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Council Information Memorandum 10-23-2000
LMC League of Minnesota Cities Cities promoting exceflence October 23, 2000 145 University Avenue West, St. Paul, MN 55103-2044 Phone: (651) 281-1200 - (800) 925-1122 TDD (651) 281-1290 LMC Fax: (651) 281-1299 - LMCIT Fax: (651) 281-1298 'Web ,Site: http://www.Imnc.org TO: Managers and Clerks (Please distribute a copy of these materials to other interested persons in your city) FROM: James F. Miller .� Executive Direc r RE: 2000 Policy Adoption Conference Enclosed is a copy of the LMC Proposed 2001 City Policies as adopted by the League's Board of Directors. These policies address significant city issues including property tax reform, local government aid, annexation, tax increment financing, and transportation funding. The League membership will vote on these policies as part of the Policy Adoption Conference on Friday, November 17, 2000, at the Radisson Hotel South, 7800 Normandale Boulevard, Bloomington (see map on back). The 2001 legislative session will be an active year for cities. In fact, the legislature will spend considerable time and effort on many issues that will undoubtedly affect how you govern and manage your cities. To ensure that the League's policies and legislative activities represent your city's interests, please plan to attend the Policy Adoption Conference on November 17. The accompanying ballot should be filled out and returned to Mary Diedrich by Monday, November 13, regardless of whether you will be attending the conference. The results will be tabulated and shared with those present on November 17 to help facilitate discussion. Please register as early as possible in order for League staff to plan properly for the meeting. We look forward to seeing all of you on November 17th. - OVER - AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER Ramada Plaza Hotel MINNETONKA ST. LOUIS 169 PARK 494 7 HOPKINS IA. N 16B EDEN PRAIRIE DOWNTOO MINNEAPOLIS a::O! ni, �Sje 121 55rn 100 35W .77 EDINA 62 .� 169 SOUTHDALE RICHFIELD AIRPORT 494 BLOOMINGTON 77 Directions: From 1-494 take Highway 100 North, exit at Industrial Boulevard/77th Street and go west two blocks. League of Minnesota Cities 2000 PolicyAdoption Conference November 17, 2000 9 Ramada Plaza Hotel, Minnetonka E, 8:30 a.m.-2:30 p.m. ■ Set the course for Minnesota cities' legislative efforts! Join your city colleagues, League staff, legislators, and other policymakers for an important discussion of key legislative concerns for cities. Then vote on policies for action during the upcoming legislative session! ■ Anticipated topics include: PERA: Resolving the Funding Shortfall Integrated Criminal Justice Information System The Big Plan ... What Does it Mean for Cities? Health Insurance for Public Employees—Does d Single Provider System Make Sense Election 2000 Political Analysis ■ Register today! For fast registration, register online at www.lmnc.org, or mail or fax the registration form below. Registration fee: $60 per person. Housing: Call the Ramada Plaza Hotel at. (952) 593-0000. Cancellation Policy: All cancellation requests must be in writing, postmarked by Friday, November 10th, 2000 and MINNESOTA CITI!f are subject to a $10 handling fee. Building Questions? Call Jodie Tooley (651) 281-1251 or Cathy Quality Dovidio (651) 281-1250. Communities Registration Form . LMCLMC Policy Adoption Conference • November 17, 2000 L-W--Iw,.cwr.. Minnetonka, MN • Ramada Plaza Hotel Registration fee: $60 per person City Contact person _ Telephone number Registrant's name Title Address City State Zip Make checks payable and mail to: League of Minnesota Cities, 145 University Avenue West, St. Paul, MN 55103-2044 Fax to: (651) 281-1296 G #.tt4h`s TS i l+ f + �¢ y k 3� '..� ,{ r�`Ty°*y$'. xu x t >•� r >E4 +,� q. .k 'k `� t.� a k$ t� r r jo .15E LMC League of Minnesota Cities Cities promoting exceflence 1. Registration 145 University Avenue West, St. Paul, MN 55103-2044 Phone: (651) 281-1200 • (800) 925-1122 TDD (651) 281-1290 LMC Fax: (651) 281-1299 • LMCIT Fax: (651) 281-1298 Web Site: http://www.Imnc.org MEETING RULES LEAGUE OF MINNESOTA CITIES POLICY ADOPTION CONFERENCE Registration shall remain open from the beginning of the conference until completion of policy adoption. 2. Voting Privileges The vote on any legislative matter shall be by acclamation of the delegates; except at any time before the result of the vote is announced, the presider may, and shall, if requested to do so by at least two delegates, submit the question under consideration to a vote by member. If this should occur, each member municipality represented shall have one vote. Each current LMC member city shall designate one official as delegate (and may select another city official as an alternate) for voting purposes. Possession of the voting card of the city and the signed voting card register shall be evidence that the holder of the voting card is the city's voting delegate. 3. Committee Reports The chair or vice chair of each committee shall present the committee report. Following the presentation of each committee report, the presider shall ask whether any delegate wishes to have a policy removed for individual consideration or whether a delegate wishes to propose a new policy on a subject not included in the proposed policies. The chair of the policy committee shall then move adoption of those policy statements not otherwise removed for individual consideration. Once the policy statements have been approved, the meeting chair shall bring up for discussion new policy statements or policy statements that were removed for individual consideration. Each of the respective policy statements shall be considered and acted upon separately. A policy statement on a subject not included in the policies submitted and recommended by the policy committees must be first approved for consideration by the delegates. The text of nonprocedural amendments and new policies must be submitted in writing to the presider at least three hours prior to the scheduled beginning of the policy adoption portion of the conference. After each individual policy has been considered and debated, the policy chair or a delegate shall move adoption of the policy or an amendment to the policy. --OVER-- AN EQUAL OPPORTUNri'Y/AFFIRMATIVE ACTION EMPLOYER 4. Approval Requirements A) Amendments to proposed policy statements require a favorable majority vote of the delegates voting on the motion. B) A motion to add a policy statement on a subject not initiated by a policy committee must first be approved for consideration by a favorable majority vote of the delegates voting on the motion. C) Final passage of any policy or amended policy requires a favorable vote of two-thirds of the delegates voting on the policy. 5. Disputes Disputes regarding eligibility to vote shall be referred to the LMC General Counsel and may be appealed to the conference. Appeals from decisions of the General Counsel shall be a special order of business and may be taken up at any time a new question (main motion) is in order. 6. Limits on Debate Each speaker should limit comments on any debatable question to three minutes. The chair may, however, further limit the debate by each speaker in order to consider an issue if numerous delegates request to be heard on the issue. 7. Parliamentary Procedure The policy adoption process shall be governed by the LMC Constitution, these rules, and Roberts Rules of Order, Revised. The conference shall be its own judge of these rules and Roberts Rules of Order. PLEASE PUT A CHECK MARK BY YOUR TOP FIVE (5) MAIN PRIORITIES (SEE FULL TEXT OF POLICIES IN THE PROPOSED 2001 CITY POLICIES PACK) City Name: Improving Fiscal Futures _FF -1. State -Local Fiscal Relations _FF -2. State Shared Revenues -FF-3. Taxation of Municipal Bond Interest _FF -4. City Fiscal Year -FF -5. Sales Tax on Local Government Purchases _FF -6. Payments for Services to Tax- Exempt Property FF -7. Truth -in -Taxation _FF -8. State Administrative Deductions from State Aid _FF -9. Reporting Requirements _FF -10. Federal Budget Cutbacks 11. Price of Government _FF- 12. Capital Improvement Fees -FF-13. Deferred Assessments for Roads _FF -14. Taxation of Electronic Commerce 15. Limited Market Value _FF -16. State Charges for Administrative Services Improving Local Economies -LE-1. Tax Increment Financing -LE-2. TIF Reform -LE-3. Impact of Property Tax Reform on Existing Districts _LE -4. Business Subsidies _LE -5. Economic Development Programs -LE-6. Redevelopment Programs -LE-7. Property Tax Abatement Authority -LE-8. Brownfields _LE-9.OSA Response Timelines _LE- 10. OSA Time Limitations _LE- 11. Growth Management and Annexation -LE-12 Electric Service Extension __LE- 13. State and/or County Licensed Residential Facilities -LE-14. Housing and Economic Vitality -LE-15. Preservation of Federally -Assisted Low -Income Housing -LE-16. Adequate Funding for Transportation -LE-17. State Aid for Urban Road Systems -LE-18. Turnbacks of County and State Roads ___LE- 19. Road Funding for Cities Under 5,000 _LE -20. Railroad -Related Projects -LE-21. Right of Way Management -LE-22. Workforce Readiness _LE -23. Platting Law Recodification _LE -24. Economic Development Authorities -LE-25. Infrastructure Funding Options _LE -26. Statutory Approval Timelines _LE -27. Telecommunications Restructuring Improving Service Delivery _SD -1. Redesigning and Reinventing Government _SD -2. Unfunded Mandates _SD -3. Civil Liability of Local Governments _SD -4. Environmental Protection _SD -5. Election Isses _SD -6. Local Election Authority _SD -7. Election Judge Appointment _SD -8. Election Judge Compensation _SD -9. Counting Write-in Votes _SD -10. City Costs for Enforcing State and Local Laws -SD- 11. Design -Build _SD -12. Providing Information to Citizens _SD- 13. Creating a Minnesota GIS Program _SD -14. State Regulation of Massage Therapists --SD-15. Private Property Rights and Takings _SD -16. Construction Codes _SD -17. Fees for Service _SD- 18. State Appropriation for Government Training Service (GTS) __SD- 19. Public Safety Spectrum Needs _SD -20. Joint & Several Liability Reform _SD -21. Competitive Bid Threshold _SD -22. Membership in Watershed Management Organizations _SD -23. Legalization of Fireworks _SD -24. 911 Funding. _SD -25. On -Sale Liquor or Wine Licenses to Performing Theaters and Cultural Centers _SD -26. City Use of Credit Cards _SD -27. Youth Access to Alcohol and Tobacco -SD-28. Library Funding Human Resources and Data Practices Human Resources -HR-1. Veterans' Preference -HR-2. Discipline and Discharge _HR -3. Compensation Limits -HR-4. Pay Equity _HR -5. PELRA -HR-6. Re-employment Benefits _HR -7. Essential Employees --HR-8. Pensions _HR -9. PERA Funding Deficiency -HR-10. Age Certificates / I-9 Forms _HR- 11. Employer Reference Immunity _HR -12. State Paid Police and Fire Medical Insurance _HR -13. Breathalyzers -HR-14. Preservation of Local Decision -Making Authority on Employment Related Issues --HR-15. Drug and Alcohol Rehabilitation --_HR- 16. Health Care Insurance Programs Data Practices _DP -1. Public Access to Information _DP -2. State Model Policies and Training _DP -3. Tennessen Warning _DP -4. Violations of Government Data Practices Act _DP -5. GDPA Compliance in Contracting Federal Employment Law _FED -1. FLSA/Overtime Compensation _FED -2. Peace Officer Bill of Rights _FED -3. Portability of Deferred Compensation _FED -4. Medicare/Medicaid Premium Disbursements _Electric Restructuring --over -- Use this space to make any comments or changes to the proposed policies. Use this space to suggest and briefly comment on additional policy issues you wish to be addressed. If necessary, use additional sheets. ,. W Ra' d '7 v Copyright © 2000 League of Minnesota Cities Research Foundation. All rights reserved. t_ LMC145 University Avenue West, St. Paul, MN 55103-2044 League of Minnesota Cities Phone: (651) 281-1200 • (800) 925-1122 Cities promoting excellence Fax: (651) 281-1299 • TDD (651) 281-1290 Web Site: http://www.Imnc.org October 23, 2000 Dear League Members: I am pleased to submit the accompanying draft 2001 Legislative Policies for your consideration. These policies were developed by more than 200 city officials serving on the League's policy committees and their respective policy task forces. For those of you who served on a task force or policy committee, I would like to thank you for your time and efforts. The hard work and input of city officials is the necessary foundation for developing and implementing a successful legislative agenda for the League of Minnesota Cities and its members. For those who could not participate in the policy committee process, your input in the League's policy development process is still crucial. The League needs your review of the attached draft 20011 Legislative Policies and the proposed resolutions. Please plan to attend the LMC Policy Adoption Conference on November 17 at the Ramada Plaza Hotel, Minnetonka. If you cannot attend the conference and have concerns or suggestions, please contact any member of the Intergovernmental Relations staff at the League. On behalf of the Board of Directors and League staff, please accept my sincere thanks for your contribution to this most important process. Sincerely, Gary Doty League President Mayor, City of Duluth L:igr documents/2001 PAC President's letter AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER CONTENTS Letter from the League President LeagueStaff................................................................................. Legislative Policy Committee Members ....................................... Pnliry Develonment Process......................................................... Getneral Pnlicv Statement.............................................................. Statementof Intent........................................................................ 2001 CITY POLICIES .................................... lv .................................... v .................................... vii .................................... viii .................................... viii Building Quality Communities Guideline....................................................... 1 ImprovingFiscal Futures..................................................................................... 3 FF -1. State -Local Fiscal Relations.................................................................................. 3 FF -2. State Shared Revenues......................................................................................... 4 FF -3. Taxation of Municipal Bond Interest................................................................... 4 FF -4. City Fiscal Year.................................................................................................... 4 FF -5. Sales Tax on Local Government Purchases......................................................... 5 FF -6. Payments for Services to Tax -Exempt Property .................................................. 5 FF -7. Truth-in-Taxation................................................................................................. 5 FF -8. State Administrative Deductions from State Aid ................................................. 5 FF -9. Reporting Requirements........................................................................................ 5 FF -10. Federal Budget Cutbacks....................................................................................... 6 FF -11. Price of Government............................................................................................. 6 FF -12. Capital Improvement Fees..................................................................................... 6 FF -13. Deferred Assessments for Roads.......................................................................... 7 FF -14. Taxation of Electronic Commerce....................................................................... 7 FF -15. Limited Market Value........................................................................................... 7 FF -16. State Charges for Administrative Services........................................................... 8 Improving Local Economies................................................................................ 8 LE -1. Tax Incement Financing....................................................................................... 8 LE -2. TIF Reform........................................................................................................... 9 LE -3. Impact of Property Tax Reform on Existing TIF Districts ................................... 9 LE -4. Business Subsidies...............................................................................................10 LE -5. Economic Development Programs.......................................................................10 LE -6. Redevelopment Programs.....................................................................................10 LE -7. Property Tax Abatement Authority.......................................................................11 LE -8. Brownfields..........................................................................................................11 LE -9. OSA Response Timelines......................................................................................12 LE -10. OSA Time Limitations..........................................................................................12 LE -11. Growth Management and Annexation.:...............................................................13 LE -12. Electric Service Extension....................................................................................13 LE -13. State and/or County Licensed Residential Facilities.............................................14 i LE -14. Housing and Economic Viability..........................................................................14 SD -1. LE -15. Preservation of Federally -Assisted Low -Income Housing....................................15 SD -2. LE -16. Adequate Funding for Transportation...................................................................15 SD -3. LE -17. State Aid for Urban Road Systems........................................................................16 SD -4. LE -18. Turnbacks of County and State Roads..................................................................16 SD -5. LE -19. Road Funding for Cities Under 5,000...................................................................16 SD -6. LE -20. Railroad -Related Projects.....................................................................................17 SD -7. LE -21. Right of Way Management..................................................................................17 SD -8. LE -22. Workforce Readiness............................................................................................18 SD -9. LE -23 Platting Law Recodification..................................................................................18 SD -10. LE -24 Economic Development Authorities.....................................................................18 SD -11. LE -25 Infrastructure Funding Options.............................................................................19 SD -12. LE -26. Statutory Approval Timelines...............................................................................19 SD -13. LE -27. Telecommunications Restructuring.......................................................................20 SD -14. Improving Service Delivery.................................................................................20 SD -1. Redesigning and Reinventing Government..........................................................20 SD -2. Unfunded Mandates.............................................................................................21 SD -3. Civil Liability of Local Governments..................................................................21 SD -4. Environmental Protection.....................................................................................22 SD -5. , Election Issues......................................................................................................23 SD -6. Local Election Authority.......................................................................................23 SD -7. Election Judge Appointment.................................................................................23 SD -8. Election Judge Compensation...............................................................................24 SD -9. Counting Write-in Votes.......................................................................................24 SD -10. City Costs for Enforcing State and Local Laws...................................................24 SD -11. Design-Build.........................................................................................................24 SD -12. Providing Information to Citizens.........................................................................25 SD -13. Creating a Minnesota GIS Program.....................................................................25 SD -14. State Regulation of Massage Therapists...............................................................25 SD -15. Private Property Rights and Takings.....................................................................26 SD -16. Construction Codes...............................................................................................27 SD -17. Fees for Service....................................................................................................28 SD -18. State Appropriation for Government Training Service........................................28 SD -19. Public Safety Spectrum Needs..............................................................................28 SD -20. Joint and Several Liability Reform.......................................................................29 SD -21. Competitive Bid Threshold..................................................................................29 SD -22. Membership in Watershed Management Organizations.......................................30 SD -23. Legalization of Fireworks.....................................................................................30 SD -24. 911 Funding...........................................................................................................30 SD -25. On -Sale Liquor and Wine Licenses to Performing Theaters and CulturalCenters.....................................................................................................30 SD -26. City Use of Credit Cards.......................................................................................31 SD -27. Youth Access to Alcohol and Tobacco.................................................................31 SD -28. Library Funding.....................................................................................................31 ii Human Resources and Data Practices...................................................................31 Human Resources HR -1 Veterans' Preference..............................................................................................32 HR -2. Discipline and Discharge.......................................................................................32 HR -3. Compensation Limits............................................................................................32 HR -4. Pay Equity.............................................................................................................33 HR -5. PELRA..................................................................................................................33 HR -6. Re-employment Benefits.......................................................................................33 HR -7. Essential Employees..............................................................................................33 HR -8. Pensions.................................................................................................................33 HR -9. PERA Funding Deficiency....................................................................................33 HR -10. Age Certificates / I-9 Forms.................................................................................. 34 HR -11. Employer Reference Immunity.............................................................................34 HR -12. State Paid Police and Fire Medical Insurance.......................................................34 HR -13. Breathalyzers.........................................................................................................35 HR -14. Preservation of Local Decision -Making Authority on Employment RelatedIssues........................................................................................................35 HR -15. Drug and Alcohol Rehabilitation..........................................................................35 HR -16. Health Care Insurance Programs...........................................................................35 Data Practices DP -1. Public Access to Information................................................................................35 DP -2. State Model Policies and Training........................................................................35 DP -3. Tennessen Warning...............................................................................................36 DP -4. Violations of Government Data Practices Act......................................................36 DP -5. GDPA Compliance for Contracting...................................................................... 36 Federal Employment Law FED -1. FLSA/Overtime Compensation.............................................................................36 FED -2. Peace Officer Bill of Rights..................................................................................36 FED -3. Portability of Deferred Compensation..................................................................37 FED -4. Medicare/Medicaid Premium Disbursements.......................................................37 ElectricRestructuring.................................................................................................37 Adequate Supply and Demand ...................... Consumer Protection ..................................... Environmental Concerns ............................... Fair Market Competition ..................................................................... 38 ..................................................................... 38 ..................................................................... 38 ...................................................................................................... 39 Local Authority ............................................. Stranded Recovery Cost ................................ Property Tax ..................................................................... 39 .....................................................................39 .........................................................................................................................40 iii LEAGUE STAFF WORKING WITH STATE AND FEDERAL ISSUES Jim Miller, Executive Director Mandates, telecommunications Gary Carlson, Director of Intergovernmental Relations Aid to cities, electric utility restructuring, general revenue sources for cities, personnel, property tax system, tax increment financing, transportation Anne Finn, Intergovernmental Relations Representative Transportation, housing, land use, public safety Kevin Frazell, Director of Member Services Government innovation and cooperation, electric utility restructuring Tom Grundhoefer, General Counsel General municipal governance, telecommunications Ann Higgins, Intergovernmental Relations Representative Elections and ethics, housing, information policy, telecommunications, utility service districts, year 2000 Andrea Stearns, Intergovernmental Relations Representative Civil liability and criminal justice, economic development and redevelopment, general government, local/tribal relations, tax increment financing Remi Stone, Senior Intergovernmental Relations Representative Civil liability, environment, general government, housing and building codes, labor relations, land use/annexation, personnel, transportation and transit iv Legislative Policy Committee Members Improving Fiscal Futures Dennis Kraft, Chair, City Manager, Robbinsdale Richard Abraham, City Administrator, Lake City Karen Anderson, Mayor, Minnetonka Bill Barnhart, Intergovernmental Relations, Minneapolis (alternate) Curt Boganey, City Manager, Brooklyn Park Tom Burt, City Administrator, Rosemount Gino Businaro, Finance Director, Mound Dennis Cavanaugh, Mayor, St. Anthony Jane Chambers, Assistant City Manager, Brooklyn Center Tom Cran, Budget Office, St. Paul Reggie Edwards, City Administrator, Chisago City John Erar, City Administrator, Farmington Richard Fursman, City Administrator, Andover Pat Harris, Councilmember, St. Paul Jeff Haubrich, Assistant Council Adminstrator, Red Wing Terri Heaton, Chief Financial Officer, Bloomington Pat Hentges, City Manager, Mankato Elizabeth Kautz, Mayor, Burnsville James Keinath, City Administrator, Circle Pines Linda Koblick, Councilmember, Minnetonka Tom Lawell, City Administrator, Apple Valley Dean Lotter, City Administrator, Janesville Paul McLaughlin, Councilmember, International Falls Peter Meintsma, Mayor, Crystal Tom Melena, City Administrator, Oak Park Heights Steve Mielke, City Manager, Hopkins David Minke, City Administrator, Princeton John Moir, Finance Director, Minneapolis Gary Neumann, Assistant Administrator, Rochester Steve Okins, Finance Director, Willmar Tammy Omdal, Finance Dept., Minneapolis Roger Peterson, Association of Metropolitan Municipalities Douglas Reeder, City Administrator, South St. Paul Michael Rietz, City Administrator, Kasson Michael Robertson, City Administrator, Otsego Ryan Schroeder, City Administrator, Cottage Grove James Smith, Councilmember, Independence Gerald Sorenson, Administrative Services Director, Moorhead Jerry Turnquist, Councilmember, Oak Park Heights David Mark Urbia, City Administrator, Blue Earth Dan Vogt, City Administrator, Brainerd Jim Willis, City Administrator, Inver Grove Heights Rick Wolfsteller, City Administrator, Monticello Improving Local Economies Brenda Johnson, Chair, Councilmember, Chatfield Jon Hohenstein, Vice Chair, City Administrator, Mahtomedi V Dick Allendorf, Councilmember, Minnetonka David Beaudet, Councilmember, Oak Park Heights Jerry Bohnsack, City Administrator, New Prague Doug Borglund, City Administrator, Howard Lake Patrick Boylan, Assistant City Manager, Lexington Gerald Brever, City Administrator, Staples Jim Brimeyer, Councilmember, St. Louis Park Cathy Busho, Mayor Rosemount Mike Campbell, Intergovermental Relations Director, St. Paul Kevin Carroll, City Administrator, Carver Tim Cruikshank, City Administrator, Minnetrista Dan Donahue, City Manager, New Hope Michael Eastling, Public Works Director, Richfield Reggie Edwards, City Administrator, Chisago City Karen Elhard, Clerk -Treasurer, Northome Jim Elmquist, City Administrator, Mora Mark Erickson, City Administrator, Lakefield John Flora, Public Works Director, Fridley Roger Fraser, City Manager, Blaine Matt Fulton, City Manager, New Brighton Rick Getschow, City Administrator, Lauderdale John Goedeke, Councilmember, Roseville Tom Goodwin, Councilmember, Apple Valley Mary Gover, Councilmember, St. Peter Chuck Groth, Mayor, Fairmont Tom Harmening, Community Development Director, St. Louis Park Desta Hunt, Councilmember, Fergus Falls Marvin Johnson, Mayo, Independence Steven Jones, City Manager, Montevideo Andrea Hart Kajer, Intergovernmental Relations Director, Minneapolis (alternate) Patrick Klaers, City Administrator, Elk River Larry Lee, Community Development Director, Bloomington Don Levens, City Administrator, Cokato Nancy Mancino, Mayor, Chanhassen Marcia Marcoux, Councilmember, Rochester Mark Nagel, City Manager, Anoka Steve O'Malley, Deputy Manager, Burnsville Samantha Orduno, City Manager, Richfield Bruce Peterson, Director Planning & Development Services, Willmar Roger Peterson, Association of Metropolitan Muncipalities Dale Powers, Councilmember, Clear Lake Gene Ranieri, Association of Metropolitan Municipalities Stephen Sarvi, City Administrator, Victoria Mark Sather, City Manager, White Bear Lake David Schaaf, Mayor, Oak Park Heights Terry Schneider, Councilmember, Minnetonka Mary Sjodin, Information Technology Director, Red Wing Terry Spaeth, Administrative Assistant, Rochester Cathy Thurber, Councilmember Minneapolis Craig Waldron, City Administrator, Oakdale Jeff Weldon, City Administrator, Redwood Falls Mark Winson, Chief Administrative Officer, Duluth Heather Worthington, City Administrator, Falcon Heights John Young, Jr., Councilmember, Hawley Improving Service Delivery Mark Karnowski, Chair, City Administrator, Lindstrom Judd Mowry, Councilmember, Tonka Bay Laurie Ahrens, Assistant City Manager, Plymouth Beverly Aplikowski, Councilmember, Arden Hills Mike Campbell, Intergovernmental Relations Director, St. Paul Pat Crawford, Clerk -Treasurer, Motley Pam Dmytrenko, Assistant to City Manager, Richfield Mary Hamann -Roland, Mayor, Apple Valley Tom Hansen, Deputy Manager, Burnsville Joel Hanson, City Administrator, Little Canada John Kysylyczyn, Mayor, Roseville Barret Lane, Councilmember, Minneapolis Jan LeSuer, Councilmember, Golden Valley Joe Lynch, City Administrator, Arden Hills Larry Nicholson, Councilmember, Moorhead Desyl Peterson, City Attorney, Minnetonak Gene Ranieri, Association of Metropolitan Municipalities David Schaaf, Mayor, Oak Park Heights David Senjem, Councilmember, Rochester Chad Shryock, City Administrator, Wabasha Al Thomas, Councilmember, Minnetonka Kent Torve, Mayor, Loretto Karen Lowery Wagner, Intergovernmental Relations, Minneapolis (alternate) Rena Weber, Clerk, Waite Park Human Resources and Data Practices Joyce Twistol, Chair, Clerk/Personnel Director, Blaine Ken Hartung, Vice Chair, City Administrator, Bayport Mark Anderson, Human Resources Director, Brooklyn Park Geralyn Barone, Assistant City Manager, Minnetonka Holly Duffy, Assistant to Manager, Crystal Theresa Goble, Finance Director, Brainerd Terry Haltiner, Labor Relations Manager, St. Paul Bret Heitkamp, City Administrator, Champlin Kay Kuhlmann, Council Administrator, Red Wing Vi Ed Larson, City Manager, Morris Kay McAloney, Human Resources, Director, Anoka Tim Madigan, City Administrator, Faribault Teri Osterman, Clerk -Treasurer, Frazee Givonna Reed, Assistant to City Administrator, Mounds View Carol Rogers, Human Resources Senior Consultant, Minneapolis Carol Schmidt, Benefits Manager, Minneapolis Ceil Smith, Assistant to Manager, Edina Jerry Splinter, City Manager, Coon Rapids Daniel Tesch, Director of Administration, Lino Lakes Todd Torvinen, Finance Director, Duluth Karen Lowery Wagner, Intergovernmental Relations, Minneapolis Electric Restructuring Task Force Kathleen Sheran, Chair, Councilmember, Mankato Bryan Adams, General Manager, Elk River Municipal Utilities Karen Baker, House Research Larry Bakken, Councilmember, Golden Valley Mike Bash, Councilmember, Long Lake David Berg, RW Beck, Minneapolis Troy Bonkowske, Community Development Director, Caledonia Jim Brimeyer, Councilmember, St. Louis Park Chuck Canfield, Mayor, Rochester Al Crowser, Director, Alexandria Public Utilities Jim Elmquist, City Administrator, Mora Robert Filson, City Administrator, Worthington Paul Grabitske, City Administrator, Janesville James Gromberg, City Administator, Isanti Delvin Haag, Councilmember, Buffalo Jeffry Haubrich, Asst. to Council Administrator, Red Wing Ron Jabs, Mayor, Jordan Elizabeth Kautz, Mayor, Burnsville Mark Larson, City Administrator, Glencoe Rebecca Law, Minneapolis Pam Marshall, Energy Cents Coalition Kevin Maynard, General Manager, Austin Utilities Charles Mertensotto, Mayor, Mendota Heights Mark Nagel, City Manager, Anoka Mike Nitchals, General Manager, Willmar Municipal Utilities Paul Ostrow, Councilmember, Minneapolis Greg Oxley, MN Municipal Utilities Association John Remkus, Finance Director, West St. Paul Joe Rudberg, City Administrator, Becker Amy Rudolph, Flaherty & Hood, St. Paul Mark Sather, City Manager, White Bear Lake Jerry Splinter, City Manager, Coon Rapids Jim Willis, City Administrator, Inver Grove Heights Wally Wysopal, City Manager -Clerk, North St. Paul League of Minnesota Cities Policy Development Process The League's policy development process has taken place over the past six months. The process began with a member survey of priority issues facing city officials. The process will not end with the Policy Adoption Conference. The committees will schedule additional meetings during the upcoming legislative session to discuss additional issues, develop alternative solutions, and discuss strategies to implement the League's policies. Listed below is a brief chronology of the major events in the policy development process. At each step, members have the opportunity to participate in the development process. April/May The League solicits members for ideas and problems. A survey at the Annual Conference allows members to formally suggest topics. June The League President accepts applications for committees and appoints policy committee members. The policy committees are: Improving Fiscal Futures Improving Local Economies Improving Service Delivery Human Resources and Data Practices Electric Restructuring July Committees meet to discuss issues raised in the member survey. Committees can also form task forces to more thoroughly study specific issues. Task forces can include noncity members with a knowledge of the focus issue. August Committees and task forces meet to discuss issues and problems, accept through testimony and develop policy statements. September October The League Board of Directors meets with the chairs of the policy committees to review policies. November Policy Adoption Conference. Members have the opportunity to discuss the draft policies, propose changes, and suggest additional policies for member consideration. January Legislative session. During the session, the policy committees and task forces through will continue to meet on issues and strategies. Members can assist the League's May legislative efforts by volunteering to contact legislators on a variety of issues of interest to our cities. vii General Policy Statement The League of Minnesota Cities serves as a forum for cities to define common problems and develop policies and proposals to solve those problems. The League of Minnesota Cities represents 818 of Minnesota's 854 cities as well as 12 urban towns and 27 special districts. All sizes of communities are represented among the League's members (the largest nonmember city has a population of 164) and all regions of the state are represented. The policies that follow are directed at specific city issues. Two principles guide the development of all League policies: There is a need for a governmental system that allows flexibility and authority for cities to meet the challenges of governing and providing citizens with services while at the same time protecting cities from unfunded or underfunded mandates, liability or other financial risk, and restrictions on local control; and, 2. The financial and technical requirements for governing and providing services necessitate a continuing and strengthened partnership with federal, state, and local governments. This partnership, particularly in the areas of finance, development, housing, environment and transportation, is critical for the successful operation of Minnesota's cities and the well-being of residents. Statement of Intent There are many issues affecting the effectiveness of city government to improve community life, improve the fiscal future and service delivery of city government, and improve the local economy. What follows are statements of the issues facing cities and the League of Minnesota Cities' proposed responses to these issues. These statements of issues and proposed responses form the policy of the League of Minnesota Cities. Additional and alternative responses to those issues may be proposed after the Policy. Adoption Conference, and the members of the League authorize its Board of Directors to consider and support additional or alternative responses, if necessary, to resolve the issues identified in this policy statement. viii Proposed 2001 City Policies 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 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 GUIDELINE FOR BUILDING QUALITY COMMUNITIES To the greatest extent possible, legislation affecting communities at the state and federal level should enhance, not diminish, the ability of citizens, businesses, and local governments to work together in partnership to make every community "livable." ISSUE: Cities in Minnesota are at various stages in meeting the goal of being "livable, healthy communities." RESPONSE: The definition of a "livable, healthy community" below will be used to evaluate proposed legislation to determine whether or not it advances the goal of enabling all Minnesota cities to become livable, healthy communities. It should also be used by cities to evaluate their progress toward the goal of becoming livable, healthy communities. A LIVABLE, HEALTHY COMMUNITY IS: WHERE PEOPLE OF ALL AGES • share a core of common values including valuing diversity, respect for each other, and good citizenship • feel: * safe * a sense of belonging * welcome • engage in life-long learning activities that: * promote responsible citizenship * enhance the enjoyment of life * prepare them for changing job markets • participate in the decision-making process with community leaders • celebrate community • want to make their home • have access to: * good paying jobs * adequate and affordable housing * choice of efficient transportation systems including transit, pedestrians, and bicycles * gathering places * desired information * choice of cultural and recreational activities * affordable goods and services, including health care 1 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 • are involved in the nurturing of youth • care about their homes, community, and the environment • get to know each other • have the benefit of strong family support and nurturing adults WHERE LOCAL GOVERNMENT • is responsive to the needs of its citizens • is actively supported by enthusiastic volunteers • is open and user friendly • encourages and implements cooperation and collaboration • provides and maintains an adequate physical infrastructure and promotes social infrastructure to meet local needs • educates citizens of all ages on local, regional, and state issues and government processes • informs and communicates with citizens to foster participation in public policy decision- making • participates in youth development 2 I IMPROVING FISCAL FUTURES 2 3 FF -1. State -Local Fiscal Relations 4 5 Issue: Minnesota's state and local government finance system is complex and intertwined. 6 This complexity has been the subject of ongoing legislative scrutiny and has most recently 7 resulted in a governor's initiative to review the system with the goal of developing a reform 8 proposal for the 2001 Legislature. 9 10 While cities rely on their partnership with the state to provide local services, they also must 11 respond to the needs and desires of their residents. To that end, cities need flexibility in 12 determining how to finance needed local services. 13 14 In 1997, the Legislature began making changes to Minnesota's property tax system that have 15 impacted the ability of cities to fund necessary services. Those changes, including the 16 reimposition of levy limits, significant class rate compression, and changes to the limited market 17 value law all have resulted in varying unintended consequences. 18 19 Response: To remedy existing and avoid potential future unintended consequences of 20 additional property tax changes, the League supports: 21 22 • Reviewing the combined impacts of property tax changes since 1997 and changing 23 economic circumstances for taxpayers and for local governments so that policy makers 24 can better understand where the system may need further changes; 25 • Expanding available city revenue sources to reduce the reliance on the property tax; 26 and 27 • Reducing the property tax burden for all classes of property by increasing the state 28 share of school funding. Any increase in the state share of school funding must 29 guarantee a permanent reduction in the school property tax burden. The League 30 supports paying for the increased state cost through income and sales taxes. 31 32 The League opposes: 33 34 • Reimposing levy limits, which are inefficient, ineffective, interfere with local 35 accountability, and ignore local circumstances; 36 • Imposing reverse referenda requirements, which undermine the decisions of local 37 elected officials, divert focus and resources from daily operations, and can disrupt the 38 local budget process; 39 • Replacing all or part of LGA or HACA with state -mandated categorical aid programs, 40 or local option taxing authority; 41 • Switching from the classification system to a market value based system, which would 42 cause tremendous shifts of tax burden between classes of property. The League also 43 opposes applying all future levy increases to market value because this would further 44 complicate the property tax system; 45 • Expanding the limited market value law or enacting an acquisition value law; 46 • Enacting proposals that would interfere in local decision-making regarding service 47 delivery; 1 • Imposing a state -levied property tax; and 2 • Cutting LGA or HACA to finance an increased state role in school finance. 3 4 FF -2. State Shared Revenues 5 6 Issue: State revenue sharing programs address at least three problems with a stand-alone 7 local government finance system. First, the property tax base available to communities can vary 8 dramatically. These programs use state resources to equalize the ability of communities to 9 provide essential services without undue property tax burdens for local residents. 10 11 Second, nonresidents can take advantage of local services or create additional demands for 12 services without contributing to the taxes that support these services. LGA and HACA help 13 address the free rider problem where nonpaying individuals consume services without 14 contributing to the local tax base. 15 16 Third, allowing local units of government in Minnesota to levy only the property tax has 17 created an over -reliance on the property tax. LGA and HACA can reduce the overall reliance of 18 local governments on the property tax. 19 20 Although historically the Legislature has generally supported LGA and HACA programs, 21 the 1981 Legislature reduced the number of LGA and HACA payments and the 1986 Legislature 22 delayed the payments. Under current law, the first payment of LGA and HACA is made in 23 July—fully 7 months into each city's fiscal year. These changes have created cash flow problems 24 for some cities. 25 26 Response: LGA and HACA, or similar replacement revenues, must be continued 27 and additional state resources greater than the rate of inflation must be allocated to 28 prevent rapid future property tax increases. In addition, the HACA household growth 29 factor for cities should be reinstated. The Legislature should adjust the LGA and HACA 30 payment schedule to provide cities access to LGA and HACA earlier in their fiscal year. 31 32 FF -3. Taxation of Municipal Bond Interest 33 34 Issue: The state law that grants a tax exemption for municipal bond interest lowers 35 borrowing costs for cities and reduces property tax levies. 36 37 Response: The state should maintain the tax exemption for municipal bond interest 38 income. 39 40 FF -4. City Fiscal Year 41 42 Issue: The fiscal year for cities and counties currently corresponds to the property tax cycle. 43 44 Response: The state should maintain current law and not change the city fiscal year to 45 coincide with the state fiscal year. 46 47 48 4 1 FF -5. Sales Tax on Local Government Purchases 2 3 Issue: In 1992 when the state was experiencing a budget shortfall, the Legislature repealed 4 the sales tax exemption for local government purchases. Local governments now pay state sales 5 tax on purchases like road maintenance supplies and equipment, wastewater treatment facilities, 6 and building materials for affordable housing. This tax currently costs local property taxpayers 7 and ratepayers an estimated $100 million annually. In addition, proposals to extend the sales tax 8 to services would have the effect of increasing local government costs and property taxes. 9 Because no additional state aids were added to offset the additional cost, this repeal has 10 effectively increased local property taxes to finance state operations. 11 12 Response: The state should reinstate the sales tax exemption for all local government 13 purchases. The exemption must not be coupled with cuts in LGA or HACA. 14 15 FF -6. Payments for Services to Tax -Exempt Property 16 17 Issue: Taxable property in many cities is being acquired by nonprofit and government 18 entities. Converting the property to tax-exempt status can lead to a serious tax base erosion 19 without any corresponding reduction in the service needs created by the property. 20 21 Response: Cities should have the authority to collect payments from statutorily exempt 22 property owners to cover costs of service as cities have with special assessments. 23 24 FF -7. Truth -in -Taxation Process 25 26 Issue: Cities must set a preliminary levy by September 15 which, by law, becomes the 27 maximum that cities can levy for the following year. In recent years, cities have not received 28 complete tax base and aid information in a timely manner. As a result, cities often either set a 29 preliminary levy that is artificially high or they are unable to budget for unforeseen needs that 30 arise after September 15. 31 32 Response: The League supports changes to the Truth -in -Taxation process to provide 33 more meaningful information to citizens. Cities should have the authority to increase the 34 final levy from the preliminary levy to meet unforeseen and uncontrollable needs. 35 36 FF -8. State Administrative Deductions from State Aid 37 38 Issue: State administrative costs are deducted from the LGA appropriation. This reduces the 39 property tax relief provided by LGA and creates hidden appropriations for state agencies. 40 41 Response: All appropriations from LGA resources that fund state operations should 42 be repealed. 43 44 FF -9. Reporting Requirements 45 46 Issue: Budget and financial reporting requirements imposed on cities by the state often result 47 in duplication and additional costs. I Response: Requirements for reporting and advertising financial and budget 2 information should be carefully weighed to balance the validity of the state's need for 3 additional information with the costs and burdens of compiling and submitting this 4 information. In addition, all state agencies should be aware of the information already 5 required by others to avoid duplication of reporting requirements. 6 7 FF -10. Federal Budget Cutbacks 8 9 Issue: Congressional budget actions or devolution of program responsibilities may place 10 fiscal burdens on the state and local governments. 11 12 Response: The state should not reduce aids or increase fees to local governments as a 13 means for dealing with cutbacks in federal revenues. The state should take responsibility 14 for reductions in federal revenues rather than placing the burden on cities and their 15 property taxpayers. 16 17 FF -11. Price of Government 18 19 Issue: The price of government legislation enacted in 1994 was intended to measure the 20 overall effect of state and local taxation over a long period of time. The targets measure 21 government revenues as a percent of personal income. Unfortunately, the targets have been 22 misinterpreted and used unfairly to criticize city tax and budget decisions. 23 24 Response: The price of government statutes as they apply to local governments should 25 be repealed. If the price of government law is to continue to be applied to local 26 governments, price of government calculations should be based on the sum of levy and 27 state aid, not just levy, and based on long-term trends, not single -year events. 28 29 FF -12. Capital Improvement Fees 30 Issue: New development and the resulting growth create an increased demand for public 31 infrastructure and other public facilities. Severe constraints on local fiscal resources and 32 dramatic forecasts for population growth have prompted cities to critically reconsider ways to 33 pay for the inevitable costs associated with new development. Traditional financing methods 34 tend to subsidize new development at the expense of the existing community, discourage sound 35 land use planning, place inefficient pressures on public facilities, and allow under utilization of 36 existing infrastructure. Consequently, local communities are exploring methods to ensure that 37 new development pays its fair share of the true costs of growth. Given the existing authorization 38 to impose fees on new development for water, sanitary and storm sewer, and park purposes, it is 39 reasonable to extend the concept to additional public infrastructure and facilities improvement 40 also necessitated by new development. 41 42 Response: The Legislature should authorize cities to impose capital improvement fees so 43 new development pays its fair share of the off-site, as well as the on-site costs of public 44 infrastructure and other public facilities needed to adequately serve new development. I 1 FF -13. Deferred Assessments for Roads 2 3 Issue: Current law allows a city to recoup the costs for water, storm sewer, or sanitary sewer 4 improvements by levying additional assessments on the property benefiting from the 5 improvement, but not previously assessed. This authority for deferred assessment has not been 6 extended to other infrastructure, such as road improvements, even though properties are 7 benefiting from the improvements. 8 9 Response: Cities should be able to assess the cost of infrastructure improvements for 10 roads. Cities should be allowed to defer assessments against property located outside the 11 city for road improvements benefiting property abutting the improvement but not 12 previously assessed for the improvement. For example, if a city makes improvements to a 13 road that benefits city residents and township residents, the city should be able to defer the 14 assessments to the township property until the property is brought into the city. Once the 15 township property is brought into the city, the city would then be able to assess that newly 16 acquired property for road improvements previously done but not assessed at the time of 17 the improvements. 18 19 FF -14. Taxation of Electronic Commerce 20 21 Issue: Sales over the Internet and through other electronic means are projected to increase 22 exponentially over the next several years. Electronic transactions pose significant tax policy 23 challenges because of the difficulty of assigning a location to electronic sales, and because many 24 Internet "goods" are not tangible property. 25 26 Response: Federal tax policy should not place main street businesses at a competitive 27 disadvantage to electronic retailers, must not jeopardize repayment of bonds backed by 28 state and local sales tax revenues, and should ensure stability in state and local revenues. 29 To address the challenges created by the growth of e-commerce, the League supports the 30 multi -state effort to develop a streamlined sales tax system. 31 32 FF -15. Limited Market Value 33 34 Issue: Rapidly rising property values in some parts of the state have fueled legislative 35 interest in expanding the current limited market value law. One proposal would establish the 36 consumer price index as the maximum annual market value increase and extend the limit to all 37 classes of property. 38 39 Further restricting market value increases would have several negative consequences: 40 41 • It would unfairly shift taxes from properties experiencing growth in value onto all other 42 properties. 43 • Over the long-term, similar properties would be taxed at widely different rates merely due to 44 when the properties were last sold. 45 • It could discourage the sale of property because sales would return the property to full market 46 value for tax purposes. 47 • It would discourage improvements to property, which would trigger a return to full market 48 value for tax purposes. This could lead to degradation of housing and other types of property. 1 • It could adversely affect the ability of cities to bond for infrastructure improvements or for 2 tax increment financing since local tax bases would not reflect the growth in property values. 3 • Once implemented, limited market value provisions are politically difficult to sunset due to 4 the potential for large one-year tax shifts onto properties whose values were artificially 5 capped by the program. 6 7 Response: The League opposes any expansion of the limited market value law. 9 FF -16. State Charges for Administrative Services 10 11 Issue: Currently, some state agencies have wide discretion in setting the fees for special 12 services they provide to local governments. For example, the Minnesota Department of Revenue 13 recently increased the fee for administering local sales taxes by 80 percent in the middle of a 14 budget year with less than six weeks notice. The increase had no apparent relationship to the cost 15 of providing the service. 16 17 Response: State agencies should be required to demonstrate the need for increases in 18 service fees, and should give adequate notice of increases to allow local governments to 19 budget for the increases. State agencies should set administrative service fees as close as 20 possible to the marginal cost of providing the service. Local government should be given 21 the option to self-administer or contract with the private sector for the service if the state 22 cannot provide the service at a reasonable cost. 23 24 25 IMPROVING LOCAL ECONOMIES 26 27 LE -1. Tax Increment Financing (TIF) 28 29 Issue: In the context of any discussions regarding regional economic development 30 strategies and "The Big Plan," it must be recognized that the state has effectively delegated the 31 responsibility for economic development and redevelopment to cities. Unfortunately, 32 neighboring states have given their cities more development tools and, therefore, cities in these 33 states have a competitive advantage over Minnesota cities. In Minnesota, tax increment 34 financing is the most viable tool available to all cities in their economic development and 35 redevelopment efforts. Additionally, tax increment allows cities to address the changing needs 36 of their evolving communities. 37 38 The state, whether based on a lack of information or misinformation, has been critical of 39 cities' use of the tool and has implemented a series of restrictions over the past several years, 40 rather than partnering with cities and encouraging their endeavors to improve and enhance the 41 economic well-being of Minnesota and the growth and redevelopment of its cities. Critics often 42 claim that TIF is overused. Some of these critics have proposed TIF freezes or caps. This view 43 fails to recognize the benefits received by counties and school districts, as well as cities, upon 44 district expiration while only cities are required to assume the financial risks associated with 45 development decisions. Cities have used tax increment financing responsibly and examples of 46 these positive uses abound. 47 I Response: To effectively compete with other states, Minnesota must provide its cities 2 greater flexibility in the use of tax increment financing and other economic development 3 programs. In implementing any sort of regional economic development strategy and 4 objectives contained in "The Big Plan," the state should partner with cities in economic 5 development and redevelopment activities, and encourage cities' use of tax increment in 6 achieving the laudable goals of long-term tax base stabilization and growth, job creation, 7 development of low -to -moderate income housing, remediation of pollution, elimination of 8 blight, recycling and redevelopment of the infrastructure, and redevelopment of its 9 communities. 10 11 The League opposes proposals for TIF freezes or caps. Counties and school districts 12 are appropriately involved in cities' development decisions through current "review and 13 comment" requirements and should recognize the benefits they receive, without assuming 14 any of the risk, due to cities' prudent uses of TIF. 15 16 LE -2. TIF Reform 17 18 Issue: Legislative proposals to reform the tax increment financing laws will continue to 19 be introduced and debated during upcoming legislative sessions. 20 21 Response: As part of any TIF reform debates, the Legislature should consider: 22 23 • Authorizing any tax increment districts approved after April 1, 1990, to pool 24 increments in the same manner as districts certified prior to April 1, 1990; 25 • Eliminating the LGA/HACA penalty currently imposed on districts or removing the 26 restrictions on the source of payment; 27 • Expanding the use of tax increment financing to assist in the development of 28 technological infrastructure, transit -oriented development, the restoration of historic 29 structures, and for nonretail commercial projects (e.g., software companies, banks, and 30 insurance companies); 31 * Except in cases where a business is moving from one Minnesota city to another, 32 expanding the use of tax increment financing for the purposes of workforce readiness, 33 job training, and moving workers into more skilled positions; 34 • Exempting redevelopment districts from the "five-year rule"; 35 • Modifying the housing district income qualification level requirements to allow the 36 levels to vary according to those specific to individual communities; 37 • Authorizing the use of federal grants and other funds for local contributions; and 38 • Removing the LGA/HACA penalty imposed on housing districts established between 39 the penalty years of 1990 and 1993. 40 41 LE -3. Impact of Property Tax Reform on Existing TIF Districts 42 43 Issue: In addition to potential future action in light of "The Big Plan," recent Legislatures 44 have compressed property tax class rates which, in turn, has jeopardized the repayment of 45 outstanding debt or other obligations in existing TIF districts. Given the long-term nature of 46 property tax reform, cities could not have anticipated the impact of these class rate changes, nor 47 can cities project the impact of future changes. 48 9 1 The Legislature has recognized its responsibility for the impacts of its actions by creating a 2 TIF grant program to address situations where the class rate changes cause TIF district deficits. 3 The TIF grant program, currently funded at $6 million and scheduled to expire in 2002, is likely 4 to be insufficient to cover every deficit. Some of the worst deficit situations may not surface for 5 a number of years. Additional pooling and special taxing district authority might be useful in 6 certain cities but are only partial solutions. 7 8 Response: The Legislature should provide additional state resources to the TIF grant 9 program and extend the program indefinitely so that TIF obligations can be met and third 10 party bondholders are protected if the current TIF grant program is insufficient to cover 11 deficits caused by recent class rate changes. The Legislature should also explore additional 12 options to address deficits such as district duration extensions and eliminating or adjusting 13 the original tax capacity rates. 14 15 LE -4. Business Subsidies 16 17 Issue: The 1999 Business Subsidies Act was clarified and modified during the 2000 18 legislative session. In order for development agencies to effectively implement the amended 19 law, the law should be allowed to operate without further substantive legislative change. 20 21 Response: The Legislature should not make any substantive changes to the 1999 22 Business Subsidies Act during the 2001 legislative session. 23 24 LE -5. Economic Development Programs 25 26 Issue: The Minnesota Investment Fund is not adequately funded. Local governments 27 do not have an adequate slate of tools to assist job creation, redevelop blighted and decaying 28 properties, and provide adequate housing choices. Consequently, cities are not well equipped to 29 compete nationally and internationally for business development. 30 31 Response: More state resources should continue to be contributed to the Minnesota 32 Investment Fund. In addition, Congress should remove the caps that have been placed on 33 Industrial Development Bonds and acknowledge that the extensive eligibility requirements 34 now adequately limit their use. 35 36 LE -6. Redevelopment Programs 37 38 Issue: Communities across Minnesota are faced with the unique circumstances of 39 deteriorating, obsolete, and vacant structures in neighborhoods and downtowns and a lack of 40 land for development. Redevelopment activities usually require large, up -front funds to address 41 multi -phase projects of extensive duration where site assemblage, demolition, relocation, or 42 pollution clean-up must occur before private -sector interest can be generated. 43 Additionally, deterioration threatens historic structures in cities across the state. While the 44 redevelopment account administered by the Department of Trade and Economic Development is 45 a critical component in establishing a coherent statewide policy for redevelopment, cities do not 46 have sufficient tools to utilize in local historic preservation efforts. 47 A 1 Response: In recognition of the unique needs of redevelopment projects, the state 2 should continue its commitment to reinvest in its communities by increasing and 3 committing to permanent base budget funding for the redevelopment account administered 4 by the Department of Trade and Economic Development. Additionally, as part of a 5 comprehensive approach to redevelopment needs, the Legislature should consider the state 6 income tax credit legislation pursued by the Preservation Alliance of Minnesota, TIF 7 subdistricts, and other tax incentives for local historic preservation efforts. 8 9 LE -7. Property Tax Abatement Authority 10 11 Issue: In an effort to increase the number of development tools available, the 1997 12 Legislature authorized local units of government to grant property tax abatements. Although TIF 13 continues to be the primary financing mechanism for local development projects, tax abatements 14 provide a good addition to a needed list of economic development tools. In order to provide 15 maximum benefits, tax abatements should be less restrictive in terms of funding caps and 16 financing terms. Property tax abatements should not be considered a replacement for tax 17 increment financing. 18 19 Response: TIF is still the primary viable development tool available for cities. 20 Abatement authority should continue to be available, but not offered as a rationale to 21 eliminate TIF. Additionally, the Legislature should develop a state fund to facilitate state 22 participation in abatement projects. Finally, the funding caps should be increased or 23 eliminated. 24 25 LE -S. Brownfields 26 27 Issue: Brownfields are lands unsuitable for development due to the presence of chemical 28 or other contaminants. Brownfields are a major cause of blight within communities across the 29 state through loss of local tax base, jobs, housing quality, public safety, and community 30 confidence. Revitalizing this land is costly and requires the cooperation of city, county, school, 31 regional, state, and federal governments and the assistance of local economic development 32 organizations and citizens. 33 34 As we move into an era where the mass creation of jobs is a necessity and where increased 35 tax base is a requirement for local governments to adequately face growing financial pressures, 36 efforts to revitalize brownfields must not only continue but be accelerated in the upcoming years. 37 Currently, $7 million exists in the Department of Trade and Economic Development's (DTED) 38 base for the contaminated site clean-up fund. Additionally, $6.2 million is appropriated annually 39 from the Petrofund to DTED to clean up sites that contain at least some petroleum -related 40 contamination. 41 42 Response: A comprehensive set of economic development programs must be maintained 43 for cities and other development agencies. The Legislature should: 44 45 • Increase funding for the Department of Trade and Economic Development's 46 contaminated site clean-up fund and redevelopment account; 47 • Strengthen enforcement and collection of revenues for the state contamination tax; 48 0 Continue support for and funding of local and regional programs to assist in the efforts I to remediate brownfields; 2 • Establish a fully -funded program to allow cities and other development authorities to 3 gain control of and reclaim and revitalize brownfields; 4 • Protect existing tax increment financing provisions that provide for the remediation of 5 brownfields, and modify restrictions to allow the pooling of district revenues to assist in 6 the financing of remediation of brownfields; 7 • Establish an indemnification fund to provide financial security for institutions and 8 individuals as they invest in efforts to recycle brownfields in order to leverage private 9 investment in cities' efforts to increase their tax base and create jobs; and 10 • Continue financing mechanisms for cleaning contaminated sites. 11 12 LE -9. OSA Response Timelines 13 14 Issue: The Office of the State Auditor (OSA) is responsible for TIF oversight. As part 15 of their review of TIF districts, they identify alleged violations of the TIF laws and issue 16 noncompliance notices to TIF authorities. After responding to these noncompliance notices 17 within the required 60 -day period, authorities often do not receive timely responses on the matter 18 from the OSA. Additionally, TIF authorities are often unclear about the final disposition of the 19 matter upon receipt of a final noncompliance notice. 20 21 Response: In the event that the OSA determines to issue a final noncompliance 22 notice to a TIF authority, the Legislature should require the OSA to issue the notice within 23 60 days of receiving the authority's response. Any final noncompliance notice should 24 contain the OSA's final position on the matter, the date upon which they forward the 25 matter to the county attorney, and the next steps that are required to be taken according to 26 state law. Upon expiration of the 60 -day period, the authority should be deemed to be in 27 compliance with the TIF laws if no final noncompliance notice is received. 28 29 LE -10. OSA Time Limitations 30 31 Issue: The Office of the State Auditor (OSA) has the authority to issue noncompliance 32 notices for every existing TIF district in the state for alleged violations of the TIF laws. This 33 authority extends retroactively to the inception of the district. Accordingly, TIF authorities can 34 receive noncompliance notices for alleged violations that occurred twenty or more years ago. 35 Often, staff and record-keeping procedures have changed and TIF authorities find it exceedingly 36 difficult to reconstruct the past in order to identify and remedy these situations. Similarly, the 37 OSA claims the authority, based on the state's records retention schedule, to audit TIF districts 38 for up to ten years after decertification which requires cities to expend staff resources to maintain 39 files and a working knowledge of old districts for an unreasonable period of time. 40 41 Response: A reasonable timeframe within which alleged violations are identified 42 should be established. The Legislature should reasonably restrict the OSA's ability to issue 43 noncompliance notices to the six-year period prior to the notice's issuance date. The 44 Legislature should also require the OSA to conduct any audits on decertified districts 45 within one year of decertification. 12 1 LE -11. Growth Management and Annexation 2 3 Issue: Unplanned and uncontrolled urban growth has a negative environmental, fiscal, and 4 governmental impact on cities, counties, and state governments because it increases the cost of 5 providing government services, and results in the loss of natural resource areas and prime 6 agricultural land. 7 8 Response: The League believes the existing framework for guiding growth and 9 development primarily through local plans and controls adopted by local governments 10 should form the basis of a statewide planning policy and that the state should not adopt a 11 mandatory comprehensive statewide planning process. Rather, the state should: 12 13 • Provide additional financial and technical assistance to local governments for 14 cooperative planning and growth management issues, particularly where new 15 comprehensive plans have been mandated by the Legislature; 16 • Clearly establish the public purposes served by existing statewide controls such as shore 17 land zoning and wetlands conservation; clarify, simplify, and streamline these controls; 18 eliminate duplication in their administration; and, fully defend and hold harmless any 19 local government sued for a "taking" as a result of executing state land use policies; 20 • Give cities broader authority to extend their zoning, subdivision, and other land use 21 controls up to two miles outside the city's boundaries, regardless of the existence of 22 county or township controls, to ensure conformance with city facilities and services; 23 • Clearly define and differentiate between urban and rural development and restrict 24 urban growth outside city boundaries; 25 • Require the Metropolitan Council to seek cooperation from the state of Wisconsin and 26 counties (both Minnesota and Wisconsin) surrounding the metropolitan area to ensure 27 responsible and controlled development; study expansion of Metropolitan Council 28 authority in surrounding counties; and, examine the positive and negative impacts of 29 mandatory regional or local land use controls and state -imposed development 30 standards; 31 • Facilitate the annexation of urban land to cities by amending state statutes that regulate 32 annexation to make it easier for cities to annex developed or developing land within 33 unincorporated areas; 34 • Oppose legislation that would reinstate the election requirement in contested 35 annexations; and 36 • Encourage ideas consistent with the long-term goal of allowing urban development only 37 in urban areas. Density incentives such as sprawl reduction aid programs are more 38 straightforward methods of rewarding and encouraging compact urban development 39 than using LGA or HACA for another new purpose. 40 41 LE -12. Electric Service Extension 42 43 Issue: Minnesota law currently protects the right of municipally -owned utilities to 44 extend electric services to annexed areas. Electric cooperatives have announced their intention 45 to seek legislation that would eliminate the right of municipally -owned utilities to extend electric 46 services to annexed areas. Eliminating the authority to extend services would interfere with the 47 city's natural growth and with the ability of municipally -owned utilities to serve the entire 48 community. 13 I Response: The League opposes any statutory change that would impede or 2 eliminate the ability of municipally -owned utilities to extend electric services to any portion 3 of their respective cities, including annexed areas. 4 5 LE -13. State and/or County Licensed Residential Facilities (group homes) 6 7 Issue: As the need for more residential -based care facilities increases, sufficient funding is 8 also needed to ensure residents living in group homes and licensed facilities have appropriate 9 care and supervision. In view of cities' responsibilities to accommodate group homes and 10 residential -based facilities, it is important that state and county government work with local 11 officials to address residential care and public safety issues. Cities have reasonable concerns for 12 special care necessary for group home residents, particularly in case of public safety 13 emergencies. Since operators of certain residential facilities and services are not required to 14 notify cities when they intend to purchase housing for group homes, cities do not have 15 opportunity to raise concerns and requirements regarding the special care and public safety 16 measures these residences may expect. 17 18 Response: The Legislature should provide sufficient funding for such residential -based 19 services and require state and county agencies that manage those facilities or companies 20 licensed to operate group homes to notify cities in a timely manner when licensed facility 21 operators request to operate such facilities or to renew their license and allow cities to 22 require such agencies and licensed operators to identify and take appropriate measures to 23 respond to the special care residents need in case of emergencies. 24 25 Legislation should also require establishment of nonconcentration standards for state 26 or county -issued requests for proposals (RFPs) and direction to avoid clustering residential 27 facilities. Licensing authorities must also be responsible for removing any residents 28 incapable of living in such an environment, particularly if they become a danger to 29 themselves or others. 30 31 LE -14. Housing and Economic Vitality 32 33 Issue: City officials recognize that low rental vacancy rates and increased demand for 34 housing, particularly for starter homes for first-time homebuyers have had a dramatic impact on 35 affordability and threaten to undermine strong neighborhoods, healthy communities, and local 36 economic vitality. Decreased federal housing assistance and insufficient state resources for 37 housing production place statewide economic expansion at risk. Changes in social services and 38 family support, along with welfare -to -work requirements, make it paramount for the Legislature 39 and the federal government to identify and provide for additional resources for housing to 40 strengthen family stability, improve workforce availability, and improve children's school 41 performance. 42 43 Response: The Legislature must increase state investment in housing production, at 44 least doubling the current biennial housing budget, to help leverage private and local 45 resources as well as federal funds. The Legislature should continue to make additional 46 investment outside the metropolitan area for production of single-family housing 47 affordable to working families, along with affordable rental units. 48 14 1 In the metropolitan area, investing over the next biennium to carry out the goals of the 2 Livable Communities Act is critical to meet the needs of many households in which 3 working adults must now travel long distances to get to work and face a losing battle in 4 trying to afford housing for their families. 5 6 The federal government must address its responsibility to assist communities in 7 providing for production of affordable housing units and end over -reliance on housing 8 vouchers to solve the growing gap between rapidly increasing rents and the incomes of 9 workers in lower -paid employment. 10 11 The Legislature should continue to provide incentives rather than mandates to lower 12 housing construction costs and selling prices to encourage local government, builders, 13 developers, housing agencies, and organizations to address housing design and 14 construction costs, land use regulation, and other factors that affect housing development 15 costs. The Legislature should also give cities the authority to redevelop tax -forfeited 16 property for housing. 17 18 LE -15. Preservation of Federally -Assisted Low -Income Housing 19 20 Issue: Loss of federally -assisted housing in communities throughout the state remains a 21 serious threat to the well being of older city residents as well as other vulnerable populations. 22 Cities do not have sufficient local resources to purchase or provide equity take-out loans to 23 owners of subsidized rental units who are considering mortgage prepayment and conversion to 24 market -rate rentals. Without such resources, properties originally built to provide housing for 25 low-income residents will be converted to market -rate, worsening an already tight rental housing 26 market. 27 28 Cities, neighborhood organizations, and community development projects also do sometimes 29 require demolition of substandard housing, which can compound housing shortages and displace 30 occupants. 31 32 Response: The Legislature must continue to provide additional resources for the 33 Minnesota Housing Finance Agency and community-based nonprofit housing 34 organizations to buy units or make equity take-out loans to property owners in return for 35 maintaining rents affordable to low-income residents and agreeing to maintain the 36 federally subsidized mortgage to term. 37 38 LE -16. Adequate Funding for Transportation 39 40 Issue: Current funding for roads and transit systems across all government levels in the 41 state is not adequate. The League acknowledges that all Minnesota communities benefit from a 42 sound and adequately funded transportation system. 43 44 Response: More resources must be dedicated to the state's transportation system. The 45 League supports constitutionally dedicating a portion of the sales tax on motor vehicles 46 (also referred to as MVET) or other new revenue sources to a transportation fund, which 47 would fund both highway and transit projects. The League also supports an increase in the 48 gas tax that would be dedicated under the existing highway user trust fund formula. 15 1 Replacement funding for vehicle registration taxes (known as tab fees) must be 2 constitutionally dedicated to the highway user trust fund. 4 If adequate funding does not come from the state, cities should have funding options 5 made available to them to raise the necessary dollars to adequately fund roads and transit. 6 7 All nontransportation programs should be funded from sources other than the highway 8 user distribution fund or other funds dedicated to transportation. 9 10 LE -17. State Aid for Urban Road Systems 11 12 Issue: Current rules governing municipal state aid expenditures are restricting the efficient 13 use of these funds, and do not adequately acknowledge the constraints of road systems in urban 14 city environments. 15 16 Response: Rules affecting the municipal state aid system need to be changed to 17 acknowledge the technical and practical restrictions on construction and reconstruction of 18 urban road systems. New municipal state aid design standards should not apply to 19 reconstruction of existing state aid streets originally constructed under different standards. 20 Future changes to state aid rules should ensure the involvement of elected officials and 21 engineering professionals in the decision-making process. 22 23 LE -18. Turnbacks of County and State Roads 24 25 Issue: As road funding becomes increasingly inadequate, more roads are being "turned 26 back" to cities from counties and the state. 27 28 Response: Turnbacks should not occur without direct funding or transfer of a funding 29 source. A process of negotiation and mediation should govern the timing, funding, and 30 condition of turned -back roads. City taxpayers should receive the same treatment as 31 township taxpayers. The requirement for a public hearing, standards about the conditions 32 of turnbacks, and temporary maintenance funding should also apply to county turnbacks 33 to cities. At a minimum, roads proposed to be turned back to a lower government level 34 should be brought up to the standards of the receiving government or should be 35 compensated with a direct payment. Direct funding should be provided for smaller cities 36 that are not provided with turnback financing through the municipal state aid system. 37 38 LE -19. Road Funding for Cities Under 5,000 39 40 Issue: Cities under 5,000 population do not receive any nonproperty tax funds for their 41 collector and arterial streets. 42 43 Response: Cities under 5,000 population that are not eligible for Municipal State Aid 44 (M.S.A.) should be able to use county municipal accounts and the 5 percent account of the 45 highway user distribution fund. 46 47 Uses of county municipal accounts should be statutorily modified so counties can 16 I dedicate these funds for local arterials and collector streets within cities under 5,000 2 population. In addition, the five percent set-aside account in the highway user distribution 3 fund should be used to meet this funding gap. 4 5 LE -20. Railroad -Related Projects 6 7 Issue: Cities are being presented with far-reaching and long-term effects when railroad 8 expansion and related projects enter their communities. Along with the concerns related to 9 safety, environmental effects, and noise impacts on the communities, several issues have greater 10 reaching effects. They are: 11 12 • The cost -share ratio related to roadway crossing improvements will be borne by the public 13 sector to a substantial degree, some estimates are 80 percent public to 20 percent private 14 funding; 15 • The financial burden faced by the public sector to deal with mitigation improvements, a cost 16 that the Surface Transportation Board (STB) is not requiring the private sector to pay; 17 • The issues associated with the length of trains moving through communities; 18 • Liability associated with whistle -blowing ordinances; and 19 • Preemption of local authority to regulate railroad activities. 20 21 Response: The private sector must be required to pay a greater share of the 22 improvements that benefit their industry. The public sector should not be expected to 23 underwrite the costs of improvements sought by the private sector. The state and federal 24 government must participate in adequately funding the mitigation of the negative impact of 25 railroads on local government and its citizens. The federal government must exercise 26 greater oversight of the STB to ensure that fair and equitable solutions are reached when 27 dealing with cities in Minnesota. 28 29 LE -21. Right -of -Way Management 30 31 Issue: Cities have fundamental responsibility for managing the safe and convenient use of 32 public rights-of-way and hold local rights-of-way in trust for the public as a limited and valuable 33 asset. As demand increases for use of rights-of-way, cities must continue to have clear authority 34 to allocate and coordinate that resource among competing uses. Local management 35 responsibilities vary and are site specific, underscoring the necessity for maintaining local 36 authority to recover actual management costs and to exercise local zoning and land use 37 regulations. 38 39 Response: State and federal governments must: 40 41 • Uphold local authority to manage and protect public rights-of-way, including 42 reasonable zoning and subdivision regulation and the exercise of local police powers; 43 • Recognize that municipalities have a paramount role in development, utility location, 44 and implementation of construction and safety standards; 45 • Support local authority to require full recovery of actual costs of managing use of 46 public rights-of-way; 47 • Allow cities to retain authority to franchise gas, electric and cable services and collect 48 franchise fees or alternative revenue streams; and 17 1 • Maintain the courts as the primary forum for resolving disputes over the exercise of 2 such authority. 3 4 LE -22. Workforce Readiness 5 6 Issue: State and federal welfare reform efforts have focused on the importance of the 7 welfare -to -work transition, and have recognized the challenge of ensuring individuals are 8 qualified to work. Cities have an interest in the availability of qualified workers as part of their 9 economic development efforts, and can serve as a catalyst with other public entities and the 10 private sector to address workforce readiness issues. Small businesses may not have the 11 resources to work through complicated program application processes. 12 13 Response: The Legislature should continue to fully fund the job skills partnership and 14 pathways programs administered by the Department of Trade and Economic 15 Development. Flexibility should be provided to accommodate small companies' needs and 16 provide alternatives to the public training systems. The Legislature should create a block 17 grant program for cities to provide funds to small businesses for job training. 18 19 LE -23. Platting Law Recodification 20 21 Issue: The Minnesota Association of County Surveyors (MACS) is seeking to recodify 22 Minnesota Statutes Chapter 505. Two issues raised by MACS that will likely impact cities are 23 the subdivision plat requirements, and the creation and amendment of road right-of-way 24 acquisition maps. Additionally, there has been disagreement among plat law practitioners 25 whether the MACS proposal is the appropriate document for achieving recodification. 26 27 Response: It is not clear whether the platting statutes are in need of recodification. In 28 the event practitioners of plat law develop a document that is sound and ready for 29 legislative discussion, the Legislature should preserve local authority over plat approval 30 and to include language in the recodification legislation that will allow for pedestrian 31 easements or thoroughfares to be dedicated by plat (sidewalks, public trails, etc.). 32 33 LE -24. Economic Development Authorities 34 35 Issue: The 2000 Legislature authorized counties outside the metropolitan area to 36 establish county economic development authorities (EDAs). The new law lacks specificity on 37 certain process and limitations issues. County EDA activity in areas surrounding cities will 38 directly impact the adjacent city in terms of service provision and taxes. 39 40 Response: The Legislature should establish reasonable limits on county EDA activities 41 in unincorporated areas, including requiring city approval for proposed county EDA 42 activities within two miles of a city. The Legislature should revisit the county EDA 43 legislation and add specificity to other process and limitations issues such as the local 44 recommendation committee. 18 1 LE -25. Infrastructure Funding Options 2 3 Issue: Current infrastructure funding options available to cities are inadequate. Existing 4 special assessment law, Chapter 429, does not meet cities' financing needs because of the benefit 5 requirement. The law requires a minimum of 20 percent of such a project to be specially 6 assessed against affected properties. In practice, however, proof of increased property value to 7 this degree of benefit can rarely be proven from regular repair or replacement of existing 8 infrastructure, such as streets or sidewalks. Alternatives to the Chapter 429 methods for 9 financing infrastructure improvements are nearly nonexistent. 10 11 The Legislature has given cities the authority to operate utilities for waterworks, sanitary 12 sewers, and storm sewers. The storm sewer authority, established in 1983, set the precedent for a 13 workable process of charging a use fee on a utility bill for a city service infrastructure that is of 14 value to all those in a city. Similar to the storm sewer authority, a transportation or sidewalk 15 utility would use technical, well-founded measurements, and would equitably distribute the costs 16 of local infrastructure services. 17 18 Response: The Legislature should authorize cities to create, as a local option, additional 19 utilities such as a transportation or sidewalk utility. Such authority would acknowledge: 20 the effects of repeated levy limits and the general funding shift from the state to local 21 governments for building and maintaining necessary infrastructure; the benefits to all 22 taxpayers of a properly maintained public infrastructure; and the limitations of existing 23 special assessment authority. 24 25 LE -26. Statutory Approval Timelines 26 27 Issue: Since 1995, cities have been required to act on written requests relating to zoning, 28 septic systems, the expansion of Metropolitan Urban Service Areas (MUSA) and other land use 29 applications in accordance to a statutory time period generally referred to as the 60 -day rule. 30 Pursuant with Minn. Stat. § 15.99 state and local government agencies must approve or deny a 31 permit within a statutory time frame, and failure by the agency to issue a specific denial of the 32 application with contemporaneous written findings of fact shall be deemed an approval. Recent 33 court decisions have made it clear the law needs to be clarified making it more efficient and to 34 assist cities in providing accurate and timely responses to applicants. 35 36 Response: The Legislature should amend Minn. Stat. § 15.99: 37 38 ■ To allow government agencies to provide final written findings of fact at the next 39 official meeting of the governing body. 40 ■ To allow an automatic extension of the time limit an additional 60 days if the agency 41 votes down a resolution granting the request, but does not vote on a resolution denying 42 the request. 43 ■ To make clear the 60 -day time limit begins at the point when a formal complete written 44 application is received on forms provided by the city with appropriate additional 45 supporting documents and including the payment of fees if necessary. 46 ■ To increase the initial time limit to 90 days for municipalities with less than 5,000 47 population. 48 19 1 LE -27. Telecommunications Restructuring 2 3 Issue: Facilities -based competition for telecommunications services has failed to emerge 4 in many communities in Minnesota despite enactment of the 1996 Federal Telecommunications 5 Act. Outside metropolitan areas and regional trade centers, there is little evidence of head -to - 6 head competition. Further, there is a lack of coordination among federal, state, and local policies 7 aimed at encouraging competition. 8 9 Response: The Legislature should recognize that lack of consumer choice is a 10 serious disadvantage in obtaining advanced telecommunications services. State lawmakers 11 should support measures to: 12 13 • Assure communities have affordable access to state-of-the-art telecommunications to 14 strengthen local economies, expand educational opportunities, and improve quality of 15 life; 16 • Give cities express authority to provide state-of-the-art telecommunications either as 17 sole operators or in partnership with other providers; 18 • Define a strategic leadership role for state government by setting standards and 19 establishing goals for provision of these services, eliminating barriers to municipal 20 entry, increasing customer choice, and allocating resources; and 21 • Restructure telecommunications regulation and subsidies to increase investment in 22 state of the art telecommunications infrastructure and services in high-cost area and 23 low-income neighborhoods while taking into account the effect on cities' existing 24 revenue streams. 25 26 27 IMPROVING SERVICE DELIVERY 28 29 SD -1. Redesigning and Reinventing Government 30 31 Issue: Every level of government is reevaluating, reprioritizing, redesigning, and renewing 32 its organizational structure and programs in response to financial realities and citizens' needs and 33 problems. Reforms, however, must be more than change for the sake of change, or a reshuffling 34 of existing programs to appease the electorate. To be meaningful, reorganization and 35 reassignments of governmental entities and services should save money where feasible, deliver 36 improved services, serve essential needs, and be equitably structured. Cities have and will 37 continue to pursue the use of cooperative agreements, the reevaluation of city programs and 38 services, and changes to organizational structures. 39 40 Response: The federal, state, and county governments should: 41 42 • Ensure that in redesigning, reinventing, or reassigning government services and 43 programs that the appropriate level of service to citizens is evaluated, and citizen 44 demands and expectations are adequately addressed; 45 • Promote local efforts through incentives, rather than mandates; 46 • Communicate and establish a process of negotiation before shifting responsibility for 20 I delivering services from one level of government to another, or seeking to reduce 2 service duplication; 3 • Transfer authority for use of revenues dedicated to such programs, or provide 4 appropriate and adequate alternatives; 5 • Identify and repeal programs or discontinue services that are no longer necessary, or 6 which can readily and fairly be provided by the private sector; and 7 • Employ existing government entities in redesign efforts rather than create new agencies 8 or units. 9 10 SD -2. Unfunded Mandates 11 12 Issue: The cost of federal and state mandated programs substitute the judgment of 13 Congress, the President, the Legislature, and the governor for local budget priorities. These 14 mandates force cities to reduce funding for other basic services or to increase taxes and service 15 charges. The passage by the Legislature of reporting requirements for new state mandates, and 16 the passage by Congress of legislation restraining new federal mandates, should help address the 17 problem, but other steps are necessary. 18 19 Response: 20 21 • Existing unfunded mandates should be reviewed and modified or repealed where 22 possible. 23 • No additional statewide mandates should be enacted, unless full funding for the 24 mandate is provided by the level of government imposing it or a permanent stable 25 revenue source is established. 26 • Cities should not be forced to comply with unfunded mandates. 27 • Cities should be given the greatest flexibility possible in implementing mandates to 28 ensure their cost is minimized. 29 30 SD -3. Civil Liability of Local Governments 31 32 Issue: One of the barriers to the delivery of governmental services and programs is the 33 exposure of local governments and their officials to civil damage claims. The state has acted to 34 protect itself and its local governments by enacting exceptions and limitations to liability suits, 35 and authorizing self-insurance and other mechanisms to deal with claims allowed by law. 36 37 Response: The League supports: 38 39 • Creating an exception to municipal tort indemnification law (MN Stat. § 466.07) where 40 an employee is defended and indemnified for claims under a contract of insurance 41 carried by the employee. 42 • Extending the protection of the state and municipal tort claims act to quasi - 43 governmental entities when performing public services such as firefighting; 44 • Existing constitutional safeguards for protecting public and private property interests 45 without any statutory expansion of property rights; and 46 • Clarifying and maintaining the applicability of municipal immunity in various areas 47 including, but not limited to, park and recreational immunity, including the extension 48 to entities providing a public service that have not traditionally been included within 21 I the immunity (e.g. state trails over municipal utility easements) and vicarious official 2 immunity. 3 4 SD -4. Environmental Protection 5 6 Issue: Cities demonstrate strong stewardship for the protection and preservation of the 7 environment. Minnesota municipalities have historically been the leading funding source for 8 environmental protection and improvements. Municipal efforts include environmental protection 9 through wastewater treatment, wetland restorations, stormwater treatment, public utility emission 10 reductions, brownfield cleanup, safe drinking water programs as well as others. 11 12 However, at some point the diminishing or nonexistent environmental benefit received from 13 addition efforts is fiscally irresponsible. Often, the programs are improperly designed to meet 14 their stated goals. Additionally, the absence of funding by the state and federal governments has 15 removed an essential restraining feature in program design and implementation. Agencies are 16 less accountable to the governments that mandate environmental programs when they do not 17 have to find the money to implement the programs. 18 19 Specific problems faced by cities include the following: 20 21 • New programs or standards are continually adopted without regard to the existence, 22 attainability, or cost of existing programs and standards. 23 • Regulatory bodies fail to consistently use good science and the most current and accurate 24 data when establishing water quality standards. 25 • Regulatory bodies impose new permit requirements without going through rulemaking. 26 Instead, the agencies rely on internal documents, program strategies, and "best professional 27 judgment of staff" when setting permit criteria. 28 • Regulatory bodies approve permits and programs that compete with traditional municipal 29 services and encourage urban sprawl. This behavior puts at risk the public investments and 30 growth management efforts cities have made when planning for future development. 31 • Permit fees and other cost transfer elements of federal and state programs do not provide an 32 incentive for environmental agency efficiency, policy prioritization, or risk assessment. 33 • Third party environmental advocacy groups create significant hardships on cities by 34 threatening litigation even when hard science may not support the groups' positions. 35 36 Response: 37 38 • Alternative wastewater treatment and cooperative service systems should be prohibited 39 from operating in areas that can reasonably and effectively be served by existing 40 municipal systems unless: 41 • The municipal system is proven to be substantially less cost-effective and 42 substantially less beneficial to the environment; and 43 • the operation of these systems will not create a stranded public investment in the 44 existing system. 45 • Sufficient state and federal financial assistance should be provided to assist local 46 governments when complying with state and federal infrastructure requirements, 47 particularly with regard to wastewater, stormwater, and drinking water facilities. 22 1 • The MPCA should streamline its permitting and reissuing processes to allow for 2 effluent standards and permit requirements to be known earlier, thereby giving 3 communities more time to defend against contested case hearings. 4 • The Legislature should require the MPCA to make its determination regarding the re - 5 issuance of a permit within a reasonable set time period and require the MPCA to 6 reissue the permit within a reasonable set time frame. 7 • Legislation should be passed that requires state agencies to establish permit 8 requirements only when the criteria they are using is developed through the rule 9 making process. 10 • The LMC should join with other like-minded organizations to contest though judicial 11 means various regulatory activities of state agencies and advocacy groups. 12 13 SD -5. Election Issues 14 15 Issue: Delays and lack of funding at the state level have prolonged the wait for cities to have 16 direct access to the statewide voter registration system. Lack of access increases the time and 17 cost to process new voter registrations, update voter files and verify voter information in a timely 18 manner. 19 20 Response: The Legislature should provide funding to allow more cities direct access to 21 the statewide voter registration system. 22 23 SD -6. Local Election Authority 24 25 Issue: Previous Legislatures restricted city authority to schedule city elections and establish 26 terms of office for local elected officials thereby diminishing regard for the role of local self - 27 government, particularly when state policy preempts home rule authority governing city 28 elections. Statutory cities currently lack authority to create wards. 29 30 Response: The Legislature should oppose further limits on either the number or the 31 length of terms city elected officials may serve, particularly when those terms have been 32 established by voters in home rule charter cities. State policy on uniform elections should 33 continue to recognize and uphold local authority to schedule city elections in November of 34 either even- or odd -numbered years. The Legislature should support provisions to give 35 statutory cities general authority to create wards. 36 37 SD -7. Election Judge Appointment 38 39 Issue: It is increasingly difficult for local election officials to comply with statutory 40 requirements that election judges serving at precinct polling places be persons identified as 41 members of major political parties. The requirement presents a growing concern in obtaining 42 qualified election judges and a serious obstacle to efficient election administration at the local 43 level. 44 Response: The Legislature should eliminate election judge appointment criteria 45 requiring persons seeking appointment as local election judges to designate a political 46 party. 23 I SD -8. Election Judge Compensation 2 3 Issue: People willing to serve as election judges are often discouraged from doing so 4 because the city is not authorized to accept their service as a volunteer or to contribute their 5 compensation to local charities or community nonprofit organizations. 6 7 Response: The Legislature should authorize cities to allow election judges to direct 8 that their pay be donated to a local charity or community nonprofit organization of their 9 choice. 10 11 SD -9. Counting Write -In Votes 12 13 Issue: Requirements for recording and reporting votes cast for fictitious and undeclared 14 write-in candidates are unproductive, time consuming and do not serve to increase voter 15 confidence in the outcome of the election. Despite actions of the 2000 Legislature requiring 16 write-in candidates for state offices to file an affidavit of candidacy prior to election day in order 17 for votes for such candidates to be reported, election judges continue to be required to count 18 write-in votes for candidates for judicial offices. 19 20 Response: There should be no requirement to tabulate or report write-in votes cast 21 for fictional or celebrity write-in candidates or for those other write-in candidates for 22 judicial offices who have not officially declared their interest in seeking office. 23 24 SD -10. City Costs for Enforcing State and Local Laws 25 26 Issue: Cities experience substantial costs enforcing state and local laws, particularly those 27 related to traffic, controlled substances, and incarceration of prisoners. The current method in 28 our criminal justice system of recovering costs for law enforcement and prosecution through 29 fines is insufficient to meet the costs incurred by local governments. 30 31 Response: The Legislature should review this issue and adopt measures that provide 32 for complete reimbursement of the costs incurred by local governments in enforcing state 33 and local laws. Solutions that should be considered include the following: 34 35 • Increasing fine amounts; 36 • Removing or modifying county and state surcharges that conflict with cost recovery 37 principles; and 38 • Requiring the defendant to pay the full costs of enforcement and prosecution as part of 39 any sentence. 40 41 SD -11. Design -build 42 43 Issue: The standard bid procedure cities are required to use in selecting contractors for 44 municipal buildings can be quite costly. Private sector development uses a process known as 45 "design -build" in which various firms submit project proposals that include both a design and the 46 construction costs for that design. The selection is then based on the total package. By granting 47 specific statutory authority to use the design -build alternative to the Metropolitan Sports 24 1 Facilities Commission and state agencies, including the Department of Revenue, the Legislature 2 has recognized the financial savings it can provide. In documented instances, cities have saved 3 taxpayers up to 10 percent of the total project cost by using the design -build alternative. 4 5 The design -build process also permits improved project management and oversight. 6 However, absent statutory authorization to use this alternative, cities are vulnerable to lawsuits 7 from unsuccessful bidders. In addition, the design -build process for playground equipment can 8 encourage greater creativity while maintaining cost controls. Special legislation was enacted for 9 the city of Chanhassen in 1995 to experiment using this process for purchasing playground 10 equipment. 11 12 Response: The Legislature should authorize an extension of the design -build procedure 13 to cities as a less expensive alternative to the standard bid procedure. 14 15 SD -12. Providing Information to Citizens 16 17 Issue: To keep the public updated and informed, state law requires local units of government 18 to publish various notification documents in newspapers, and often dictates which newspapers 19 receive cities' publication business. The number and variety of documents required to be 20 published and the costs of publication are burdensome. Technological advancements have 21 expanded the ways government can provide information to citizens. In many cases, these new 22 technologies are more efficient and cost effective. 23 24 Response: Cities should be authorized to take advantage of new technologies to 25 increase the dissemination of information to citizens and potentially lower the associated 26 costs. Specifically, the Legislature should authorize local units of government to designate 27 an appropriate daily/weekly publication, elect alternative means of communication such as 28 city newsletters, cable television, and the Internet, and expand the use of summaries where 29 information is technical or lengthy. Additionally, the Legislature should eliminate 30 outdated or unnecessary publication requirements. 31 32 SD -13. Creating a Minnesota GIS Program 33 34 Issue: Local governments are finding geographic information systems (GIS) an essential tool 35 for comprehensive land use, real estate, environmental, and other land management information. 36 In many counties, maintenance of official land records has not been automated, creating a barrier 37 to GIS development. In addition, the start-up costs of GIS implementation can be prohibitive. 38 39 Response: The Legislature should encourage local government implementation of GIS 40 through grants and/or the dedication of a revenue source such as real estate transaction 41 fees. In addition, cities should be involved in the development of county land records 42 modernization plans. 43 44 SD -14. State Regulation of Massage Therapists 45 46 Issue: The state does not currently regulate massage therapy, an emerging and rapidly 47 growing profession. In order to control prostitution and to provide for health and sanitation 25 1 standards, several cities have entered the traditional state domain of health-care licensure by 2 enacting ordinances that require all massage therapists to obtain a local professional license. 3 These ordinances allow local law enforcement officers to differentiate between legitimate 4 massage therapists, who have a city license, and prostitution businesses fronting as massage 5 therapy establishments. 6 7 The lack of statewide regulation of massage therapists has hampered law enforcement 8 techniques, and has caused problems for cities attempting to regulate an entire health-care 9 profession without any statewide standards. Currently, 25 states regulate massage therapists on a 10 statewide level. Statewide regulation of massage therapists would provide a clear set of 11 educational standards that massage therapists must meet, and would provide local law 12 enforcement agencies with an easy tool to distinguish between prostitution and legitimate 13 massage therapy. Statewide regulation would not disturb traditional powers over land use and 14 business licensure. 15 16 Response: The League supports the statewide regulation of massage therapists in order 17 to aid local law enforcement efforts at controlling prostitution and other criminal activity. 18 19 SD -15. Private Property Rights and Takings 20 21 Issue: The Legislature has been introducing an increasing number of bills designed to 22 diminish or control local governments' ability to exercise traditional planning and zoning 23 authority and eminent domain powers. Legislation to control cities' abilities to perform 24 regulatory acts such as road right of way condemnation, shooting range zoning and amortization 25 received strong support from legislators. In addition, bills have been introduced to codify the 26 property rights section of Minnesota's Constitution. 27 28 The Federal Swamp Buster/Sod Buster programs, the Army Corps of Engineers' dredge and 29 fill programs, and the State's Wetlands Conservation Act and Community Based Planning Act, 30 appear to be the nexus for much of the property rights and takings legislation proponents. 31 32 The League supports local governments' ability to balance the rights of private landowners 33 with the interest of the public. However, the League is concerned various legislative initiatives 34 will adversely impact cities in three ways. First, such legislative initiatives undermine the 35 fundamental authority of cities to protect the public health, safety, and welfare of its citizens. 36 Second, if the Legislature acts to codify part of the Minnesota Constitution, an argument may be 37 made that the Legislature intended to create new causes of action against cities. This would 38 encourage more lawsuits and expose cities to the expense of defending those cases. Third, by 39 changing the state's eminent domain law, including "quick take" provisions, municipal 40 condemnation will be come more costly and take longer to conclude. 41 42 Response: The League encourages the state and federal governments to improve their 43 regulatory programs by eliminating property rights issues that were caused by the 44 adoption of such laws as the Wetlands Conservation Act or Swamp Buster/Sod Buster. 45 The League opposes legislation that diminishes the ability of cities to act in the best 46 interests of the health, safety, and welfare of its citizens, that increases the cost of doing 47 business for the public good, or that creates the possibility of additional lawsuits against 48 cities. 26 1 SD -16. Construction Codes 2 3 Issue: Each year the Legislature addresses construction codes issues that have some impact 4 on local governments. For example, the Legislature mandated bleacher safety code requirements 5 and is exploring the idea of having both the fire and building officials approve building permits. 6 7 In addition, the Construction Codes Advisory Council has indicated it may be recommending 8 legislation to institute an appeals process for disagreements over the application or interpretation 9 of various construction codes and to establish a statewide building code. The International 10 Organization for Standardization (ISO) has been evaluating Minnesota's building codes and 11 enforcement. There is some expectation on the part of council members that ISO will act as the 12 catalyst for a statewide building code. 13 14 While all cities must enforce certain codes, such as the accessibility code, the electrical code 15 and the bleacher safety code, the state's building code remains a local option for cities outside 16 the metropolitan area. Many Greater Minnesota cities have adopted the state building code and 17 all cities within the seven -county metropolitan area are required to adhere to the state building 18 code. 19 20 Response: A building code provides many benefits including uniformity of construction 21 standards in the building industry, consistency in code interpretation and enforcement, and 22 life safety guidance. 23 24 A statewide -enforced building code may have benefits, but requiring it would result in 25 an unfunded mandate. The enforcement of a building code can be cost prohibitive for 26 many cities due to the expenses and overhead related to staffing vs. the limited building 27 activity occurring in some communities. 28 29 The League supports adoption of a state building code so long as there is not mandatory 30 enforcement at the local level. The adoption of an enforced state building code should 31 remain a local option for municipalities outside the seven -county metropolitan area, unless 32 the state fully funds the costs of enforcement and inspection services necessary to enforce a 33 statewide building code. In the event the Legislature requires an enforced statewide 34 building code, local governments must have the option to hire or select a building official of 35 their choice and set the appropriate level of service, even if the state fully funds code 36 enforcement activities. 37 38 An appeals process would provide an excellent forum to resolve code disputes. 39 To the extent the insurance industry is concerned about insuring structures not built to 40 code, the industry should drive code compliance by issuing policies or setting rates based 41 on whether the structure meets various code requirements. 42 43 Finally, the Legislature should work with cities and the Department of Administration 44 in determining the best method to designate a municipality's building official and in 45 clarifying the distinction between administering and enforcing the building code and the 46 administrative duties of a city when operating a building code department or managing 47 staff. 48 27 1 SD -17. Fees for Service 2 3 Issue: Interest is increasing at the Legislature and among interest groups to mandate to local 4 governments specific fee limitations for various municipal services. Examples of legislation 5 include building permit fee legislation and coin operated amusement machine license fee 6 legislation, both designed to rigorously control local fee setting authority. This stems, in part, 7 from a belief of some that plan check fees, license fees, and other municipal fees for service do 8 not reflect the actual benefits received. 9 10 Additionally, other groups have begun discussing the value of fees for providing services. 11 Recently, the Citizens Jury explored the value of fees for service and gave limited 12 acknowledgment of the value fees may have in providing core municipal services. The media 13 has entered the discussion, as well, urging the public and policy makers to monitor fee -setting 14 processes. 15 16 Response: While the state has a role in providing a general statewide funding policy, 17 the state should not interfere in the simple budgetary decision-making functions performed 18 by cities. 19 20 The League supports the Legislature endorsing local government authority to charge 21 fees that are reasonably related to the cost of providing the service, permit, or license and 22 acknowledging there are other associated costs inherent in the provision of those services, 23 permits, or licenses. 24 25 However, cities oppose any move to legislate specific methods to pay for municipal 26 services or place caps on license fees or other fees. General services such as permitting, 27 inspections, or enforcement are best funded out of a city's general fund. Cities are better 28 prepared than the state to make local budgetary decisions when providing local services. 29 30 SD -18. State Appropriation for Government Training Service 31 32 Issue: In 1977, the Government Training Service was created in order to provide a 33 coordinated response to the training needs of state and local governments. GTS was charged 34 with coordinating the needs of the state, cities, counties, townships, and school districts, with the 35 delivery capability of the state's institutions of higher learning and other continuing education 36 service providers. 37 State financial support of GTS is important. Many cities and other local governments find it 38 difficult to adequately fund official and staff training. GTS provides a cost-effective mechanism 39 for taking advantage of the efficiencies of cooperation. 40 41 Response: The League supports the state general fund appropriation for the 42 Government Training Service. 43 44 SD -19. Public Safety Spectrum Needs 45 46 Issue: Cities have benefited from successful efforts at the federal level to gain access to 47 exclusive radio and wireless communications capacity for state and local public safety spectrum. 28 I For future interoperability, cities will need additional spectrum to ensure public safety agencies 2 can communicate with each other and with surrounding jurisdictions. 3 4 Unless secured for public safety purposes, allocation of spectrum in the 138-144 MHz band 5 is likely to be auctioned off to the highest bidder for private use. 6 7 Spectrum in the 800 MHz range requires many more sites to cover the same geographic 8 range and uses more expensive radio equipment. Although many local public safety agencies are 9 moving to new 800 MHz systems, others will need to remain in lower frequency bands. 10 Equipment in 800 MHz range does not communicate with many of the existing public safety 11 systems that operate at lower frequencies. 12 13 Response: The federal government must make sufficient spectrum available to allow 14 public safety agencies that require multi -agency communications to respond to accidents, 15 disasters, and criminal activity that cross jurisdictional boundaries. 16 17 The Legislature should not force cities to modify current public safety communications 18 or become part of the 800 MHz radio system until the city chooses to do so. Rather, the 19 Legislature should provide for a transition that guarantees uninterrupted service that is 20 capable of communicating among local public safety agencies, while allowing cities to form 21 coordinated dispatch and services. Regional funding of such systems should be considered 22 taking into account the useful life of current systems. 23 24 SD -20. Joint and Several Liability Reform 25 26 Issue: Under joint and several liability, a party named in a lawsuit can be held liable for 27 an entire damage award even if they are not found to be substantially at fault. Accordingly, 28 cities as "deep pockets" often are brought into lawsuits where it is likely that other named 29 defendants are uninsured or otherwise unable to pay. Cities will often settle these cases due to 30 the high degree of exposure and, at minimum, are almost always responsible for their defense 31 attorney's fees. Joint and several liability results in cities paying for others' negligence. 32 33 Response: The Legislature should eliminate or severely restrict the application of 34 joint and several liability to situations where private and public entities are substantially at 35 fault for the damages incurred. 36 37 SD -21. Competitive Bid Threshold Increase 38 39 Issue: The 2000 Legislature passed and the Governor signed into law an increase in the 40 spending threshold under the uniform municipal contracting law. Under the uniform municipal 41 contracting law, a city must bid out all purchases of supplies, materials, equipment, rental of 42 equipment, as well as construction, alteration, repair or maintenance of real or personal property 43 when the estimated amount of the contract exceeds $35,000 for municipalities of less than 2,500 44 population, or $50,000 for all others. The law also requires that purchases between $10,000 and 45 $25,000 be let with either sealed bids or through direct negotiation by obtaining two or more 46 quotations. However, this increase does not apply to other local contracting provisions in the 47 special assessment and public improvement statutes. 48 29 I Response: The Legislature should pass legislation to make the contracting threshold 2 provisions consistent among all local government contracting provisions retroactive to 3 August 1, 2000. 4 5 SD -22. Membership in Watershed Management Organizations 6 7 Issue: In 1999, the Legislature enacted a restriction that will prevent city employees from 8 serving on watershed management organization boards. The restriction will prevent city staff, 9 who may have an interest and expertise in watershed management issues from serving on a 10 watershed management board. 11 12 Response: Elected city councils have ultimate oversight of the functions of watershed 13 management organizations. The state should repeal the membership restrictions for 14 watershed management organization boards. In addition, the state should provide an 15 exception to the watershed district law to allow cities to recommend individuals who do not 16 live in the watershed to serve on the watershed district boards when a portion of the 17 watershed is located in the city but no one lives in that area. 18 19 SD -23. Legalization of Fireworks 20 21 Issue: Fireworks products can cause serious injuries and fire loss. Fireworks have been 22 illegal in Minnesota since 1941, and legalizing them would undermine fire prevention efforts. 23 Legalizing fireworks would increase public safety enforcement, emergency response, and fire - 24 suppression costs. 25 26 Response: The League opposes the legalization of fireworks. 27 28 SD -24. 911 Funding 29 30 Issue: As cities struggle to afford to maintain and improve the hardware, software, and 31 training to provide 911 services, costs continue to rise, and many cities are forced to choose 32 between bearing all costs or making incremental improvements to their systems. 33 34 Response: The League supports an adequate state funding source for the upgrades 35 and modifications of 911 and related systems that will allow cities to provide effective, 36 reliable emergency communications services. 37 38 SD -25. On -Sale Liquor or Wine Licenses to Performing Theaters and 39 Cultural Centers 40 41 Issue: Performing theaters and cultural centers are not one of the qualifying entities to 42 which municipalities may issue on -sale liquor or wine licenses. Several theaters have received 43 special legislation that allows their municipalities to issue on -sale liquor or wine licenses to 44 them. This practice interferes with the ability of municipalities to control the placement and 45 operating manner of these entities. 46 30 1 Response: The Legislature should authorize municipalities to issue on -sale liquor or 2 wine licenses to performing theaters and cultural centers subject to restrictions imposed by 3 the municipality. 4 5 SD -26. City Use of Credit Cards 6 7 Issue: Minnesota Law currently provides implied authority for city use of credit cards. 8 During the 2000 legislative session, the Legislature granted explicit statutory authorization for 9 county boards to authorize officers or employees otherwise authorized to make purchases to use 10 credit cards. 11 12 Response: The Legislature should clarify state statute to explicitly authorize city 13 councils to authorize city officers and staff otherwise authorized to make purchases to use 14 credit cards. 15 16 SD -27. Youth Access to Alcohol & Tobacco 17 18 Issue: The minimum age to purchase tobacco in Minnesota is 18. Cities have an interest 19 in preventing their youth from obtaining these products. To this end, many cities operate 20 compliance check programs in an effort to discern the current level of youth access and to reduce 21 youth access. 22 23 Response: The League opposes any proposal that could result in increased risks of 24 youth access to alcohol and tobacco products and expanded off -sale venues for the sale of 25 such products. The League supports statutory changes that assist in reducing youth access 26 to alcohol and tobacco products without imposing unfunded mandates on local 27 governments. 28 29 SD -28. Library Funding 30 31 Issue: Many community libraries in Minnesota are city owned. Although located in an 32 individual community, city libraries serve a much wider area. Local libraries need to be 33 improved in order to provide access to both written and electronic media to enhance the 34 educational capacity of both adults and children. 35 36 Response: The League supports a state matching grant program to provide dollars 37 to assist communities to work in partnership to build and improve libraries. 38 39 4o HUMAN RESOURCES & DATA PRACTICES 41 42 Human Resources 43 44 Issue: Many state laws increase the cost of providing city services to residents by 45 requiring city governments to provide certain levels of compensation or benefits to public 46 employees, by specifying certain working conditions, or by limiting city governments' ability to 47 effectively manage their personnel resources. For instance, existing state laws limit 31 I governments' ability to effectively address incompetence or misconduct of city employees 2 specifying certain procedures to be followed or standards of conduct. 4 Response: The state government should refrain from passing laws that regulate the 5 public sector workplace, and should repeal or modify problematic existing laws and 6 regulations to encourage full local accountability. 7 8 The League of Minnesota Cities proposes the following initiatives and reforms: 9 10 HR -1. Veterans' Preference 11 • The Legislature should conduct a study of Minnesota's veterans' preference law to 12 determine its effectiveness and efficiency in light of today's employment laws, statutes, 13 and regulations. Minnesota's veterans' preference protections were created at the turn 14 of the 19th Century. These protections were designed to assist veteran employees at a 15 time when Minnesota's and the federal government's labor and personnel laws were in 16 their infancy. It is likely the Legislature will find parts of the law need modernization. 17 18 HR -2. Discipline and Discharge 19 • Veterans' Preference. The state should modify veterans' preference and civil service 20 laws that restrict the ability of local governments to effectively discipline public 21 employees. The LMC urges Legislature to make it a priority to amend the law to 22 address the following two points: 23 24 ■ remove the right to multiple, duplicative disciplinary proceedings; and 25 ■ exclude probationary period employees from veterans preference termination 26 law protections. 27 28 In addition the law should be amended to limit any back -pay claims to a maximum of 29 $100,000; to limit the period in which to request a hearing to 20 days (from the current 30 60 days); to require parties to select their hearing panel representative within 10 days 31 after notice has been given to the employer that the veteran employee is seeking a 32 veterans' preference hearing; and, to require the panel to hear the petition within 30 33 days after the third panel representative is selected and issue a decision within 30 days 34 following the hearing. 35 36 HR -3. Compensation Limits 37 • The Legislature should acknowledge that all state and local governments, not just 38 schools districts, must be competitive in recruiting and retaining upper level 39 management employees. In addition, there is no correlation between the compensation 40 of citizen volunteers and career public sector professionals. Therefore, the state should 41 repeal laws limiting the compensation of a person employed by a statutory or home rule 42 charter city to the governor's salary. 43 • The Legislature should repeal laws limiting the compensation of all public employees. 44 The Governor's salary cap limits the ability of public sector employers to attract and 45 retain qualified employees. 46 32 1 HR -4. Pay Equity 2 • The Pay Equity Law, Minn. Stat. § 471, should be repealed. Public sector employers 3 have met or exceeded the intent of the pay equity law. Even in the absence of this law 4 public employers are held accountable to existing state and federal laws which prohibit 5 discrimination based on gender. 6 7 HR -5. Public Employees Labor Relations Act (PELRA) 8 • The state should modify the definition of public employee under PELRA by removing 9 the existing 14 -hour / 67 day requirement and replace it with a definition in which 10 employees must work more than an annual average of 20 hours per week. 11 • Temporary or seasonal employees should be excluded from the PELRA definition of 12 public employee in Minn. Stat. § 179A. 13 14 HR -6. Re-employment Benefits 15 • Public sector temporary or seasonal employees should not be eligible for re - 16 employment benefits. 17 18 HR -7. Essential Employees 19 • Cities must balance the health, welfare, and safety of the public with the costs to 20 taxpayers. Therefore, the Legislature should carefully examine requests from interest 21 groups seeking essential employee status under Minn. Stat. § 179A (PELRA). The 22 League opposes legislation that mandates arbitration that increases costs and removes 23 local decision-making authority. 24 25 HR -8. Pensions 26 • The state should amend the open meeting law to clarify that the open meeting law 27 applies to volunteer firefighter relief associations and local salaried police and 28 firefighter relief associations. 29 • The state should adjust the eligibility thresholds for public pensions to reflect real 30 dollars in today's economy and index the threshold for automatic future adjustments. 31 • The League opposes special legislation for individual employee pension benefit 32 increases unless they are initiated and approved by the city council of the impacted city. 33 34 HR -9: Public Employees Retirement Association (PERA) Coordinated Plan 35 Funding Deficiency 36 37 Issue: Recent analysis has demonstrated that the PERA coordinated plan has been using 38 overly optimistic actuarial assumptions for several years. The plan is expected to need additional 39 funding of more than $100 million a year over the next 25 years to cover projected pension 40 benefits. If the additional funding comes exclusively from employer and employee payroll 41 contributions, the increased contributions would be 30 percent higher than current levels. 42 Contribution rate increases may reduce employee's take-home pay, strain local budgets, and 43 result in property tax increases. 44 33 I Response: City officials recognize that employer and employee contribution rate 2 increases are an important part of the funding solution. To reduce the magnitude of the 3 increases, the Legislative Commission on Pensions and Retirement should: 4 5 • Supply PERA with state aid funded through reduced contributions to the Teachers' 6 Retirement Association and the Minnesota State Retirement System. In 1984, PERA 7 and MSRS sufficiencies were similarly transferred to TRA when it was under -funded. 8 • Implement pro -rated service credit. PERA is the only major Minnesota pension plan 9 that awards a full -year's service credit to part-time employees. 10 • Exclude all seasonal employees from participation in PERA. 11 • Explore the possibility of former employees taking refunds by offering a portion of 12 employer contributions as part of the refund. 13 • Reduce the guaranteed interest for deferred members' benefits. 14 • Increase the plan's vesting period from 3 to 5 years prospectively. 15 • Increase the amortization period for the plan's unfunded liability from 20 to 30 years. 16 • Restructure the POST fund in one or more of the following ways: 17 1. Eliminate the POST fund and combine the assets and liabilities of retirees with the 18 active fund. 19 2. Redirect some excess POST fund earnings to the active funds. Currently, retirees 20 are given all the benefits of high rates of investment return, and are also guaranteed 21 annual increases even in years of poor investment performance. 22 3. Pay excess mortality costs (when pensioners live longer than expected) out of the 23 post-retirement fund rather than the active pension funds. 24 4. Spread POST fund investment returns over a 10 -year period rather than a 5 -year 25 period. 26 • Not approve any benefit changes that increase the ongoing cost of the plan. 27 28 HR -10. Age Certificates / I-9 Forms 29 • The federal 1-9 form requires employers and employees to report the same information 30 required by Minnesota's age certificate. The state should repeal Minn. Stat. § 181A.06 31 and endorse the federal 1-9 form to verify age information, and eliminate redundancy 32 for employers and employees when reporting information. 33 34 HR -11. Employer Reference Immunity 35 • The Legislature should enact legislation that provides limited immunity to cities when 36 giving accurate written disclosure of information regarding employment related 37 references. This legislation should not undermine the immunity found in the Data 38 Practices Act. 39 4o HR -12. State Paid Police and Fire Medical Insurance 41 • The state should fully fund programs that pay for health insurance for police and fire 42 employees required under Minn. Stat. § 299A.465, as amended in 1997, for police and 43 fire employees hurt or killed in the line of duty. 44 • The Legislature should clarify whether Minn. Stat. § 299A.465 applies to injuries 45 incurred prior to June 1, 1997 (the effective date of the law). 34 1 • The Legislature should clarify the amount of an employer's contribution under Minn. 2 Stat. § 299A.465 and whether it changes over time. 3 4 HR -13. Breathalyzers 5 • Minn. Stat. § 181.950-.957 should be amended to permit the use of breathalyzers as an 6 acceptable technology for determining alcohol use. Currently, breathalyzer use is 7 permitted under federal and state commercial drivers' laws. 9 HR -14. Preservation of Local Decision -Making Authority on Employment 10 Related Issues 11 • The League supports local decision-making authority, and opposes legislation intended 12 to interfere in local decisions. 13 14 HR -15. Drug and Alcohol Rehabilitation 15 • Minn. Stat. § 181.953, subd. 10(b), an employer cannot terminate an employee for a 16 positive controlled substance test without first providing the employee a chance for 17 rehabilitation and treatment. Recently, some cities have been advised that this law 18 applies to "probationary" employees as well as permanent employees. Therefore, the 19 League supports a legislative change to clarify that the state law on drug and alcohol 20 rehabilitation and treatment does not apply to probationary employees. 21 22 HR -16. Health Care Insurance Programs 23 • The League supports voluntary participation in programs designed to provide for post - 24 retirement health insurance benefits or in health insurance plans structured to pool all 25 public employees. 26 27 Data Practices 28 29 DP -1. Public Access to Information 30 • Cities (and other state and local units of government) are required to establish policies 31 and make clear to the public procedures for obtaining access to data classified as 32 government public data. These requirements must accord local officials flexibility to 33 establish policies and procedures that reflect the availability of resources and existing 34 formats in which information is maintained and organized. 35 36 DP -2. State Model Policies and Training 37 • The Department of Administration is required to provide model policies and training 38 assistance to cities in complying with the Government Data Practices Act (GDPA). The 39 Legislature must continue to fully fund the on-going costs of GPDA compliance training 40 and education and directly involve local officials in the development and 41 implementation of training activities. 35 I DP -3. Tennessen Warning 2 • Changes enacted in 1999 addressed only the school district portion of the issues facing 3 local government employers when complying with the employee notice requirements of 4 the Tennessen warning. The Legislature should limit compliance with notice 5 requirement to initial hiring procedures. The initial hiring notice will cover subsequent 6 disciplinary or other personnel -related actions that are likely to adversely affect the 7 individual's employment status. 8 9 DP -4. Violations of Government Data Practices Act 10 • In some circumstances, local government compliance with the Government Data 11 Practices Act is hampered by fears of punitive legal action against public employees 12 responsible for responding to requests for information while also protecting data 13 classified as private or nonpublic. The Legislature should maintain current damage 14 award requirements for willful violations of the GDPA. 15 16 DP -5. GDPA Compliance in Contracting 17 • The 1999 Legislature imposed requirements on the private sector to comply with the 18 Government Data Practices Act when under contract. Despite assurances to the 19 contrary, testimony in support of these new requirements generally supported imposing 20 these obligations whenever government contracts with the private sector to provide 21 public services. The Legislature should clarify that the 1999 changes in GDPA 22 requirements for access to public government data pertain solely to the contract 23 product delivered by the private sector. 24 25 26 THE LEAGUE SUPPORTS THE FOLLOWING POLICIES REGARDING 27 FEDERAL EMPLOYMENT LAW: 28 29 FED -1. FLSA/Overtime Compensation 30 31 • The Fair Labor Standards Act (FLSA) was designed for private employer - employee 32 relations. Government employees were exempt for over 100 years. Through a series of 33 court decisions, this statute is now applied to local governments. Certain exceptions for 34 state and local government employees should be reinstated by statute to allow for public 35 accountability and record keeping. 36 37 FED -2. Peace Officer Bill of Rights 38 39 • Congress should oppose a federal peace officer bill of rights because it will only 40 compound the difficulties with internal investigations, local enforcement and diminish 41 local accountability. 42 43 36 1 FED -3. Portability of Deferred Compensation 2 3 • Public sector employees are increasingly changing jobs between the public and private 4 sectors. Congress should enact legislation that would permit tax deferred rollovers 5 between public and/or private deferred compensation plans to improve the portability 6 of funds. 7 8 FED -4. Medicare/Medicaid Premium Disbursements 9 10 • Minnesota continues to be a net loser in federal Medicare and Medicaid premium 11 disbursements. Congress should recognize this disparity and provide Minnesota with a 12 more balanced and represented share of the costs of providing health care under 13 Medicaid and Medicare. 14 15 16 ELECTRIC RESTRUCTURING 17 18 Introduction: Cities have a strong interest in the public policy debate about electric 19 restructuring or deregulation. Minnesota already enjoys some of the lowest average electric rates 20 in the nation. The case has yet to be made that deregulation will result in either lower rates or 21 improved service for consumers. 22 23 Issue: For many decades, electric service to Minnesota citizens has been delivered 24 through a combination of investor-owned utilities (IOUs), municipal utilities, and rural electric 25 cooperatives. This system has served Minnesota well, delivering reliable, universal service at 26 rates among the lowest in the country. 27 28 In recent years, many have begun to promote "deregulation" or "restructuring" 29 of the industry, meaning that electric service would no longer be a franchised monopoly. A 30 number of states, primarily those with high electric rates, have taken steps to move toward such 31 restructuring. In most of these cases, transmission and distribution remain regulated, with retail 32 competition allowed for generation source. 33 34 Advocates of restructuring argue that such competition will lead to lower rates. However, 35 estimates by the federal Energy Information Agency* are that while the upper Midwest, 36 including Minnesota, will experience slightly lower rates in the short-term, longer-term rates 37 may actually be higher under restructuring. Concerns have also been expressed as to 38 whether residential customers, and those in rural and other harder -to -serve areas will actually 39 experience decreased reliability and increased rates. 40 41 Local elected officials have the primary responsibility to the citizens of their cities to 42 make certain restructuring that allows retail competition is as beneficial to the citizens as it is to 43 the industry. Beneficial to the citizen means that all Minnesotans experience the same reliable, 44 high-quality, universal, and low-cost service they experience under the current system of electric 45 power delivery. 46 47 EIA is the nonpartisan research arm of the U.S. Department of Energy 37 I City residents have a strong interest in the outcome of this important public policy 2 debate. Cities are substantial consumers of electric power. Over 180 cities have 10 percent or 3 more of their property tax base in electric industry property, while others collect franchise fees 4 and/or sales taxes on electric purchases within their boundaries. Citizens in 126 Minnesota 5 communities currently receive economical electric service from municipal utilities, which make 6 payments -in -lieu of taxes to help support city services. Significant increases in the cost of 7 electric power for city operations or losses of these traditional sources of revenue will result in 8 property tax increases. 9 10 Response: The federal government should not mandate restructuring; the decision 11 should be left to the states. 12 13 The Legislature should continue to follow a slow, deliberative approach, taking time 14 to consider how alternative models for delivering electric power will affect the state's 15 traditional benefits of reliable, universal, high-quality and low-cost service. The public 16 policy discussion should be focused on actual benefits to citizens, rather than on ideological 17 arguments, stakeholder interests, and over -reliance on simplistic objectives like "consumer 18 choice." Those advocating a change should bear the burden of proof to demonstrate that 19 restructuring and deregulation will, at a minimum, maintain Minnesota's high-quality, 20 low-cost, and reliable service. Only when that burden of proof has been met should 21 restructuring occur. 22 23 The following public policy goals should be incorporated into any legislation 24 restructuring the electric industry: 25 26 Adequate Supply and Demand 27 28 The state's current generation and transmission capacity is inadequate to meet 29 projected future needs. No new significant capacity has been built since the 1980's (Sherco 30 3). Current regulatory and other governmental policies serve as a disincentive to meet 31 customer demand. The state should review and amend these policies as necessary to 32 encourage development of adequate capacity and reliability. 33 34 Consumer Protection 35 36 Consumer interests must continue to be protected, especially for the most 37 vulnerable populations. Reliable service must be universally available and programs such 38 as cold -weather shut-off rules should be continued either as requirements for all market 39 participants or as separate state programs. 40 41 Environmental Concerns 42 43 The environment must be adequately protected, with conservation and renewable 44 energy efforts maintained. The federal government must review the appropriateness of 45 current environmental regulations and their effect in a deregulated market; for example, 46 exemptions from the Clean Air Act for some generation facilities. 47 38 1 Fair Market Competition 2 3 To ensure fair market competition, the federal and state governments must have the 4 authority to review mergers to prevent abuse of market power. 5 6 Cities must remain viable competitors in the electric market. Municipal utilities 7 must be granted exemptions from rules like the open meeting law and data practices 8 requirements where they hamper the ability to effectively compete with private companies. 9 To ensure adequate service to every citizen, cities and other local governments must 10 maintain their ability to issue tax-exempt bonds for construction of electric infrastructure, 11 and be given explicit authority to aggregate or municipalize provision of electricity. 12 13 Local Authority 14 15 Cities must maintain their traditional authority over land use, zoning, rights-of-way 16 management and cost recovery, as well as the ability to franchise providers and to receive 17 payments -in -lieu of taxes from municipal utilities. Cities' authority to negotiate siting fees 18 and agreements for proposed generating facilities should be enhanced. 19 20 To avoid unnecessary demand for the limited space in public rights of way, open 21 access to transmission and distribution facilities should be maintained through regulation. 22 23 As the electric market is opened to interstate competition, the federal government 24 must preserve the application of Minnesota's state and local sales taxes to the sale of 25 electricity, regardless of the place of origin. 26 27 Stranded Cost Recovery 28 29 Issue: Regulated utilities have traditionally made operating decisions based on needs of 30 consumers within their service territories. Many decisions, therefore, have been based more on 31 need than on economics. In the transition from a regulated to a restructured competitive 32 environment, electric generators' investments in fixed assets and other obligations may or may 33 not remain as economically viable. Estimates of these "stranded costs" vary greatly, with some 34 indicating no stranded costs or possibly even negative stranded costs resulting from increased 35 prices after deregulation in Minnesota. 36 37 Response: If regulatory actions have contributed to investment by existing regulated 38 utilities that are not economically viable in a competitive market, and if restructuring 39 occurs, the League supports transition mechanisms that will allow utilities to collect 40 revenues for those particular stranded costs. However, these charges must be carefully 41 monitored to ensure that only eligible and verifiable costs are covered and that over - 42 collections do not occur. Taxpayers and ratepayers should not be expected to cover the 43 cost of investments that were made for business reasons, apart from the requirement to 44 serve under the regulated system. 45 46 If negative stranded costs for the regulated utility as a whole can be established, and 47 are solely the result of transition to a restructured environment, these regulated utilities 39 1 should be required to contribute some limited percentage of established amounts to offset 2 tax breaks given to these utilities as a result of restructuring. 3 4 Property Tax 5 6 Issue: Part of the discussion regarding possible deregulation of the electric power 7 industry has centered on electric utility taxation. Proponents of restructuring assert that if 8 effective free market competition is to replace governmental regulation, state tax policy must be 9 changed. The main focus of the Investor Owned Utilities (IOUs) so far has been removal of the 10 attached machinery or personal property tax. Utilities subject to the tax argue it places them at a 11 competitive disadvantage to non -Minnesota companies, rural electric cooperatives (co-ops), and 12 municipals. However, accurate comparisons of tax burden are difficult, as other states use 13 completely different taxing systems. Additionally, co-ops and municipals do pay direct taxes on 14 some of their property and indirectly when they purchase wholesale power from sources that are 15 taxed, such as IOUs. Municipals make substantial payments -in -lieu of taxes. 16 17 Utility personal property can be a significant portion of the local tax base in all cities. 18 Most obviously affected are cities that have power plants; however, transmission and distribution 19 equipment account for over half of the personal property taxes paid by the IOUs and exist in 20 nearly every city. Replacing the revenue that would be lost to cities, counties, school districts, 21 and other local taxing jurisdictions is a stated goal of the IOUs; however, the mechanics and 22 funding sources of such a replacement revenue would be difficult to develop and administer, and 23 could be subject to reductions or elimination over time. Furthermore, replacement revenues or 24 aids may not fully address the problems created by a large tax base reduction. 25 26 Response: Cities oppose proposals for exempting the IOUs from the personal 27 property tax, apart from the decision to restructure the electric industry in Minnesota. 28 29 If and when restructuring occurs, a truly independent review of the overall tax 30 burden should be conducted to determine whether Minnesota utilities are at a competitive 31 disadvantage. 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