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Home My WebLink AboutCouncil Information Memorandum 01-11-20021. 2. 3. 4. S. 6. 7. 8. JANUARY 11, 2002 COUNCIL MEETING SCHEDULE. TUESDAY, JANUARY 15, 7. 00 PM TUESDAY, JANUARY 22, 7: 00 PM SATURDAY, JANUARY 12,5:30 PM MONDAY, JANUARY 14,7:00 PM WEDNESDAY, JANUARY 16, 7. 00 PM THURSDAY, JANUARY 17, 7: 00 PM THURSDAY, JANUARY 18, 7. 00 PM Dummy SPEC)AL COUNCIL MEETING, TOPICS: HOUSING SUMMIT ISSUES; CHARITABLE GAMBLING REQUEST, ANNUAL CURBSIDE WASTE COLLECTIONDAY; QUARTERLYCITYMANAGER CHECK-IN, DISCUSS FUTURE STUDY SESSION TOPICS, Public Safety Training Room REGULAR COUNCIL MEETING, Council Chambers PLYMOUTH CITY WINTER HOLIDAYPARTY, Plymouth Creek Center YOUTHADVISORY COUNCIL MEETING, Council Chambers PLANNING COMMISSION, Council Chambers HOUSING & REDE VEL OPMENT A UTHORITY (HRA), Medicine Lake Room PUBLIC SAFETYADVISORYBOARD, Police Department Library A List of future Regular Council Meeting agenda items is attached (M-7) January, February, and March calendars are attached (M-8) OFFICIAL CITY MEETINGS January 2002 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 Dec 2001 7:00 PM HUMAN S 2 T W T F S RIGHTS 1 COMMISSION - 2 3 4 5 6 7 8 Medicine Lake 9 10 11 12 13 14 15 Room 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 6 7 8 9 10 11 12 7:00 PM REGULAR COUNCIL 7:00 PM EQC, Council Chambers 6:00 PM SPECIAL COUNCIL MEETING WITH PLYMOUTH AREA MEETING, Council LEGISLATORS, Chambers Plymouth Creek Center 7:00 PM PRAC, Council Chambers 13 14 15 16 17 18 19 7:00 PM YOUTH ADVISORY T:W PM SPECIAL TOPICS HOUSING 7:00 PM PLANNING 7:00 PM HRA - Medicine Lake COUNCIL, Public Safety Training SUMMIT ISSUES, c GAM G COMMISSION, Council Chambers Room Room R" EEQUAEST ANNUAL CURBSIDE WASTE 7:00 PM PUBLIC PICK-UP; CITY MANAGER QUARTERLY CHECK-IN, SAFETY Public Saiaty Training Room ADVISORY BOARD, Police Dept. Library 20 21 22 23 24 25 26 MARTIN LUTHER KING 7:30 AM LOCAL BUSINESS COUNHoteRadsson 7:00 PM PACT - Hadley Lake Room JR. BIRTHDAY (Observed) - City Offices 7:00 PM REGULAR Closed COUNCIL MEETING, Council Chambers 27 28 29 30 31 Feb 2002 7:00 PM YOUTH S M T W T F S ADVISORY 1 2 COUNCIL, Public Safety Training 3 4 5 6 7 8 9 Room 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 modified on 1/10/2002 OFFICIAL CITY MEETINGS February 2002 Sunday Monday Tuesday I Wednesday Thursday Friday Saturday Jan 2002 S M T W T F S 1 2 3 4 5 Mar 2002 S M T W T F S 1 2 1 2 2:00 PM - 7:00 PM FIRE & ICE FESTIVAL, 6 7 8 9 10 11 12 3 4 5 6 7 8 9 Parkers Lake 13 14 15 16 17 18 19 10 11 12 13 14 15 16 20 21 22 23 24 25 26 17 18 19 20 21 22 23 27 28 29 30 31 24 25 26 27 28 29 30 31 3 4 S 6 7 8 9 7:00 PM 7:00 PM HUMAN PLANNING RIGHTS COMMISSION, COMMISSION - Council Chambers Medicine Lake Room 10 11 12 13 14 15 16 7:00 PM YOUTH 7:00 PM 7:00 PM EQC, 7:00 PM PRAC, ADVISORY REGULAR Council Chambers Council Chambers COUNCIL, Public COUNCIL Safety Training MEETING, Council Ash Room Chambers Wednesday (First Day of Lent) 17 18 19 20 21 22 23 PRESIDENTS 7:00 PM 7:00 PM HRA - DAY - City PLANNING Medicine Lake Offices Closed COMMISSION, Council Chambers Room 7:00 PM PUBLIC SAFETY ADVISORY BOARD, Police Dept. Library 24 25 26 27 28 7:00 PM YOUTH ADVISORY COUNCIL, Public Safety Training Room 7,30 AM 930 AM, TVVINVVEST STATE OF E CITY MEETING, Plymouth Creek Center 7:30 AM LOCAL BUSINESS COUNCIL, Radisson Hotel 7:00 PM PACT- IHadle Lake Room y 7:00 PM YOUTH SERVICES AWARDS PROGRAM, Plymouth Creek Center 7:00 PM REGULAR COUNCIL MEETING, Council Chambers modified on 1/10/2002 OFFICIAL CITY MEETINGS March 2002 Sunday Monday Tuesday I Wednesday Thursday Friday Saturday 1 % Feb 2002 Apr 2002 '"' S M T W T F S S M T W T F S --T-2— 1 2 3 4 5 6 3 4 5 6 7 8 9 7 8 9 10 11 12 13 10 11 12 13 14 15 16 14 15 16 17 18 19 20 17 18 19 20 21 22 23 21 22 23 24 25 26 27 24 25 26 27 28 28 29 30 3 4 5 6 7 8 9 7:00 PM PLANNING 7:00 PM HUMAN RIGHTS COMMISSION, COMMISSION - Council Chambers Medicine Lake Room 10 11 12 13 14 15 16 7:00 PM YOUTH ADVISORY COUNCIL, Public 7:00 PM REGULAR COUNCIL 7:00 PM ECC, Council Chambers 7:00 PM PRAC, Council Chambers Safety Training MEETING, Council Room Chambers 17 18 19 20 21 22 23 7:00 PM PLANNING 7:00 PM HRA - Medicine Lake Room COMMISSION, Council Chambers 7:00 PM PUBLIC SAFETY ADVISORY BOARD, Police Dept. Library 24 25 26 27 28 29 30 7:00 PM YOUTH ADVISORY COUNCIL, Public 7:30 AM LOCAL BUSINESS COUNCIL, Radisson 7:00 PM PACT - Hadley Lake Room Good Friday Safety Training Hotel Room 7:00 PM REGULAR Passover begins at sunset COUNCIL MEETING, Council Chambers 31 Easter modified on 1/10/2002 01/09/2002 11:36 FAX 651 602 1358 METRO COUNCIL Z001/001 Metropolitan Council Building communities that work DATE: January 9, 2002 TO: Clerks City Managers Council Members Mayors Commissioners FROM: Melissa Manderschied, Public Affairs voice) 651.602.1126 fax) 651.602.1358 email) melissa.manderschied@metc.state.mn.us RE: State of the District Hosted by Metropolitan Council member Saundra Spigner Just a quick reminder about the State of the District. Wednesday, January 16, 2002 7:00-8:30 PM Plymouth Library (Vicksburg and 36th) Council Member Saundra Spigner will be sharing her thoughts on the opportunities and challenges facing Northwest Hennepin County in 2002, including the Metropolitan Council's legislative initiatives. Please plan to discuss your City's 2002 Legislative Agenda. Please RSVP by Friday, January 11, 2002 to 651.602.1390. Clerk: The invite was mailed January 3, 2002. Please distribute to Council Members, City Managers, Commissioners, and Mayors. .�/Motmpolitaa Council MCM PUk CM*9.230 EM Fifth Stf*d • SC Pw4 Mi.,%.ta 55101.1625 • (651)602-1000 • Fax 602-1550 • Try 291-0900 Metra lnro Live 602.1$99 - cb*.tar emRwlcievs.mm.w • wwmmomeowiLorr SENT VIA FAX January 4, 2002 Minnesota Pollution Control Agency Mr. Harvey Schmitt Dorglass, Inc. 6008 Culligan Way Minnetonka, MN 55345 , RE: Petroleum Tank Release Site File Closure Site: Dorglass, Inc., 9625 36`x' Avenue North, Plymouth Site ID#: LEAK00001070 Dear Mr. Schmitt: We are pleased to let you know that the Minnesota Pollution Control Agency (MPCA) staff has determined that your investigation and/or cleanup has adequately addressed the petroleum tank release at the site listed above. Based on the information provided, the MPCA staff has closed the release site file. Closure of the file means that the MPCA staff does not require any additional investigation and/or cleanup work at this time or in the foreseeable future. Please be aware that file closure does not necessarily mean that all petroleum contamination has been removed from this site. However, the MPCA staff has concluded that any remaining contamination, if present, does not appear to pose a threat to public health or the environment under current conditions. The MPCA reserves the right to reopen this file and to require additional investigation and/or cleanup work if new information, changing regulatory requirements or changed land use make additional work necessary. If you or other parties discover additional contamination (either petroleum or nonpetroleum) that was not previously reported to the MPCA, Minnesota law requires that the MPCA be immediately notified. You should understand that this letter does not release any party from liability for the petroleum contamination under Minn. Stat. ch. 115C (2000) or any other applicable state or federal law. In addition, this letter does not release any party from liability for nonpetroleum contamination, if present, under Minn. Stat. ch. 115B (2000), the Minnesota Superfund Law. 520 Lafayette Rd. N.; St. Paul, MN 55155-4194; (651) 296-6300 (Voice); (651) 282-5332 (TTY) St. Paul • Brainerd • Detroit Lakes • Duluth • Mankato • Marshall • Rochester • Willmar; www.pca.state.mn.us Equal Opportunity Employer • Printed on recycled paper containing at least 20% fibers from paper recycled by consumers. Mr. Harvey Schmitt Page 2 January 4, 2002 Please note that as a result of performing the requested work you may be eligible to apply to the Petroleum Tank Release Compensation Fund (Petrofund) for partial reimbursement of the costs you have incurred in investigating and cleaning up this petroleum tank release. The Petrofund is administered by the Petroleum Tank Release Compensation Board (Petro Board) and the . Minnesota Department of Commerce. To learn more about who is eligible for reimbursement, the type of work that is eligible for reimbursement, and the amount of reimbursement available, please contact Petrofund staff at (651) 297-1119 or 1-800-638-0418. If future development of this property or the surrounding area is planned, it,should be assumed that petroleum contamination may still be present. If petroleum contamination is encountered during future development work, the MPCA staff should be notified immediately. - . For specific information regarding petroleum contamination that may remain at this leak site, please call the Leaking Underground Storage Tank File Request Program at 651/297-8499. The MPCA fact sheet Request to Bill for Services Performed must be completed.prior to arranging a time for file review, Thank you for your response to this petroleum tank release and for your cooperation with the MPCA to protect public health and the environment. If you have any questions regarding this letter, please call me at (651) 297-8580. Sincerely, Chris McLain Project Manager Petroleum Remediation Unit Petroleum and Landfill Remediation Section Majors and Remediation Division CLM:ais cc: Sandra Paulson, City Clerk, Plymouth Richard Kline, Fire Chief, Plymouth Dave Jaeger, Hennepin County Solid Waste Officer Minnesota Department of Commerce Petrofund Staff Gray Freshwater Center Hwys.15 & 19, Navarre 2500 Shadywood Road Excelsior, MN 55331-9578 Phone: (952) 471-0590 Fax: (952) 471-0682 Email: admin@minnehahacreek.org Web Site: www.minnehahacreek.org Board of Managers Pamela G. Blixt James Calkins Lance Fisher Monica Gross Scott Thomas Malcolm Reid Robert Schroeder Printed on recycled paper containing at least 30% post consumer waste. Minnehaha CreekWatershed District Improving Quality of Water, Quality of Life MEMORANDUM FROM: Jim Hafner, Senior District Technician Minnehaha Creek Watershed District TO: Cities and Townships within the Watershed RE: Proposed Stream, Lake and Wetland Buffer Rule DATE: January 9, 2002 In March 2001, the Minnehaha Creek Watershed. District (MCWD) provided to you a copy of a proposed MCWD rule requiring the establishment of vegetated buffers adjacent to certain categories of streams, lakes and wetlands within the watershed. A public hearing was held and comments were received. Since then, the MCWD has continued to engage in research and discussion, and the MCWD Board of Managers has revised the proposed rule in a number of respects. The Board of Managers expects within the next several weeks to approve a revised proposed rule for publication and a second 30 -day public comment period and hearing. You will receive a copy of the proposed rule and the documents on which the rule is based will be available for your review. Information about the rulemaking also will continue to be found on our web site at www.minnehahacreek.org. We encourage you to prepare to receive the rule document and to participate in the public comment process as you believe appropriate. In light of the extensive rulemaking process to date, the Board will not be inclined to further extend the comment period short of any substantial unexpected issues that may arise.. The rule will propose buffers of 25 to 50 feet, in which structures, hard surface, filling, excavating and vegetative disturbance will be limited. Buffer averaging is proposed for compliance flexibility. In addition, the Board is exploring the option of a comprehensive riparian management plan as a performance-based alternative to full buffer width. The rule contains a number of full or partial exceptions applicable to preexisting structures and hard surface, single-family parcels, public utilities, stormwater facilities and others. The proposed rule also specifies temporary construction -phase buffers and imposes peak -flow -based restrictions on point source discharges to streams, lakes and wetlands. We invite you to review the rulemaking documents carefully once they are available, and to provide the MCWD with the benefit of your insights and information. If you have nay questions please contact me at 952-471-0590 or jhafner@minnehahacreek.org. December 20, 2001 CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD • SHOREWOOD, MINNESOTA 55331-8927 • (952) 474-3236 FAX (952) 474-0128 • www.ci.shorewood.mmus • cityha1I@ci.shorewood.mn.us Laurie Ahrens Assistant City Manager City of Plymouth 3400 Plymouth Boulevard Plymouth, Minnesota 55447-1482 Dear Ms. Ahrens: On behalf of the Shorewood City Council, I want to express our deepest appreciation for the $6,600 commitment made by the City of Plymouth on efforts to establish state -level restrictions on the use and sale of lawn fertilizers that contain phosphorus. As I have said before, we need all of the thousands of dollars we can get from local governments to compete with the millions of dollars in advertising spent by fertilizer companies. Plymouth's contribution to this effort is significant. I would also like to thank the Plymouth City Council for the participation of Councilmember Ginny Black in our ad hoc group, which now has the name of "Minnesota Water Quality Partnership". Her insight, energy, and commitment are contributing greatly to the success of our effort thus far. We are optimistic about our chances for success during the 2002 session of the Legislature. Your continued involvement will be important to achieving that success. Mayor ?.s `� PRINTED ON RECYCLED PAPER SUBJECT: SURFACE WATER UTILITY FEE AND CREDIT Page 3 various ideas. Granted, it has taken what seems to be a long time, but the consequences for the City's water management program could be far-reaching. Concerns over the means of calculating the fee. Mike Kohn of the Plymouth Finance Department has spoken with my staff about your concerns. He shared the calculations he performed on behalf of the Harrison Place Townhome development (enclosed). He agreed that the percentage of impervious surface would warrant a rate reduction (as allowed in the Storm Water Utility ordinance), and has recalculated the fee accordingly. The original fee would have been $229.30 per month ($3.82 per unit). This has been reduced to $179.60 per month ($2.99 per unit), which is a 22% reduction. Mike also pointed out that he made these adjustments without requiring the Harrison Place association to make an official appeal. Impervious surfaces are not only measurable, they are the single most significant factor in water quality in the City. Therefore, impervious surface was used as the criteria to determine rates for the Surface Water Utility Fee. Certainly, there are other criteria, but none that would be as readily measurable or would provide as fair a means of appeal (a fact that has benefited Harrison Place). I apologize for the seeming slow action on this issue. I hope that this lengthy explanation will help you understand that a great deal of effort (and, consequently, time) is required to answer what seem, on the surface to be simple questions. As was conveyed in your phone conversation, your name and number have been recorded and you will receive notice when this issue comes before the City Council. Your input is appreciated, and thank you again for your participation. If you have any other questions, please don't hesitate to call me anytime at 763-509-5520. Sincerely, I- Dan Faulkner, Director of Public Works Enclosure cc: Joy Tierney, Mayor Dwight Johnson, City Manager Marjorie Vigoren, Solid Waste Coordinator Bob Erickson, President Harrison Place Association 10552 - 57th Ave. N. Plymouth, MN 55442 N:N pw�Engineering% W TRRES RCS[P hrUNGERd[ doe Harrison Place on Bass Creek 21.25 acres 13 structures x 11,200 sq. ft. = 145,600 sq. ft. 4 structures x 5,200 sq. ft. = 20,800 sq. ft. 3 driveways x 900 sq. ft. = 2,700 sq. ft. 16 driveways x 3,000 sq. ft. = 48,000 sq. ft. 217,100 sq. ft. 217,100/925,800 = 23.45% impervious 925,800 — 7,500 NURP = 918,300/43,560 = 21.08 acres x *$8.52/acres = $179.60/60 units = $2.99 per unit per month * Based on Impervious Coverage/Rate Per Acre Table derived from U.S. Department of Agriculture Soil Conservation Service Runoff Curves. Plymouth City Council City of Plymouth 3400 Plymouth Blvd. Plymouth, Mn. 55447 Dear Mayor Tierney and City Council, Dec. 17, 2001 I am the past president of the Harrison Place Townhome Association. In that capacity the present board has requested that I mite this letter to express the collective concerns of our community regarding the Plymouth "sm-face water fee ordinance". Ourresidents concerns involve 2 main points: - 1) Credit for the construction of a surface water runoff holding pond - We were led to believe when the ordinance was ado ted, 2001 city council meeting), that we would very shortly be able to apply for: An approx. 2096 reduction in the fee for our previous construction of a conforming runoff pond and --The city would take over the maintenance of that pond. These credits or fee reductions would be implemented to bring us more fairly, in line with those who had not been required to build a pond and what the fee monies would now be funding for other residents. We nowfind ourselves approximately 6 months past the approval of the fee ordinance, having paid the fee for 4 months, and still notable to apply for any reliefl I have recently contacted the city (Dec 17,2001) and a number of reasons/excuses have been offered to axplain the delay, but no completion date has been offered, and from our point of view action has been too slow 2) Equitable and appropriate calculation of the fee- According to publications, from phone conversations, and from city council meeting dialog, the following was a partial list of the means of calculating the new fee: -Single family homes would be capped at $3.25 per month regardless of the acreage it resided on. -Farms would not be charged on a per acre basis -Undeveloped parcels would not be charged for acreage because they have no structures. -Townhouse developments would pay at the rate of $10.79 per acre divided by the number of homes. My contention is that these elements are not consistent and should be modified. At Harrison Place our total development covers an -st. area of 21 1/4 acres. Only approximately 50916 of that total is buildable because of wetlands, buffer zones, Bass Creek, and the proximity of Bass Lake Road. We have been told by your finaa-2ce dept. that they have been instructed by you to use total acreage in their calculation, irregardless of what portion is buildable. He advised me to take my concerns to the Council if I disageed With this. We feel this method of calculation unfairly burdens the residents of Harrison Place in comparison to single family homes and farms and undeveloped parcels. In fact, we believe this reasoning to be in direct conflict and opposite with calculations on these other types of parcels. If we use the existing calculation reasoning, a developi-nent with the maximum density allowed would benefit the most from lower fees, even though it produces a much greater runoff and polution problem!! The residents of Harrison Place believe they are unfairly targeted by the current interpretation of the ordinance. We believe that our less dense development and unbuildable land increases the percentage of permeable surface and results in much more favorable runoff mi tiga tion. We are being penalized for doing the right thing!! I would appreciate your action on our concerns for: credit for pond construction, city maintenance of our pond, and review of the fee calculation method for our homes to make them consistent with other parcels. Please inform me when I can expect a reply to these concerns. If I can be of help in any way, please do not hesitate to contact me. copy- RMF Entities Ltd -Harrison Place Board cerely, (? me C. g Un er 0607 57th PI. N. Plymouth, Mn. 55442 Phone 763-383-078:9 CITY O� December 18, 2001 PUMOUTR Jerome C. Unger Harrison Place Townhome Association 10607 57`h Place North Plymouth, MN 55442 Dear Mr. Unger: Thank you for your letter written on behalf of the Harrison Place Townhome Association regarding the surface water utility fee. I appreciate you taking the time to document your specific concerns. I am forwarding a copy of your letter to Public Works Director Dan Faulker and requesting that he provide a response to the questions in your letter, along with an update on the status of the incentive plan. That letter will be shared with the City Council. Your letter will be part of the public record when this issue is considered by the City Council. Sincerely, Joy Tierney Mayor PLYMOUTH :1 Beau tilldPlace'To Live 3400 PLYMOUTH BOULEVARD • PLYMOUTH, MINNESOTA 55447-1482 • TELEPHONE (763) 509-5000 0 -1 --www ri nlvmn ith mn i is Cities may have reserves in dedicated funds, such as sewer and water utilities or enterprise funds, which are generated from user fees. These reserves are dedicated for operation, maintenance, and improvement of the utility or enterprise. In each of these situations, if the funds are classified as reserved, the funds cannot be used for any other purpose. Similarly, monies in debt service funds can only be used for the repayment of debt for the particular project. Rainy day funds The state of Minnesota maintains a budget reserve of $653 million. This is commonly referred to as the rainy day fund. Due to the volatility in estimating state income and sales tax revenues, this fund helps the state address unexpected economic downturns, other fluctuations in state revenues, or unexpected expenditure needs. Similarly, city fund balances act as a rainy day fund for revenue shortfalls, unexpected expenditures or emergencies. Given that cities only receive property taxes and state aids twice a year, these funds can be critical for responding to unforeseen local needs. Fund balances and credit ratings Cash flow needs, savings for projects, and reserves for unforeseen needs are three important reasons why fund balances are important. Gov. Ventura outlined a fourth reason in his State of the State speech last week: favorable bond ratings. The governor said that the state's triple-A bond rating "allows us to borrow money to finance building projects at the lowest interest rate available and consequently save millions of dollars in interest payments. If we try to solve this budget problem with quick fix accounting gimmicks or borrowing on future revenue sources, you can be sure that Wall Street will be watching and our credit rating will suffer." As with the state, Wall Street takes into account the financial well-being of a city when determining its municipal bond.rating. The city's reserves are an important indicator of a city's overall financial health; a city is more likely to be given a higher bond rating if they are deemed to have a healthy city fund balance. Like the state, a high rating for a city reflects the strength of the local economy and indicates its sound fiscal management. Like the state, a high rating bolsters the confidence of other investors and its taxpaying residents. This high bond rating is significant for taxpayers as its issuance enables the city to borrow at a lower interest rate, thereby lowering the cost of municipal debt, and ultimately saving the taxpayers' money. League of Minnesota Cities January 7, 2002 3 City fund balance basics City fund balances have become a popular topic of discussion among state policymakers. Some of these discussions include basic misunderstanding of city finances. This heightened attention means it is important for city officials to be able to explain to their citizens, legislators, and the media the purposes of city fund balances. While each city's financial situation is unique, this article provides an overview of the basic characteristics that most city fund balances share. What the Office of the State Auditor reports as city fund balances is really a combination of several important components of city finances including cash flow funds, savings for projects, and rainy day reserves. Cash flow funds Due to the semi-annual structure of city finances, city fund balances are very different from the state's reserves. The Office of State Auditor report measures city fund balances on Dec. 31, shortly after the city receives its largest sources of revenue from the property tax and state aid distributions. These reserves are necessary to carry cities through the next five to six months of operations—until the next property tax and state aid distributions in June and July. Measuring a city's fund balance on Dec. 31 is equivalent to measuring your personal wealth on the day after payday --before you've paid the mortgage and car loan. Without adequate cash flow reserves, cities would be forced to borrow to pay for operating expenses, which increases the overall cost of city services to taxpayers. Graph A shows a one-year cash balance for the city of Oak Park Heights. The cash balance is highest in December and July, after taxes and state aids are distributed to the city. The difference between the peaks and valley, about two-thirds of the city's cash balance at the end of December, is the city's cash flow need. • Tapping city fund balances through state aid cuts would be a one-time source of revenue for the state and wculd not solve the ongoing state budget problem. • Looking at city fund balances on December 31 is very deceiving since cities. have just received state aid payments and property tax settlements. It is akin to looking at your checkbook on payday and believing you have a lot of money, without accounting for the bills that must be paid. • Financial advisors have indicated that bond ratings could be adversely affected by a forced depletion of reserves. Although the governor and others have recently criticized city and county fund balances, at this time we believe that neither the legislature nor the governor will propose legislation that will directly force cities to deplete their reserves. A more likely scenario might be that the governor or legislators rationalize general cuts in city aids by concluding that local reserves are higher than they need to be and that cities can weather the cuts without cutting services or raising taxes. If that scenario plays out, there are several points that you may want to consider. -Cities did not proportionately benefit during the state's economic growth over the past decade. • In the decade from 1992 to 2002, aid to cities has grown by about 10% while state general fund revenues have increased by over 60%. • Overall, aids to cities were cut by 10% for 2002 alone. • Cities have paid a sales tax since the last state recession in the early 1990s. Cities and counties now pay over $100 million per year in sales tax. -Cutting aid to cities will have consequences • Aids and taxes pay for city services. Reducing aids will affect the level of services citizens receive. The largest expenditure category for cities is public safety. Depending on the extent of aid cuts, public safety expenditures could be impacted at a time when citizen demands for increased public safety are rising. Financial advisors have indicated that city bond ratings could be adversely affected depending on the nature and severity of cuts. Preserving bond ratings is as important to cities as to the state; they directly affect the cost of government. All of these impacts could be compounded in cities with low property values because they cannot as easily compensate for aid cuts. If you have general questions on fund balances, contact Eric Willette or Gary Carlson at the League offices. 145 University Avenue West, St. Paul, MN 55103-204.4 L ta Cities Phone: (651) 281-1200 (800) 925-1122 cellence TDD (651) 281-1290 LMC Fax: (651) 281-1299 LMC1T Fax: (651) 231-1298 Web Site: http://www.Imne.org MEMORANDUM To: City Mayors From: James F. Miller Re: City Fund Balances and state aid cuts Date: 1/9/2002 The projected state budget deficit has once again focused attention on city fund balances and potential cuts in aids paid to cities. We fully expect the upcoming legislative session will include intense scrutiny of not only the state budget but the operations of cities as well. In preparation for the session, we would like to provide you with some information on fund balances that may help you to respond to criticism of your city's reserves and to respond to proposals to cut state aids such as LGA or the market value homestead credit reimbursement. The attached memo is a description of the importance of city fund balances. Although the concepts outlined in this brief are simple and straightforward, when coupled with specific information on your city's financial situation they might help explain to citizens, the media or other interested parties why maintaining sufficient reserves is a prudent cost-effective financial practice. Below are a few responses to criticisms or questions about your reserves and responses to legislative proposals to force your city to reduce its reserves. The unique needs and financial situation of each city are important factors in determining the necessary level of reserves. For example, a rapidly growing community that is expanding its tax base may need a different level of reserves than a stable, aging community. A "one -size -fits -all" budget reserve for all cities would not accommodate these unique community characteristics. Most cities maintain at least one-half of their annual operating budgets in reserve simply to avoid short-term borrowing. These reserves are similar to the state's cash flow account and are necessary because property tax settlements and aid payments only occur twice a year. Jan 10 ZOOZ 17:25:01 Via Fax -> 763+589+5869 Laurie Ahrens Page 003 Of 003 Association of Metropolitan Municipalities News Fax January 7 - 11, 2002, no. 2, page 2 of 2 cities where the growth in levy plus aids for 2002 has exceeded infla- tion and population growth, These "excess" aid reductions would to- tal $48,024,000 million, and are being justified by the fact that the growth in levies plus aids for 2002 is 9.09 percent for cities, which significantly exceeds the three- year average of 4.13 percent. The Governor's budget document notes that if a city does not receive enough LGA to cover this "excess" aid reduction, the remainderwould be taken out of their market value homestead credit aid. At this time, it is unclear whether this would apply to the uniform aid reduction as well. The Governor's plan would ensure that no city or county will experience a permanent reduction in state aids that exceeds six per- cent of its tax base. Levy limits for 2003 will be adjusted to allow cities to levy back for the uniform aid reduction, but cities would have to get voter approval in order to levy back for any "ex- cess" aid reduction. To help address cash flow prob- lems, the Governor's plan would send cities half of the LGA pay- ment they are scheduled to receive in July of 2002 in March. Partial Payment of Market Value Homestead Credit In addition to the LGA cuts, the Governor's proposal would also reduce payment of the market value homestead credit to all cit- ies by 2 percent for 2002. Unlike the LGA reductions, this appears to be a one-time reduction that would not continue for 2003. During his remarks, the Governor stressed that his plan would not "raid" local government fund bal- ances, but that he does expect lo- cal governments to rely on their fund balances to cover expenses in the short-term, until more perma- nent spending and tax decisions can be made. He also stressed that he expects cities and counties to increase tax levies in 2003 only as a last resort. Revenue Raising Steps The primary revenue raising steps included in the Governor's pro- posal are a five -cent increase in the gas tax, and indexing the tax to inflation; a 29 -cent increase in the cigarette tax, wvith comparable percentage increases in other to- bacco taxes; and the expansion of the sales tax to Cover purchases made by school districts, motor vehicle repairs, legal services pur- chased by individuals, newspa- pers and magazines, institutional meals and telemarketing calls. Businesses and cities that pur- chase legal services would not be subject to the sales tax. The Governor's plan calls for the gas tax and cigarette tax increases to go into effect March 1, 2002. The proposed gas tax increase would not yield additional money for transportation, but rather, it would allow the state to keep the MVST dollars in the general fund that it currently transfers to the Highway User Trust Fund. Addi- tionally, $245 million of the money allocated from the general fund in 2000 for highway bottlenecks and corridors would be used to help cover the deficit and then be re- placed by trunk highway bonds, which will be repaid by revenues resulting from indexing the gas tax. Again, this results in no new money for transportation. This is a basic overview of the Governor's proposal. We will pro- vide additional details, including city -by -city information, as soon as it becomes available. In the mean- time, a link to the full text of the Governor's proposal is availaple atwww.amm145.org. Jan 18 ZOOZ 1724:18 Via Fax -> 763+589+5868 Laurie Ahrens Page 032 Of 883 AMM FAX Pftomhll* In ProAding NEWS.COS d Odons January 7'-'1; 1, =i, , ne. 2 Governor Announces Plan to Address state's $1.95 M. Deficit AMM Fax News is faxed to all AMM CIO managers and adtnini5lrafors, leglslative can. facts and Board manbers. Please share this fax with yoWF mayors, rowncilmembers and staff to keep th em abreast ofinTortant metro city issues To offset the state's $1.953 billion budget deficit for fiscal years 2002/2003, Governor Ventura is proposing $700 million in spend- ing cuts, $397 million in tax changesfincreases, and the use of $667 million in reserves, including the $14 million set aside last ses- sion for reforming LGA. He also anticipates approximately $340 million in savings as a result of re- financing general fund transporta- tion appropriations with transpor- tation bonds and using other bal- ances. Noting that it will cost the state $3.7 million for every week of inaction, Governor Ventura said the Legis- lature should be prepared to act on his plan by the first week of Feb- ruary. While it proposes spending down the state's entire $653 million bud- get reserve, the Governor's pro- posal also includes a plan to re- store 60 percent of that amount ($389 million) by July 1, 2003. The spending cuts proposed for fiscal years 2002/2003 include a 0.9 percent reduction in K-12 edu- cation, 2.5 percent in higher ed., 5.2 percent in local government aids and 1.5 percent in health and human services. All other areas of the budget, grouped together, would be reduced by 5.3 percent. The proposed cuts for fiscal years 2004/2005 include a larger reduc- tion of 10,5 percent ($323 million) for locai government aids - LGA Reductions The 5.2 percent reduction in local government aids for fiscal years 2002/2003 amounts to $146 mil- lion. This includes a $73,703, 000 reduction in city LGA and a $29,052,000 reduction in county HACA. It also includes market value credit aid reductions of $11, 491,000 for cities and $25,268,000 for counties. The re- maining money would come from townships ($2,831,000) and spe- cial districts ($3,568,000). The LGA reduction would be achieved two ways. First of all, all cities would experience a uniform reduction in their 2002 LGA equal to two percent of their levy plus aids, which would save the state $25, 679,000. For 2003, all cities would experience a reduction in their LGA equal to 1.7 percent of their adjusted net tax capacity. A second round of cuts, which the Governor's plan refers to as "ex- cess" aid reductions, would target Association of 145 UnivuslryAvenue West Metropolitan 5( Paal, ADV 55103-29,14 Ph—e-, (651) 215-i000 Municipalities Fax. (651) 281-12" E-mail: amnQamm105.ovg AMM Fax News is faxed to all AMM CIO managers and adtnini5lrafors, leglslative can. facts and Board manbers. Please share this fax with yoWF mayors, rowncilmembers and staff to keep th em abreast ofinTortant metro city issues To offset the state's $1.953 billion budget deficit for fiscal years 2002/2003, Governor Ventura is proposing $700 million in spend- ing cuts, $397 million in tax changesfincreases, and the use of $667 million in reserves, including the $14 million set aside last ses- sion for reforming LGA. He also anticipates approximately $340 million in savings as a result of re- financing general fund transporta- tion appropriations with transpor- tation bonds and using other bal- ances. Noting that it will cost the state $3.7 million for every week of inaction, Governor Ventura said the Legis- lature should be prepared to act on his plan by the first week of Feb- ruary. While it proposes spending down the state's entire $653 million bud- get reserve, the Governor's pro- posal also includes a plan to re- store 60 percent of that amount ($389 million) by July 1, 2003. The spending cuts proposed for fiscal years 2002/2003 include a 0.9 percent reduction in K-12 edu- cation, 2.5 percent in higher ed., 5.2 percent in local government aids and 1.5 percent in health and human services. All other areas of the budget, grouped together, would be reduced by 5.3 percent. The proposed cuts for fiscal years 2004/2005 include a larger reduc- tion of 10,5 percent ($323 million) for locai government aids - LGA Reductions The 5.2 percent reduction in local government aids for fiscal years 2002/2003 amounts to $146 mil- lion. This includes a $73,703, 000 reduction in city LGA and a $29,052,000 reduction in county HACA. It also includes market value credit aid reductions of $11, 491,000 for cities and $25,268,000 for counties. The re- maining money would come from townships ($2,831,000) and spe- cial districts ($3,568,000). The LGA reduction would be achieved two ways. First of all, all cities would experience a uniform reduction in their 2002 LGA equal to two percent of their levy plus aids, which would save the state $25, 679,000. For 2003, all cities would experience a reduction in their LGA equal to 1.7 percent of their adjusted net tax capacity. A second round of cuts, which the Governor's plan refers to as "ex- cess" aid reductions, would target Jan 87 Z66Z 15:33:29 Via Fax 763+589+5660 Laurie Ahrens Page 66Z Of 66Z AMM FAXil novidinP 9 �--NEWS ftmces sod solutions January 7 -11, 2001 Met Council Committee to Begin as Blueprint Discussions, AMM to ASS4(iatitlti Of srs ur`MN5siv 204ar Metropolitan ?hlne. (65i) 1'15-4 ,40 Present Results of Regional Forums Fcx: !W) 281-1299 The Metropolitan Council has organized a committee of the whole to review and Munidpaiitie; E -mal/: am0A2)0rnml45.vrg prepare the 2002 Blueprint. The committee will meet on two Wednesdays each AMM Fax News it ri:xed .9 211 AMAs 60, month. The January meetings are scheduled for January 16 and January 30. At the managers and admialstnators,legislative eoa- January 16 meeting AMM will discuss with the committee ways to communicate tach and Board members. Please share this the Blueprint's work products to cities. We will also summarize the findings from fax with your mayors, councllmembers and the regional meetings held in November and December. The presentation will be sta11rokeep rhimabreasdofmWwriantmetro posted on the AMM website prior to the 161", so that members may review it and city issues, send comments to Kris Lyndon Wilson at kristine0_amm145.orq. Potential Impact of State Budget Woes on City Aids and Credits Sade of the State In 2002, Minnesota cities are expected to receive approximately $540 million in Focuses on Deficit Local Government Aid (LGA) and $160 million from the new market value homestead credit. While LGA is often the first program that comes to mind when the state starts On Thursday, January 3, during his an- talking about reducing intergovernmental aids, the market value homestead credit nual State of the State address, Graver- could also be impacted by attempts to address the budget deficit. nor Ventura discussed the 5tate `5 $1.953 billion budget deficit for fiscal year 2002- In the past, when the state has made cuts in intergovernmental aids, it has typically 03, as well as its ongoing $1.2 billion looked to cut programs, such as the old HACA, that went out to all types of LGUs shortfall. The Governor stated that he (cities, counties, and school districts). However, due to the changes made to inter - expects the deficit to be resolved quickly governmental aids during the 2001 session, there aren't very many broad -reaching and that he will have a detailed budget- aid programs left— with the exception of the market value homestead credit. This balancing plan by.lanuary 10. Whilo pro- new credit automatically appears on homeowners' tax bills, thus reducing the amount viding no specifics, the Governor stated they must pay. The amount of the credit varies based on the market value of the that thare are no ''sacred cows--- all por- home, peaking at $304 for a $75,000 home and phasing out entirely for a $414,000 tions of the, budget will need to share in home - the cuts Ha noted shit Fria major bud- get areae cvnsurae 85 percent of the The state then reimburses cities, counties, school districts and special districts for state's resources. The five areas are K their portion of the credit, based on their share of the total tax bill, thus ensuring that 12 education (41 %), health care (1796), each LGU ultimately collects the entire amount it levied. The credit is currently sched- higherad (10%), 110cal government aids uled to be paid out in two installments -- one in late October and one in late Decem- and crv&'s (10S), and health and hu- ber, but the payment of these credits could be impacted by budget cuts. (TIF dis- man service (7%�. The GovE�rnor indi tricts will receive their credit payments in one lump sum in late December.) ca ted that he would prefer that tha defi- cit be covered by spending cuts, rather Another approach the state has taken in the past to reduce aids to local govern - than tax increases, but that nothing is ments is to use a formula that calculates each city's "revenue base," which is the offthe table. He hinted that he would be sum of their le levy plus aids, and then take a percentage of that base as a reduction in open fexpanding the sales tax base, aid and/or credit payments. (The reduction comes out of aid payments first, but if a possibly to include clothing or services. city doesn't receive any aid or doesn't receive enough to cover their reduction, credit payments could also be reduced.) The percentage reduction is dependent on the amount of money the legislature decides to cut from intergovernmenal aids. Met Council Committee to Begin as Blueprint Discussions, AMM to ASS4(iatitlti Of srs ur`MN5siv 204ar Metropolitan ?hlne. (65i) 1'15-4 ,40 Present Results of Regional Forums Fcx: !W) 281-1299 The Metropolitan Council has organized a committee of the whole to review and Munidpaiitie; E -mal/: am0A2)0rnml45.vrg prepare the 2002 Blueprint. The committee will meet on two Wednesdays each AMM Fax News it ri:xed .9 211 AMAs 60, month. The January meetings are scheduled for January 16 and January 30. At the managers and admialstnators,legislative eoa- January 16 meeting AMM will discuss with the committee ways to communicate tach and Board members. Please share this the Blueprint's work products to cities. We will also summarize the findings from fax with your mayors, councllmembers and the regional meetings held in November and December. The presentation will be sta11rokeep rhimabreasdofmWwriantmetro posted on the AMM website prior to the 161", so that members may review it and city issues, send comments to Kris Lyndon Wilson at kristine0_amm145.orq. Jan 10 ZOOZ 10:05:50 Via Fax -> 763+509+5868 Administrator -Fr1 aY Fax - A weekly legislative update from the League of Minnesota Cities 1) "Excess" Aid Reduction—essentially reduces the revenue increase for cities that proposed relatively large levy + aid growth for 2002. Applied to any city where the Pay 2001 to Pay 2002 levy + aid increase is greater than 4.5 percent. The 4.5 percent factor is equal to the 3 -year statewide average annual growth rate in households plus inflation. Cities with populations less than 1,000 are exempt from the excess levy cut. • A city's "excess" aid reduction equals the difference between its actual increase in levy + aid for Pay 2002 and an increase equal to its previous 3 -year average annual growth rate in households plus inflation times 1.25. • If a city's 3 -year average annual growth rate in households plus inflation is less than the 3 -year average annual change in inflation (2.95%), then the city's rate will equal the average inflation rate. • The "excess' aid reduction is applied first to LGA, then if necessary to the market value homestead credit reimbursement. 2) Uniform Aid Reduction—essentially reduces aid to all cities. • For aids paid in 2002, the cut is equal to 2 percent of each city's levy + LGA. Aid Reductions for Pay 2003 / State FY 2004: Page 00Z of 00Z January 10, 2002 The pay 2002 "excess" aid reduction applied to LGA is carried forward, as a Permanent aid reduction applied to a city's levy + aid rrvenuc. base for pay 2003 for levy limit purposes. However, the reduction cannot exceed 617c of a city's payable 2002 adjusted net tax capacity (tax. base). The LPay 2002 "excess" aid reduction applied to the market va'tue homestead credit reimbursement is carried forward, not as an aid reduction, but as Ei levy reduction applied to the Pair 2003 levy + aid revenue base for levy 'Limit purposes. This levy reduction cannot exceed 6% of a city's payable 2002 adjusted net tax capacity. The Pay 2003 "excess' aid reductions can be restored as a levy increase if voters approve the increase. 2) Uniform aid reduction (all cities) • For payable year 2003, the uniform aid reduction rate will be 1.717c of 2002 adjusted net tax capacity. 3) Maximum cut --the combined aid reduction of both the "excess" aid reduction and the "uniform" aid reduction cannot exceed 6% of the city's 2002 adjusted net tax capacity. 4) Eliminate City Police / Fire Amortization Aid If this additional aid cut results in a total aid reduction greater than 676 of ANTC, then the marginal reduction amount attributable to the amortization aid 1) The "excess" aid reduction for Pay 2002 is would be added to the city's LGA extended to Pay 2003 aids. grandfathered base. • LGA reductions in Pay 2003 will first 5) Statutory inflation for LGA is also be applied to the grandfathered LGA eliminated in aids paid beginning in 2004. base amount. For more information on city legislative issues, contact any member of the League of Minnesota Cities Intergovernmental Relalions team. 651.281.1200 or 800.925.1122 Jan 10 Z002 18:65:87 Via Fax -> 763+589+5066 Administrator - Fr1 F - Lr� a ax Y� V.m..r v, A weekly legislative update from the League of Minnesota Cities The Big Fix Today, the governor unveiled his supplemental budget recommendations to balance the state's budget. We are currently trying to analyze the impacts of the proposal. While we wait for a draft of the supplemental budget legislation, we are relying on the Department of Finance and Department of Revenue descriptions of the proposal. What follows is a brief, preliminary description of the proposal. For the remainder of the current biennium, the proposal include!, a drawdown of the state's $653 million reserve, $700 million in spending cuts, $397 million in tax increases and other one-time changes in expenditures. The proposal also includes actions in the next biennium to balance the ongoing structural budget deficit. Cities will feel the pain. Of the $700 million in state spending cuts for the remainder of this biennium, cities will shoulder $214 million of the total. The city share includes the direct reductions in LGA and market -value homestead credit as described below and reductions in the tax increment financing grant program of $129 million. Although the TIF grant program was dramatically reduced, $38 million per year will apparently be preserved for FY 2004 and 2005. Although the budget materials do not directly address levy limits, it appears that the governor will extend levy limits into the future. In addition, cities affected by the "excess" aid reduction as defined below would be required to seek voter app. -oval to replace the loss of revenue. In addition to the cuts in LGA and market value homestead credit reimbursement, the governor eliminates city police and fire amortization aids and the statutory inflationary increase in LGA that has annually increased the appropriation by Page 001 of BBZ January 10, 2002 approximately $14 million. These two changes are not effective until pay 2004. The proposal also includes a 5 -cent increase in gas tax and an automatic indexing of the gas tax for future years, which will raise an estimated $199 million in FY 2003. To convert the gas tax increase into a general fund revenue, the proposal reduces the statutory dedication of the motor vehicle sales tax, which will save $194 million in general fund revenues. However, this means that the gas tax increase will only provide $5 million in new transportation revenue this biennium. In the future, cities will also feel the pinch on legal service and automobile repair costs. The state sales tax will be extended to those purchases beginning in 2003. Although the city share of that tax increase has not been estimated, the combined impact of the sales tax changes will increase state revenues by an estimated $604 million for the 2004-05 biennium. The governor has also proposed extending the sales tax to school purchases. One small positive note—the LGA payments to cities will actually be accelerated. Instead of paying LGA in July and December, each city would receive 114 of the total in March,'/ in July and the remaining 11z on December 15. This change could modestly benefit each city's cash flow situation—assuming they still receive LGA City Aid Reductions Note: We have not yet seen detailed estimates of the impact of these cuts for individual cities. We will make that information available as soon as possible. Pay 20002 / State FY 2003: There are two components to the aid cuts— an "excess" cut and a "uniform" cut. For mors nrormatior on city legislative issues, contact any member or the League Of Minnesota Cities Inlergovemmental Relations team. 651.281.1200 or 800.925.1122 2001 City Council Attendence X - Absent DATE MEETING TYPE Johnson Hewitt Slavik Stein Black Harstad Tierney 9 -Jan Regular 23 -Jan Regular 31 -Jan S ecial 6 -Feb Special 13 -Feb Regular X 13 -Feb Special I X 27 -Feb Regular X X 20 -Mar Regular 20 -Mar Special 27 -Mar Regular 27 -Mar Special 3-A r Special X 10 -Apr Regular X _ 17 -Apr Board of Review 17 -Apr Special 24 -Apr Regular 24 -Apr Special 1 -May Board of Review X 1 -May Special X 8 -May Regular 22 -May Regular 6 -Jun Special X 12 -Jun Regular 12 -Jun Special X X 26 -Jun Regular X 26 -Jun Special X 10 -Jul Regular 17 -Jul Special X 24 -Jul Regular X 14 -Aug Regular 21 -Aug Special 28 -Aug Regular X 28 -Au S ecial X 29 -Aug Special 4 -Sep Special 10 -Sep S ecial X 11 -Sep Regular 25 -Sep Regular 25 -Sep Special X 9 -Oct Regular 23 -Oct Regular 29 -Oct S ecial X 13 -Nov Regular 13 -Nov Special 20 -Nov Special X 27 -Nov Regular 17 -Dec S ecial 18 -Dec Re ular December 27, 2001. 15390 18`h Ave. North, #1106 Plymouth, MN 55447 Ms. Lori Ahrens City of Plymouth 3400 Plymouth Blvd. Plymouth, MN 55447-1482 Dear Ms. Ahrens: I am writing to confirm our phone conversation of last week. I would like to submit my resignation from the Wayzata/Plymouth Chemical Health Commission effective immediately. I appreciated the opportunity to serve and represent Plymouth. However, I am finishing my MBA and will have additional time constraints during the January to May 2002 period. Therefore, I think it would be best for another citizen to assume the balance of my term. I have spoken with Ms. Sandy Paulson of the City of Plymouth and she has identified an excellent replacement member. Because of this, I believe the transition can be seamless and that the City of Plymouth will be adequately represented. I trust that you will forward this letter to anyone else in Plymouth city government that may need it. I appreciate your assistance and would like the opportunity to be considered for other boards and commissions in the future. Sincerely, "X Kristin M. 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