HomeMy WebLinkAbout13.F.2. League of MN Cities and Metro Cities-Draft Legislative Policies
13.F.0l.
CITY OF SHAKOPEE
Memorandum
TO: Mayor and City Council
FROM: Mark McNeill, City Administrator
SUBJECT: League ofMN Cities and Metro Cities - Draft Legislative Policies
DATE: October 27, 2008
INTRODUCTION:
The Council is asked to endorse the draft 2009 Legislative Policies, as recommended by
the League of Minnesota Cities, and Metro Cities Policy Committees.
BACKGROUND:
Attached are policies which have been separately distributed by the LMC and Metro
Cities (fonnedy the Association of Metropolitan Municipalities). The LMC is asking
that any comments be received by Friday, November 7th. Metro Cities will consider
their policies at its November 20 Annual Meeting.
Annually the City of Shakopee has considered these policies. As a whole, these policies
are usually beneficial to all cities. However, ifthere are individual policies with which
the Shakopee Council has issues, those can be removed, and a written request to modify
those could be made to the League Board, or submitted at the Metro Cities Annual
Meeting. (There must be five cities in agreement of those in attendance at the Metro
Cities meeting for debate to be heard on the floor about any specific policy.)
ALTERNATIVES:
The Council can choose to:
1. Endorse the LMC and Metro Cities Policies as drafted.
2. Endorse the policies, but remove individual ones for individual comment.
3. Do not submit comments.
RECOMMENDATION:
I recommend that the policies be endorsed. If the Council has individual policies with
which they want to comment, they should be removed from consent agenda and
discussion made.
RELATIONSHIP TO VISIONING:
Due to the diversity of policies, all of the City's goals could be seen as supported by the
LMC and Metro Cities policies.
ACTION REQUIRED:
Unless the Council has individual issues, it should, by motion, direct that staff notify the
League of Minnesota Cities and Metro Cities that it endorses the policies as written.
~A\~~
Mark McNeill
City Administrator
MM:cn
*City Council Members: Please bring your copies of the Legislative Policies mailed to
you on Tuesday, October 28th.
*Anyone interested in obtaining a copy of the Legislative Policies, please see Carmela.
Ie @
. .
'~ .....,.
LEAGUEoF CONNECTING & INNOVATING
MINNESOTA 5 I:S: CE 19'13
CITIES
MEMORANDUM
To: Administrators, Managers or Clerks and League Policy Committee Members
From: Jim Miller, Executive Director
Date: October 6, 2008
Re: 2009 Draft Legislative Policies
You and your city now have the opportunity to help shape and finalize the League's 2009 City
Policies. Enclosed please find the Draft 2009 League of Minnesota City Policies, or view them on the
League of Minnesota website (www.lmc.org). This document includes the policies developed by more
than 150 city officials participating in the League's four policy committees this summer. Policies
recommended~for~deletionCstrickenentirelYJ_arelhose thatwer~accomplished in the recent legislative ...
session. .
The next steps in the policy development process will occur with the October meeting of the League's
Board of Directors where the Board will receive and review, on a preliminary basis, the draft policies
fromthe League'spolicy committees. The Board does not approve the policies until receiving input
from the general membership. The Board will give final consideration to the draft p()lici,es ~tits
November 20, 2008 Board meeting.
Please review the draft policies and share your comments with the Board of Directors by em ailing
comments to poJicycomments@lmc.org, or by directly contacting any member of the League's lOR
staff with suggestions or questions. Each policy is followed by a set of initials indicating the staff
member responsible for that policy. A directory of lOR staff is included in the front of the draft policy
document and below.
If you have comments on any of the policies, please include your name, title, and city as well as a
reference to the appropriate policy number in your message. The comment period will end on
November 7, 2008.
If you have any questions regarding the draft policies or the policy process, please feel free to contact
Intergovernmental Relations Director Oary Carlson at gcarlson@lmc.org or call 651.281.1255.
Thank you for taking the time to review the proposed Draft 2009 League of Minnesota City Policies.
__0' - -~.........._--- Lea!!"Uc IGR staff information ._---~- --".........._--
Gary Carlson CGe) 651.281.1255 gcarlson@lmc.org
Anne Finn CAF) 651.281.1263 afinn@lmc.org
Ann Higgins CAH) 651.281.1257 ahiggins@lmc.org
Jenn O'Rourke (10) 651.281.1261 iorourke@lmc.org
Craig Johnson (CJ) 651.281.1259 ciohnson@lmc.org
Hue Nguyen CHN) 651.281.1260 hnguyen@lmc.org
Laura Kushner (LK) 651.281.1203 Ikushner@lmc.org
14i5 IJN EVfRS ETI AVE. WEST PHONE: (651) 281-1200 r.".:X: {b51) 28Hm
ST~ PAUL MN 58103-2044 rm.L F RU: ':800) 91.5-1122 .....Tn: l...i....-....~.li..',C.ORG
~\\~y<\
METRO
CITIES
- .,.
Association of Metropolitan Municipalities
-
-,
January 2009
"kegislative ~plicies
145 University Ave; W., St. Paul, Minnesota 55103-2044
Phone: (651 ) 215-4000 Fax: (651 ) 281-1299
Website: www.amm145.org
V Table of Contents
Municipal Revenue & Taxation (I)
State and LocaLFiscal Relationship (I-A) 1
Levy Limits (I-B) 1
Local Government Aid (LGA) (I-C) 1
State Property Tax Relief Programs (I-D) 2
-
Market Value Homestead Credit (I-E) 2
Limited Market Value (I-F) 3
Fiscal Disparity Fund Distribution (I-G) 3
~
. Constitutional Tax and E,xpenditure Limits (I-H) 3
State Property Tax: Oppose Extension to Other Property (I-I) 3
Class Rate Tax System (I-J) 3
Personal Property Taxation: Electric Utility (I~K) 4
Sales Tax on Local Government Purchases (I-L) 4
City Revenue Stability and Fund Balance (I-M) 4
Public Employees' Retirement Association (PERA) (I-N) 4
Aggregate Mining Fee (I-O) 5
State Program Revenue Sources (I-P) 5
Post Employment Benefits (I-Q) 5
State Budget Stability (I-R) 5
2009 Legislative Policies i
-,
Table of Contents
General Legislation (II) -
Mandates & Local Authority (II-A) 7
City Enterprise Activities (II-B) 7
Firearms on City Property (II-C) 7
-
911 Telephone Tax (II-D) 7
800 MHz Radio System (II-E) 7
Building Codes (II-F) 8
Administrative Fines (II-G) 8
Residential Care Facilities (II-H) 8
Annexation (II-I) 9 -
Housing & Economic Development (III)
Introduction 11
City Role in Ho:using (III-A) 11
- City Role in Affordable and Life Cycle Housing (III-B) 11
Inclusionary Housing (III-C) 12
Metropolitan Council Housing Targets (III-D) 12
State Role in Affordable Housing (III-E) 13
Federal Role in Affordable Housing (III-F) 13
Mortgage. Foreclosure (III -G) 14
City Role in Economic Development (III-H) 14
Development (III-I) 14
Redevelopment (III-J) 15
Tax Increment Financing (III-K) 15
Eminent Domain (III-L) 16
ii 2009 Legislative Policies
Table of Contents
This Old Housel This Old Shop (III-M) 1'7
Business Subsidy Policy (III-N) 1'7
Internet Technology (III-a) 1'7
City Role in Environ. Protection alid Sustainable Deve!. (III-P) 18
Impaired Waters (III-Q) 18
Metropolitan Agencies (IV)
Purpose of Metropolitan Governance (IV-A) 19
Roles and Responsibilities of the Metropolitan Council (IV-B) 19
Selection of Metropolitan Council Members (IV -C) 20
-
Funding Regional Services (IV-D) 20
Regional Systems (IV-E) 20
Review of Local Comprehensive Plans (IV-F) 21
- Local Zoning Authority (IV-G) 22
Regional Growth (IV-H) 22
C.';:'-_j
Comprehensive Planning Schedule (IV-I) 23
Natural Resource Protection (IV-I) 23
Inflow and Infiltration (IjI) (IV-K) 24
Water Supply (IV-L) 24
Servi<;e Availability Charge (SAC) (IV-M) 25
Funding Regional Parks & Open Space (IV-N) 26
Livable Communities (IV -0) 26
Density (IV-P) 26
-
2009 Legislative Policies iii
~,
Table of Contents
Transportation (V) -'
Transportation and Transit Funding (V-A) 27
Regional Transit System (V-B) 27
Transit Operating Subsidies (V -C) 27
-
Street Improvement Districts (V-D) 28
Highway Turnbacks & Funding (V-E) 28
"3C" Transportation Planning Process: Elected Officials!
Role (V-F) 29
Photo Enforcement of Traffic Laws (V -G) 29
Airport Noise Mitigation (V-H) 29
Cities Under 5,000 Population (V-I) 29 -
, ---'
County State Aid Highway (CSAH) Distribution
Formula (V-J) 30
Municipal Input! Consent for Trunk High,w~ys and
County Roads (V - K) . 30
Plat Authority (V-L) 30
..- ,.
City Speed Limit Control (V -M) 31
Speed Limits Surrounding City Parks and Schools (V-N) 31
MnDOT Maintenance Budget (V -0) 31
Transit Taxing District (V-P) 31
Committee Rosters (VI)
2008 Housing & Economic Development Committee 33
. 2008 Metropolitan Agencies Committee 33
2008 Municipal Revenue & Taxation Committee 34
2008 Transportation & General Government Committee 35
iv ;'''".,. --:..'t.;.;:",,,,.._, 2009 Legislative Policies
Municipal Revenue &
Taxation (I)
I-A State and Local Fiscal Relationship
-
Metro Cities supports a strong st~te and local fiscal partnership that emphasizes the
following principles:
. Strong financial stewardship and accountability for public resources that emphasizes
maximizing efficiencies in service delivery and effective communication between the
state and local units of government, and to the public, about state and local roles and
responsibilities;
. Certainty and predictability in revenue sources including the property tax and local
government aids;
. Adequate revenue sources available to cities that allow the needs of cities to be
~ met, mandates to be funded, and that maintain our state's economic vitality and
competitiveness;
. Recognition that a 'one size fits all' system that limits cities to the property tax as the
major non-state aid revenue source does not fit all and to permit access to other tax
and revenue sources that are not currently accessible as well as,oppose reductions or
limitations on the use of various license,d~vel6p1!lent, or other general fees to pay for
related services;
. An equitable revenue and finance system that values all citizens receiving adequate
levels of city services at similar levels oftaxation, provides financial assistance to
compensate cities and their taxpayers for overburdens created by non-taxpaying users
of services and reduces tax burden disparities among cities.
I-B Levy Limits
Metro Cities strongly opposes levy limits and urges the Legislature to repeal them. Levy
limits undermine local budgeting processes and the relationship between locally elected
officials and their residents by allowing the state to decide the appropriate level of local
taxation and services.
Metro Cities also opposes the imposition of artificial mechanisms such as valuation
freezes, payroll freezes, reverse referenda, super majority requirements for levy, or other
limitations to the local government budget and taxing process.
I-C Local Government Aid (LGA)
Local Government Aid (LGA), the only remaining form of general purpose state aid to
Minnesota cities, was modified by previous legislatures, at a significant cost to most
metropolitan area communities. As a result, many of the metropolitan area's 183 cities
no longer receive LGA. LGA formula changes and the appropriation increase passed by
2009 Legislative Policies 1
~
Municipal Revenue & Taxation
the 2008 Legislature were supported by Metro Cities and will allow for a slightly higher
distribution of LGA dollars to the metropolitan area. However, the LGA formula
continues to be geographicaHydisparateand volatile, and warrants further analysis and
improvement. Metro Cities supports:
. Continued restoration of previous LGA cuts to fully fund the current LGA formula.
. The continuation of LGA to assist those cities whose public service needs and costs -
exceeds their ability to pay.
. Modifying the LGA formula to address geographic disparities in LGA distribution
and the needs of metro area cities that are not addressed through the current formula
and distribution.
. Modifying LGA formula floors and caps for the purpose of reducing annual payment
distribution volatility.
. The inclusion of inflationary factors in the LGA formula.
. A state-conducted analysis of the LGA formula that includes an examination of
existing geographic disparities in the distribution of local government aid, an analysis
of current need and capacity factors and consideration of alternative factors, an
analysis of the formula used to calculate aid for small cities, volatility inthe local -
government aid distribution and the impact of including the unique needs of rapidly
growing cities on the LGA formula.
1-0 State property Tax Relief Programs
Metro Cities supports state funded property tax relief programs for homestead property
taxpayers such as the circuit breaker and enhanced targeting for special circumstances.
Metro Cities supports the update of the Departmentof Revenue's "Voss" database to link
income and property values, and the consideration of income relative to property taxes
paid in determining eligibility for state property tax relief programs.
Metro Cities supports an analysis of the State's property tax relief programs to determine
their effectiveness in providing property tax relief to individuals and families.
I-E Market Value Homestead Credit
Metro Cities supports the Market Value Homestead Credit Program, a state aid to
individual homestead property taxpayers, as a direct credit to the taxpayer, rather than a
reimbursement to local units of government. The current MVHC reimbursement
structure undermines accountability in a number of ways, most directly by enabling the
state to reduce or even eliminate the reimbursement to local units of government while
preserving the benefit of the credit to the homeowner. Further, any savings to the state
resulting from reductions in the MVHC should be spread proportionally to all benefiting
taxpayers.
2 2009 Legislative Policies
Municipal Revenue & Taxation
I-F Limited Market Value
Metro Cities strongly opposes extension of artificial limits in valuing property at market
for taxation purposes to additional property classes since such limitations shift tax
burdens to other classes of property and create disparities between properties of equal
value. The Legislature should monitor the effects of the Limited Market Value (LMV)
- phase-out to avoid excessive tax burden increases to currently benefiting properties.
Metro Cities believes that enhanced targeting for special circumstances better serves the
tax system.
I-G Fiscal Disparity Fund Distribution
Metro Cities opposes the use of fiscal disparities to fund social or physical metropolitan
programs since it results in a metropolitan,-wide property tax increase hidden from the
public.
- Metro Cities supports the continuation of the fiscal disparities program until such time as
an appropriate replacement is developed. Metro Cities supports a state conducted
analysis of the Fiscal Disparities Program to determine whether the ptogramis meeting-
its original goals and objectives, and whether changes to the program should be
considered to better meet those objectives.
I-H Constitutional Tax and Expenditure Limits
Metro Cities strongly opposes including tax and expenditure limits in the state
constitution. This would eliminate any flexibility on the part of the Legislature or local
governments to respond to unanticipated critical needs, emergencies, or fluctuating
economic situations. When services such as education, public safety and health care
require increased funding beyond the overall limit, experiences in at least one other state
indicate that other publicly funded services receive less than adequate resourCes.
Constitutional limits result in a reduced base during times of economic downturn and the
inability to recover to previous service levels when economic prosperity returns.
I-I State Property Tax: Oppose Extension to Other Property
The 2001 Property Tax Reform Act shifted general education funding to the state, and
funded it, in part, with a state property tax on commercial/industrial and cabin property.
Since cities' only source of general funds is the property tax, Metro Cities strongly
opposes extension of a state-levied property tax to additional classes of property.
I-J Class Rate Tax System
Metro Cities opposes elimination of the class rate tax system, or applying future levy
increases to market value, since this would further complicate the property tax system.
2009 Legislative Policies 3
~
Municipal Revenue & Taxation
---
I-K Personal Property Taxation: Electric Utility
The Minnesota Department of Revenue has revised its regulations for calculating the
taxable market value of electric and natural gas utility property. This affects property
taxes paid by investor-owned utilities (lOUs) not only to the state, but also to local
governments. Provisions in the previous regulations, such as depreciation limits and ,-~~<
prescribed weights for the cost and income approaches to value, helped to preserve the
taxable value of this property over the many decades it is in service.
IOUs enjoy a guaranteed rate of return on their capital investments, but host cities
experience the costs of environmental damage, nuisance and lost economic development
as the result of this property. laDs argued that their property is over-valued and that
depreciation limits should be removed. However, changes to the utility property
valuation rules will drastically reduce the taxable market value that helps compensate
host cities for hosting base load electric generation facilities.
Metro Cities opposes changes to the utility property valuation rules that result in a
significant decline in the taxable market value of utility property. Metro Cities supports -
state appropriated aid to cities to keep them financially whole and to compensate for the .~
economic and environmental costs of hosting base load electric generation facilities,
rather than through increases in property class rates or other mechanisms.
I-L Sales Tax on Local Government Purchases
The Legislature should reinstate the sales tax exemption for all local government
purchases without requiring a reduction in other aids.
I-M City Revenue Stability and Fund Balance
Metro Cities opposes state attempts to control or restrict city fund balances. These funds
are necessary to maintain fiscal viability, meet unexpected or emergency resource needs,
purchase capital goods and infrastructure, provide adequate cash flow and maintain high
level bond ratings.
<~
I-N. Public Employees' Retirement Association (PERA)
Metro Cities supports employees and cities sharing equally in the cost of necessary
contribution increases. Metro Cities also supports state assistance to local governments to
cover any additional contribution burdens placed on cities over and above contribution
increases required by employees. Cities should receive sufficient notice of these increases
so that they may take them into account for budgeting purposes. Further, Metro Cities
will monitor legislative proposals and when necessary and appropriate, respond in a
manner that supports this policy and provides for the fair treatment of employees and the
protection of municipalities' interests.
4 2009 Legislative Policies
Municipal Revenue & Taxation
IwO Aggregate Mining Fee
In order to provide an incentive for the extraction of local aggregate resources prior to
urbanized development, and in order to help offset the negative impacts of aggregate
mining on local communities, the state should authorize cities and townships to collect a
per ton host community fee from the operators of aggregate mines with the fee proceeds
- to be deposited in the municipality's general fund.
The 2008 Legislature adopted an Aggregate Resource Preservation Act as.an incentive
for the extraction of local aggregate resources prior to urbanized development, as well as
a modified tax structure that requires 42.5% of the aggregate tax to be distributed to host
cities and townships. Metro Cities supports legislative efforts to assist aggregate host
cities in offsettingJhe negative impacts of aggregate mining on local communities.
Metro Cities would prefer that cities and townships be allowed to collect a per ton host
community fee from the operators of aggregate mines with the fee proceeds to be
deposited in the municipality's general fund. The Legislature may wish to consider an
examination of the negative impacts of aggregate mining on cities adjacent to host cities.
~ IwP State Program Revenue Sources
Metro Cities opposes any attempt by the state to finance programs of statewide value and
significance with local revenue sources such as municipal utilities or property tax
mechanisms. These local revenue sources are created to finance local government
services. Statewide programs, such as the Clean Water Legacy Act, serve important state
goals and objectives, and should be financed through traditional state revenue sources
such as the income or sales tax.
-<
I-Q Post Employment Benefits
Metro Cities supports statutory authority allowing local governments to establish trusts
from which to fund post-employment health and life insurance benefits for public
employees, with participation by cities on a strictly voluntary basis, in recognition that
cities have differing local needs and circumstances. Cities should also retain the ability
to determine the level of post employment benefits to be provided to employees.
Metro Cities supports a study ofthe fiscal impacts to both cities and retirees of pooling
retirees separately'frorri active employees. .
I-R State Budget Stability
In the last several years, the State has experienced budget deficits and increased volatility
in state revenues. To address state budget shortfalls, the Legislature and Governor have
focused their efforts on reductions in expenditures, shifting of costs to other units of
government, and drawing down the state budget reserve.
In 2007, the Legislature and Governor created the State Budget Trends Study
Commission to study the implications of state demographic trends on the state's tax base
2009 Legislative Policies 5
-
Municipal Revenue & Taxation
and revenue collections, as well as trends in spending for state programs. The
Commission is charged with examining the state budget with regard to budget stability
and flexibility and may make recommendations for state tax and budget changes that
include changes in the tax base, mix oftax types, state and local finance relationships,
entitlements and the budget structure.
Metro Cities supports the work of the State Budget Trends Study Commission to examine --
our state's budget and revenue structures and to provide recommendations to the
Legislature. Metro Cities urges the Legislature to consider changes that enhance and
improve stability, flexibility and adequacy in our state's revenue system. As part of this
study, Metro Cities supports an examination of the property tax system and the
relationships between state and local tax bases.
-
6 2009 Legislative Policies
~ General Legislation (II)
II-A Mandates & Local Authority
Metro Cities opposes statutory changes that erode local control and authority or create
additional mandated tasks requiring new or added local costs without a corresponding
state appropriation or funding mechanism. New unfunded mandates potentially result in
increased property taxes, impeding cities' ability to fund traditional service needs.
11-8 City Enterprise Activities
Metro Cities supports cities having the authority to establish city enterprise operations in
response to community needs, local preferences, state mandates or to ensure residents'
quality of life. Creation of an enterprise operation allows a city to provide a desired
service while maintaining financial and management control. The state should refrain
from infringing on this ability to provide and control services for the benefit of
- community residents.
II-C Firearms on City Property
Cities should be allowed to prohibit handguns in city-owned buildings, facilities and
parks. This would allow locally elected officials to determine whether to allow permit-
holders to bring guns into municipal buildings, liquor stores, city council chambers and
city sponsored youth activities. It is not Metro Cities' intention for cities to have the
authority to prohibit legal weapons in parking lots, on city streets or city sidewalks.
11-0 911 Telephone Tax
Public safety answering points (PSAPs) must be able to continue to rely on state 911,
revenues to pay for upgrades and modifications to local 911 systems, maintenance and
operational support, and dispatcher training. State funding should also support the
technology and training needed to provide the number and location of wireless and, voice
over internet protocol (VoIP) calls to 911 on computer screens and transmit that data to
police, fire and first responders.
II-E 800 MHz Radio System
Metro Cities supports the work of the Metropolitan Emergency Services Board
(previously the Metropolitan Radio Board) in implementing and maintaining the 800
MHz radio system, as long as cities are not forced to modify their current systems or
become a part of the 800 MHz Radio System until they choose. Metro Cities further
urges the Legislature to provide cities with the financial means to obtain required
infrastructure and subscriber equipment (portable and mobile radios) as well as provide
funding for operating costs, since the prime purpose of this system is to allow public
safety agencies and other units ofgovernrnent the ability to communicate effectively.
2009 Legislative Policies 7
,-
General Legislation
II-F ' Building Codes
In spite of the serious downturn in the construction economy, thousands of new housing
units have been constructed annually in the metro area, and when the economy rebounds,
building will resume. Structural and water intrusion problems have surfaced in many
houses and commercial buildings built in the last 20 years. These problems have resulted
in dissatisfied homeowners and conflicts between the state, builders and cities. ,-
Metro Cities supports an equitable distribution of fees from the newly created
Construction Code Fund, with proportional distribution based on the area of enforcement
where the fees were received. Metro Cities further supports a joint effort by the state,
cities and builders to collectively identify appropriate uses for the fund, including
education, analysis of new materials and construction techniques, building code updating,
building inspector training, and the development of performance standards and
identification of construction "best practices." Metro Cities does not support legislative
solutions that fail to recognize the interrelationships between builders, state building
codes and cities.
II-G Administrative Fines -
Traditional methods of citation, enforcement and prosecution have met with increasing
costs to local units of government. The use of administrative fines is a tool to moderate
those costs. Metro Cities supports the use of administrative fines for local traffic offenses.
Metro Cities will continue to support cities' authority to use administrative fines for
regulatory ordinances, such as building codes, zoning codes, health codes, and public
safety and nuisance ordinances. Metro Cities supports the use of city administrative
fines, at a minimum, for regulatory matters that are not duplicative of misdemeanor or
higher level state traffic and criminal offenses. Metro Cities also endorses a fair hearing
process before a disinterested third party.
Residential Care Facilities ~
II-H
Sufficient funding and oversight is needed to ensure that residents living in residential
care facilities have appropriate care and supervision, and that neighborhoods are not
disproportionately iInpacted by high concentrations of residential care facilities. Under
current law, operators of certain residential care facilities are notrequired to notify cities
when they intend to purchase single-family housing for this purpose. Cities do not have
the authority to regulate the locations of group homes and residential care facilities;
Cities have reasonable concerns about high concentrations of these facilities in residential
neighborhoods, and additional traffic and service deliveries surrounding these facilities
when they are grouped closely together. Municipalities recognize and support the
services residential care facilities provide. However, cities also have an interest in
preserving balance between group homes and other uses in residential neighborhoods.
Cities should have statutory authority to require licensed agencies and licensed providers
that operate residential care facilities to notify the city of properties being operated as
8 20Q9 Legislative Pol,icies .
General Legislation
residential care facilities. The Legislature should also require the establishment of non-
concentration standards for residential care facilities to prevent clustering and require the
appropriate county agencies to enforce these rules.
II-I Annexation
The 2006 Legislature created the Municipal Boundary Adjustment Task Force to study
and make recommendations on what, if any, changes should be made to laws governing
municipal boundary adjustments. The task force was charged with developing
recommendations regarding best practices annexation training for city and township
officials to better communicate and jointly plan potential annexations.
Metro Cities supports substantive changes to the state's annexation laws that will lead to
better land-use planning, energy conservation, greater environmental protection, fairer tax
bases, and fewer conflicts between townships and cities. Metro Cities also supports
technical annexation changes that have been agreed to by cities and townships.
-
2009 Legislative Policies 9
General Legislation
-
-
10 2009 Legislative Policies
^ Housing & Economic
" ......,
, ~ I
," "..
~1 t~ Developm.ent (III)
I I
I I
I I
I I
I I
L_______"
Introduction
While the provision of housing is predominantly a private sector, market-driven activity,
all levels of government - federal, state and local - have a role to play in facilitating the
production and preservation of affordable housing in Minnesota.
Metro Cities' housing policies recognize and support the intergovernmental nature of this
issue - including participation from federal, state, regional and local governments.
Policies A through C outline the role of cities. Cities are responsible for much of the
ground-level housing policy in Minnesota - including land-use planning, building code
enforcement, and often times the packaging of financial incentives. However, the State
and Metropolitan Council must also playa major role by" empowering local units of
government and providing a variety of funding programs and tools. Policy D addresses ___.-i
the state's responsibility to provide financial resources and establish a general direction
M for housing policy. Finally, Policy E speaks to tHe urgent need for the federal government
to increase its financial support for the production and preservation of affordable housing.
III-A City Role in Housing
In the state of Minnesota, the provision of housing is predominantly a private sector,
market-driven activity. However, all cities facilitate the development of housing via
responsibilities in the areas of land-use planning; zoning o.rdinances and subdivision,
regulations. Many cities choose to play an additional role by providing financial
incentives and regulatory relief, participating in state and regional housing programs and
supporting either local or countywide Housing and Redevelopment Authorities. Cities are
also responsible for ensuring the health and safety of local residents and the structural
soundness and livability of the lbcal housing stock via building permits and inspections.
Metro Cities strongly opposes any effort to reduce, alter or interfere with cities' authority
to carry out these functions in a locally determined manner.
"'-8 City Role in Affordable and Life Cycle Housing
Metro Cities' supports affordable and life cycle housing and recognizes its importance to
the economic and social well being of individual communities and the region. Cities can
facilitate the production and preservation of affordable and lifecyc1e housing by:
+ Applying for funding from applicable grant and loan programsj
+ Working with developers and local residents to blend affordable housing into new
and existing neighborhoodsj
+ Expediting review processeSj and
+ Working to reduce locally imposed development costs.
-
2009 Legislative Policies 11
Housing & Economic Development
JII-C Inclusionary Housing
Metro Cities supports the location of affordable housing in residential and mixed-use
neighborhoods throughout a city. However, Metro Cities does not support passage of a
mandatory inclusionary housing law that would require a certain percentage of units in all
new housing developments to be affordable to households at a particular income level
because these units can't be produced without a deep developer subsidy or cross-
subsidization from the other houses in the development. --,
V/hile Metro Cities believes there are cost savings to be achieved through regulatory
reform, density bonuses, and fee waivers, Metro Cities does not believe a mandatory
inclusionary housing approach can achieve the desired levels of affordability solely
through these steps. The Metropolitan Council, in creating its affordable housing targets,
must recognize both the opportunities and financial limitations of cities. The Council
should partner with cities to facilitate the creation of affordable housing through direct.
financial assistance and/or advocating for additional resources through the MilU1esota
Housing Finance Agency.
JII-D Metropolitan Council Housing Targets
-=-
In advance of the 2008 Comprehensive Plan deadline and in response to projected growth
in the Metro Area, the Metropolitan Council created a methodology to determine how
many affordable housing units would be needed and where those units should go. From
that process, each metro area city was assigned an affordable housing "target". Further,
Met Council Comprehensive Plan guidance instructs cities to guide sufficient land to
accommodate the "targets".
Metro Cities supports the creation of affordable and lifecycle housing in the metro area.
However, providing affordable and lifecycle housing is a shared responsibility between
the private sector and government at all levels; including the federal government, state
government and Metropolitan Council. Land economics, construction costs and
infrastructure needs create barriers to the creation of affordable housing that cities cannot
overcome without assistance.
Therefore, Metro Cities supports a Metropolitan Council affordable housing policy that
recognizes the following tenets:
. The Council's housing policies characterize individual city housing numbers as
"targets", not "goals".
. Cities need significant financial assistance from the federal and state government, as
well as the Metropolitan Council, in order to make progress toward creating
additional affordable housing.
. Improved transportation infrastructure and transit service is required to make progress
toward creating affordable housing.
. Absent significant resources to assist cities, the Met Council will not hold cities
responsible if the "targets" can't be met.
12 2009 Legi~lative Policies
Housing & Economic Development
III~ E State Role in Affordable Housing
Primarily through the programs of the Minnesota Housing Finance Agency (MHFA), the
state establishes general direction and prioritization of housing issues. The state
financially supports a variety of housing types including homeless shelters, transitional
housing, supportive housing, senior housing, and family housing. The state must continue
to be an active partner in addressing lifecycle and affordable housing issues.
Particularly, the state should:
. Increase funding, including state general funds and, possibly, alternate sources of
revenue, for programs that support lifecycle and affordable housing. The state should
consider establishing a non-competitive program to create a pipeline to match city-
subsidized affordable housing projects;
. Support housing programs that assist housing development throughout the low-to-
moderate income range;
- . As a means of reconciling affordable housing with community development goals,
Metro Cities supports housing programs designed to develop market rate housing in
areas with high concentrations of affordable housing, where the private market might
not otherwise invest;
. Continue the policy of using MHFA's investment earnings for housing programs;
. Amend the tax exempt bond allocation statute to maximize its availability for
affordable rental housing;
. Provide exemptions from, or reductions to sales, use and transaction taxes applied to
7:) the development and production of affordable housing; and
-, . Authorize cities to amend their comprehensive plans, in order to facilitate increased
lifecycle and affordable housing, with a simple majority vote of all members of the
city council, rather than a super majority;
. Consider providing state tax credits to incent cross-subsidized affordable units in a
market rate development project. This incentive could be used in conjunction with
city, regional, or other state incentives.
III~F-f;ederal Role in Affordable Housing
. .....'~
Metro Cities encourages the federal government to maintain and increase current levels
of funding for affordable housing. Federal investment in affordable housing will increase
the supply of affordable and life cycle housing as well as increase the inter-jurisdictional
collaboration between the two levels of government. Federal funding plays a critical role
in aiding states and local governments in their efforts to maintain and increase affordable
housing throughout the state. Metro Cities strongly encourages the following:
. To preserve and increase funding for the Community Development Block Grant
Program, which is a catalyst for creating more affordable housing;
2009 Legislative Policies 13
'..;:10::;'
Housing & Economic Development
. To create and implement a more streamlined procedural method for local units of
government to participate and access federal funding and services dealing with grants,
loans, and tax incentive programs for economic and community development efforts;
. To preserve resources to sustain existing public housing throughout the Metro Area;
and;
. To commit resources to Section 8 funding. It is a flexible, cost effective, and
successful program that has helped nearly two million families find housing through
promotion of self-sufficiency and stability.
III-G Mortgage Foreclosure
Sub-prime mortgages and predatory lending practices have resulted in thousands of
mortgage foreclosures throughout the state. Foreclosures are devastating to homeowners
and tenants and can be equally devastating to neighborhoods when the presence of vacant
housing results in reduced property values and increased crime. The additional public
safety and code enforcement costs of managing vacant properties are a financial strain on
cities.
Metro Cities supported the 2007 Legislature's efforts to eliminate predatory lending -
practices and the 2008 Legislature's efforts to reduce foreclosures among current
recipients of sub-prime mortgages, including technical changes to the foreclosure
process, increased financial support for mortgage foreclosure prevention activities, and
financial assistance to individuals. As solutions to address vacant housing are developed,
including assistance to cities for property management, neighborhood recovery and
public safety costs associated with foreclosures, Metro Cities urges the Legislature to
partner with cities and the private sector to adopt and implement those solutions.
III-H City Role in Economic Development.
The State of Minnesota should continue to recognize cities as the primary unit of
goverrunent responsible for the implementation of economic development and
redevelopment policies and land use controls. However, the state should begin to shift its
focus from addressing economic needs based on population or location to a broader
statewide perspective, which is based on economic development strategies, economic
development priorities and economic impact. The state should also recognize the
additional cost cities bear when undertaking redevelopment vs. development projects.
---
III-I Development
The economic viability of the Metro Area is enhanced by a broad array of economic
development tools that create infrastructure, recycle previously developed property,
provide incentives for business development and support technological advances. It
should be the goal of the state Legislature to champion development throughout the state
by providing enough sustainable funding to assure that the state remains competitive in a
global marketplace. Metro Cities supports the following: .. -
14 2009 legislativ~ Pqlicies
Housing & Economic Development
. Increased funding in the Livable Communities Demonstration Account in order to
assist communities with development that may not be exclusively market driven or
market proven in their particular location;
. Increased funding for the Contamination Cleanup Grant Account;
. Increased funding for the Metropolitan Council Tax Base Revitalization Program;
. Continued funding for the Minnesota Investment Fund;
. Continued funding for the Urban Initiative Program;
. Continued support for the Bioscience partnerships between cities, companies, and the
University of Minnesota;
. Financial tools for transit oriented development, including funding for the Transit
Improvement Area program to better leverage existing programs in areas that are, or
will be served by transit projects.
. Development of funding mechanisms that support the creation and expansion of
"green" jobs.
IH-J Redevelopr'nent
Redevelopment allows local communities to adjust to changing market conditions, better
- utilize existing public infrastructure, and maintain a viable local tax base. However, due
to the higher up-front costs of redevelopment, as compared to Greenfield development,
desirable redevelopment projects often require public assistance. The State of Minnesota
has a responsibility to provide cities with practical and flexible resources that will address
the challenges and take advantage ofredevelopment opportunities. Metro Cities supports:
. Increased and sustained general fund and bond funding, ofthe Redevelopment Grant
Program, administered by the Department of Employment and Economic
::.:-, Development (DEED), dedicated to Metropolitan Area projects.
. Increased, flexible and sustained funding for the Contamination Cleanup Account for
cleanup of polluted land and the recycling of previously developed land.
III-K Tax Increment Financing
Tax Increment Financing (TIF) has been and continues to be the primary tool available to
~, local communities for assisting economic development, redevelopment and housing.
Over time, several statutory changes have made this critical tool increasingly difficult to
use, while recent property tax reform has resulted in a decreased state financial stake in
city TIF decisions. At the same time that TIF has become more restrictive and difficult to
use, federal and state development and redevelopment resources have been steadily
shrinking. The 2006 eminent domain changes will make redevelopment significantly
more expensive in some cases, and impossible in others. The cumulative impact ofTIF
restrictions, shrinking federal and state redevelopment resources, and changes to eminent
domain laws will restrict a citi s ability to address problem properties and will accelerate
- the decline of developed cities in the Metropolitan Area. Without proper tools and
resources to address decline, cities will be unable to stop it. At a_minimum, the state
should authorize increased flexibility in local TIF decisions.
2009 Legislative Policies 15
Housing & Economic Development
~
Metro Cities urges the Legislature to: --
. Not adopt any statutory language that would further constrain or directly or indirectly
reduce the effectiveness of TIF;
. Incorporate the Soils Correction District criteria into the Redevelopment District
criteria so that a Redevelopment District can be comprised of blighted and
contaminated parcels in addition to railroad property;
. Expand the flexibility of TIF to support a broader range of redevelopment projects;
. Increase the ability to pool increments from other districts to support projects;
. Continue to monitor the impacts of tax reform on TIF districts and if warranted
provide cities with additional authority to pay for possible TIF shortfalls.
. Allow for the creation of transit zones and transit related TIF districts to address
development and redevelopment issues associated with transit or transfer stations;
. Consider creating an inter-disciplinary TIF team to review local exception TIF
proposals, using established criteria, and make recommendations to the legislature on
their passage. ' ,
In addition, for sites that do not meet the restrictive blight and contamination definitions -
of the 2006 changes to eminent domain law, the Legislature should explore creating
incentives to encourage owners whose properties Ipeetthe blight definitions under M.S.,
Chapter 469, to voluntarily sell their land for redevelopment purposes. Incentives could
include income tax credits, capital gains deferrals or other incentives targeted at property
owners.
Finally, Metro Cities encourages the State Auditor to continue to work toward a more
efficient and streamlined reporting process.
III-L Eminent Domain
Eminent domain law changes made by the 2006 Legislature resulted in a significant --,
philosophical and legal shift in Minnesota. Whereas prior to 2006, Minnesota law
provided extensive deference to local goverrunents, statutory changes enacted in 2006
provide significantly greater deference to property owners. Eminent domain actions for
traditional public uses such as streets, parks or sewers will cost more. And except for the
most extreme cases of blight or contamination, eminent domain for redevelopment --,
purposes will be nearly impossible at any cost.
The proper operation and long term economic vitality of our cities is dependent on the
ability of a city, its citizens and its businesses to continually reinvest and reinvent.
Reinvestment and reinvention strategies can occasionally conflict with the priorities of
individual residents or business owners. Eminent domain is a critical tool in the
reinvestment and reinvention process and without it; our cities will be allowed to
deteriorate to unprecedented levels before the public will be able to react. Metro Cities
strongly encourages the Governor and Legislature to revisit the 2006 eminent domain
changes to allow local goverrunents to address blight and contamination problems before
16 2009 Legislative Policies
Housing & Economic Development
those conditions become financially impossible to address. Specifically, the Legislature
should:
. Re-write the blight and contamination definitions and standard of review sections to
reflect the deterioration conditions that currently exist in the Metro Area.
. Allow for the assembly of multiple parcels in order to properly and appropriately
- redevelop blighted or contaminated sites.
. Provide for the ability to acquire land from "holdouts" who will now view a publicly
funded project as an opportunity for unethical personal gain at taxpayer expense.
. Review the new enhanced compensation provisions to determine whether individuals
are inappropriately enriched by the process.
. Allow for modifications to the effective date language in the 2006 legislation in order'
to accommodate delays in project schedules that are beyond the control ofthe
acquiring authority.
III-M This. Old Housel This Old Shop
Metro Cities supports the reenactment of the "This Old House" law, which allowed
- owners of older homestead property to defer an increase in their tax capacity resulting
from repairs or improvements to the home. In particular, "This Old House'" or asimilar
program, should be reauthorized as an incentive for re-occupying and homesteading
foreclosed or vacant homes.
Metro Cities also supports passage of similar legislation for owners of older
commercial/industrial property that make improvements that increase the property's
market value by at least 12%. .
III-N Business Sub,sidy Policy
Without a thorough study, the Legislature should not make any substantive changes to the
Business Subsidy Act during the next legislative session, but should look to technical
changes that would stream line both state and local processes and procedures.
111-0 Internet Technology
Where many traditional economic development tools have focused on managing the costs
and availability of traditional infrastructure-roads, rail, utilities, etc."-the new economy
is increasingly dependent on reliable, redundant, cost effective, high bandwidth
telecommunications capabilities. While the United States was once a leader among
"wired" economies, its position has slipped dramatically as other countries have
facilitated investments in fiber-optic deployment (fiber to the premises), commitments to
true high speed internet capacity (l00 mb to 1 gb) and improved networks (Internet 2).
Recognizing that there is a policy debate regarding the role of government versus private
telecommunications companies in implementing the next generation of internet
capability, bringing about such capabilities is increasingly important to insure that U.S.
companies in general and Minnesota companies in particular can compete effectively in
--
2009 Legislative Policies 17
Housing & Economic Development
the global economy. -~
Metro Cities endorses a comprehensive strategy to stimulate the implementation of true
high speed, world class, high bandwidth internet capabilities that are reliable, redundant,
cost effective and available to all properties.
III-P City Role in Environmental Protection and Sustainable Development
-
Historically, cities have played a major role in environmental protection, particularly in
water quality. Through the construction and operation of wastewater treatment and storm
water management systems, cities are a leader in protecting the surface water of the state.
In recent years, increased emphasis has been placed on protecting ground water and
removing impairments from storm water. In addition, there is increased emphasis on city
participation in controlling our carbon footprint and in promoting green development.
Metro Cities supports public and private environmental protection efforts to. reduce,
greenhouse gas emissions and to further protect surface and ground water. Metro CitIes
also supports "green" design and construction techniques to the extent that those
techniques have been thoroughly tested and are truly environmentally beneficial, -
economically sustainable, and represent sound building practices. Metro Cities supports
additional, feasible environmental protection with adequate funding and incentives to
comply.
III-Q Impaired Waters
Metro Cities supports continued development of the metropolitan area in a manner that is
responsive to the market, but is cognizant of the need to protect the water resources of the
state and metro area. Metro Cities supports the goals of the Clean Water Act and efforts
at both the federal and state level to implement it. However, insufficient resources for
impaired water assessments, total maximum daily load (TMDL) analysis, and capital -
projects threaten both our environment and the metro area's ability to respond to market
demands for development and redevelopment. Consequently, Metro Cities supports
continued funding for clean water, including dedicated funding for:
. Surface water impairment assessments
. TMDL development
. Storm water construction grants
. Wastewater construction grants
18 2009 Legislative Policies
~ Metropolitan Agencies (IV)
IV-A Purpose of Metropolitan Governance
The statutorily-defined Twin Cities metropolitan region is made up of 193 cities and
townships covering over 3,000 square miles in seven counties. The effective and
efficient delivery of certain public services and the continued economic growth of this
region is enhanced by the existence of a regional entity to provide coordination and
facilitate cooperation.
Therefore, Metro Cities supports the continued existence of a metropolitan governance
system for the purpose of:
. Facilitating long-term region-wide planning with the cooperation and consideration of
the affected local units of government; and
. Planning for and providing those public services that are needed by the region, but
~ cannot be effectively and efficiently provided by local governments or the state.
With or without the Metropolitan Council as it exists today, the region needs some entity
to perform these functions. However, the Twin Cities' metropolitan Governance structure
should not be granted, nor should it assume, general local government or state agency
powers.
IV-B Roles and Responsibilities of the Metropolitan Council
. - 't
The primary responsibilities of the Metropolitan Council are to:
---. Plan for the orderly and economical development of the metropolitan area by
.
preparing a comprehensive development guide that includes long-range .
comprehensive policy plans for the transportation/aviation, wastewater treatment and
recreational open space systems.
. Review local comprehensive plans for compatibility with the plans of neighboring
communities, consistency with Metropolitan Council policies and conformity with
metropolitan system plans.
. Provide specific regional services and administer select regional grant programs as
assigned by state or federal law.
. Provide technical assistance, research and information to local units of government.
Overall, it is the Metropolitan Council's role, through the regional development guide
and its accompanying policy plans, to set broad regional goals and then provide cities
with technical assistance and incentives to achieve those goals. Local governments are
ultimately responsible for zoning, land use planning and development decisions within
their borders.
2009 Legislative Policies 19
Metropolitan Agencies
Any additional responsibilities taken on by, or authority granted to the Metropolitan -
Council should be limited to a specific statutory assignment, or grant. -
IV-C Selection of Metropolitan Council Members
Members of the Metropolitan Council should be selected via an open process that
includes an opportunity for local governments and other stakeholders to provide
meaningful input. Council members should understand and be responsive to the districts
they represent while also serving the best interests of the region. Metropolitan Council
members should serve fixed, staggered terms.
IV-D Funding Regional Services
The Metropolitan Council should continue to fund its regional services and activities
through a combination of user fees, property taxes, and state and federal grants.
. The Metropolitan Council should set user fees via an open process that includes
public notices and public hearings. User fees should be uniform by type of user and
set at a level that supports effective and efficien.t public services based on commonly
accepted industry standards, and allows for sufficient reserves to ensure long-term
service and fee stability.
. Metro Cities supports the use of user fees and property taxes to fund regional projects
so long as the benefit conferred on the region is proportional to the fee or tax, and the
fee or tax is comparable to the benefit cities receive in return.
. Metro Cities supports user fees for regional projects so long as the fees are not used to
coerce a particular response from cities..
. Fee proceeds should be used to fund regional services or programs for which they are
collected. ~
IV-E Regional Systems ---
Regional systems are currently defined in statute as transportation (with aviation),
wastewater treatment and recreational open space. The purpose of these regional systems
and the Metropolitan Council's authority for them is clearly outlined in state statute. In
order to alter the focus or expand the reach of any of these systems, the Metropolitan
Council must seek a statutory change.
The system plans/statements prepared by the Metropolitan Council for these regional
systems should be specific in terms of the size, location and timing of regional
investments in order to allow for consideration in local comprehensive planning. System
plans should clearly state the criteria by which local plans will be judged for consistency
and the criteria that will be used to find that a local plan is more likely than not to have a
substantial impact on or contain a substantial departure from metropolitan system plans.
Additional regional systems should only be established if there is a compelling
metropolitan problem or concern that can best be addressed through the designation.
20 2009 Legislative Policies
Metropolitan Agencies
Common characteristics of the four existing regional systems include public ownership of
the system and its components and an established regional or state funding source. These
characteristics should be present in any new regional system that might be established.
Water supply does not meet these criteria.
IV~F Review of Local Comprehensive Plans
,-
In reviewing local comprehensive plans and plan amendments, the Metropolitan Council
should:
. Recognize that its role is to review and comment, unless it is found that the local plan
is more likely than not to have a substantial impact on or contain a substantial
departure from one of the four system plans;
+ Be aware of the statutory time constraints imposed by the Legislature on plan
amendments and development applications;
. Provide for immediate effectuation orplan amendments that have no potential for
- substantialimpact on systems plans;
. Require the information needed for the Metropolitan Council to complete its review,
but not prescribe additional content or formafbeyond that which is required by the
Metropolitan Land Use Planning Act (LUP A);
. When a city's local comprehensive plan ts deemed incompatible with the Met
Council's systems plans, Metro Cities supports a formal appeals process that includes
a peer review and encourages cities and the Met Council to work in a cooperative and
timely fashion toward the resolution of outstanding issues. Metro Cities opposes the
imposition of sanctions or monetary penalties when a city's' local comprehensive plan
is deemed incompatible with the Met Council's systems plans or the plan fails to meet
a statutory deadline when the city has made legitimate efforts to meet Met Council
requirements.
. Concerning 'flexible' residential development and achieving consistency with the
Metropolitan Council's system plans and policies, Metro Cities supports the
Metropolitan Council working with affected cities and other organizations such as the
Pollution Control Agency, Department of Natural Resources, and other relevant
stakeholders to identify common ground as well as potential conflicts between
respective goals for flexible development.
-
2009 Legislative Policies 21
Metropolitan Agencies
IV-G, Local Zoning Authority ,--
Local governments are responsible for zoning. Local zoning decisions, which are the
implementation of cities' comprehensive plans, should not be conditioned upon the
approval of the Metropolitan Council or any other governmental agency. Metro Cities
strongly opposes the creation of any appeals boards with the authority to supersede city
zoning decisions.
-
rV-H Regional Growth
The most recent regional population forecasts project an additional 930,000 people and
460,000 households for the seven-county metropolitan area by the year 2030~ In order to
accommodate this growth in a manner that preserves the region's high quality of life:
. Natural resource protection will have to be balanced with growth and
development/reinvestment;
. Significant new resources will have to be provided for transportation and transit;
. New households will have to be incorporated into the core cities,Jirst and second-ring
-
suburbs, and developing cities through both development and redevelopment.
In order for regional and local planning to result in the successful implementation of
regional policies:
. The State of Minnesota must contribute additional financial resources, particularly in
the areas of transportation and transit, reinvestment, affordable housing development,
and the preservation of parks and open space. If funding for regional infrastructure is
not adequate, cities should not be responsible for meeting the growth forecast set
forth by the Metropolitan Council.
-
. The Metropolitan Council must work to pursue levels of state and federal
transportation funding that are adequate to meet identified transportation and transit
needs in the metropolitan area.
. The Metropolitan Council must recognize the limitations of its authority and continue
to work with cities in a collaborative, incentives-based manner, and
. Metropolitan. counties, including the collar counties and school districts, must be
brought more thoroughly into the discussion due to the critical importance of facilities
and services such as county roads and public schools in accommodating forecasted
growth.
. Greater recognition must be given to the fact that the "true" metropolitan region
extends beyond the traditional seven-county area and the need to work collaboratively
with the twelve adjacent counties in Minnesota and Wisconsin, and the cities within
those counties. The region faces environmental, transportation, and land-use issues
22 200? Legislative Policies
Metropolitan Agencies
that cannot be solved by the seven-county metro area alone. Metro Cities supports an
analysis to determine the impacts of Metropolitan Council's growth management
policies and infrastructure investments on the growth and development of the collar
counties, and the impacts of growth in the collar counties on the metropolitan area.
IV-I Comprehensive Planning Schedule
, - Cities are scheduled to review their comprehensive plans and submit any necessary
updates to the Metropolitan Council in 2008.
Any future changes to the schedule for local comprehensive planning should be
accompanied by the statutory establishment of a complementary schedule for regional
planning. This schedule should:
(1) protect cities from being forced into a state of perpetual planning in response to
regional actions; and;
(2) ensure sufficient time for cities to understand and incorporate regional policies
into their local planning efforts.
- IV-J Natural Resource Protection
Metro Cities supports the Metropolitan Council's efforts to compile and maintain an
inventory and assessment of regionally significant natural resources for the purpose of
providing local communities with additional information and technical assistance.
However, any additional steps taken by the Metropolitan Council regarding the protection
of natural resources must recognize that:
. The state has a significant role to play in the protection of natural resources-,--" ..
especially when those resources are significant to a multi-county area that is home to
more than 50 percent of the state's population and a travel destination for many more.
Given the limited availability of resources and the artificial nature of the metropolitan
area's borders, neither the region nor individual rnetropolitan communities would be
well served by assuming primary responsibility for financing and protecting these
resources. Metro Cities urges the state and/or the Metropolitan Council to provide
financial assistance for the preservation of regionally significant natural resources.
. The completion of local Natural Resource Inventories and Assessments (NRI/A) is
not a regional system nor is it a required component of local comprehensive plans
under the Metropolitan Land Use Planning Act.
. The protection of natural resources will have to be balanced with the need to
accommodate growth and development, reinvest in established communities,
encourage more affordable housing and provide transportation and transit
connections. Decisions about the zoning or land-use designations of specific parcels
of land not already contained within a public park, nature preserve or other protected
area are, and should remain, the responsibility of local units of government.
-
2009 Legislative Policies 23
Metropolitan Agencies
IV-K Inflow and Infiltration (III>
-"--
The Metropolitan Council's Water Resources Management Plan established an III
surcharge in 2007 on cities that are determined to be contributing unacceptable amounts
of storm water to the MCES wastewater treatment system. Currently 46 cities have been
identified as excessive III contributors. This number is subject to change, depending ?n
rain events, and any city in the metropolitan area could be affected.
While Metro Cities recognizes the importance of controlling III because it affects the
size, and therefore the cost, of wastewater treatment systems and because excessive III in
one city can affect development capacity of another city that lies down pipe, we are
concerned about the potential for cities to incur increasingly exorbitant costs, and
decreasing benefits, in their on-going efforts to mitigate excessive III. Metro Cities
opposes the~demand' charge that is set to occur once the surcharge program expires.
Instead, Metro Cities would encourage the Metropolitan Council to work with cities to
establish a process for reaching agreed upon benchmarks to reduce inflow and
infiltration. The benchmarks should be determined using a data-supported definition of
excessive III, and adequate and verifiable flow data that is updated regularly
Metro Cities continues to monitor the surcharge program, and encourages the -
Metropolitan Council to support state financial assistance for Metro Area III mitigation
through future Clean Water Legacy Act appropriations or similar legislation.
Further, Metro Cities supports state capital assistance to provide grants to metro area
cities for the purpose of mitigating inflow and infiltration problems into municipal
wastewater collection systems.
IV-L Water Supply
The 2005 Legislature authorized the Metropolitan Council to carry out planning activities
to address the water supply needs of the Metro Area. The Water Supply Advisory
Committee, whose members include five municipal officials, began its work inJanuary
2006. Its work includes analyzing technical water supplyluse data, the development of a
master metro area water supply plan, recommendations for clarifying roles of local,
regional and state governments and streamlining and consolidating approval processes,
and recommendations for funding future planning and capital investments.
r
The advisory committee completed Phase I of its work in December 2006, and submitted
a report to the Legislature in January, 2007. Metro Cities supports the process outlined
for phase II ofthe committee's work, including the development of a master metro area
water supply plan, with the additionof a technical advisory group that includes municipal
expertise to assist in providing information to the advisory committee.
In addition to the Metropolitan Council, there are currently at least five state agencies
with water related jurisdiction. There are also several federal agencies involved in water
issues. Metro Cities supports the Metropolitan Council activities associated with
24 2009 Legislative Policies
Metropolitan Agencies
clarifying local, regional and state water supply roles. Metro Cities encourages the
Metropolitan Council to consider the inter-relationships of wastewater treatment, storm
water management and water supply. Metro Cities also supports analytical work that will
help streamline and consolidate the myriad and often conflicting water supply permitting
processes. Metro Cities further supports efforts to identify capital funding sources to
assist with municipal water supply projects. However, Metro Cities opposes the insertion
of the Metropolitan Council as another regulator in the water supply arena.
Metro Cities further opposes the elevation of water supply to "Regional System" status;
or the assumption of Met Council control and management of municipal water supply
infrastructure. At this time, we oppose any regional taxes or fees for water supply
planning.
IV-M Service Availability Charge (SAC)
The Met Council adopted changes to its SAC program in 2006. The original proposal
would have disallowed the use of 'grandfathered (pre 1973) SAC credits. Metro Cities
opposed that change, and convened a work group to review the proposals and make.
- recommendations. As a result of those discussions and subsequent meetings with MCES
staff, the Metropolitan Council adopted a 'no net cr.edit' proposal. Under this proposal,
when a redeveloping property's neW use requires lower wastewater capacity than what.
was used in the prior seven years, SAC credits ardimited to the amount needed on the
site for the new use. A property developing at the same or less.er wastewater demand will
not incur SAC nor get credits.
Metro Cities supports a SAC program that emphasizes equity, simplification and lower
rates. Under a no-net-credit structure, Metro Cities supports a baseline 'look back' of
~, seven years, 10 years for phased developments and longer time lines to be decided on a
--.,
case by case basis for redevelopment projects that involve extenuating circumstances.
Metro Cities also supports a start date of 20 1 0 to allow cities adequate time to determine
and use existing SAC credits.
Metro Cities supports modifications to SAC rules adopted by the Metropolitan Council in
2008 that allow for a voluntary transfer of SAC credits from one metro city to another
and from one site to another within a city, for projects that, without the credits, would
mean that a business would move its operations out of state.
Metro Cities supports the rule change with the following conditions: that the business be
required to provide a written "but for" certification indicating that without the transfer the
business would move its operations out of state, that such transfers are strictly voluntary,
that transfers be part of a package of state incentives and that cities being requested to
transfer SAC credits be notified oftherequest at the start of any development
negotiations.
-
2009 Legislative Policies 25
Metropolitan Agencies
Metro Cities supports this rule change with the understanding that these transfers will be
limited to economic development projects with statewide significance and as such are -
likely to occur only in rare circumstances.
IV-N Funding Regional Parks & Open Space
In the seven-county metropolitan area, regional parks essentially serve the role of state
parks. Therefore, the state should continue to provide capital funding for the acquisition,
development and improvement of these parks. State funding should equal 40 percent of
the operating budget for regional parks.
IV-O Livable Communities
The Livable Communities Act (LCA) is operated by the Metropolitan Council and
provides a voluntary, incentive-based approach to affordable housing development,
brown field clean up and mixed-use, transit-friendly development and redevelopment.
Metro Cities strongly supports the continuation of this approach, which has been widely
accepted and is fully utilized by local communities.
Metro Cities supports increased funding and flexible eligibility requirements in the -
livable communities demonstration account in order to assist communities with
development that may not beexc1usively market driven or market proven in their
particular location and in order to support important development and redevelopment
goals.
~,
Metro Cities supports statutory modifications in the Livable Communities Demonstration
Account Program to reflect the linkages among the LCD A and municipal objectives and
goals and Met Council systems objectives and goals. Metro Cities also supports statutory
changes to assure that all metropolitan area cities are eligible to participate in the LCD A
progratrL -
-
Use of interest earnings from LCA funds should be limited to covering the costs of
administering theprograiIl. Remaining interest earnings not used for program
administration should be considered part of the LCA funds and used to fund grant
requests from the established LCA accounts, according to established funding criteria.
IV-P Density
Metro Cities supports a reasonable Met Council density policy that bases density
projections on actual development patterns, is flexible, and accommodates cities at
various development stages. Any MetCouncil density policy must take into account the
impacts of market trends on city development and redevelopment activities;
26 2009 Legislative Policies
Tre nsportation (V)
V-A Transportation and Transit Funding
- Metro Cities supported the 2008 Transportation Finance bill. This legislation allows for
necessary resources for MnDOT, the county road system and the MSA road system, and
will help make up for the lack of state resources over the last twenty years. Metro. Cities
was proud to be part of the effort to secure this base level funding.
However, the resources contained in the transportation finance bill represent only half of
the need in our counties, cities and state. Metro Cities recognizes the need for additional
transportation funding statewide, and will continue to advocate for additional resources to
maintain our transportation infrastructure. In addition, cities still lack the authority to use'
.
additional tools for city street improvements; such resources continue to be restricted to
property taxes and special assessments. It is imperative that alternative authority be
- granted to municipalities for this purpose to relieve the burden on the property tax
system.
V-B Regional Transit System
The Twin Cities Metropolitan Area needs a multi-modal regional transit system that
serves both commuters and the transit dependent. The transit system should be composed
of a mix of HOV lanes, Bus Rapid Transit, express and regular route bus service,
exclusive transit ways, light rail transit and commuter rail corridors designed to connect
residential, employment, retail and entertainment centers. The system should be
regularly monitored and adjusted to ensure that routes of service correspond to the
region's changing travel patterns,
Metro Cities strongly supported the 14 cent sales tax which was passed by the 2008
Legislature. This tax will be levied in the Metropolitan Area and dedicated to transit.
The sales tax represents a commitment to investment in our region's transitways. It will
be important to direct these revenues purposefully, and to avoid subsidizing areas of
transit funding that are the responsibility of the Legislature and Metropolitan Council.
Metro Cities is opposed to legislative directives that constrain the ability of metropolitan
transit providers to provide a full range of transit services, including reverse commute
routes, suburb-tb-suburb routes, transit hub feeder services or new, experimental services
,- that may show a low rate of operating cost recovery from the fare box.
V-C Transit Operating Subsidies
The Twin Cities metropolitan area is served by a regional transit system that is expanding
to include rail transit and dedicated bus ways. Any operating subsidies necessary to
support this system should come from a regional or statewide funding source. The
property taxpayers of individual cities and counties should not be singled out to fund the
-
2009 Legislative Policies 27
Transportation
operation of specific transit lines or routes of service within this regional system. The -
Metropolitan Council must find a stable and growing revenue source to fund the
operating budget for Metro Transit. MVST revenue projections have not been reliable
and as a result the Met Council is continuing to operate at a funding deficit. The ~ cent
sales tax will be used, in part, to fund operating costs on designated transitways in the
Metropolitan Area. It is critical that this tax not be allocated in ways that allow the '
Legislature or Met Council to abrogate their responsibilities for funding operating costs
for the metropolitan transit system. -
V-D Street Improvement Districts
Metro Cities supports the authority of local units of government to establish street
improvement districts. Street improvement districts allow for cities in developed and
developing areas to fund new construction as well as reconstruction and maintenance
efforts. A street improvement district is designed to allow cities, through the use of a fair
and objective fee structure, to create a district or districts within the city in which fees
would be raised and must also be spent. The street improvement district would also
provide cities with populations under 5,000 with an alternative to the property ta~ system
and special assessments. -
V-E Highway Turnbacks & Funding
Metro Cities supports jurisdictional reassignment or turnback of roads on a phased basis
using functional classifications and other appropriate criteria subject to a corresponding
mechanism for adequate funding of roadway improvements and continued maintenance.
Metro Cities does not support the wholesale turnback of county roads without the total
cost being reimbursed to the city in a timely manner.
Cities do not have the financial capacity, other than significant property tax increases, to
absorb the additional roadway responsibilities without new funding sources. The existing
municipal turnback fund is not adequate based on contemplated turnbacks. The 2008
Transportation Finance legislation will add approximately $6 million to the Metro
Turnback Fund, bringing the fund up to $20 million, which falls short of the $100 million
needed.
Metro Cities supports additional funding for municipalities that are assuming the role of
maintenance and upkeep on city streets that maintain a level of traffic consistent with
state highways. Cities should be compensated for providing a service that traditionally
has been borne by the state. The state has abrogatedjts responsibility for maintaining
major roads throughout the state by requiring, through omission, that cities bear the
burden of maintenance on major state roads.
V-F "3C" Transportation Planning Process: Elected Officials' Role
Metro Cities supports continuation of the Transportation Advisory Board (TAB), with a
majority of locally elected officials as members and participating in the process. The
28 2009Legislative Policies
Transportation
TAB was developed to meet federal requirements, designating the Metropolitan Council
as the organization that is responsible for a continuous, comprehensive and cooperative
(3C) transportation planning process to allocate federal funds among metropolitan area
projects. This process requirement was reinforced by the 1991 lntermodal Surface
Transportation Efficiency Act (ISTEA), the 1998 Transportation Efficiency Act for the
21 st Century (TEA21) and the 2005 Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users (SAFETEA-LU).
...-
V-G Photo Enforcement of Traffic Laws
Cities should be allowed to enforce traffic laws and promote public safety on
Minnesota's streets and highways through the use of photo enforcement technology.
V-H Airport Noise Mitigation
Metro Cities supports noise abatement programs and expenditures designed to minimize
the impacts of Metropolitan Airports Commission (MAC) operated facilities on
neighboring communities. The MAC should determine the design and geographic reach
- of these programs only after a thorough public input process that considers the priorities
and concerns of impacted cities and their residents. The MAC and the state should seek
long-term solutions to fund the full mitigation package as adopted in 1996 for all homes
in the 64-60 DNL impact area. Noise abatement efforts should be paid for by fees and
charges collected from airport users, as well as state and federal funds. Furthermore,
unless mitigation funding is provided, Metro Cities opposes any legislation that requires a
property owner to disclose those properties that lie within 64-60 DNL noise contours.
Acknowledging that the communities closest to MSP and reliever airports are
significantly impacted by noise, traffic, and other numerous expansion-related issues,
Metro Cities supports the broad goal of providing MSP-impacted communities greater
representation on the MAC. Metro Cities wants to encourage continued communication
between the MAC commissioners and the cities they represent. Regular contact between
the MAC and cities will enhance communication and problem solving.
V-I Cities Under 5,000 Population
Cities under 5,000 in population do not directly receive any non-property tax funds for
collector and arterial streets. Current CSAH distributions to metropolitan counties are
inadequate to provide for the needs of smaller cities in the metropolitan area. Criteria,
such as the number of average daily trips, should be established in a small city local road
improvement program for funding qualification, and a distribution method devised. .
Possible funding sources include the five-percent set-aside account in the Highway User
Tax Distribution Fund, modification to county municipal accounts, street improvernent
districts, and/or state general funds.
V-J County State Aid Highway (CSAH) Distribution Formula
-
2009 Legislative Policies 29
Transportation
Even with the additional resources provided by the Legislature through the transportation --
finance bill, significant needs remain in the metro area CSAH system. The additional
revenue for the CSAH system will result in more projects being completed faster,
however, greater pressure is being placed on municipalities to participate in cost sharing
activities, encumbering an already over-burdened local funding system. When the
alternative is not building or maintaining roads, cities bear not only the costs of their local
systems but also pay upward of fifty percent of county road projects. Metro Cities
supports special or additional funding for cities that have burdens of additional cost -
participation in county road projects.
Although only 10% of the CSAH roads are in the metro area, they account for nearly
50% of the vehicle miles traveled. The new CSAH formula passed by the Legislature
will better account for needs in the Metropolitan Area, and the new formula is a first step
in providing additional resources for the Metropolitan Area.
V-K MunicipallnputlConsent for Trunk Highways and County Roads
Minnesota Statutes direct the Minnesota Department of Transportation (MnDOT) to
submit detailed plans with city cost estimates at a point one and a half to two years prior --
to bid letting, at which time public hearings are held for citizen/business/municipal input.
If MnDOT does not concur with requested changes, it may appeal. Currently, that
process would take a maximum of three and a half months and the results of the appeals
board are binding on both the city and MnDOT.
Metro Cities opposes any changes to current statutes that would allow MnDOT to
disregard the appeals board ruling for state trunk highways. The result of such a change
would significantly minimize MnDOT's need to negotiate in good faith with a city for
appropriate project access and alignment, and it would make the public hearing and
appeals process meaningless.
Metro Cities opposes elimination of the county road municipal consent and appeal
process for the same reasons we oppose changing the process as it applies to MnDOT
trunk highway projects.
V-L Plat Authority
Metro Cities supports current law granting counties review and comment authority for
access and drainage issues for city plats abutting county roads. Metro Cities opposes any
statutory change that would grant the county veto power or that would shorten the 120-
day review and permitprocess time.
V-M City S.peed Limit Control
Metro Cities supports a reduction in the state-wide default speed limit from 30 to 25 mph
on local residential roads. Metro Cities supports design standards that result in slower
30 2009 Legislative Policies
Transportation
speeds on local roads. In the event of a uniform speed limit reduction, Metro Cities
supports increased state funding for education and enforcement.
V-N Speed Limits Surrounding City Parks and Schools
At cities' or counties' discretion, Metro Cities supports a year round reduction of speed
limits within 500 feet of any city and county parks and schools.
-
v-a MnDOT Maintenance Budget
With the passage of the transportation finance legislation, much of MNDOT' s
maintenance budget has been restored. However, it is likely that local units of
government will continue be asked to maintain state-owned infrastructure. Metro Cities'
supports MnDOT alleviating cities of the State's responsibility through the additional
resources provided to MnDOT in the Transportation Finance legislation. We also support
funding that allows the State to maintain its own infrastructure.
V-P Transit Taxing District
~
Metro Cities supports a stable revenue source to fund capital and operating costs for
transit at the Metropolitan Council. The transit taxing district, which funds the capital
cost of transit service in the Metropolitan Area through the property tax system, is
inequitable. Because the boundaries of the transit taxing district do not correspond with
any rational service line, cities in the taxing district and out of the taxing district are
contributing unequally to the transit service in the Metropolitan Area. This inequity
should be corrected. However, Metro Cities does not support the expansion of the transit
taxing district without a corresponding increase in service. To do so would add another
burden to property tax payers without a corresponding benefit.
-
2009 Legislative Policies 31
Transportation
." ';!'-
-
..........
32 2009 Legislative Policies
ijt Committee Rosters (VI)
Housing & Economic Development
Anne Norris (Chair), City Manager, Crystal
Bonnie Balach, Consultant, Minneapolis
Cecile Bedor, Planning & Econ. Dev., Minneapolis
Gino Businaro, Councilmember, Chaska
Tami Diehm, Councilmember, Columbia Heights
Rick Getschow, City Manager, Hopkins
Bryan Hartman, Program Manager, Bloomington
~ Brian Heck, Administrator-Clerk, Shorewoocl
Lee Helgen, Councilmember, St. Paul
Jon Hohenstein, Comm. Dev. Dir., Eagan
SchawnJolmson, Asst. to City Manager, New Brighton
~rian Kleven, Councilmember, EDA Comm., Osseo
teve Lampi, Mayor, Brooklyn Park
R. Michael Leek, Comm. Dev. Dir., Shakopee
Dean Lotter, City Manager, New Brighton
Bruce Nordquist, Comm. Dev. Dir., Apple Valley
Tammy Omdal, Deputy City ManagerjCFO, Burnsville
Samantha Orduno, Administrator, Dayton
Terence Quigley, Councilmember, Shoreview
Ron Rankin, Comm. Dev. Dir., Minnetonka
Melissa Reed, Government Relations Rep., Minneapolis
Robert Schreier, Dir. of Commun. Dev., Brooklyn Park
Bob Streetar, Comm. Dev. Dir., Columbia Heights
Wendy Underwood, Government ReI. Rep., St. Paul
Craig Waldron, Administrator, Oak dale
Pierre Willette, Government Relations Rep., Minneapolis
Liz Workman, Councilmember, Burnsville
Metropolitan Agencies
Chuck Haas (Chair), Councilmember, Hugo
Susan Arntz, Admlnistrator, Waconia
David Beaudet, Mayor, Oak Park Heights
Holly Dahl, Mayor, Lakeville
",
-
2009 Legislative Policies 33
Committee Rosters
Cheryl Fischer, Mayor, Minnetrista -
Elizabeth Glidden, Councilmember, Minneapolis
Tom Goodwin, Councilrnember, Apple Valley
Brian Heck, Administrator-Clerk, Shorewood
Susan Hoyt, Administrator, Lake Elmo
Schawn JOMson, Asst. to the City Manager, New Brighton
Dean Johnston, Mayor, Lake Elmo
Dan Kealy, Councilmember, Burnsville -
Matt Kline, Water Operator, Lakeland
Larry Lee, Comm. Dev. Dir., Bloomington
Thomas Link, Comm. Dev. Dir., Inver Grove Heights
Terry Schneider, Councilmember, Minnetonka
Pierre Willette, Govt. Relations Rep., Minneapolis
Wendy Wulff, Councilmember, Lakeville
Municipal Revenue & Taxation
Marcia Glick (Chair), City Manager, Robbinsdale
Clark Arneson, Asst. City Manager, Bloomington ---
Patrick Born, Chief Financial Officer, Minneapolis
Tom Burt, City Manager, Golden Valley
Scott Cordes, Sr. Budget Analyst, St. Paul
Charlie Crichton, Councilmember, Burnsville
Holly Dahl, Mayor, Lakeville
Jim Dickinson, Administrator, Independence
Lori Economy-Scholler, Chief Financial Officer, Bloomington
Jerry Faust, Mayor, St. Anthony Village
Walt Fehst, City Manager, Columbia Heights
Susan Iverson, Finance Dir.fTreas., Arden Hills
Marv Johnson, Mayor, Independence --
Tom LaweU, Administrator, Apple Valley
Dean Lotter, City Manager, New Brighton
Kristi Luger, City Manager, Excelsior
Linda Masica, Councilmember, Edina
Mary McComber, Councilmember, Oak Park Heights
Steve Mielke, Administrator, Lakeville ,-
Bruce Nawrocki, Councilmember, Columbia Heights
Tammy Omdal, Deputy City Manager/CFO, Burnsville
Calvin Portner, Asst. City Manager, Brooklyn Park
Don Rambow, Finance Dir., White Bear Lake
Gene Ranieri, IGR Director, Minneapolis
Robin Roland, Finance Dir., Farmington
Ryan Schroeder, Administrator, Cottage Grov~
Danna Elling. Schultz, Councilmember, HastingI'
Continued.. .
34 2009 Legislative Policies
Committee Rosters
Steve Sinell, City Assessor, Eden Prairie
Dick Woodruff, CounciImember, Shorewood
Wendy Wulff, Councilmember, Lakeville
Transportation & General Government
Doug Anderson, (Chair), Mayor, Dayton
,--
Susan Arntz, Administrator, Waconia
Janis Callison, Mayor, Minnetonka
Scott Cordes, Financial Services, St. Paul
Steve Elkins, Councilmember, Bloomington
Dan Gustafson, CounciImember, Burnsville
William Hargis, Mayor, Woodbury
Tom Harmening, City Manager, St. Louis Park
Sandy Hewitt, Councilmember, Plymouth
Greg Hoag, Public Works Dir., Arden Hills
Susan Hoyt, Administrator, Lake Elmo
Gordon Hughes, City Manager, Edina
.......... Marvin Johnson, Mayor, Independence
Schawn Johnson, Asst. to the City Manager, New Brighton
Dean Johnston, Mayor, Lake Elmo
Steve Lampi, Mayor, Brooklyn Park
R. Michael Leek, Cornm. Develop. Dir, Shakopee
Linda Loomis, Mayor, Golden Valley
Dean Lotter, City Manager, New Brighton
Kristi Luger, City Manager, Excelsior
Scott Lund, Mayor, Fridley
John Maczko, City Engineer, St. Paul
Mary McComber, Councilmember, Oak Park Heights
Mark McNeill, Administrator, Shakopee
Justin Miller, Administrator, Falcon Heights
Mike Mornson, City Manager, St. Anthony Village
Veid Muiznieks, Chief of Police, Newport
Samantha Orduno, Administrator, Dayton
Bud Osmundson, Dir. of Public Works/City Engineer, Burnsville
Danna Elling Schultz, Councilmember, Hastings
Ellsworth Stein, Airport ReI. Commission, Mendota Heights
Dick Swanson, Councilmember, Blaine
Wendy Underwood, Government Relations Rep., St. Paul
Jon Wer*s, Director of Transportation Services, Minneapolis
Ady Wickstrom, Councilmember, Shoreview
Pierre Willette, Government ReI. Rep., Minneapolis
Dick Woodruff, Councilmember, Shorewood
Wendy Wulff, Councilmember, Lakeville
-
2009 Legislative Policies 35
Committee Rosters
-
-
.....
-
36 2009 Legislative Policies
[
. "{}. .r
~
h i
c
'> .,
i
f
t
,
t-
DRAFT !
I
i
I
f
r
K
t
2009 I
~
I
I
I
I
I
. CITY I
I
!
I
POLICIES I
!
I
!
[
.j
Send comments to policvcomments@lmc.org
or contact an IGR representative
Comment period ends Friday, November 7,2008
" Gary Carlson (GC) 651.281.1255gcarlson@lmc.org I
Anne Finn (AP) 651.281.1263 afinn@lmc.org
Ann Higgins (AR) 651.281.1257 ahiggins@lmc.org
Jenn O'Rourke (JO) 651.281.1261 iorourke@lmc.org
Craig Johnson (CJ) 651.281.1259 ciohnsonrc41mc.org
Hue Nguyen (HN) 651.281.1260 hnguven@lmc.org
Laura Kushner (LK) 651.281.12031kushner@lmc.org I
,
~ Initials following each policy are those of the policy author.
~ Underlining indicates new language.
~ Strikeouts indicate deleted language.
~\
TABLE OF CONTENTS
IMPROVING SERVICE DELIVERy................................................. 6
SD- 1. Unfunded Mandates (GC/J 0).... ..................... ........ ........ ... ........................ ...................... 6
SD- 2. Local Approval of Special Laws (GC) ...........................................................................6
SD- 3. Redesigning and Reinventing Government (10)............................................................ 7
SD- 4. City Costs for Enforcing State and Local Laws (AF) .................................................... 8
SD- 5. Responsibility for Locating Private Underground Facilities (AH) ................................ 9
SD- 6. Utility Relocation Under Design-Build Road Construction (AF)................................ 11
SD- 7. National Fire Protection Association (NFP A) Standards (AF) .................................... 11
SD- 8. Ambulance Service Costs and Liability (AP) .............................................................. 12
SD- 9. Fees for Service (AF) ................................................................................................... 14
SD- 10. Providing Information to Citizens (J 0)......... ........................... .................................. 14
SD- 11. Contracting and Purchasing (CJ)........... .............. ........................................ ....... ........ 15
SD- 12. City Enterprise Operations (J 0) ........................................ ....... ............. ..................... 16
SD- 13. Initiative and Referendum (AH)........ ........................ ................ ............ ......... ....... ..... 16
SD- 14. Civil Liability of Local Governments (CJ) ................................................................ 17
SD- 15. Private Property Rights and Takings (HN) ................................................................. 18
SD- 16. Sustainable Development (HN) ...................... ...... ...... .......... ....... ............... ................ 20
SD- 17. Construction Codes (HN)............................. .................... ........ .................. ................ 22
SD- 18. Disability Access Requirements (HN) ....................................................... ................ 25
SD- 19. Restrictions on Possession of Firearms on City Properties (AF) ...............................26
SD- 20. Creating a Minnesota GIS (AH)................................................................................. 27
SD- 21. Public Safety Communications (AF/AH)................................................................... 27
SD- 22. CriMN et (AF).... ........ .... ... ........ ........ ............ .......... ......... ........... ............ .... .... ............ 28
SD- 23. Pawn Shop Regulation and Use of the Automated Pawn System (APS) (AF) ........ 30
SD 24. Emergency Management }..ssistance Compact (GC) ................................................. 31
SD- 25. Compensation and Reimbursement for Public Safety Services (A F) ........................ 32
SD- 26. Administrative Fines (AF) ................ ......... .......... ................... ............ ........... ..... ........ 33
SD- 27. Homeland Security Costs and Liability (AF) ............................................................. 34
SD- 28. Immigration Reform (AF) ........................ ........ ...... .... ... ....... ......................... ............. 35
SD- 29. Racial Profiling (AF) ...... ......... ................... ........... ........ ..... ...... ............ ...... .... ...... '" ... 36
SD- 30. Legalization of Fireworks (AF) ................. ..................... ........ ............ ........... ............. 37
SD- 31. Traffic Enforcement Cameras (AF)........................................................................... 38
SD- 32. Fire Mutual Aid (AF) .... ........................... ............... .............. ........... ... .......... ............. 39
SD 33. Dangerous Dogs (}..F)....... ........ ......... ................... ............. ..... ............... ...... ... ..... ... ..... 40
SD- 34. Operation of Motorized Foot Scooters (AF) .............................................................. 40
SD- 35. Methamphetmnine (JO). ........ ...... ................ ............. ....... ........................ ... ................ 41
SD- 36. State Regulation of Massage Therapists (AF)............................................................ 41
SD- 37. On-Sale Liquor or Wine Licenses to Cultural Centers (JO)....................................... 42
SD- 38. Youth Access to Alcohol and Tobacco (JO) ............................................................. 43
SD- 39. Smoking Ban Ordinances (JO) ................................................................................... 43
SD- 40. Environmental Protection (CJ) ......................................... .................. ........................ 44
SD- 41. Impaired Waters (CJ) ...................... ............ ....................................... .,......... ............. 46
2
'.
SD- 42. Phosphorus Reduction (CJ).......... ... ................ ..... ........... ... ......,..... .... ............. ....... .... 47
SD- 43. Urban Forest Management Funding (CJ/JO) ............................................................ 48
SD- 44. Election Issues (AH).......................................................................................... ......... 49
SD- 45. Local Election Authority (AH)................................................................................... 50
SD- 46. Ranked Choice Voting Issues (AH) ........................................................................... 51
SD- 47. State Assistance for Library Funding (10) ........ ................... ...... ...... ..... ......... ............. 51
SD- 48. P ark and Library Land Tax Break (10)...................................................................... 52
SD- 49. Charter Law Changes Expense Limit Increase (GC/AH) ........................................... 52
SD 50. Utility Rate Clarification (Ge) ................................................................................... 53
SD-NEW A. Liquor Licensing for City Venues (10)............................................................. 54
SD-NEW B. Maintenance of Effort for Libraries (10)........................................................... 54
SD- NEW C. Organized Solid Waste Collection (CJ)........... .......................................... ........ 55
SD-NEW D. Rental Housing Licensing (HN)........................................................................ 57
IMPROVING LOCAL ECONOMIES............................................... 58
LE- 1. Growth Management and Annexation (CJ/HN).. .............. ........ ................................... 58
LE- 2. Official State Mapping Responsibility (CJ/AF) ...........................................................59
LE- 3. Electric Service Extension (AH).................................. .................. ............ .................. 60
LE- 4. Statutory Approval Timelines (CJ)............................... ................................................ 60
LE- 5. Public Infrastructure Utilities (AF)............................... .................................... ............ 62
LE- 6. Development Disputes (CJ) ............. ...... .......... ............. ......... ....... ........... ............ ........ 62
LE- 7. New Resources for Affordable Housing (HN) .............................................................63
LE- 8. Residential Care Facilities (group homes) (HN/AF) ................................................... 64
LE- 9. Inclusionary Housing (HN)..................... ..... .... ....... ......... ....... .......... ........................... 65
LE- 10. Community Land Trusts (AHIHN)............................................................................. 66
LE- 11. State Broadband Policy Priorities for Cities (AH) .....................................................66
LE- 12. Competitive Cable Franchising Authority (AH) ........................................................ 68
LE- 13. Right-of-Way Management (AH)............................................................................... 70
LE- 14. Wireless Tower and Antenna Siting (AH)..................................................................7l
LE- 15. Use Deeds (GC). ... ..... .... .......... ............................ ....... .......... ....... .................. ..... ........ 72
LE- 16. Economic Development Authorities (10) .................................................................. 73
LE- 17. Workforce Readiness (J 0)............ ........................... ..... ......... ......................... ............ 73
LE- 18. Community Reinvestment Partnerships and Financing (10)...................................... 74
LE- 19. Tax Increment Financing (TIF) (JO) .......................................................................... 75
LE- 20. TIF District Deficits (JO)...... ........... ........ ..... ................ ...... .... ..................... ...... ......... 76
LE- 21. Business Subsidies (JO)..... ........... ..... ..... ..... ........... ............ ........................... ............. 76
LE- 22. Business Development Programs (10) ....................................................................... 77
LE- 23. Land Recycling Programs (10) .................................................................................. 78
LE- 24. Property Tax Abatement Authority (10) ..................................................................... 79
LE- 25. OSA Response Timelines (10) ................................................................................... 79
LE- 26. OSA Time Limitations (JO) ....................................................................................... 80
LE- 27. Adequate Funding for Transportation (AF)................................................................ 81
LE- 28. Tumbacks of County and State Roads (AF)............................................................... 83
LE- 29. MnlDOT Rights-of-Way Maintenance (AF) .............................................................. 83
LE- 30. Road Funding for Cities Under 5,000 (AF)................................................................ 84
LE 31. GrlHlt /..nticipation Bond /"uthority (AF/JO)......................,........................................ 84
3
"
LE- 32. Railroad-Related Projects (AF)... ....... ................. ....... ... ........... ......... ............. .... ... ..... 85
LE- 33. Statewide ,^.viation Airport Planning and Funding (AF)............................................86
LE-NEW A. Transit Improvement Areas (JO) ........................................................................87
LE-NEW B. Foreclosure (HN) ..... ........... .................... ................. .......... .... ........... ............ ..... 88
LE-NEW C. Energy Efficiency Improvement Requirements for Housing (Cl) .................... 89
IMPROVING FISCAL FUTURES..................................................... 91
FF -1. State-Local Fiscal Relations (GC/J 0) ............................................................................ 91
FF - 2. State Budget Stability (GC/JO)......................................................... ................. ............ 92
FF -3. Funding LGA (GC/J 0) .................................................................. ................................ 93
FF -4. Local Government Aid Reform (GC/J 0).. ................................ ..................................... 94
FF 5. State Administrative Deductions from State Aid (GCnO) ............................................96
FF-6. State Charges for Administrative Services (GC/J0)......................................................96
FF - 7. Reporting Requirements (GC/J 0)......... ................................... ......... ............................. 97
FF-8. Limited Market Value and Homestead Tax Burdens (GC/JO)...................................... 97
FF-9. Restructuring the Market Value Homestead Credit (GC/JO) ........................................98
FF -10. Sales Tax on Local Government Purchases (GC/JO) .......... ........ ................................ 98
FF -11. Sales Tax on Capital Equipment (GC/J 0) .......... ...... .............. ..... ................................ 99
FF -12. Taxation of Electronic Commerce (GC/JO) .......................... ...................................... 99
FF-13. Taxation of Electric Generation Personal Property (GC/JO)..................................... 100
FF -14. State Restrictions on Local Budgets (GC/JO) ................................. ................ ........... 101
FF -15. Truth-in- Taxation Process (GC/J 0) ................. ............................... ....... .................... 101
FF -16. City Fund Balances (GC/JO) ........ .................... ........................................... .............. 102
FF-17. City Revenue Diversification (GC/JO) ...................................................................... 102
FF -18. City Franchise Authority (GC/JO). .......... ....................... ................ .... ................ .... ... 103
FF-19. Utility Valuation Rules Utility Valuation Transition Aid (GC/JO)........................... 104
FF-20. Payments for Services to Tax-Exempt Property (GC/JO) ......................................... 105
FF-21. Revenue Recapture .i\uthority for Cities (GC/JO) .....................................................106
FF -22. Impact Fees (GC/JO).... ........... ...... ............ ......... ......... ......... ............ ............ .............. 106
FF-23. Equity in Library Funding (GC/JO) ................................................ ........................... 107
FF-24. Equitable Funding of Community Education Services (GC/JO) ............................... 107
FF -NEW A. Housing Improvement Areas (lO) ................................................................... 108
HUMAN RESOURCES & DATA PRACTICES ............................109
I
Human Resources ............ .......................... .... ......... ............ ........................... ....... ........ ........ .... 109
HR-1. Personnel Mandates and Limits on Local Control (LK! AF)....................................... 109
HR-2. Firefighter and Ambulance Payroll (LK!AF).............................................................110
HR -3. Pay Equity (LK! AF). .... ............................. .................... ............. .......... '" ........ ............ 110
HR-4. Public Employment Labor Relations Act (PELRA) (LK! AF).................................... 111
HR-5. Payment of Arbitration Fees (LK! AF) ........................................................................ 111
HR-6. Essential Employees (LK! AF) ................... .... .................... ............. ..... ....... ......... ....... 112
HR-7. Re-employtnent Benefits (LK! AF) ............ ................................................ ..... ............ 112
HR -8. Pension Benefits (LK! AF) .......... ............ ... ................... ............. ..... ............. ... ............ 113
HR-9. Public Employees Retirement Association (PERA)(LK!AF)..................................... 113
4
-
HR -10. Pension Post Fund Deficit (LK/GCI AF). .......... ...... ....... .............................. ............. 115
HR-ll. Volunteer Firefighter Pension Benefits (GCI AF) ..................................................... 116
HR-12. Retirement Work Incentives (LK/ AF) ......... .............. ............... ...... .......................... 117
HR-13. State Paid Police and Fire Medical Insurance (LK/AF) ............................................117
HR-14. Health Care Insurance Programs (LK/AF) ............................................................... 120
HR 15. Deferred Compensation Contributions (LK/}.F/GC) ............................................... 121
HR -16. Workers' Compensation (LK/ AF) ...... ...... ......... ... ........... ....... ..... ........ ............ ......... 121
HR -17. Breathalyzers (LK/ AF) .. ........... ........ ....... ............ ......... .................. ............ .............. 122
HR -18. Veterans' Preference (LK/ AF)..................................................................... ............. 123
HR-19. Drug and Alcohol Rehabilitation (LK/ AF).. ...... ........... ................ ............. ........ ....... 123
Data Practices....................... ......................................................... ...... ...................................... 123
DP- 1. Data Practices and Open Meeting Law Compliance Issues (AH).............................. 123
Federal E mp loymen t Law..... ...................................................... ................. ............................ 125
FED- 1. FLSA/Overtime Compensation (LK/ AF) ............. ..................................... ............... 125
FED- 2. Consolidated Omnibus Budget Reconciliation Act (COBRA) (LK)....................... 125
FED- 3. MedicarelMedicaid Premium Disbursements (LKlAF)........................................... 125
FED- 4. Flexible Spending Accounts (LKlER) ........ ................... .......................................... 126
- - FED- 5. Reserve Income Replacement Program (RIRP) (LK).............................................. 126
FED- 6. IRS Regulations on Death Benefits (LK) ................................................................ 127
FED- 7. Federal Public Safety Collective Bargaining Bill (LK) ........................................... 127
HR-NEW A. Part-Time Peace Officer Licenses (AF/LK) ..................................................... 128
HR -NEW B. Background Checks (AF ILK) '" .......... ................ ....... .............. ........................ 129
DP-NEW A. Preliminary Budget Documents (AH/LK)........................................................ 129
ELECTRIC RESTRUCTURING ..................................................... 131
Electric Restru cturing .. ......... ....... ..... ................... ............... ........ ...... ...... ....... .......................... 131
Stranded Cost Recovery..... ......... .... ......... .......... ...... ...... .... ............................ .......... ................ 134
Property Tax.............................................................................................................................. 135
5
COMMITTEE RECOMMENDATIONS
1
2 IMPROVING SERVICE DELIVERY
3 SD-l. Unfunded Mandates (Ge/JO)
4 Issue: The cost of federal and state mandated programs substitute the judgment of Congress, the
5 president, the Minnesota Legislature, and the governor for local budget priorities. These
6 mandates force cities to reduce funding for other basic services or to increase taxes and service
7 charges. The passage by the Legislature of reporting requirements for new state mandates, the
8 recently-enacted Office of the State Auditor program for local governments to register their ideas
9 for mandates reform, and the passage by Congress of legislation restraining new federal
10 mandates, should help address the problem, but other steps are necessary.
11
12 Response:
13 . Existing unfunded mandates should be reviewed and modified, or repealed where
14 possible. .-.'
15 . No additional statewide mandates should be enacted unless full funding for the
16 mandate is provided by the level of government imposing it or a permanent stable
17 revenue source is established.
18 . Cities should not be forced to comply with unfunded mandates.
19 . Cities should be given the greatest flexibility possible in implementing mandates to
20 ensure their cost is minimized.
21 . The lefdslative local impact note process should be modified to allow the chairs or
22 rankin2 minority members of the Senate Finance Committee and the House Ways and
23 Means Committee to make reQuests for local impact notes. In addition. a prepared local
24 impact note must be distributed to the chair or rankin2 minority member of any
25 committee considerin2 the bill.
26
27 SD-2. Local Approval of Special Laws (GC)
28 Issue: The Minnesota Constitution prohibits special legislation except for certain special laws
29 relating to local govenunent. It provides that a special law must name the affected local unit of
6
COMMITTEE RECOMMENDATIONS
1 government and is effective only after approval by the local govemment unit, unless general
2 state law provides otherwise. Under state statute, a special law is not effective unless approved
3 by the affected local unit of government, except under limited circumstances.
4
5 In recent years, the Legislature has occasionally enacted general laws that affect a single local
6 unit of government. By enacting a general law with limited application, local approval is not
7 required.
8
9 Response: The League supports the constitutional requirement that a special law must be
10 approved by the affected local unit of government before it can take effect. If a law is
11 intended to affect or benefit a single local unit of government, the Legislature must follow
12 the requirements for enacting a special law set forth in the Minnesota Constitution and in
13 state statute. The League specifically opposes the Legislature's technique of bypassing the
14 constitution by not naming the local government, but describing the local government in
15 such narrow terms that it can only apply to one entity.
16
17 SD-3. Redesigning and Reinventing Government (JO)
18 Issue: Every level of government is re-evaluating, reprioritizing, redesigning, and renewing its
19 organizational structure and programs in response to financial realities and citizens' needs and
20 problems. Reforms, however, must be more than change for the sake of change or a reshuffling
21 of existing programs to appease the electorate.
22
23 To be meaningful, reorganization and reassignments of governmental entities and services
24 should save money where feasible, deliver improved services, serve essential needs, and be
25 equitably structured. Cities have and will continue to re-evaluate city programs and services,
26 pursue the use of cooperative agreements, and consider organizational changes that provide
27 greater government efficiency and result in better service to citizens.
28
29 Response: The federal, state, and county governments should:
7
COMMITTEE RECOMMENDATIONS
1 . Ensure that in redesigning, reinventing or reassigning government services and
2 programs, the appropriate level of service to citizens is evaluated and citizen demands
3 and expectations are adequately addressed.
4 . Promote local efforts through incentives rather than mandates.
5 . Communicate and establish a process of negotiation before shifting responsibility for
6 delivering services from one level of government to another, or seeking to reduce
7 service duplication.
8 . Transfer authority for use of revenues dedicated to such programs or provide
9 appropriate and adequate alternatives.
10 . Identify and repeal programs or discontinue services that are no longer necessary, and
11 evaluate which services can readily and fairly be provided by the private sector.
12 . Employ existing government entities in redesign efforts rather than create new agencies
13 or units.
14
15 SD-4. City Costs for Enforcing State and Local Laws (AF)
16 Issue: Cities experience substantial costs enforcing state and local laws, particularly those
17 related to traffic, controlled substances, and incarceration of prisoners. The current method in our
18 criminal justice system of recovering costs for law enforcement and prosecution through fines is
19 insufficient to meet the costs incurred by local governments. Further, when a violator requests
20 relief from paying the full amount of the fine and surcharge, the courts have been more inclined
21 to waive the fine than to reduce the surcharge. When this occurs, the local units of government
22 recover no costs even though the city has incurred expenses.
23
24 Response: The Legislature should review this issue and adopt measures that provide for
25 complete reimbursement of the costs incurred by local governments in enforcing state and
26 local laws. For example, the Legislature should closely monitor whether local units of
27 government incur additional enforcement and/or prosecution costs as a result of the
28 recently reduced driving while intoxicated (DWI) threshold. The state should provide the
29 necessary funding to compensate local units of government for related cost increases.
30 Solutions that should be considered include:
8
COMMITTEE RECOMMENDA TIONS
"
1 . Increasing fine amounts.
2 . Removing or modifying county and state surcharges that conflict with cost recovery
3 principles.
4 . Requiring the courts to consider ordering restitution from the defendant to reimburse
5 the costs of enforcement and prosecution as part of any sentence based on ability to pay.
6 . Requiring that if a court reduces the amount paid by a violator, any reduction should
7 be made from the surcharge and not the fine.
8
9 SD-5. Responsibility for Locating Private Underground Facilities (AH)
10 Issue: Since 2006, citos have boen Cities are responsible for complying with major changes to
11 state pipeline safety regulations issued by the Minnesota Office of Pipeline Safety (MNOPS).
12 Under the regulations, cities are responsible for locating and marking private service laterals that
13 connect in the public right-of-way to city sanitary and storm sewer, water, and district heating
14 systems. Gities continuo to be concernod.
15
16 City concerns regarding abeffi the increased likelihood of damage to private service laterals
17 continue. During sewer and water service replacement and repair or when cable or fiber to the
18 premises (FTTP) are being installed. those underground facilities located on private property
19 during se'vvcr and viator sorvico replacement and '.",hen cable or fiber to the premises (FTTP)
20 facilities are being installed, are vulnerable to being hit or cut. particularly when horizontal
21 directional drilling (HDD) methods are used.
22
23 Response: Cities have made changes to local permitting requirements for installation of
24 service connections to city water mains and sewer systems. Some cities haye imposed
25 impose mapping and locating requirements for installation of private services. Cities have
26 also attempted to regulate_horizontal direction drilling to limit liability for cities and assign
27 responsibility to excavators for hits and damage by exesvsters to existing and newly
28 installed private underground facilities..Proper locates require that contractors accept
29 responsibility for damage and threats to public safety as a result of loss of service and
30 damage resulting from excavation activity. Private contractors working for builders,
9
COMMITTEE RECOMMENDATIONS
1 investor-owned utilities, telecommunications and other service providers must construct or
2 install underground utilities in compliance with local permitting, right-of-way management
3 ordinances and building code requirements.
4
5 Contractors operating HDD equipment should be required to be responsible for training
6 operators; maintaining logs regarding scope of work, contractor name, and materials
7 installed; and for any damage done to public or private property. In addition, property
8 owners in the excavation area should receive advance notice of any directional boring or
9 other excavation activities that could affect the quality of utility services. Notice must
10 include at least one phone number for assistance in case of any service problems.
11
12 When engaged in such projects within the public right-of-way, cities may require that HDD
13 contractors provide advance notice to the city or municipal utility of intent to use
14 directional drilling, and require them to expose all city utilities and private service laterals
15 that they cross or parallel. At meets, excavators should also be required to provide and
16 distribute copies to locators of documented written requests for locates, including a map.
17
18 Cities must also have discretion not to locate privately-owned laterals for which they have
19 no accurate locate records, and not be held responsible for actions by excavators when the
20 city determines not to locate such facilities. Excavators should be held responsible for
21 locating and protecting any private service lateral that is potentially impacted by
22 excavation activities conducted on private property beyond the public right-of-way. At a
23 minimum, cities and excavators should undertake reasonable efforts to share available
24 information regarding the location of such facilities.
25
26 Nothing in statute or rules should absolve contractors and excavators from liability and
27 damages as a result of their actions.
28
10
COMMITTEE RECOMMENDATIONS
1 SD-6. Utility Relocation Under Design-Build Road Construction (AF)
2 Issue: The Minnesota Department of Transportation (Mn/DOT) has promoted legislation relating
3 to the design-build construction process that would require private and public utilities to be
4 responsible for utility relocation necessitated by road construction. The policy, if enacted, would
5 create unanticipated costs for utilities owned and operated by cities. Municipally-owned utilities
6 would be unreasonably held to the same standards as privately-owned utilities that exist in the
7 public right-of-way.
8
9 Response: The League supports use of the design-build procedure; however, municipal
10 utilities that exist in the public right-of-way should not be penalized under this process.
11 Municipal utilities legitimately exist in the public right-of-way. When a Mn/DOT
12 construction project requires the relocation of utilities, the cost of relocating municipal
13 utilities should be shared equitably between the department and affected municipal
14 utilities.
15
16 SD-7. National Fire Protection Association (NFP A) Standards (AF)
17 Issue: The National Fire Protection Association (NFP A) is an international association of
18 individuals and trade and professional organizations that deals with fire and life safety. The
19 NFP A has advocated legislation that would mandate two standards: NFP A 1710, Organization
20 and Deployment o/Fire Suppression Operations, Emergency Medical Operations, and Special
21 Operations to the Public by Career Fire Departments, and NFP A 1720, Organization and
22 Deployment of Fire Suppression, Emergency Medical Operations, and Special Operations to the
23 Public by Volunteer Fire Departments. NFP A standards 1710 and 1720 define minimum
24 response times, minimum fire company staffing levels, initial full alarm response levels, and
25 extra alarm response levels. Although NFP A codes and standards are voluntary, they are often
26 adopted by local jurisdictions. NFP A standards 1710 and 1720 pre-empt local authority and
27 place a one-size-fits-all mandate on all cities.
28
29 Response: Levels of service delivery for fire and emergency medical services (EMS) have
11
COMMITTEE RECOMMENDA TIONS
1 always been determined by local jurisdictions. The NFP A has gone outside its authority in
2 proposing the national minimum response, operating, and staffing standards. If mandated,
3 the NFP A standards would force local governments to shift dollars from fire prevention
4 programs to fire suppression activities, potentially increasing the risk of fire and the
5 danger to local firefighters.
6
7 The League opposes any attempt to mandate standards for minimum staffmg levels of fire,
8 specialized or emergency medical services vehicles controlled by units of local government.
9 The League also opposes any attempt to adopt a standard dictating or affecting the
10 response time of any fire, specialized or emergency medical services vehicle.
11
12 SD-8. Ambulance Service Costs and Liability (AF)
13 Issue: The cost of providing ambulance care has increased steadily over the last several years
14 due in part to changes in Medicare reimbursement. The federal Balanced Budget Act (BBA) of
15 1997 made two significant changes to ambulance billing. First, the act mandated that all
16 ambulance services accept Medicare assignments as payment in full; that is, ambulance services
17 cannot bill the Medicare patient for any unpaid balance beyond the Medicare payment. Second,
18 the act mandated a uniform fee schedule that was implemented in April 2002. The new fee I
19 schedule significantly reduced reimbursement levels for many ambulance services. The BBA I
20 mandates are impactin~the ability of some Minnesota ambulance service providers to adequately
21 fund their operations.
22
23 The loss of revenue due to Medicare reimbursement changes, coupled with higher insurance
24 rates, is affecting the ability of many non-govemment-based ambulance service providers to
25 deliver emergency care, particularly in rural Minnesota. All ambulance services and personnel
26 are regulated by Minn. Stat. S 144E and must comply with the same licensing, training, and
27 equipment-related requirements, regardless of ownership. However, non-government-based
28 ambulance service providers are treated differently from government-based service providers in
29 terms of exposure to liability. While government-based ambulance service providers have
30 specific statutory caps on damages that limit their liability, non-government-based ambulance
12
COMMITTEE RECOMMENDATIONS
1 service providers are not protected by such caps. Consequently, non-government-based
2 ambulance service providers have experienced inordinate growth in their insurance rates.
3
4 Non-govemment-based ambulance service liability exposure is a concern for three reasons. First,
5 municipalities that contract for ambulance service may be required to purchase excess liability
6 coverage in order to protect non-government-based ambulance service providers against claims.
7 Second, it may discourage mutual aid agreements between government- and non-government-
8 based ambulance service providers. Finally, unlimited liability exposure threatens the existence
9 of small, non-government-based rural ambulance providers, which could leave large geographic
10 areas without any ambulance service and undermine emergency response to mass casualty
11 incidents.
12
13 In addition, the liability exposure of medical directors associated with ambulance service is a
14 concern. While medical directors of government-based ambulance services may arguably be
15 covered by public official immunity, the law is unclear and should be clarified.
16
17 Response: The League supports federal legislation that would:
18 . Require Medicare to set ambulance payment rates at the "national average cost" of
19 providing service.
20 . Require adequate reimbursement for ambulance providers.
21 . Establish a "prudent layperson" standard for the payment of emergency ambulance
22 claims such that if a reasonable person believed an emergency medical problem existed
23 when the ambulance was requested, Medicare would pay the claim.
24 . Make it easier for providers to file claims with Medicare by eliminating a processing
25 system that often leads to the rejection of legitimate reimbursement claims.
26
27 The League also urges the Legislature to extend the protection of the state and municipal
28 Tort Claims Act to, at a minimum, licensed third parties that contract with a municipality
29 to provide ambulance services. The League also supports insuring the applicability of
30 public official immunity to medical directors in the course of ambulance service activities.
31
13
COMMITTEE RECOMMENDATIONS
1 SD-9. Fees for Service (AF)
2 Issue: While general services-such as pennitting, inspections or enforcement-are typically
3 funded out of a city's general fund, cities often impose fees to cover the cost of providing certain
4 services, permits, and licenses.
5
6 The Legislature and interest groups often seek to mandate specific fee limitations for various city
7 services. Over the last several years, the Legislature has enacted a number of new laws designed
8 to rigorously control local fee-setting authority. Examples of such mandates inc.lude placing
9 limits on coin-operated amusement machine license fees, on-sale and off-sale liquor license fees,
10 license fees for retailers selling fireworks, and planning and zoning fees. The state also requires
11 cities that collect more than $5,000 in development-related fees each year to annually report all
12 construction and development fees to the Department of Administration. In addition, the
13 Legislature adopted a law defining "tax" to mean any fee, charge or assessment imposed by a
14 governmental entity. This provision requires that fees or charges which meet the definition of a
15 tax must be treated as a tax for all purposes.
16
17 Response: While the state has a role in providing a general, statewide funding policy, the
18 state should not interfere in the decision-making functions performed by cities when setting
19 city budgets to provide city services. The League seeks authority for cities to charge fees
20 that are reasonably related to the cost of providing the service, permit or license. The
21 League opposes legislation that would require specific methods to pay for city services or
'-
22 would place caps on city fees.
23
24 SD-IO. Providing Information to Citizens (10)
25 Issue: To keep the public updated and informed, state law requires local units of government to
26 publish various notification documents in newspapers, and often dictates which newspapers
27 receive cities' publication business. The number and variety of documents that are required to be
28 published and the costs of publication are burdensome. Technological advancements have
14
COMMITTEE RECOMMENDATIONS
1 expanded the ways government can provide infonnation to citizens. In many cases, these new
2 technologies are more efficient and cost effective.
3
4 Response: Cities should be authorized to take advantage of new technologies to increase the
5 dissemination of information to citizens and potentially lower the. associated costs.
6 Specifically, the Legislature should authorize local units of government to designate an
7 appropriate daily/weekly publication; elect alternative means of communication such as
8 city newsletters, cable television, and city web sites; and expand the use of summaries
9 where information is technical or lengthy. Additionally, the Legislature should eliminate
10 outdated or unnecessary publication requirements.
11
12 SD-ll. Contracting and Purchasing (el)
13 Issue: Minnesota statutes stipulate contracting and purchasing requirements for Minnesota cities.
14 The law prescribes the process political subdivisions must use to make purchases and award
15 contracts, and requires a competitive sealed bid procedure for contracts or purchases over
16 $50,000. The intent of these statutory requirements is to provide taxpayers with the best value for
17 their dollar and ensure integrity in the process. However, imposing these statutory requirements
18 may, at times, result in political subdivisions paying more for goods and services than private
19 entities under the same circumstances.
20
21 The Legislature recognized the benefits associated with alternative purchasing methods when it
22 amended municipal contracting law in 2004 to authorize the use of reverse auctions to purchase
23 supplies, materials, and equipment. Similarly, other contracting procedures, including "design-
24 build" and direct negotiation are proven alternatives to the formal bidding process. Authorizing
25 broader use of these types of alternatives would further streamline local contracting and reduce
26 cities' purchasing costs.
27
28 Response: The League supports broader use of alternative contracting and purchasing
29 methods that streamline the process and reduce local purchasing costs. Specifically, the
30 League supports authorizing cities to use the design-build procedure and providing
15
COMMITTEE RECOMMENDATIONS
1 municipalities with broader authority, similar to that of private businesses, to directly
2 negotiate contracts. The Legislature should establish a task force to review municipal
3 contracting laws, and consider contracting and purchasing reforms that give cities the
4 flexibility to provide quality goods and services at the lowest cost to taxpayers.
5
6 SD-12. City Enterprise Operations (10)
7 Issue: Historically, city enterprise operations have been created in response to community needs,
8 lack of a private market, financial reporting requirements, state and federal mandates, to enforce
9 state and local law, and to ensure a quality of life for the residents of a community. Establishing
10 an enterprise operation allows a city to provide a desired service while maintaining financial
11 control over service levels, costs, and public inputs.
12
13 In some cases, enterprise operations produce general public benefits and may require public
14 support to ensure a desired level of service at a reasonable cost. The benefits of an enterprise
15 operation, therefore, should be evaluated not solely in terms of profitability but also on the
16 service benefits to citizens of the community.
17
18 Response: The League supports the local decisions made by cities to deliver services by
19 establishing a city enterprise operation. The state should refrain from infringing on the
20 ability of a city to provide services for its community.
21
22 SD-13. Initiative and Referendum (AR)
23 Issue: The Legislature may consider legislation to establish initiative and referendum in state
24 election law bv proposing that proposes to place a question on the state general election ballot for
25 voter approval to amend the state constitution to provide for initiati';e and referendum allow state
26 laws to be initiated or repealed by submission of petitions which would cause such questions to
27 be placed on the state general election ballot.
28
16
COMMITTEE RECOMMENDATIONS
1 Re~ponse: Cities strongly support our representational system of governance, and therefore
2 oppose amending the state constitution to provide for initiative and referendum. The
3 Legislature is the appropriate governing body to consider and enact public policy that
4 reflects statewide interests.
5
6 The process of adopting state law based on good public policy is best upheld and supported
7 by increasing the accountability and responsiveness of the legislative process, not by
8 circumventing it. Presenting complex issues to voters in the guise of direct democracy
9 further weakens representative government.
10
11 A state constitutional amendment to provide for initiative and referendum subjects cities
12 and their residents and taxpayers to the unintended outcomes of such unwise attempts to
13 place those decisions into the hands of special interests that can raise unlimited funds for
14 the purpose of promoting their more narrow interests.
15
16 SD-14. Civil Liability of Local Governments (el)
17 Issue: One of the barriers to the delivery of governmental services and programs is the exposure
18 ofIocal governments and their officials to civil damage claims. The state has acted to protect
19 itself and its local governments by enacting exceptions and limitations to liability suits, and
20 authorizing self-insurance and other mechanisms to deal with claims allowed by law.
21
22 Response: The League supports:
23 . Creating an exception to municipal tort indemnification law, Minn. Stat. ~ 466.07,
24 where an employee is defended and indemnified for claims under a contract of
25 insurance carried by the employee.
26 . Extending the protection of the state and municipal Tort Claims Act to quasi-
27 governmental entities when performing public services such as firefighting or licensed
28 third-party ambulance providers that contract with a municipality to provide
29 ambulance services.
17
COMMITTEE RECOMMENDATIONS
1 . Existing constitutional safeguards for protecting public and private property interests
2 without any statutory expansion of property rights.
3 . Clarifying and maintaining the applicability of municipal immunity in various areas,
4 including, but not limited to, vicarious official immunity and park and recreational
5 immunity, including the extension to entities providing a public service that have not
6 traditionally been included within the immunity (e.g., state trails over municipal utility
7 easements ).
8 . Preserving recent changes to Minnesota's joint and several liability laws that require a
9 municipality to be at least 50 percent at fault to be held responsible for 100 percent of a
10 damage award.
11 . Reasonable limits on the amount and circumstances in which statutory attorney fees
12 may be awarded in order to encourage settlement by all parties and decrease the
13 likelihood of litigation.
14
15 SD-15.Private Property Rights and Takings (HN)
16 Issue: The Legislature has considered an increasing number of bills designed to diminish or limit
17 local governments' ability to exercise traditional planning, zonillg,and emillentdorrtaill
18 authority. In the wake of the U.S. Supreme Court's decision upholding the ability oflocal
19 governments to use eminent domain for economic development purposes, the Legislature
20 enacted significant restrictions on cities' use of eminent domain for economic development and
21 redevelopment, and imposed new compensation and procedural requirements that apply to all
22 condemnation actions, including those for traditional public uses such as roads, parks, and
23 schools. Legislation to control cities' abilities to perform regulatory acts-such as road rights-of-
24 way condemnation, shooting range zoning, and amortization-has also received strong support
25 from legislators. In addition, some legislators would like to authorize businesses to seek inverse
26 condemnation when a governmental entity enters the business market and provides competing
27 goods or services or limits the number of businesses that can operate privately or receive public
28 contracts. Finally, bills have been introduced to codify the property rights section of the
29 Minnesota Constitution.
30
18
COMMITTEE RECOMMENDATIONS
1 The League supports local govel11ments' ability to balance the rights of private landowners with
2 the interests of the public. The League, however, is concel11ed that aggressive efforts by property
3 rights advocates to limit local govel11ment authority, or require compensation for regulatory
4 actions that impact private property, will adversely impact cities in four ways.
5
6 First, such legislative initiatives threaten a wide array of planning, environmental, historic
7 preservation, and land conservation measures and undermine the fundamental responsibility of
8 cities to protect the public health, safety, and welfare of its citizens. Second, recent changes to
9 Minnesota's eminent domain statute create uncertainty in the law that will delay resolution of
10 condemnation cases, cost taxpayers more for public projects, and make it more difficult for cities
11 to assemble the parcels ofland needed to facilitate critical development and redevelopment
12 projects. Third, allowing businesses to seek inverse condemnation when a city provides
13 competing goods or services or limits the number of private operators would discourage cities
14 from undertaking public-private partnerships, such as organized collection of solid waste to
15 manage flow, address public safety concel11S, and minimize wear and tear on local infrastructure.
16 Fourth, if the Legislature acts to codify part ofthe Minnesota Constitution, an argument could be
17 made that the Legislature intended to create new causes of action against cities. This would
18 encourage more lawsuits and expose cities. to the expense of defending those cases.
19
20 Response: State law must continue to provide cities with the tools needed to balance the
21 rights of private property owners with the interests of the public. The League opposes
22 legislation that diminishes the ability of cities to act in the best interest of the health, safety,
23 and welfare of its citizens; that increases the cost of doing business for the public good; or
24 that creates the possibility of additional lawsuits against cities.
25
26 Specifically, the League opposes legislation that:
27 . Allows businesses to seek inverse condemnation when a city provides competing goods
28 or services, or limits the number of private operators.
29 . Creates an automatic cause of action for damages any time a local regulatory action
30 impacts the use or reduces the value of private property.
31
19
COMMITTEE RECOMMENDATIONS
1 The League supports legislation that:
2 . Authorizes cities to use eminent domain for economic development and redevelopment
3 projects that advance a greater public good that benefits the community.
4 . Empowers local elected officials to determine whether a particular taking of property
5 serves a public purpose.
6 . Creates incentives to encourage landowners to voluntarily sell their property to the
7 public for development or redevelopment.
8
9 SD-16. Sustainable Development (HN)
10 Issue: Minnesota cities spend significant time and resources planning for growth, development,
11 and redevelopmentthat will best serve the future needs oftheir citizens. Numerous factors are
12 considered as part of that process, but an area of increasing interest involves concepts often
13 categorized as "sustainable development". Minn. Stat. ~ 4A.07, subd.1 (b) defines this term, as it
14 pertains to local government, to mean "development that maintains or enhances economic
15 opportunity and community well-being while protecting and restoring the natural environment
16 upon which people and economies depend. Sustainable development meets the needs of the
17 present without compromising the ability of future generations to meet their own needs."
18
19 . Cities playa key role in fostering sustainable development and other conservation practices due
20 to their role in land use planning and zoning, stormwater and wastewater management, and local
21 economic development. Local governments can take a lead on these issues by choosing to
22 incorporate aspects of sustainable development into their local operations and facilities. They can
23 also develop local policies and regulations that support and guide individual and private
24 sustainability efforts. The ability of a city to affect these changes can, however, be restricted by
25 policies and requirements imposed by other levels of government.
26
27 Sustainable development initiatives can cover a wide range of issues, but share the benefit of
28 lessening the future environmental impacts of communities on the land, air, and water in their
29 area. Lakes, streams, rivers, wetlands, wildlife habitat, and other natural resources can be
30 protected and enhanced in quality through local efforts. Energy efficiency and renewable energy
20
,
COMMITTEE RECOMMENDATIONS
1 production reduce the energy demands of a community and the environmental impacts of energy
2 production. By more effIciently using public infrastructure and minimizing resource
3 consumption, the costs to individuals, business, and government can be reduced. New and
4 expanded business and job opportunities are also generated by the "green" products and services
5 needed to implement sustainable development initiatives. The ideal result of well-planned
6 sustainability and conservation efforts is a city that is more efficient in the use of its resources
7 and infrastructure, creates fewer environmental problems for future generations to address, and is
8 a more desirable home for residents and businesses.
9
10 Response: The League supports federal, state, and regional efforts to promote sustainable
11 development where the effectiveness of the proposed practice is supported by sound
12 science, and as long as those efforts do not supersede the authority of local governments to
13 determine their own policies regarding land use and related issues. Providing technical
14 assistance and financial incentives, and streamlining regulations to encourage local
15 governments and private property owners to engage in sustainable development practices,
16 as well as assisting in education and information efforts for the building industry and the
17 public, are the best means to generate successful results. These programs should focus on
18 outcomes, allowiIig flexibility inl10w to best meet those outcomes in different locations and
19 situations. The League opposes mandates that limit the authority of cities to determine
20 what practices will best meet the needs of their communities.
21
22 The League supports sustainable-development efforts that meet the above criteria,
23 including programs proposed in the following areas:
24 . Shifting public resources, services, investments, purchasing power, and procurement
25 toward more economically and environmentally sustainable outcomes where those
26 solutions are cost effective and appropriate.
27 . Using local land-use planning and zoning to protect and enhance limited natural
28 resources, and reduce the impacts of growth and development on local infrastructure.
29 . Promoting efficient and renewable energy sources.
30 . Encouraging sustainable building design, construction, and operation strategies focused
31 on integrated design, energy efficiency, water conservation, stormwater management,
21
COMMITTEE RECOMMENDATIONS
1 waste reduction, pollution prevention, indoor environmental quality, and the use of
2 low-impact building materials and products.
3 . Supporting sustainable economic development, such as brownfield clean-up, on-site
4 stormwater management, and sustainable business practices and technologies.
5
6 SD-17. Construction Codes (HN)
7 Issue: Each year, the Legislature addresses construction codes issues that have some impact on
8 local governments, such as statewide enforcement of the building code, disputes related to code
9 development, and code official training and education.
10
11 While all cities must enforce certain codes-such as the accessibility code, the electrical
12 code, and the bleacher safety code--the state's building code remains a local option for
13 cities under 2,500 population that are located in a non-metropolitan county where voters
14 have approved an exemption from the state building code and that did not adopt the code
15 before Jan. 1, lm 2008. Many greater Minnesota cities have adopted the state building
16 code, and all cities within the seven-county metropolitan area are required to adhere to the
17 state building code.
18
19 Legislation passed in 2008 now makes the state building code the standard that applies statewide
20 for the construction, reconstruction, alteration, and repair of the buildings and other structures of
21 the type governed by the code. The changes do not require enforcement by municipalities that
22 are not currentlv enforcing the code.
23
24 In the past, the Construction Codes Advisory Council (CCAC) and the Builders' Association of
25 Minnesota (BAM) have indicated an interest in legislation to require statewide enforcement of
26 the building code. The CCAC expired June 30,2003, but the re-establishment of the CCAC
27 during the 2007 session and changes made in 2008 could renew interest in statewide enforcement
28 of the building code.
29
22
COMMITTEE RECOMMENDATIONS
1 Disputes concerning code development have led to efforts to either repeal the International
2 Mechanical Code or create a new board with the authority to adopt, administer, interpret, and
3 enforce mechanical codes in Minnesota. Such proposals undercut efforts to adopt a single set of
4 compatible codes, which help provide for more efficient compliance, administration, and
5 enforcement of construction regulations.
6
7 While a single set of coordinated codes helps provide consistency in code administration and
8 enforcement, implementation of sustainable building design, construction, and operation does
9 not readily integrate with the existing state building and energy code system. As a result, many
10 cities are interested in adopting more aggressive local standards for sustainable development and
11 conservation.
12
13 Finally, the Legislature has directed the state Construction Codes and Licensing Division to
14 develop competency criteria and continuing education requirements for all construction code
15 inspectors. While the Legislature supports greater training and education requirements for local
16 code officials, it has, at the same time, redirected excess building permit surcharge dollars into
17 the general fund to help balance the state's budget rather than making these funds available for
18 code related research and training.
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 an
25 unfunded mandate. The enforcement of a building code can be cost prohibitive for many
26 cities due to the expenses and overhead related to staffing vs. the limited building activity
27 occurring in some communities.
28
29 The League supports adoption of a state building code as 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 under 2,500 population that are located in a non-
23
COMMITTEE RECOMMENDATIONS
1 metropolitan county where voters have approved an exemption from the state building
2 code and that did not adopt the code before Jan. 1, 19-+7 2008, unless the state fully funds
3 the costs of enforcement and inspection services necessary to enforce a statewide building
4 code. In the event that the Legislature requires an enforced statewide building code, local
5 governments must have the option to hire or select a building official of their choice and set
6 the appropriate level of service-even if the state fully funds code enforcement activities.
7
8 To the extent the insurance industry is concerned about insuring structures not built to
9 code, the industry should drive code compliance by issuing policies or setting rates based
10 on whether the structure meets various code requirements.
11
12 Cities that have adopted the state building code endeavor to provide quality code
13 administration and enforcement. The League supports the development of coordinated
14 construction codes and additional enforcement tools that help local officials efficiently
15 administer and enforce construction regulations to protect the health and safety of citizens
16 in their jurisdictions. In addition, the League urges the state to make surplus revenue from
17 the building permit surcharge available to local governments to help defray the cost of
18 complying with code official training and education requirements.
19
20 Finally, the state should collaborate with local governments, construction industry
21 representatives, and other stakeholders to review the building and energy codes and
22 consider modifications to encourage sustainable building design, construction, and
23 operation. The state should also develop components in the building inspector training
24 program to ensure inspectors are familiar with these practices and technologies. The
25 Legislature should authorize cities to experiment with more aggressive local standards for
26 sustainable development and conservation that will help inform the state code development
27 process.
28
24
COMMITTEE RECOMMENDATIONS
1 SD-18. Disability Access Requirements (HN)
2 Issue: Title II of the Americans with Disabilities Act (ADA) of 1990 requires that state and local
3 governments provide people with disabilities equal opportunity to benefit from all of their
4 programs, services, and activities. Public entities are not required to take actions that would
5 result in significant financial and administrative burdens, but they must modify policies,
6 practices, and procedures to avoid discrimination unless they can demonstrate that doing so
7 would fundamentally alter the nature of the service, program or activity being provided.
8
9 State and local governments are also required to follow specific standards when constructing
10 new facilities and altering existing public buildings, and they must relocate programs or
11 otherwise provide access in inaccessible older buildings. Under the ADA, public entities are not
12 necessarily required to make each existing facility accessible. However, their programs-when
13 viewed in their entirety-must be readily accessible to people with disabilities. A public entity
14 may achieve program accessibility through various methods. For example, a city may alter
15 existing facilities, acquire or construct new facilities, relocate a service or program to an
16 accessible facility, or provide services at other accessible sites.
17
18 In a recent district court decision, the court took an expansive view of disability access
19 requirements for public recreation facilities. The case involved a parent who sued a city due to
20 difficulty viewing soccer and baseball games on certain city fields. The court, in interpreting the
21 Minnesota Human Rights Act (MHRA), held that any public facility is a public service. Since
22 the MHRA requires that every public service be accessible to disabled persons, the court
23 concluded that each and every playing field and other public facility must be fully accessible.
24 The court .rejected the ADA's limitations on modifications for physical access to older facilities,
25 as well as the ADA's "when viewed in its entirety" language for program access. The result is a
26 more restrictive state standard for physical access to public facilities than required by the ADA
27 and the state building code.
28
29 Response: The League of Minnesota Cities supports changes to the MHRA that will make
30 state accessibility standards compatible with the federal ADA for public services and
25
COMMITTEE RECOMMENDATIONS
"
1 facilities. The Legislature should clarify that a facility that is in compliance with handicap
2 access provisions of the state building code meets the physical access requirements of the
3 MHRA. State law should also specify that access requirements apply to public programs
4 and services as a whole, rather than to each individual aspect of a public program or
5 service.
6
7 SD-19. Restrictions on Possession of Firearms on City Properties (AF)
8 Issue: The Minnesota Citizens Personal Protection Act limits the authority of police chiefs to
9 issue permits to carry handguns, and mandates that sheriffs issue permits to all applicants over
10 age 21 vv'ho have not been eonvicted of a serious crime or diagnosed \vith a mental illness. The
11 fret, also known as "conceal-and-carry," prohibits guns on most school properties and gives
12 private entities the right to prohibit guns in their establishments, but preserves the longstanding
13 law forbidding forbids other local units of government from restricting permit holders from
14 bringing prohibiting loaded firearms to public places on their properties. The inconsistencies in .
15 the law's treatment of different kinds of properties have caused confusion about how the law
16 applies to multi-use facilities, such as municipal ice arenas used for school-sponsored programs.
17 The recent shooting inthe MOITisonCounty Government Center also shows the hartl1 that cah
18 result from preventing local control of their own facilities.
19
20 Further, the law gives private property owners the right to prohibit guns in their establishments,
21 but prohibits landowners from restricting firearm possession by tenants and their guests without
22 distinguishing between residential and commercial properties. This creates confusion for
23 shopping malls and other retail properties with large common areas that are not occupied by the
24 tenants but which the tenants and their customers must cross to access the tenant's space.
25
26 Response: The League requests an amendment to the Citizens Personal Protection Act that
27 would allow cities to prohibit handguns in city-owned buildings, facilities, and parks. The
28 League is not seeking a repeal of the Citizens Personal Protection Act, nor authority to
29 prohibit legal weapons in parking lots or on city streets and sidewalks. The Lea2ue also
30 supports efforts bv commercial property owners to clarify that the prohibition on
26
COMMITTEE RECOMMENDATIONS
1 restricting possession by tenants and their guests applies only to residential rental
2 property.
3
4 SD-20. Creating a Minnesota GIS (AH)
5 Issue: Cities recognize geographic information systems (GIS) as an essential tool for
6 comprehensive land use, real estate, environmental, law enforcement and other laflEl management
7 and planning information. In fl'lffi'lY counties where, maintenance of official land records has not
8 been automated, vv'hich creates a barrier~ to GIS development continue. In addition, the start-up
9 costs of GIS implementation can be prohibitive. Cities and counties have increasingly found
10 more opportunities to cooperate in developing applicationsJor use of GIS at the 10calleveI.
11
12 Response: The Legislature should encourage local government implementation of GIS
13 through grants., and an exemption from the state sales tax for capital equipment and from
14 levy limits for costs associated with such activities. In addition, cities should be involved in
15 the development of county land records modernization plans.
16
17 SD;.;2 LPublicu Safety Communications { AF/AH)
18 Issue: The state role in financing public safety communications has important cost implications
19 for cities. The state needs to accept financial responsibility for use of the backbone by
20 participating cities. Cities are incurring new higher local expenses for participation in the 800
21 MHz statewide public safety system. In the past several years, the Legislature has turned to
22 revenue sources upon which cities have traditionally depended to help cover local costs of
23 purchasing and implementing new technology for computer-aided dispatch, 911 public safety
24 answering points (PSAPs) operations, and interoperable radio communications equipment and
25 subsystems to finance the build-out of the backbone for the new system. As a result of ~
26 previous legislative action, all ef the revenues raised during the next three years (2008 in 2008
27 through 201 O} from a 30-cent increase in the 911 fee will have been directed to fund revenue
28 bond debt service used to complete the statewide build-out of the Allied Radio Matrix for
29 Emergency Response (ARMER) statevv'ide build out and the cost of operations of the state public
27
COMMITTEE RECOMMENDATIONS
1 safety radio communications backbone,,:, making it possible for the state to accept financial
2 responsibility for the use of the backbone by participating cities.
3
4 At the federal level, the Federal Communications Commission (FCC) has recently ordered
5 (Aug. 10, FCC Second Report and Order in the 700 MHz proceeding) reservation of 700 MHz
6 wireless spectrum for a national interoperable broadband network to meet public safety
7 communications needs. But, to date, no successful proposal for development of such public
8 safety uses has been offered.
9
10 Response: The League supports actions at the state lcyel to continued and increased state
11 financing of the steep increases in local costs to participate in ARMER. includinl! the
12 acquisition and modernization of statc'.vide public safety cammunications infrastructure
13 aBEl subscriber equipment, such as portable and mobile radios required for ARMER users,
14 and to providc incentives that encourage regional cooperation and partnerships for the
15 effective delivery of 911 service. In doing so, the Legislature should insist on direct
16 involvement and participation of cities and other loeal jurisdictions and in the regional
17 planning process for future 911 operations and training and use of ARMER. The League
18 also urges the FCC to continue to support availability of wireless spectrum necessary to
19 expand channel capacity that will allow public safety agencies to meet future needs of cities
20 and other local units of government.
21
22 SD-22. CriMNet (AF)
23 Issue: Public safety is compromised by the lack of centralized, complete, and accurate criminal
24 history data about individuals, incidents, and cases. Without an integrated criminal justice
25 information system, Minnesota cannot always hold serious criminals accountable for their
26 crimes. CriMNet, Minnesota's effort to integrate the l, 1 00 criminal justice information systems
27 operated by agencies at all levels, will improve access to relevant criminal history data for public
28 safety and criminal justice authorities.
29
28
COMMITTEE RECOMMENDATIONS
1 City officials are well aware of the complex issues raised by the utilization of electronic record
2 keeping, data sharing, and access to records that identify data subjects. The League recognizes
3 that one of the challenges in making CriMNet operational is meeting the requirements of the
4 Minnesota Government Data Practices Act (MGDP A).
5
6 More than 500 cities operate police departments. These departments vary dramatically in fiscal
7 capacity, staffing resources, and technical expertise. Further, each municipal law enforcement
8 agency has unique operating procedures, strengths, and needs based on the community it serves.
9 The League knows CriMNet will have a significant impact on municipal police business
10 practices, and could mean increased staffing needs, training, and equipment purchases. The
11 League also recognizes that every agency must participate fully in CriMNet to make the system
12 effective.
13
14 Response: The League supports efforts by the state to integrate criminal justice
15 information systems. The League also supports cooperation between legislators, law
16 enforcement and corrections agents, court officials, prosecutors, community groups, and
17 businesses that build public support for CriMNet.
18
19 If CriMNet is to be implemented statewide, the Legislature must consider the different
20 capacities of municipalities to participate. The League requests thatthe Legislature fund
21 CriMN et planning and implementation at the local level.
22
23 To ensure compliance with the MGDPA, comprehensive guidelines and operational
24 practices should be implemented to safeguard access to and use of CriMNet data. However,
25 data practices policies should not create new, unfunded mandates for local units of
26 government or compromise CriMNet's usefulness to the criminal justice system by creating
27 unnecessary barriers. CriMNet stakeholders and participating users at the local level
28 should be involved in crafting any legislation that would govern data practices
29 requirements for CriMN et.
30
29
COMMITTEE RECOMMENDATIONS
1 SD- 23. Pawn Shop Regulation and Use of the Automated Pawn System
2 (APS) (AF)
3 Issue: Minn. Stat. 325J enables licensure for pawnbrokers and provides statewide minimum
4 regulations for the pawn industry. Specifically, the law:
5 . Requires pawnbrokers to record all transactions, including details of the item pawned or sold,
6 information about the customer and the cost of the transaction.
7 . Requires pawnbrokers to maintain records of all transactions for three years, and to make
8 records available upon request to law enforcement agencies.
9 . Allows pawnbrokers to charge a maximum monthly interest rate of 3 percent of the principal
10 amount loaned in a transaction, plus a reasonable fee for storage and services.
11 . Allows local units of government to enact more restrictive standards.
12
13 The Automated Pawn System (APS), a computerized system for tracking and monitoring pawn
14 transactions, was launched by the city of Minneapolis in 1997 and made available to other
15 municipalities after Minn. Stat. 325J was enacted. The purpose of the APS is to provide a tool to
16 verify compliance with current law, to help identify and minimize illegal activity, to recover
17 stolen property, and to provide a legitimate environment for consumers. Currently, almost 180
18 municipal law enforcement agencies participate in the APS system as either a "query only" or
19 "contributing" member.
20
21 All access to and use of information in the APS system is governed by the Minnesota Data
22 Practices Act. Only authorized users have access to the data. There is no public access to the
23 data. Further, data that would reveal the identity of persons who are customers of a licensed
24 pawnbroker or secondhand goods dealer are private data on individuals and only used for law
25 enforcement purposes. Data describing the property in a regulated transaction with a licensed
26 pawnbroker or secondhand goods dealer is public.
27
28 Original pawn and secondhand transactions reported to the APS carry a $1 fee, regardless of the
29 number of items involved. All subsequent updates or corrections to transactions are processed
30
COMMITTEE RECOMMENDATIONS
1 without charge. Contributing jurisdictions may also add regulatory costs to the transaction fee.
2 The total transaction fee is then typically assessed by the dealer to the customer.
3
4 A bill that would weaken Minn. Stat. 25J and restrict the use of the APS has been introduced in
5 the Minnesota Legislature. Specifically, the legislation would forbid law enforcement agents
6 from acquiring customer infoTInation from pawn and secondhand shops until they have probable
7 cause to do so, and would eliminate the authority oflocal units of government to more strictly
8 regulate pawn and secondhand dealers. The legislation would also replace all current municipal
9 licensing fees with a $0.25 per transaction fee.
10
11 Response: The League supports the authority of cities to regulate and license pawnbrokers,
12 and opposes any legislation that would remove the authority of local governments to enact
13 more restrictive regulations than currently exist in Minn. Stat. 325J.
14
15 The League supports the authority of cities to set licensing and transaction fees that would
16 enable them to recover their full regulatory and enforcement expenses.
17
18 The League supports coopera:tionbetvVeen law enforcemenfagencies and the pawn
19 industry that enhances the ability to identify illegal activity and recover stolen property.
20 Access to transaction information by law enforcement agencies is vital to accomplishing
21 this goal. Further, the sharing of information through the use of the APS is a proactive way
22 to prevent property and other crimes.
23
24 SD 24. EmergcncylVlanagemcnt A.ssistance Compaet (GC)
25 Issue: The State of Minnesota, along \vith all other states, participates in the Emergency
26 Management Assistance Compact (EMAC). The intent ofEM.'\.C is to provide an orderly and
27 uniform mechanism through which states can provide assistance to each other in disasters. The
28 EM.^..C system is coordinated by the EMAC Committee ofthe National Emergency Management
29 Association (1'lEMA),.
30
31
COMMITTEE RECOMMENDATIONS
1 EMAC specifics that when a state sends emergency assistance to another statc, the rcsponding
2 state' s cmployees are considered to bc agcnts of the requcsting statc for purposes of liability and
3 immunity. EM/\C also provides that a state and the state officers and employees providing
4 assistance are not liable for any good faith act or omission 'vvhile providing interstate emergency
5 assistance pursuant to EM/\C.
6
7 \Vhile the EMAC system contemplates that local governments 'Nill playa role, the compact itself
8 (Minn. Stat. 192.89 in Minnesota) docs not address the status oflocal governments and their
9 employees \vhen providing inter state assistanee. j\s a result, the current EM.^...C arrangement
10 could expose participating local go';ernments to potential liability.
11
12 Response: The League supports legislative and/or administrative changcs to eliminate
13 barriers and disincentives to local governments that are willing to pnr;ide disaster
14 assistance in other states through thc EMl'..C system. The state should take all steps Reeded
15 to extend to loeal governments and lecal government effieers and employees the same
16 liability preteetiens and immunities as arc provided to the state and state employees under
17 EM.:'...C.
18
19 SD-25. Compensation and Reimbursement for Public Safety Services (AF)
20 Issue: Municipal public safety personnel often respond to emergencies involving non-residents.
21 For example, municipal fire, police, and/or ambulance services may be dispatched to the scene of
22 a traffic accident on an interstate highway involving victims from other cities or states. Although
23 cities can bill for some public safety services they provide to non-residents, they have limited
24 authority to collect on unpaid bills.
25
26 Cities have also found that auto insurance policies vary when it comes to coverage for
27 emergency responses. Insurance companies of those responsible for accidents sometimes deny
28 payment for fire and ambulance service.
29
32
COMMITTEE RECOMMENDATIONS
1 While emergency responses are legitimate functions of municipal public safety departments, the
2 costs of providing services to non-residents should not be borne by the community's taxpayers.
3
4 Response: Cities should be compensated for emergency responses they provide to non-
S residents. They should have the authority to bill for the full cost of fire and ambulance
6 services they provide, and to collect on unpaid bills. Finally, minimum auto insurance
7 policies should be required to insure for the cost of emergency responses.
8
9 SD-26. Administrative Fines (AF)
10 Issue: Cities have implemented administrative enforcement programs for violations of local
11 regulatory ordinances, such as building codes, zoning codes, health codes, and public nuisance
12 ordinances. This use of administrative proceedings has kept enforcement at the local level and
13 reduced pressure on over-burdened district court systems.
14
15 The Legislature has repeatedly increased the fine surcharge on district court cases to generate
16 revenues for the state's general fund. The surcharge-the amount paid over and above the fine-
17 is now $+275 per citation. The growth in the surcharge has dramatically increased the cost of
18 citations and has caused some to question whether the total of the fine and surcharge is
19 disproportionate for minor matters. To lower the amount imposed on their residents, a number of
20 cities have expanded their administrative programs to include some offenses traditionally heard
21 in district court, such as minor traffic offenses.
22
23 The increased state surcharges have not been used to assist local units of government with the
24 growing costs of enforcement and prosecution. No matter which entity~city, county or state--
25 issues a statutory citation, the violator pays between $115 and $127 for a minor speeding
26 violation. Of this amount, the city receives between $13 and $20, and the county receives just
27 slightly more.
28
33
COMMITTEE RECOMMENDA TIONS
I Further, when a violator requests relief from paying the full amount of the fine and surcharge, the
2 courts have been more inclined to waive the fine than to reduce the surcharge. When this occurs,
3 the local units of government recover no costs even though the city has incurred expenses.
4
5 Response: The League supports the use of city administrative fines for local regulatory
6 ordinances, such as building codes, zoning codes, health codes, and public nuisance
7 ordinances. The League also supports the use of city administrative fines, at a minimum,
8 for regulatory matters that are not duplicative of misdemeanor or higher level state traffic
9 and criminal offenses. Cities should have the authoritv to issue administrative citations for
10 low-level moving and equipment violations that: 1) would otherwise result in warnings.
11 and 2) occur on roadways where the speed limit is 45 miles per hour or less. Further, the
12 League endorses the concept that administrative penalty hearings should be held before
13 disinterested third parties, which may include city councils, to ensure fairness in the
14 proceedings.
15
16 If state leaders enact legislation that prohibits cities from using administrative fines for
17 minor traffic offenses, they should also change the distribution of statutory violation fine
18 revenues so that cities are adequately compensated for enforcement and prosecution costs.
19 Finally, the state should require that if a court reduces the amount paid by a violator, any
20 reduction should be made from the surcharge and not the fine.
21
22 SD-27.Homeland Security Costs and Liability (AP)
23 Issue: The federal government's response to terrorism has resulted in new responsibilities for
24 local governments in a number of areas. For example, shortly after the terrorist attacks on Sept.
25 11,2001, the federal government tapped local law enforcement personnel to provide security and
26 perform screening at our nation's airports. These new responsibilities increase cities' liability
27 exposure and result in higher local costs for public safety services. In addition, local
28 governments are expected to continue emergency planning and capacity building efforts, provide
29 additional training and equipment for first responders, and improve emergency response
30 coordination and communication.
34
COMMITTEE RECOMMENDATIONS
1
2 As partners in protecting our country from terrorism, the federal government must: 1) provide
3 greater direct financial support for our first responders; 2) maintain funding for general pre- and
4 post-disaster emergency management programs; and 3) ensure a coordinated and effective
5 national emergency response system.
6
7 Response: The League recommends that when the federal government requires or
8 contracts for cities' assistance in meeting federal homeland security responsibilities, the
9 federal government should fully cover the costs, including the risk of liability arising from
10 these activities.
11
12 The League supports greater federal funding to prepare, train, and equip our first
13 responders. We also support changes in the federal funding process to ensure Department
14 of Homeland Security funds move quickly to the local level.
15
16 SD-28. Immigration Reform (AF)
17 Issue: The United States and the. State of Minnesota have long traditions of welcoming
18 immigrants. Immigrants strengthen Minnesota by contributing to the state's economy, enhancing
19 cultural resources, and participating in efforts to build strong communities.
20
21 According to the National League of Cities, roughly 35 percent of undocumented immigrants
22 have lived in the United States for 10 years or more. Approximately 1.6 million undocumented
23 immigrants are children, and another 3.1 million children in the United States have at least one
24 undocumented parent. These families are forced to live "underground" and are unable to get
25 drivers' licenses or car insurance in most states. In addition, they are unlikely to obtain health
26 insurance and are afraid to report crimes to local law enforcement.
27
28 Since immigrants are barred :from most federal public assistance, the burden of providing social
29 services, education, and health care falls to state and local governments that are increasingly
30 feeling the financial impact of both legal and illegal immigrants living in their communities.
35
COMMITTEE RECOMMENDATIONS
1
2 Re~ponse: The League of Minnesota Cities, together with the National League of Cities,
3 urges Congress to move quickly to enact and enforce effective immigration laws.
4
5 Federal and state governments must not transfer responsibility for enforcing U.S.
6 immigration laws to local personnel, including police officers, firefighters, educators, health
7 professionals, and social service employees. Finally, federal and state governments must not
8 prohibit local units of government from implementing policies aimed at fostering positive
9 relationships between local government officials, including law enforcement personnel, and
10 immigrant communities.
11
12 SD-29. Racial Profiling (AF)
13 Issue: The League recognizes that where profiling by law enforcement officials exists, it must be
14 eliminated. The League supports action by the State of Minnesota to fund and implement
15 effective and meaningful responses to racial profiling that WIll effectuate fair treatment of all
16 people regardless of age, race or ethnicity.
7
18 Response: The League supports efforts to ensure that all interventions initiated by law
19 enforcement officials be based on an objective demonstration of probable cause to believe
20 that a law has been violated. A law enforcement official's decision to stop, question or
21 detain individuals will he based solely on a reasonable suspicion of illegal activity and
22 without consideration of age, race or ethnicity. The League supports training programs to
23 support these goals and recommends that the state develop, fund, and present such training I
24 programs to all law enforcement agencies in the state.
25
26 The League supports objective, well-formulated statistical sampling by third parties under
27 the auspices of a state-funded study to document and. analyze law enforcement
28 interventions, coupled with an effective means to sanction any documented instances of
29 inappropriate treatment of citizens. Additionally, the League supports state funding for
30 video cameras in police cars as an incentive for voluntary local participation in data
36
COMMITTEE RECOMMENDATIONS
1 collection efforts aimed at identifying patterns of profiling.
2
3 SD-30. Legalization of Fireworks (AF)
4 Issue: In 2002, the state enacted a law allowing the sale and use of non-aerial, non-explosive
5 consumer fireworks, including sparklers, party poppers, snakes, and other novelty items-
6 relaxing the ban on consumer fireworks in place in Minnesota since 1941. In 2008, the
7 Legislature further relaxed the ban by increasing the amount of explosive material allowed in
8 legal fireworks.
9
10 Local fire service professionals have reported that consumers and law enforcement personnel
11 have had difficulty distinguishing between legal and illegal fireworks, and that the 2002 law
12 resulted in greater use in Minnesota of illegal fireworks purchased in other states.
13
14 According to data provided by the Minnesota State Fire Marshal Division, injury trends and
15 dollar losses related to fireworks incidents surged after the consumer fireworks ban was lifted.
16 Hospital reports reveal that the annual number of injuries caused by fireworks rose dramatically
17 in 2002 and remains elevated. Likewise, Minnesota Fire Incident Reporting System records show
18 that the annual dollar loss resulting from fireworks incidents increased significantly in 2002 and
19 has since grown.
20
21 In 2003, the state enacted a number of provisions limiting local authority pertaining to fireworks
22 sales. The 2003 law caps the allowable municipal permit fee at $100 per vendor selling fireworks
23 with other products, and $350 per vendor selling fireworks exclusively. The law restricts cities
24 from requiring fireworks sellers to purchase additional liability insurance. Finally, the 2003 law
25 states that cities cannot prohibitor restrict the display of consumer fireworks if the display and
26 structure complies with National Fire Protection Association (NFP A) Standard 1124. The NFP A
27 is a private international association of individuals and trade and professional organizations.
28 (NFP A Standard 1124 is not a public document and is available only for a fee.)
29
37
COMMITTEE RECOMMENDATIONS
1 Fireworks products can cause serious injuries and fire loss. The legal sale of consumer fireworks
2 undeTInines fire prevention efforts. The sale and use of consumer fireworks increases local public
3 safety enforcement, emergency response, and fire-suppression costs.
4
5 Response: The League opposes legislation that would further relax the ban on the sale and
6 use of consumer fireworks. The League supports a repeal of the 2002 law that relaxes the
7 ban on the sale and use of consumer fireworks.
8
9 Fees are needed to cover the costs associated with compliance checks, education, and
10 inspections relating to the sale of a regulated product. The current fee caps do not allow
11 cities to recover these costs. The League supports allowing cities to establish and impose
12 reasonable fees on retailers that sell fireworks. The League opposes restrictions on
13 requiring fireworks retailers to purchase additional liability insurance. Finally, the League
14 seeks repeal of the NFP A reference.
15
16 SD-31. Traffic Enforcement Cameras (AF)
17 . Issue: Drivers who disobey traffic laws can cause serious traffic accidents and contribute to
18 gridlock. In spite of the severity ofthis problem, cities cannot always afford the levels of peace
19 officer enforcement that residents demand. The technology exists to enforce traffic laws with
20 photographic evidence. For example, there is less running of red lights when motion imaging
21 recording systems (MIRS) are installed at traffic signals.
22
23 Response: Local law enforcement agencies should have the express authority to use photo
24 enforcement technology to enforce traffic laws. Local law enforcement officers should have
25 the express authority to issue citations for traffic violations by mail where the violation is
26 detected with photographic evidence.
27
38
COMMITTEE RECOMMENDATIONS
1 SD-32. Fire Mutual Aid (A F)
2 Issue: City and township fire depatiments regularly assist each other with firefighting and other
3 response activities. This mutual aid is mostly authorized by individual written contracts with
4 each city or township, which results in a patchwork of different agreements with different
5 provisions. Often, each city attorney recommends different provisions.
6
7 Following the Red River floods and the St. Peter tornados, emergency responders (including fire
8 departments) met and helped pass a statute to govern mutual aid situations when there is an
9 emergency (declared by mayor or governor) and no written agreements. The statute, Minn. Stat.
10 12.331, provides a framework for how worker's compensation, liability, property claims,
11 insurance, and charges between the departments will be handled in mutual aid situations.
12
13 The League of Minnesota Cities Insurance Trust (LMCIT) developed a model mutual aid
14 agreement that contai~s the same basic structure for liability as the statute. Many cities have
15 entered into area-wide mutual aid agreements that are similar to the LMCIT model agreement.
16 To provide uniformity, there should be a statute that is similar to Minn. Stat. 12.331, to govern
17 dailyUliremufiial ciidsituati()Il.s thaf d()rl()frise t()thelevd of emergenCies.
18
19 Response: The Legislature should pass a statute to provide uniform provisions when fire
20 departments assist each other. These provisions should include statutory definitions and
21 clarifications for:
22 . Who is in command of the mutual aid scene.
23 . Who will cover the firefighters for worker's compensation.
24 . How liability and property claims will be handled.
25 . Who will pay for expendable supplies such as foam.
26 . When fire departments will charge each other for these services.
27 . The ability for fire departments to opt out by having a separate written agreement.
28
39
COMMITTEE RECOMMENDATIONS
1 SD 33. Dangerous Dogs (AF)
2 Issue: When a dangerous dog poses a threat to public safety, immediate action by an animal
3 control authority may be necessary. Although Minn. Stat. sections 317.10 through 317.56 clearly
4 define and regulate dangerous dogs, the lmv is silent v:ith regard to 'vvho designates a dog as
5 dangerous. The law also lucks a provision pertaining to duc process rights for the o'vvner of a
6 dangerous dog. The absence of these pro':isions limits the ability of animal control authorities to
7 protect communities from dangorous dogG.
8
9 Response: The dangerous dogs statute should dearly state that the animal control authority
10 is the designating authority. Further, the statute should contain a detailed process far dog
11 owners who want to appeal the designation. The process should'preserve the rights of the
12 dog owner while protecting the public.
13
14 SD-34. Operation of Motorized Foot Scooters (AF)
15 Issue: Current state statute pre-empts the authority oflocal units of government to regulate the
16 operation of motorized foot scooters. The Jaw provides that an operator mustbe 12 years of age
17 or older. Although the law contains safety provisions, including a requirement that operators
18 under the age of 18 must wear helmets, it does not require training or permits for operators of
19 any age. Further, it does not explicitly restrict the operation of motorized foot scooters to low-
20 volume and/or low-speed roadways.
21
22 Use of motorized equipment on roadways is inherently more dangerous than the use of non-
23 motorized bicycles and is comparable to the operation of motorized watercraft. While the law
24 governing watercraft operation also requires an operator to be at least 12 years of age, Minn.
25 Stat. 86B.1O 1 requires watercraft operators between the ages of 12 and 18 to successfully
26 complete a youth watercraft safety program and to obtain a watercraft operator's permit. The
27 youth watercraft safety program is administered by the state, and includes a personal watercraft
28 educational course and a testing program that emphasizes safe and legal operation.
29
40
COMMITTEE RECOMMENDATIONS
1 Re~ponse: State law should limit operation of motorized foot scooters to roadways with
2 speed limits of 30 miles per hour or less. State law should require motorized foot scooter
3 operators between the ages of 12 and 18 to obtain an operator's permit by successfully
4 completing a state-administered motorized foot scooter safety program modeled after the
5 watercraft safety program. In addition, state law should allow local units of government to
6 be more restrictive in regulating the operation of motorized foot scooters, and should
7 provide explicit authority to regulate hours of use.
8
9 SD-35. Methamphetamine (10)
10 Issue: The production and abuse of methamphetamine (meth) continues to be a problem for
11 communities across Minnesota. Cities are facing serious issues pertaining to meth, including
12 costly cleanup of drug labs, and the social problems and public safety issues resulting from meth
13 abuse. To meet the challenges presented by the growing meth problem, cities are working with
14 retailers to monitor the sale of precursor ingredients, and are coordinating with other units of
15 government on the impact on communities.
16
17_ Response:TheLegislature-and state agencies must:
18 . Provide sufficient funding to assist local units of government with cleanup of drug labs.
19 . Allow local governments to be more restrictive in the development of ordinances at the
20 ' city and county level to appropriately address the needs of their communities.
21 . Support public education on methamphetamine, including information to local
22 government officials, retailers, schools, and health care providers.
23 . Provide training, equipment, standards, and support sufficient to allow local law
24 enforcement and other responders to safely perform their duties.
25
26 SD-36. State Regulation of Massage Therapists (AF)
27 Issue: The state does not currently regulate massage therapy, an emerging and rapidly growing
28 profession. In order to control prostitution and to provide for health and sanitation standards,
29 several cities have entered the traditional state domain of health-care licensure by enacting
41
COMMITTEE RECOMMENDATIONS
1 ordinances that require all massage therapists to obtain a local professional license. These
2 ordinances allow local law enforcement officers to differentiate between legitimate massage
3 therapists who have a city license, and prostitution businesses fronting as massage therapy
4 establishments.
5
6 The lack of statewide regulation of massage therapists has hampered law enforcement techniques
7 and caused problems for cities attempting to regulate an entire health-care profession without
8 any statewide standards. Currently, 25 states regulate massage therapists on a statewide level.
9 Statewide regulation of massage therapists would provide a clear set of educational standards
10 that massage therapists must meet, and would provide local law enforcement agencies with an
11 easy tool to distinguish between prostitution and legitimate massage therapy. Statewide
12 regulation would not disturb traditional powers over land use and business licensure.
13
14 Response: The League supports the statewide regulation of massage therapists in order to
15 aid local law enforcement efforts to control prostitution and other criminal activity.
16
17 SD-37. On-Sale Liquor or Wine Licenses to Cultural Centers (JO)
18 Issue: Cultural centers are not one ofthe qualifying entities to which municipalities may issue
19 on-sale liquor or wine licenses. Several cultural centers have received special legislation that
20 allows their municipalities to issue on-sale liquor or wine licenses to them. This practice
21 interferes with the ability of municipalities to control the placement and operating manner of
22 these entities. In 2003, performing theaters were added to the list of establishments to which
23 municipalities may issue on-sale liquor or wine licenses, but cultural centers were not included.
24
25 Response: The Legislature should authorize municipalities to issue on-sale liquor or wine
26 licenses to cultural centers, subject to restrictions imposed by the municipality.
27
42
COMMITTEE RECOMMENDATIONS
1 SD-38. Youth Access to Alcohol and Tobacco (10)
2 Issue: The minimum age to purchase alcohol in Minnesota is 21. The minimum age to purchase
3 tobacco in Minnesota is 18. The minimum age to sell alcohol and tobacco products in Minnesota
4 is 18. The penalty for a minor or underage person using false identification is 90 days in jail
5 and/or up to $1,000. Cities have an interest in preventing youth from obtaining these products.
6 To this end, many cities operate compliance check programs in an effort to discern the current
7 level of youth access and to reduce youth access. Statewide, a number of cities have created
8 community partnerships with their court systems, local businesses, and school districts to quickly
9 address problems associated with youth access to alcohol and tobacco.
10
11 Response: The League opposes any proposal that could result in increased risks of youth
12 access to alcohol and tobacco products and expanded off-sale venues for the sale of such
13 products. The League supports the sale of alcohol and tobacco products only in controlled
14 environments. The League supports statutory changes that assist in reducing youth access
15 to alcohol and tobacco products, including increasing the penalties for youth who use false
16 identification and adults who provide alcohol to minors. The League supports locally-
17 -determinedalcol101 compliance check programs, but any state mandate for alcohol
18 compliance checks should come with state-supported funding initiatives to support these
19 locally-determined compliance efforts. The Legislature should consider a grant program
20 supporting locally-based community partnerships that can quickly and effectively respond
21 to youth access problems.
22
23 SD-39. Smoking Ban Ordinances (10)
24 Issue: The Legislature in 2007 voted to extend the Clean Indoor Air Act to cover all workplaces,
25 including restaurants and bars. The new law sets a floor with minimum standards, and allows
26 local governments to implement more restrictive ordinances.
27
28 Response: The Legislature should preserve the ability of local governments to enact more
29 restrictive ordinances.
43
COMMITTEE RECOMMENDATIONS
1
2 SD-40. Environmental Protection (eJ)
3 Issue: Cities demonstrate strong stewardship for the protection and preservation of the
4 environment. Minnesota municipalities have historically been the leading funding source for
5 environmental protection and improvements. Municipal efforts include environmental protection
6 through wastewater treatment, wetland restorations, stormwater treatment, public utility emission
7 reductions, brownfield cleanup, safe drinking water programs, as well as others.
8
9 At some point, however, the diminishing or nonexistent environmental benefit received from
10 additional efforts is fiscally irresponsible. The programs are often improperly designed to meet
11 their stated goals. Additionally, the absence of funding by the state and federal government has
12 removed an essential restraining feature in program design and implementation. Agencies are
13 less accountable to the governments that mandate environmental programs when they do not
14 have to find the money to implement the programs.
15
16 Specific problems faced by cities include:
17 .. N ewprograms or standards are continually adopted without regard to the existence,
18 attainability or cost of existing programs and standards. i
-19 . Regulatory bodies fail to consistently use good science and the most current and accurate I
20 data when establishing water quality standards. I
21 . Regulatory bodies impose new permit requirements without going through rulemaking.
22 Instead, the agencies rely on internal documents, program strategies, and "best professional
23 judgment of staff' when setting permit criteria.
24 . Regulatory bodies approve permits and programs that compete with traditional municipal
25 services and encourage urban sprawl. This behavior puts at risk the public investments and
26 growth management efforts cities have made when planning for future development.
27 . Permit fees and other cost-transfer elements of federal and state programs do not provide an
28 incentive for environmental agency efficiency, policy prioritization or risk assessment.
44
COMMITTEE REC.OMMENDATIONS
1 . Third-party environmental advocacy groups create significant hardships on cities by
2 threatening litigation even when hard science may not support the groups' positions.
3
4 Response: Alternative wastewater treatment and cooperative service systems should be
5 prohibited from operating in areas that can reasonably and effectively be served by
6 existing municipal systems, unless:
7 . The municipal system is proven to be substantially less cost-effective and substantially
8 less beneficial to the environment.
9 . The operation of these systems will not create a stranded public investment in the
10 existing system.
11
12 Sufficient state and federal financial assistance should be provided to assist local
13 governments when complying with state and federal infrastructure requirements,
14 particularly with regard to wastewater, stormwater, and drinking water facilities.
15
16 The Minnesota Pollution Control Agency (MPCA) should streamline its permitting and re-
17 issuing processes to allow for effluent standards and permit requirements to be known
8 earlier, thereby giving communities more time to defend against contested case hearings.
19
20 The Legislature should require the MPCA to make its determination regarding the
21 reissuance of a permit within a reasonable set time period, and require the MPCA to
22 reissue the permit within a reasonable set time frame.
23
24 The state should ensure townships are required to meet the same environmental protection
25 and regulatory requirements as cities.
26
27 Legislation should be passed that requires state agencies to establish permit requirements
28 only when the criteria they are using is developed through the rule-making process.
29
30 State agencies need to develop science-based standards and quantify new effluent
31 standards, ensuring that they are scientifically and economically practicable.
45
COMMITTEE RECOMMENDATIONS
1
2 SD-4L Impaired Waters (Cl)
3 Issue: Despite the billions of dollars that Minnesota municipalities have invested and continue to
4 invest in wastewater and stOTInwater management systems and best management practices to
5 protect, preserve, and restore the quality of Minnesota's surface waters, the quality of some of
6 Minnesota's surface waters does not meet federal water quality requirements. The federal Clean
7 Water Act requires that further efforts be made by the state to reduce human impacts on surface
8 waters that are determined to be impaired due to high pollutant loads of nutrients, bacteria,
9 sediment, mercury, and other contaminants. Scientific studies ofthese waters must be conducted
10 to determine how much pollution they can handle (Total Maximum Daily Loads, or TMDLs).
11 The pollutant load reduction requirements will affect municipal, industrial, and agricultural
12 practices and operations along any river, stream or lake determined to be impaired. While the
13 source of 86 percent of the pollutants affecting Minnesota waters are non-point sources, there
14 will also be new costs and requirements for point-source dischargers, like municipal wastewater
15 treatment facilities. Municipal storm water systems will also face increased protective
16 requirements and regulation as part of the state's impaired waters program.
18 Response: The League will work actively with the administration, the Legislature, and
19 other stakeholders in the design and implementation of Minnesota's impaired waters
20 program to:
21 . Ensure equitable funding solutions are found, such as the state general fund or
22 bonding, that broadly collect revenue to address this statewide problem.
23 . Support legislative passage of revenue streams dedicated to providing at least $80
24 million per year to these programs. These funds should supplement traditional sources
25 of fundin2 for these purposes. not be used to cover bud2et cuts. backfill past pr02ram
26 reductions. or to otherwise supplant normal state spendin2 on water pr02rams.
27 . Direct the majority of funds collected by the state for impaired waters into programs
28 that fund municipal wastewater and stormwater projects, and for state programs
29 needed for municipal wastewater and stormwater permitting and technical support,
30 including the Clean Water Revolving Loan Fund, Wastewater Infrastructure Fund,
46
COMMITTEE RECOMMENDATIONS
1 Phosphorus Reduction Grant Program, TMDL Grants Program, Small Community
2 Wastewater Treatment Grant and Loan Program, and other state programs that
3 provide financial resources for city wastewater treatment facilities, septic tank
4 replacement, stormwater management projects, and other city water quality
5 improvement and protection projects.
6 . More adequately cover the current five-year wastewater infrastructure funding need
7 projection of more than $2.1 billion.
8 . Recognize and address the upcoming costs of stormwater management infrastructure
9 and operation on municipalities from new regulatory mandates and load reduction
10 requirements.
11 . Allow flexibility in achieving pollutant load reductions and limitations through offsets
12 or trading of pollutant load reduction credits for both point and non-point load
13 reduction requirements within watersheds.
14 . Recognize and credit the work underway and already completed by local units of
15 government to limit point and non-point source water pollutant discharges.
16 . Recognize the diversity of efforts and needs that exists across the state.
17 . Ensure the best science available is used to accurately determine the sources of
18 pollutant load in order to maximize positive environmental outcomes and minimize
19 unnecessary regulatory and financial burdens for cities.
20 . Ensure the state requires that the MPCA retain control of the TMDL development
21 process and that all scientific research related to TMDLs is conducted by the MPCA or
22 qualified, objective parties pursuant to state contracting, procurement, and conflict of
23 interest laws.
24 . Clarify state water quality mandates so cities know specifically what they are required
25 to do and what methods of achieving those outcomes are acceptable to state and federal
26 regulators.
27
28 SD-42. Phosphorus Reduction (CJ)
29 Issue: In 2002, the Legislature enacted a new law to regulate the sale and use oflawn fertilizers
30 containing phosphorus in the metropolitan area. In 2004, the legislation was expanded statewide.
47
COMMITTEE RECOMMENDATIONS
1 In 2007, legislation was passed to reduce the phosphorus content of residential dishwasher
2 detergents. These laws will improve and enhance the quality of the state's surface waters. In
3 addition, the new law will reduce the costs to local governments of complying with a variety of
4 federal and state surface water quality standards.
5
6 Cities are required by several levels of government to improve and enhance the quality of surface
7 waters. Additionally, surface water runs through watersheds that rarely are wholly within a city's
8 boundaries. To be effective, measures for comprehensive water quality improvements need to be
9 regional or statewide.
10
11 The 2002, 2004, and 2007 laws underscore the most cost-effective way to reduce phosphorus in
12 our lakes, wetlands, and streams-by preventing it from entering these systems. The laws,
13 however, address only two, specific phosphorus inputs to city water systems. Many other sources
14 of phosphorus, such as commercial detergents, affect both surface water quality and treatment
15 requirements at municipal wastewater treatment facilities. The state is the appropriate level of
16 government for effective and economical administration and enforcement responsibility.
17
18 Response:- The League opposes any legislation that would weaken existing phosphorus
19 fertilizer and dishwasher detergent regulation legislation, and supports removing
20 phosphorus from products at the manufacturing level rather than at the wastewater
21 treatment center. The League further supports retail display requirements to ensure
22 consumers are able to readily identify the phosphorus content of fertilizer products.
23
24 SD-43. Urban Forest Management Funding (CJ/JO)
25 Issue: Urban forests are an essential part of city infrastructure. Dutch elm disease, oak wilt
26 disease, drought, storms, and emerald ash borer threaten our investment in trees. The costs for
27 control and removal can be catastrophic and put pressure on city budgets. The Minnesota
28 Department of Natural Resources, through its Urban and Community Forestry program, and the
29 Minnesota Department of Agriculture, through its Shade Tree and Invasive Species program,
30 currently have regulatory authority to direct tree sanitation and control programs. Although these
48
COMMITTEE RECOMMENDATIONS
1 programs allow for addressing some tree disease, pest, and other problems, funding levels have
2 been inadequate to meet the need of cities to build capacity for urban tree programs and respond
3 to catastrophic problems. Cities share the goal of the state's Releaf program-promoting and
4 funding the inventory, planning, planting, maintenance, and improvement of trees in cities
5 throughout the state. In addition, economic gains for stormwater management, tourism,
6 recreation, and other benefits must be protected from tree loss. A lack of timely investment in
7 urban forests costs cities significantly more in the long run.
8
9 Response: The League supports funding for a state matching grant program to assist cities
10 with building capacity for urban forest management and meeting the costs of preparing
11 for, and responding to, catastrophic urban forest problems. Additionally, the League
12 supports reinstatement of the Minnesota Releaf program, through the Legislative and
13 Citizens' Commission on Minnesota Resources (LCCMR), with an increased appropriation
14 that can better address the needs of building capacity and managing urban forests across
15 the state.
16
17 SD-44. Election Issues (AH)
18 Issue: Cities play an important role in administering state and federal election law and
19 conducting voting activities.
20
21 Response: The League recommends the Legislature take the following actions to strengthen
22 the role and effectiveness of local election administration:
23 . Limit application of the voter complaint process to compliance with the requirements of
24 the federal Help America Vote Act (HA VA).
25 . Ensure updated election laws are transmitted to city election officials no later than June
26 30 every year as needed, using online as well as alternative methods of distribution that
27 ensure the information received is timely, accurate, and accessible.
28 . Provide posters explaining the election process to be posted in polling places for odd- as
29 well as even-year elections, and minimize the number of posters that must be displayed
30 in the polling place.
49
COMMITTEE RECOMMENDATIONS
I . Allow eligible 'Voters not affiliated with major political parties to serve as election
2 judges.
3 . Allow precinct polling places to be locatcd within one mile outside of precinct
4 boundaries.
5 . Establish a single standard for thc 100 foot rule for regulating Iingcring and political
6 activity near polling places located on privatc and public property.
7 . Repeal the prohibition for election judges to be within six feet of election equipment in
8 the polling place.
9 . Expedite resolution of candidate eligibility related to residency in errors and omissions
10 proceedings.
11 . Simplify thc -;ouehing process and reduce cxisting polling placc record l(eeping
12 rcquircments that arc diffiealt for election jadges to administer.
13
14 SD-45. Local Election Authority (AR)
15 Issue: City authority to schedule city elections and establish terms of office for local elected
16 officials strengthens regard for the role of local self-government-particularly when voters
17 approve those matters in home rule charter cities. Additionally, statutory cities currently lack
18 authority to create or abolish wards.
19
20 Response: The League opposes:
21 . Further limits on the number or the length of terms elected city officials may serve,
22 particularly when those terms have been established by voters in home rule charter
23 cities.
24 . Restrictions on local authority to schedule city elections in November of either even- or
25 odd-numbered years.
26 The League supports general authority for statutory cities to create and abolish wards.
27
50
COMMITTEE RECOMMENDA TIONS
1 SD-46. Ranked Choice Voting Issues (AH)
2 Issue: The state Ranked Choice Voting (ReV) Issues Task Force is reviewing has reviewed and
3 made final recommendations for amending and adopting new state election laws and rules,.---fHffi
4 '.-viI! make recommendations to thc Legislature that must be accomplished prior to conducting
5 state or local elections that use RCV as the method of election of candidates for elective office.
6
7 Response: Before the Legislature enacts changes to state election law authorizing cities to
8 conduct elections using RCV, the secretary of state must identify and propose how to
9 resolve issues for voters and the method of voting to be followed when RCV elections are
10 held related to the use of this method of voting. The Legislature must also include statewide
11 standards to ensure RCV is implemented consistently throughout the state so that voters
12 will have confidence in the fairness of the alternative voting process and the outcome of
13 such elections.
14
15 As the RCV Issues Task Foree continues its review of state legislature deliberates whether
16 to make changes to state election laws and rules to authorize the use of RCV, mcmbers
17 lawmakers should:
18 . Maire use of sub groups tEl examine and make rccommendations regarding Make
19 changes to voting procedures and rules te that ensure uniform statewide standards ill
20 implemented.
21 . Provide state and local funding options to cover the increased local government eosts to
22 implement RCV, such as changes to ballot design, voter education outreach, and
23 purchase. programming. and testing of new voting equipment purchase. operations
24 and testiftg procedu.res.
25
26 SD-47. State Assistance for Library Funding (10)
27 Issue: Many community libraries in Minnesota are city-owned. Although located in an
28 individual community, city libraries serve a much wider area. Local libraries need to be
51
COMMITTEE RECOMMENDATIONS
I improved in order to provide access to both written and electronic media to enhance the
2 educational capacity of adults and children.
3
4 Response: The League supports a state matching grant program to provide dollars to assist
5 communities to work in partnership to build and improve libraries.
6
7 SD-48. Park and Library Land Tax Break (10)
8 Issue: As the price for land increases, it is becoming more difficult for cities and other local units
9 of government to compete with developers to save and secure land and easements that are
10 deemed appropriate for park, library, trail, and green spaces.
11
12 Response: The state should amend the tax laws to provide tax incentives for property
13 owners who sell land and easements to local units of government when the land is to be
14 used for park, library, trail or green space purposes.
15
16 SD-49. Charter Law Changes Expense Limit Increase (GC/AH)
17 Issue: Homc rule charters are designed to provide for greater local input on the structure and
18 authority of city government. The experience of sevcral existing home rule charter cities and
19 statutory cities considering a home mle charter has generated proposals to change several
20 technical aspects of the charter adoption and revision process. The 2007 Legislature considered
21 several bills that proposed changes to Minn. Stat. 410, the state law governing municipal home
22 rule authority and operation of city charter commissions. One of the bills enacted but later vetoed
23 would have increased compensation that charter commissions receive for expenses. The other
24 bill \vould have added provisions for abolishing charter commissions. Currently, state law allows
25 termination only by a decision of the charter commission. The Legislature failed to take final
26 action on that bill, but it is likely to be reconsidered during the 2008 session.
27 Under current law (Minn. Stat. & 410.06), charter commission expenses that are paid by the city
28 are limited to $10,000 in a first class city and $1.500 in all other cities. The first class city limit
52
COMMITTEE RECOMMENDATIONS
1 was increased in 1961 from $1 ,500 to $10,000 while the limits for all other charter cities have
2 not been adiusted since 1947.
3'
4 Response: The League supports.;- increasin2: the allowable annual charter commission
5 expense limit to $5.000 for cities other than cities of the first class.
6 . ,""..mending Minn. Stat. 410 to providc that thc thrcshold for forcing an election on a
7 chartcr amendment approved by ordinanee be incrcased to 5 pcrccnt of rcgistercd
8 yotcrs ia the city. Under thc currcnt la',v, a refcrcndum on a ehartcr changc by
9 ordinance may be triggercd if a numbcr of citizens equal to 2 percent of those voting in
10 the last election petition for a challcngc.
11 . Increasing the alloYlablc annual charter commission expensc limit to $5,000 for cities
12 other than cities of thc first class.
13 . Authorizing an election to disband a charter cemmission before a charter is adopted
14 upon a petition signed by 5 percent of registered 'latcrs in the city.
15
16 SD 50. Utility Ratc Clarification (GC)
17 Issue: Minn. Stat. ~ 141.075 specifies that utility rates for water, seVier, and stormwater services
18 should be set by the governing body at an amount that is as nearly as possible proportionate to
19 the cost of furnishing the service. HO'.vever, some home rule city charters ha'/e been amended to
20 include restrictions on utility rate increases that can conflict '.vith state statute. \Vith recent rapid
21 increases in the cost of providing water, wastewuter, and storm\vater services und maintaining
22 the related infrastructure, a charter restriction on utility rates can prcyoot a city from imposing
23 utility rate increases that 'llould allow the city to cover the cost of furnishing the service as
24 required by Minn. Stat. ~ 411.075. In addition, the statute requires that rates be set by the
25 governing body. Rate limitations in a city charter prc','cnt the governing body from eJwrcising its
26 state mandated duty to set rates.
27
28 Response: MiBn. 8tat. ~ 444.075 shauld be amended ta elarify that utility rates must be set
29 as nearly as passiblcproportionate to the cost of furnishiBg the service, regardless af any
30 lacal charter restrietians.
53
COMMITTEE RECOMMENDATIONS
1
2 SD-NEW A. Liquor Licensing for City Venues (JO)
3 Issue: State Liquor Control interprets liquor laws (Minn. Stat & 340AAO 1) to require a
4 municipal license or private license when a private party provides and dispenses or consumes
5 alcohol on city property and the only commercial transaction is the rental of city property. For
6 instance, if a family rents the community center or local park pavilion and serves alcohol to
7 fellow family members in conjunction with a family reunion, according to the state, the city or
8 the family must procure a liquor license or the services of a licensee, or the city must issue itself
9 a license even when no sale of alcohol is taking place on the premises. This interpretation differs
10 from the practice of many cities in the state.
11
12 Res/Jonse: The Leag:ue of Minnesota Cities seeks statutory clarification so it's clear a city
13 may allow individuals who rent city property to dispense alcohol to social g:uests without
14 anyone obtaining: a license if those individuals are only serving: and consuming: alcohol, not
15 selling: it and they do so without hope of pecuniary benefit.
16
17 SD-NEW B. Maintenance of Effort for Libraries (JO)
18 Issue: The state's library Maintenance of Effort mandate (MOE ) is a minimum level required
19 by the state to receive federal and state aid funds; this is covered under Minn. Stat. 9 134.34.
20 The money includes funds for statewide and regional delivery of interlibrary loans, licensing of
21 electronic resources, continuing education opportunities, and grants coordinated or administered
22 by the region; Literacy is a big issue for many communities and libraries playa key role in
23 addressing the issue.
24
25 While the MOE is seen as a mandate by cities and counties, the MOE also protects the taxpayer
26 investment in library resources and services by providing a more stable source of funding. In
27 tough times, it sounds like a short-term easy fix to funnel money away from public libraries and
28 into public safety/public works. But the public library is an important part of the community
29 infrastructure and needs consistent investment lust as any other part of the infrastructure.
54
COMMITTEE RECOMMENDA TIONS
I
2 In 2008, the legislature was close to relieving counties of their MOE requirements for certain
~ mandated services including libraries, when the levy limits were put into place. Questions arose
4 for both cities and library systems as to how those services would be paid for as the MOE was
5 still in place for cities, and what these funding increases would be.
6
7 Res/Jonse: Before modifvin2 the library MOE requirements, the state should study the
8 current system, includin2 the interaction with city and county levy limits, to assure that
9 libraries receive necessary fundin2 without overburdenin2 the contributin2 local
10 20vernments.
11
12 SD-NEW C. On!anized Solid Waste Collection (CJ)
13 Issue: 'Organized collection' is the term used to refer to a situation where a local unit of
14 government, for any of a variety of reasons, decides that there is a public interest served by
15 limiting the number of solid waste and recycling collection services available in the area. The
16 reasons for implementing organized collection can vary, but include:
17 . Public safety concerns caused by the number and frequency oflarge trucks moving quickly
18 through residential neighborhoods.
19 . Reducing wear on public infrastructure from heavy truck traffic.
20 . Improving the efficiency, cost and quality of garbage and recycling service provided to local
21 residents.
22 . Cooperating with other local governments to best meet solid waste management and
23 recycling objectives.
24 . Taking local steps to reduce energy impacts of public services.
25 . Meeting the requirements of county ordinances and solid waste management plans as
26 required under Minn. Stat. S 115.94.
27
28 Organized collection is also encouraged in state solid waste policies as a means of improving the
29 efficiency and coordination of solid waste management between local units of government.
55
COMMITTEE RECOMMENDATIONS
1 There are very specific public procedures laid out in statute defining how such a decision must
2 be publicly vetted and approved and over what time period that can occur.
3
4 Despite all of these important and valid reasons for using organized collection, legislation has
5 been discussed in several recent sessions that would allow special takings claims by the solid
6 waste industry if local governments make decisions that limit the number of companies that can
7 collect garbage in a community in a manner that prevents a company currently operating in the
8 community from continuing to do so through the implementation of organized collection. The
9 unspecified and ongoing liability this change would create would have the effect of eliminating
10 organized collection as a waste management option. This change would also create a virtual
11 monopoly situation for any company awarded a solid waste contract under organized collection.
12 The local unit of government would have to 'buyout' a contractor in the future to change
13 providers, even if their services were no longer the lowest bid. Furthermore, this is a precedent
14 that, if applied to other government purchasing and service contracting decisions, would clearly
15 run counter to the public purpose of government providing services at the lowest feasible cost to
16 taxpayers.
17
18 This issue has generated sufficient controversy that the Minnesota Pollution Control Agency is
19 currently conducting a study to attempt to determine whether efficiency benefits of organized
20 collection can be documented.
21
22 Response: The League of Minnesota Cities opposes efforts to apply inverse condemnation
23 claims to city solid waste contracting decisions.
24
25 Further. the League of Minnesota Cities supports the current state policv that organized
26 collection is a valuable tool as part of a comprehensive solid waste and recycling
27 management program and recognizes the need to protect and preserve the authority of
28 cities to adopt solid waste service contracts that protect public safety. the environment and
29 public infrastructure.
30
31
56
COMMITTEE RECOMMENDATIONS
1 SD-NEW D. Rental Housing Licensing (HN)
2 Issue: Rental property provides a key housing option in many cities. With today's mortgage
3 environment many single family homes have been converted to rental property.
4 Evidence also exists in some communities of problem rental properties that consume E!
5 disproportionate amount of city resources and negatively impact the safety of other tenants, the
6 neighborhood and property values of neighbors.
7
8 Res/Jonse: The League of Minnesota Cities supports the ability of municipalities to license
9 rental housing to ensure safe and sanitary housin2 for tenants. and the maintenance of the
10 property and problem tenants to protect neighborin2 property values.
11
57
COMMITTEE RECOMMENDATIONS
1 IMPROVING LOCAL ECONOMIES
2 LE- 1. Growth Management and Annexation (CJ/HN)
3 Issue: Unplanned and uncontrolled growth has a negative environmental, fiscal, and
4 governmental impact on cities, counties, and the state because it increases the cost of providing
5 government services and results in the loss of natural resource areas and prime agricultural land.
6
7 Response: The League believes the existing framework for guiding growth and
8 development primarily through local plans and controls adopted by local governments
9 should form the basis of a statewide planning policy, and that the state should not adopt a
10 mandatory comprehensive statewide planning process. Rather, the state should:
11 . Provide additional financial and technical assistance to local governments for
12 cooperative planning and growth management issues, particularly where new
13 comprehensive plans have been mandated by the Legislature.
14 . Clearly establish the public purposes served by existing statewide controls, such as
15 shore land zoning and wetlands conservation; clarify, simplify, and streamline these
16 controls; eliminate duplication in their administration; and fully defend and hold
17 harmless any local government sued for a "taking" as a result of executing state.land-
18 use policies.
19 . Give cities broader authority to extend their zoning, subdivision, and other land-use
20 controls outside the city's boundaries, regardless of the existence of county or township
21 controls, to ensure conformance with city facilities and services.
22 . Clearly define and differentiate between urban and rural development and restrict
23 urban growth without municipal services or annexation agreements outside city
24 boundaries. This should contain a requirement that counties and joint power districts
25 that provide sewer, water, and other services, which have been traditionally provided
26 by cities, include as a condition of providing service the annexation of properties that
27 are the recipients of such services in cases where annexation is requested by a city that
28 could feasibly be providing those services.
58
COMMITTEE RECOMMENDATIONS
1 . Facilitate the annexation of urban land to cities by amending state statutes that regulate
2 annexation to make it easier for cities to annex developed or developing land within
3 unincorporated areas.
4 . Oppose legislation that would reinstate the election requirement in contested
5 annexations.
6 . Encourage ideas consistent with the long-term goal of allowing urban development only
7 in urban areas. Density incentives such as sprawl-reduction aid programs are more
8 straightforward methods of rewarding and encouraging compact urban development
9 than using local government aid (LGA) for another new purpose.
10 . Establish reasonable limitations on the amount cities can pay to townships as part of an
11 orderly annexation agreement that goes beyond tax-sharing arrangements and
12 coverage of documented, stranded assessments and assets.
13
14 LE-2. Official State Mapping Responsibility (ClI AF)
15 Issue: For many years, the Minnesota Department of Transportation (Mn/DOT) has provided the
16 mapping services to keep survey-level accuracy in place for the state's official maps and records.
17 Thatinformation changes when roads are made or improved, andl1eeds regular adjustment when
18 municipal boundary adjustments are made. The information is then used at all levels of
19 government to accurately determine property boundaries for transportation aid, utility service
20 boundaries, state and local funding formulas, election issues, and a number of other uses.
21
22 No state agency, however, has ever been statutorily provided with mapping responsibility and
,
23 MnlDOT is not funded for providing that level of detail in its mapping. Because MnlDOT, as an
24 agency, requires Jess specificity in its maps, a change has slowly been integrated to mostly
25 restrict MnlDOT mapping to what changes occur in road ownership and responsibility, leaving
26 many mapping needs unmet for other users of boundary data.
27
28 Response: The League supports legislation making J\'InJDOT a named state entiltt,the
29 official provider of survey-level mapping for the state, including maps for municipal
59
COMMITTEE RECOMMENDATIONS
1 boundary adjustments. The departmcHt's budget should includc Le2:islature must provide
2 the necessary appropriations to the entity for providing that service.
3
4 LE-3. Electric Service Extension (AH)
5 Issue: Minnesota law preserves the right of municipal electric utilities to grow with the cities
6 they serve. Municipal electric utilities may grow either through application to the Minnesota
7 Public Utilities Commission (MPUC) or through condemnation proceedings. Eliminating
8 authority of municipal electric utilities to extend services, or making extension of municipal
9 electric service to annexed property unreasonably costly, would interfere with community
10 development and make it unfeasible for municipal electric utilities to serve properties located
11 within rural electric cooperative (REC) service territory in annexed areas, even if the REC had
12 not served them priqr to annexation.
13
14 Response: The current MPUC administrative process has become oppressive. The League
15 opposes any attempt to remove or alter the eminent domain option available to municipal
16 electric utilities in state law, or to make it financially unfeasible for municipal utilities to
compensate rural electric cooperatives for serving future customers who reside in annexed
18 areas where the cooperative has not provided service.
19
20 LE-4. Statutory Approval Timelines (CJ)
21 Issue:, Cities since 1995 have been required to act on written requests relating to zoning, septic
22 systems, the expansion of Metropolitan Urban Service Areas (MUSA), and other land-use
23 applications in accordance with a statutory time period generally referred to as the 60-day rule.
24 Pursuant to Minn. Stat. S 15.99, state and local government agencies must approve or deny a
25 permit within a statutory timeframe. Failure by the agency to issue a specific denial of the
26 application with contemporaneous written findings of fact is deemed an approval.
27
28 Minn. Stat. S 15.99 does not directly address whether an appeal of a decision triggers an
29 extension or is part of an original zoning request that must be handled within the 60- or 120-day
60
COMMITTEE RECOMMENDA TIONS
1 time period. In a recent court of appeals decision, the court found that a zoning application is not
2 approved or denied for the purposes of Minn. Stat. S 15.99 until the city has resolved all appeals
3 challenging the application. According to the court, an appeal is not a request for a permit,
4 license or other govemmentalapproval; therefore, it does not trigger a new 60-day time period.
S Under this interpretation, a decision rendered by a zoning board or planning commission is not
6 the final approval or denial of an application ifthe city allows an appeal to the city council.
7
8 This court decision is problematic for a couple of reasons. Forcing cities to further condense the
9 process for considering planning and zoning applications will make it more difficult to gather
10 public input and leave less time for thoughtful deliberation by zoning boards and planning
11 commissions. It may also provide an incentive for cities to extend the original 60-day period in
12 every instance in order to build-in adequate time to consider possible appeals.
13
14 While the Legislature has clarified some aspects of this law, additional modifications are
15 necessary to assist cities in providing accurate and timely responses to applicants and to allow
16 adequate time for public input.
17
18 Response: The Legislattire shotild repeal or amend MitJ.:Il~Stat. ~ 15.99: If repeal is unlikely,
19 amendments should:
20 . Increase the initial time limit to 90 days.
21 . Clarify that approval does not abrogate the need for approvals under other applicable
22 federal, state or local requirements.
23 . Provide appeal rights to adjacent property owners.
24 . Clarify that, if requests are to be decided by a board, commission or other agent of a
25 governmental agency, and the decision of the board, commission or other a~~ent is
26 adopted subject to appeal to the governing body of the agency, then the agelllcy may
27 extend the 60-day time limit to resolve the appeal.
28
61
COMMITTEE RECOMMENDATIONS
1 LE-5. Public Infrastructure Utilities (AF)
2 Issue: Current infrastructure funding options available to cities are inadequate. The existing
3 special assessment law, Chapter 429, does not meet cities' financing needs because of the benefit
4 requirement. The law requires a minimum of 20 percent of such a project to be specially assessed
5 against affected properties. In practice, however, proof of increased property value to this degree
6 of benefit can rarely be proven from regular repair or replacement of existing infrastructure such
7 as streets or sidewalks. Alternatives to the Chapter 429 methods for financing infrastructure
8 improvements are nearly nonexistent.
9
10 The Legislature has given cities the authority to operate utilities for waterworks, sanitary sewers,
11 and storm sewers. The storm sewer authority, established in 1983, set the precedent for a
12 workable process of charging a use fee on a utility bill for a city service infrastructure that is of
13 value to everyone in a city. Similar to the storm sewer authority, a transportation or sidewalk
14 utility would use technical, well-founded measurements and would equitably distribute the costs
15 of local infrastructure services.
16
17 Response: The Legislature should authorize cities to create, as a local option, additional
18 utilities such as a transportation or sidewalk utility. Such authority would acknowledge the
19 effects of repeated levy limits and the general funding shift from the state to local
20 governments for building and maintaining necessary infrastructure; the benefits to all
21 taxpayers of a properly maintained public infrastructure; and, the limitations of existing
22 special assessment authority.
23
24 LE-6. Development Disputes (el)
25 Issue: State law is clear that fees collected under Minn. Stat. S 462 are eligible for judicial
26 review in the event of dispute. The Legislature recently limited the timeframe during which an
27 aggrieved party may challenge planning and zoning fees to 60 days after approval of an
28 application. However, the law is not clear about what notice requirements to the municipality are
62
COMMITTEE RECOMMENDATIONS
1 necessary, relative to the timing for a person aggrieved by an ordinance or decision under the
2 municipal planning act to seek review.
3
4 Response: The Legislature should amend Minn. Stat. ~ 462.361 to establish a 60-day time
5 limitation in which an aggrieved person may bring an action against the municipality.
6
7 LE-7. New Resources for Affordable Housing (HN)
8 Issue: The ~ 2008 Legislature reduced increased state funding for housing progruffiS
9 administered by Minnesota Housingl(the state's housing finance agency) 2009 base budget bv
10 $200,000 in its attempt to erase the state's deficit. by $60 million for the biennium. /. substantial
11 portion of the increased funding came from one time re'/onue sources.
12
13 Cities, along with local housing officials, are'concerned about the state's lack of commitment to
14 helping of a needed increase to the base budget for Minnesota Housing, particularly feHfle
15 Economic Development & Challenge Fund. This fund has helped cities meet demand for
16 affordable housing that is sensitive to local conditions. The League recognizes that federal, state
17 and local governments all have a role to play in meeting affordable housing needs.
18
19 In ~ 2008, the League supported unsuccessful efforts by housing advocacy organizations and
20 Minnesota National Association of Housing and Redevelopment Officials (NAHRO) to secure a
21 dedicated source of funding through the proposed Housing Solutions Act. The proposals,
22 including a Minnesota NAHRO initiative called the Housing Account for Leveraged
23 Opportunities (HALO), would have provided state resources on a flexible and timely basis to
24 help cities offer housing initiatives to meet unique local needs.
25
26 Response: The Legislature should:
27 . Provide the flexibility neeessary to allow communities to raise matehing funds to
28 qualify for state resourees far deyelopment of homeownership, multi family rental
29 assistftB:ee, ftftd housing renovation programs to meet a range of local housiflg needs.
63
COMMITTEE RECOMMENDATIONS
1 . Provide stable and Ion2 term fundin2 for Minnesota Housin2 and other affordable
2 housin2 programs to help rebuild the state's partnership with local 20vernments in the
3 development of homeownership, multi-familv rental assistance and housin2 renovation
4 programs, and allow flexibility for cities to achieve partnerships and levera2e resources
5 with private and public entities.
6 . Substantially increase long-term funding for the Economic Development & Challenge
7 Fund, which would leverage private and local resources to develop workforce rental
8 and single-family homes.
9 . L\dopt changes that were included in the yetoed 2007 omnibus tax bill that would ha'/c
10 broadened thc allo,yablc usc of tax inercment financing (TIF) for dcyclopment of
11 affordable housing, and would havc alloy/cd greatcrpooling of increment for
12 affordable housing outsidc the TIF district.
13 . Fully fund the market value homestead credit (MVHC) program so as not to
14 discourage cities from promoting development of more housing to meet the needs of
15 households with a wide range of lower to moderate incomes.
16
17 LE-8. Residential Care Facilities (group homes) (HN/ AF)
18 Issue: Sufficient funding and oversight is needed to ensure that residents living in residential
19 care facilities have appropriate care and supervision, and that neighborhoods are not
20 disproportionately impacted by high concentrations of residential care facilities. Under current
21 law, operators of certain residential care facilities are not required to notify cities when they
22 intend to purchase single-family housing for this purpose. And cities do not have authority to
23 regulate the locations of group homes and residential care facilities. Cities have reasonable
24 concerns about the safety of group home residents, particularly in case of public safety
25 emergencies. Cities also have an interest in preserving a balance in residential neighborhoods
26 between group homes and other uses.
27
28 Response: Cities should have statutory authority to require agencies and licensed and
29 re!zistered providers that operate residential care facilities to notify the city before ef
30 properties lli being operated as residential care facilities. The Legislature should also
64
COMMITTEE RECOMMENDATIONS
1 require establishment of non-concentration standards for residential care facilities to
2 prevent clustering. Finally, licensing authorities must be responsible for removing any
3 residents incapable of living in such an environment, particularly if they become a danger
4 to themselves or others.
5
6 LE-9. Inclusionary Housing (HN)
7 Issue: Provisions in current state statute (Minn. Stat. 462.358, subd. 11) allowing cities to enter
8 into development agreements for the inclusion of a portion of the units in the development to be
9 affordable for low- or moderate-income families have been a source of conflict between cities
10 and housing developers.
11
12 Cities are concerned builders view this statute as a restriction on local authority to adopt policies
13 that promote availability of housing affordable to those who are unable to purchase or rent
14 housing at price points that the market alone provides.
15
16 Response: The Legislature should:
17 . Strengthen and clarify dties'authorityto carry out policies that offerdevelopefs a
18 range of incentives in return for including a designated number of affordable units in
19 their projects.
20 . Identify strategies to ensure long-term affordability of rental and owner-oc(~upied
21 housing produced as a result of such policies and practices.
22 . Focus state housing policy on support for local assessment of housing needs, and direct
23 additional state resources and the full exercise of local authority to increase
24 development of affordable rental units and access to entry-level owner-occupied
25 housing.
26 . Support voluntary measures to encourage cities to adopt and carry out land-use plans,
27 activities, and subdivision regulations aimed at providing for construction and
28 marketing of housing where a portion of all new units are affordable to lower-income
29 households.
30
65
COMMITTEE RECOMMENDATIONS
1 LE-IO. Community Land Trusts (AH/HN)
2 Issue: The steeply increasing price ofland available for housing development, particularly for
3 retaining affordability of housing for lower-income households, is a growing concern throughout
4 the state. Creating more permanently affordable, owner-occupied housing depends heavily on
5 maximizing the cost-effectiveness of taxpayer investments. The Legislature has previously
6 appropriated funding and granted the Minnesota Housing Finance Agency authority to assist
7 cities with funding community land trusts (CLTs) for affordable housing;
8
9 Response: The Legislature should support continuation of the land trust capacity-building
10 program and provide capital start-up funds so community land trusts can continue to offer
11 gap financing, interest rate write-downs, predevelopment financing, and financial
12 underwriting costs. The Legislature should also support efforts by the Coalition of
13 Community Land Trusts to develop property tax valuation that would lower property
14 taxes for sales-price-restricted properties enrolled in CL T programs.
15
16 LE-ll. State Broadband Policy Priorities for Cities (AR)
17 Issue: Communities increasingly recognize the need for statewide and national initiatives to
18 obtain higher symmetrical broadband speeds and greater capacity to ensure sufficient robust
19 affordable Internet connectivity is widely available. Expanding the use of broadband technology
20 has been shown to grow new markets for business, enhance educational access, strengthen health
21 care, increase the potential to attract and retain jobs, improve quality of life and service delivery,
22 and provide Minnesotans and Minnesota business with the capabilities necessary to compete in
23 today's global marketplace.
24
25 Lack of state policy establishing a goal of achieving significantly greater bandwidth dramatically
26 diminishes the opportunities to achieve these goals. Increasingly, cities and other local units of
27 government, as well as regional initiatives among county, school, city and other local entities, are
28 pointing the way toward public policy priorities that need to be addressed at the state level.
29
66
COMMITTEE RECOMMENDATIONS
1 Broadband internet access must be capable of a continuously-available internet protocol OP)
2 connection capable of supporting full-motion, two-way interactive video applications. In order to
3 support videoconferencing applications, 6 megabits is needed for participants to utilize its time-
4 savings and efficiencies for a wide variety of purposes. In the near future, the demand for more
5 capacity and bandwidth will make evident the need to provide infrastructure capable of
6 providing up to 1 gigabit broadband speed throughout the state.
7
8 Thc "Gig Group," comprised of a diverse membership of metro area public and private sector
9 broadband users and government entities, supports actions to achieve 1 gigabit broadband speeds
10 statevv'idc by 2015, including authority for cities to install fiber connections to the promises and
11 to be a provider of broadband services.
12
13 Response: The Legislature, Governor's office, and state agencies must take immediate steps
14 in respondin2: to the work of the Ultra Hi2:h Speed Broadband Task Force to develop a goal
15 of substantially increasing broadband speed and capacity, as well as statewide access to
16 symmetrical (upload and download) connectivity that is significantly greater than is
17 currently available at the local level.
19 The League also encoura2:es the task force to support the broadband principles adopted bv
20 the National Association of Telecommunications Officers & Advisors (NATOA). including
21 the importance of providin2 affordable and widelv accessible hi2:h capacity broadband
22 connectivity .
23
24 To achieve this goal, the Legislature should flfl:lSt enact a state broadband policy to address
25 measures to be undertaken to make warld class braadband eapaeity ayailable throughout
26 the state, ifleluding:
27 . BringiBg together stakeholders iBeluding eities, sen,jec prayidcrs, earp orate and small
28 business eustomers, as well as teehnology cxperts and publie poliey lcadcrs to develop
29 recommendations for state iBitiatives and funding to aehieve a goal of at least 1 gigabit
30 broadband speeds aad statev.ide eOBBeetiYH)'.
67
COMMITTEE RECOMMENDATIONS
1 . Support recommendations to address necessarv steps to achieve the 20al of statewide
2 deployment of advanced broadband networks with symmetrical hi2h-speed capacity.
3 . Undertaking Complete comprehensive statewide mapping of broadband services to
4 identify underserved areas and connectivity issues.
5 . Encourage public/private collaboration in achieving to achieve state broadband goals,
6 ineluding partnerships and cooperation in providing last-mile connections.
7 . Recognizing~ that two-way symmetrical communications require higher broadband
8 speed, and undertake immediate that mcasurcs be undcrtaken immediately actions to
9 move toward that goal.
10 . Promotffig~ measures tlHrt to authorize and encourage cities and other local units of
11 government to playa direct role in providing broadband services by incenting offerin2
12 incentives to those entities to meet and discuss local needs for hb!h capacity bandwidth
13 with incumbent providers; requiring private sector service providers to respond to
14 those local or regional intercsts needs within a reasonable specified timeframe.
15 . ~supportffig initiatives to make it easier for cities, municipal utilities, schools, libraries,
16 and other public sector entities to collaborate and proceed with their own plans for
17 deploying broadband infrastructure and services at the local and regional level to meet
18 those needs.
19
20 LE-12. Competitive Cable Franchising Authority (AR)
21 Issue: Local residents, subscribers to cable/video services the Federal Communications
22 Commission (FCC), and state and federal lawmakers have signaled growing interest and support
23 for measures to spur increased direct competition in the delivery of advanced video and
24 telecommunications services at the local level. In recent years, increasing numbers of
-"v_.
25 telecommunications service providers have begun offering competitive video services and claim
26 that local franchising can be a barrier to entry.
27
28 Cities strongly disagree with that viewpoint, and maintain there is no evidence local franchising
29 is a barrier to competitive entry by competitive wireline video service providers. Under the
30 framework of existing non-exclusive local franchising, communities have realized significant
68
COMMITTEE RECOMMENDATIONS
1 benefits of the deployment and upgrades to cable systems. Indeed, local franchising authorities
2 have promoted the benefits of competition and development of innovative services as a primary
3 source for deployment of broadband technology.
4
5 In pursuing the goal of providing increased consumer choice, city officials look for opportunities
6 to encourage competitive entry while ensuring community needs and interests are met. The
7 League is concerned alarmed about strong evidence of significant haTIn to communities,-public,
8 education and government (PEG) programming, and utilization of institutional networks (I-Nets)
9 as a result of state franchising enacted in other states. Studies conducted in 2008 by NATOA,
10 the Alliance for Community Media, and others have clearly documented the negative results of
11 such legislation for consumers, cable TV subscribers, cities, PEG organizations, and more
12 studies are currently underway, including the University of Minnesota study legislated during the
13 2008 legislative session.
14
15 Response: State policy should maintain franchise authority at the local level to ensure
16 competitive franchise agreements reflect new technology and are reasonably tailored to the
17 technical and operational differences among providers and communities.
18
19 Local governments desire competition and encourage additional providers of cable and
20 multi-channel video programming services, regardless of technology, to enter the market.
21 Despite local government support for competition, market forces have slowed development
22 of wireline competition. The exercise of local franchising is not to blame.
23
24 Accordingly, the Legislature, FCC, and Congress should recognize, support, and maintain
25 flexible exercise of local franchising authority to encourage increased competition between
26 incumbent cable system operators and new wireline competitive video service providers.
27
28 Fundamental reasons for retaining local franchise authority include:
29 . Consumer protection and enforcement of quality of service standards and local
30 accountability.
31 . Assessment and delivery of services to meet community needs and interests.
69
COMMITTEE RECOMMENDATIONS
1 . Provision of channel capacity and related equipment, facilities, and other support of
2 public, educational, and government (PEG) use of that capacity.
3 . Production and development of diverse programming.
4 . Effective control and management of public rights-of-way.
5 . Provision of institutional networks (I-Nets) to service important community needs, such
6 as public safety communications, libraries, schools, and other public institutions with
7 access to state-of-the-art applications and the ability to communicate effectively with
8 their constituencies.
9 Maintaining local franchising also most effectively creates and preserves agreements that
10 guarantee broad access to services throughout the community, ensuring there is no digital
11 divide for access to available additional services such as access to IP voice and high-speed
12 Internet via infrastructure that delivers video programming services.
13
14 LE-13. Right-of-Way Management (AR)
15 Issue: Cities have fundamental responsibility for managing the safe and convenient use of public
16 rights-of-way and hold local rights-of-way ~n trust for the public as an increasingly scarce and
17 va:lua.ble.asset. As demahd ihcrea.ses. for use of right.s:'of-way for uridergrourid arid 6verhead
18 wireless facilities and sites for wireless communications towers, cities must continue to have the
19 necessary authority to allocate.and coordinate the use of this resource among competing uses.
20 Local management responsibilities vary and are site specific, underscoring the necessity for
21 maintaining local authority.
22
23 Response: State and federal policymakers and regulators must:
24 . Uphold local authority to manage and protect public rights-of-way, including
25 reasonable zoning and subdivision regulation and the exercise of local police powers.
26 . Recognize cities have a paramount role in developing, locating, siting, and enforcing
27 utility construction and safety standards.
28 . Support local authority to require full recovery of actual costs of managing use of
29 public rights-of-way.
70
COMMITTEE RECOMMENDATIONS
1 . Maintain city authority to franchise gas, electric, cable services, and open video
2 systems, and to collect franchise fees and alternative revenue streams.
3 . Maintain the courts as the primary forum for resolving disputes over the exercise of
4 such authority.
5 . Maintain existing city authority to review and approve or deny plans for installation of
6 additional wires or cables on in-place utility poles. In the alternative, cities should have
7 broader authority to require the underground placement of new and/or existing
8 services at the cost of the utility or telecommunications entity.
9
10 LE-14. Wireless Tower and Antenna Siting (AR)
11 Issue: As demand for wireless communication service increases, wireless service providers have
12 increasingly requested to site towers, antennas, and other facilities in cities. Cities must continue
13 to have local zoning authority and police power to manage and coordinate the siting of these
14 facilities. Local management needs vary and are site specific, underscoring the necessity for
15 maintaining local authority.
16
17 While state law regarding local rights-of-way management (Minn. Stat. S 237.162-163) does not
18 apply to siting such facilities inpublicrights-of...way,the Federal Telecommunications Act of
19 1996 preserves and provides for the exercise of state and local authority over zoning and land-
20 use decisions for wireless service facilities.
21
22 Response: The Legislature should clarify that wireless service providers are not exempt
23 from local zoning and police power regulations where the provider proposes to use public
24 rights-of-way to site their facilities. Cities must continue to be permitted to consider public
25 health, safety, and welfare concerns, including issues of aesthetic and property value, in
26 responding to requests to site wireless facilities. The Legislature should maintain laws that
27 recognize and uphold city authority to manage the siting of wireless facilities through local
28 zoning and regulation and provider agreements, including fair compensation.
29
71
COMMITTEE RECOMMENDATIONS
1 LE-15. Use Deeds (GC)
2 Issue: The state's tax forfeiture laws allow a local unit of government to acquire a tax-forfeited
3 property through a use deed that requires the local government to identify a specific public use
4 for the property. The property is then restricted to that specific use in perpetuity.
5
6 The Department of Revenue has recently identified several issues with the administration of use
7 deeds, including a concern that monitoring a parcel's use over time is difficult and impractical.
8 The department also contends that some of the current uses of property acquired through use
9 deeds do not constitute a "public use" as specified in statute. While the statute does not define
10 public use, the department believes the original intent of use deeds was for "direct use" by the
11 public, such as parks and streets, but not other public uses such as open space, retaining ponds,
12 governmental administrative offices or for economic development, redevelopment or affordable
13 housing.
14
15 The department has also noted that the use-deed process transfers tax-forfeited property to public
16 ownership without giving the private market an opportunity to purchase the property. Over time,
17 this limits the amount of taxable property and reduces revenues to the tax forfeit sale fund that
18 helps reimburse local governments for tax forfeitures statewide. The department has estimated
19 there are about 1 00 use deeds granted per year in the state.
20
21 During the 2007 legislative session, the department proposed several changes to the use-deed
22 law, including a restriction on use deeds to public ownership where the public has direct access
23 to the property. The proposal would have also required that for any other use, the local
24 government must either purchase the property outright or allow the property to be offered for
25 sale for a period of 24 months. If, after that time, the property is unsold, the local government
26 can claim the property for free with no use-deed restriction. The department proposal would have
27 also clarified how recording fees are collected on properties involving use deeds.
28
29 Response: Use deeds provide cities with an important tool that allows tax forfeit property to
30 be acquired for public uses at no cost. The League opposes changes to use deeds that would
72
COMMITTEE RE.COMMENDATIONS
1 narrowly define public use to be situations where the public can directly use the property.
2 State and federal laws include many mandated requirements~ such as wetlands
3 replacement and stormwater treatment and runoff protection, that indirectly benefit the
4 public and therefore constitute a public use even though the property might not qualify
5 under the department's direct-use definition. In addition, court decisions at the federal and
6 state levels support the idea that affordable housing, economic development, and
7 redevelopment constitute a public use.
8
9 The League supports administrative modifications that would ease the department's
10 burden of monitoring use-deeded property as long as the monitoring requirements do not
11 place an undue burden on cities.
12
13 LE-16. Economic Development Authorities (10)
14 Issue: The 2005 Legislature authorized all counties outside the metropolitan area to establish
15 county economic development authorities (EDAs). Minn. Stat. 469.1082 provides specificity on
16 certain process and limitations issues. County EDA activity in areas surrounding cities will
17 directly impact the adjacent city in terms of service provision and taxes.
19 Response: The Legislature should establish reasonable limits on county EDA activities in
20 unincorporated areas, including requiring city approval for proposed county EDA
21 activities within two miles of a city. The Legislature should revisit the county EDA
22 legislation, and consider specificity to other process and limitations issues such 3.S the local
23 recommendation committee.
24
25 LE-17. Workforce Readiness (JO)
26 Issue: State and federal welfare reform efforts have focused on the importance of th(;: welfare-to-
27 work transition, and have recognized the challenge of ensuring that individuals are qualified to
28 work. With the changing economy, and the baby boomer generation set to retire soon, cities
29 Gfti.es have an interest in the availability of qualified workers as part of their economic
30 development efforts, and can serve as a catalyst with other public entities and the private sector
31 to address workforce readiness issues.
73
COMMITTEE RECOMMENDATIONS
1
2 Response: The Legislature should continue to fully fund the job skills partnership and
3 other workforce training programs administered by the Department of Employment and
4 Economic Development. the Department of Human Services, and the various education
5 a2:encies. The Legislature should provide additional flexible funding to local workforce
6 councils, including governments and educational facilities, for the purpose of upgrading the
7 skills and productivity of the workforce, and pursue additional creative programming and
8 funding to prepare and place underemployed and unemployed Minnesotans, .as well as
9 deal with those phasing: out of the workplace and retirine. The Legislature should continue
10 to support cities that provide workforce programs that are coordinated with and
11 compliment state and regional efforts by seeking municipal approval before making any
12 changes to those service areas.
13
14 LE-18. Community Reinvestment Partnerships and Financing (JO)
15 Issue: The 2001 property tax reform package has had is having a dramatic impact on how the
16 state of Minnesota's community reinvestment needs are addressed. The impacts bring into
17 question the future viability of tax increment financing (TIF) as the primary tool to fund
_", ............. .........n..___......"....._m._.__..,.."......_...__.......".,.___..___.......'''................".._......... ,_.........._____..._........__n....."'....___..............,....................,.,."..........__..........,............_.....,...___......_".".__...._....____m'__..._......_..._....._.~,'__".,.,...._...._....__.....,..._._m.__.'........._........._n.._.'_..,...........,."......._n..___..-......_.____._......"._......__.__
18 community reinvestment efforts. Additionally, the impacts of the 2006 eminent domain reforms
19 will dramatically limit a city's ability to assemble parcelsofland needed to facilitate economic
20 development and redevelopment projects. Activities cities have historically been able to
21 undertake, but will likely be less able to achieve in the future given the likely diminished
22 effectiveness ofTIF and limited ability to assemble parcels ofland, include long-term: tax base
23 stabilization and growth, job creation, development oflow-to-moderate income and workforce
24 housing, remediation of pollution, elimination of blight, recycling and redevelopment of
25 infrastructure, and redevelopment of communities.
26
27 Research into another strategy of community reinvestment has focused on public and private
28 investments in youth. This body of work suggests that this form of economic development pays
29 off in areas such as improved high school graduation rates and homeownership rates. Helping
30 youth develop the social and emotional skills necessary to be contributing members of the state
31 economy meets the state's interest in building quality communities that sustain into the future.
74
COMMITTEE RECOMMENDATIONS
1
2 Re~ponse: To ensure Minnesota is able to continue to effectively compete with other states,
3 the Legislature has a responsibility to partner with cities, state agencies, and other
4 community reinvestment organizations to develop a statewide community reinvestment
5 strategy, and to identify and implement additional tools to fund community reinvestment
6 efforts. The state should partner with cities in community reinvestment activities. State
7 acknowledgment of the need for community reinvestment and economic development is
8 essential to the state's prosperity, and legislation is needed to generate resources sufficient
9 to address these critical needs at the local level. The state should maintain a long-term
10 vision for a healthy society and renew its commitment to early childhood family education
11 and pre-school programs that better equip individuals to contribute to the local and state
12 economies and that ultimately make for quality communities.
13
14 LE-19. Tax Increment Financing (TIF) (JO)
15 Issue: Until the state identifics and implements additional development tools, TIP remains the
16 most viable tool available to fund community rcinvestment efforts despite the significant impacts
17 of the 2001 property tax reform package. Cities and development authorities \vill be required to
18 devoteconsidctlible efforts in bfdertb understaridandaddfesstheiiripacts ofthe 2001jiroperty
19 tax reform package on existing TIP districts and potential future projects.
20 Despite the significant impacts of the 2001 property tax reform package, TIF remains the most
21 viable tool available to fund community reinvestment efforts. Future changes to current statutes
22 that would render TIF less flexible will almost certainly curtail local efforts to SUPPOIt iob
23 creation, housing, redevelopment and remediation.
24
25 Response: So as to not further complicate this process, the Legislature should not enact
26 future TIF law restrictions during the next legislative session. In order to allow TIF to
27 maintain the effectiveness that remains in the wake of the 2001 property tax reform
28 package, the Legislature should consider:
29 . Authorizing any tax increment districts approved after April 1, 1990, to pool
30 increments in the same manner as districts certified prior to April 1, 1990, for
31 affordable housing and pollution remediation.
75
COMMITTEE RECOMMENDATIONS I
i
1 . Expanding the use of TI F to assist in the development of technological infrastructure
2 and products, biotechnology, research, transit-oriented development, restoration of
3 designated historic structures, non-retail commercial projects, and non-wetland areas
4 where unstable/non-buildable soils exist.
5 . Modifying various provisions in order to better facilitate redevelopment and housing
6 activities, such as allowing a city to dcla)' thc start of incrcmcnt that would rcsult in thc
7 TIF authority having thc ability to rcccivc a full first ycar worth of incrcmcnt.
8 . Modifying the housing district income qualification level requirements to allow the
9 levels to vary according to those specific to individual communities.
10 . Allowing any lease payments received after the decertification of a district to not count
11 as tax increment.
12 . Discoural!inl! any statutory mechanisms that directly or indirectly decrease the impact
13 of city redevelopment and economic development proiects.
14
15 LE-20. TIF District Deficits (JO)
16 Issue: Along with the property tax reform of200l, the Legislature committed state resources
17 through the TIF grant program in order to address the impacts of property tax reform on existing
18 TIF districts. This funding, however, was eliminated in order to help address the state budget
19 deficit. Since then, the Legislature has authorized municipalities to extend districts provided
20 certain criteria are met. At this time it remains unclear whether this will adequately address
21 district shortfalls~
22
23 Response: Municipalities using the new authorization for district extensions will need to
24 closely monitor the effects to ensure the extension adequately addressed the shortfalls. If
25 necessary, the Legislature should consider amendments to the 2003 authorization,
26 including state assistance, for addressing TIF district deficits.
27
28 LE-21. Business Subsidies (JO)
29 Issue: In recent years, the Legislature has clarified and modified sections of the Business
30 Subsidies Act. In order for development agencies to effectively implement the amended law, the
31 Legislature should avoid further substantive changes.
76
COMMITTEE RECOMMENDATIONS
1
2 Response: Without thorough study, the Legislature should avoid further substantive
3 changes to the Business Subsidies Act during the next legislative session, but should
4 consider additional technical changes and updates that would streamline process{~s and
5 procedures. For cxamplc, thc Legislaturc should considcr incrcasing the business subsidy
6 eaps currently in statutc by which a local government needs to hold a public meeting and
7 gi'/e notice.
8
9 LE-22. Business Development Programs (10)
10 Issue: In recent years, the state has created and funded the Jobs Opportunity Building Zones
11 (JOBZ), designed to lure business development into greater Minnesota, and provided insufficient
12 bonding appropriations for other Department of Employment and Economic Development
13 (DEED) business development programs such as the Greater Minnesota Business Development
14 Public Infrastructure Grant Program. Furthermore, other proven statewide business development
15 programs, such as the Minnesota Investment Fund, have been cut substantially and recent
16 funding amounts have not matched the needs statewide. The redevelopment and economic
17 development needs of cities, statewide, have not gone away. Legislation that prohibits any new
18 JOBZ or tax increment financing (TIF) sends the wrong message to cities about what business
19 development tools will be available or sustainable. In light of the current economic times, local
20 governments may need to increasingly rely on these types of state programs in order to
21 effectively compete nationally and internationally for business development.
22
23 The 2005 Legislature addressed the state' s need for infrastructure that 'vVill assist in facilitating
24 high yolumes of international air cargo in Minnesota by passing the air cargo legislation to
25 further expand and expedite access to global markets. This is important as the state's gap puts
26 our internationally engaged businesses at a competitive disadvantage, and makes it difficult to
27 attract ne'.':" manufacturing and distribution jobs to the state. Helping Minnesota businesses
28 expeditiously reach markets v/orldwide 'Nill impro';e Minnesota' s competitiveness and boost the
29 state's economy.
30
77
COMMITTEE RECOMMENDATIONS
1 Re5ponse: The Legislature should continue to fund and keep flexible the Greater
2 Minnesota Business Development Public Infrastructure Grants and JOBZ programs, as
3 well as proven statewide business development programs such as the Minnesota Investment
4 Fund and DEED land recycling programs. These funds should not be raided to balance any
5 state budget shortfall, and priority should be given to increasing the funding for these
6 proven programs.. especially durin2 these economic times. The Lea2ue supports new
7 JOBZ projects havin2 the full duration of tax benefit. rather than the reduced time frame
8 for projects comin2 on line just now. Furthermore. 20in2 forward the state should keep in
9 mind the needs of the entire state when developin2 new business development
10 pr02rammin2.
11
12 The state should also authorize and fund additional business development tools that
13 increase Minnesota's competitiveness by improving access to global markets.
14
15 LE-23. Land Recycling Programs (10)
16 Issue: Communities across Minnesota are faced with expensive barriers to re-using property.
17 These roadblocks include deteriorating, obsolete, and vacant structures, as well as varying levels
18 contamination. Such barriers pose significant problems for cities seeking to re~use existing
19 infrastructure, maintain and improve property tax base, provide jobs and housing opportunities,
20 and preserve historic structures. While land recycling activities have always been particularly
21 costly since they usually encompass multi-phase projects of extensive duration where site
22 assemblage, demolition, relocation or pollution cleanup must occur before private-sector interest
23 can be generated, the 2001 property tax reform package significantly diminished the ability of
24 cities to undertake these efforts by dramatically reducing revenues generated by tax increment
25 financing (TIF). Exacerbating this situation, the land recycling programs administered by the
26 Department of Employment and Economic Development (DEED) and the Metropolitan Council
27 programs continue to be underfunded.
28
29 Response: In recognition of the unique needs of land recycling projects statewide, the
30 Legislature should increase funding for the statewide redevelopment account. The League
31 supports a competitive program through DEED with both bonding and general fund
78
COMMITTEE RECOMMENDATIONS
] appropriations that distributes the funds equitably between greater Minnesota and the
2 metro area. Additionally, as part of a comprehensive approach to land recycling needs, the
3 Legislature should consider state income tax credits and other tax incentives for local
4 historic preservation efforts. The Legislature should also revive the "This Old House" law,
5 and consider enacting similar authority that would provide a tax deferral on improvements
6 to commercial buildings, including those located in designated rehabilitation or historic
7 preservation districts. Finally, the Legislature should continue its support and im:rease
8 funding levels for state and regional programs to assist in contamination cleanup and
9 brownfields remediation efforts.
10
11 LE-24. Property Tax Abatement Authority (JO)
12 Issue: In an effort to increase the number of development tools available, the 1997 Legislature
13 authorized local units of government to grant property tax abatements. Although tax increment
14 financing (TIF) continues to be the primary financing mechanism for local development projects,
15 tax abatements provide a good addition to a needed list of economic development tools.
16 Recognizing the need for municipal development tools, the 2008 Legislature expanded the
17 abatement authority bv converting the limit on abatements from ten percent of the current tax
18 levy to ten percent of net tax capacity. In order to provide maximum benefits, tax abatements
19 should be less restrictive in terms of funding caps and financing terms. Property tax abatements
20 should not be considered a replacement for TIF.
21
22 Response: TIF is still the primary, viable development tool available for cities~ Abatement
23 authority should continue to be available, but not offered as a rationale to eliminate TIF.
24 Additionally, the Legislature should develop a state fund to facilitate state partidpation in
25 abatement projects. Finally, the funding caps and duration limits should be eliminated.
26
27 LE-25. OSA Response Timelines (10)
28 Issue: The Office of the State Auditor (OSA) is responsible for tax increment financing (TIF)
29 oversight. As part of its review ofTIF districts, the OSA identifies alleged violations of the TIF
30 laws and issues noncompliance notices to TIF authorities. After responding to these
31 noncompliance notices within the required 60-day period, authorities often do not receive timely
79
COMMITTEE RECOMMENDATIONS.
1 responses on the matter from the OSA. Government agencies typically have response":time
2 deadlines. Additionally, TIF authorities are often unclear about the final disposition of the matter
3 upon receipt of a final noncompliance notice.
4
5 Response: In the event that the OSA determines to issue a final noncompliance notice to a
6 TIF authority, the Legislature should require the OSA to issue the notice within 60 days of
7 receiving the authority's response. Any final noncompliance notice should contain the
8 OSA's final position on the matter, the date upon which it forwarded the matter to the
9 county attorney, and the next steps that are required to be taken according to state law.
10 Upon expiration ofthe 60-day period, the authority should be deemed to be in compliance
11 with the TIF laws if no final noncompliance notice is received.
12
13 LE-26. OSA Time Limitations (JO)
14 Issue: The Office of the State Auditor (OSA) has the authority to issue noncompliance notices
15 for every existing tax increment financing (TIF) district in the state for alleged violations of the
16 TIF laws. This authority extends retroactively to the inception of the district. Accordingly, TIF
17 authorities can receive noncompliance notices for alleged violations that occurred 20 or more
18 years ago. Often, staff and record-keeping procedures have changed, and TIF authorities find it
19 difficult to reconstruct the past in order to identify and remedy these situations. Similarly, the
20 OSA claims the authority, based on the state's records retention schedule, to audit TIF districts
21 for up to lO years after decertification, which requires cities to expend staff resources to maintain
22 files and a working knowledge of old districts for an unreasonable period oftime.
23
24 Response: A reasonable timeframe within which alleged violations are identified should be
25 established. The Legislature should reasonably restrict the OSA's ability to issue
26 noncompliance notices to the six-year period prior to the notice's issuance date. The
27 Legislature should also require the OSA to conduct any audits on decertified districts
28 within one year of decertification.
29
80
COMMITTEE RECOMMENDATIONS
1 LE-27. Adequate Funding for Transportation (AF)
2 Issue: The League recognizes that all Minnesota residents and businesses benefit from a sound
3 transportation system that offers diverse modes of travel. In spite of the significant funding
4 increase for transportation enacted in 2008, G,gurrent funding for roads, bridges, and transit
5 systems across all government levels in the state is remains inadequate, and Minnesota's
6 transportation system is failing to meet needs pertaining to public safety, population growth and
7 economic development.
8
9 Due to funding challenges, the state has delayed regionally significant road construction and
10 reconstruction projects. Urban areas are experiencing growing congestion and are lagging behind
11 other regions in making transit investments. Rural roads are not being upgraded to meet modern
12 safety standards, and are not serving the needs of industries that depend on the ability to
13 transport heavy loads.
14
15 Local roads, bridges, sidewalks, and trails are critical components of Minnesota's transportation
16 infrastructure. Cities, like the state, have inadequate resources to preserve and reconstruct aging
17 transportation infrastructure, and to build transportation infrastructure to serve new development.
18 Existing funding mechanisms, such as municipal state aid (MSA), special assessments and
19 bonding, have limited applications, making it difficult for cities to address growing needs.
20
21 Further, as the state funding shortfall has grown, the trunk highway project cost participation
22 requirements imposed on local units of government have increased dramatically. This burden has
23 been exacerbated by the state's use of trunk highway bonds as a funding source, because under
24 Minnesota's constitution, trunk highway bond dollars cannot be spent on local components of
25 trunk highway projects, and the bond dollars are not distributed through the Highway User Tax
26 Distribution Fund formula. Cost participation requirements put added pressure on local budgets,
27 contribute to property tax increases and divert local resources from the over 39,000 lane miles in
28 Minnesota under municipal jurisdiction.
29
81
COMMITTEE RECOMMENDATIONS
1 Response: More resources must be dedicated to all components of the state's transportation
2 system, and local units of government must have access to resources and funding tools to
3 meet growing needs. The League supports:
4 . Accelcration of the phase in of the cOnstitutional dedication of 100 percent of the metor
5 '<,chiclc sales tax (MV8T) to transportation purposes.
6 . lVIVST distribution of 60 percent for roads and bridgcs, and 40 pcrcent for transit.
7 . Dedication of thc salcs tax on leased vehicles to transportation purposcs.
8 . A permanent increase in the gas tax.
9 . Indexing of the gas tax, provided there is a limit on how much the tax can be increased
10 for inflation in a given amount of time.
11 . Increases in vehicle registration taxes (tab fees).
12 . Trunk highway bonding, provided the Legislature implements reasonable restrictions
13 on the amount of debt service the state will incur, and provided the Legislature
14 appropriates funding to assist with local costs related to projects funded with trunk
15 highway bonds.
16 . General obligation bonding for local roads and bridges, particularly for routes of
17 regional significance.
IS . . A Sales fax bicreaseto fUllcftraiisportati()Illleeds.
19 . Funding to assist cities burdened by cost participation responsibilities imposed by
20 improvement projects on the state's principal arterial system and on the county state
21 aid highway (CSAH) system.
22 . Funding for transportation components of economic development and redevelopment
23 projects of regional significance.
24 . Full funding for all components of state highway projects, including related stormwater
25 management systems, through state sources.
26 . Funding to build roads to standards that can accommodate the year-round transport of
27 heavy loads.
28 . A sales tax exemption for materials purchased for state and local road, bridge,
29 sidewalk, trail and transit construction projects.
30 . Authority for cities to impose development impact fees.
82
COMMITTEE RECOMMENDATIONS
1 . Local funding options that would allow cities to raise revenues for roads, bridges,
2 sidewalks, trails, and transit.
3
4 LE-28. TUfnbacks of County and State Roads (AF)
5 Issue: As road funding becomes increasingly inadequate, more roads are being "turned back" to
6 cities from counties and the state.
7
8 Response: Turnbacks should not occur without direct funding or transfer of a funding
9 source. A process of negotiation and mediation should govern the timing, funding, and
10 condition of turned-back roads. City taxpayers should receive the same treatment as
11 township taxpayers. The requirement for a public hearing, standards about the conditions
12 of turn backs, and temporary maintenance funding should also apply to county turnbacks
13 to cities. At a minimum, roads that are proposed to be turned back toa city government
14 should be brought up to the standards of the receiving government, or that city should be
15 compensated with a direct payment. Direct funding should be provided for smaller cities
16 that are not provided with turnback financing through the municipal state aid system.
18 LE-29. Mn/DOT Rights-of-Way Maintenance (AF)
19 Issue: Maintenance of property, including government property and facilities, is important to
20 public safety and to the image of Minnesota cities. Cities are acutely aware of the responsibility
21 they have for enforcing property maintenance codes pertaining to grass mowing, noxious weed
22 abatement, the placement of trash in yards and fence maintenance.
23
24 Minnesota has many miles of highways that run through cities. In recent years, the Minnesota
25 Department of Transportation (Mn/DOT) has cut a substantial percentage of its rights-of-way
26 management staff. The cuts have resulted in reduced maintenance along some corridors and on
27 parcels acquired by MnlDOT for transportation purposes. Specifically, Mn/DOT has reduced the
28 frequency of mowing, litter collection, noxious weed abatement and repair of fences and guard
83
COMMITTEE RECOMMENDATIONS
1 rails. This maintenance reduction has created public safety concerns and has undermined efforts
2 to keep corridors attractive.
3
4 Response: The League requests that Mn/DOT be required to maintain state rights-of-way
5 and parcels acquired by Mn/DOT for transportation purposes located within city limits in
6 a manner consistent with local ordinances governing the upkeep of private property when
7 requested by the city. Alternatively, Mn/DOT should reimburse Minnesota cities for the
8 labor, supplies, and equipment necessary to maintain state rights-of-way to meet city
9 standards and/or minimize public safety hazards. The Legislature must provide Mn/DOT
10 with adequate funds to maintain state rights-of-way.
11
12 LE-30. Road Funding for Cities Under 5,000 (AF)
13 Issue: Cities under 5,000 population do not receive any non-property tax funds for their collector
14 and arterial streets. Citing this fact, the 2005 Legislature appropriated $4 million in additional
15 local government aid (LGA) to be distributed to cities under 5,000 population. However, this
16 increase amounts to a fraction ofwnat cities over 5,000 population receive in municipal state aid
17 . (MSA) from tne Highway User Tax DiStribtitioIiFuhd(HUTDF).
18
19 Response: ,cities under 5,000 population that are not eligible for MSA should be able to use
20 county municipal accounts and the 5 percent account of the HUTDF.
21
22 Uses of county municipal accounts should be statutorily modified so counties can dedicate
23 these funds for local arterials and collector streets within cities under 5,000 population. In
24 addition, the 5 percent set-aside account in the highway user distribution fund should be
25 used to meet this funding gap.
26
27 LE 31. Crant Anticipation BOBd f....uthority (.AF/JO)
28 Issue: Grant !..nticipation Reycnuc Vehicle (G..^..RVEE) bonds are bonds bused on future federal
29 transportation funding. In states that have enacted legislation CIlabling local governments to issue
84
COMMITTEE RECOMMENDATIONS
1 GARVEE debt, the bonds have been used to advance funded transportation projects ::it the local
2 level to avoid futuro inflationary costs and provide additional project schoduling flexibility.
3
4 Response: The League supports legislation that would enablc local governments to use
5 CARVEE bonds as a financing tool to accelerate the developmcnt and construction of
6 funded projects that arc already includcd in Mn/DOT Transportation Improvemcnt Plans
7 to proYidc project scheduling flexibility and avoid future inflationar)' costs.
8
9 LE-32. Railroad-Related Projects (AP)
10 Issue: Cities are being presented with far~reaching and long-term effects when railroad
11 expansion and related projects enter their communities. Along with the concerns related to
12 safety, environmental effects, and noise impacts on the communities, several issues have greater
13 reaching effects:
14 . The cost-share ratio related to roadway crossing improvements is borne by the public sector
15 to a substantial degree. Some estimates are 80 percent public to 20 percent private funding.
16 . The financial burden is faced by the public sector to deal with mitigation improvements, a
17... cost that the Surface. Transportation Board (STB ). is.not requiring the private . sector to pay.
18 . The issues associated with the length of trains moving through communities.
19 . Liability associated with whistle-blowing ordinances.
20 . Pre-emption of local authority to regulate railroad activities.
21
22 Response: The private sector must be required to pay a greater share of the improvements
23 that benefit its industry. The public sector should not be expected to underwrite the costs of
24 improvements sought by the private sector. The state and federal government must
25 participate in adequately funding mitigation of the negative impact of railroads on local
26 government and its citizens. The federal government must exercise greater oversight of the
27 STB to ensure fair and equitable solutions are reached when dealing with cities in
28 Minnesota.
29
85
COMMITTEE RECOMMENDATIONS
1 LE-33. Statewide Aviation Airport Planning and Funding (AF)
2 Issue: Airports are an essential component of Minnesota's transportation infrastructure. The
3 Minneapolis International Airport (MSP) serves as an important gateway to the region, the nation
4 and global markets. It serves as the primary access point to our national airport system. L^.t somc
5 point, the current This airport~ even with all the planned improvements~ will eventually reach its
6 capacity. The state needs to addrcss implement a long term strategy to make better use of other
7 airport facilities, and existing resources, reduce environmental impacts, and achieve sound and
8 sustainable economic growth throughout the state.
9
10 Aviation planning is a multi-layered effort with different levels of responsibilities. Currently, the
11 State Airports System Plan is put together by MnJDOT with individual pieces developed by the
12 Federal Aviation Agency (FAA}, Metropolitan Council (MC), and Metropolitan Airports
13 Commission (MAC). Aviation planning could be improved by a more unified statewide effort
14 and coordination of the various aviation strategies through creation of an oversight body.
15
16 Minn. Stat. S 360.017 establishes the State Airport Fund and authorizes the Minnesota
17 Department .of Transportation (MnlDOT) Office of Aeronautics to . support cities, . counties and
18 townships in the planning, development, maintenance and safe operation of public airports. In
19 2003, in order to help balance the state's budget, the Legislature transferred $15 million from the
20 State Airport Fund to the General Fund. Plans to repay the State Airport Fund in 2007 were
21 delayed to 2008, then again to 2009, and stakeholders fear more delays will occur. Efforts to
22 preserve and improve the quality of airports throughout the state will be hindered by the
23 unavailability of these revenues.
24
25 Response: The state needs a higher degree of integration of agencies (FAA, Mn/DOT, MC,
26 and MAC) and communities related to aviation planning. The League supports the
27 development of a statewide airport advisory board, which could provide input, review and
28 make recommendations to assist in development of a comprehensive statewide State
29 Airports System Plan.
30
86
COMMITTEE RECOMMENDA TIONS
1 The state needs to look at how ViC can cnhance our make planning: and investment decisions
2 that will maximize the potential for airports to become economic development centers
3 providing that provide access to domestic and global marketplaces. This can be an
4 opportunity that enables Investments in airports allow existing businesses to remain and
5 grow, help attract new businesses, increase employment, and lower product and service
6 costs for the benefit of the region. Finally, the Leg:islature must repay the State Airport
7 Fund so that airport maintenance and improvements throug:hout Minnesota can occur.
8
9 LE-NEW A. Transit Improvement Areas (JO)
10 Issue: In 2008 the Department of Emplovment and Economic Development (DEED) was
11 authorized to establish Transit Improvement Areas. Transit Improvement Areas include parcels
12 of land that are located in part within one-half mile of a transit station. A transit station is
13 defined as a physical structure or designated area which supports the interconnection of various
14 transportation modes, including light rail, commuter rail and rapid bus transit, and which
15 promotes and achieves the loading, discharging and transporting of people. The commissioner
16 of DEED may designate a Transit Improvement Area if it will increase the effectiveness of a
17 . .. mass transit proiectbv incorporating one or more modes . of public transportation wi th
18 commercial and housing development as well as providing a clean and pleasant place for
19 pedestrian use. The law requires the commissioner to consult with other affected state or
20 regional agencies. This language was initiated by communities concerned about the lack of tools
21 available to shape development around maior transit stations. Although the language passed and
22 was signed in law by the Governor (Chapter 300), there was no funding put into place to
23 implement the new program.
24
25 Res/Jonse: The Lea2ue of Minnesota Cities supports the implementation of this pr02ram
26 and ur2es the Le2islature to authorize various fundin2 mechanisms for Transit
27 Improvement Areas. includin2.tax increment financin2. tax abatement. bondin2 and
28 2eneral fund appropriations for a revolvin210an pr02ram or for a 2rant pr02ram.
29
87
COMMITTEE RECOMMENDA TIONS
1 LE-NEW B. Foreclosure (HN)
2 Issue: Over the last few years, Minnesota has seen a surge in the number of mortgage
3 foreclosures. An estimated 28,000 more foreclosures statewide could occur in 2008.
4
5 Cities are feeling the financial impacts of the growing foreclosure crisis. Many cities are
6 dedicating already strained resources to address public safety and maintenance problems
7 associated with foreclosed and vacant homes. Cities are also seeing revenues decline due to
8 delinquent utilitv payments, property tax payments and nuisance abatements.
9
10 Foreclosures have also resulted in an unprecedented number of vacant properties, making them a
11 top concern for communities. Left unaddressed, these abandoned properties destabilize
12 neighborhoods by depressing property values within surrounding neighborhoods and driving up
13 costs of municipal services.
14
15 Although cities are doing their best to preserve the viability and safety of their communities, it is
16 evident that they cannot address the issues stemming from foreclosures alone.
18 Res/Jonse: The LegJslature should:
19 . In addition to any federal resources provided to cities under HR 3221 and any other
20 federalfundine. secure state and federal resources for_cities to help pay for costs
21 associated with foreclosures;
22 . Allow for an expedited process to address nuisance properties. a property tax
23 abatement process for homes in foreclosure. process for cities to aCQuire abandoned
24 properties if they determine it is preferable to do so. and financine options for cities to
25 seek reimbursement for costs;
26 . Allow cities to recover delinQuent property taxes and utility bills prior to the sale of
27 foreclosed properties and allow cities to collect liens on properties that eo tax forfeit
28 . ReQuire all delinQuent property taxes and utility bills be paid prior to the sale of a
29 foreclosed property;
30 . Improve notification to cities when a house is in the foreclosure process and vacated:
88
COMMITTEE RECOMMENDATIONS
1 . ReQuire foreclosing party/mortgage holder to maintain foreclosed properties. If the
2 foreclosing party is unwilling to maintain the property cities should be allowed to
3 charge foreclosing party/mortgage holder for cost of maintenance: and
4 . Support a coordinated structure of responses to the foreclosure crisis to prevent
5 foreclosures, activate and guide private investment and home purchases, and support
6 distressed neighborhoods.
7
8 LE-NEW C. Ener2:V Efficiencv Improvement Requirements for Housin2:
9 (CJ)
10 Issue: Rising energy costs have brought attention to the poor energy efficiency of many private
11 residences, especially in older housing stock. The affordability of this housing could be severely
12 impacted by continued increases in home energy costs. Improvements in the energy efficiency of
13 this housing stock would improve the affordability oflocal housing options and would help
14 achieve state energy demand and greenhouse gas emission reduction goals. The challenge is how
15 best to achieve that result.
16
17 Legisiat.ivediscussioIls l1ave suggest.edtl1at.minimum eIlergye-rfidel1cyimpro\fements could be
18 added as point of sale requirements for this older housing stock, including basic renovations such
19 as improved attic insulation levels, window caulking and outlet sealing.
20
21 While the goals of such a program are laudable, there are a number of concerns for how this
22 would actually be accomplished in individual cities. Most cities do not, for example, have point
23 of sale inspections. There will also be cases where the house will be structurally unable to meet
24 high attic insulation requirements, such as with manufactured housing or with older houses with
25 very little attic space. There are also concerns that the cost of meeting these energy requirements
26 could result in homeowners being reluctant to sell their houses because of the expense of the
27 improvements that would be required to meet new standards.
28
29 What homeowners will need to accomplish these energy efficiency improvements is increased
30 exposure to educational information, such as increased access to energy audits and increased
89
COMMITTEE RECOMMENDATIONS
1 familiality with and access to programs that finance home energy efficiency projects. City
2 government is probably not the best lead provider of that SOli of public program. Electric utilities
3 have a customer relationship with homeowners, a regulatory requirement to meet energy demand
4 reduction goals through conservation spending, and access to technical expertise that can take
5 into account variations in housing age and construction. Cities could, however, playa strong role
6 in increasing public exposure to approved educational materials.
7
8 Res/Jonse: The League of Minnesota Cities agrees that there is a need to improve the
9 enerey efficiency of older housing stock to reduce energy consumption and improve the
10 affordabilitv of housing. The state should focus its efforts on improving educational
11 programs and on improvin1! the use of existin1! statewide Conservation Improvement
12 Program (CIP) financed programs to provide homeowners with technical and financial
13 support for weatherization and energy efficiency improvements. Cities should use their
14 communication tools. such as newsletters and web sites. to promote these efforts and to
15 help link homeowners to educational materials and program resources.
16
17
90
COMMITTEE RECOMMENDATIONS
1 IMPROVING FISCAL FUTURES
2 FF-l. State-Local Fiscal Relations (OCIlO)
3 Issue: Since the 1970s, services provided by Minnesota cities have been largely funded through
4 a combination of property taxes, state aids, and state property tax relief programs. This system of
5 municipal finance has evolved to ensure that municipal services can be funded without excessive
6 local tax burdens.
7
8 In recent years, the state-local partnership has eroded under the stress of state budget deficits and
9 an emerging belief among legislators that cities should be more financially independent. If this
10 trend continues, further reductions in state aid to cities will create fiscal problems for many
11 communities already struggling with the effects of recent aid reductions and the shift away from
12 an interdependent state-local fiscal policy.
13
14 Response: The League supports a strong state-local fiscal partnership. The state-local fiscal
15 system, and any future modifications, should be consistent with the following principles:
16 . Accountability. Cities believe a viable partnership with the state requires cities and the
17 state to communicate effectively with each other and with the public about their roles
18 and responsibilities. Cities and the state must also exercise sound financial stewardship,
19 including maximizing efficiencies in service delivery and other means of cost
20 containment whenever possible.
21 . Certainty. Cities need to have more certainty and predictability in all of their available
22 revenue sources, including the property tax and the amount of funding they receive
23 from local government aid and similar programs. The current practice of almost
24 annual adjustments to local government aid (LGA) and similar programs and the
25 imposition of levy limits do not allow for prudent financial planning and decisions.
26 . Adequacy. The revenue sources available to cities and the state must raise adequate
27 funds to meet city needs, to fund mandates, and to maintain Minnesota's long-term
28 competitiveness.
29 . Flexibility. As cities become increasingly diverse in their characteristics, a "one-size-fits-
30 all" system that limits all cities to the property tax as the major, non-state aid revenue
91
COMMITTEE RECOMMENDA TIONS
1 source is increasingly unworkable. Some cities have sufficient property tax base to
2 sustain an adequate service level, but many do not. Cities should have greater access to
3 other tax and revenue sources than currently permitted.
4 . Equity. All citizens should receive adequate levels of municipal services at relatively
5 similar levels of taxation. This means that the state should provide financial assistance
6 to cities that have high needs, low fiscal capacity, or both. The state should also provide
7 financial assistance to compensate cities and their taxpayers for overburden created by
8 non-taxpaying users of city services and to reduce tax burden disparities among
9 communities and between cities and townships.
10
11 FF-2. State Budget Stability (GCIJO)
12 Issue: Since 2002, the Legislature has struggled annually to solve a series of projected budget
13 deficits only to find that their actions were not sufficient to permanently balance the state budget.
14 Past efforts to solve the state deficit have largely focused on expenditure reductions, shifting of
15 costs to other governments, the use of one-time reserves and fee and fine increases. Although
16 recent state budget forecasts have improved, the possibility exists that the state could again slip
J7 into defidtuIiless the state iinplefueIits correc:tive actions.
18
19 Response: To address future state budget deficits, the Legislature:
20 . Must consider all options, including revenue increases, with a particular focus on
21 changes that increase state revenues and improve the stability ofthe state's revenue
22 stream.
23 . Must not further reduce aid to cities.
24 . Must consider the aggregate impact of recent budget cuts in order to enact a balanced
25 response for taxpayers.
26 . Must reinstate estimates of inflationary increases to expenditure estimates.
27 . Should build a 5-percent budget reserve.
28
92
COMMITTEE RECOMMENDATIONS
1 FF-3. Funding LGA (OCIlO)
2 Issue: Local government aid (LOA) is an important component in the state's property tax relief
3 system. In 2001, the Legislature enacted significant changes to the state's property tax relief
4 programs, which included an increase in LOA funding, state takeover of general education
5 funding, a state takeover of transit funding, and an elimination of homestead agricultural credit
6 aid (HACA) for cities. The Legislature's goal for these changes was to provide relatively
7 balanced property tax relief to taxpayers.
8
9 Prior to the 2003 legislative session, actual state revenue collections failed to meet projected
10 growth resulting in a 15 percent state budget deficit. During the 2003 session, the Legislature
11 balanced the state's budget deficit, in part, by permanently reducing LOA by $150 million,
12 eliminating the inflationary increase in LOA funding, and temporarily reducing funding for the
13 market value homestead credit (MVHC) reimbursement by $20 million. At the same time,
14 funding for the general education takeover and the transit takeover were not cut. The cuts in city
15 funding were coupled with a one-year extension oflevy limits that prohibited larger cities from
16 recovering these lost revenues through the property tax.
18 In ~ 2008, the Legislature restored $4& $42 million in LOA funding for the 2009 distribution
19 and included an additional two percent increase for 2010 and a four percent increase for 2011.
20 Even with this restoration and adjustments, LOA funding in 2011 remains will remain nearly H
21 ~percent below the 2003 pre-reduction funding level.
22
23 Response: In order to reduce pressure on the property tax, help restare the balanee
24 aehic';ed by the 2001 tax reforms, and to equalize property tax bases, the League supports
25 an increase in the LGA appropriation to at least the level that would have been provided
26 prior to the 2003 cuts, including the loss of the annual inflation adjustment.
27
93
COMMITTEE RECOMMENDATIONS
1 FF-4. Local Government Aid Reform (GC/JO)
2 Issue: The Local Government Aid (LGA) program was created as a component of the larger
3 property tax refoTIn passed in 1972 known as the "Minnesota Miracle." Prior to 1971, the state
4 maintained a number of smaller state aid programs, many of which were "shared tax" programs
5 which distributed aid based solely on the geographic location where the revenue was collected.
6 In contrast, the LGA program was established to provide aid to cities based on differences in
7 "need" and differences in "ability" to raise revenue. Although the LGA formula's measures of
8 need and ability to pay have been modified over the years, the general goals of the fonnula have
9 been to equalize tax bases, assist cities with service "overburden" and to reduce the overall
10 reliance of cities on the property tax.
11
12 The 2003 Legislature adopted a nevI LGA formula. definition of need for cities O'ler 2,500
13 population, largely based on recommendations by the governor. The need formula for smaller
14 cities ',vas updated to reflect current city conditions.
15
16 The 2003 Legislature also changed ho"v the program measures a city's ability to pay for its needs
by including taconite aids in the formula. This provision, '.vhich vias not part oftl1c gO'lemor's
........ ',' ,......._,_..... ...... ~.."-.:._...._._.,_,___...._,._...,_..___.._,.. ,','_" ...~._.......,.,._.._.,_,.,."._._..,.._,."_.__,,._,_....,......_...._.__,. '_._..__._______..._.._..,._..._.. ._._ .ur_ '_ '_'_.....__..__...._____._ ......... . .. ,.__..... "'_ .._ ._'. _,_._... ,._.,.___........... ..._._n___ _.__.........~_..,.._... ."._....._....._~__.__m _.. ._,_ .. ___ ....._.......__ _"___"'0''''_'''__'' ... ..........,_..
18 recommendation to thc Legislature, \-vas modified in 2005 to exclude taconite aids for cities that
19 are host to taconite mincs or production facilities. The Legislature and administration also
20 considered adding other factors to the ability to pay measure, including local sales tax revenues,
21 tax increment financing tax capacity, fees, and service charges.
22
23 The current LG.^.. formula caps increases in LGA changes at 10 percent of each city's previous
24 year levy and caps decrcases at 10 perccnt of previous year levy for cities over 2,500 population
25 or 5 percent of certified 2003 aid for cities under 2,500 population. These caps do not
26 automatically adjust for changcs in the program's appropriation level, which significantly altered
27 the distribution of LGA for 2006. Becausc the ne\'; formula is more volatile than the old, the caps
28 allo',';, for very large swings in LG.^.. from one year to the next, especially for larger cities.
29
94
COMMITTEE RECOMMENDATIONS
1 The current LGA formula, hovie'v'er, has exhibited sevcral keY'vvealmesses including significant
2 annual volatility and unpredictability. Further, thcrc has becn a significant increase in thc numbcr
3 of cities that are "off the fOTInula." Finally, there exists a general perception that similarly
4 situated cities arc receiving significantly diffcrent distributions of LGA and there arc valid
5 concerns that the unique circumstances of some cities are not acknowledged by the formula.
6 In 2008, the LGA formula was modified to include a new iobs factor that attempts to
7 acknowledge the overburden impacts on cities that act as regional centers or hubs of commerce.
8 The 2008 modifications were enacted as a temporary reform. The Legislature also established an
9 LGA study with the goal of developing a new LGA system.
10
11 Response: The League supports a thoroagh revie'l,' the le2:islative study of the current LGA
12 formula with the goal of identifying a new system or modifications to the existing system
13 that will address current formula deficiencies oatlined above. A new LGA system should
14 include need and capacity factors, should minimize the reliance on "side pots," and should
15 reduce tax burden disparities among cities and between cities and townships.
16
17 Until the Legislatare enacts a new formala, the Leagae supports:
L8 . :ModifyiRgthe LCA formal a te minimize valatility by adjasting the eaps,using multi. .
19 year averages ef fermula fadors, certifying the aid earlier ifi the )!ear, or other optiens.
20 . Returning to the adjusted net tax eapaeity measure of ability to pay by eliminating the
21 tacenite aid offset. The League opposes the in elusion of any additional faetors in the
22 LG,A... formula's measurement of ability to pay. {neluding these additional measares will
23 reward some eities aad punish ethers based an past and fature fmaneial decisions,
24 "/hieh runs eeuatcr to past legislative iBtent to have the LC.A... distribatien uaaffeeted by
25 loeal finaaeial deeisiens.
26 . Modifying the LCA formula caps te automatically adjust for changes in the oyer all
27 LCA appropriation.
28 . AnalyziBg the LC.A... formula to assure that the aeed aad eapaeitymeasures adequately
29 eonsider the uaique aeeds of rapidly growing eities.
30 . The followiBg formula changes provided LCA is inereased ill an amouat suffieieat to
31 offset LG,.....losses to other cities that occur due te these formula ehaages:
95
COMMITTEE RECOMMENDATIONS
1 1. Adjust the eity necd factor for inflation that oceurrcd from 2000 through 2003.
2 2. Use current population estimatcs for regional centcr aid base.
3
4 FF 5. State AdministratiYe Deductions from State A.id (GC/JO)
5 Issue: State administrative costs for agency functions including the state demographer's
6 population estimate function, the Department of Employee Relations' pay equity compliance
7 function, and the state auditor's best practice review and government information function are
8 deducted from the local government aid (LGA) appropriation, v;hich reducc3 tho property tax
9 relief provided by LG/~ and creates hidden appropriations for state agencies. In 2007, the
10 Legislature increased the appropriation for the state auditor's office by $397,000 to cover
11 allo'vVable costs, effectively reducing the appropriation for LG/~. A change to the total amount of
12 state a-dministrative costs deducted from LGA contributes to the unpredictability of LG,\ from
13 year to year.
14
15 Response: .\11 appropriations from LC,A.. resources te fund statc opcrations should bc
16 repcalcd.
18 FF-6. State Charges for Administrative Services (Ge/JO)
19 Issue: Currently, some state agencies have wide discretion in setting the fees for special services
20 they provide to local governments. For example, the Department of Revenue recently increased
21 the fee for administering local sales taxes by 80 percent in the middle of a budget year with less
22 than six-week notice. The increase had no apparent relationship to the cost of providing the
23 servICe.
24
25 Response: State agencies should be required to demonstrate the need for service fees or for
26 increases in existing service fees. Agencies should give adequate notice of increases to allow
27 local governments to budget for the increases. State agencies should set administrative
28 service fees as close as possible to the marginal cost of providing the service. Local
96
COMMITTEE RECOMMENDATIONS
1 government should be given the option to self-administer or contract with the private
2 sector for the service if the state cannot provide the service at a reasonable cost.
3
4 FF -7. Reporting Requirements (Gel] 0)
5 Issue: Budget and financial reporting requirements imposed on cities by the state often result in
6 duplication and additional costs. In 2005, the Legislature mandated cities report to the
7 Department of Revenue on all fees they collect. Cities will have to include any fee increases,
8 what the revenues are, and how they are expended. Furthermore, cities will be required to
9 provide this data going back for the last four fiscal years.
10
11 Response: Requirements for reporting and advertising financial and budget information
12 should be caref1,llly weighed to balance the validity of the state's need for additional
13 information with the costs and burdens of compiling and submitting this information. In
14 addition, all state agencies should be aware of the information already required by others
15 to avoid duplication of repor!ing requirements.
16
17 FF.;.8~Limited.Market Value and Homestead Tax Burdens.. (GC/JO)
18 Issue: The 2001 Legislature enacted a phase-out of the state's limited market value (LMV)
19 system. Under the LMV system, homeowners and cabin owners who experience rapid escalation
20 in their property's value effectively have a temporary exemption of taxes on a portion of that
21 growth. This exemption has grown rapidly over the past several years and now shifts substantial
22 property tax burdens to other types of property.
23
24 In 2005, the Legislature delayed the phase-out by extending the program for two additional years
25 due to concerns that a rapid phase-out of the program could dramatically shift tax burdens back
26 to homes and cabins. The most recent data on the LMV program show that most of the benefit
27 goes to agricultural and cabin property owners.
28
97
COMMITTEE RECOMMENDATIONS
1 Response: The LMV program should be allowed to sunset. The state should buffer
2 property tax increases on homeowners by increasing the circuit breaker and targeting
3 programs. The Legislature should also convert the circuit breaker and targeting into
4 automatic refunds to qualifying taxpayers.
5
6 FF-9.Restructuring the Market Value Homestead Credit (GC/JO)
7 Issue: As originally established, the market value homestead credit (MVHC) provides tax relief
8 to homestead property by reducing the homeowner's property tax bill. Local units of government
9 are subsequently compensated by the state for the loss of property tax revenue under the credit.
10 In 2003, the MVHC reimbursement structure allowed the state to reduce and, in some cases,
11 even eliminate the reimbursement to 103 local units of government while preserving the apparent
12 benefit of the credit to the homeowner. The 2005 Legislature extended these cuts through 2006,
13 but these cuts are scheduled to be restored beginning in 2007.
14
15 Response: The MVHC program should be restructured to provide the credit directly to the
16 homeowner. If the program cannot be restructured as a direct taxpayer payment, the
forll1!llap3rametersshould be. adjll~ted in the flltuxe t<Lmatch the resource~ 3vailable fOr
18 the program.
19
20 FF-IO. Sales Tax on Local Government Purchases (GC/JO)
21 Issue: When the state was experiencing a budget shortfall in 1992, the Legislature repealed the
22 sales tax exemption for local government purchases. Local governments now pay state sales tax
23 on purchases like road maintenance supplies and equipment, wastewater treatment facilities, and
24 some public safety equipment. This tax currently costs local property taxpayers and ratepayers
25 more than $100 million annually. In addition, proposals to extend the sales tax to services would
26 have the effect of increasing local government costs and property taxes. Because no additional
27 state aids were added to offset the additional cost, this repeal has effectively increased local
28 property taxes to finance state operations. In recent sessions, there have been city specific
29 requests for exemptions that have been granted by the Legislature including a local wastewater
98
COMMITTEE RECOMMENDATIONS
1 treatment plant exemption and the Legislature has granted several large private exemptions,
2 including an exemption for the new Twins baseball stadium in Minneapolis. Additionally, there
3 have been itemized exemptions proposed, such as for water or wastewater systems, public safety
4 equipment or local transportation projects, that would provide cost-savings for cities.
5
6 Response: The state should reinstate the sales tax exemption for all local government
7 purchases. The exemption must not be coupled with cuts in local government aid (LGA) or
8 other state-shared revenues. Any sales-tax study conducted by the Department of Revenue
9 or the Legislature should review the practice of local units of government paying sales tax.
10
11 FF-ll. Sales Taxon Capital Equipment (OCIlO)
12 Issue: Purchases of capital equipment used in the production of taxable goods are exempt from
13 Minnesotasales tax. When a contractor installs the equipment, however, cities and other entities
14 must pay the tax and follow an elaborate process to receive a refund. This process includes a
15 requirement for an up-front written agreement appointing the contractor as the purchasing agent..
16 Many cities and other entities fail to follow the process properly or are unaware of the process
11 until after tile project has been initiated, resulting in a forfeiture of the tax exemption.
18
19 Response: The League supports legislation that would allow the exempt entity to be eligible
20 for the refund, even if the application is submitted after the project has been initiated.
21
22 FF-12. Taxation of Electronic Commerce (OellO)
23 Issue: Sales over the Internet and through other electronic means are projected to increase
24 exponentially over the next several years. Electronic transactions pose significant tax-policy
25 challenges because of the difficulty of assigning a location to electronic sales and because many
26 Internet goods are not tangible property.
27
28 Response: Federal tax policy should not place main street businesses at a competitive
29 disadvantage to electronic retailers, must not jeopardize repayment of bonds backed by
99
COMMITTEE RECOMMENDATIONS
I state and local sales tax revenues, and should ensure stability in state and local revenues.
2 To address the challenges created by the growth of electronic commerce, the League
3 supports the multi-state effort to develop a streamlined sales tax system.
4
5 FF-13. Taxation of Electric Generation Personal Property (GC/JO)
6 Issue: Investor-owned utilities (lOUs) have a longstanding relationship with Minnesota cities.
7 10Us site baseload power plants in host communities, and in exchange pay personal property tax
8 on attached generation machinery to the cities, counties and school districts hosting the plants.
9 These plants bring jobs to our communities, but they also create nuisances such as air pollution,
10 nuclear waste, noise, vibration, and coal train traffic. They also create security risks and take up
11 land that could be used for other, less disruptive commercial and industrial development. Cities
12 believe personal property taxes paid by 10Us are a fair compensation for the environmental and
13 economic costs of hosting baseload power plants.
14
15 IOU s argue that personal property tax relief is important to pass along to their shareholders and
16 ratepayers. However, only a few IOU shareholders and ratepayers actually live in the
17 communities hosting baseload power plants. Further, almost all new power plants receive
18 personal property tax exemptions from the Legislature, while host communities with existing,
19 non-exempt baseload plants will continue to have them for decades to come.
20
21 Response: Personal property taxes on attached electric generation machinery are a fair
22 way to spread the environmental and economic costs of baseload power plants among all
23 IOU shareholders and ratepayers. The League supports the continuation of personal
24 property taxes paid by IOUs to host communities. Where an IOU is seeking a personal
25 property tax exemption for a new power plant, the League supports legislation giving the
26 host city the right to negotiate a reasonable siting fee with the IOU proposing to site the
27 plant.
28
100
COMMITTEE RECOMMENDATIONS
1 FF-14. State Restrictions on Local Budgets (GC/JO)
2 Issue: Levy limits, which \vcre last imposcd by thc Legislature in 2003 as a tmnsition tool,
3 expired beginning "vith taxes payable in 2005. During the 2008 legislative session, levy limits
4 were imposed on cities over 2,500 population for three years. In the past, Levy limits replaced
5 replace local accountability with a state judgment about the appropriate level of local taxation
6 and local services. Recent proposals to impose restrictions on local budgets, including the
7 taxpayer satisfaction survey, the rcverse referendum, thc property tax frecze and a Colomdo like
8 "taxpayers' bill of rights" "vould also erode thc decision making authority of elected city
9 councils. Additionally, state restrictions on local budgets can have a negative effect on a city's
10 bond rating due to the restriction on revenue flexibility.
11
12 Response: City councils are elected to make decisions about local budgets and meeting
13 community needs. It is inappropriate for the Legislature to undermine local decision-
14 making and accountability through the continued imposition of levy limits or proposals
15 such as the "taxpayers' bill of rights." The League supports the principle of representative
16 democracy that allows city councils to formulate local budgets. The League opposes state
17 restrictions on local budgets.
18
19 FF-15. Truth-in-Taxation Process (GenO)
20 Issue: Cities must set a preliminary levy by Sept. 15, which is the levy used to compute the
21 parcel-specific truth-in-taxation forms. With only a few limited exemptions (voter.;.approved
22 levies. levies for natural disasters and levies for certain tort judgments). this preliminary levy. by
23 law, becomes the maximum that cities can levy the following year. In recent years, cities have
24 not reeoi','ed complete tax base and aid information in a timclymanner. As a result, cities e.fteH
25 set a preliminury levy that is artificially high or they are maybe unable to budget for unforeseen
26 needs that arise after Sept. 15.
27
28 Response: The League supports ehanges to the Tru.ihiB Taxation preeess to provide Blare
29 meaniBgful i>>:t'ormation to eitizeBs, iBeludiBg the exemptions eu.aeted iu.1901 far eities that
101
COMMITTEE RECOMMENDATIONS
1 proposc levy inereases Icss than the implicit price deflators. This calculation, ho"vc'..er,
2 must aecount for the impact of state aid cuts on proposed levies by factoring out le'..y
3 increases to eo','cr state aid cuts. Cities should have the authority to increase the final levy
4 ' from the preliminary levy with the approval of the commissioner of the Department of
5 Revenue, to meet additional, unforeseen and uncontrollable needs, includilll~ arbitrator
6 awards resultin2: from labor ne2:otiations, the impact of new and existin2: federal or state
7 mandates includin2: administrative rules, or other non-discretionary bud2:et factors.
8
9 FF-16. City Fund Balances (OCIlO)
10 Issue: As a component of a prudent financial management plan, cities maintain a fund balance
11 composed of cash flow funds, savings for projects, rainy day reserves to maintain high level
12 bond ratings, and to minimize borrowing costs. Although the size of a city's fund balance should
13 be determined through local financial needs and local preferences, some cities are being
14 criticized for maintaining "excessive" reserves.
15
16 The Office of the State Auditor (OSA) report measures city fund balances on Dec. 31, shortly
17 after the city receives its largest sources of revenue from the property tax and state aid
18 distributions. To measure at this time, however, yields a picture of a high fund balance even
19 though the city will spend down these funds to cash flow the next five to six months of its
20 operations.
21
22 Response: The state should respect local decisions on adequacy of local fund balances.
23
24 FF-17. City Revenue Diversification (GCIJO)
25 Issue: Under current state law, the property tax is the only generally accessible form oflocal tax
26 revenue for cities. Recent retrenchment Lack of adequate growth in state aid programs will likely
27 increase city reliance on property taxes in the future. Allowing cities to diversify their revenue
28 stream would prevent rapid rises in property taxes.
29
102
COMMITTEE RECOMMENDA TIONS
1 Response: Cities should be able to diversify their sources of revenues. State law should be
2 modified to generallv authorize ftllew any city to impose a local option sales tax for public
3 capital projects of regional significance with the adoption of a supporting resolution by the
4 city council and approval ofthe voters at a general or special election without apprayal by
5 the state Legislature. The League opposes legislation that would require mandatory
6 revenue sharing of sales tax revenues with neighboring jurisdictions. In addition, cities
7 should have general authority to create utilities, similar to the storm sewer utility
8 authority, in order to fund local services where benefit or usage of the service can be
9 measured.
10
11 FF-18. City Franchise Authority (GC/JO)
12 Issue: Under Minn. Stat. Chapter 216B and Minn. Stat. ~ 300.03, a city may require a public
13 utility furnishing gas or electric utility services or occupying streets, highways or other public
14 property within a municipality to obtain a franchise to operate within the community. In addition,
15 cable system operators are required to obtain a franchise under Minn. Stat. Chapter 238.
16
17 Under a franchise, the city may require the utility to pay a fee to the municipality to help offset
18 public maintenance costs for the public property and generate a return on a publicly held asset.
19 The fee is intended as a mechanism by which gas or electric utilities with facilities occupying the
20 public streets and highways compensate the city for the use of a valuable public asset and/or for
21 the increased maintenance and reconstruction costs associated with having facilities in the right-
22 of-way.
23
24 State law currently allows the franchise fee to be based upon gross operating revenues or gross
25 earnings of the utility from its operations in the municipality. In this manner, all utility users
26 within the municipality contribute to the public costs associated with the utility operation. In the
27 absence of franchise fees, municipal costs resulting from utility operations are currently being
28 funded through the property tax, which is being paid for by property tax payers.
29
103
COMMITTEE RECOMMENDATIONS
1 Response: Municipal authority to collect franchise fee revenues from utilities is an
2 important and equitable mechanism to offset the costs of maintaining public right-of-way
3 and to generate a return on a publicly held asset. Municipal franchise authority must be
4 preserved. In addition, in situations where a local provider decides to sell their operations,
5 the city must have the right of first refusal to purchase the assets of the utility.
6
7 FF-19. Utility Valuation Rules Utility Valuation Transition Aid (Geno)
8 Issue: The Minnesota Department of Revenue hus revised its rules reviewing its regulations for
9 calculating the taxable market value of eloctric and natural gas utility property. This valuation
10 change affects will dramatically affect the property taxes paid by investor ovmed utilities (lOUs)
11 not only to the state, but also to local governments. Provisions in the current regulations, such as
12 depreciation limits and prescribed weights for the cost and income approaches to value, help to
13 preserve thc taxable value of this property over the many decades it is in service.
14
15 IOUs enjoy a guaranteed rate of return on their capital investments, but host cities experience the
16 costs of enviromnental damage, nuisance, and lost economic development as the result of this
7 property. IQlJs. arglletl1attheirp:rcmerty is oVt:)ryaluedandthilt depreciation . limits shol.lldbe
18 removed. HO'v';ever, substantial changes to the utility property valuation ruleD could drastically
19 reduce the taxable market value that helps compensate host cities for hosting bascload electric
20 generation facilities. The valuation change dramatically reduces the taxable market value that
21 helps compensate host cities for hosting electric generation facilities.
22 In 2007 the Minnesota Department of Revenue revised its rules regarding the valuation of
23 electric and natural gas utilitv propertv. This change in the rules resulted in valuation changes
24 for utility property that dramatically reduced the amount of revenue that local governments will
25 collect in property tax from these utilities.
26
27 Recognizing that the communities that host these utilities bare extraordinary burdens connected
28 with stress on local infrastructure. public safety, and public nuisance due to the presence of these
29 facilities in their communities. the Legislature created the Utility Valuation Transition Aid
104
COMMITTEE RECOMMENDATIONS
1 program. This program compensates host communities that have lost more than 4% of their net
2 tax capacity as a result of Department of Revenue's rule changes.
3
4 Response: Thc Lcaguc opposcs changcs to thc utility propcrty yaluation rulcs that 'Nould
5 rcsult in a significant dccline in thc taxable markct yaluc of utility propcrty. In the cvent
6 that nC'l1 utility valuation rulcs producc such a dccline, the Legislature should stcp in to
7 hclp kcep host cities financially 'Ilholc as a vlay of compensating for thc cconomic and
8 cnvironmcntal costs of hosting baseload electric generation facilitics. The League sHpports
9 Icgislativc efforts to offsct thc reduction in revcnue to host citics creatcd by the rule changc
10 in ordcr to I<.eep host cities financially wholc and to eompensatc thcm for the economic and
11 cnvironmental costs of hosting electric generating facilities.
12
13 The League supports the continuation of the Utility Valuation Transition Aid program and
14 opposes any efforts to divert promised funds away from host communities for any purpose
15 including balancing of the budget should there be a budget deficit. If the Legislature does
16 determine that is necessary to re-allocate the funds in the Utility Valuation Transition Aid
17 program for another purpose. the League supports other legislative efforts that would
18 compensate the host communities for the economic and environmental costs of hosting
19 these facilities. These other efforts could include. but are not limited to increasing the class
20 rate on utility property to the extent that it would offset the negative effects of the utility
21 valuation rule change.
22
23 FF-20. Payments for Services to Tax-Exempt Property (GC/JO)
24 Issue: Taxable property in many cities is being acquired by nonprofit and government entities.
25 Converting the property to tax-exempt status can lead to serious tax base erosion without any
26 corresponding reduction in the service needs created by the property.
27
28 Response: Cities should have the authority to collect payments from statutorily-exempt
29 property owners to cover costs of service similar to the authority provided under the
30 special assessment law.
105
COMMITTEE RECOMMENDATIONS
1
2 FF-21. RCYCHUC Rccapturc l\uthority for Citics (GC/JO)
3 Issue: The revonue rocapture program in Minn. Stat. 270/\..03 authorizes government entities to
4 contract '.vith the Minnesota Dcpartment of Revcnue to collect certain unpaid debts. Under the
5 program, the Department of Revenuc '.vill reduce or offset a taxpayer's state tax refund or other
6 payment to collect a debt. Cities currently have limited authority to use revenue recapturc for
7 debts to municipal libraries, hospitals or ambulance services, unlike counties or other state
8 agencies that have general authority to U3e revenue recapture for a broader list of debts. This list
9 includes unpaid taxes, as 'Nell as interest and penalties on unpaid taxes, criminal and petty
10 misdemeanor fines, and court ordered restitution. Cities have other debt collection needs, such as
11 damage to public infrastructure, v:here access to this program \vould assist ','lith the collection of
12 unpaid debts ',vhich, if unaddressed, are a burden on property taxes and a city' s general fund.
13
14 Response: The reyenue recapturc statutcs shauld be cxpanded ta allaw cities to usc the
15 same gcneral re"leDUe recapture authority available to eaunties and state agencies.
16
17 nFF -22~lmpactFees((JC/JO).
18 Issue: New development and the resulting growth create an increased demand for public
19 infrastructure and other public facilities. Severe constraints on local fiscal resources and dramatic
20 forecasts for population growth have prompted cities to reconsider ways to pay for the inevitable
21 costs associated with new development.
22
23 Traditional financing methods tend to subsidize new development at the expense of the existing
24 community, discourage sound land-use planning, place inefficient pressures on public facilities,
25 and allow under-utilization of existing infrastructure. Consequently, local communities are
26 exploring methods to ensure new development pays its fair share of the true costs of growth.
27 Given the existing authorization to impose fees on new development for water, sanitary and
28 storm sewer, and park purposes, it is reasonable to extend the concept to additional public
29 infrastructure and facilities improvement also necessitated by new development.
106
COMMITTEE RECOMMENDATIONS
I
2 Re~ponse: The Legislature should authorize local units of government to impose impact
3 fees so new development pays its fair share of the off-site, as well as the on-site, costs of
4 public infrastructure and other public facilities needed to adequately serve new
5 development.
6
7 FF-23. Equity in Library Funding (GCIJO)
8 Issue: Many community libraries in Minnesota are city-owned. Although located in an
9 individual community, city libraries serve a much wider area. In some Minnesota counties, there
10 are wide disparities between city and rural tax burdens for library services. Furthermore, library
11 services have expanded over the years with the offering of videos and Internet access in many
12 locations, putting more demand on stretched library budgets.
13
14 Response: The League supports equity in availability of quality library services to city and
15 township residents as long as there is equity in local property tax levies for libraries among
16 participating jurisdictions. If cities where a library is located are responsible for
17 maintenance, upkeep,anrlcapital Improvements to the library, those costs must be
18 considered part of the total equity requirement, not in addition to it. In order to continue to
19 provide the expanded services, cities should be relieved of state-mandated maintenance-of-
20 effort funding levels and given the authority to charge user fees for other services without
21 jeopardizing the state aid they do receive. Cities that provide library facilities where
22 library operations are associated with a regional library system should be contractually
23 guaranteed a direct voice in the governance and funding decisions within the library
24 system.
25
26 FF-24. Equitable Funding of Community Education Services (OC/JO)
27 Issue: Under Minn. Stat. 124D.20, school districts are authorized to levy for community
28 education programs that can include youth recreational activities. However, state statute limits
29 the total amount of revenue that can be raised by the school district to fund community education
107
COMMITTEE RECOMMENDATIONS
1 programs and this limit has not been sufficiently increased in recent years. In many instances,
2 cities participate in the funding of these programs and with the statutory limit on the amount
3 school districts can levy, the increased cost of these programs is increasingly falling on cities and
4 their property taxpayers. In areas where the school district is significantly larger than the city, the
5 burden of funding these programs is falling disproportionately on city taxpayers while the
6 programs benefit the entire school district.
7
8 Response: The League supports a statutory increase in the community education revenue
9 authorization for school districts. Increasing the amount of the community service revenue
10 available to school districts would provide a steady source of revenue, which would be
11 assessed against all properties in the school district, not just against properties in the city.
12
13 FF-NEW A. Housin2: Improvement Areas (JO)
14 Issue: In 1996. cities were granted general authority to use Housing Improvement Areas (HIAs)
15 in order to finance housing improvements for condominium and townhome complexes under
16 Minn. Stat. S 428A.ll to 428.21. Several cities have used this tooL and found it to be a useful
17 mechanism for maintaining alder association homes; This genefallaW SUIlsets Juhe30,2009.
18 which means this important funding tool will expire for cities.
19
20 Res/lonse: The Housin2: Improvement Areas statute should be made permanent.
21 Additionallv. the Le2:islature should consider chan2es to the statutes that would clarify or
22 add specificity to the process for usin2: the housin2: improvement area statute.
23
108
COMMITTEE RECOMMENDATIONS
1 HUMAN RESOURCES & DATA PRACTICES
2 Human Resources
3 HR-l. Personnel Mandates and Limits on Local Control (LK/AF)
4 Issue: Many state laws increase the cost of providing city services to residents by requiring city
5 governments to provide certain levels of compensation or benefits to public employees, by
6 specifying certain working conditions, or by limiting city governments' ability to effectively
7 manage their personnel resources. For instance, existing state laws limit governments' ability to
8 effectively address incompetence or misconduct of city employees by specifying certain
9 procedures or standards of conduct that cities must follow. Several laws are potentially
10 contradictory and force local governments to choose which one to follow.
11
12 Response: Any new legislation and changes to existing legislation should meet the following
13 goals:
14 . Recognize the need for local decision-making authority by local elected officials with
15 regard to the terms and conditions of employment for local government employees (e.g.,
16 allow local elected officials to determine employee compensation and to make employee
17 benefit decisions about domestic partner benefits and coverage of extended family by
18 sick leave policies).
19 . Provide funding that pays the full costs of any mandated employment-related
20 expenditures.
21 . A void and E!;liminate expensive and time-consumiIig duplicative legal protections and
22 processes for public employees ( e.2:. licensure reQuirements for full time and paid-on-
23 call firefi2:hters).
24 . Eliminate contradictory existing laws regarding public employment.
25 . Eliminate mandates for local government employers that are not imposed upon the
26 state as an employer.
27 . Use the collective bargaining process established by state law, rather than legal
28 mandates, to determine benefits for employees covered by collective bargaining
29 agreements.
109
COMMITTEE RECOMMENDATIONS
1
2 HR-2. Firefighter and Ambulance Payroll (LK! AF)
3 Issue: Traditionally, many volunteer and paid on-call fire departments have issued paychecks
4 only once or twice per year. Payroll checks in these types of departments would be quite small if
5 issued biweekly or even monthly so employees prefer to receive larger checks once or twice per
6 year. Issuing checks less often saves time and money for administrative staff who prepare the
7 payrolls. However, Minn. Stat. 181.101 specifies that wages must be paid at least once every 31
8 days, regardless of whether the employee requests to be paid at longer intervals.
9
10 Response: Minn. Stat. 181.101 should be amended to exempt volunteers and paid on-call
11 employees of fire and ambulance services from the requirement to be paid every 31 days.
12
13 HR-3. Pay Equity (LKJAF)
14 Issue: State law requires all public jurisdictions, such as cities, counties, and school districts, to
15 eliminate any sex-based wage inequities in compensation. These entities are required to file
16 . reports with the state Depa.rtl11ent ofEl11ployee Relations (DOER) to ertSlitecompliahce\vith the
17 law. The 2003 Legislature adopted a two-year reporting moratorium and extended the pay equity
18 reporting cycle from three to five years beginning in 2005 in order to provide some relief from
19 this reporting mandate. However, the Legislature enacted a new law in 2005 that reverts to the
20 previous three-year pay equity reporting cycle.
21
22 Response: The League supports the purpose behind the Local Government Pay Equity Act.
23 We also support efforts to minimize the reporting burden associated with this law,
24 including: a deimition of "public emplovee" that fits with the way that cities utilize seasonal
25 and temporarv workers. a longer reporting cycle: iHlEl-continued improvements to the
26 electronic reporting of pay equity data. and continuin2: improvements to the process bv
27 which cities receive notification of reportin2: requirements and compliance issues.
28
110
COMMITTEE RECOMMENDATIONS
1 HR-4. Public Employment Labor Relations Act (PELRA) (LK.! AF)
2 Issue: The League supports the purpose of the Public Employment Labor Relations Act
3 (PELRA) to balance the rights and interests of public employees, public employers, and the
4 general public. However, certain changes are necessary to assist public employers in
5 implementing this law. For example, current definitions of "public employee" are confusing and
6 difficult to manage. In addition, the arbitration process has produced decisions that are contrary
7 to the interests of the public, and the legal standard for overturning arbitration decisions is very
8 difficult to meet.
9
10 Response: Minn. Stat. 179A should be modified to:
11 . Change the definition of "public employee" under PELRA by removing the existing 14-
12 hour/67-day requirement and replace it with a definition in which employees must work
13 more than an annual average of 20 hours per week.
14 . Exclude temporary or seasonal employees from the PELRA definition of public
15 employee in Minn. Stat. 179A.
16 . Provide different options for accessin2 arbitrators and utilizin2 the arbitration process
17 ino rder -to" ad.<rresslneQ1l1tles" hetWeeIl.llIl.lon and.. maI1a2emeI1trepresentatives~
18 . Allow public employers to bypass mandatory arbitration required under PELRA and
19 directly access the district court system in situations where an employee is being
20 terminated for gross misconduct (sexual harassment, sexual abuse, theft or a felony
21 conviction) that is related to the employee's position with the public employer.
22
23 HR-5. Payment of Arbitration Fees (LKJAF)
24 Issue: Like other employers, cities must sometimes make difficult employment decisions and
25 uphold certain principles in order to best serve the public. In a union environment, grievance
26 arbitration is generally used as a "last-resort" remedy when a difficult employment decision must
27 be made or to uphold an important principle. Union officials have introduced legislation for the
28 past several years that would require a city or the union to pay arbitration fees if a reasonable
29 settlement is offered and refused in a grievance situation, and the arbitrator ultimately decides on
111
COMMITTEE RECOMMENDATIONS
1 a less favorable remedy. The legislation proposed by the unions could have the impact of
2 discouraging cities from using the grievance arbitration process in a manner that best serves the
3 public good.
4
5 Response: The League opposes legislation that would undermine the grievance arbitration
6 process and discourage cities from using the process in the manner intended. Specifically,
7 the League opposes any legislation that proposes payment of grievance arbitration fees
8 when a settlement is offered and declined.
9
10 HR-6. Essential Employees (LK! AF)
11 Issue: Cities must balance the health, welfare, and safety of the public with the costs to
12 taxpayers. Essential employee status removes the right to strike, but gives the right to mandatory
13 binding arbitration. This status can result in arbitration awards that exceed the city's budget or
14 conflict with the city's compensation policy. In recent years, a number of employee groups have
15 sought and often received essential status.
16
17 .. Response: The Legislature should carefully examine requestsfrolIl interest groups seeking
18 essential employee status under Minn. Stat. 179A (PELRA). The League opposes legislation
19 that mandates arbitration that increases costs and removes local decision-making
20 authority.
21
22 HR-7. Re-employment Benefits (LK/AF)
23 Issue: Cities employ many student workers and others in seasonal-, parks-, and recreation-
24 related positions. In the past, such workers generally have not filed for unemployment benefits
25 because there has not been an expectation of continued employment. In recent years, cities have
26 experienced an increase in the number of such workers applying for unemployment benefits.
27 This increases costs to cities and taxpayers in a way that may not have been originally intended.
28
112
COMMITTEE RECOMMENDATIONS
1 Response: Public sector temporary or seasonal employees should not be eligible for re-
2 employment benefits.
3
4 HR-8. Pension Benefits (LK! AF)
5 Issue: Pension benefit plans have years of service requirements and limitations and exclusions
6 that act to ensure that the fund's administrators have the ability to predict, contain, and control
7 costs. Thisprotects the fund's ability to pay future benefits to its participants. Legislative
8 exceptions to these exclusions and limitations can undermine this ability. Cities should have the
9 ability to weigh-in on these decisions through city council approval.
10
11 Response: The League opposes special legislation for individual employee pension benefit
12 increases unless they are initiated and approved by the city council of the impacted city.
13
14 HR-9. Public Employees Retirement Association (PERA) (LK!AF)
15 Issue: PERA identified a significant long-term funding deficiency in its Coordinated Plan and
..16 .. the Police and Fire Plan that was the result of changing demographic pattems and plan .
17 experience. In 2001, the Legislature adopted modest employer and employee contribution rate
18 increases and plan modifications to address the coordinated plan deficiency. In 2005, the
19 Legislature enacted significant, phased-in contribution increases for the Coordinated and Police
20 and Fire plans that generally share the burden between the employee and employer. However,
21 the scheduled Coordinated Plan contributions also include two additional years of contribution
22 increases for employers if the fund deficiency is not addressed by the first three years of
23 contribution increases. In order to moderate these additional Coordinated Plan employer
24 contribution increases, benefits may need to be modified, especially where the plan differs
25 greatly from that of most other states by providing substantially higher benefits.
26
27 Response: The League supports requiring employees to share equally with cities in the cost
28 of these increases or providing state assistance to local governments to cover any additional
29 contribution burden that is placed on cities over and above the contribution increases
113
COMMITTEE RECOMMENDATIONS
1 required by employees. Cities must be given sufficient notice of these increases so that they
2 may take them into account for budgeting purposes.
3
4 The League encourages the Legislature to consider the following plan modifications that
5 will help align PERA contributions and costs, and reduce the need for additional
6 contribution increases:
7 . The League believes the legislative intent of "in-line of duty" disability retirement
8 benefits for police officers and firefighters was to provide special protection for police
9 officers and firefighters when they are performing the type of duties that are uniquely
10 required for their jobs. The League supports the statutory changes made to Minn. Stat.
11 353.01 in 2007 that separate injuries resulting from "hazardous duties" from injuries
12 resulting from "non-hazardous duties" for purposes of police and fire disability
13 retirement benefits. The League will monitor the effects of the 2007 changes as they are
14 implemented.
15 . The PERA eligibility guidelines must be modified to take into account temporary,
16 seasonal, unique part-time, and student employment situations in cities-particularly in
17 recreational operations. The plan should be modified to use pro-rated service credit,
18 which would make PERA consistent with the other major Minnesota pension plans.
19 The Leaeue supports a comprehensive review of exclusions with an eve toward
20 simplifvine 'current elieibilitv euidelines. Such a review should also include a possible
21 revision of current penalties for employers that fail to report covered employees to
22 ensure that these penalties are not overlv harsh and punitive.
23 . The League opposes the expansion of the PERA corrections plan to include dispatchers
24 due to the substantial differences between the dispatchers and the other positions
25 covered by this plan.
26 . The League supports the transfer of all school district employees out of the PERA
27 Coordinated Plan and into another fund that is more appropriate for school district
28 employees.
29 . The League supports an increase in the number of years required for vesting in the
30 PERA Coordinated and PERA Police and Fire plans to help reduce the need for
31 additional employer and employee contribution increases.
114
COMMITTEE RECOMMENDATIONS
1
2 HR-IO. Pension Post Fund Deficit (LKJGC/ AF)
3 Issue: Thc Post Fund, which is the pool of assets transferred from the three state\vide retiroment
4 systems when employeos retire, is currently estimated to have a deficiency of more than $2.1
5 billion. Under current law, there is no mechanism to fund this deficit other than unpredictable
6 investment returns. Although the deficit has been reduced over the past t',vo years, there is no
7 certainty that recent investment returns can be sustained.
8
9 In response to the deficit, the state's three major public pension plans established the Post Fund
10 Committee of the Joint Retirement Systems to develop recommendations to address the Post
11 Fund deficit. The committee's proposal ',yould begin to address the deficit by reducing the annual
12 benefit adjustments for retirees through the elimination of the investment return adjustment,
13 thereby only adjusting benefits by inflation up to 2.5 percent per year. The proposal also contains
14 an "inflation equalizer" adjustment for individuals 'v'lho retired in 2001 or later that would be
15 triggered in years \'/hoo current inflation is less than the 2.5 percent adjustment limit. If the 2.5
16 percent inflation cap in earlier years prevented these retirees from receiving a full inflation
17 adjustment, the current year adjustment \'/ould hn.vcan inflatibnequa.lizct component, ho\yever,
18 the sum of the inflation and equalizer adjustments could not exceed 2.5 percent.
19
20 In the event that these adjustments are not sufficient to address the deficit in a reasonable amount
21 of time, the proposal includes a failsafe merger proposal that v;ould dissolve the Post Fund and
22 divide the assets among the three active funds. If the Post Fund is dissolved under this scenario,
23 an annual increase of 2.5 pereent ',vould be applied to all retirees regardless of inflation or
24 investment returns.
25 To address the shortfall in the Post Fund, the 2008 Legislature enacted changes to the annual
26 benefit adiustments to retirees and established a failsafe merger proposal that will dissolve the
27 Post Fund and return the assets and liabilities of retirees to the respective active funds if the
28 funding level of the Post Fund declines to 80 percent in anyone year or 85 percent for two
29 consecutive years. If the Post Fund is dissolved, retiree benefit adjustments will be limited to 2.5
30 percent per year.
115
COMMITTEE RECOMMENDATIONS
I
2 Response: The League supports the provisions in the proposal developcd by the Post Fund
3 Committee of the Joint Rctircmcnt Systems to 2008 omnibus pension bill that will modify
4 rcducc benefit increases for retirees. The Leal!ue will oppose any future initiatives to
5 further expand retiree benefit increases until the Post Fund achieves at least 105 composite
6 funded ratio.
7
8 The League will carefully monitor the dcyclopmcnt of any impact of the failsafe merger
9 proposal or other approach that would spread the dcfieit to .2!! employers and active
10 employees. The League supports an ongoing reevaluation of the Post Fund status and
11 further corrective action, including, but not limited to, a further tightening of the annual
12 benefit adjustment. If the Post Fund is dissolved. the Leal!ue will oppose any retiree
13 benefit increases or associated employee and employer contribution increases that would
14 increase retiree benefits beyond the 2.5 percent annual adiustment included in current law.
15
16 HR-II. Volunteer Firefighter Pension Benefits (GC/AF)
17 Issue; Cities thrQughoutthe state have established individuaL pension plans with different. levels
18 of pension benefits for their volunteer firefighter relief association members. The efficiency of
19 this system has been questioned by various members of the Legislature and by state agencies
20 from time to time. In 2006, the Legislature authorized a study by the legislativc auditor to
21 research this issue. The 2008 Legislature created an advisory board to recommend the structure
22 and administration of a voluntary statewide volunteer firefighter retirement plan. The plan must
23 be presented to the Legislature during the 2009 session.
24
25 Response: The Leagae supperts a thorough study of volunteer and paid on call firefighter
26 pcnsion.bcnefits throughout the stat-e. The League ftls.e supports a centralized, statewide
27 volunteer firefighter pension plan if: a) the plan is offered on a voluntary, not mandatory,
28 basis; and b) the plan is offered in a manner that takes into account the different fmancial
29 capacities and needs of a wide variety of cities.
30
116
COMMITTEE RECOMMENDATIONS
1 HR-12. Retirement Work Incentives (LKJAF)
2 Issue: Demographic experts warn that as the Baby Boomers retire, employers will begin to
3 experience a substantial significant labor shortage and lose the substantial expertise and
4 knowledge of a fully-trained workforce. In addition, retirees are living longer, are healthier, and
5 able to work longer. Therefore, one solution to the coming labor shortage is to provide some
6 incenti yes for retirees to continue working after retirement or to postpone full retirement with a
7 "phased-in" approach that would allow "knowledge transfer" to take place between the retiree
8 and less-experienced replacement staff.
9
10 Response: The League supports changes to Minnesota statutes (if actuarially neutral for
11 PERA pension plans) that would allow:
12 . A "phased-in" approach to retirement so that employees could reduce work hours in
13 the final years before retirement without harming their retirement or other benefits.
14 . Either an increase in the amount of money that retirees could earn with a PERA public
15 employer before it affected their retirement benefit (indexed for inflation), or a limit on
16 the number of hours that retirees could work for a PERA public employer before it
affected their retirement.benefitr
18 . A retiree to be re-employed by a public employer for a limited time period without
19 penalty, and that would allow, at the expiration of the time period, a retiree to
20 contribute toward PERA and earn a "new" pension with the public employer.
21
22 HR-13. State Paid Police and Fire Medical Insurance (LK/AF)
23 Issue: Minn. Stat. 299A.465 requires public employers to continue health insurance benefits for
24 firefighters and peace officers injured in the line of duty. Before the law was enacted in 1998,
25 proponents testified that the benefit was needed for extreme situations resulting from activities
26 that make public safety 'vYork unique. Howcwer, the 1a'1I did not contain language limiting .
27 eligibility for the benefit to individuals injured 'vVhile protecting life or property. Further, tThe
28 law originally contained a provision requiring the Department of Public Safety (DPS) to
29 reimburse employers for the full amount of administering this benefit.
117
COMMITTEE RECOMMENDATIONS
1
2 'With thc absence of clear eligibility criteria, virtually all recipient::; of Public Employces
3 Retirement f~ssociation Police and Fire (PERf~ P &F) line of duty disability benefits became
4 eligible for the continued health insurance bcnefit. Before 2008, Mmany of the claims approved
5 under Minn. Stat. 299A.465 were for injuries sustained while engaging in non-hazardous, on-the-
6 job activities such as fitness training or office duties. The number of eligible claimants quickly
7 multiplied, and some stakeholders began speculating that the continued health insurance benefit
8 was acting as an incentive for employees to apply for PER"^- P &F line of duty disability benefits.
9 In addition to the increasing number of claimants, combined with rising health insurance eosts
10 began to strain the fund. By 2002, the fund created to provide this benefit became deficient.
11
12 Instead of increasing the fund, the 2003 Legislature amended the law to pro-rate reimbursements
13 to cities based on the amount available and the number of eligible applicants. The 2003 law
14 change triggered a significant and unanticipated cost to cities. Even if the health insurance
15 benefit was discontinued entirely, the costs for existing recipients will substantially increase well
16 into the future due to the growing cost of health insurance.
17
18 The2005Legislatureattempted t6iii.itiga.te the impa.ct of tliislawOrierriplo)le:rs byp:roviairig
19 additional reimbursement funds and creating a stakeholder panel to determine eligibility for
20 benefits under Minn. Stat. 299A.465. However, the Legislature preserved the language that
21 reimburses employers on a pro rata basis, and the law continued to exist without the definitions
22 necessary to narrow eligibility for the benefit and meet the intent of the law. The panel, which is
23 seHe expireQ on July 1, 2008, did not succeed in narrowing eligibility for the continued health
24 insurance benefit, in part because the few claims denied by the panel were overturned by the
25 courts.
26
27 In 2007, the Legislature attempted to limit eligibility for PERA-P&F line-of-duty disability
28 benefits by defining "duty disability" as an injury sustained while performing activities that
29 present "inherent dangers specific to these professions." This means public safety employees
30 injured while performing duties that do not present inherent dangers would be ineligible for line-
31 of-duty disability benefits. Due to the correlation that has been established between the PERA- .
118
COMMITTEE RECOMMENDATIONS
1 P&F line-of-duty disability benefits and the continued health insurance benefit under Minn. Stat.
2 299A.465, early indications are that this change is expected to resulti!:!g in a decline in eligibility
3 for continued health insurance.
4
5 Re~ponse: The League supports the following legislative actions to address the funding
6 deficiency in this program:
7 . The state must fully fund programs that pay for health insurance for police and fire
8 employees injured or killed in the line of duty as originally required under Minn. Stat.
9 299A.465.
10 . Cumulative injuries that occur over time in the job should not qualify a police officer or
11 firefighter for benefits under Minn..Stat. 299A.465 since these types of cumulative
12 injuries are not unique to the dangers of police officer and firefighter duties.
13 . The Legislature must clarify that the amount of an employer's contribution under
14 Minn. Stat. 299A.465 is no greater than that given to active employees in the same job
15 class.
16 . The Lcgislature must identify an appeals proeess for cities to access in the cyent of
17 disagreements between the eity and the employee on the benefits assigned under Minn.
18 Stat. 2991'...465. The Legislature must ttls& establish the minimum criteria used to
19 determine ability to work, and set a percentage threshold of disability for eligibility into
20 this program. At a minimum, the Legislature must identify that a workers'
21 compensation determination as to whether the injury is work-related is necessary in
22 order to receive the benefits under Minn. Stat. 299A.465.
23 . Employees who receive a policelfire disability retirement benefit and accept another job
24 that offers them group health benefits should be required to pay for their group health
25 benefits with the city should they decide to continue them. The Legislature must amend
26 Minn. Stat. 299A.465 to reflect that employees are required to inform the city when
27 they become eligible for coverage under another group plan and that failure to do so is
28 grounds for termination from the benefits granted under Minn. Stat. 299A.465.
29 . The panel created to evaluate elaims made under Minn. Stat. 299..."...465 must be allowed
30 to expire as required on July 1, 2008.
31
119
COMMITTEE RECOMMENDATIONS
1 HR-14. Health Care Insurance Programs (LKJAF)
2 Issue: Cities, like other employers in the state, are struggling with the rising costs of health care
3 insurance for their employees. In addition, cities must cope with unfunded mandates imposed on
4 them by the Legislature such as the requirement to pool early retirees with active employees and
5 the requirement to bargain over changes in the "aggregate value" of benefits, even when the
6 city's contribution has not changed.
7
8 Response: The League supports legislative efforts to control health insurance costs while
9 maintaining quality health care services. However, cities have differing local needs and
10 circumstances and must retain the flexibility to provide unique and creative solutions to the
11 rising costs of health care insurance for their employees. The League:
12 . Opposes legislative action that undermines local flexibility to manage rising health care
13 costs.
14 . Supports group programs designed to provide post-retirement health insurance
15 benefits or health insurance plan benefits for public employees if participation by cities
16 is strictly voluntary.
17 . . Encourages tl1eLegislature to carefully examine any new, mandated insurance-related
18 benefit before imposing it upon city employers to make sure it does not contribute to
19 the rising cost of providing health insurance.
20 . Supports changes to Minn. Stat. 471.6161, subd. 5, that would clarify the intent of the
21 subdivision is to address changes in cost vs. changes in value. For example: (1) a change
22 in provider networks does not constitute a change in the "aggregate value of benefits;"
23 (2) a change in benefit levels required by an incumbent insurance carrier does not
24 constitute a change in "aggregate value."
25 . Supports changes to Minn. Stat. 471.61 that would allow cities to pool all retirees (those
26 under or over age 65) separately from active employees to help cities avoid the liabilities
27 associated with the new Government Accounting Standards Board (GASB)
28 requirements on "implicit subsidy."
120
COMMITTEE RECOMMENDATIONS
1 . Supports ehangcs to Minnesota Statutes that would aUO'l1 cities to create Other Post
2 Employment Benefit Trusts, and to invest these trusts in a broad array of higher
3 yielding inyestments such as those pcrmissiblc for pension investments.
4
5 HR 15. Dcferred Compcnsation Contributions (LK/1\F/GC)
6 Issue: Current la'.,;, allO\','s employer contributions to many pension funds sponsored by union
7 organizations. The la'.',' also allo'1/s contributions to one specific plan established under IRS Code
8 157 specifically, the Minnesota deferred compensation plan. Howe'v'cr, many cities offer a
9 variety of deferred compensation plans, such as ICM1^' and Natiomvide. In addition, cities could
10 sa'v'e money by offering contributions to other types ofIRS plans, such as 101(a) plans, in lieu of
11 salary increases. Currently, Minnesota statutes are in conflict 'vVith IRS regulations that require
12 ongoing contributions to supplemental pension programs (such as 101(a) plans).
13
14 Response: The League supports ehanges to Minn, Stat. 356.24 that 'would allow employer
15 contributions (up to the federal limits) to any deferred compensation or health care sa'/ings
16 program that meets the requirements of the InterBal Reo/enue Cede of 1954. In addition,
17 the League supports ehangesto Minn. Stat. 356.24 that 't'lould alloy/ongoing contributions
18 to supplemeBta.1 pension programs in compliance with IRS regulations.
19
20 HR-16. Workers' Compensation (LK/AF)
21 Issue: Rising medical costs are an increasingly serious problem for all employers and insurers,
22 and now represent over half of all loss costs within the workers' compensation system. Medical
23 costs will be a major driver of future workers' compensation premium increases. In addition,
24 virtually every year legislators introduce proposals to expand the heart, lung and infectious
25 disease presumptions for public safety workers, or to make the presumptions more conclusive
26 and difficult to rebut. These types of benefit expansions further increase municipal workers'
27 compensation costs.
28
121
COMMITTEE RECOMMENDATIONS
1 In the last several years, the Workers' Compensation Advisory Council (WCAC)-ajoint labor-
2 management committee whose purpose is to review proposals for benefit changes or other
3 amendments to the workers' compensation system-has been discussing ideas to address
4 escalating medical costs. While the WCAC system has worked well for many years to help
5 stabilize and de-politicize workers' compensation issues, more recently this group has had
6 difficulty reaching agreement on more controversial issues. However, in 2007 the WCAC
7 recommended legislation that would have helped contain medical costs in the workers'
8 compensation system by adjusting some payments to hospitals to offset greater benefits for
9 workers.
10
11 Response: Legislative action is necessary to address increasing workers' compensation
12 costs, particularly rising medical costs. The League supports use of the WCAC system to
13 consider proposals for changes to the workers' compensation law, and urges the WCAC
14 and the Legislature to approve medical cost containment reforms.
15
16 The League opposes expansion of workers' compensation and related health insurance
17 benefits because of the potential for dramatically increasing costs to cities. Specifically, the
18... League opposes expansion ofthe heart,llln.g and infectious disease presumptions. as well as
19 any expansion of the law that would require payment of health insurance premiums or that
20 would include mental injuries that have no physical cause or manifestation.
21
22 HR-17. Breathalyzers (LK! AF)
23 Issue: Currently, breathalyzer use is permitted for alcohol testing under federal commercial
24 drivers' laws. Minnesota law does not clearly allow for the use ofbreathalyzers in testing.
25
26 Response: Minn. Stat. 181.950 through Minn. Stat. 181.957 should be amended to permit
27 the use of breathalyzers as an acceptable technology for determining alcohol use.
28
122
COMMITTEE RECOMMENDATIONS
1 HR-18. Veterans' Preference (LKJAF)
2 Issue: The League recognizes the important contributions veterans have made and agrees with
3 the intent of legislation that gives veterans certain preferences in employment. However, since
4 the veterans' preference law was initially passed, the number of employment protections has
5 greatly increased. This includes a federal law that specifically protects veterans from
6 employment discrimination.
7
8 Response: The League supports the Legislature undertaking a study of Minnesota's
9 veterans' preference law to determine its effectiveness and efficiency in light of today's
10 employment laws, statutes, and regulations, and to consider possible modifications to
11 current laws.
12
13 HR-19. Drug and Alcohol Rehabilitation (LKJ AF)
14 Issue: Under Minn. Stat. 181.953, subd. 1 O(b), an employer cannot terminate an employee for a
15 positive controlled-substance test without first providing the employee a chance for rehabilitation
16 . andtrel1!I11~l1tR~cel1tly,s()Ineciti~~l1a:vl:Qeel1 ac1yis~dtl1is layvapplies .tQ'~probalioruirx"n ..
17 employees, as well as to regular employees.
18
19 Response: The League supports a legislative change to clarify that the state law on drug
20 and alcohol rehabilitation and treatment does not apply to probationary employees.
21
22 Data Practices
23
24 DP-l. Data Practices and Open Meetin2 Law Compliance Issues (AH)
25 Issue: The 2006 Legislature limited the amount cities are authorized to charge for copies of
26 police reports to 25-cents per page, which does not cover the city cost for copying, while
27 exempting state government from this restriction-thereby permitting the Department of Public
123
COMMITTEE RECOMMENDATIONS
I Safety to continue to charge $5 per accident report issued for any reports issued by the
2 Department of Public Safety, including reports issued by the state patrol.
3
4 In ~ 2008, proposals that V/ould have steeply the Legislature increased the statutory limits on
5 exemplary damages damage awards for Government Data Practices Act (GDP A} violations and
6 also increased the limits on the maximum civil penalties courts may impose to compel
7 compliance with the act. were again put forv;ard. These adiustments were deemed by the
8 Legislature to be necessary due to the fact that the existing limits had not been adiusted for many
9 years. The League, along with the Minnesota School Boards Association and tho Minnesota
10 Nmvspaper Association, once again persuadod lawmakers not to include the proposals in final
11 omnibus data practices legislation.
12
13 Response: The Legislature should allow cities to charge the same amount for copies of
14 reports issued by local police and fire as charged by the Department of Public Safety
15 charges for rcports issucd by the statc patrol.
16
17 (;Hies oppose inereasing The League opposes further increases in the maximum exemplary
18 damages that courts may impose against government entities found to have violated the
19 GPDA.i unless thcre is elear and conYineing e';idence of willful noncompliance. Cities also
20 opposc increasing further increases in the maximum civil penalty that may be imposed
21 when a court order is issued to compel a government entity to comply with the law unlcss
22 the court finds that the city has willfully disregarded its duty te eomply. GDPA~ any
23 statutory change that would make it a mandatory civil penalty to compel compliance
24 under the GDPA: or any statutory change that would expand the award of attorney's fees
25 to unintentional violations of the open meeting law.
124
COMMITTEE RECOMMENDATIONS
1
2 Federal Employment Law
3 FED-I. FLSA/Overtime Compensation (LK! AF)
4 Issue: The final changes to the Fair Labor Standards Act (FLSA) in the area of defining
5 "exempt" and "non-exempt" are more likely to expand the number of public sector employees
6 who are eligible for overtime rather than to limit the number.
7
8 Response: The League opposes any changes to the state's overtime laws that would further
9 broaden the number of public sector employees eligible for overtime. If the state changes
10 Minnesota's overtime law, then consideration should be given to better aligning state law
11 with the federal law. Providing consistency in state and federal law would minimize the
12 administrative burden on cities and avoid confusion for employees.
13
14 FED-2. Consolidated Omnibus Budget Reconciliation Act (COBRA) (LK)
15 Issue: The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) law, which
16 requires employers to offer continued health and dental insurance group benefits after an
17 employee terminates, has been interpreted to apply to Employee Assistance Programs (EAPs),
18 health funding mechanisms such as Health Reimbursement Arrangements (HRA)/V oluntary
19 Employee Benefit Accounts (VEBAs), and flexible benefits. The application of COBRA benefits
20 to these programs results in unlikely and impractical outcomes.
21
22 Response: Congress should clarify the intended benefits to which COBRA law should
23 apply, excluding programs such as EAPs, HRA/VEBAs, and flexible benefits.
24
25 FED-3. MedicareIMedicaid Premium Disbursements (LK! AF)
26 Issue: Minnesota continues to be a net loser in federal Medicare and Medicaid premium
27 disbursements.
125
COMMITTEE RECOMMENDATIONS
1
2 Response: Congress must recognize this disparity and provide Minnesota with a more
3 balanced and representative share of the costs of providing health care under Medicaid
4 and Medicare.
5
6 FED-4. Flexible Spending Accounts (LKJER)
7 Issue: Health care costs are rising dramatically and employees need financial relief. Flexible
8 spending accounts provide some relief, but the current "use it or lose it" provision for medical
9 spending discourages employees from participating in this program.
10
11 Response: The League supports legislation that would allow employees to roll unused funds
12 over to the next plan year, or into a tax-qualified retirement plan, or a 457 plan.
13
14 FED-5. Reserve Income Replacement Program (RlRP) (LK)
15 Issue: Since the Sept. 11,2001, terrorist attacks, the federal government has relied heavily on
16 state National Guard and other military reserve forces to fight the war on terrorism; Anumberof
17 these citizen-soldiers have experienced a loss of income while serving on active duty, which has
18 caused financial hardship for some of these members and their families.
19
20 Congress recently enacted the Reserve Income Replacement Program (RIRP) to provide monthly
21 income differential payments to National Guard and military reserve members who are
22 involuntarily serving on active duty. These payments are intended to bridge the gap between the
23 average monthly civilian earned income of the member before mobilization and the member's
24 total monthly military compensation while involuntarily mobilized. This program is of benefit to
25 cities because it reduces the financial stress placed on city employees called up to serve and
26 minimizes the distraction from their duties before leaving and upon return to the job. The RIRP
27 program expires in December 2008.
28
126
COMMITTEE RECOMMENDATIONS
1 Re.\ponse: It is the federal government's responsibility to minimize the financial hardship
2 placed on state National Guard and military reserve members who are ordered to federal
3 active service. The League urges Congress to extend the RIRP program beyond 2008.
4
5 FED-6. IRS Regulations on Death Benefits (LK)
6 Issue: Current IRS regulations do not allow any type of death benefit to be included in a post-
7 employment health savings plan and other tax-free funding vehicles. If the employee who owns
8 the savings plan account dies, he or she cannot leave the remaining funds to a designated
9 beneficiary (unless the beneficiary is a spouse or dependent child). If the employee does not have
10 a spouse or dependent child, the funds are typically redistributed among plan participants. A
11 death benefit provision is an attractive feature for many employee groups.
12
13 Response: IRS regulations should be changed to allow post employment health savings
14 plans and other tax-free vehicles for both active employees and retirees to include a
15 provision that allows the employee to designate beneficiaries in addition to spouses or
16 children.
..17
18 FED-7. Federal Public Safety Collective Bargaining Bill (LK)
19 Issue: Congress is considering a bill that would require all states to establish collective
20 bargaining procedures for all public safety employees. The bill directs the Federal Labor
21 Relations Authority (FLRA) to determine, state by state, whether it meets the bill's requirements
22 with regard to collective bargaining rights for public safety employees. While it appears
23 Minnesota is likely to pass the tests set out by the bill, federal public sector lobbyists have
24 expressed serious concern that the bill is very much open to interpretation. In addition, the bill
25 directs the FLRA to "consider and give weight, to the maximum extent practicable, to the
26 opinion of affected employee organizations."
27
127
COMMITTEE RECOMMENDATIONS
1 Response: The League opposes the federal collective bargaining bill for public sector
2 employees. Public sector collective bargaining should be left to the determination of each
3 state.
4
5 HR-NEW A. Part-Time Peace Officer Licenses (AF/LK)
6 Issue: Part-time licensed peace officers provide critical services to communities. However,
7 Minn. Stat. S 626.8468 restricts the number of part-time licensed peace officers that a law
8 enforcement agency may employ. The statute caps the allowable number at the level the agency
9 employed during the years 1996 through 1998. For many cities, this cap is zero.
10
11 Some stakeholders believe part-time officer positions compromise professional standards within
12 the law enforcement community and increase potential liability for the cities that use them. This
13 belief has resulted in efforts to preserve the cap on part-time licenses or eliminate part-time
14 licensure entirely.
15
16 Cities are anticipating maior challenges as the workforce ages. In addition, many greater
17 MiriiiesotaCitiesare experienCing population deere-ases. Thesefad6fsnavemade it difficult for .
18 some cities to recruit and retain peace officers. Hiring part-time officers is one strategy that cities
19 can use to help meet the staffing needs required to provide high quality public safety services.
20
21 Response: The League of Minnesota Cities believes individual cities are in the best position to
22 make public safety staffing decisions for communities and opposes efforts to eliminate part-time
23 officer licenses. However, the League is also sensitive to concerns about liability issues and
24 maintaining high standards for police officer licensure. The League supports a study of the issue
25 of part-time licenses with the aim of maintaining the viability of a quality police force for all
26 Minnesota cities.
27
128
COMMITTEE RECOMMENDATIONS
1 HR-NEW B. Back2"round Checks (AF/LK)
2 Issue: Many Minnesota cities operate under a longstanding practice of performing background
3 checks for employment purposes by accessing the computerized criminal iustice system
4 maintained by the Bureau of Criminal Apprehension (BCA) through the city's local police
5 department. The BCA's position, in the past, has been that such access was appropriate if the
6 city adopted an ordinance al10wing the city to access the system. In the past year, the BCA has
7 begun to audit local police departments and in some cases has prohibited further use of the
8 system for employment background check purposes. In many cases, the BCA has indicated that
9 the city does not have the appropriate ordinance and internal controls in place to allow such
10 access in a legally compliant manner.
11
12 While cities can access employment background information through the BCA directly, it is
13 more time consuming and costly to do so.
14
15 Using local police department access to the data base maintained by BCA to conduct
16 employment background checks is an effective use oflocal resources. It is one strategy that
17 cities can use to help keep costs dowIl and provide quality serviceS.
18
19 Response: Cities are capable of and should be allowed to continue the use of the BCA data
20 base system at no charge for the purpose of conducting employment background checks.
21 The League of Minnesota Cities urges the BeA to adopt a model ordinance and establish
22 recommended guidelines and training for cities that wish to continue to use local police
23 departments for employment background checks.
24
25 DP-NEW A. Preliminary Bud2"et Documents (AH/LK)
26 Issue: In these challenging budget times, cities are encouraged to engage in creative problem
27 solving and propose innovative solutions to address budget problems. Currently, preliminary
.
28 budgetary documents produced by cities are public information. This results is a chilling effect
29 on innovation and creativity. Unlike local governments, the state is not required to disclose its
129
COMMITTEE RECOMMENDATIONS
1 preliminary budget data. Minn. Stat. Q 13.605, subd. 2, provides that legislative and budget
2 proposals including preliminary drafts are protected nonpublic data and do not become public
3 data until presented to the Legislature.
4
5 Response: The Government Data Practices Act (GDPA) should be amended to make
6 budget proposals, including preliminary drafts, that are created, collected, or maintained
7 by the city's administration protected nonpublic data. After the budget is presented to the
8 city council, the supporting data, including department reQuests, are public data.
9 Supportin2 data should not include preliminary drafts.
10
130
COMMITTEE RECOMMENDATIONS
1 ELECTRIC RESTRUCTURING
2 Cities have a strong interest in the public policy debate about electric restructuring or
3 deregulation. Minnesota already enjoys some of the lowest average electric rates in the nation.
4 The case has yet to be made that deregulation will result in either lower rates or improved service
5 for consumers.
6
7 Electric Restructuring
8 Issue: For many decades, electric service to Minnesota citizens has been delivered through a
9 combination of investor-owned utilities (IOUs), municipal utilities, and rural electric
10 cooperatives. This system has served Minnesota well, delivering reliable, universal service at
r
11 rates among the lowest in the country.
12
13 In recent years, many have begun to promote "deregulation" or "restructuring" of the industry,
14 meaning that electric service would no longer be a franchised monopoly. A number of states,
15 primarily those with high electric rates, have taken steps to move toward such restructuring. In
16 most of these cases, transmission and distribution remain regulated, with retail competition
17 allowed for generation source.
18
19 Advocates of restructuring argue that such competition will lead to lower rates. However,
20 estimates by the federal Energy Information Agency are that while the upper Midwest, including
21 Minnesota, will experience slightly lower rates in the short-term, longer-term rates may actually
22 be higher under restructuring. Concerns have also been expressed as to whether residential
23 customers, and those in rural and other harder-to-serve areas, will actually experience decreased
24 reliability and increased rates.
25
26 Local elected officials have the primary responsibility to the citizens of their cities to make
27 certain restructuring that allows retail competition is as beneficial to the citizens as it is to the
28 industry. Beneficial to the citizen means that all Minnesotans experience the same reliable, high-
29 quality, universal, and low-cost service they experience under the current system of electric
30 power delivery.
131
COMMITTEE RECOMMENDATIONS
1
2 City residents have a strong interest in the outcome of this important public policy debate. Cities
3 are substantial consumers of electric power. Many cities have a significant portion of their
4 property tax base in electric industry property, while others collect franchise fees and/or sales
5 taxes on electric purchases within their boundaries. Citizens in 126 Minnesota communities
6 currently receive economical electric service from municipal utilities, which make payments-in-
7 lieu oftaxes to help support city services. Significant increases in the cost of electric power for
8 city operations or losses of these traditional sources of revenue will result in property tax
9 1l1creases.
10
11 Response: The federal government should not mandate restructuring; the decision should
12 be left to the states.
13
14 The Legislature should continue to follow a slow, deliberative approach, taking time to
15 consider how alternative models for delivering electric power will affect the state's
16 traditional benefits of reliable, universal, high-quality and low-cost service. The public
17 policy discussion should be focused on actual benefits to citizens, rather than on ideological
18 arguments,. stakeholder interests, and (tver-reliance on simplistkobJectiveslike~"consumer_
19 choice." Those advocating a change should bear the burden of proof to demonstrate that
20 restructuring and deregulation will, at a minimum, maintain Minnesota's high-quality,
21 low-cost, and reliable service. Only when that burden of proof has been met should
22 restructuring occur.
23
24 The following public policy goals should be incorporated into any legislation restructuring
25 the electric industry:
26
27 Adequate supply and demand. The state's current generation and transmission capacity is
28 inadequate to meet projected future needs. No new significant capacity has been built since
29 the 1980s (Sherco 3). In the past, regulatory and other governmental policies served as a
30 disincentive to meet customer demand. The Minnesota Energy Security and Reliability Act
31 enacted by the 2001 Legislature took significant steps to reduce these disincentives. The
132
COMMITTEE RECOMMENDATIONS
1 experience of other states would strongly suggest that deregulation prior to the
2 development and maintenance of adequate reserve capacity can lead to price spikes and
3 compromise service reliability. The state should continue to review and amend these
4 policies as necessary to encourage further development and maintenance of adequate
5 capacity and reliability.
6
7 Consumer protection. eonsumer interests must continue to be protected, especially for the
8 most vulnerable populations. Reliable service must be universally available and pro-grams
9 such as cold-weather shut-off rules should be continued either as requirements for all
10 market participants or as separate state programs.
11
12 Environmental concerns. The environment must be adequately protected, with conservation
13 and renewable energy efforts maintained. The federal government must review the
14 appropriateness of current environmental regulations and their effect in a deregulated
15 market; for example, exemptions from the elean Air Act for some generation facilities.
16
17 Fair market competition. To ensure fair market competition, the federal and state
18 governments must have the authority to review mergers to prevent abuse of market power.
19
20 eities must remain viable competitors in the electric market. Municipal utilities must be
21 granted exemptions from rules like the open meeting law and data practices requirements
22 where they ham-per the ability to effectively compete with private companies. To ensure
23 adequate service to every citizen, cities and other local governments must maintain their
24 ability to issue tax-exempt bonds for construction of electric infrastructure, and be given
25 explicit authority to aggregate or municipalize provision of electricity.
26
27 Local authority. eities must maintaID their traditional authority over land use, zoning,
28 rights of way management and cost recovery ,as well as the ability to franchise providers
29 and to receive payments-in-lieu of taxes from municipal utilities. eities' authority to
30 negotiate siting fees and agreements for proposed generating facilities should be enhanced.
31
133
COMMITTEE RECOMMENDATIONS
I To avoid unnecessary demand for the limited space in public rights of way, open access to
2 transmission and distribution facilities should be maintained through regulation.
3
4 As the electric market is opened to interstate competition, the federal government must
5 preserve the application of Minnesota's state and local sales taxes to the sale of electricity,
6 regardless of the place of origin.
7
8 Stranded Cost Recovery
9 Issue: Regulated utilities have traditionally made operating decisions based on needs of
10 consumers within their service territories. Many decisions, therefore, have been based more on
11 need than on economics. In the transition from a regulated to a restructured competitive
12 environment, electric generators' investments in fixed assets and other obligations mayor may
13 not remain as economically viable. Estimates of these "stranded costs" vary greatly, with some
14 indicating no stranded costs or possibly even negative stranded costs resulting from increased
15 prices after deregulation in Minnesota.
16
17 Response: If regulatory actions have contributed to investment by existing regulated
18 utilities that are D()t eC()D()nucallyviible iiiacompetitivemarket and if restructuring
19 occurs, the League supports transition mechanisms that will allow utilities to collect
20 revenues for those particular stranded costs. These charges, however, must be carefully
21 monitored to ensure only eligible and verifiable costs are covered and that over-collections
22 do not occur. Taxpayers and ratepayers should not be expected to cover the cost of
23 investments made for business reasons, apart from the requirement to serve under the
24 regulated system.
25
26 If negative stranded costs for the regulated utility as a whole can be established, and are
27 solely the result of transition to a restructured environment, these regulated utilities should
28 be required to contribute some limited percentage of established amounts to offset tax
29 breaks given to these utilities as a result of restructuring.
30
134
'.(:"; ~
COMMITTEE RECOMMENDATIONS
I Property Tax
2 Issue: Part of the discussion regarding possible deregulation of the electric power industry has
3 centered on electric utility taxation. Proponents of restructuring assert that if effective free
4 market competition is to replace governmental regulation, state tax policy must be changed. The
5 main focus of the investor owned utilities (IOUs) so far has been removal of the attached
6 machinery or personal property tax. Utilities subject to the tax argue it places them at a
7 competitive disadvantage to non-Minnesota companies, rural electric cooperatives (co-ops), and
8 municipals. However, accurate comparisons of tax burden-are difficult, as other states use
9 completely different taxing systems. Municipals make .substantial payments-in-lieu of taxes.
10 Additional1y, co-ops and municipals do pay direct taxes on some of their property and indirectly
11 when they purchase wholesale power from sources that are taxed, such as IOUs.
12
13 Utility personal property can be a significant portion of the local tax base in all cities. Most
14 obviously affected are cities that have power plants; however, transmission and
15 distribution equipment account for over half of the personal property taxes paid by the
16 IOUs and exist in nearly every city. Replacing the revenue that would be lost to cities,
17 counties, school districts, and other local taxing jurisdictions is a stated goal of the IOUs;
18 however~ the mechariicsaIid fl.lndirigsou.rcesof stIch a replacemerifrevenue wOllldbe
19 difficult to develop and administer, and could be subject to reductions or elimination over
20 time. Furthermore, replacement revenues or aids may not fully address the problems
21 created by a large tax base reduction.
22
23 Response: einesoppose proposals for exempting the IOUs from the personal property tax,
24 apart from the decision to restructure the electric industry in Minnesota.
25
26 If and when restructuring occurs, a truly independent review of the overall tax burden
27 should be conducted to determine whether Minnesota utilities are at a competitive
28 disadvantage. If an overall tax disadvantage is identified, the state should correct it. Under
29 no circumstances should local units of government or their citizens be required to shoulder
30 the burden of tax relief for IOUs.
135