensure quality
results.
Recommendation: Take the consumer's ability to
pay into account when providing services to
people with disabilities or elderly people.
An Agenda for Reform 31
The last principle shaping health care reform must be con-
centration: that is, targeting resources to those who need
them most. Elsewhere the concept is known as means -
testing. The days are over when the state can afford to fi-
nance those of means at the same rate as those without
means.
MinnesotaCare, of course, is already income -sensitive.
But we should begin to take the consumer's ability to pay
into greater account when providing services to those with
disabilities or the elderly. For example, some individuals
have received extensive personal in-home care services,
paid for entirely by the state, even though their families'
health care insurance policies could have paid the cost. In
short, the taxpayers are picking up the tab that could have
been covered privately. Similarly, because of generous eli-
gibility requirements, some affluent families pay little for
the health care of a son or daughter with developmental
disabilities.
While means -testing might be resisted initially by some, it
is absolutely essential if Minnesota is to solve its long-
term budget problems and to ensure adequate treatment
for the most needy.
Conclusion
The state must change its role in health care. It must move
from a model that chiefly reimburses providers to one that
chiefly ensures greater consumer choice. It must concern
itself with outcomes and results, not means and proce-
dures. It must give consumers greater financial incentives
to invest in their own good health. It should encourage the
creation of more community-based providers and it
should concentrate its resources on those who most need
help.
It is imperative that the reforms we are recommending be
implemented very soon. The best case would be if federal
changes were of a magnitude that could be accommo-
dated in Minnesota without substantial service changes
because of the efficiencies resultant from our recommen-
dations. But we must acknowledge the possibility that
even after accomplishing efficiencies a shortfall could re-
main. Then Minnesota would be forced to cut back on eli-
gibility for health care benefits. In either case, doing
nothing is not an option. We must begin now to reform
government health care programs.
32 An Agenda for Reform
Acknowledgements
When Governor Carlson asked us to undertake this study
we knew that it was a monumental task and one that we
could not do alone. We would like to thank the following
individuals both in and outside state government, who
provided us with sound advice and expertise:
Morrie Anderson, Paul H.Anderson, Renee Anderson,
Stephanie Andrews, Gary Bastian, Anne Barry, Tom Berg,
Jim H. Bruton; Robert Cline, Virginia Davis, Sue Dosal,
Dennis Erickson, Richard Ericson, George Fol mran, Jay
Fonkert, Joseph P. Graba, Lisa Griskey, John Gross,
Kathy Guthrie, Ron Hackett, Jan Harrington, Jim Hetland,
Ann Jaede, Bruce Johnson, David Johnson, Judith
Johnson, Michael S. Jordan, Mary Kennedy, Laura King,
Linda Kohl, Ted Kolderie, LeRoy Koppendrayer, Mark
Larson, Kirsten Libby, Terrence J. MacTaggart, Scott
Malm, Tom Melcher, Tom Moss, Dale Nelson, John
Petraborg, Deb Pile, Steve Reckers, Chris Roberts, Jim
Schowalter, Matt Smith, Dan Storkamp, John M. Stuart,
Dianne Tourville, Bob Wedl, Frank Wood and many oth-
ers.
While we were working on this project the Citizens
League formed a study committee that in August issued a
very fine report on the same subject. Many of the league's
ideas in Choose Reform, Not Declining Quality are re-
flected in our report. We are grateful to the league mem-
bers who served on that committee particularly to
co-chairs Charles Neerland and Becky Malkerson and to
league Executive Director Lyle Wray and staff member
Janet Dudow.
We especially appreciate the wise counsel of Babak
Armajani, Robert Brown, Mick Finn, Curt Johnson, Verne
Johnson, Ted Kolderie and Jon Schroeder.
The project was coordinated by Susan Heegaard, of
Minnesota Planning, and we were greatly aided by our
student assistant at the Humphrey Institute, Susan Scott.
John Brandl and Vm Weber
November 13, 1995
Choices are few if
state government is
'to get more for less
The other day Vin Weber and
I presented to Gov. Carlson a
report he had requested from us
on Minnesota's coming fiscal
crisis. In the report we project
immense imbalances and to
forestall them recommend a
host of sweeping and controver-
sial policies..
Now I'm wondering whether
any actions other than those we
have recommended could ac-
complish the threefold task we
set for ourselves — don't raise
taxes; balance the budget, and
ensure that Minnesotans get
quality education, health care
and other vital services.
First, a recap on what we
found and what we recom-
mended. Spending demands,
largely driven by increasing
numbers of children, prisoners,
infirm elderly and disabled per-
sons, are growing much more
rapidly than are tax revenues.
Consequently, all of the major
areas of state spending will be
strapped. If we took every one
Much of state
government's
spending goes
toward making up
for the effects of a
variety of human
weaknesses.
of the following actions the
state's budget would be in bal-
ance in the year 2001:
> Hold our spending on ele-
mentary and high schools to
only slightly more dollars per
student than they get now.
Tliat's a cut in inflation -adjust -
ea dollars per student.
>,-.Spend the same number of
dpllars per person on our gov-
emment-funded health care
programs as we do now. Again,
that's a big cut in real dollars.
(For decades both education
and health have been getting
huge increases.)
>2 Allocate to higher education
then about what it gets now.
r, _Give $50 million less in prop
eity tax relief payments to cities
and individuals than they'll re-
ceive this year. (For 25 years the
state's property tax relief pay-
ments have risen an average of
I5 percent per year.)
>nProvide funding for 750 fewer
prison inmates than are project-
ed for 2001.
Since it would take all of
those actions to balance the
bydget our problem isn't one of
If setting priorities. All of the
state's main spending areas are
important and there isn't big
mpney available in any of them
to Aransfer to others. If we want
high quality services, they will
have to be achieved in some
way other than applying more
money.
„So, how might we get more
for less? In the report we con-
tended that government has
only two kinds of policies potent
enough to make a big differ-
egce: submitting government.
funded programs to competi-
tion, and accomplishing govern-
ment's responsibilities by help-
ing families, churches and other
communities take care of their
people.
To me the interesting ques-
tion now is what if even the
levers of competition and com-
munity are insufficiently power-
ful to move us to a more effec-
tive government?
Much of state government's
spending goes toward making
up for the effects of a variety of
human weaknesses. If fewer fa-
thers abandoned their children
there would be lower levels of
drug use, depression, crime and
even learning and psychological
disorders. If fewer single women
had children when not in a po-
sition to raise them competent-
ly, the same applies.
Indeed, one study by social
scientists found that the delete-
rious effects of fatherlessness
are so great as to "erase the
relationship between race and
crime and between low income
and crime."
Irresponsible parenting is the
most serious manifestation, be-
cause it is a generator, of a radi-
cal individualism that knows lit-
tle of obligations to others, and
creates a host of expensive so-
cial problems. You can easily
make a list of other ways that
egoism is harming society.
The philosopher Michael No-
vak writes "to be a civil place, a
society depends upon having as
many policemen as there are
citizens — inner policemen,
consciences." Consciences de-
void of duty, honor and shame
— all of which reflect obliga-
tions to others — become not
society's policemen but its de-
linquents.
Some see emerging in Amer-
ica a moral conversion which
they are calling a "Great Awak-
ening," an acceptance of per-
sonal responsibility and a turn-
ing away from the notion that
morality consists of not judging
anyone else's behavior.
Perhaps the only alternative
to a public policy that puts
more dependence on competi-
tion and on the communities we
have now is a spiritual renewal
leading to a strengthened sense
of community and concern for
others.
But while we're waiting, and
whether you think a Great
Awakening is necessary or non-
sense, can you make a case for
any other ways to meet public
responsibilities?
— John Brandl, a former state
legislator, Is a professor at the
University of Minnesota's Hum-
phrey Institute of Public
Affairs.