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Home My WebLink About5.F.4. League of MN Cities-Draft Legislative Policies 5,F,4. CITY OF SHAKOPEE CONSENT Memorandum TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: League ofMN Cities - Draft Legislative Policies DATE: October 11, 2006 INTRODUCTION: The Council is asked to endorse the draft 2007 Legislative Policies, as determined by the League of Minnesota Cities Policy Committees. BACKGROUND: Attached are policies which were distributed by the LMC. They are to be considered by the League Board on November 16th; as such, they are asking that any comments be received by Tuesday, October 31 st. Periodically the City of Shakopee has considered League Policies, and those of the Association of Metropolitan Municipalities. As a whole, these policies are usually beneficial to all cities. However, if there 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. At the AMM police adoption meeting held last year, Shakopee was the only city that raised a question from the floor at the policy adoption meeting regarding an individual policy - that related to eminent domain. ALTERNATIVES: The Council can choose to: 1. Endorse the LMC Policies as drafted. 2. Endorse the LMC Policies, but remove individual ones for individual comment. 3. Do not comment. RECOMMENDATION: I recommend that the LMC Policies be endorsed. If the Council has individual ones 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 ofthe City's goals could be seen as supported by the LMC policies. ACTION REQUIRED: Unless the Council has individual issues, it should, by motion, direct that staff notify the League of Minnesota Cities Board of Directors that it endorses the policies as written. ~ Mark McNeill City Administrator MM:th Note: If staff would like to review these policies, please see Toni. League of Minnesota Cities 145 University Avenue West, St. Paul, MN 55103-2044- L-gru. 0/ Mjnn...ota Cities (651) 281-1200 · (800) 925-1122 Cia.... promoting ~""CQ Fax: (651) 281-1299 · TOD: (651) 281-1290 www.lmnc.org MEMORANDUM To: Administrators, Managers or Clerks (and) LMC Policy Committee Member From: Jim Miller, Executive Director Date: October 2, 2006 Re: 2007 Draft Legislative Policies , You and your city now have the opportunity to help shape and finalize the League's 2007 Legislative Policies. Attached please find the proposed 2007 League of Minnesota Cities Draft Legislative Policies, or view them on the LMC web site (www.1mnc.org). This document includes the policies developed by more than 150 city officials participating in the League's four policy committees this summer. The next steps inthe policy development process will occur with the October meeting of the Board of Directors where the Board will receive and review, on a preliminary basis, the draft policies from the League's policy committees. The Board does not approve the policies until receiving input from the general membership. The Board will give final consideration to the draft policies at its November 16, 2006. Board meeting. Please review the draft policies and share your comments with the Board of Directors by em ailing comments to policycomments@lmnc.org,or directly contacting any memberofthe League's lGR 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 League lGR staff is included in the front of the draft policy document and below. Please include your name, title, and city, as well as a reference to the appropriate policy number, in your E-mailmessage. To be considered by the Board of Directors, all comments are requested by Tuesday, October 31. Thank you for taking the time to review the proposed 2007 Draft Legislative Policies. lfyou have any questions about the draft policies or the process, please feel free to contact lGR Director Gary Carlson at gcalrson@lmnc.org or 651.281.1255. League IGR staff information Gary Carlson (Ge) 651.281.1255 gcarlson@lmnc.org Anne Finn (AP) 651.281.1263 afinn@lmnc.org Ann Higgins (AR) 651.281.1257 ahiggins@lmnc.org Jenn O'Rourke (JO) 651.281.1261 iorourke@lmnc.org Craig Johnson (CJ) 651.281.1259 ciohnson@lmnc.org Laura Harris (LR) 651.281.1260 lofferdahl@lmnc.org Laura Kushner (LK) 651.281.1203 lkushner@lmnc.org AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER ll3AOldW3 NOIlO'o' 3AI1'o'Wllljj'o' / HINnlllOddO Wnb3 Nit ilUPO:j.S;;Il pUU 'SS;;IU!PU;;Il ;;I:)lO])llOM lOJ ilu!punJ ;;Ilq!X;;IU ;;Ilom ;;Ipnpu! s;;Iilump A:)!lOd ';;I:)JOd )[SU.L dI.L ;;Iq:j. UlOlJ suoHs;;Iililns uo p;;lsuq S;;I!:)!Iod :j.U;;IUldOl;;1MP :)!UlOUO:);;I pun dU s,;;Inilu;;I'1 ;;Il[:j. O:j. s;;Iiluuq:) M;;IJ 13 P;;lPU;;IUlUlO:);;Il ;;I;;IU!UlUlO:) ;;Iq.L ')UiJl,udo/CJdCJP :J1WOUO:JCJ puv GlIJ) :JupuVUl.!lIUCJWCJ.l:JuI XV.l . 'UlumOJd (OTVH) s;;ImuTQloddO;;lilUl;;lM'1 lOJ lUno:):)y ilu!SnOH ;;Iq:j. Aq p;;ll!nb;;ll spunJ ilU!l[:):j.UUl ;;IS!Ul O:j. 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'sa!:)!lod iluHs!xa JO laqUlnu 13 Ol sailuuq:) 8U naM S1:1 sap!lod Mau ~AY papuaUlUlo:)al aau!UlUlO;) aSl all1- {aSV AJ:aA!Iaa ;:);)!A.laS nU!AO.UIWI Slq~!Iq~!H ~~n!mm03 AanOd LOOZ ~JO'OUWrMMM 06(;'N8(; (1:99) :aOl . 66(;1:-'j;8(; ('j;99) :xe:l (;(;'j;'j;-9(;6 (008) . 00(;1:-1:8(; ('j;99) 17170(;-801:99 NIAI'lned 'is ':j.saM anua^\;I A:l!SJi3^!Un 9171: Sa!~!~ e~OSaUU!W :JO an~eal statewide jurisdiction and funding for the state redevelopment account or considering another program to address redevelopment needs in the metropolitan area. . Adequate funding for transportation. Recommended changes to this policy include support for a 60/40 split ofMVST dollars between roads and transit, clarification of existing city wheelage tax authority under Minn.Stat.s426.05, and state funding to cover all components of state highway projects, including related stormwater management systems. Improvin!! Fiscal Futures (IFF) - The IFF Committee recommended adding a list of broad tax policy principles to the League's State/Local Fiscal Relations policy, which are based on recommendations from the League's Financing Local Government Task Force report issued in 2005. The committee also proposed a new policy on community education funding and recommended changes to several existing policies. . NEW - Equitable funding of community education services. This new policy supports a statutory increase in the community education revenue authorization for school districts to provide a steady source of revenue that would be assessed against all properties in the school district, not just properties which are located in the city. . Local government aid (LGA) reform. The committee recommended that the League continue to support several adjustments to the LGA formula including the elimination of the taconite aid from the capacity factor, adjusting the need factor to reflect inflationary pressure and using current population estimates for the regional center aid base. This year, the committee also recommended that the League identify formula modifications that would minimize volatility in the program. . Market value homestead credit (MVHC) programfunding. Members recommended that the League continue to support the restructuring of the MVHC program to eliminate city budget vulnerability that exists under the current program. . City revenue diversification. The committee adopted language opposing mandatory sharing of local sales tax revenue with neighboring cities and townships. Human Resources and Data Practices - The Human Resources and Data Practices Committee adopted two new policies and recommended changes to several existing policies. . NEW-Volunteer firefighter pension benefits. Thispolicy supports a statewide study of paid and volunteer firefighter pension benefits. It also supports a centralized, statewide volunteer firefighter pension plan provided that participation is voluntary and the plan takes into account the different financial capacities of cities. . NEW - Reserve Income Replacement Program (RIRP). This new policy urges Congress to extend an<J fund the RIRP program, which provides a federal income replacement payment to eligible National Guard and military reserve members who are ordered to federal active service. . Public Employees Retirement Association. Changes to this policy support an increase in the number of years required for vesting to help reduce the need for additional contribution increases. . Health care insurance programs. The committee recommended that the League support changes to state law that would clarify"the requirement to bargain over changes in the "aggregate value" of benefits. Members also supported allowing cities to pool retirees separately from active employees in order to avoid liabilities associated with the new Government Accounting Standards Board (GASB) requirements regarding"implicit subsidy," and authorizing cities to invest these trusts in a broader array of investments similar to those available to pension funds. . Data practices compliance issues. This revised policy opposes efforts to increase the maximum penalties that may be imposed on government entities that have violated the state data practices act. " DRAFT 2006 CITY POLICIES Send comments to policycomments@lmnc.org or contact an IGR representative Comment period ends Tuesday, October 31,2006 GaryCarlson (GC) 651.281.1255 gcarlson@Jmnc.org Anne Finn (AF) 651.281.1263 afllm@hlmc,org Ann Higgins (AH) 651.281.1257 ahiggins@hllllc.org Jenn O'Rourke (JO) 651.281.1261 jorourke@hlmc.om Craig Johnson (el) 651.281.1259 ciohnson@lnmc.org Laura Harris (UI) 651.281.12601hanis@lmnc.org Laura Kushner (LK) 651.281.1203 lkushner@lmnc.org );> Initials following each policy are those of the policy author. );> Underlining indicates new language. );> Strikeouts indicate deleted language. t\ 2006 DRAFT CITY POLICIES TABLE OF CONTENTS IMPROVING SERVICE DELIVERY 1 SD~ 1. Unfunded Mandates (GC/JO) ............. ....... .................. ......................,............ ......... ......1 SD- 2. Redesigning and Reinventing Government (GC/JO) ..................................................... 1 SD- 3. City Costs for Enforcing State and Local Laws (AF) ...................................................3 SD- 4. Responsibility for Locating Private Underground Facilities (AH)................................4 SD- 5. Utility Relocation Under Design-Build Road Construction (AP) ................................. 6 SD- 6. National Fire Protection Association (NFP A) Standards CAp) ..........................;.......,.. 6 SD- 7. Medicare Reimbursement for Ambulance Service (AP) ............................................... 7 SD- 8. Fees for Service (AF/LH) .................................................. ...................................... ..... 8 SD- 9. Providing Inforn1ation to Citizens (JO) ...................................................................... 10 SD- 10. Contracting and Purchasing (LH) ............................................. .........................,....... 10 SD- 11. City Enterprise Operations (10)................................................................................ 11 SD- 12. Initiative and Referendum (AH) .......................:.......................................... ...,......... 12 SD- 13. Civil Liability of Local Governments (LH) ....................;......................................... 13 SD-14. Private Property Rights and Takings (CJ/LO) ........................................................... 14 SD- 15. Construction Codes (LH) ................ ............ .............. ......... ........ ..... ............. ............. 18 SD- 16. Disability Access Requirements (LH) ......................................................................21 SD- 17. Firearms on City Properties (AF) ..........................................................................., 23 SD- 18. Creating a Minnesota GIS (AH) .........................,..................................................... 23 SD- 19. Public Safety Spectrum Needs (AH) ........................................................................ 24 SD- 20.800 MHz Radio System (AH) ..........................................................................."..... 25 SD- 21. CriMNet (AP) .............. ..... .......:............................................ ..... ................ ............... 26 SD- 22. Compensation and Reimbursement for Public Safety Services (AF) .............~.......... 28 SD- 23. Administrative Fines (AF) ......... ............:.... ............. ..................... ....... ........ ............. 29 SD- 24. Homeland Security Costs and Liability (LH) ........................................................... 31 SD- 25. 0.08 DWI (AF) ........................... ....... ................................ .'.... ............. ...... ...... ......... 32 SD- 26. 911 PSAP Funding Needs (AH) ............................................................................... 33 SD- 27. Racial Profiling (AP)...... ....................................................'............... ....................... 34 SD- 28. Legalization of Fireworks (AP) ................................................................................35 SD- 29. Traffic EnforcementCameras (AP) .......................................................................... 37 SD- 30. Fire Mutual Aid (AP) ...............................................................................................38 SD- 31. Dangerous Dogs (AF) ............................................................................................... 39 SD- 32. Operation of MotoIized Foot Scooters (AF) .............................................................39 SD- 33. Methamphetalnine (JO) .......... .................. ........................ ... ......;..............................40 SD-34. State Regulation of Massage Therapists (AF) ........................................................... 41 SD- 35. On-Sale Liquor or Wine Licenses to Cultural Centers (JO) ...................................... 42 SD- 36. Youth Access to Alcoholand Tobacco (10) ..............................................................43 SD- 37. Smoking Ban Ordinances (JO) ................................................................................. 43 SD- 38. Environmental Protection (eJ) ................................................................................. 44 SD- 39. Ilnpaired Waters (CJ).............. ..................................... .............................................46 SD- 40. Phosphorus Reduction (CJ) ................................. ....... .................................. ............48 SD- 41. Election Issues..................................................................... ..................... ........ ......... 49 SD- 42. Local Election Authority.... ........ .................. ................... ....... ...................................52 SD- 43. State Assistance for Library Funding (JO)................................................................. 52 SD- 44. Park and Library Land Tax Break (JO)..................................................................... 53 SD- AA. Funding to Manage Shade Tree Diseases and Pests (JOICJ) NEW......................... 53 SD- BB. Immigration Refonn (AF) NEW.............................................................................. 54 SD- Cc. Sustainable Development (CJ/LH) NEW................................................................. 55 SD- DD. State Oversight of Amusement Ride Safety (AP) NEW......................................... 57 SD- EE. Local Approval of Special Laws (GC/LH) NEW..................................................... 58 IMPROVING LOCAL ECONOMIES' 60 LE- 1. Growth Management and Annexation (CJ)..,.............................................................. 60 LE- 2. Electric Service Extension (AH) ........ ..................... .............. ......................... ............. 61 LE- 3. Statutory Approval Timelines (CJ/LO) ....................................................................... 62 LE- 4.Public,Jnfrastructure Utilities (AF)...................................... ....................................... 64 LE- 5. Development Disputes (CJ/LO) ............ .................................................,........ ............ 65 LE- 6 New Resources for Affordable Housing- Amendment (AH) ......................................65 LE- 7. State and/or County Licensed Residential Facilities (group homes) (AH) ................... 68 LE- 8. Inc1usionary Housing (AH)........ ........... .......................................... ........................... 69 LE- 9. Community Land Trusts (AR) ....................................................................................70 LE- 10. Municipal Telecommunications Authority (AH) ...................................................... 71 -. .----.--.-------LE--l-1..Right-of-Way.Managemen t.. {AH),,-.-,;-;;;-;;;;;;.;-;-;;;-;-;-;=-;;7;-;.;;,......;-;-;.;7;-;.;-;-;-;-;.; ;;;';;-;-;;:-;;=-.-.:;';;;';.-;;; 72-- -.---------- LE- 12. Cable Franchising Authority (AH) ................................ 0>....................... ....... ....... ..... 73 LE- 13. Franchising Competitive Cable Service Providers (AR).;......................................... 74 LE- 14. Wireless Tower and Antenna Siting (AH) ................................................................. 75 LE- 15. Economic Development Authorities (JO) .................................................................. 76 LE- 16. Workforce Readiness (JO) .................................................................................. .... 77 LE- 17. Community Reinvestment Partnerships and Financing (JO) ..................................... 77 LE- 18. Tax Increment Financing (JO) ..............;................................................................... 79 LE- 19. TIP District Defi.cits (JO)... .............,......., .......................... ........ .............................. 80 LE- 20. Business Subsidies (JO) ................................................. ...................... ..................... 80 LE- 21. Business Development Programs (JO/LO) ............................................................... 81 LE- 22. Land Recycling Programs (JO) ................................................................................. 82 LE- 23. Property Tax Abatement Authority (JO) .................................;................................. 83 LE- 24. OSA Response Timelines (JO) ................................................................................. 84 LE- 25. OSA Time Limitations (JO)...... ......................... ............... ............................. ............ 84 LE- 26. Adequate Funding for Transportation (AP) .............................................................. 85 LE- 27. Turnbacks of County and State Roads (AP).............................................................. 87 LE- 28. MnDOT Rights-of-Way Maintenance (AP) .............................................................. 88 LE- 29. Road Funding for Cities Under 5,000 (AF)...................;........................................... 89 LE-30.. Grant Anticipation Bond AuthOlity (AF/JO) .......;....................................................89 LE- 31. Railroad-Related Projects (AF) ................................,................................................90 LE- 32. Statewide Aviation Planning (AF) ............................................;............................... 91 IMPROVING FISCAL FUTURES 93 FF- 1. State-Local Fiscal Relations (GC/JO) ........................................................................93 FF- 2. State Budget Stability (Ge/JO) .................................................................................. 95 FF- 3. Price of Government (GC/JO) ...... .................................. .......................... .................. 96 FF- 4. Funding LGA (Ge/JO) ................. ............................ ............................................... ... 96 FF- 5. Local Government Aid Refonn (GC/JO) ................................................................... 98 FF- 6. State AdministrativeDeductions from State Aid (GC/JO) ....................................... 100 FF- 7. State Charges for Administrative Services (GC/JO).................................................100 FF- 8. Reporting Requirements (GC/JO) ............................................................................ 101 FF- 9. Limited Market Value (GC/JO) .... .............. .......... ....... ............................................. 101 FF- 10. Restructuring the Market Value Homestead Credit (GC/JO) ................................. 102 FF- 11. Lund Tax on Commercial/Industrial Property {GC/JO).......................................... 102 FF- 12. Sales Tax on Local Government Purchases (GC/JO) ............................................. 103 FF- 13. Sales Tax on Capital Equipment (GC/JO) ..............................................................104 FF- 14. Taxation of Municipal Bond Interest (GC/JO) ....................................................... 104 FF- 15. Taxation of Electronic Commerce (GC/JO) ...............;........................................... 105 FF- 16. Taxation of Electric Generation Personal Property (GC/JO) .................................. 105 FF- 17. State Restrictions on Local Budgets (GC/JO) ........................................................ 106 FF- 18. Truth-in-Taxation Process (GC/JO) .................................................~..................... 107 FF- 19 . City Fiscal Year (GC/JO) ....................................................................................... 108 FF- 20. City Fund Balances (GC/JO) ...~........................................... ...................... ............. 108 FF- 21. City Revenue Diversification (GC/JO)...................................................................109 FF- 22. City Franchise Authority (GC/JO) .......................................................................... 109 FF- 23. Utility Valuation Rules (GC/JO) ............................................................................ 111 FF- 24. Payments for Services to Tax-Exempt Property (GC/JO)......................................112 FF- 25. Impact Fees (GC/JO) .............................................................................................. 112 FF- 26. Equity in Library Funding (GC/JO) ....................................................................... 113 FF- AA. Equitable Funding of Community Education Services (GC/JO) NEW.................. 114 HUMAN RESOURCES & DATA PRA.CTICES 115 Human Resources 115 HR- 1. Personnel Mandates and Limits on Local Control (LK!AF/LH) .............................. 115 HR- 2. Pay Equity (LK! AF/LH) ....................................;...................................................... 1] 6 HR- 3. Public Employment Labor Relations Act (PELRA) (LK! AF/LH) ............................ 116 HR- 4. Essential Employees (LK! AF/LH) ........................................................................... 117 HR- 5. Re-employment Benefits (LK! AF/LH) .................................................................... 118 HR - 6. Pension Benefits (LK! AF/LH) .... ............................... ........... ....... ............................ n 8 HR- 7. Public Employees Retirement Association (PERA) (LK! AF/LH) ............................ 119 HR g. Social Security Contributions for Elected Officials (CG)..............................,.......... 121 HR- 9. Retirement Work Incentives (LK) ................................,........................................... 122 HR- 10. State Paid Police and Fire Medical Insurance (LK! AF/LH) .................................... 123 HR-ll. Health Care Insurance Programs (LK!AF/LH)....................................................... 125 HR- 12. Employee Recognition, Wellness and Safety Programs (LK) ................................ 127 HR- 13. Deferred Compensation Contributions (LK!AF/LH)..;............................................ 127 HR- 14. Workers' Compensation (LK! AF/LH) .............................,'..................................... 128 HR- 15. Breathalyzers (LK! AF/LH) .............................. ........... ......... ............... ...... ...... ....... 129 HR- 16. Veterans' Preference (LK! AF/LH) ......................................................................... 130 HR- 17. Drug and Alcohol Rehabilitation (LK! AF/LH) ....................................................... 130 Data Practices 131 DP- 1. State Model Policies and Training Data Practices Compliance Issues (AR)............. 131 Federal Employment Law 132 FED- 1. FLSAJOvertime Compensation (LK/AF/LH)......................................................... 132 FED- 2. Consolidated Omnibus Budget Reconciliation Act (COBRA) (LK) ...................... 132 FED- 3. Medicare/Medicaid Premium Disbursements (LK! AF/LH) ................................... 133 FED- 4. Flexible Spending Accounts (LK!ER).....................................................................133 HR- AA. Volunteer Firefighter Pension Benefits (LK) (NEW) ...........................................134 FED- BB. Reserve Income Replacement Program (RIRP)(LH) (NEW)........:..................... 134 ELECTRIC RESTRUCTURING 136 Adequate Supply and Demand... ....... ................. ....... ........................ ...... ..... ..... .................... 138 Consunler Protection .;. .... .................. ..... ............................. .................. .... ........ ..... ...... ........ 139 Environmental Concerns..................................................... ................:............. ~................... 139 Fair Market Competition ... ..... ............... ......... ............. ................................... ....................... 139 Local Authority ...................... ..................... ~.......................;................................................ 140 Stranded CO'st Recovery....... ..... ..... ....................... .... .................. .......... ................>....... ........ 140 , Prope(t:y,Tax .. ............................ ............... .,...................................... .................. .......... ........ 141 1 IMPROVING SERVICE DELIVERY 2 SD-l. Unfunded Mandates (GC/JO) 3 Issue: The cost of federal and state mandated programs substitute the judgment of Congress, the 4 president, the Minnesota Legislature, and the governor for local budget priorities. These 5 mandates force cities to reduce funding for other basic services or to increase taxes and service 6 charges. The passage by the Legislature of reporting requirements for new state mandates, the 7 recently enacted State Auditor's program for local governments to register their ideas for 8 mandates reform, and the passage by Congress of legislation restraining new federal mandates 9 shouldheJp address the problem, but other steps are ne.c;essary. 10 Response: 11 . Existing, unfunded mandates should be reviewed and modified or repealed, where 12 possible. 13 . No additional statewide mandates should be enacted, unless full funding for the 14 mandate is provided by the level of government imposing it or a permanent stable 15 " revenue source is established. 16 . Cities should not be forced to comply with unfunded mandates. 17 . Cities should be given the greatest flexibility possible in implementing mandates to 18 ensure their cost is minimized. 19 20 SD-2. Redesigning and Reinventing Government (GCnO) 21 Issue: Every level of government is re-evaluating, reprioritizing, redesigning, and renewing its 22 organizational structure and programs in response to financial realities and citizens' needs and 23 problems. Reforms, however, must be more than change for the sake of change or a reshuffling ] 1 of existing programs to appease the electorate. 2 3 To be meaningful, reorganization and reassignments of governmental entities and services 4 should save money, where feasible, deliver improved services, serve essential needs, and be 5 equitably structured. Cities have and will continue to re-evaluate city programs and services, . ':""-"" 6 pursue the use of cooperative agreements, and consider organizational changes that provide 7 greater government efficiency and result in better service to citizens. 8 9 Response: The federal, state, and county governments should: 10 . Ensure that in redesigning, reinventing or reassigning government services and 11 programs the appropriate level of service to citizens is evaluated and citizen demands 12 and expectations are adequately addressed. 13 . Promote local efforts through incentives~ rather than mandates. 14 . Communicate and establish a process of negotiation before shifting responsibility for 15 delivering services from one level of government to another or seeking to reduce service 16 duplication. 17 . Transfer authority for use of revenues dedicated to such programs, or provide 18 appropriate and adequate alternatives. 19 . Identify and repeal programs ,or (iiscontinue services that are no longer necessary and 20 evaluate which services can readily and fairly be provided by the private sector. 21 . Employ existing government entities in redesign efforts rather than create new agencies 22 or units. 2 1 SD-4. Responsibility for Locating Private Underground Facilities (AR) 2 Issue: Beginning in 2006, cites became responsible for complYing with The Minnesota Office of 3 Pipeline Safety (MnOPS) has adopted major changes to state pipeline safety regulations issued 4 by the Minnesota Office of Pipeline Safety (MNOPS) that make cities responsible for locating 5 and marking private service laterals that connect in the public right~of-way to city sanitary and 6 storm sewer, water and district heating systems. There is increasing likelihood of hei!!htened 7 risk of dama~e to private service laterals located on private property during sewer and water 8 service replacement and when cable or fiber to the premises (FITP)'facilities are bein!! installed, 9 particularly when horizontal directional drilling (HDD) methods are used. 10 11 Response: The League is working .."ith affiliates representing city engineers, public works, 12 water and wastewater utility managers to Some cities have made identify changes to local 13 permitting requirements for ef..the installation of service connections to city mains water 14 and sewer systems; mapping and locating methods reouirements for those private services; 15 and regulation of horizontal direction drilling to assist cities in complying with new 16 l\fuOPS rules and to protect cities from liability for hits and damage by excavators to 17 existing and newly installed private underground facilities. Proper locates require that 18 contractors accept responsibility for damage and threats to public safety as a result of loss 19 of service and damage resulting from excavation activity. Private contractors working for 20 builders, investor-owned utilities, telecommunications and other service providers must 21 construct or install underground utilities in compliance with local permitting, right-of-way 22 management ordinances and building code requirements. 23 4 1 8D-3. City Costs for Enforcing State and Local Laws (AF) 2 Issue: Cities experience substantial costs enforcing state and local laws, particularly those 3 related to traffic, controlled substances, and incarceration of prisoners. The current method in our 4 criminal justice system ofrecovering costs for law enforcement and prosecution through fines is 5 insufficient to meet the costs incurred by local governments. Further, when a violator requests 6 relief from paying the full amount of the fine and surcharge, the courts have been more inclined 7 to waiv~ the fine than to reduce the surcharge. When this occurs, the local units of government 8 recover no costs even though the city has incurred expenses. 9 1,0 Response: The Legislature should review this issue and adopt measures that provide for 11 complete reimbursement of the costs incurred by local governments in enforcing state and 12 local laws. Solutions that should be considered include the following: 13 Increasing fine amounts. 14 Removing or modifying county and state surcharges that conflict with cost recovery 15 principles. 16 Requiring the. defendant to pay the full courts to consider orderim! restitution from the 17 defendant to reimburse the costs of enforcement and prosecution as part of any sentence 18 based on ability to pav. 19 Requiring that if a court reduces the amount paid by a violator, any reduction should be 20 made from the surcharge and not the fine. 21 3 1 Contractors operating HDD equipment should also be required to be responsible for 2 training operators, maintaining logs regarding scope of work, contractor name, materials 3 installed and for any damage done to public or private property. In addition, property 4 owners in the excavation area should receive advance notice of any directional boring or 5 other excavation activities that could affect the quality of utility services. Notice must 6 include at least one phone number for assistance in case of any service problems. 7 8 When engaged in such projects within the public right-of-way, cities may require that HDD 9 contractors provide advance notice to the city or municipal utility of intent to use 10 directional drilling and reQuire them to expose all city utilities and private service laterals 11 that they cross or parallel. At meets, city officials would also urge that excavators should 12 also be required to provide and distribute copies of documented written requests for 13 locates, including a map, to locators, particularly when emergency meets arc called. 14 15 Cities must also have discretion not to locate privately owned laterals for which they have 16 no accurate locate records and not be held responsible for actioIl~ by eXl:avators whent~e 17 city determines notto locate such facilities. Excavators should be held responsible for 18 locatin2 and protectin2 anvprivate service lateral that is potentially impacted by 19 excavation activities conducted on private property beyond the public ri2ht-of-way. At a 20 minimum. cities and excavators should undertake reasonable efforts to share available 21 information re2ardin2 the location of such facilities. 22 5 1 Nothing in statut~ or rules should absolve contractors and excavators from liability and 2 damages as a result of their actions. 3 4 SD-5.Utility Relocation Under Design-Build Road Construction (AP) 5 Issue: The Minnesota Dept of Transportation (Mn/DOT) has promoted legislation relating to the 6 design-build construction process that would require private and public utilities to be responsible 7 for utility relocation necessitated by road construction. The policy, if enacted, would create, 8 unanticipated costs for utilities owned and operated by cities. Municipally owned utilities would 9 be unreasonably held to the same standards as privately owned utilities that exist in the public -~. -,.. 10 right-of-way. 11 12 - Response: The League supports use of the design-build procedure; however, municipal 13 utilities that exist in the public right-of-way should not be penalized under this process. 14 Municipal utilities legitimately exist in the public right-of-way. when a Mn/DOT 15 construction project requires the relocation of utilities, the cost of relocating municipal 16 utilities should be equitably shared between the department and affected municipal 17 utilities. 18 19 SD-6. National Fire Protection Association (NFP A) Standards (AF) 20 Issue: The National Fire Protection Association (NFP A) is an international association of 21 individuals and trade and professional organizations that deals with fire and life safety. The 22 NFP A has adopted advocated legislation that would mandate two Hew standards: NFP A 1710, 23 Organizati01i and Deploym,erlf of Fire Suppression Operations, Emergency Medical Operations, 6 1 and Special Operations to the Public by Career Fire Depart1nents, and NFPA 1720, 2 Organization and DeploY11'wnt of Fire Suppression, Emergency Medical Operations, and Special 3 Operations to the Public by Volurueer Fire Depamnents. NFP A standards'17l0 and 1720 define 4 minimum response times, minimum fire company staffing levels, initial full alarm response 5 levels, and extra alarm response levels. Although NFPA codes and standards are voluntary, they 6 are often adopted by local jurisdictions. NFP A standards 1710 and 1720 preempt local authority 7 and place a one-size-fits-all mandate on all cities. 8 9 Response: Levels of service delivery for fire and emergency medical services (EMS) have 10 always been determined by local jurisdictions. The NFP A has clcfilrly gone outside its 11 authority in proposing the national minimum response, operating, and staffing standards. 12 The NFP A standards, if mandated, would force local governments to shift dollars from fire 13 prevention programs to fire suppression activities, potentially increasing the risk of fire 14 and the danger to local firefighters. 15 ".<. 16 The League opposes any attempt to mandate standards for minimum staffing levels of fire, 17 specialized, or emergency medical services vehicles controlled by units oflocal government. 18 The League also opposes any attempt to adopt a standard dictating or affecting the 19 response time of any fire, specialized or emergency medical services vehicle. 20 21 SD-7 . Medicare Reimbursement for Ambulance Service (AF) 22 Issue: The federal Balanced Budget Act (BBA) of 1997 made two significant changes to 23 ambulance billing. First, the act mandated that all ambulance services accept Medicare 7 1 assignments as payment in full; that is, ambulance services can no longer cannot bill the 2 Medicare patient for any unpaid balance beyond the Medicare payment. Second, the act 3 mandated a new uniform fee schedule that was implemented in April 2002. The new fee 4 schedule significantly reduced reimbursement levels for many ambulance services. The BBA 5 mandates will have profound impacts on the ability of some Minnesota ambulance service 6 providers to fund their operations. - >-" -... 7 8 Response: The League supports federal legislation that would: 9 . Require Medicare to set ambulance payment rates at the "national average cost" of 10 providing service. 11 . Require adequate reimbursement for ambulance providers. 12 . Establish a "prudent layperson" standard for the payment of emergency ambulance 13 claims such that if a reasonable person believed an emergency medical problem existed 14 when the ambulance was requested, then Medicare would pay the claim. 15 . Make it easier for providers to file Claims with Medicare by eliminating a processing 16 system that often leads to the rejection of legitimate. reimbursement claims. 17 18 SD-8.Fees for Service (AF/LH) 19 Issue: While general services-such as permitting, inspections or enforcement-are typically 20 funded out of a city's general fund, many times cities impose fees to cover the cost of providing 21 certain services,pennits and licenses. 22 8 1 The Legislature and interest groups often seek to mandate specific fee limitations for various city 2 services. Over the last several years, the Legislature has enacted a number of new laws designed 3 to rigorously control local fee setting authority. Examples of such mandates include placing 4 limits on building permit fees and coin-operated amusement machine license fees, capping 5 license fees for retailers selling fireworks, and restricting local authority to set planning and 6 zoning fees. The state also requires cities that collect more than $5,000 in development-related 7 fees each year to annually report all construction and development fees to the Department of 8 Administration. In addition, the Legislature adopted a law defining "tax" to mean any fee, charge 9 or assessment imposed by a governmental entity. This provision requires that fees or charges that 10 meet the definition of a tax must be treated as a tax for all purposes. has directed cities to report 11 to the Commissioner of Re.venue by January 15, 2006, on the amount and type of fees imposed, 12 amount and type of fee increases since January 1, 2003, revenues denysd from each fee foHOO 13 four most recent fiscal years and the uses of fee revenues. 14 15 Response: While the state h;lS a role in providing a general statewide funding policy~ the 16 state should not interfere in the decision-making functions performed by cities when setting 17 city budgets to'provide city services. The League supports the Legislature endorsing city 18 authority to charge fees that are reasonably related to the cost of providing the service, 19 permit or license, and acknowledging there are other associated costs inherent in the 20 provision of those services, permits or licenses. Cities, however , oppose any move to 21 legislate specific methods to pay for city services or place caps on city fees. 22 9 1 SD-9. Providing Information to Citizens (JO) 2 Issue:. To keep the public updated and informed, state law requires local units of government to 3 publish various notification documents in newspapers, and often dictates which newspapers 4 receive cities'publicationbusiness. The number and variety of documents that are required to be 5 published and the costs of publication are burdensome. Technological advancements have 6 expanded the ways'government can provide information to citizens. In many cases, these new 7 technologies are more efficient and cost effective. 8 9 Response: Cities should be authorized to take advantage of new technologies to increase the 10 dissemination of information to citizens and potentially lower the associated costs. 11 Specifically, the Legislature should authorize local units of government to designate an 12 appropriate daily/weekly publication; elect alternative means of communication such as 13 city newsletters, cable television, and city web sites; and expand the use of summaries 14 where information is technical or lengthy. Additionally, the Legislature should eliminate 15 outdated or unnecessary publication requirements. 16 17 SD-IO. Contracting and Purchasing (LH) 18 Issue: Minnesota Statutes stipulate contracting and purchasing requirements for Minnesota 19 cities. The law prescribes the process that political subdivisions must use to make purchases and 20 award contracts and requires a competitive sealed bid procedure for contracts or purchases over 21 $50,000. The intent of these statutory requirements is to provide taxpayers with, the best value for 22 their dollar and ensure integrirj in the process. However, imposing these statutory requirements 10 1 may, at times, result in political subdivisions paying more for goods and services than private 2 entities under the same circumstances. 3 4 The Legislature recognized the benefits associated with alternative purchasing methods when it 5 amended municipal contracting law in 2004 to authorize the use of reverse auctions to purchase 6 supplies, materials and equipment. Similarly, other contracting procedures, including "design- 7 build" and direct negotiation are proven alternatives to the formal bidding process. Authorizing 8 broader use of these types of alternatives would further streamline local contracting and reduce 9 cities' purchasing costs. 10 11 Response: The League supports broader use of alternative contractin2 and purchasin2 12 methods that streamline the process and reduce local purchasin2 costs. contracting and 13 purchasing reforms that give cities the flexibility to previde quality goods and services at 14 the lowest cost to taxpayers. Specifically, the League supports authorizing cities to use the 15 design-build procedure and providing municipalities with broader authority, similar to 16 that of private businesses, to directly negotiate contracts. The le2islature should establish a 17 task force to review municipal eontractin2 laws and consider contractin2 and JJurchasin2 18 reforms that 2ive cities the flexibility to provide Quality 200ds and services at the lowest 19 cost to taxpayers. 20 21 SD-l1. City Enterprise Operations (10) 22 Issue: Historically, city enterprise operations have been created in response to community needs, 23 lack of a private market, financial reporting requirements, state and federal mandates, to enforce J 1 1 state and local law, and to ensure a quality of life for the residents of a community. Establishing 2 an enterprise operation allows a city to provide a desired service while maintaining financial 3 control over service levels, costs, and public inputs. 4 5 In some cases, enterprise operations produce general public benefits and may require public 6 support to ensure a desired level of service at a reasonable cost. The benefits of an enterprise 7 ()peration, therefore, should be evaluated not solely in terms of profitability, but also on the 8 service benefits to citizens of the community. 9 10 Response: The League supports the local decisions made by cities to deliver services by 11 establishing a city enterprise operation. The state should refrain from infringing on the 12 ability of a city to provide services for its community. 13 14 SD-12. fuitiative and Referendum (AR) 15 Issue: The Legislature may consider legislation that proposes to place a question on the 200911 16 state general election ballot for voter approval to amend the state constitution to provide for 17 initiative and referendum. 18 19 Response: Cities strongly support our representational system of governance, and 20 therefore, the League opposes amending the state constitution to provide for initiative and 21 referendum. The Legislature is the appropriate governing body to consider and enact 22 public policy that reflects statewide interests. The process of adopting state la w based on 23 good public policy is best upheld and supported by increasing the accountability and 12 1 responsiveness of the legislative process, not by 'circumventing it. Presenting complex 2 issues to voters in the guise of direct democracy further weakens representative 3 government. A state constitutional amendment to ,provide for iriitiative and referendum 4 ami subjects cities and their residents and taxpayers to the unintended outcomes of such, 5 unwise attempts to place those decisions into the hands of special interests that can raise 6 unlimited funds for the purpose of promoting their more narrow interests. 7 8 SD-13. Civil Liability of Local Governments (LH) . ...- 9 Issue: One of the barriers to the delivery of governmental services and programs is the exposure 10 of local governments and their officials to civil damage claims. The state has acted to protect 11 itself and its local governments by enacting exceptions and limitations to liability suits, and 12 authorizing self-:-insurance and other mechanisms to deal with claims allowed by law. 13 14 Response: The League supports: 15 . Creating an exception to municipal tort indemnification law, Minn. Stat.g466.07, where 16 an employee is defended and indemnified for claims under a contract of insurance 17 carried by the employee. 18 . Extending the protection of the state and municipal Tort Claims Act to quasi- 19 governmental entities when performing public services such as firefighting. 20 . Existing constitutional safeguards for protecting public and private property interests 21 without any statutory expansion of property rights. 22 . Clarifying and maintaining the applicability of municipal immunity in various areas, 23 including, but not limited to, vicarious official immunity and park and recreational 13 1 immunity, including the extension to entities providing a public service that have not 2 traditionally been included within the immunity (e.g., state trails over municipal utility 3 easements). 4 . Preserving recent changes to Mirines()ta'sjofut and several liability laws that require a 5 municipality to be at least SO percent at fault to be held responsible for 100 percent of a 6 damage award. , 7 . Reasonable limits on the amount and circumstances in which statutory attorney fees 8 may be awarded in order to encourage settlement by all parties and decrease the ..-.. 9 likelihood of litigation. 10 . Clarifying liability limits that apply in joint pewers situations to aveid creating 11 disincentives fer lecal governments to act cooperatively. 12 13 SD-14. Private Property Rights and Takings (CJ/LO) 14 Issue: The Legislature has considered boen introducing an increasing number of bills designed to 15 diminish or limit control local governments' ability to exercise traditional planning..-atTEi zoning 16 authority and eminent domain authority powers. In the wake of the U.S. Supreme Court's 17 decision upholding the ability of local !!overnments to use eminent domain for economic 18 development purposes, the Minnesota legislature enacted significant restrictions on cities' use of 19 eminent domain for economic development and redevelopment. and imposed new compensation 20 and procedural requirements that apply to all condemnation 'actions, including: those for 21 traditional public uses such as roads, parks and schools. Legislation to control cities' abilities to 22 perform regulatory acts-such as road rights-of-way condemnation, shooting range zoning, and 23 amortization-has also received strong support from legislators. Policymakcrs are also 14 1 sympatheticto bills that would limit cities' ability to use conderrmation for economic 2 development and redevelopment purposes. ill addition, some legislators would like to authorize 3 businesses to seek inverse condemnation when a governmental entity enters the business market 4 and provides competing goods or services or limits while limiting the number of businesses that 5 can operate privately or receive public contracts. Finally, bills have been introduced to codify the 6 property rights section of the Minnesota Constitution. 7 8 Minnesota la'll contains several protections for property owners. For example, Minn. Stat. 9 ~ 117.52 requires cities to folIo's the Federal Uniform Relocation Assistance and Real Property 10 "^~cquisition Policies Act 'Nhen acquiring property. The law requires early notification to 11 landowners whose property may be the subject of an eminent domain proceeding and requires a 12 city to negotiate in good faith v/ith thelandO'.vner prior to initiating the e-minent domain process. 13 Under state lav:, the city must also obtain an appraisal, make the appraisal information available 14 to the property owner, and advise the landowner that they may seek their own appraisal and be 15 reimbursed by the city (not to exceed $1,500) \vhen property is being acquired for transportation 16 purposes. 17 18 Under Minnesota law, cities acquiring property through direct purchase or eminent domain must ", ...... ",",, -' . .... 19 pdy ~elocatlon assistance and bene4its to property owners if federal relocation benefits and 20 assistance are not available. 'Nhile payment of relocation benefits to landovmers displaced 21 through ern.in€ffitdomain may be justified, requiring a city to provide these benefits to 22 landowners when acquiring property through direct purchase results in a city paying more for a 23 property than other potential buyers would pay for the same property. 15 1 2 The League supports local governments' ability to balance the rights of private landowners with 3 the interests of the public. The League, however, is concerned that aglITessive efforts by property 4 rights advocates to limit local government authority, or require compensation for regulatory 5 actions that impact private property, various legislative initiatives will adversely impact cities in 6 four ways. First, such legislative initiatives threaten a wide array of planning:, environmental, 7 historic preservation, and land conservation measures and undennine the fundamental 8 responsibility authority of cities to protect the public health, safety, and welfare of its citizens. 9 Second, recent changes to changing the state's Minnesota's eminent domain statute will-create 10 uncertainty in the law that will delay resolution of condemnation cases, cost taxpayers more for 11 public projects, and make it more difficult for cities to assemble the parcels of land needed to 12 facilitate critical perform statutory development and redevelopment proiects functions. Third, 13 allowing businesses to seek inverse condenmation when a city provides competing goods or 14 services or limits the number of private operators would discourage cities from undertaking 15 public-private partnerships, such as organized collection of solid waste to manage flow, address 16 publiy safety concerns, and minimize wear and tear on local infrastructure. Finally, if the 17 Legislature acts to codify part of the Minnesota Constitution, an arguDilent may be made that the 18 Legislature intended to create new causes of action against cities. This would encourage more I 19 lawsuits and expose cities to the expense of defending those cases. 20 21 Response: State law must continue to provide aIffiw cities with the tools needed to balance 22 the rights of private property owners with the interests of the public. The League opposes 23 legislation that diminishes the ability of cities to act in the best interest of the health, safety, 16 1 and welfare of its citizens, that increases the cost of doing business for the public good, or 2 that creates the possibility of additional lawsuits against cities. 3 4 Specifically, the League opposes legislation that: 5 . Prevents cities from using eminent domain for economic development and 6 redevelopment projects that advance a greater public ;;;ood that benefits the 7 community; as currently authorized under state law. 8 . Reduces the deferencc given to local elected officials to determine whether a particular 9 taking of property serves a public purposc; and 10 . Allows businesses to seek inverse condemnation when a city provides competing goods 11 or services, or limits the number of private operators: or... 12 . Creates an automatic cause of action for damages any time a local regulatory action 13 impacts the use or reduces the value of private propertv. 14 15 Howcver, the League is not opposed to changes that would create a more transparent 16 propcrty acquisition process. 17 18 The League supportsJegislation that: 19 . Authorizes cities to use eminent domain for economic development and redevelopment 20 projects that advance a greater public good that benefits the community: 21 . Empowers local elected officials to determine whether a particular taking of property 22 serves a public purpose: and 17 1 . Clarifies clarifying that property owners who voluntarily sell their property to an 2 acquiring authority when there is no threat of condemnation are not eligible for the 3 payment of relocation assistance and benefits. 4 5 SD-15. Construction Codes (LH) 6 Issue: Each year, the Legislature addresses construction codes issues that have some impact on 7 local governments, such as statewide enforcement of the building code.. aBG disputes related to 8 code development, and code official training and education. 9 10 While all cities must enforce certain codes-such as the accessibility code, the electrical code, 11 and the bleacher safety cod~the state's building code remains a local option for those cities 12 under 2,500 population that are located in a non-metropolitan county where voters have 13 approved an exemption from the state building code and that did not adopt the code before 14 January J, 1977. Many greater Minnesota cities have adopted the state building code and all 15 cities within the seven-county metropolitan area are required to adhere to the state building code. 16 17 In the past, the Construction Codes Advisory Council (CCAC) and the Builders' Association of 18 Minnesota have indicated an interest in legislation to require statewide enforcement of the 19 building code. /Jthough tI:I:e The CCAC expired on June 30, 2003, due to legislative inaction on 20 a bill to extend the council, the Builders' Association and certain state agencies contiIlUe to 21 express interest in an enforced statewide buildin; code but efforts by ~he state construction codes 22 and licensing division to re-establish the CCAC could renew interest in statewide enforcement of 18 1 the building code. 2 3 Disputes concerning code development have led to efforts to either repeal the International 4 Mechanical Code or create a new board with the authority to adopt, administer, interpret and 5 enforce mechanical codes in Minnesota. Such proposals undercut efforts to adopt a single set of 6 compatible codes, which help provide for more efficient compliance, administration and- 7 enforcement of construction regulations. 8 9 In addition, the need and desire for the implementation of sustainable building design, 10 construction and operation does not readily integrate with the existing state building and energy 11 code system. 12 13 Finally, the legislature has directed the state construction codes and licensing division to develop 14 competency criteria and continuing education requirements for all construction code inspectors. 15 While the legislature supports greater training and education requirements for local code 16 officials, it has, at the same time, redirected excess buildin~pennit surcharge dollars intoJhe 17 general fund to help balance the state's budget rather than making these funds available for code 18 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 19 1 A statewide-enforced building code may have benefits, but requiring it would result in an 2 unfunded mandate. The enforcement of a building code can be cost prohibitive for many 3 cities due to the expenses and overhead related to staffing vs. the limited building activity 4 occurring in some communities. 5 6 The League supports adoption of a state building code as long as there is not mandatory 7 enforcement at the local level. The adoption of an enf{)rcedstate,building code should 8 remain a local option for municipalities under 2,500 population that are located in a non- 9 metropolitan county wbere voters have approved an exemption from the state building 10 code and that did not adopt the code before January 1, 1977, unless tbe state fully funds the 11 costs of enforcement and inspection services necessary to enforce a statewide building code. 12 In tbe event that tbe Legislature requires an enforced statewide building code, local 13 governments must have tbe option to hire or select a building official of their choice and set 14 tbe appropriate level of service - evenif the state fully funds code enforcement activities. 15 16 To the extent tbe insurance industry is concerned about insuring structures not built to 17 code, the industry should drive code compliance by issuing policies or setting rates based 18 "on whether the structure meets various code requirements. 19 20 Cities that have adopted the state building.code endeavor to provide quality code 21 administration and enforcement. The League supports the development of coordinated 22 construction" codes that help local officials efficiently administer and enforce construction 23 regulations to protect the health and safety of citizens in their jurisdictions. In addition. the 20 1 League urges the state to make surplus revenue from the building permit surchan!e 2 available to local governments to help defray the cost of complying with code official 3 training.and education reouirements. 4 5 Finallv. the state should both review the building and energy codes as they relate to ^ 6 sustainable building design. construction and operation and develop components in the 7 building inspector training program to assure that inspectors are familiar with these 8 practices and technologies. 9 10 SD-16. Disability Access Requirements (LH) 11 Issue: Title II of the Americans With Disabilities Act (ADA) of 1990 'requires that state and 12 local governments give people with disabilities an equal opportunity to benefit from all of their 13 programs, services, and activities. Public entities are not required to take actions that would 14 result in significant financial and administrative burdens, but they must modify policies, 15 practices, and procedures to avoid discrimination unless they can demonstrate that doing so 16 would fundamentally alter the nature of the service, program, or activity being provided. 17 18 State and local governments are also required to follow specific standards when constructing 19 new facilities and altering existing public buildings, and they must relocate programs or 20 otherwise provide access in inaccessible older buildings. Under the ADA, public entities are not 21 necessarily required to make each existing facility accessible. However, their program.<;-when 22 viewed in their entirety-must be readily accessible to people with disabilities. A public entity 23 may achieve program accessibility through various methods. For example, a city may alter 21 1 existing facilities, acquire or construct new facilities, relocate a service or program to an 2 accessible facility, or provide services at other accessible sites. 3 4 In a recent district court decision, the court took an expansive view of disability access 5 requirements for public recreation facilities. The case involved a parent who sued a city due to 6 difficulty viewing soccer and baseball games on certain city fields. The court, in interpreting the 7 Minnesota Human Rights Act (MHRA), held that any public facility is a public service. Since 8 the MHRA requires that every public service must be accessible to disabled persons, the court 9 concJuded that each'and every playing tieldand other public facility must be fully accessible. 10 The court rejected the ADA's limitations on modifications for physical access to older facilities 11 as well as the ADA's "when viewed in its entirety" languageJor program access. The resuIt is a 12 more restrictive state standard forphysical access to public facilities than required by the ADA 13 and the state building code. 14 15 Response: The League of Minnesota Cities supports changes to the MHRA that will make 16 state accessibility standards compatible with the federal ADA for public services and 17 facilities. The Legislature should clarify that a facility that is in compliance with handicap 18 access provisions of the state building code meets the physical access requirements of the 19 MHRA. State law should also specify that access requirements apply to public programs i 20 and services as a whole, rather than to each individual aspect of a 'public program or 21 service. 22 22 1 SD-17. Firearms on City Properties (AF) 2 Issue: The Minnesota Citizens Personal Protection Act limits the authority of police chiefs to 3 issue permits to carry handguns, and mandates that sheriffs issue permits to all applicants over 4 age 21 who have not been convicted ofa serious crime or diagnosed with a mental illness. The 5 act, also known as "conceal-and-carry," prohibits guns on most school properties and gives 6 private entities the light to prohibit guns in their establishments, but preserves the longstanding 7 law forbidding local units of government from restricting permit holders from bringing loaded 8 fireanns to local public places. The inconsistencies in the law's treatment of different kinds of 9 properties have caused confusion about how the law applies to multi-use facilities, such as 10 municipal ice arenas used for school-sponsored programs. 11 12 Response: The League requests an amendment to the Citizens Personal Protection Act that 13 would allow cities to prohibit handguns in city-owned buildings, facilities, and parks. The 14 League .is not seeking a repeal of the Personal Protection Act nor authority to prohibit legal 15 weapons in parking lots or,on city streets and sidewalks. 16 17 SD-18. Creating a Minnesota GIS (AH) 18 Issue: Local governments are finding Cities recop:nize geographic information systems (GIS) te 19 00 as an essential tool for comprehensive land use, real estate, environmental, and other land 20 management information. In many counties, maintenance of official land records has not been 21 automated, creating a barrier to GIS development. In addition, the start-up costs of GIS 22 implementation can be prohibitive. Cities and counties need to cooperate in developing GIS at 23 the local level. 23 1 2 Response: The Legislature should encourage local government implementation of GIS 3 through grants and an exemption from sales tax for capital equipment and from levy limits 4 for costs associated with such activities/or the dedication of a revenue source such as real 5 ~statc transaction fees. In addition, cities should be involved in the development of county 6 land records modernization plans. 7 8 SD-19. Public Safety Spectrum Needs CAR) 9 Issue: Increased concentration of ownership of wireless spectrum licenses, particularly for cell 10 phones, radio,TV, and satellite broadcasting, threatens future availability of spectrum necessary 11 for interoperability and access to the technology that city public safety services need to respond 12 to disasters, terrorism, and other emergencies. Police, fire, and emergency management officials 13 oppose FCC restrictions that prevent police, fire, and emergency responders with public safety 14 licenses from adding needed capacity and coverage to existing radio communications systems. 15 Cities also support FCC measures to open up spectrum for emergency service providers that will 16 also prevent interference with public safety communications. 17 18 Response: The Federal Communications Commission must encourage interoperability and 19 expansion of spectrum available to enhance existing public safety communications systems 20 that and provide sufficient expanded channel capacity to allow local public safety agencies 21 to communicate across jurisdictions in response to accidents, disasters, and criminal 22 activities. Federal and state officials should encourage regional public safety 23 communications planning and allocate sufficient telecommunications spectrum to meet 24 1 future public safety needs of cities and other local units of government. 2 3 Cities should also receive fair and immediate compensation for any transfers associated 4 with state or federal regulations that reouire citv public safetv operations to change 5 frequencies and/or channels in order to operate public safety and emergency 6 communications. 7 8 The federal government should 3Iso take immediate stepsto ensure emergency warning --, . -... 9 systems are linked to make sure that all areas are protected in the event of national, 10 statewide or regional emergencies. 11 12 SD-20. 800 MHz Radio System (AR) 13 Issue: The 2005 Legislature appropriated $62.5 million from revenue bonds backed by 911 14 surcharge revenues for continued build-out of the statewide Allied Radio Matrix for Emergency 15 Response (ARMER) of which $8 million is to be used to pay up to 50 percent of costs of cities in 16 the metro area to build subsystems under Phase IT portion of the state plan. Another $45 million 17 is to be used to construct Phase ill of ARMER, along with $9 million to reimburse cities in the 18 southeast State Patrol district and in Benton, Sherburne, Stearns and Wright Counties for up to 19 50 percent of their subsystem development costs. The Legislature has also approved plans for 20 further expansion of the backbone to remaining areas of the state over the next three years. The 21 Legislature has recognized the necessity of providing public safety personnel the means to 22 communicate with one another in order to respond effectively to large-scale incidents and to 25 1 facilitate rescue and public safety protection, but has not addressed how cities and other local 2 units of govemment will be able to afford to obtain coverage. 3 4 Response: The League urges the Legislature to continue to provide cities with the means to 5 finance the acquisition of communications infrastructure improvements and subscriber 6 equipment(portable and mobile radios) required for use of ARMER and to encourage .. 7 partnerships that maximize effective emergency response and cooperation between local, 8 regional, state and federal resources. In doing so, the Legislature should continue to 9 support and insist on direct participation of affected local jurisdictions ona regional basis 10 in the overall planning and build-out of ARMER and in the use of funds allocated to local 11 participation, including the planning and build-out of local infrastructure and acquisition 12 of equipment. 13 14 Lawmakers must also continue to facilitate local participation in ARMER by scaling the 15 local share of investments in equipment and infrastructure to the limits on local fiscal 16 resources. In making these decisions, the Legislature must also recognize that many of the 17 locations and circumstances throughout the state pose special concerns for the need for 18 rapid and effective emergency response and communications interoperability between 19 public safety entities and may be sites of regional and statewide significance. 20 21 SD-21. CriMNet (AP) 22 Issue: Public safety is compromised by the lack of centralized, complete, and accurate criminal 23 history data about individuals, incidents, and cases. Withoutan integrated criminal justice 26 1 information system, Minnesota cannot always hold serious criminals accountable for their 2 crimes. CriMNet, Minnesota's effort to integrate the 1,100 criminal justice information systems 3 operated by agencies at all levels, will improve access to relevant criminal history data for public 4 safety and criminal justice authorities. 5 6 City officials are well aware of the complex issues raised by the utilization of electronic record 7 keeping, data sharing and access to records that identify data subjects. The League recognizes 8 that one of the challenges in making CriMNet operational is meeting the requirements of the 9 Minnesota Government Data Practices Act (MGDPA). 10 11 More than 500 cities operate police departments. These departments vary dramatically in fiscal 12 capacity, staffing resources, and technical expertise. Further, each mu~cipallaw enforcement 13 agency has unique operating procedures, strengths, and needs based o~ the community it serves. 14 The League knows CriMNet will have a significant impact on municipal police business 15 practices, and could mean increased staffing needs, training, and equipment purchases. The 16 League also recognizes that every agency must participate fully in CriMNet to make the system 17 effective. 18 19 Response: The League supports efforts by the state to integrate criminal justice 20 information systems. The League also supports cooperation between legislators, law 21 enforcement and corrections agents, court officials, prosecutors, community groups, and ..... 22 businesses that build public support for CriMNet. 23 27 1 If CriMNet is to be implemented statewide, the Legislature must consider the different 2 capacities of municipalities to participate. The League requests that the Legislature fund 3 CriMNet planning and implementation at the local level. 4 5 To ensure compliance with the MGDP A, comprehensive guidelines and operational 6 practices should be implemented to safeguard access to and use of CriMNet data. However, 7 data practices policies should not create new unfunded mandates for local units of 8 government or compromise CriMNet's usefulness to the criminal justice system by creating 9 unnecessary barriers. CriMNet stakeholders and participating users at the local level 10 should be involvedin crafting any legislation that would govern data practices 11 requirements for CriMNet. 12 13 SD-22. Compensation and Reimbursement for Public Safety Services (AP) 14 Issue: Municipal public safety personnel often respond to emergencies involving non-residents. 15 For example, municipal fire, police and/or ambulance services may be dispatched l0 the scene of 16 a traffic accident on an interstate highway involving victims from other cities or states. Although 17 cities can bill for some public safety services they provide to non-residents, they have limited 18 authority to collect on unpaid bills. 19 20 Cities have also found that auto insurance policies vary when it comes to coverage for 21 emergency responses. Insurance companies of those responsible for accidents sometimes deny 22 payment for fire and ambulance service. 23 28 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- 5 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-23. 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 loc~l1evel and 13 reduced pressure on over-burdened district courf 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 thefine-.---_ 17 is how $72 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 its 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 29 . 1 The increased state surcharges have not been used to assist local unit~ of government with the 2 growing costs of enforcement and prosecution. No matter which entity-city, county or state- 3 issues a statutory citation, the violator pays between $115 and $127 for a minor speeding 4 violation. Of this amount, the city receives between $13 and $20, and the county receives just 5 slightly more. 6 7 Further, when a violator requests relief from paying the full amount of the fine and surcharge, the 8 courts have been more inclined to waive the fine than to reduce the surcharge. When this occurs, 9 the local units of government recover no costs even though the city has incurred expenses. 10 11 Response: The League supports the use of city administrative fines for local regulatory 12 ordinances, such as building codes, zoning codes, health codes, and public nuisance 13 ordinances. The League supports the use of city administrative fll1es, at a minimum, for 14 regulatory matters that are not duplicative of misdemeanor or hi~her level state traffic and 15 criminal offenses. Further, the League endorses the concept that administrative penalty 16 hearings should be held before disinterested third parties, which may include city councils, 17 to ensure fairness in the proceedings. 18 19 If state leaders enact legislation that prohibits cities from using administrative fines for 20 minor traffic offenses, they should also change the distribution of statutory violation fine 21 revenues so that cities are adequately compensated for enforcement and prosecution costs. 22 Finally, the state should require that if a court reduces the amount paid by a violator, any 23 reduction should be made from the surcharge and not the fine. 30 1 2 See also SD-3, City Costs for Enforcing State and Local Laws. 3 4 SD-24. Homeland Security Costs and Liability (LH) 5 Issue: The federal government's response to terrorism has resulted in new responsibilities for 6 local governments in a number of areas. For example, shortly after the terrorist attacks on 7 September 11,2001, the federal government tapped local law enforcement personnel to provide 8 security and perform screening at our nation's airports. These new responsibilities increase 9 cities' liability exposure and result in higher local costs for public safety services. In addition, 10 local governments are expected to continue emergency planning and capacity building efforts, n provide 'additional training and equipment for first responders, and improve emergency response 12 coordination and communication. ' 13 14 As partners in protecting our country from terrorism, the federal government must: 1) provide 15 greater direct financial support for our first responders; 2) maintain funding for general pre. and 16 post-disaster emergency management programs; and 3) ensureacoordinated and effective 17 national emergency response system. 18 19 Response: The League recommends that when the federal government requires or 20 contracts for cities' assistance in meeting federal homeland security responsibilities, the 21 federal government should fully cover the costs, including the risk of liability arising from 22 these activities. 23 31 . 1 The League supports greater federal funding to prepare, train and equip our first 2 responders. We also support changes in the federal funding process to ensure that 3 Department of Homeland Security funds move quickly to the local level. 4 5 SD-25. 0.08 DWI (AP) 6 Issue: In August of 2005, the legal blood alcohol content (BAC) level for operating motor 7 vehic1esin Minnesota was reduced from 0.10 to 0.08. Analyses anticipating the fiscal impact of -- 8 the 0.08 threshold on cities have been inconclusive. Under the currentdriving-while-impaired 9 (DWI) law, the arresting authOlity is responsible for prosecution of suspected DWI offenders. 10 The reduced threshold may result in more DWI arrests by city law enforcement officers; thus, 11 increased prosecution costs for cities. 12 13 Response: The League is committed to building quality communities and to increased 14 publicsafety. By implementing the 0.08 percent BAC level threshold, the state secured 15 critical federal highway funds that will assist in the maintenance and upgrade of a safe 16 transportation system. 17 18 The Legislature should closely monitor whether local units of government incur additional 19 enforcement and/or prosecution costs as a result of the reduced DWI threshold. The state 20 should provide the necessary funding tocompensatelocal units of government for related 21 cost increases. 22 23 See also 5D-2, City Costs for Enforcing State and Local Laws. 32 1 2 SD-26. 911 PSAP Funding Needs (AR) 3 Issue: Citiesthat operate Public Safety Answering Points (PSAPs) have procedures, skills, 4 telecommunications and computer technology required to deliver high quality services at a cost 5 that can only remain affordable at the local level if the state 911 funding mechanism provides a 6 guaranteed and stable source of revenue. Questions arise about whether local 911 call and 7 dispatching operations can enter into five-year lease/purchase agreements for equipment when 8 there is no longer a guarantee of state funding after 2007.lncreasingly, local costs for operating 9 PSAPs and 911 service are rising as cun-ent funding sources fail to keep pace with rapid changes 10 in technology and cost of 911 response and service delivery. The 2005 Legislature responded by 11 raising the 911 surcharge on monthly phone bills from 40-65 ,cents, raising the amount PSAPs 12 will receive from 10-cent~ to 20 cents for the next two fiscal years. But revenues from the current 13 911 surcharge on phone bills meet only a small share ofPSAP operating costs. State 911 fees are 14 also committed to bonding needed to finance the state 800 MHz public safety network 15 (ARMER). PSAPs increasingly rely on property tax revenues to cover much of the cost of 16 maintenance and required technical and operational improvements to 911 services as state 17 funding has failed to keep up with the need for training dollars and system upgrades required to 18 comply with FCC requirements for cell phone automated location identification technology and 19 the need for additional technology and costs related to capabilities to receive and identify the 20 phone number and location of 911 calls made by individuals using Voice over the internet 21 (V oIP) communications. 22 33 1 Response: PSAPs must be able to rely on a continuing source of 911 revenues at the state 2 level to pay for upgrades and modifications to local 911 systems, maintenance and 3 operational support, and dispatcher training. State funding shouJd also support the 4 technology and training needed to provide number and location of wireless and VoIP calls 5 to 911 on computer screens and transmit that data to police, fire and first responders. 6 7 SD-27. Racial Profiling CAP) 8 Issue: The League recognizes thatwherefaeial profiling by law enforcement officials exists it 9 must be elintinated. The League supports' action by the state of Minnesota tofund and implement 10 effective and meaningful responses to racial profiling that will effectuate fair treatment of aU 11 people regardless of a!1:e, race or ethnicity. 12 13 Response: The League supports a meaningful and effective response to the concerns of 14 residents that police traffic stops reflect efforts to assure that all interventions initiated bv 15 law enforcement officials be based on an objective demonstration of probable cause to 16 believe that a law has been" vIolated. ..\..11 members ofthe community must have confidence 17 that each member of the community is being treated fairly. and respectfully, and that the 18 race or ethnicity of the driver is not llsed as a factor in deciding to stop a motofvehicIe. A 19 law enforcement official's decision to stoP. Question or detain individuals will be based 20 solely on a reasonable suspicion of illegal activity and without consideration of age. race or 21 ethnicity. The League supports training programs to support these goals and recommends 22 that the state develop, fund, and present such training programs to all law enforcement 34 I 1 agencies in the state. 2 3 The Leaguc opposes the mandatory collection of traffic stop data as counterpraductiyc and 4 ineffective in adequately responding to those members of our comnmnities whe do not feel 5 a part of the community by virtue of their concerns about racial profilin~. In an effort to 6 ascertain the scope and dcgree of the problem, the The League would suppor~ objective, 7 well-formulated statistical sampling by third parties under the auspices of a state-funded 8 study that would develop' documentation of traffic stops and an analysis of those stops, to 9 document and analyze law enforcement interventions. coupled with an effective means ef 10 enforcing sanctions against to sanction auy documented instances of inappropriate 11 treatment of citizens. Additionally, the League supports state funding for video cameras in 12 police cars as an incentive for voluntary local participation in data collection efforts aimed 13 at identifying patterns of profiling. 14 15 SD-28. Legalization of Fireworks CAF) 16 Issue: ill 2002, the state enacted a law allo~ing the sale and use of non-aerial, nOTF-explm;ive 17 consumer fireworks, including sparklers, party poppers, snakes, and other novelty items - 18 relaxing the ban'on consumer fireworks in place in Minnesota since 1941. 19 20 Local fire service professionals have reported that consumers and law enforcement personnel 21 have had difficulty distinguishing between legal and illegal fireworks. and that the 2002 law 22 resulted in greater use in Minnesota of illegal fireworks purchased in other states. 23 35 1 Accordin~ to data provided by the Minnesota State Fire Marshal Division, iniury trends and 2 dollar losses related to fireworks incidents surged after the consumer fireworks ban was lifted. 3 Hospital reports reveal that the annual number of iniuries caused bv fireworks rose dramatically 4 in 2002 and remains elevated. Likewise, Minnesota Fire fucidentReporting System records 5 show that the annual dollar loss resulting from fireworks incidents increased significantly in 6 2002 and has since grown. 7 8 In 2003, the state enacted a number of provisions limiting local authority pertaining to fireworks 9 sales. The 2003 law caps the allowable municipal permit fee at $100 per vendor selling fireworks 10 with other products and $350 per vendor selling fireworks exclusively. The law restricts cities 11 from requiring fireworks sellers to purchase additionalliability insurance. Finally, the 2003 law 12 states that cities cannot prohibit or restrict the display of consumer fireworks if the display and 13 structure complies with National Fire Protection Association (NFP A) Standard 1124. The NFP A 14 is a private international association of individuals and trade and professional organizations. 15 (NFP A Standard 1124 is not a public document and is available only for a fee.) 16 - .. ~~ 17 Fireworks products can cause serious injuries and fire loss. The legal sale of consumer fireworks 18 undermines fire prevention efforts. The sale and use of consumer fireworks increases local public 19 safety enforcement, emergency response, and fire-suppression costs. 20 21 Response: The League opposes legislation that would further relax the ban on the sale and 22 use of consumer fir~works. The League supports a repeal of the 2002 law that relaxes the 23 ban on the sale and use of consumer fireworks. 36 1 2 Fees are needed to cover the costs associated with compliance checks, education and 3 inspections relating to the sale of a regulated product. The current fee caps do not allow 4 cities to recover these costs. The League supports the establishment of a allowing cities to 5 establish and impose reasonable, uniform cap on the fees cities can impose on retailers that 6 sell fireworks. The League opposes restrictions on requiring fireworks retailers to purchase 7 additional liability insurance. Finally, the LMC seeks repeal of the NFPA reference. 8 9 SD-29. Traffic Enforcement Cameras (AP) 10 Issue: Drivers who disobey traffic laws can cause serious traffic accidents and contribute to 11 gridlock. In spite of the sevelity of this problem, cities cannot always afford the levels of peace 12 officer enforcement that residents demand. The technology exists to enforce traffic laws with 13 photographic evidence. For example, when installed at traffic signals, motion imaging recording 14 systems (MIRS) have been shown to reduce red light running. 15 16 Response: Local law enforcement agencies should have the express authority to use photo 17 enforcement technology (including MIRS technology) to allow a vehicle, not its occupants, 18 to be identified when the vehicle has violated a traffic law. Local law enforcement officers 19 should have the express authority to issue citations for traffic violations by mail where the 20 violation is detected with photographic evidence. 21 "~'r 37 1 SD-30. Fire Mutual Aid (AF) 2 Issue: City and township fire departments regularly assist each other for firefighting and other 3 response activities. This mutual aid is mostly authorized by individual written contracts with 4 each city or township involved. This results inapatchwork of different agreements with different 5 provisions. Often, each city attorney recommends different provisions. 6 ".-.... 7 Years ago after the Red River floods and the St. Peter tornados, emergency responders inc1u~ing 8 fire departments met and helped pass a statutetogbVen1 mutual aid situations when there is an 9 emergency (declared by mayor or governor) and no written agreements. This statute, Minnesota 10 Statute12.331, providesaframework as to how worker's compensation, liability, property claims 11 and il1surance and charges between the departments will be handled in mutual aid situations. 12 13 LMCIT developed a model mutual aid agreement that contains the same basic structure fOI 14 liability as that statute. Many cities have entered into area-wide mutual aid agreements that are 15 similar to this mode1agreement. To provide uniformity, there should be a statute that is similar to 16 Minn. Stat. 12.331,to govern daily fire mutual aid situations that do not rise to the level of 17 emergencies. 18 19 Response: The state Legislature should pass a statute to provide uniform provisions when 20 fire departments assist each other. These provisions should include statutory definitions 21 and clarifications for: 22 . who is in command of the mutual aid scene; 23 . who will cover the firefighters for worker's compensation; 38 1 . how liability and property claims will be handled; 2 . who will pay for expendable supplies such as foam; 3 . when fire departments will charge each other for these services; and 4 . the ability for fire departments to opt out by having a separate written agreement. 5 6 SD-3L Dangerous Dogs (AF) 7 Issue: When a dangerous dog poses a threat to public safety, immediate action by an animal 8 control authority may be necessary. Although Minnesota Statute (M.S.) sections 347.40 through 9 347.56 clearly defines and regulates dangerous dogs, the law is silent with regard to who 10 designates a dog as dangerous. The law also lacks a provision pertaining to due process rights for 11 the owner of a dangerous dog. The absence of these provisions limits the ability of animal 12 control authorities to protect communities from dangerous dogs. 13 14 Response: The dangerous dogs statute should clearly sta,te thatthe animal control authority 15 is the designating authority. Further, the statute should contain a, detailed process for dog 16 owners who want to appeal the designation. The process should preserve the rights of the 17 dog owner while protecting the public. 18 --... 19 SD-32. Operation of Motorized Foot Scooters (AF) 20 Issue: Current state statute preempts the authority of local units of government to regulate the 21 operation of motorized foot scooters. The law provides that an operator must be 12 years of age 22 or older. Although the law contains safety provisions, including a requirement that operators 23 under the age of 18 must wear helmets, it does notrequire training or permits for operators of 39 i 1 any age. Further, it does not explicitly restrict the operation of motorized foot scooters to low- 2 volume and/or low-speed roadways. 3 4 Use of motorized equipment on roadways is inherently more dangerous than the use of non- S motorized bicycles and is comparable to the operation of motorized watercraft. While the law 6 governing watercraft operation also requires an operator to be at least twelve years of age, Minn. 7 Stat. 86B.101 requires watercraft operators between the ages of 12 and 18 to successfully 8 complete a youth watercraft safety program and to obtain a watercraft operator's pennit. The 9 youth watercraft Safet)Tprograhlis administered by the state and includes a personal watercraft 10 educational course and a testing program that emphasizes safe and legal operation. 11 12 Response: State law should limit operation of motorized foot scooters to roadways with 13 speed limits of 30 miles per hour or less. State law should require motorized fQot s.coQt~r 14 operators between the agesof12 and 18 to obtain an operator's permit by successfully 15 completing a state-administered motorized foot scooter safety program modeled after the 16 watercraft safety program. In addition, state law should allow local units of government to 17 be more restrictive in regulating the operation of motorized foot scooters, and should 18 provide explicit authority to regulate hours of use. 19 20 SD-33. Methamphetamine (IO) 21 Issue: The production and abuse of methamphetamine continues to be a is an increasing problem 22 for communi ties across Minnesota. Cities are facing serious issues pertaining to meth, including 23 costly clean up of drug labs and the social problems and public safety resulting from meth abuse. 40 1 To meet the challenges presented by the growing meth problem, cities are working with retailers 2 to monitor the sale of precursor ingredients and, are coordinating with other units of government 3 on the impact on commuriities. 4 5 Response: The Legislature and state agencies must: 6 . Provide sufficient funding to assistloc~ll units of government with clean up of drug labs. 7 . Allow local governments to be more restrictive in the development of ordinances at the 8 ' city and county level to appropriately address the needs of their communities. ---.. -. -'.- - .n 9 . Support public education on methamphetamine, including information to local 10 government officials, retailers~ schools, and health care providers. 11 . Provide training, equipment, standards and support sufficient to allow local law 12 enforcement and other responders to safely perform their duties. 13 14 SD-34. State Regulation of Massage Therapists (AP) 15 Issue: The state does not currently regulate massage therapy, an emerging and rapidly growing 16 profession. In order to control prostitution and to provide for health and sanitation standards, 17 several cities have entered the traditional state domain of health-care licensure by enacting 18 ordinances that require all massage therapists to obtain a local professional license. These 19 ordinances allow locallaw.enforcement officers to differentiate between legitimate massage 20 therapists, who have a city license, and prostitution businesses fronting as massage therapy 21 establishments. 22 23 The lack of statewide regulation of massage therapists has hampered law enforcement techniques 41 1 and caused problems for cities attempting to regulate an entire health-care profession without 2 any statewide standards. CUlTently, 25 states regulate massage therapists on a statewide level. 3 Statewide regulation of massage therapists would provide a clear set of educational standards 4 that massage therapists must meet, and would provide local law enforcement agencies with an 5 easy tool to distinguish between prostitution and legitimate massage therapy. Statewide 6 regulation would not disturb traditional powers over land use and business licensure. 7 8 Response: The League supports the statewide regulation of massage therapists in order to 9 aid local law enforcement efforts to control prostitution and other criminal activity. 10 11 SD-35. On-Sale Liquor or Wine Licenses to Cultural Centers (JO) 12 Issue: Cultural centers are not one of the qualifying entities to which municipalitie~ may issue 13 on-sale liquor or wine licenses. Several cultural centers have received speciallegi31ation that 14 allows their municipalities to issue on-sale liquor or wine licenses to them. This practice 15 interferes with the ability of municipalities to control the placement and operating manner of 16 ,these entities. In 2003,'perfonning theaters were added to the list of establishments to which 17 municipalities may issue on-sale liquor or wine licenses, but cultural centers were not included. 18 19 i{.esponse: The Legislature should authorize municipalities to issue on-sale liquor or wine 20 licenses to cultural centers subject to restrictions imposed by the municipality. 21 42 1 SD-36. Youth Access to Alcohol and Tobacco (JO) 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. Cities have an interest in preventing youth from obtaining these products. To this end, 5 many cities operate compliance check programs in an effort to discern the cun'ent level of youth 6 access and to reduce youth access. 7 8 Response: The League opposes any proposal that could result in i~creased risks of youth 9 access to alcohol and tobacco products and expanded off-sale venues for the sale of such ! 10 products. The League supports the sale of alcohol and tobacco products only in controlled 11 environments. The League supports statutory changes that assist in reducing youth access 12 to alcohol and tobacco products. The League supports locally determined alcohol 13 compliance check programs, but any state-mandate for alcohol compliance checks should 14 come with state-supported funding initiatives to support these locally determined 15 compliance efforts. 16 17 SD-37. Smoking Ban Ordinances (JO) 18 Issue: Cities are being confronted with the issue of local smoking ban ordinances. Some local 19 governments in Mirmesota have adopted ordinances that ban smoking in restaurants and/or bars; 20 others have chosen not to adopt ordinances. A number of cities have passed resolutions deferring 21 action on the smoking ban issue until the Legislature addresses the issue. There is no clear 22 consensus among Minnesota cities supporting a statewide ban. 23 43 1 Response: If the Legislature addresses the smoking ban issue with a uniform statewide law, 2 it should preserve the ability of local units of government to enact more restrictive 3 ordinances at the local level. 4 5 SD-38. Environmental Protection (el) 6 Issue: Cities demonstrate strong stewardship for the protection and preservation of the 7 environment. Minnesota municipalities have historically been the leading funding source for 8 environmental protection and improvements. Municipal efforts include environmental protection 9 through wastewater treatment, wetland restorations, stormwater treatment, public utility emission 10 reductions, brownfie1d cleanup, safe drinking water programs, as well as others. 11 12 At some point, however, the diniinishing or nonexistent environmental benefit received from 13 additional efforts is fiscally irresponsible. The programs are often improperly designed to meet 14 their stated goals. Additionally, the absence of funding by the state and federal governments has 15 removed an essential restraining feature in program design and implementation. Agencies are 16 less accountable to the governments that mandate environmental programs when they do not 17 have to find the money to implement the programs. 18 19 Specific problems faced by cities include: 20 . New programs or standards are continually adopted without regard to the existence, 21 attainability or cost of existing programs and standards. 22 . Regulatory bodies fail to consistently use good science and the most current and accurate 23 data when establishing water quality standards. 44 1 . Regulatory bodies impose new pennit requirements without going through rulemaking. 2 Instead, the agencies rely on internal documents, program strategies, and "best professional 3 judgment of staff' when setting permitcritelia. 4 . Regulatory bodies approve permits and programs that compete with traditional municipal 5 services and encourage urban sprawl. This behavior puts at lisk the public investments and 6 growth management efforts cities have made when planning for future development. 7 . Pemlit fees and other cost transfer elements of federal and state programs do not provide an 8 incentive for environmental agency efficiency, policy priolitization or risk assessment. 9 . Third party environmental advocacy groups create significant hardships on cities by --l0:---~threateningii1igati-on-eve&when-hard-seienee--may-oot-3tl-pporHhe-grotlp~ositions. 11 12 Response: Alternative wastewater treatment and cooperative service systems should be 13 prohibited frollloperating in areas that can reasonably and effectively be served by 14 existing munidpal systems unless: 15 . The municipal. system is proven to be substantially less cost,;effective and substantially 16 less beneficial tothe environment; and 17 . The operation of these systems will not create a stranded public investment in the 18 existing system. 19 20 Sufficient state and federal financial assistance should be provided to assist local 21 governments when complying with state arid federal infrastructure requirements, ,22 particularly with regard to wastewater, storm water, and drinking water facilities. 23 45 1 The Minnesota Pollution Control Agency (MPCA) should streamline its permitting and re- 2 issuing processes to allow for effluent standards and permit requirements to be known 3 earlier, thereby giving communities more time to defend against conlested case hearings. 4 5 The Legislature should require the MPCA to make its determination regarding the 6 reissuance ora permit within a reasonable set time period and require the MPCA to reissue 7 the ,permit within a reasonable set time frame. 8 i 9 Legislation should be passed that requires state agencies to establish permit requirements ! 10 only when the criteria they are using is developed through the rule-making process. 11 12 State agencies need to develop science-based standards and quantify new effluent 13 standards, ensuring that they are scientifically and economically practicable. 14 15 SD-39. Impaired Waters (eJ) 16 Issue: Despite the billions of dollars that Minnesota municipalities have invested and continue to 17 invest in wastewater and stonnwater management systems and best management practices to 18 protect, preserve, and restore the quality of Minnesota's smface waters, the quality' of some of 19 Minnesota's sUlface waters does not meet federal water quality requirements. The federal Clean 20 Water Act requires that further efforts must be made by the state to reduce human impacts on 21 surface waters that are detennined to be impaired due to high pollutant loads of nutrients, 22 bacteria, sediment, mercury, and other contaminants. Scientificstudi~s of these waters must be 23 conducted to detennine how much pollution they can handle (Total Maximum Daily Loads or 46 1 TMDLs). The pollutant load reduction requirements will affect municipal, industrial, and 2 agricultural practices and operations along any river, stream or lake determined to be impaired. 3 While the source of 86 percent of the pollutants affecting Minnesota waters are non-point 4 sources, there will also be new costs and requirements for point source dischargers, like 5 municipal wastewater treatment facilities. Municipal stormwater systems will also face increased 6 protective requirements and regulation as part of the state's impaired waters program. 7 8 Response: The League will work actively with the administration, the Legislature, and 9 other stakeholders in the design and implementation of Minnesota's impaired waters 10 program to: II, .", .Ensure equitable funding solutions are found, such as the state general fund or 12 bonding, that broadly collect revenue to address this statewide problem. 13 . Direct the majority of funds collected by the state for impaired waters into programs 14 that fund municipal wastewater and stormwater projects, and for state programs 15 needed for municipal wastewater and stormwater. permitting and technical support. 16 . More adequately cover the current five-year wastewater infrastructure funding need 17 projection of more than $2.1 billion. 18 . Recognize and address the. upcoming costs of storm water management infrastructure 19 and operation on municipalities from new regulatory mandates and load reduction 20 requirements. 21 . Allow flexibility in achieving TMDL limits through trading of pollutant load reduction 22 credits for botb point and non-pointload reduction requirements within watersheds. 47 1 . Recognize and credit the work already being done by local units of ,government to limit 2 point and non-point source water pollutant discharges. 3 . Recognize the diversity of efforts and needs that exists across the state. 4 . Ensure the best science available is used to maximize environmental outcomes and 5 minimize unnecessary regulatory and [mandaI burdens. 6 . The state must assure that the MPCA retain control of the TMDL development process 7 and thatall scientific research related to TMDLs is conducted by the MPCAor 8 qualified, objective parties pursuanfto state contracting, procurement and conflict of 9 interest laws. 10 . Clarify state water quality mandates so cities lmow specifically what they are required 11 to do and what methods of achieving those outcomes are acceptable to state and federal 12 regulators. 13 14 SD-40. Phosphorus Reduction (el) 15 Issue: fu 2002, the Legislature enacted a new law to regulate the sale and use of lawn fertilizers ,16: containing phosphorus in the metropolitan area. fu2004, that legislation'was expanded 17 statewide. The law will serve to improve and enhance the quality of the state's surface waters. In 18 addition, the new law will reduce the costs to local governments of complying with a variety of 19 federal and state surface Water quality stanqards. 20 21 Cities are required by several levels of government to improve and enhance the quality of surface 22 waters. Additionally, surface water runs through watersheds that rarely are wholly within a city's 48 1 boundaries. To be effective, measures for comprehensive water quality improvements need to be 2 regional or statewide. 3 4 The 2002 and 2004 laws underscore the most cost-effective way to reduce phosphorus in our 5 lakes"wetlands, and streams - by preventing it from entering these systems. These laws, 6 however, address only non-commercial residential use of lawn fertilizer. Many other sources of 7 phosphorus, such as commercial detergents, affect both surface water quality and treatment 8 requirements at municipal wastewater treatment facilities. The state is the appropriate level of -"' . _n_ 9 government for effective and economical administration and enforcement responsibility. , - 10 11 Response: The League opposes any legislation that would weaken phosphorus fertilizer 12 regulation legislation and supports removing phosphorus from products, at the 13 manufacturing level rather than at the wastewater treatment center. The League further 14 supports retail displav reauirements to assure that consumers are able to readilv identifv 15 the phosphorus content of fertilizer products. 16 17 SD-41. 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 that theLegislature take the following actions to 22 strengthen the role and effectiveness of local election administration: 49 1 . Allocate remainin1! federal Help America Vote Act iliA V A) funds to address local 2 election administrative needs and recommendations of the State Voting Machines 3 OptionsWorkin1! Group re2"ardin1! future electronic votin1! eQuipment~ 4 . Require the secretary of state to use federal Help America Vote Act (JLA~ VA) funding 5 for voter education at the locallcvcl to assist vaters in registering, including visuals and 6 hands on demonstrations; grants to citics for polling place accessibility improvements; 7 and providc for direct involvement of local election officials In the development of vater 8 'education materials; 9 . Require use of a neutral third party to investigate and make findings regarding \loter 10 complaints related to compliance with HA V A requirements; 11 . Direct the Secretary of State to assure that updated election laws are transmitted to city 12 election officials no later than June! 30 in even 'numbered every years, using electronic 13 as well. as traditional means that assure that the information received is timely, accurate 14 and accessible; 15 . Direct the Secretary of State to provide posters explaining t4~ election process to be , 16 posted in polling places for odd-as well as even year elections and to maximize tile value 17 of the information available to voters bv reducin2: the number of posters that must be 18 displayed in the pollin1! place; 19 . Support enhancements to the statewide voter registration system (SVRS) to assure that 20 system security and quality of performance is satisfactory and givc cities direct view 21 access no later than the second quarter of 2006; 50 1 . Establish acceptable standards for error in entry of voter records into SVRS und 2 authorize county election officials to conduct spot checks for accuracy of data entry and 3 changes to voter records; 4 . Allow eligible voters who are not affiliated with major political parties to serve as 5 election judges and oppose mandates that city election officials certify the political 6 party preference of election judges appointed bv the city; 7 . Repeal statutes requiring use of political party lists for appointment of election judges; 8 . Authorize cities to enact an ordinance no more than 90 days prior to the opening of 9 filings to require write in candidates for city elective offiees to file a written request at 10 leastfivc days before election in order for votes cast f.or such candidates-to be tabulated 11 and reported in the official canvass; 12 . Allow precinct polling places to be located within one mile outside of precinct 13 boundaries; 14 . Establish a single standard for the tOO-foot rule for regulating lingering and political 15 activity near polling places located on private and public property; 16 . Repeal the prohibition for election judges to be within 6 feet of election equipment in , 17 the polling place; 18 . Require candidates to establish evidence of residency by the close of iIling; and 19 . Provide for expedited resolution by the courts of eligibility qualification issues related. 20 to candidate residency issues iIi errors and omissions proceedings.~ and 21 . Simplify the vouching process and reduce existing polling place record-keeping 22 reQuirements that are difficult for election judges to administer. 23 51 1 SD-42. Local Election Authority (AR) ..... 2 Issue: City authority to schedule city elections and establish terms of office for local elected 3 , officials strengthens regard for the role of local self-government--particularly when voters 4 approve those matters in home rule charter cities. Additionally, statutory cities currently lack 5 authority to create or abolish wards. 6 7 Response: The Legislature should oppose further limits on either the number or the length 8 of terms elected city officials may serve as provided in current state law--particularly when --, , -- . -_. 9 those terms have been established by voters in home rule charter cities. State policy on 10 uniform elections should continue to recognize and uphold local authority to schedule city 11 elections in November of either even- or odd-numbered years. The Legislature s~oIIld. 12 support provisions to give statutory cities general authority to create and abolish wards. 13 14 SD-43. State Assistance for Library Funding (10) 15 Issue: Many community libraries in Minnesota are city-owned. Although located in an 16 individual cortnnunity, city libraries serve a much wider area. Local libraries need to be 17 improved in order to provide access to both written and electronic media to enhance the 18 educational capacity of adults and children. 19 20 ,Response: The League supports a state matching grant pro grain to provide dollars to assist 21 communities to work in partnership to build and improve libraries. 22 52 1 SD-44. Park and Library Land Tax Break (JO) 2 Issue: As the price for land increases, iris becoming more difficult for cities and other local units 3 of government to compete with developers to save and secure land and easements that are 4 deemed appropriate for park,library, trail, and green spaces. 5 6 Response: The state should amend the tax laws to provide tax incentives for property 7 owners who sell land and easements to local units of government when the land is to be I Ad- ~., 8 used for park, library, trail or green space purposes. .--" '.-- 9 .10 SD-AA. Fundin2 to Mana2e Shade Tree Diseases and Pests (JO/CJ) NEW 11 Issue: The resurgence of Dutch Elm Disease and the spread of Oak Wilt has brought about a 12 significantly increased need for city tree removal services. Consequently, this has put fiscal 13 pressure on city budgets at a time when many are still experiencing aid cuts. Although the 14 Department of Natural Resources' Releafpro!ITamand the Department of Agriculture's Shade 15 Tree and Invasive Species program currently allow for addressing tree disease and pest 16 problems, funding levels have been inadequate to assist cities. Cities share the goal of the state's 17 Releafprogram--promoting and funding theplanting,maintenance"andimprovement of trees in 18 the state. ,By not having the resources to take preventative steps to halt fast-spreading diseases 19 by removing infected trees in a timelvmanner, it ends up costing cities'significantly more in the 20 long run. 21 22 Response: The Lea2'uesuuuorts fundin2' for a state matchin2' 2'rant ur02'ram thatworild 23 assist cities with meetin2' the costs of addressiru:! shade tree disease and uest uroblems. 53 1 Additionallv. tbe League would support fundingtbe current Releafprogram with an 2 increased appropriation tbat can better address thecneeds of manacinlZ urban forests across 3 the state. 4 5 SD-BB. Immh!ration Reform (AF) NEW 6 Issue: The United States and the State of Minnesota have Ion!! traditions of welcoming 7 immigrants. ImmiQ"fants strengthen Minnesota by contributing to the state's, economy, enhancing 8 cultural resources, and participating in efforts to build strong communities. -,-- --..... . -.- 9 10 According to the National Lea!!Ue of Cities, roughly 35 percent of undocumented immigrants 11 have lived in the United States for 10 vears or more. Approximately 1.6 million undocumented 12 immigrants are children, and another 3 .1 million children in the United States have at least one 13 undocumented parent. These families are forced to live "underground," unable to get drivers' 14 licenses or car insurance in most states. They are unlikelv to obtain health insurance, and are 15 afraid to rep0l1 crimes to local law enforcement. 1'6 17 Since immigrants are barred from most federal public assistance, the burden of providing social 18 services, educlltion, and health care falls to state and local governments who are increasin!!ly 19 feeling the fmancial impact of both le!!al and illegal immigrants living in their communities. 20 21 Response: The Leal!ue of Minnesota Cities, together with the National LealZue of Cities. 22 urges'CoI1!!ress to move Quicklv to enact and enforce effective immil!ration laws. 23 54 1 Federal and state governments mustnot transfer responsibilitv for enforcing United States 2 immi!!ration laws to local personnel such as police officers.firefi!thters. educators. health 3 professionals and social service employees. Finallv ~ federal and state governments must not 4 prohibit local units of government from implementing policies aimed at fostering positive 5 relationships between local governihent officials. including law enforcement personnel. and 6 immi!!rant communities. 7 8 SD-CC. Sustainable Development (CJILH) NEW - - -' . -.. 9 Issue: Minnesota cities spend significant time and resources planning for growth. development. 10 and Tedevelopment that will best serve the future needs of their citizens. Numerous factors are 11 considered as part of that process. but an area of increasing interest involves concepts often 12 categorized as "sustainable development." This term has been defmed in state statute (Minn. 13 Stat. 4A.07. subd, I (b)) as it pertains to local government to mean "development that maintains or 14 enhances economic opportunity and communiry well-being while protecting and restoring the - 15 natural environment upon which people and economies depend. Sustainable development meets 16 the needs of the present without compromising the ability of future generations to meet their own 17 needs. " 18 19 Due to their role in land use planning and zoning. stormwater and wastewater management. and 20 local economic development. cities playa key role in fostering sustainable development and 21 other conservation practices. 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 55 1 sustainability efforts. The ability of a city to affect these chanQ:es can. however. be restricted by 2 policies and requirements imposed bv other levels of government. 3 4 ' Sustainable development initiatives can cover a wide range of issues. but share the benefit of 5 lessening the future environmentalimpacts of communities on the land. air and water in their 6 area. Lakes. streams. rivers. wetlands. wildlife habitat and other natural resources can be 7 protected and enhanced in quality through local efforts. Energy efficiency and renewable energy 8 production reduce the energy demands of a community and the environmental impacts of energy . _....h 9 production. By more efficiently using public infrastructure and minimizing resource 10 consumption. the costs to individuals. business. and government can be reduced. New and 11 expanded business and job opportunities are also generated bv the "greeri" products and services 12 needed to implement sustainable development initiatives.-The ideal result of well-planned 13 sustain ability and conservation efforts is a city that is more efficient in the use of its resources 14 and infrastructure. that creates fewer environmental problems for future generations to deal with. 15 and that is a more desirable home for residents and businesses. 16 17 Response: The Lea2ue supports federal. state. and regional efforts to promote sustainable 18 development where the effectiveness of the proposed practice 'is supported bv sound 19 science. and as 10m! as those efforts do not supersede the authority of local governments to 20 determine their own policies regarding land use and related issues. Providing technical 21 assistance and [mancial incentives and streamlining re1?ulations'toencourage local 22 governments and private property owners to engage in sustainable development practices. 23 as well as assistim! in education and information efforts for the build.inQ industrv and the 56 1 public. are the best means to generate successful results. These programs should focus on 2 outcomes. allowing flexibility in how to best meet those outcomes in different locations and 3 situations. The Lemme opposes mandates that limit the authoritv of cities to determine 4 what practices will best meet the needs of their communities. .5 -, " 6 The League supports sustainable development efforts that meet the above criteria. 7 including programs proposed in the following areas: 8 . ShiftiIU!: public resources. services. investments. purchasing power and procUrement - - -" 9 toward more economicallv and environmentallv sustainable outcomes where those 10 solutions are cost effective and appropriate. 11 . Using local land use planning and zoning to protect and enhance limited natural 12 resources and reduce the impacts of growth and development on local infrastructure. 13 . Promoting efficient and renewable energy sources. 14 . Encouraging sustainable building design. construction. and operation strategies focused 15 on integrated design. energv efficiencv. water conservation. stormwater management. 16 waste reduction. pollution prevention. indoor environmental aualitv. and the use of 17 low-impact building materials and products~ 18 . Supporting sustainable economic d~velopment. such as brownfield clean-up. on-site - , 19 stormwater management. and sustainable business nractices and technologies. 20 21 SD-DD. State Oversh!ht of Amusement Ride Safety (AF) NEW 22 Issue: Minnesota statutes provide only minimal regulations pertaining to amusement rides. Ride ,.~.. 23 operators must have insurance coverage. and carnival rides must be inspected at least once per 57 1 'year by a representative of the insurance agency that provides coverage. The state does not 2 certify ride operators. reQUlate ride inspections, or collect data on amusement ride injuries. , 3 4 Amusement rides have the potential to cause catastrophiciniuries to riders and bvstanders if thev 5 · malfunction or are'improperly assembled or operated. City officials want members of the public 6 to be safe on and near the amusement rides operated at theme parks and community events. and 7 some have enacted ordinances imposing safety requirements. However. cities generally do not 8 have the capacity to provide thorou!!h oversight of amusement ride safety. - -, 9 10 Response: The League of Minnesota Cities supports state oversight of amusement ride 11 safety. Specifically. the State of Minnesota should:' 12 . establish safetv standards for operation of amusement rides: 13 . reQuire and provide routine inspections of amusement rides: 14 . rewlate and certifv amusement ride operators: 15 . collect data on amusement ride injuries: 16 . sanction operators that fail to comply with safetv standards: and 17 . continue to allow local ordinances that are more restrictive than state laws governing 18 amusement rides. 19 20 SD-EE. Local Apuroval of Special Laws (GCILH) NEW 21 Issue: The Minnesota Constitution prohibits special legislation exceptfor certain special laws 22 relating to local government. It provides that a speciallaw must name the affected local unit of 23 government and is effective only after approval by the local government unit. unless general 58 1 state law provides otherwise. Under state statute. a special law is not effective unless approved 2 by the affected local unit of govemment. except under limited circumstances. 3 4 ]n recent years. the legislature has occasionally enacted general laws that affect a single local 5 unit of government. By enacting a general law with limited application. local approval is not 6 required. 7 8 Res/Jonse: The League supports the constitutional reauirement that a special law must be 9 approved by the affected local unit of government before it can take effect. If a law is 10 intended to affect or benefit a single local unit of government, the legislature must follow 11 the reQuirements for enacting a special law set forth in the Minnesota Constitution and 12 state statute. The League specifically opposes the Legislature' techniQue of bypassing the , 13 constitution bv not naminl! the local government but describing the local government in 14 such narrow terms that it can only applv to one entity. 59 1 IMPROVING LOCAL ECONOMIES 2 LE.-l. Growth IYIanagement and Annexation (CJ) 3 Issue: Unplanned and uncontrolled growth has a negative environmental, fiscal, and 4 governmental impact on cities, counties, and state governments because it increases the cost of 5 providing government services and results in the loss of natural resource areas and prime 6 agricultural land. 7 8 Response: The League believes the existing framework for guiding growth and 9 development primarily through local plans and controls adopted by local governments 10 should form the basis of a statewide planning policy, and that the state should not a;,~;,~pt a 11 mandatory , comprehensive statewide planning process. Rather, the state should: 12 . Provide additional financial and technical assistance to local governments for 13 cooperative planning and growth management issues, particularly where new 14 comprehensive plans have been mandated by the Legislature. 15 . Clearly establish the public purposes served by existing statewide controls such u:> shore 16 land zoning and wetlands conservation; clarify, simplify, and streamline these controls; 17 eliminate duplication in their administration; and fully defend and hold harmless any 18 local government sued for a "taking" as a result of executing state land-use policies. , 19 . Give cities broader authority to extend their zoning, subdivision, and other land-use 20 controls up to two miles outside the city's boundaries, regardless of the existence of 21 county or township controls, to ensure conformance with city facilities and services. 60 1 . Clearly define and differentiate between urban and rural development and restrict 2 urban growth without municipal services or annexation agreements outside city .. . .' . - I 3 boundaries. 4 . Facilitate the annexation of urban land to cities by amending state statutes that regulate 5 annexation to make it easier for cities to annex developed or developing land within 6 unincorporated areas. 7 . Oppose legislation that would reinstate the election requirement in contested 8 annexations. 9 . Encourage ideas consistent with the long-term goal of allowing urban development only 10 in urban areas. Density incentives such as sprawl reduction aid programs are more 11 straightforward methods of rewarding and encouraging compact urban development 12 than using LGA for another new purpose. 13 14 LE-2. Electric Service Extension (AR) 15 Issue: Minnesota law preserves the right of municipal electric utilities to grow with the cities . , 16 they serve: Municipal electric utilities may grow either through application to the Mmnesota 17 Public Utilities Conmlission (MPUC) or through condemnation proceedings. Eliminating 18 authority of municipal electric utilities to extend services or making extension of municipal 19 electric service to annexed propelty unreasonably costly would interfere with conUTIunity 20 development and make it infeasible for municipal electric utilities to serve properties located 21 within rural electric cooperative (REC) service territory in annexed areas even if the REC had 22 not served them prior to annexation. 23 61 1 Response: The current administrative process at the MPUC has become oppressive. The 2 League opposes any attempt toremove or alter the eminent domain option available to 3 municipal electric utilities in state ~aw or to make it financially infeasible for municipal 4 utilities to compensate rural electric cooperatives for servin2: future customers who reside 5 in annexed areas ~herethe cooperative has not provided service. 6 7 LE-3. Statutory Approval Timelines (CJILO) 8 Issue: Since 1995, cities have been required to act on written requests relating 9 to zoning, septic systems, the expansion of Metropolitan Urban Service Areas (MUSA), and 10 other land-use applications in accordance with a statutory time period generally refelTed.to as the 11 60-day rule. Pursuant to Minn. Stat. S 15.99, state and local government agencies must approve ! 12 or deny a pennit within a statutory timeframe. Failure by the agency to issue a specifi~ denial of 13 the application with contemporaneous written findings of fact is deemed an approval. 14 15 Minn. Stat. S 15.99 does not directly address whether an appeal of a decision triggers an 16 extension or is part of an original zoning request that must be handled within the 60- or 120-day 17 time period. In a recent court of appeals decision, the court found that a zoning applicationis not 18 approved or denied for the purposes of Minn. Stat. S 15.99 until the city has resolved all appeals 19 challenging the application. According to the court, an appeal is not a request for a penuit, 20 license or other governmental approval, and therefore, does not trigger a new 60-day time period. 21 Under this interpretation, a decision rendered by a zoning board or planning commission is not 22 the final approval or denial of an application if the ~ity allows an appeal to the city council. 62 1 This court decision is problematic for a couple of reasons. Forcing cities to further condense the 2 process for considering planning and zoning applications will make it more difficult to gather 3 public input and leave less time for thoughtful deliberation by zoning boards and planning 4 commissions. It may also provide an incentive for cities to extend the original 60-day period in 5 every instance in order to build-in adequate time to consider possible appeals. 6 7 While the Legislature has clarified some aspects of this law, additional modifications are 8 necessary to assist cities in providing accurate and timely responses to applical1ts and to allow 9 adequate time for public input. 10 11 Response: The Legislature should repeal or amend Minn. Stat. S 15.99. If repeal is 12 unlikely, amendments should: ..:;,. " 13 . Increase the initial time limit to 90 days,for municipalities with less than 5~OOO 14 population. 15 - Clarify that approval does not abrogate the need for approvals under other applicable . 16 ,federal, state or local requirements. 17 . Provide appeal rights to. adjacent property owners. 18 . Clarify that, if requests are to be decided by a board, commission, or other agent of a 19 governmental agency, and the decision of the board, commission, or other agent is 20 adopted subject to appeal to the governing body of the agency, then the agency may 21 extend the 60-day time limit to resolve the appeal. ! ! 22 63 1 LE-4. Public Infrastructure Utilities (AF) 2 Issue: Cun-ent 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. h1 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 storn1 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 all those 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: 19 the effects of repeated levy limits and the general funding shift from the state to loca! , .... 20 governments for building and maintaining necessary infrastructure; the benefits to aU 21 taxpayers of a properly maintained public infrastructure; and, the limitations of existing 22 special assessment authority. 23 64 1 LE-S. Development Disputes (CJILO) 2 Issue: State law is clear that fees collected under Minn. Stat. S 462 are eligible for judicial 3 review in the event of dispute. The Legislature recently limited the timeframe during which an 4 aggrieved party may challenge planning and zoning fees to60 days after approval of an 5 application. However, the law is not clear what notice requirements to the municipality are 6 necessary relative to the timing fora person aggrieved byan ordinance or decision under the 7 municipal planning act to seek review. 8 --, . _... - - 9 Response:, The Legislature should amend Minn. Stat. '~ 462.361 to establish a60-day time 10 limitation in which an aggrieved 'person may bring an action against the municipality. 11 12 LE-6 New Resources for Affordable Housing, - Amendment (AR) 13 Issue: Cities remain actively interestod iIDd sujrportiY8 of legislative efforts to adcIfcss long term 14 homelessness; maximizc use of tax incromcnt fmancing for affordablc housing; and restore full 15 funding of programs admini,s.tered by the Minnesota Housing Finance l..gency and other state )6 agencies; and undertake or modify existing state fiscal policics in order to assist cities to 17 encourage development and rctcntion of the existing supply of affordable housing. 18 19 Cities support tax policies that encouragc de'/elopment of affordable housing. In 2005, the 20 Legislaturc recreated the proferential 4 d housing property tax classification that provides a tax 21 brcak for affordable housing. Unfortunately, the 2005 Legislature also cxtended reductions for 22 103 cities in s~atc payments for the Market Value Homestead Credit (MVHC) Program. Failure 65 1 to fully fund M'lHC has created financial disincenti'les for cities to facilitate de':elopment of 2 affordable housing atthe 10cal18':el. 3 Legislative appropriations for housing programs have declined in recent years as state resources 4 were redirected to programs aimed at reducing the risk of long-tenn homelessness. h1 the 2005- 5 2006 biennium. appropriations for other housing programs administered by the Minnesota 6 Housing Finance Agency (MHFA) were scaled back to only $70 million (from a previous high 7 of $173 million in 2000-2001 ). During the same period. the need for affordable rental and 8 single-family housing has been steadily increasing as housing prices ffi1d land costs have out- 9 paced wage increases and the range of housing opportunities at the local level. Statewide. by 10 20] O. the number of low-income households not able to afford housing isproiected to grow to 11 330.000. an increase of 10 percent over the need for affordable housil1g that was measured in 12 2000. 13 14 Response: The 20091 Legislature should take the following actions to address affordable 15 housing issues: 16 . Dedicate alternative sources of revenue such as a new surcharge on the one-time 17 transfer of real oropertv as proposed bvthe Housing Solutions Act to raise 18 approximately · $40 million per year to fund tenant- and proiect-based rental 19 assistance and workforce housing and to create a new local housing incentive fund 20 to assist homeowner and rental housing development at the local level: 21 . Make it possible for communities to flexibly raise matching resources as proposed 22 bv the Housing Account for Leverage Opportunities (HALO) to aualifv for 23 approximately a threshold of at least $17 million each year of the biennium in state 66 1 matching funds to allow cities to develop homeownership. multifamilv. rental 2 assistance and renovation housing programs to meet a range of local housing needs: 3 . Use new dedicated revenues to increase funding for the MHF A Housing Trust Fund 4 bv approximatelv $29 million to provide rental assistance to low-income families 5 and individuals. with kev resources aimed at continued support for the state plan to 6 end long-term homelessness; and 7 . Double current funding for the MHFA Economic Development & Challenge Fund 8 for loans and grants that leverage significant private and local resources for 9 development of workforce rental and.ownership of single-familv homes. 10 . Authorize $33 million in bendin2" for construction and rchabilitation of supportivc 11 hOllsin2" desifncd to serve pcoplc cXJJericncim: hm2" tcrm homclcssncss: 12 . Make changes to tax increment financing to maximize its use for development of 13 affordable housing; and 14 . Continue to fEullYJund the MVHC Program so as not to ~enalize cities for 15 developing te encourage citics to continue to develop affordable housing. 16 17 In addition, the Lcgislaturc must support measurcs designed to restore full funding ef the 18 base budget for the l\1inncsota Housing Financc Agency and ether housing programs fOr 19 the ncxt biennium. The Legislature should also consider local needs fer affordable h.Jusing 20 and dircct the l\1innesota Housing Finance f..:gency to ceordinate allocation of state funds to 21 assist communities to provide affordablc heusing for additional cmployees hired as a result 22 of ncw employment opportunities. 23 67 1 Other strategies that should be considered include creation of a state affordable housing 2 tax credit or a charitable tax credit for funds donated to approved projects, with efforts 3 directed to promote program efficiency and use of existing income eligibility standards and 4 reporting requirements along with compatibility between tax credits and existing housing 5 programs. 6 7 The Legislature should also oppose efforts to restrict or interfere with local authQrity to 8 carry. out land-use, zoning, permitting and subdivision regulations and support local 9 authority to provide financial incentives and regulatory relief to facilitate development of I 10 housing that may not otherwise be attractive to the private market or that supports 11 important local development and redevelopment goals. 12 13 LE-7. State and/or County Licensed Residential Facilities (group homes) CAR) 14 Issue: As the need for more residential-based care facilities increases, sufficient funding is also 15 needed to ensure residents living in group homes and licensed facilities have appropriate care 16 and supervision. In view of cities' responsibilities to accoinmodate group homes and residential- 17 based facilities, state and county governments should work with local officials to address 18 residential care and public safety issues. Cities have reasonable concerns about the special care 19 necessary for group home residents, particularly in case of public safety emergencies. Since 20 operators of certain residential facilities and services are not required to notify cities when they 21 intend to purchase housing for group homes,.cities do not have an opportunity to raise concerns 22 and requirements relating to the special care and public safety measm:es these residences may 23 expect. 68 1 ..,..,",.., 2 Response: The Legislature should provide sufficient funding for such residential-based 3 services. Agencies and licensed providers that manage and operate group homes should be 4 required to notify cities in a timely manner when they request to operate such facilities or 5 renew their licenses. The League supports giving cities the authority to requiregroup 6 homes to identify and take appropriate measures to respond to the special care residents 7 need in case of emergencies. 8 The Legislature should also require establishment of non-concentration standards for state 9 or county-issued requests for proposals (RFPs) and direction to avoid clustering residential .--..' 10 facilities. Licensing authorities must also be responsible for removing any residents 11 incapable of living in suchan environment, particularly if they become a danger to 12 themselves or others. ~...' 13 14 LE-8. Inclusionary Housing CAR) 15 Issue: Provisions in current state statute (M.S. 462.358, subd. 11) adopted in 2002 as a means of 16 allowing cities to enter into specific detailed subdivision development, agreements tor the I 17 inclusion ofaY-ef a portion of the units in the development to be affordable for low or moderate 18 income families have become been tAe f!: source of conflict between cities and seme housing 19 developers. 20 21, Cities are concerned that builders are incre::dngly viewfng the language in this statute as a 22 restriction on local authority to adopt policies that promote availability of housing affordable to 23 those who are unable to purchase or rent housing at price points that the market alone provides. 69 I 1 2 Response: The Legislature should: 3 . Strengthen and clarify cities' authority to carry out policies that offer developers a 4 range of incentives in return for including a designated number of affordable units in 5 their projects. 6 . Identify strategies to ensure long-term affordability of rental and owner-occupied 7 housing produced as a result of such policies and practices. 8 . Focus state housing policy on support for local assessment of housing needs and direct 9 additional state resources and the full exercise of local authority to increase 10 development of affordable rental units and access to entry-level owner-occupied 11 housing. 12 . 'Support voluntary measures to encourage cities to adopt and carry out land-use plans, 13 activities, and subdivision regulations aimed at providing for construction and 14 marketing of housing where a portion of all new units are affordable to lo~ver income 15 households. 16 17, LE-9. Community Land Trusts (AR) 18 Issue: The steeply increasing price of land available for housing development, particularly for 19 retaining affordability of housing for lower income households, is a growing concern throughout 20 the state. Creating more pennanently affordable owner-occupied housing depends heavily on 21 maximizing the cost-effectiveness of taxpayer investments. The Legislature has previously 22 appropriated funding and granted the Minnesota Housing Finance Agency authority to assist 23 cities with funding community land trusts (CLTs) for affordable housing. 70 1 2 Response: The Legislature should support continuation of the land, trust capaCity -building 3 program and provide capital start-up funds so community land trusts can continue to offer 4 gap financing, interest-rate write-downs, predevelopment financing, and financial 5 underwriting costs. The Legislature should also support efforts b~ the Coalition of 6 Community Land Trusts to develop property tax valuation that w'ould lower property 7 taxes for sales-price-restricted properties enrolled in CLT programs. 8 9 LE-10. Municipal Telecommunications Authority (AR) 10 Issue: Cities must have the authority and the toolsto establish the necessary infrastructure, 11 educational resources, applications, and skill-sets to become connected cOlmnunities. Increasing 12 opposition to municipal entry by private teleconununications interests makes it imperative that 13 members of Congress and the state Legislature recognize the importance of the role cities play in 14 assuring that their communities benefit from availability of affordable advanced broadband 15 services. 16 17 Response: Congress, the Legislature and state agencies must support policies and programs .__'-0- 18 that make it possible for cities to provide affordable access to advanced 19 telecommunications and information services by: 20 . Allowing a city to become a telecommunications and information service provider and 21 to 'extend services beyond city corporate boundaries upon consent of the local governing 22 body of each jurisdiction to which service would be provided. 71 1 . Eliminating barriers to municipal entry and defining a strategic leadership role for 2 cities. 3 . Supporting efforts by cities to bring advanced wireless and fiber to thehoIne (FTTH) 4 services to local residents and businesses. 5 . Encouraging collaboration among communities and institutions to expand education, 6 health care, and economic opportunities at the local and regional level. 7 . Allowing cities and municipal utilities to join with other entities, such as broadband 8 over powerline (BPL) providers, cooperative associations, investor-owned utilities, or 9 other municipal utilities or power agencies, to provide telecommunications and 10 information service. 11 12 LE-l1. Right-of-Way Management (AH) 13 Issue: Cities have fundamental responsibility for managing the safe and convenient use of public 14 rights-of-way and hold local rights-of-way in t11lst for the public as ani increasingly scarce and 15 valuable asset. As demand increases for use of rights-of-way for tower sites, as wel4t& for 16 underground and overhead wireless facilities and sites for wireless communications towers, cities 17 must continue to have the necessary authority exercise their authority to allocate and coordinate 18 the use of this resource among competing uses. Local management responsibilities vary and are 19 site specific, underscoring the necessity for maintaining local authority. 20 21 Response: State and federal policyrnakers and regulators must: 22 . Uphold local authority to manage and protect public rights-of-way, including 23 reasonable zoning and subdivision regulation and the exercise of local police powers. n 1 . Recognize that cities have a paramount role in developing, locating, siting, and 2 enforcing utility construction and safety standards. 3 . Support local authority to require full recovery of actual costs of managing use of 4 public rights-of-way. 5 . Maintain city authority to franchise gas, electric, cable services, and open video 6 systems, and to collect franchise fees and alternative revenue streams. 7 . Maintain the courts as the primary forum for resolving disputes over the exercise of 8 such authority. 9 . Maintain existing city authority to review and approve or deny plans for installation of 10 additional wires or cables on in-place utility poles. In the alternative, cities should have 11 broader authority to require the underground placement of new and/or eXIsting 12 services at the cost of the utility or telecommunications entity. 13 14 LE-12. Cable Franchising Authority (AR) 15 Issue: Local franchising authority allows cities and multijurisdictional cable commissions to 16 establish tenus and conditions of local franchises that meet the unique needs and interests of the 17 community, including customer service standards and consumer protection measures; public, 18 educational and government (PEG) channels and programming; bandwidth capacity; Institutional 19 Networks (I-Nets) and the necessary financial resources to comply with the franchise. This 20 franchising process, in its current form, has succeeded in providing community residents with the 21 benefits of system upgrades by franchise operators that provide digital video, broadband 22 technologies and IF telephony. However, as technologies converge arid expand, cities oow face 23 chalJenges, such as how to franchise competitive cable overbuilders, local and competitive 73 1 exchange carriers (LECs and CLECs), municipal and investor-owned utilities, broadband 2 overpowerline (BPL), fiber to the premises (FTTP/FITH) service providers and other wireline 3 system operators that seek to provide video services. In such circumstances, cities must continue ., 4 to have the necessary authority and flexibility to franchise such providers in a manner that 5 enables the community to benefit from the availability of and improvements to existing services. 6 7 Response: Congressional and state policymakers must uphold the authority of cities and 8 multijurisdictional cable commissions to negotiate agreements with wireline multichannel 9 cable and video services, regardless of the provider. Cities and other franchising 10 authorities need discretion and flexibility to negotiate the terms and conditions of, 11 agreements with competitive providers regardless of how they provide services that assure 12 continued availability of PEG channel bandwidth capacity, programming and capital 13 support, I-Nets, customer service standards, franchise fees or similar compensation that 14 meet the specific needs of their communities. 15 16 LE-13. Franchising Competitive Cable Service Providers (AR) 17 Issue: Under current state law, local franchising authorities must adopt agreements that are "no 18 more favorable or less burdensome" with regard to area served, public, educational and 19 government (PEG) programming and franchise fees. During the 2005-2006 legislative session, 20 the League reached agreement with the Minnesota Teleconm1unications Alliance (MTA), ',vhich 21 had ~'.pproached UfC regarding on tern1S of legislation that would allow a new provider to offer 22 ~nultichannel video programming and PEG in a different service area than that served by an 23 incumbent cable franchise operator. Opposition by incumbent cable franchise operators and 74 1 reservations by Owest about local authority to include build-out requirements in such agreements 2 helped defeat the bill last session. 3 4 Response: The state Legislature and Congress should recognize and support increased 5 flexibility in the exercise of local franchising authority in order to encourage entry by 6 competitive multichannel video service providers, without giving unfair advantage to one 7 provider over another. Local franchising authorities need flexibility to take advantage of 8 opportunities to provide increased customer choice while requiring measures designed to 9 prevent economic, racial or other discriminatory redlining or "cherry~picking" that could 10 result in creation of a "digital divide" within the community. Changes to existing federal 11 or state cable franchising statutes should fully maintain local authority to assure that all , I ' 12 providers meet community needs and interests, including PEG channel capacity, funding 13 and institutional networks (I-Nets) consistent with up~to-date technology and tailored to 14 reasonable technical and operational differences among providers. 15 16 LE~14. Wireless Tower and Antenna Siting (AR) 17 Issue: As demand for wireless communication service increases, wireless service providers have 18 increasingly requested to site towers, antennas, and other facilities in cities. Cities must continue 19 to have local zoning authority and police power to manage and coordinate the siting of these 20 facilities. Local management needs vary and are site specific, underscoring the necessity for 21 maintaining local authOlity. 22 While state law regarding local rights-of-way management (MS. 237.162.163) does not apply to 23 siting such facilities in public rights-of-way, the federal Telecommunications Actof 1996 75 1 preserves and provides for the exercise of state and local authority over zoning and land-use 2 decisions for wireless service facilities. 3 4 Response: The Legislature should clarify that wireless service providers are not exempt 5 from local zoning and police power regulations where the provider proposes to use public 6 rights-of-way to site their facilities. Cities must continue to be permitted to consider public 7 health, safety, and welfare concerns, including issues of aesthetic and property value, in 8 responding to requests to site wireless facilities. The Legislature should maintain laws that 9 recognize and uphold city authority to manage the siting of wireless facilities through local 10 zoning and regulation and provider agreements, including fair compensation. 11 12 LE-lS. Economic Development Authorities (JO) 13 Issue: .'The 2005 Legislature authorized all counties outside the metropolitan area to establish 14 county economic development authorities (EDAs). Minnesota Statutes 469.1082 provides" 15 specificity on certain process and limitations issues. County EDA activity in areas su,rrounding 16 cities will directly impact the adjacent city in tenns of service provisiqn and taxes. 17 18 Response: The Legislature should establish reasonable limits on county EDA activities in 19 unincorporated areas, including requiring city approval for proposed county EDA 20 activities within two miles of a city. The Legislature should revisit the county EDA 21 legislation, and consider specificity to other process and limitations issues such as the local 22 recommendation committee. 23 76 1 LE-16. Workforce Readiness (IO) 2 Issue: State and federal welfare reform efforts have focused on the importance of the welfare-to- 3 work transition, and have recognized the challenge of ensudng that individuals are qualified to 4 work. Cities have an interest in the availability of qualified workers as part of their economic 5 development efforts, and can serve as a catalyst with other public entities and the private sector 6 to address workforce readiness issues. 7 8 Response: The Legislature should continue to fully fund the job slalls partnership and 9 other workforce training programs administered by the Department of Employment and 10 Economic Development. The Legislature should provide additional flexible funding to local 11 workforce councils. includin~ governments and educational facilities, forthe purpose of 12 , upgrading the skills and productivity of the workforce as well as pursue additional creative 13 programming and funding to prepare and place underemployed and unemployed 14 Minnesotans. 15 16 LE-17. Community Reinvestment Partnerships and Financing (10) 17 Issue: The200l property taxrefoffi1 package is having a dramatic impact on how the state of 18 Minnesota's conm1unity reinvestment needs are addressed. The impacts bring into question the 19 future viability of tax increment financing (TIF) as the primary tool to fund community 20 reinvestment efforts. Additionally. the impacts of the 2006 eminent domain reforms will 21 dramatically limit a city's ability to assemble parcels of land needed to facilitate economic 22 development and redevelopment protects. Activities that cities have historically been able to 23 undertake, but will likely be less able to achieve in the future given the likely diminished 77 1 effectiveness ofTIF and limited ability to assemble parcels of land, include: long-teml tax. base 2 stabilization and growth, job creation, development of low-to-moderate income and workforce 3 housing, remediation of pollution, elimination of blight, recycling and redevelopment of 4 infrastmcture, and redevelopment of communities. 5 6 Research into another strategy of community reinvestment has focused on public and private 7 investments in youth. This body of work suggests that this fonn of ecbnomic development pays 8 off in areas such as improved high school graduation rates and homeownership rates. Helping 9 youth develop the social and emotional skills necessary to be contributing members of the state 10 'economy meets the state's interest in building quality communities that sustain into the future. 11 12 Response: To ensure Minnesota is able to continue to effectively compete with other states, 13 the Legislature has a responsibility to partner with cities, state agencies, and other 14 community reinvestment organizations to develop a statewide community reinvestment 15 strategy, and to identify and implement additional tools to fund community reinvestment 16 efforts. The state should partner with cities in community reinvestment activities. State 17 acknowledgment of the need for community reinvestment and economic development is 18 essential to the state's prosperity, and legislation is needed to generate resources sufficient 19 to address these critical needs at the local level. The state should maintain a long-term 20 vision for a healthy society and renew its commitment to early childhood family education 21 and pre-school programs that better equip individuals to contribute to the local and state 22 economies and that ultimately make for quality communities. 23 78 1 LE-18. Tax Increment Financing (JO) 2 Issue: Until the state identifies and implements additional development tools, TIP remains the 3 most viable tool available to fund conillmnity reinvestment efforts despite the significant impacts 4 of the 2001 property tax reform package. Cities and development authorities will be required to " 5' de:vote considerable efforts in order to understand and address the impacts of the 2001 property 6 tax refonll package on existing TIP districts and potential future projects. 7 8 Response: So as to not further complicate this process, the Legislature should not enact 9 future TIF law restrictions during the next legislative session. In order to allow TIF to 10 maintain the effectivel1ess that remains in the wake of the 2001 property tax reform 11 package, the Legislature should consider: 12 . Authorizing any tax increment districts approved after Aprill, 1990, to pool 13 increments in the same manner as districts certified prior to April 1, 1990, for 14 affordable housing and pollution remediation. , 15 . Expanding the use of TIF to assist in the development of technological infrastructure; 16 biotechnology; research; transit~oriented development; restoration of designated 17 historic structures; development of non-retail commercial projects and non-wetland 18 areas where unstable/non-buildable soils exist. 19 . Modifying various provisions in order to better facilitate redevelopment activities. 20 . Modifying the housing district income qualification level requirements to allow the 21 levels to vary according to those specific to individual communities. 22 79 1 LE-19. TIF District Deficits (JO) 2 Issue: Along with the property tax reform of 2001, the Legislature committed state resources 3 through the TlF grant program in order to address the impacts of property tax reform on existing 4 TIP districts. This funding, however, was eliminated in order to help address the state budget 5 deficit. Since then, the Legislature has authorized municipalities to extend districts provided 6 certain critelia are met. At this time it remains unclear whether tru.s will adequately address 7 district shortfalls. 8 9 Response: Municipalities using the new authorization for district extensions will need to 10 closely monitor the effects to ensure the extension adequately addressed the shortfalls, If 11 necessary, the Legislature should consider amendments to the 20U3 authorization, 12 including state assistance, for addressing TIF district deficits. 13 14 LE-20. Business Subsidies (10) 15 Issue: In recent years, the Legislature has clarified and modified the Business Subsidies Act. In 16 order for development agencies to effectively implement the amended law, the Legislatun:: 17 should avoid further substantive changes. 18 I 19 Response: Without thorough study, the Legislature should avoid further substantive I 20 changes to the Business Subsidies Act during the next legislative session, but should 21 consider technical changes that would streamline processes and procedures. 22 80 1 LE-21.Business Development Programs (JOlLa) 2 Issue: In recent years, the state has created and funded the Jobs Oppo~nity Building Zones 3 (JOBZ), designed to lure business development into greater Minnesota, and provided insufficient 4 bonding appropriations for other DEED business development programs such as the Greater 5 Minnesota Business Development Public Infrastructure Grant Program. Furthermore, other 6 proven statewide business development programs, such as the Minnesota Investment Fund, have 7 been cut substantially. In light of the CUlTent economic times, local governments increasingly 8 may need to rely on these types of state programs in order to effectively compete national1y and 9 internationally for business development. 10 11 The 2005 Legislature addressed the state's need for infrastructure that will assist in facilitating 12 high volumes of international air cargo in Minnesota by passing the air cargo legislation to 13 further expand and expedite access to global markets. This is important as the state':; gap puts 14 our internationally engaged businesses at a competitive disadvantage and makes it difficult to 15 attract new manufacturing and distribution jobs to the state. Helping our businesses expeditiously 16 reach markets worldwide will improve Minnesota's competitiveness and boost the state's 17 economy. 18 19 Response: The Legislature should continue to fund and keep flexible the Greater 20 Minnesota Business Development Public Infrastructure Grant~ program and JOBZ 21 programs, as well as proven statewide business development programs such as the 22 Minnesota Investment Fund and land recycling programs at DEED. Furthermore, these 23 funds should not be raided to balance any state budget shortfalL 81 1 2 The state should also autliorize and fund additional business development tools that 3 increase Minnesota's competitiveness by improving access to global markets. 4 5 LE-22. Land Recycling Programs (JO) 6 Issue: Communities across Minnesota are faced with expensive barriers to re-using property. 7 These roadblocks include deteriorating, obsolete, and vacant structures, as well as varying levels 8 of contamination. Such barriers pose significant problems for cities seeking to re-use existing 9 infrastructure, maintain and improve the property tax base, provide jobs and housing 10 opportunities, and preserve historic structures. While land recycling activities have always been 11 particularly costly, since they usually encompass multi-phase projects of extensive duration 12 where site assemblage, denJolition, relocation ore pollution cleanup must occur before private- 13 sector interest can be generated, the 2001 property tax refonn package significantly diminished 14 the ability of cities to undertake these efforts by dramatically reducing revenues generated by 15 TIP. Exacerbating this situation, the land recycling programs administered by the Department of 16 Employment and Economic Development and the Metropolitan Council programs continue to be 17 under funded. 18 19 Response: In recognition of the unique needs of land recycling projects statewide, the 20 Legislature should restore statewide iurisdiction and funding for the redevelopment 21 account or consider another program to address redevelopment needs in the metro area. 22 increase the funding fer the statewide redevelopment program at'DEED. We support a 23 competitive program with both bonding and general fund appropriations. Additionally, as 82 1 part of a comprehensive approach to'land recycling needs, the Legislature should consider 2 state income tax credits and other tax incentives for local historic preservation efforts. The 3 Legislature should alsoTevive the "This Old House" law, and consider enacting similar 4 authority that would provide a tax deferral on improvements to commercial bUildings, 5 including those located in designated rehabilitation or historic preservation districtso 6 Finally, the Legislature should continue its support and increase funding levels for state 7 and regional programs to assist in contamination cleanup and brownfields remediation 8 efforts. 9 10 LE-23. Property Tax Abatement Authority (10) 11 Issue: In an effort to increase the number of development tools available, the 1997 Legislature 12 authorized local units of government to grant property tax abatements. Although rIP continues 13 to be the primary financ;ingmechanism for local development projects, tax abatements provide a 14 good addition to a needed list of economic development tools. In orderto provide maximum 15 benefits, tax abatements should be less restrictive in ternlsoffundingcaps and financing terms. 16 Property tax abatements should not be considered a replacement for ta.x increment financing. 17 18 Response: TIF is still the primary, viable development tool available for cities. Abatement 19 authority should continue to be available, but not offered as a rationale to eliminate TIF. 20 Additionally, the Legislature should develop a state fund to facilitate state participation in 21 abatement projects. Finally, the funding. caps and duration limits should be eliminated. 22 83 1 LE-24. OSA Response Timelilles (JO) 2 Issue: The Office of the State Auditor (OSA) is responsible for TIP oversight As part of its 3 review of TIP districts, the OSA identifies alleged violations of the TIP laws and issues - .. . . 4 noncompliance notices to TIP authorities. After responding to these noncompliance notices 5 within the required 60-day period, authorities often do not receive timely responses on the matter 6 from the OSA. Government agencies typically have response-time deadlines. Additionally, TIF 7 authorities are often unclear about the final disposition of the matter upon receipt of a final 8 noncompliance notice. 9 10 Response: In the event that the OSA determines to issue a final non-compliance notice to a 11 TIF authority, the Legislature should require the OSA to issue the notice within 60 days of 12 receiving the authority's response. Any final noncompliance notice should contain the 13 OSA's final position on the matter, the date upon which it forwarded the matter to the 14 county attorney, and the next steps that are required to be taken according to state law. 15 Upon expiration of the 60-day period, the authority should be deemed to be in c.ompliance 16 with the TIF laws if no.final noncompliance notice is received. 17 18 LE-25. OSA Time Limitations (JO) 19 Issue: The Office of the State Auditor (OSA) has the authority to issue noncomplii:mce notices 20 for every existing TIP district in the state for alleged violations of the rIP laws. This authority I 21 extends retroactively to the inception of the district Accordingly, TJF,authorities can receive , ' , ' I 22 noncompliance notices for alleged violations that occurred 20 or more years ago. Often, staff and 23 record-keeping procedures have changed, and TIP authorities find it difficult to reconstruct the 84 1 past in order to identify and remedy these situations. Similarly, the OSA claims the authority, 2 based on the state's records retention schedule, to audit TIFdistricts for up to 10 years after 3 decertification, which requires cities to expend staff resources to maintain files and a working 4 knowledge of old districts for an unreasonable period of time. 5 6 Response: A reasonable timeframe within which alleged violations are identified should be 7 established. The Legislature should reasonably restrict the OSA's ability to issue 8 noncompliance notices to the six-year period prior to the notice's issuance date. The 9 Legislature should also require the OSA to conduct any audits on decertified districts 10 within one year of decertification. 11 12 LE-26. Adequate Funding for Transportation (AP) 13 Issue: Cun-ent funding for roads and transit systems across all government levels in the state is 14 inadequate. Mim1esota's transportation system is failing to meet the capacity needs necessary to 15 sustain population growth and promote economic development. 16 17 The inability of the state and 10cal units of government to adequately fund transportation has 18 created significant challenges for both the public and private sectors in Minnesota. For example, 19 industries that depend upon being able to transport heavy loads by truck have increasingly 20 expressed frustration at the weight limits imposed by road authorities as a result of under-huilt 21 roads. This problem has caused friction between businesses and road authorities. The restrictions 22 are necessary to avoid severe road damage; however, weight limits result in steep increases in the 23 cost of doing business. 85 1 2 The League recognizes that all Minnesota communities benefit from a sound and adequately 3 funded transportation system that offers diverse modes of travel. 4 5 Response: More resources must be dedicated to the state's transportation system. The 6 League supports: 7 .' The constitutional amcndment proposed by the 2005 Legislature that will be presented 8 on thc 200(i general election ballot. If passed, the amcndment will phase in 9 Constitutional dedication of 100% of the existing motor vehicle sales tax (MVST) to 10 fund both highway and transit projects. \ 11 . Equitable distribution of the MVST distribution of 60 percent for roads and 40 percent 12 for transit under state statute. 13 . An increase in the gas tax. 14 . Constitutional dedication of replacement funding for vehicle registration taxes (known 15 as tab fees) to the highway user tax distribution fund. 16 . Local funding options, such as special taJffi1g explicit authority to impose street utility 17 fees, that would allow local units of government cities to raise the dollars necessary to 18 adequately fund roads and transit. 19 . Clarification of the authority for cities to impose a wheelage tax under Minn. Stat. ." ~ .." 20 426.05. The statute should include a workable collection system. 21 . Special funding for cities burdened by excessive cost participation responsibilities 22 imposed by improvement projects on the state's principal arterial system and on the 23 county state aid hhzhway (CSAH) system, and for transportation components of 86 1 economic development andredevelopmellt projects of regional significance. Cities 2 under 5,000 population should be eligible for this funding. 3 . Full fundinl! for all components of state hi2'hwav proiects. inc~uding related stormwater 4 ~ana2'ement svstems, through state sources. 5 . A distribution formula for state transportation bonds that provides a portion of bond 6 dollars to local units of government for transportation purposes. 7 . Legislation that would prohibit funding of non-transportation programs from the 8 highway user tax distribution fund or other funds dedicated to transportation. 9 . Funding to build roads to standards that can accommodate the year-round transport of 10 heavy loads. 11 12 LE~27. Turnbacks of County and State Roads (AF) 13 Issue: As road funding becomes increasingly inadequate, more roads are being "turned back" to 14 cities from counties and the state. 15 16 Response: Turnbacks should not occur without direct funding or ~ransfer of a funding 17 source. A process of negotiation and mediation should govern the timing, funding, and 18 condition of turned-back roads. City taxpayers should, receive the same treatment as 19 township taxpayers. The requirement for a public hearing, standards about thE:' conditions 20 of turnbacks, and temporary maintenance flmding should also apply to county turnbacks 21 to cities. At a minimum, roads that are proposed to be turned back to a city government 22 should be brought up to the standards of the receiving government, or that city should be 87 1 compensated with a direct payment. Direct funding should be provided for smaller cities 2 that-are not provided with turnback financing through the municipal state aid system. 3 4 LE-28. MnDOT Rights-of-Way Maintenance (AF) 5 Issue: Maintenance of propelty, including government property and facilities, is important to 6 public safety and to the image of Minnesota cities. Cities are acutely aware of the responsibility 7 they have for enforcing property maintenance codes pertaining to grass mowing, noxious weed 8 abatement, the placement of trash in yards and fence maintenance. 9 10 The State of Minnesota has manYlTules of highways running through Minnesota cities. In recent 11 years the Minnesota Department of Tnmsportation (MnDOT) has cut'a substantial percentage of 12 its rights-of-way management staff., The cuts have resulted in reduced maintenance along some 13 cOlTidors and on parcels acquired by MnDOT for transportation purposes. Specifically, MnDOT 14 has reduced the frequency of mowing, litter collection, noxious weed abatement and repair of 15 fences and guard rails. This maintenance reduction has created public safety concerns and has ,., ',,-' " -""'-' ,-' . .'. 16 undermined efforts to keep eoriidors attractive. 17 18 Response: The League of Minnesota Cities requests that MnDOT, be required to maintain 19, state rights-of-way and parcels acquired by MnDOT for transportation purposes located 20 within city limits in a manner consistent with local ordinances governing the upkeep of 21 private property when requested by the city. Alternatively, MnDOT should reimburse 22 Minnesota cities for the labor, supplies and equipment necessary to maintain state rights- 88 1 of-way to meet city standards and/or minimize public safety hazards. The Legislature must 2 provide MnDOT with adequate funds to maintain state rights-of-way. 3 4 LE-29. Road Funding for Cities Under 5,000 (AF) 5 Issue: Cities under 5,000 population do not receive any nonproperty tax funds for their collector i 6 and arterial streets. Citing this fact, the 2005 Legislature did appropri3;te $4 million in additional t 7 local government aid (LGA) to be distributed to cities under 5,000 population. However, this 8 increase amounts to a fraction of what cities overS,OOO population receive in municipal state aid 9 (MSA) from the Highway User Tax Distribution Fund (HUDTF). 10 11 Response: Cities under 5,000 population that are not eligible for MSA should be able to use 12 county municipal accounts and the 5 percent account of the HUTDF. 13 14 Uses of county municipal accounts should be statutorily modified so counties can dedicate 15 these funds for local arterials and collector streets within cities under 5,000 population. In 16 addition, the 5 percent set-aside account in the highway user distribution fund should be 17 used to meet this funding gap. 18 19 LE-30. Grant Anticipation Bond Authority (AF/JO) , I 20 Issue: Grant Anticipation Revenue Vehic1e(GARVEE) bonds are bonds based on future federal 21 transportation funding. In states that have enacted legislation enabling local govemments to 22 issue GARVEE debt, the bonds have been used to advance funded transportation projects at the 23 locallevel to avoid future inflationary costs and provide additional project scheduling flexibility. 89 1 2 Response: The League of Minnesota Cities supports legislation that would enable local 3 governments in Minnesota to use GARVEE bonds as a financing tool to accelerate the 4 development and construction of funded projects that are already included in MNDOT 5 Transportation Improvement Plans to provide project scheduling flexibility and avoid 6 future inflationary costs. 7 8 LE-31. Railroad-Related Projects (AP) 9 Issue: Cities are being presented with far-reaching and long-term effects when railroad 10 expansion and related projects enter their communities, Along with the concerns related to , 11 safety, environmental effects, and noise impacts on the communities, several issues have greater 12 reaclling, effects: 13 . The cost-share ratio related to roadway crossing improvements is ~orne by the public sector I 14 to a substantial degree. Some estimates are 80 percent public to 20 percent private funding. 15 . The financial burden is faced by the public sector to deal with mitigation impro':ements, a 16 cost that the Surface Transportation Board (STB) is not requiringthe private sector to pay. 17 . The issues associated with the length of trains moving through communities. 18 . Liability associated with whistle-blowing ordinances. 19 . Pre-emption of local authority to regulate railroad activities. 20 21 Response: The private sector must be required to pay a greater share of the improvements 22 that benefit its industry. The public sector should not be expected to underwrite the costs of 23 improvements sought by the private sector. The state and federal government must 90 1 participate in adequately funding mitigation of the negative impact of railroads on local 2 government and its citizens. The federal government must exercise greater oversight of the 3 STB to ensure fair and equitable solutions are reached when dealing with cities in 4 Minnesota 5 6 LE-32. Statewide Aviation Planning (AP) 7 Issue: Minneapolis International Airport (MSP) serves as an important gateway to the region, the 8 nation and global markets. It serves as the primary access point to our national airport system. At 9 some point, the current airport even with all the planned improvements will reach its capacity. 10 The state needs to address a long term strategy to make better use of other airport facilities, 11 existing resources, reduce environmental impacts, and achieve sound and sustainable economic 12 growth throughout the state. 13 14 Aviation planning is a multi -layered effort with different levels of responsibilities. Currently, the 15 State Airports System Plan is put together by MnDOT with individual pieces developed by the 16 FAA, Met Council and Metropolitan Airports Commission. Aviation planning could be 17 improved by a more unified statewide effort and coordination of the various aviation strategies 18 through creation of an oversight body. 19 20 Response: The state needs a higher degree of integration of agenCies (FAA, MnDOT, MC, 21 and MAC) and communities related to aviation planning. The League supports the 22 development of a statewide airport advisory board, which could proyide input, review and 91 , I 1 make recommendations to assist in development of a comprehensive statewide State 2 Airports System Plan. 3 4 The state needs to look at how we can enhance our airports to become economic 5 development centers providing access to domestic and global marketplaces. This can be an 6 opportunity that enables existing businesses to remain and grow, attract new businesses, 7 increase employment, and lower product and service costs for the benefit of the region. " I 92 1 IMPROVING FISCAL FUTURES 2 FF-l. State-Local Fiscal Relations (GC/JO) 3 Issue: Since the 1970s, services provided by Minnesota cities have been largely funded through 4 a cornbination,of property taxes, state aids, and state property tax relief programs. This system of 5 municipal fmance has evolved to ensure that municipal services can be funded without excessive 6 local tax burdens. 7 8 f.1though the 2001 2005 state budget deficit Vias addressed by the 2003 Legislature, future state 9 budget forecasts could re'/eal a further short term state deficit. In recent years, the state-local 10 ,partnership has eroded under the stress of state budg:etdeficits and an emerging belief among 11 leg:islators that cities should be more financially independent. If this trend continues, further 12 Further reductions in state aid to cities will create fiscal problems for many communities already 13 struggling with the effects of the 2003 aid cuts recent aid reductions and the shift away from an 14 interdependent state-local fiscal policy. 15 16 Response: The League sUPl>orts a strong state-local fiscal partnership. The state-local fiscal 17 system, and any future modifications should meef be consistent with the following gaals 18 principles: 19 . Accountabilitv. Cities believe that a viable partnershin with the state reQuires cities and 20 the state to communicate effectivelv with each other and with the public about their 21 roles and responsibilities. Cities and the state must also exercise sound financial 22 stewardship. including maximizing efficiencies in service delivery and other means of 23 cost containment whenever possible. 93 1 2 . Certain11/. Cities need to have more certaintv and nredictabilitv in all of their available 3 revenue sources. including the propertv tax and the amount of funding thev receive 4 from local government aid and similar programs. The current practice of almost 5 annual adiustments to LGA and similar programs and the imposition of levv limits do 6 not allow for prudent financial planninl! and decisions. 7 8 . AdeQuacv-The revenue sources available to cities and the state must raise adeauate . --.-, - - 9 funds to meet ci11/ needs. to fund mandates. and to maintain 1\1innesoia's lon!!-term 10 competitiveness. '11 12 . Flexibilitv-As cities become increasinglv diverse in their characteristics. a "one-size-fits- 13 aU" svstem that limits all cities to the propertv tax as the maior. non.state aid revenue 14 source is increasinglv unworkable. Some cities have sufficient proper11/tax base to 15 sustain an adeauate service level. but manv do not. Cities should have greater access to 16 other tax and revenue sources than currentlv permitted. 17 18 . Eauitv-AlI citizens should receive adeauate levels of municipal services at relatively 19 similar levels of taxation. This means that the state should provide financial assistance 20 to cities that have high needs. low fiscal capacitv. or both. The state should also provide 21 fmancial assistance to compensate cities and their taXllavers for overburden created bv 22 non-taxuavin1! users of citv services and to reduce tax burden disparities among 23 communities and between cities and townships. 94 '. 1 2 . Reduce tax burden disparities among c9mmunitics and between cities and adjacent 3 townships. 4 . Compensate cities and their taxpayers fer overburden and tax exempt property. 5 4l Compensate for state imposed mandates. 6 . Provide sufficicnt funding te address these gaals. 7 . Rcspect the dcciskm making authority of local officials. 8 . Not cut the Local Covernment Aid and market value homestead credit reimbursement --, 9 programs to balance the state budget or to increase funding for K 12 education or any 10 other purpose. 11 12 FF-2. State Budget Stability (GC/JO) 13 Issue: Since 2002, the Legislature has annually struggled to solve a series of projected budget 14 deficits only to find that their actions were not sufficient to permanently balance the state budget. 15 Past efforts to solve the state deficit have largely focused on expenditure reductions, shifting of 16 costs to other governments, the use of one-time reserves and fee and fine increases. Although 17 recent state bud!!et forecasts have improved, the possibility exists that the state could again slip 18 into deficit unless the state ~mplements corrective actions. 19 20 Response: To address future state budget deficits, the state Legislature: 21 . Must consider all options including revenue increases, with a particular focus on 22 changes that increase state revenues and improve the stability of the state's revenue 23 stream. 95 1 . Must not further reduce aid to cities. 2 . Must consider the aggregate impact of recent budget cuts in order to enact a balanced 3 response for ta~'Payers~ 4 e Must reinstate estimates of inflationary increases to expenditure estimates. 5 . Should build a five percent budget reserve. 6 7 FF-3. Price of Government (OC/JO) 8 [The committee recoml1'lended deleting this policy as over the past several years the P. O. G. - ... -"" 9 report has become less and lessofafocalpoint to ctiticize cities.] 10 Issue: The price of government legislation enacted in 1994 '.vas intended to measure the overall 11 effect of state and locul taxation over a long period of time. The targets measure government 12 revenues as a percent of personul income. Unfortunately, the targets have been misinterpreted 13 and used unfairly to criticize citytax and budget decisions. 14 15 RCSp81'lSe: The price of government statutes, as they apply to local governments, sheuld be 16 repealed. If the price of government law is to continue to be applied to local governments, 17 price of government calculations shawd be based on the sum of levy and state aid, not just 18 lc'l)', and based on long term trends, not single year events. 19 20 FF -4. Funding LGA (GC/JO) 21 Issue: LGAis an important component in the state's property tax,relief system. In 2001, the 22 Legislature enacted significant changes to the state's property tax relief programs, which 23 included an increase in LGA funding, state takeover of general education funding, a. state 96 1 takeoverof transit funding, and an elimination of HACA for cities. The Legislature's goal for 2 these changes was to provide relatively balanced property tax relief to taxpayers. 3 4 Prior to the 2003 legislative session, the state's general fund faced a 15 percent budget deficit. 5 During the 2003 legislative session, the Legislature balanced the state's budget deficit, in part, by 6 permanently reducing Local Government Aid (LGA) by $150 million, eliminating the 7 inflationary increase in LGA funding and temporarily redu.cing funding for the market value 8 homestead credit reimbursement by $20 million. At the same'time, funding for the general _... 9 ""education takeover and the transittakeover were not cut. The cuts in city funding were coupled 10 with a one""year extension of levy limits that prohibited larger cities from recovering these lost 11 revenues through the property tax. 12 13 In 2005, the Legislature restored $48 million in LGA funding: Even with this restoration, WA 14 funding remains nearly 17 percent below the 2003 funding level. 15 16 Response: The League supports further restoration of the 2003 LGA cuts in an amount 17 necessary to.fully fund the newLGA formula and to help restore the balance achieved by 18 the 2001 tax reforms. The annual inflationary increase to LGA should be reinstated until 19 the program is fully funded. 20 97 1 FF-5.LocaIGovernment Aid Reform (Ge/JO) 2 Issue: The 2003 Legislature adopted a new LGA formula definition of need for cities over 2,500 3 population, largely based on recommendations by the governor. The need formula for smaller 4 cities was updated to reflect current city conditions. 5 6 The 2003 Legislature also changed how the program measures a city's ability to payfor its needs 7 by including taconite aids in the formula. This provision, which was not part of the governor's 8 recommendation to the Legislature, was modified in 2005 to exclude taconite aids for cities that - -. 9 are host to taconite mines or prodhction facilities. The Legislature and administration also . 10 considered adding other factors to the ability-to-pay measure, including local sales tax revenues, 11 tax increment financing tax capacity, fees, and service charges. 12 13 The current LGA formula caps increases in LGA changes at 10 percent of each city's previous 14 year levy and caps decreases at 10 percent of previous year levy for cities over 2,500 population 15 or 5 percent of certified 2003 aid for cities under 2,500 population. These caps do not 16 automatically adjust for changes in the program's appropriation level, which significantly altered 17 the distribution of LGA for 2006; Because the new formula is more volatile than the old, the caps 18 allow for very large swings in LGA from one year to the next, especially for larger cities. 19 20 In 2005, the Legislature also adopted a technical change to the LGA formula that corrected a 21 drafting error from the 2003 legislative session. The League and its members supported this 22 . correction even though some cities would have experienced significant, unanticipated LGA 98 1 restoration in the absence of this correction. Cities that gave up this unanticipated LGA are the 2 same cities that are still facing MVHC cuts. 3 4 Response: The League supports: .5 - Returning to the adjusted net tax capacity measure of ability-to-pay by eliminating the 6 taconite aid offset. The League opposes the inclusion of any additional factors in the 7 LGA formula's measurement of ability to pay. Including these measures will reward Q some cities and punish others based on past and future fmancial decisions, which runs 'J . ...._-. 9 counter to past legislative intent to have the LGA distribution unaffected by local 10 financial decisions. 11 . Modifying the LGA formula taps to automatically adjust for changes in the overall 12 LGA appropriation. 13 . Modifving the LGA formula to minimize volatilitv bv adjusting the caps. usiD1! multi- 14 year averages of formula factors. certifvinll the aid earlier in the vear. or other options. 15 . Analyzing the LGA formula to assure that the need and capacity measures adequately 16 consider the unique needs of rapidly-growing cities. 17 . The following formula changes providedLGA is increased in an amount sufficient to 18 offs~t LGA losses to other cities that occur due to these formula changes: ~- 19 1. Adjust the city need factor for inflation that occurred from 2000 through 2003. 20 2. Use current population estimates for regional center aid base. 21 99 1 FF-6. State Administrative Deductions from State Aid (GC/JO) 2 Issue: State administrative costs are deducted from the LGA appropriation, which reduces the 3 property tax relief provided by LGA and creates hidden appropriations for state agencies. 4 5 Response: All appropriations from LGA resources to fund state operations should be 6 repealed. 7 8 FF-7. State Charges for Administrative Services (GC/JO) . _. .. 9 Issue: Currently, some state agencies have wide discretion in setting the fees for special services 10 they provide to local governments. For example, the Department of Revenue recently increased 11 the fee for administering local sales taxes by 80 percent in the middle ofa budget year with less 12 than six weeks notice. The increase had no apparent relationship to the cost of providing the 13 servIce. 14 15 Response: State agencies should be required to demonstrate the need for service fees or for 16 increases in existing servic~ fees. Agencies should give adequate notice of increases to allow 17 local governments to budget for the increases. State agencies should set administrative 18 service fees as close as possible to the marginal cost of providing the service. Local 19 government should be given the option to self-administer or contract with the private 20 sector for the service if the state cannot provide the service at a reasonable cost. 21 100 1 FF-8. Reporting Requirements (GC/JO) 2 Issue: Budget and [mancial reporting requirements imposed on cities by the state often result in 3 duplication and (j.dditional costs. In 2005, the Legislature mandated cities report to the 4 Department of Revenue on all fees they collect. Cities will have to include any fee increases, 5 what the revenues are, and how they are expended. Furthermore, cities will be required to 6 provide. this data going back for the last four fiscal years. 7 8 Response: Requirements for reporting and advertising financial and budget information __0" . __"h - - 9 should be carefully weighed to balance the validity of the state's need for additional 10 information with the costs and burdens of compiling and submitting this information. In 11 addition,'all state agencies shoUld be aware of the information already required by others 12 to avoid duplication of reporting requirements. 13 14 FF-9. Limited Market Value (GC/JO) 15 Issue: The 2001 Legislature enacted a phase-out of the state's limited market value (LMV) 16 system. Under the LMV system, homeowners and cabin owners who experience rapid escalation 17 in their property's value, effectively have a temporary exemption of taxes on a portion of that 18 growth. This exemption has grown rapidly over the past several years and now shifts substantial 19 property tax burdens to other types of property. 20 21 In 2005, the Legislature delayed the phase-out by extending the program for two additional 22 years. A rapid phase-out of the program could dramatically shift tax burdens back to homes and 23 cabins. 101 . 1 2 Response: The LMV program should be continued for homesteaded property. The state 3 should further buffer, property tax increases by increasing the circuit breaker and 4 targeting programs. 5 6 FF-IO. Restructuring the Market Value Homestead Credit (GC/JO) 7 Issue: As originally established, the market value homestead credit provides tax relief to 8 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 even 11 eliminate the reimbursement to lOJlocal 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 17 formula parameters should be adjusted in the future to match the resources available for 18 the program. 19 ' 20 FF-ll. Land Tax onCommerdallIndustriaI Property (OCllO) 21 [The committee is "recomntendingdeletion of this position as this proposal has received little 22 attention over the past two years, and it appears any support for the proposal111ay not 23 reemerge.) 102 . 1 Issue: Proposals to transition the state property tax on commercial/industrial (Cm property to a 2 tax based solely on land '/alue Tl/ould increase the cost of holding underutilized land, \.'lhich can 3 load to more efficient use of land by encouraging redeT/clopmcnt' of 'lacant or underused C/l 4 parcels. The proposal has many potential problem.s, hO\vever, including: 5 _ Indiscriminately increasing taxes on both underutilized CfI property and desirable business:)s 6 #rat require large amounts of land; 7 . Conflicting with local zoning such as parking, height, and storm watcr mitigation 8 requirements; nu - -. .9 .. Making it more di.fficultto asseillble parcels for largc redevelopment projects; and 10 . Making it morc difficult for border cities to attract and retain land intensiT,'e businesses. 11 ~~ 12 Response: The League opposes the transition of the stat-e property tax on CIl properties to 13 u tux based on land value. 14 15 FF-12. Sales Tax on Local Government Purchases (GC/JO) 16 Issue: When the state was experiencing a budget shortfall in 1992,'the Legislature repealed the 17 sales tax exemption for local government purchases: Local governments now pay state sales tax 18 on purchases like road maintenance supplies and equipment, wastewater treatment facilities, and 19 some public safety equipment. This tax currently costs local property taxpayers and ratepayers 20 more than $100 million annually. In addition, proposals to extend the sales tax to services would 21 have the effect of increasing local government costs and property taxes. Because no additional 22 state aids were added to offset the additional cost, this repeal has effectively increased 10cal 23 property taxes to fmance state operations. In recent sessions. there have been city specific 103 1 requests for exemptions that have been !!ranted by the legislature including a local wastewater 2 treatment plant exemption arid the legislature has granted several large private exemptions 3 including: an exemption for the new Twins baseball stadiuminMinneaDolis. 4 5 Response: The state should reinstate the sales tax exemption for ,all local government 6 purchases. The exemption must not be coupled with cuts in LGA, or other state-shared 7 revenues. 8 ... . 9, "".FF-13. "Sales ,Tax on Capital Equipment (Oe/lO) 10 Issue: Purchases of capital equipment used in the production of taxable goods are exempt from 11 Minnesota sales tax. When a contractor installs the equipment, however, cities and other entities 12 must pay the tax and follow an elaborate process to receive a refund. This process includes a 13 requirement for an up-front written agreement appointing the contractor as the purchasing agent. 14 Many cities and other entities fail to follow the process properly or are unaware of the process 15 until after the project has been initiated, resulting in a forfeiture of the tax exemption. 16 17 Response: The League supports legislation that would allow the exempt entity to be eligible 18 for the refund even if the application is submitted after the project has been initiated. 19 20 FF-14. Taxation of l\funicipal Bond Interest (GC/JO) 21 [The committee is recomm,ending deletion of this policy as the last legislative discussion on this 22 topic occurred in the early 1990's.] 104 1 Issue: The state law that grants a tax C1wmption for municipal bond interest lowers borrowing 2 costs for cities and reduces property tax lor:ies. 3 4 Response: The state should maintain the tax exemption for nmnicipal bond interest income. 5 6 FF-15. Taxation of Electronic Commerce (GC/JO), 7 Issue: Sales over the Internet and tbroughother electronic means are projected to increase 8 exponentially over the next several years. Electronic transactions pose significant tax policy -.~--. - _... - __. 9 challenges because of the difficulty of assigning a location to electronic sales and because many 10 Internet goods are not tangible property. 11 12 Response: Federal tax policy should not place main street businesses at a competitive 13 disadvantage to electronic retailers, must not jeopardize repayment of bonds backed by state and 14 local sales tax revenues, and should ensure stability in state and local revenues. To address the 15 challenges created by the growth of electronic commerce, the League supports the multi-state 16 effort to develop a streamlined sales tax system. 17 18 FF-16. Taxation of Electric Generation Personal Property (GC/JO) 19 Issue: Investor-owned utilities (lOUs) have a longstanding relationship with Minnesota cities. 20 IOUs site baseload power plants in host communities, and in exchange pay personal property tax 21 on attached generation machinery to the cities, counties and school districts hosting the plants. 22 These plants bring jobs to our communities, but they also create nuisances such as air pollution, 23 nuclear waste, noise, vibration, and coal train traffic. They also create security risks and take up 105 1 land that could be used for other, less disruptive commercial and industrial development. Cities 2 believe that personal property taxes paid by IOUs are a fair compensation for the environmental 3 and economic costs of hostingbaseload-power plants. 4 5 IOUs argue that personal property tax relief is important to pass along to their shareholders and 6 ratepayers. However, only a few IOU shareholders and ratepayers actually live in the 7 communities hosting baseload power plants. Further, almost all new power plants receive 8 personal property tax exemptions from the Legislature, while host communities with existing, 9 non-exempt baseload plants will continue to have them for decades to come. 10 11 Response: ' Personal property taxes on attached electric generation machinery are a fair 12 way to spread the environmental and economic costs of baseload power plants among all 13 IOU shareholders and ratepayers. The League supports the continuation of personal 14 property taxes paid by IOUs to host communities. Where an IOU is seeking a personal 15 property tax exemption for a new power plant, the League supports legislation giving the 16 host city the right to negotiate a reasonable siting fee with the IOU proposing to site the 17 plant. 18 19 FF~17. State Restrictions on Local Budgets (GC/JO) 20 Issue: Levy limits, which were last imposed by the Legislature in 2003 as a transition tool, have 21 expired beginning with taxes payable in 2005. In the past, levy limits replaced local 22 accountability with a state judgment about the appropriate level of local taxation and local 23 services. Recent proposals to impose restrictions on local budgets, including the taxpayer 100 1 satisfaction survey, the reverse referendum, the property tax freeze and a Colorado-like 2 taxpayers' bill of rights would also erode the decision-making authority of elected city councils. 3 Additionally, state restrictions on local budgets can have a negative effect on a city's bond rating 4 due to the restriction on revenue flexibility. 5 6 Response: City councils are elected. to make decisions about local budgets and meeting '7 community needs. It is inappropriate fortheLegislature to undermine local decision.. 8 making and accountability thr~ugh the continued impositionoflevy limits or proposals -, - .... 9 such as the ::ta}"1>~yel"s'. bill of rights::'. The League, supports the principle of representative 10 democracy that allows city councils to formulate local budgets. The League opposes state 11 restrictions on local budgets. 12 13 FF-18. Truth-in-Taxation Process (GC/JO) 14 Issue: Cities must set a preliminary levy by September 15, which, by law, becomes the 15 maximum that cities can levy the following year. In recent years, cities have not received ..' . 0" . 16 complete tax base and aid information in a timely manner. As a result,citiesoften either set a 17 preliminary levy that is artificially high or they are unable to budget for unforeseen needs that 18 arise after September 15. 19 20 Response: The League supports changes to the Truth-in- Taxation process to provide more 21 meaningful information to citizens, including the exemptions enacted in 2001 for cities that 22 propose levy increases less than the implicit price deflators. This calculation, however, 23 must account for the impact of state aid cuts on proposed levies by factoring out levy 107 1 increases to cover state aid cuts. Cities should have the authority to increase the final levy 2 from the preliminary levy to meet unforeseen and uncontrollable needs. 3 4 FF-19. City Fiscal Year (GC/JO) 5 [The c01?unittee is rec011'l7nending deletion of this policy as the Legislature.has not discussed 6 modifications to the fiscal year structure since the early 90's. The policy is no longer needed. ] 7 Issue: The fiscal year for cities and counties currqntly corresponds to the property tax_cycle. 8 -- ,- - - -- 9 Rcsptmse: The state shauld.maintain current law and not change the city fiscal year to 10 coincide with the state fiscal year. 11 12 FF-20. City Fund Balances (GC/JO) 13 Issue: As a component of a prudent financial management plan, cities maintain a fund balance 14 comprisod composed of cash flow funds, savings for projects, rainy day reserves to maintain 15 high level bond ratings, and to minimize borrowing costs. Although the size of a city's fund 16 balance should be determined through local financial needs and local preferences, some cities are 17 being criticized for maintaining "excessive" reserves. 18 19 The OSA report measures city fund balances on Dec. 31, shortly after the city receives its largest 20 sources of revenue from the property tax and state aid distributions. To measure at this time, 21 however, yields a picture of a high fund balance even though the city will spend down these 22 funds to cash flow the next five to six months of its operations. 23 108 1 Response: The state should respect local decisions on adequacy of local fund balances. 2 3 FF-21. City Revenue Diversific~tion (GC/JO) 4 Issue: Under current state law, the property tax is the only generally accessible form of local tax 5 revenue for cities. Recent retrenchment in state aid programs willlike1y increase city reliance on 6 property taxes in the future. Allowing cities to diversify their revenue stream would prevent 7 rapid 1i.ses in property taxes. 8 -... . ~..'. - - 9 Response: Cities should be able to diversify their sources of revenues. State law should be 10 modified to allow any city to impose a local option sales tax for public capital projects of 11 regional significance with the adoption of a supporting resolution by the city council and 12 approval of the voters at a general or special election without approval bv the state 13 legislature. In addition, cities should have general authority to create utilities, similar to the 14 storm sewer utility authority, in order to fund local services where benefit or usage of the 15 service can be measured. The Lea1!Ue opposes legislation that would reouire mandatory 16 revenue sharing of sales tax revenues with neighboring iurisdictions. 17 18 FF-22. City Franchise Authority (GC/JO) 19 Issue: Under MS Chapter 216Band MS Section 300.03, a city may require a public utility 20 furnishing gas or electric utility services or occupying streets, highways or other public property 21 within a municipality to obtain a franchise to operate within the community. In addition, cable 22 system operators are required to obtain a franchise under MS Chapter 238. 23 109 , 1 Under a franchise, the city may require the utility to pay a fee to the municipality to help offset 2 public maintenance costs for the public property and generate a return on a publicly held asset. 3 The fee is intended asa mechanism by which gas or electric utilities with facilities occupying the ' 4 public streets and highways compensate the city for the use of a valuable public asset and/or for 5 the increased maintenance and reconstruction costs associated with having facilities in the right- 6 of-way. 7 8 State law currentlyallow~ the franchise fee to be based upon gross operating revenues or gross -- . --- 9 earnings of the utility from its operations in the municipality. In this manner, all utility users 10 within the municipality contribute to the public costs associated with the utility operation. In the 11 absence of franchise fees, municipal costs resulting from utility operations are currently being 12 funded through the property tax, which is being paid for by property tax payers. 13 14 Response: Municipal authority to collect franchise fee revenues from utilities is an 15 important and equitable mechanism to offset the costs of maintaining public right-of-way 16 and to generate a return on a publicly held asset. Municipal franchise authority must be 17 preserved. 18 19 In addition, in situations where a local provider decides to sell their operations, the city 20 must have the right of first refusal to purchase the assets of the utility. 21 110 1 FF-23. Utility Valuation Rules (GC/JO) 2 Issue: The Minnesota Department of Revenue is reviewing its regulations for calculating the 3 taxable market value of el~ctric and natural gas utility property. This affects property taxes paid 4 by investor-owned utilities (IOUs) not only to the state, but also to local governments. 5 Provisions in the current regulations, such as depreciation limits and prescribed weights for the 6 ,cost and income approaches to value, helpto preserve the taxable value of this property over the 7 many decades it is in service. 8 ___.0. . -- 9 IOUs enjoy a guaranteed rate of return on their capital investments, but host cities experience the 10 costs of environmental damage, nuisance, and lost economic development as the result of this 11 property. IOU s argue that their property is overvalued and that depreciation limits should be 12 removed. However, sUQstan!ial changes to the utility property valuation rules could drastically 13 reduce the taxable market value that helps compensate host cities for hosting baseload electric 14 generation facilities. 15 16 Response: The League opposes ,changes to the utility property valuation rules that would 17 result ina significant decline in the taxable market value of utility property. In the event 18 new utility 'valuation rules produce such a decline, the Legislature shall step in to help keep 19 host cities financially whole as a way of compensating for the economic and environmental 20 costs of hosting baseload electric generation facilities. 21 111 1 FF-24. Payments for Services to Tax-Exempt Property (GC/JO) 2 Issue: Taxable property in many cities is being acquired by nonprofit and government entities. 3 Converting the property to tax-exempt status can lead to serious tax base erosion without any 4 corresponding reduction in the service needs created by the property. 5 6 Response: Cities ;jlmuld have the authority to collect payments from statutorily exempt 7 property owners to cover costs; of service similar to the authority orovided under the 8 special assessment law. as, cities have with special assessments. .--. ....... __u 9 10 FF-25. Impact Fees (GC/JO) 11 Issue: New development and the resulting growth create an increased demand for public 12 infrastructure and other publicfacilities. Severe constraints on local fiscal resources and dramatic 13 forecasts for population growth have prompted cities to reconsider ways to pay for the inevitable 14 costs associated with new development. 15 16 Traditional financing methoc:ls tend to subsidize new development at the expense of the existing 17 community, discourage sound land-use planning, place inefficientpressures on public facilities, 18 and allow under-utilization of existing infrastructure. Consequently, local communities are 19 exploring methods to ensure new development pays its fair share of the true costs of growth. 20 Given the existing authorization to impose fees on new development for water, sanitary and 21 storm sewer, and park purposes, it is reasonable to extend the concept to additional public 22 infrastructure and facilities improvement also necessitated by new development. 23 112 1 Response: The Legislature should authoriZe local units of government to impose impact 2 fees so new development pays its fair share of the off-site, as well as the on-site, costs of 3 public infrastructure and other public facilities needed to adequately.serve new 4 development. 5 6 FF-26. Equity in Library Funding (GC/JO) 7 Issue: Many corrmmnity librarie.s in Minnesota'are city-owned. Although located in an 8 individual commmiity, city libraries serve a much wider area. In some Minnesota counties, there - 'L 9 are wide disparities between city and rural tax burdens for library services. Furthermore, library 10 services have expanded over the years with the offering of videos and Internet access in many 11 locations, putting more demand on stretched library budgets. 12 13 Response: The League supports equity in availability of quality library services to city and 14 township residents as long as there is equity in local property tax levies for libraries among 15 participating jurisdictions. ll' cities where a library is located are responsible for 16 maintenance, upkeep and capital improvements to the library, those costs must be 17 considered part of the total equity requirement, not in addition to it. In order to continue to 18 provide the expanded services, cities should be relieved of state-mandated maintenance-of- 19 effort funding levels and given the authority to charge user fees for other services without 20 jeopardizing the state aid they do receive. Cities that provide library facilities where 21 library operations are associated with a regionallihrary system should he contractually 22 guaranteed a direct voice in the governance and funding decisions within the library 23 system. 113 1 2 FF~AA. Equitable Funding of Community Education Services (GC/JO) NEW 3 -Issue: Under Minn. Stat. 124D.20. school districts are authorized to levy for community 4 education pro !!rams that can include youth recreational activities. However. state statute limits 5 the total amount ofrevenue that can be raised by the school district to fund community education 6 programs and this limit has nJ)t been sufficiently increased in recent years. In many instances, 7 cities participate in the funding of these programs and with the statutory limit on the amount 8 school districts can 'levy. the increased cost of these programs is increasinglv falling on cities and - .. -- . _.. . 9 their property taxpayers. In areas where the school district is significantly larger than the city. the 10 burden of funding these programs is falling disproportionately on city taxpayers while the 11 pro !!rams benefit theentireschobl district. 12 13 Response: The League supports a statutory increase in the community education revenue 14 authorization for school districts. Increasing the amount of the community service revenue 15 available to school districts would provide a steady source of revenue. which would be 16 assessed against all properties in the school district. not just properties in the city. 114 1 HUMAN RESOURCES & DATA PRACTICES 2 Human Resources 3 HR-!. Personnel Mandates and Limits on Local Control (LKlAFILH) 4 Issue: Many state laws increase the cost of providing city services to residents by requiting 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 linut 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 tbe 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 (i.e. 16 allow local elected officials to determine employee compensation without imposing 17 artificial compensation limits). 18 . Provide funding that pays the full costs of any mandated employment-related 19 expenditures. 20 . Eliminate 'expensive and time-consuming duplicative legal protections and processes for 21 public employees. : 22 . Eliminate contradictory ,existing laws regarding public employment. 115 1 . Eliminate mandates for local government employers that are not imposed upon the 2 state as an employer. 3 . Use the collective bargaining process established by state law,:rather than legal 4 mandates, to determine benefits for employees covered by collective bargaining 5 agreements. 6 7 HR-2. Pay Equity (LK/AF/LH) , 8 Issue: State law requires all public jurisdictions suchas cities, counties and school districts to 9 ~liminate any sex-based wage inequities in compensation. These entities are required to file 10 reports with the state Department of Employee Relations (DOER) to ensure compliance with the 11 law. In the 2003 session, the Legislature adopted a two-year reporting moratorium and extended 12 the pay equity reporting cycle from three to five years beginning in 2005 in order to provide 13 some relief from this reporting mandate. However, the Legislature enacted a new law in 2005 14 that reverts to the previous three-year pay equity reporting cycle. 15 I 16 Response: The League supports the purpose behind the Local Government Pay Equity Act. 17 We also support efforts to minimize the reporting burden associated with this law, 18 including a longer reporting cycle and continued improvements to the electronic reporting 19 of pay equity data. 20 21 HR-3. Public Employment Labor Relations Act (PELRA) (LK! AF/LR) 22 Issue: The League supports the purpose of the Public Employment Labor Relations Act 23 (PELRA) to balance the rights and interests of public employees, public employers and the 116 1 general public. However, certain changes are necessary to assist public employers in 2 implementing this law. For example, current definitions of "public employee" are confusing and 3 difficult to manage. In addition, the arbitration process has produced decisions that are contrary 4 to the interests of the public, and the legal standard for overturning arbitration decisions is very 5 difficult to meet. 6 7 Response: Minn. Stat. 179A should be modified to: 8 . Change the definition of "public employee" under PELRA by removing the existing 14- 9 hour/67-day requirement and replaceit with a definition in which employees must w.9rk 10 more than an annual average of 20 hours per week. ' 11 . Exclude temporary or seasonal employees from the PELRA definition of public 12 employee in Minn. Stat. 179A. 13 . Allow public employers to bypass mandatory arbitration required under.PELRA and 14 directly access the district court system in situations where an employee is being 15 terminated for gross misconduct (sexual harassment, sexual abuse, theft, or a felony 16 conviction) that is related to the employee's position with the public employer. 17 18 HR-4. Essential Employees (LK! AF/LR) 19 Issue: Cities must balance the health, welfare, and safety of the public with the costs to 20 taxpayers. Essential employee status removes the light to strike but gives the right to mandatory 21 binding arbitration. This status can result in arbitration awards that exceed the city's budget or 22 conflict with the city's compensation policy. In recent years, a number of employee groups have 23 sought and often received essential status. ] 17 1 2 Response: The Legislature should carefully examine requests from interest groups seeking 3 essential employee status under Minn. Stat. 179A (PELRA). The League opposes legislation 4 that mandates arbitration that increases costs and removes local decision-making 5 authority. 6 7 HR-S. Re-elnployment Benefits (LK! AF/LH) 8 Issue: Cities employ many student workers and others in seasonal, parks and recreation-related 9 positions. In the past, sikh workers, generally have notfiled for unemployment benefits because 10 there has not been an expectation of continued employment. In recent years, cities have 11 experienced an increase inthe number of such workers applying for unemployment benefits. 12 This increases costs to cities and taxpayers in a way that may not have been originally intended. 13 14 Response: Public sector temporary or seasonal employees should 110t be eligible for re- 15 employment benefits. 16 " 17 HR-6. PensionBellefits (LKJ AF/LR) I 18 Issue: Pension benefit plans have years of service requirements and limitations and exclusions 19 that act to ensure that the fund's administrators have the ability to predict, contain, and control 20 costs. This protects the fund' s ability to pay future benefits to its participants. Legislative 21 exceptions to these exclusions and limitations can undernune this ability. Cities should have the 22 ability to weigh-in on these decisions through city council approval. 23 118 1 Response: The League opposes special legislation for individual employee pension benefit 2 increases, unless they are initiated,and approved by the city council of the impacted city. 3 4 HR-? Public Employees Retirement Association (PERA) (LK/AF/LH), 5 Issue: PERA identified a significant 10ng-tenll funding deficiency in its coordinated plan and the 6 police and fire pl,m that was the result of changing demographic patterns and plan experience. In 7 2001, the Legislature adopted modest employer and employee contribution rate increases and 8 plan modifications to address the coordinated plan deficiency. In 2005, the Legislature enacted 9 significant, phased-in contribution increases for the coordinated and police and fire plans that 10 generally share the burden between the employee and employer. However, the scheduled r I 11 coordinated plan contributions also include two additional years of cOlltribution increases for I 12 employers if the fund deficiency is not addressed by the first three years of contribution 13 increases. In order to moderatethese additional coordinated plan employer contribution 14 increases, benefits may need to be modified, especially where the plan ,differs greatly from that 15 of most other states by providing substantially higher benefits. 16 17 Response: The League supports requiring employees to share equally with cities in the cost 18 of these increases or providing state assistance to local governments to cover any additional 19 contribution burden that is placed on cities over and above the contribution increases 20 required by employees. Cities must be given sufficient notice of these increases so that they 21 may take them into account for budgeting purposes. 22 119 1 The League encourages the Legislature to consider the following plan modifications that 2 will help align PERA contributions and costs and reduce the need for additional 3 contribution increases: 4 ... The League believes the legislative intent of "in-line of duty" disability retirement 5 benefits for police officers and firefighters was to provide special protection for police 6 "officers and firefighters when they are performing the type of; duties that are uniquely 7 required for their jobs.The League supports the separation of injuries resulting from 8 "hazardous duties" from injuries resulting from "non-hazardous duties" for purposes 9 of police and fire disability retirement benefits. The League also supports CHanges that 10 would eliminatcPERAA disability benefits for police officers and firefightcrs who are 11 retiring at normal retirement age. 12 . The PERAeligibility guidelines must be modified to take into account temporary, 13 seasonal. unique part-time and student employment situations in cities, particularly in 14 recreational operations. The plan should be modified to use pro-rated service credit, 15 which would make PERA consistent with the other major Minnesota pension plans. 16 . The League opposes the expansion of the PERA corrections plan to include dispatchers 17 due to the substantial differences between the dispatchers and the other positions 18 covered by this plan. I 19 . The League supports the transfer of all school district employ~es out of the PERA 20 coordinated plan and into another fund that is more appropriate for school district 21 employees. 22 . The League supports eliminating or reducing the pension benefit known as 23 augmentation. The augmentation benefit is unique to J\iinnesola and was originally 120 : , 1 developed bcforc thc statc cnactcd combined scrvice laws for public pension plans. 2 Eliminating or reducing augmentation will reduce the need for additional contribution 3 increases and will climinatc or rcduce the incentivc for public employecs to leave public 4 service. 5 . The League supports an increase in the number of years reauired for vestillgin the 6 PERA Coordinated and PERA PolicelFire plans to help reduce the need for additional 7 employer and employee contribution increases. 8 9 HR 8. Social Security Contributions for Elected Officials (CG) 10 Issue: City officials elected' for the first time after July 1, 2002 are not eligible for the PER/\. 11 Coordinated Plun. They can participate in the Defined Contribution Plan (DCP), but if they 12 choose to do so, they cannot make contributions to social security. Social Security participation 13 is only available if they do not participate in the DCP. In order to make it possible for those 14 jurisdictions thut 'sish topro",ide social security contributions for their elected officials who also 15 choose the DCP, PERl\. must modify the State's agreement with the Social Security 16 Administration. This modification can either make the contributions mandatory across all 17 jurisdictions or allmy for decisions on an agency by agency basis. Under the city by city 18 arrangement, the city' s existing elected officials elected after June 30, 2002 '.",ho have joined 19 the DCP would each vote on whether they want to pc.y into Social Security. :\fter the effective 20 date for that j misdicti on, all nev/l)' elected officials of the city 'Nould be required to have Social 21 Security coverage. 22 121 ! , 1 Rcsp(mse: Thc LCilgllcSnpportschanges to the 218 agreement between the State and the 2 Social Security Administration that would allow for each city to make its own decision 3 about whether its elected officials can contributcto social security. 4 5 HR~9. R~tirement Work Incentives (LK) 6 Issue: Demographic expelts warn that as the Baby Boomers retire, employers will begin to 7 " experience a substantial labor shortage. In addition, retirees are living longer and are healthier 8 and able to work longer. Therefore, one solution to the coming labor shortage is to provide some - - 9 incentives for retirees to continue working after retirement or to postpone full retirement with a 10 "phased-in" approach. 11 12 Response: The League supports changes to Minnesota statutes (if actuarlally neutral for , 13 PERA pension plans) that would allow: 14 . A "phased-in" approach to retirement so that employees could reduce work hours in 15 the final years before retirement without harming their retirement or other benefits; 16 . Either an increase in the amount of money that retirees could earn with a PERA public, 17 employer before it affected their retirement benefit (indexed for inflation), or a limit on 18 the number of hours that retirees could work for a PERA public employer before it 19 affected their retirement benefit; 20 . A retiree to be re-employed by a public employer for a limited time period without 21 penalty, and that would allow, at the expiration of the time period, a retiree to 22 contribute toward PERA and earn a "new" pension with the public employer. 23 122 1 HR-IO. State Paid Police and Fire Medical Insurance (LK/AF/LH) 2 Issue: In 1998, proponents of a bill requiring public employers to continue health insurance 3 benefits for firefighters and peace officers injured in the line of duty testified that the benefit was 4 needed for extreme situations resulting from activities that make public safety work unique. The 5 bill became law (Minn. Stat. 299AA65) with a provision obligating the Department of PiibliC 6 Safety (DPS) to reimburse employers for the full amount of administering this benefit. 7 8 As a result of the broad nature of the language in Minn. Stat. 299A.465, many of the claims 9 approved under the statute have been for injuries sustained while engaging in non-hazarcious on- 10 the-job activities such as fitness training or office duties. The number of eligible claimants 11 quickly multiplied. In addition to the increasing number of claimants, rising health insurance 12 costs began to strain the fund. By 2002, the fund created to provide this benefit became 13 deficient. \ 14 ; 15 Instead of increasing the fund, the 2003 Legislature amended the law to pro-rate reimbursements 16 to cities based on the amount available and the numberof eligible applicants. The 20031(1v'l 17 change triggered a significant ,md unanticipated cost to cities. Even if the health insurance 18 benefit was discontinued entirely, the costs for existing recipients will substantially increase well 19 into the future due to the growing cost of health insurance. 20 21 The 2005 Legislature attempted to mitigate the impact of this law on employers by providing 22 additional reimbursement funds and creating a stakeholder panel to determine eligibility for 23 benefits under Minn. Stat. 299A.465. However, the Legislature preserved the language that 123 1 reimburses employers on a pro rata basis, and the law continues to exist without the definitions 2 necessary to narrow eligibility for the benefit and meet the intent of the law. 3 4 Response: The League supports the following legislative actions to address the funding 5 deficiency in this program: 6 . The state must fully fund programs that pay for health insurance for police and fire 7 employees injured or killed in the line of duty as originally required under Minn. Stat. 8 299A.465. 9 . The Legislature must change the criteria for health insurance benefits under Minn. 10 Stat. 299A.465 so that only those police officers and firefightel;"s who are engaged in 11 hazardous duties are eligible to receive the benefit. At a minimum, police officers and 12 firefighters ",ho are engaged in duties such as physical fitness training, routine office 13 work and non-hazardous classroom training should not qualify for this benefit if they 14 become disabled as a result of one of these duties. In addition, cumulative injuries that 15 occur over time in the job should not qualify a police officer or firefighter for this type 16 of benefit since these types of cumulative injuries are not unique to the dangers of police 17 officer and firefighter duties. 18 . The Legislature must clarify that the amount of an employer's contribution under 19 Minn. Stat. 299A.465 is no greater than that given to active employees in the same job 20 class. 21 . The Legislature must identify an appeals process for cities to access in the ~vent of 22 disagreements between the city and the employee on the benef~ts assigned under Minn. 23 Stat. 299A.465. The Legislature must also establish the minimum criteria used to 124 1 determine ability to work, and set a percentage threshold of disability for eligibility into 2 this program. At a minimum, the LegIslature must identify that a workers' 3 compensation determination as to whether the injury is work-related is necessary in 4 order to receive the benefits under Minn. Stat. 299 A.465. 5 . Employees who receive a police/fire disability retirement benefit and accept another job 6 . that offers them group health benefits should be required to pay for their group health 7 benefits with the city should they decide to continue them. The Legislature must amend 8 Minn. Stat. 299A.465 to reflect that employees are required to inform the city when 9 they become eligible for coverage under another group plan and that failure to do so is 10 grounds for termination from the benefits granted under Minn. Stat. 299A.465. The 11 statute must also be amended to discontinue the city's contribution when the employee 12 reaches normal retirement age (currently age 55 for police officers and firefighters). 13 . The panel created to evaluate claims made under Minn. Stat. 299 A.465 must create' 14 definitions and standards that clarify th~ law's intent and that will result in a more 15 moderate application of the law. 16 17 HR;.11. Health Care Insurance Programs (LKJAF/LH) 18 Issue: Citks, like other employers in the state, are struggling with the lising costs of health care 19 insurance for their employees. In addition, cities must cope with unfunded mandates imposed on 20 them by the Legislature such as the requirement to pool early retirees with active employees and 21 the requirement to barg-ain over changes in the "aggregate value" of benefits. even when the 22 city's contribution has riot changed. 23 ]25 1 Response: The League supports legislative efforts to control health insurance costs while 2 maintaining quality healtll care services. However, cities have differing local needs and 3 circumstances and must retain the flexibility to provide unique and creative solutions to the 4 rising costs of health care insurance for their employees. The League: 5 . Opposes legislative action that undermines local flexibility to manage rising health care 6 costs. 7 . Supports group programs designed to provide post-retirement health insurance 8 benefits or health insurance plan benefits for public employees if participation by cities 9 is strictly voluntary. 10 . Encourages the Legislature to carefully examine any new mandated insurance-related 11 benefit before imposing it upon city employers to make sure that it does not contribute 12 to the rising cost of providing health insurance. ! 13 . Supports changes to Minn. Stat. 471.6161, subd.5. that would Clarifv the intent of the 14 subdivision is to address changes in cost vs. changes in value. 15 For Example: 16 0 A change in provider networks does not constitute a change in the "aggregate value 17 of benefits." 18 0 A change in benefit levels reauired bv an incumbent insurance carrier does not 19 constitute a change in "aggregate val ue." 20 . Supports changes to Minn. Stat. 471.61 that would allow cities to pool all retirees (those 21 under or over age 65) separately from active employees to help cities avoid the liabilities 22 associated with the new Government Accounting Standards Board (GASB) 23 requirements on "implicit subsidv." 126 1 . Supports changes to Minnesota Statutes that would allow cities to invest these trusts in 2 a broad array of higher-yielding investments such as those permissible for pension 3 investments. 4 5 HR-12. Employee Recognition, Wellness and Safety Programs (LK) 6 Issue: Many employers use employee recognition, wellness and safety programs to help tetain 7 employees, control costs and increase productivity. Studies consistently show that employees 8 rank recognition as a key factor in employee satisfaction. Studies also show that wellness and 9 safety programs can help control costs in areas such as health insurance ai1d workers' 10 compensation as well as improving employee attendance. Like all employers, cities need the 11 flexibility to structure human resources policies and programs that attract and retain a qualified 12 workforce. While the League has consistently taken the position that cities currently have the 13 authority to implement such programs, the State Auditor's Office has taken the position that they 14 do not and has recommended that cities seek specific authority. 15 16 Response: In order to clarify that cities do have the legal authority to implement employee 17 recognition, weIlness and safety programs, the Legislature shouldamend!!xisiing statutes 18 (e.g., Minn. Stat.15A6) to give cities specific authority for such expenditures. 19 i 20 HR-13. Deferred Compensation Contributions (LKlAF/LR) I 21 Issue: Cunent law allows employer contributions to many pension funds sponsored by union 22 organizations. The law also allows contributions to one specific plan established under IRS 23 Code 457 - specifically, the Minnesota State Deferred Compensation Plan. However, many 127 1 cities offer a variety of deferred compensation plans, such as ICMA aI,1d Nationwide. In 2 addition, cities could save money by offering contributions to other types of IRS plans, such as 3 40l(a) plans, in lieu of salary increases. Currently, Minnesota statutes are in conflict with IRS 4 i-egulations that require ongoing contlibutions to supplemental pension programs (such as 401 (a) 5 plans). 6 7 Response: The League supports changes to Minn. Stat. 356.24 that would allow employer 8 contributions (up to the federal limits) to any deferred compensation or health care savings 9 program that meets the requirements of the Internal Revenue Code of 1954. In addition, 10 the League supports changes to Minn. Stat. 356.24 that would allow ongoing contributions 11 to supplemental pension programs in compliance with IRS regulations. 12 13 HR-14. Workers' Compensation (LK/AF/LR) 14 Issue: Changing market conditions, lower investment returns, and higher medical costs are 15 increasing '.'i'orkers' compensation costs. Rising medical costs are an ~ncreasingly serious 16 problem for all employers and insurers and now represent over half of all loss costs within the 17 workers' compensation system. Medical costs will be a major driver of future workers' 18 compensation premium increases. In addition, virtually every year legislators introduce proposals 19 to expand the heart, lung and infectious disease presumptions for public safety workers, or to 20 make the presumptions more conclusive and difficult to rebut. These types of benefit expansions 21 further increase municipal workers' compensation costs. 22 128 1 futhe last several years, the Workers' Compensation Advisory Council (WCAC) - a joint 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, including legislative changes needed 7 to stem the growth ofmedical costs in the workers' compensation system. 8 9 Response: Legislative action is necessary to address increasing workers' compensation 10 costs, particularly rising medical costs. The League supports use df the WCAC system to 11 consider proposals for changes to the worl{ers' compensation law,' and urges the WCAC to 12 approve medical cost containment reforms. 13 14 The League opposes expansion of workers' compensation benefits because of the potential 15 for dramatically increasing costs to cities. Specifically, the League opposes expansion of the 16 heart, lung and infectious disease presumptions as well as any expansion that would 17 include mental injuries that have no physical cause or manifestation. 18 19 HR-15. Breathalyzers (LK/AF/LR) 20 Issue: Currently, breathalyzer use is pennittedfor alcohol testing under federal commercial 21 drivers' laws. Minnesota law does not clearly allow for the use of breathalyzers in testing. 22 129 1 Response: Minn. Stat. 181.950.957 should be amended to permit the use of breathalyzers as 2 an acceptable technology for determining alcohol use. 3 4 HR~16. Veterans' Preference (LK/AF/LH) 5 Issue: The Leaguerecognizes the important contributions that veterans have made and agrees 6 with the intent of legislation that gives veterans certain preferences in' employment. However, 7 since the Veterans Preference law was initially passed, the number of employment protections 8 has greatly increased. This includes a federal law that specifically protects veterans from 9 employment discrimination. 10 11 Response: The League supports the Legislature undertaking a study of Minnesota's 12 veterans' preference law to determine its effectiveness and efficiency in light of today's 13 employment laws, statutes, and regulations, and to consider possible modifications to 14 current laws. 15 16 HR-!7. Drug and Alcohol Rehabilitation (LK/AF/LH) 17 Issue: Under Minn. Stat. 181.953, subd. 10(b), an employer cannot temunate an employee for a I 18 positive controlled substance test without first providing the employee a chance for rehabilitation I 19 and treatment. Recently, some cities have been advised that tHis law applies to "probationary" 20 employees as well as regular employees. 21 22 Response: The League supports a legislative change to clarify thatthe state law on drug 23 and alcohol rehabilitation and treatment does not apply to probationary employees. 130 1 i 2 Data Practices , 3 DP-l. State l\10del Policies and Training Data Practices Compliance Issues 4 (AR) 5 Issue: The 2006 Legislature limited the amount that cities are authorized to charge for copies of 6 police reports to 25~cents per page. which does not cover the city cost for copying while . . ... -. .' 7 exempting state government from this restriction. thereby permitting the State Department of 8 Public Safety to continue to charge $5 per report. Until recently. t+heDepartment of 9 Administration is required to provideg model policies and training assistance to cities in 10 complying with the Government Data Practices Act (GDPA). In the 2005'"-2006 legislative 11 session, proposals that would have steeply increased maximum exemplary damages.for GDP A 12 violations and the maximum civil penalties courts may impose to compel compliam':e with the 13 act have been added to GDP A omnibus legislation without a. hearing on whether such increased I 14 penalties are appropriate or necessary. 15 16 Response: The Legislature should allow cities to charge the same amount for copies of state 17 police reports as the Department of Public Safety is authorized to charge for such accident 18 reports. The Legislature must also fully fund the costs of ongoing GPDA compliance 19 training and education for local responsible authorities conducted bv the Information 20 Policv Administration Division (lP AD). and directly involve local officials in the 21 development and implementation of training activities, and provide model policies to cities 22, to assist them in complying with state data practices reQuirements. 131 1 2 Cities strongly oppose increasing the maximum exemplarv damages that courts may 3 impose against government entities found to have violated the Government Data Practices 4 Act unless thereis dear and convincing evidence of willful noncompliance. Cities also 5 oppose increasing the maximum civil penaltv that mav be imposed when a court order is 6 issued to compel a government entity to complv with the law unless there is a finding that 7 the city has willfullv disregarded its duty to comply. 8 -~.. . _h - - 9 Federal Employment Law 10 FED-I. FLSA/Overtime Compensation (LK! AF/LR) 11 Issue: The final changes to the Fair Labor Standards Act (FLSA) in the area of defining 12 "exempt" and "non-exempt" are more likely to expand the number of public sector employees 13 who are eligible for overtime rather than to limitthe number. 14 15 Response: The League opposes any changes to the state's overtime laws that would further 16 broaden the number of public sector employees eligible for overtime. ,If the state changes 17 Minnesota's overtime law, then consideration should be given to better alignmg state law 18 with the federal law. Providing consistency in state and federal law would lninimize the 19 administrative burden on cities and avoid confusion for employees. 20 21 FED-2. Consolidated Omnibus Budget Reconciliation Act (COBRA) (LK) 22 Issue: The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) law, which , . , 23 requires employers to offer continued health and dental insurance group benefits after an 132 1 employee tem1inates, has now been interpreted to apply to Employee Assistance Programs 2 (EAP's), health funding mechanisms such as Health Reimbursement Arrangements 3 (HRA)/Voluntary Employee Benefit Accounts (VEBA's), and flexible benefits. The application 4 of COBRA benefits to these programs results in unlikely and impractical outcomes. 5 6 Response: Congress should clarify the intended benefits to which COBRA law should 7 apply, excluding programs such as EAP's, HRAlVEBA's, and flexible benefits,. 8 9 FED;o.3. Medicare/Medicaid Premium Disbursements (LK! AF/LH) 10 Issue: Minnesota continues to be a net loser in federal Medicare and Medicaid premium 11 disbursements. 12 13 Response: Congress must recognize this disparity and provide Minnesota with a more 14 balanced and representative share of the costs of providing health care under Medicaid 15 and Medicare. 16 I 17 FED-4. Flexible Spending Accounts (LK/ER) I I 18 Issue: Health care costs are rising dramatically and employees need financialrelief. Flexible 19 spending accounts provide some relief, but the current "use itor lose it" provision for medical 20 spending discourages employees from participating in this program. 133 1 2 Response: The League supports legislation that would allow employees to roll unused funds 3 over to the next plan year, or into a tax-qualified retirement plan, or a 457 plan. 4 5 HR-AA. Volunteer Firefighter Pension Benefits (LK) (NEW) 6 Issue: Citiesthroulrhout the state have established individual pension plans with different levels 7 of pension benefits for therr volunteer firefighter relief association members. The efficiency of 8 this system has been questioned by various members of the -legislature and by state alrencies -, '-.-"" - ,- 9 from time to time. In 2006, the Lelrislature authorized a study by the lelrislative auditor to 10 research this issue. 11 12 Response: The League supports a thorough studv of volunteer and paid on-call fIrefighter - 13 'pension benefits throughout the state. 'The League also sUDPorts a centralized. statewide 14 volunteer firefighter pension plan if: a) the plan is offered Qna voluntary. not mandatorv, 15 basis: and b) the plan is offered in a manner that takes into account the different financial 16 capacities and needs of a wide varietv of cities. 17 18 FED-BB. Reserve Income Replacement Program (RIRP) (LR) (NEW) 19 Issue: Since the terrorist attacks on September 11. 2001. the federal government has relied 20 heavily on state National Guard and other military reserve forces to fight the war on terrorism. A 21 number of these citizen-soldiers have experienced a loss of income while serving on active duty, 22 which has caused financial hardship for some of these members and their families. 23 134 1 Congress recently enacted the Reserve Income Replacement Program (RlRP) to provide monthly 2 income differential payments to National Guard and military reserve ri1embers who are 3 involuntarily serving on active duty. These payments are intended to bridge the gap between the 4 average monthly civilian earned income of the member before mobilization and the member's 5 total monthly military compensation while involuntarily mobilized. This progran1 is of benefit to 6 cities because it reduces the financial stress placed on city employees~aJled up to serve and 7 minimizes the distraction from their duties before leaving and upon return to the lob. The RIRP 8 program expires in December 2008. 9 10 Response: It is the federal government's responsibility to minimize the financial hardship 11 placed on state National Guard and military reserve members who are ordered to federal 12 active service. The League urges Congress to extend the RIRP program beyond 200K --'''-' 13S 1 ELECTRIC RESTRUCTURING, 2 3 Cities have a strong interest in the public policy debate about electric restructuring or 4 deregulation. Minnesota already enjoys some of the lowest average electric rates in the nation. 5 The case has yet to be made that deregulation will result in either lower rates or improved service 6 for consumers. 7 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 11 rates among the lowest in the country. 12 ! 13 In recent years, many have begun to promote "deregulation" or "restnicturing" of the industry, I 14 meaning that electric service would no longer be a franchised monopoly. A number of states, 15 primmily those with high electlic rates, have taken steps to move toward such restructuring. In 16 most ofthese 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 Infornlation Agency* are that while the upper Midwest, 21 inc1udingMinnesota, will experience slightly lower rates in the short-term, longer-term rates 22 may actually be higher under restructuring. Concerns have also been expressed as to whether 136 Ci 1 residential customers, and those in rural and other harder-to-serve areas will actually experience 2 decreased reliability and increased rates. 3 4 Local elected officials have the primary responsibility to the citizens of their cities to make 5 certain restructuring that allows retail competition is as beneficial to the citizens as it is to the 6 industry. Beneficial to the citizen means that all Minnesotans experience the same reliable, high- 7 quality, universal, and low-cost service they experience under the current system of electric 8 power delivery. 9 10 City residents have a strong interest in the outcome of this important public policy debate. Cities 11 are substantial consumers of electric power. Many cities have a significant portion of their 12 property tax base in electric industry property, while others collect franchise fees and/or sales 13 taxes on electric purchases within their boundalies. Citizens in 126 Minnesota com:11Unities 14 currently receive economical electric service from municipal utilities, which make paymenls-in- 15 lieu of taxes to help support city services. Significant increases in the cost of electric power for 16 city operations or 10sses of these traditional sources of revenue will result in property tax 17 increases. 18 19 Response: The federal government should not mandate restructuring; th(~ r.ledsion sh~mld 20 be left to the states. 21 I 22 The Legislature should continue to follow a slow, deliberative app~oach, taking time to 23 consider how alternative models for delivering electric power will affect the state's 137 1 traditional benefits of reliable, universal, high-quality and low-cost service. The public 2 policy discussion should be focused on actual benefits to citizens, rather than on ideological 3 arguments, stakeholder interests, andover-reliance on simplistic ~bjectives like "consumer 4 choice." Those advocating a change should bear the burden of proof to demonstrate that I 5 restructuring and deregulation will, at a minimum, maintain Minnesota's high-quality, 6 low-cost, and reliable service. Only when that burden of proof has been met should 7 restructuring occur. 8 9 The following public policy goals should be incorporated into any legislation restructuring 10 the electric industry: 11 12 Adequate Supply and Demand 13 14 The state's current generation and transmission capacity is inadequate to meet projected 15 future needs. No new significant capacity has been built since the 1980s (Sherco 3). In the 16 past, regulatory and other governmental policies served as a disincentive to meet customer 17 demand. The Minnesota Energy Security and Reliability Act enacted by the 2001 18 Legislature took significant steps to reduce these disincentives. The experience of other 19 states would strongly suggest that deregulation prior to the development and maintenance 20 of adequate reserve capacity can lead to price spikes and compromise service reliability. 21 The state should continue to review and amend these policies as necessary to encourage 22 further development and maintenance of adequate capacity and reliability. 23 138 F.. 1 Consumer Protection 2 3 Consumer .interests must continue to be protected, especially for the most vulnerable 4 populations. Reliable service must be universally available and pro-grams such as cold- S weather shut-off rules should be continued either as requirements for all market 6 participants or as separate state programs. 7 8 Environmental Concerns 9 10 The environment must be adequately protected, with conservation and renewable energy 11 efforts maintained. The federal government must review the apprppriat~ness of current 12 environmental regulations and their effect in a deregulated mark~t; for example, I 13 exemptions from the Clean Air Act for some generation facilities. 14 15 Fair Market Competition 16 17 To ensure fair market competition, the federal and state governments must have the 18 authority to review mergers to prevent abuse of market power. 19 Cities must remain viable competitors in the electric market. Municipal utilities must be 20 granted exemptions from rules like the open meeting law and data practices requirements 21 where they ham-per the ability to effectively compete with private companies. To ensure 22 adequate service to every citizen, cities and other local governments must maintain their 139 1 ability to issue tax-exempt bonds for construction of electric infrastructure, and be given 2 explicit authority to aggregate or municipalize provision of electricity. 3 4 Local Authority 5 6 Cities must maintain their traditional authority over land use, zoning, rights of way 7 management and cost recovery, as well as the ability to franchise providers and to receive [, 8 payments-in-lieu of taxes from municipal utilities. Cities' authority to negotiate siting fees 9 and agreements for proposed generating facilities should be enhanced. 10 11 To avoid unnecessary demand for the limited space in publiciights of way, open access to 12 transmission and distribution facilities should be maintained through regulation. 13 14 As the electric market is opened to interstate competition, the federal government must 15 preserve the application of Minnesota's state and local sales taxes to the sale of electricity, 16 regardless of the place ~f origin. 17 18 Stranded Cost Recovery 19 i I 20 Issue: Regulated utilities have traditionally made operating decisions based on needs of 21 consumers within their service territOlies. Many decisions, therefore, have been based more on 22 need than on economics. In the transition from a regulated to a restructured competitive 23 environment, electric generators' investments in fixed assets and other obligations mayor may 140 "' 1 not remain as economically viable. Estimates of these "stranded costs" vary greatly; with some 2 indicating no stranded costs or possibly even negative stranded costs resulting from increased I I 3 prices after deregulation in Minnesota. 4 5 Response: If regulatory actions have contributed to investment by existing regulated 6 utilities that are not economically viable in a competitive market and if restructuring 7 occurs, the League supports transition mechanisms that will allow utilities to collect 8 revenues for those particular stranded costs. These charges, however, must be carefully 9 monitored to ensure that only eligible and verifiable costs are covered and that over- 10 collections do not occur. Taxpayers and ratepayers should not be expected to cover the cost 11 of investments made for business reasons, apart from the requirement to serve under the 12 regulated system. 13 14 If negative stranded costs for the regulated utility as a whole can be established, and are 15 solely the result of transition to a restructured environment, thes~ regulated utilities should I 16 be required to contribute some limited percentage of established amounts to offset tax 17 breaks given to these utilities as a result of restructuring. 18 19 Property Tax 20 21 Issue: Part of the. discussion regarding possible deregulation of the electric power industry has 22 centered on electric utility taxation. Proponents of restructuring assert that if effective free 23 market competition is to replace governmental regulation, state tax policy must be changed. The 141 1 main focus of the investor owned utilities (lOUs) so far has been removal of the attached 2 machinery or personal property tax. Utilities subject to the tax argue it places them at a 3 competitive disadvantage to non-Minnesota companies, rural electric cooperatives (co-ops), and 4 municipals. However, accurate comparisons of tax burden are difficult, as other state's use 5 completely different taxing systems. Municipals make substantial payments-in-lieu of taxes. 6 Additionally, co-ops and municipals do pay direct taxes on some of their property and indirectly 7 when they purchase wholesale power from sources that are taxed, such as IOUs. 8 9 Utility personal property can be a significant portion of the local tax base in all cities. Most i 10 obviously affected are cities that have power plants; however, transmission and distribution I 11 equipment account for over half of the personal property taxes paid by the rODs and exist in 12 nearly every city. Replacing the revenue that would be lost to cities, counties, school districts, 13 and other local taxing jurisdictions is a stated goal of the IOUs; however, the mechanics and 14 funding sources of such a replacement revenue would be difficult to develop and administer, and 15 could be subject to reductions or elimination over time. Furthern1ore, replacement revenues or 16 aids may not fully address the problemsC:J:"eated by a large tax base reducticm. 17 18 RespoTlse:Cities oppose proposals for exempting the IODs from the personal property tax, 19 apart from the decision to restructure the electric industry in Minnesota. 20 21 If and when restructuring occurs, a truly independent review of the overall tax burden 22 should be conducted to determine whether lVlinnesota utilities are at a competitive 23 disadvantage. 142 -, .. .. 1 If an overall tax disadvantage is identified, the state should correct it. Under no 2 circumstances should local units of government or their citizens be required to shoulder the 3 burden of tax relief for IOUs. 4 5 ! I I 143