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01-5Counoil File # O�� rj Green Sheet # (O �{ 9 �� RESOLUTION CITY OF SAINT PAUL, MTNNESOTA `� Presented By Referred To Committeen Date i WHEREAS, the League ofMinnesota Cities, which represents 811 ofMinnesota's 856 z cities, as weil as 10 urban towns and special districts, has led the coordination of inember cities in 3 the development of the 2001 City Policies for Le�islative and Administrative Action which 4 identifies issues as priorities for action during the`2001 legislative session; and s 6 WHEREAS, the City of Saint Pau] was an active participant in this coordinated effort and � the City approves generally of these priorities. a 9 NOW,1`AEREFORE, BE IT RESOLVED that the Saint Paul City Council does hereby so recommend for consideration by the Minnesota State Le�islature, 2001 City Policies for si Legislative and Administrative action, submitted by the Lea�ue ofMinnesota Cities and does iz hereby request that these issues be addressed by the Le�islature durin� the 2001 session. 13 14 , Requested by Department of: By: Adopted by Council: Date ba,,,�_ 3 �.pf�l T�.. � � Adoption Certified by Council Secretary gy: � � �.� Approved b Mayor: Date � F/ By' Form Approved by City Attorney B C� t-- r� ,�� Approved by Mayor for Submission to Council Sy : �/C��vG � � Coleman's Office Mike Campbell 266-8537 IST BE IXJ COIAJqL AGBQl461' (QST9 January 3, 2001 , o�-. 5 00o GREEN SHEET No 1 G�!� 91 ; wurm.rs � ■ oa�unrenc.mcr« 3 rnrcwca anwno.av wuuoru.a[aMttso¢ TOTAL # OF SIGNATURE PAGES The City needs to have Council approval of its legislative support items with respect to the League of Minnesota Cities (LMC)in order to pursue those support items at the 2001 Legislature. PLANNING COMMISSION CIB COMMITfEE CML SERVICE COMMISSION �� G�� " �E� � � 26Q6 When approved, the LNC support package can be pe�rsued at�the State Legislature during session. None �SraanWR+�sravn � (CLIP ALL LOCATIONS FOR SIGNATUR� �s a� ce�avrm, e�erwa�a w�aer e w�aa�cra n,� a�mre�n YES NO tfes tAis P��rm ever been a dty emPbY�'r YES NO Doec Uus YersoNfirm P� a siull nat normalbD�sessed bY anY wrteM city empbyee? VES NO k thia persaMmm a tarpMad vendoR YES,- NO ❑ arcaatnc ❑ wwxcuia[mractta The City would not be able to proceed with supporting the LMC policies. AMOUNT OF TRANSACTION f CAST/REVENUE BUDGEfED (CIRCLE ON� YES NO ACiNRV qUMBER �0 ... .4...r . . . t �.. ., a' � :ty fy ' � �9 � .� i i�. 4 � � 1 ! � �� l ( `�� .�.. � . � + 5 �'r e � � nV r : ,��,�'✓� , �. :�., . ._. ., . � _ , . . ' - " _ . . . , , , .� ' k n ��nY .' � ' - � . ' . . " . � . . . . H " �� . .. . . '�` , . a . . .i . . ' . . . .. ..... . . .. . { ' .. . . ' r . ' �........ - , . p.�' '°4 t:;, .. . , , . �. . ��, l.eague of .. Minn:esota Ci#ies � . � o.. ,� � �� q . : . . . ... _. „ • , � wm • , ,.,.,: . .._ . .. .�_.� .�-„ - , , . ,. � . . _ ,' . �.�r , � , . . . � ' , ,. ..,, , ., ,., _ ' , ' . ,dg, . r ... " .. _. �� ° � r , , , ' , - � , . � �� Z � Q � . � � � � ��. �� ,� � �� . � � � � � .�� t�� . �� . � {. . � �� . ..�� s � �Po 1��c��es� �� _ � � �. , . � �� :. . � _ � �� u s _ �� _ . v �. �: . � � . _ �� , � � � • F r > � �,�vi. b �, ..,:�� "Y ° r . . � �_. _ . ' .. � �y� a'.F ' ,� . . . , � . ::. . . _ ' , . � y ti v i. � �4�' �� , ,.' k: ;. .' � � � r .' .. � �' �� °>For �l.e islative>and �:� , . � � � g . .:. ��{` 2S k ad�ministrative' action , t u � , ` �_ , , - .' . ` '.: - �'�� "�Adopted November 17, �200D �,� �� _ � � _� � _ � , �,� , �� ° � ,.. r � � �� s� � � . � � � � � � �� b � ti „„ �. ,,. . Y j� ' '. �.' , . 4 ��i1C�Of.�lAhCSO��dtr2,4 �,�� ` -� � Y; � � °� - � � ' _ ` , 145 UniversicyAvenue Wesc , - .. ,' � � St. Paul, MN; 55103-2044 -.'� � _ �M �� KES o s-a a s r � e s� �� : .(651),281-1200ac (80Q) 925-1122 ; . ��$Wl.�d�ng r � _ , � Fa�c (65 t) �281-1299;:, � � � q(.1 a � It�/ � �, " -� � I�"e °f'K'""�"t° C�'r°e �.., TDD (651) 281-1290 � �. , �� . � �r��.or � Cornmun�tres *,x .� ,... ;-, + - � �.�. i ' . f. y x ��" `� X � 3 ` `rr. �° � r `��',�... _. ,. .. , _ .. ,.... ,... , ,.,.. . . __ ,. ,.._, r , . , ,_, �... > .. . . .. , , � � , , � ' , , � � ' CONTENTS ................... ................... ................... ................... ................... ................... ................... I.eague Staff ........................................................................................................................ iv I,egislative Policy Committee Members .............................................................................. v Policy Development Process ................................................................................................ vri GeneralPolicy Statement ..................................................................................................... vin Building Quality Communities Guideline ................................................... ix 2001 CITY POLICIE5 Improving Fiscal Futures ................................................................................... FF-1. State-L.ocal Fiscal Relations .................................................................... FF-2. 3tate Shared Revenues .................................................................. FF-3. Ta�cation of Municipal Bond Interest ............................................ FF-4. City Fiscal Yeaz ............................................................................. FF-5. Sales Tax on L.ocal Government Purchases .................................. FF-6. Payments for Services to Tax-Exempt Property ........................... FF-7. Truth-in-Taxation Process ............................................................. F�-8. State Administrative Deductions from State Aid .......................... FF-9. Reporting Requirements ................................................................. FF-10. Federal Budget Cutbacks ................................................................ FF-11. Price of Government ...................................................................... FF-12. Capital Improvement Fees .............................................................. FF-13. Deferred Assessments for Roads ................................................... FF-14. Taxation of Electronic Commerce ....................................................................... FF-15. Limited Market Value ........................................................................................... FF-16. State Charges for Administrative Services ........................................................... Improving Local Economies ....................................................................... ' LE-1. Taac Incement Financing ................................................................ I,�2. TIF Reform .................................................................................... I.E-3. Impact of Properry TaY Reform on Existing TIF Districts ............ ' LE-4. Business Subsidies ........................................................................ LE-5. Economic Development Programs ................................................ LE-6. Redevelapment Programs .............................................................. f L.E-7. Property Tas Abatement Authority ................................................ I.E-8. Brownfields ................................................................................... LE-9. OSA Response Timelines ............................................................... I LE-10. OSA Time Limitations ................................................................... LE-11. Growth Management and Annexation .......................................... I LE-12. Electric Service Extension ............................................................. LE-13. State and/or County Licensed Residendal Facilities ...................... 2001 City Policies 6\—S 1 I 2 2 2 2 3 3 3 3 3 4 4 4 5 5 5 � .................... 6 .................... 6 .................... 7 .................... 7 .................... 7 .................... 8 .................... 8 .................... 8 ................... 9 ................... 10 ................... 10 ................... 11 ................... 11 i I.E-14. LE-15. LE-16. LE-17. LE-18. L.E-19. LE-20. LE-21. LE-22. LE-23. LE-24. LE-25. LE-26. LE-27. Housing and Economic Viability ..................................................... Preservauon of Federally-Assisted I.ow-Income Housing ............... Adequate Funding for Transportation .............................................. State Aid for Urban Road Systems ................................................... Turnbacks of County and State Roads ............................................. Road Funding for Cities Under 5,000 .............................................. Railroad-Related Projects ................................................................ Right of Way Management ............................................................. Workforce Readiness ....................................................................... Platting Law Recodification ............................................................. Econoauc Development Authorities ................................................ Infrastructure Funding Options ........................................................ Statutory Approval Timelines .......................................................... Telecommunications Restructuring .................................................. Improving Service Delivery ........................................................................... SD-1. SD-2. SD-3. SD-4. SD-5. SD-6. Sb-7. SD-8. SD-4. SD-10. SD-1 I. SD-12. SD-13. SD-14. SD-15. SD-16. SD-17. SD-18. SD-19. SD-20. SD-21. SD-22. SD-23. SD-24. SD-25. SD-26. SD-27. SD-28. Redesigning and Reinventing Government ..................................... Unfunded Mandates ........................................................................ Civil Liability of Local Governments ............................................. Environmental Protecfion ................................................................ ElectionIssues ................................................................................. Local Election Authority .................................................................. Election Judge Appointrnent ............................................................ Election Judge Compensation .......................................................... Counting Write-in Votes .................................................................. City Costs for Enforcin State and I.ocal I.aws .......... 12 .......... 12 .......... 13 .......... 13 .......... 13 .......... 14 .......... 14 .......... 14 .......... 15 .......... 15 .......... 15 .......... 16 .......... 16 .......... 17 ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... ............. ........ g................................................... Design-Build ......................................................................................................... Providing Information to Citizens ......................................................................... Creating a Minnesota GLS Program ..................................................................... State Regnlation of Massage Therapists ............................................................... Private Property Rights and Takings ..................................................................... ConstructionCodes ............................................................................................... Feesfor Service .................................................................................................... State Appropriation for Govemment Training Service ........................................ Public Safety Spectrum Needs .............................................................................. Joint and Several Liability Reform ...................................................................... Competitive Bid Threshold .................................................................................. Membership in Watershed Management Organizations ....................................... Legalization of Fireworks ..................................................................................... 911 Funding ........................................................................................................... On-Sale Liquor and Wine Licenses to Performing Theaters and CulturalCenters ..................................................................................................... CityUse of Credit Cards ....................................................................................... Youth Access to Alcohol and Tobacco ................................................................. LibraryFunding ..................................................................................................... 17 17 18 18 I9 20 20 20 20 21 21 21 22 22 22 23 23 24 25 25 26 26 26 26 27 27 27 27 27 ii League of 1VTinnesota Cities ' ' Human Resources & Data Practices ............................................................ , ' ' � L I , , Human Resources HR-1. Veterans' Preference ............................................................................. HR-2. Discipline and Discharge ...................................................................... HR-3. Compensation Limits ........................................................................... HR-4. Public Employees Labor Relations Act (PELRA) ............................... HR-5. Re-employment Benefits ...................................................................... HR-6. Essential Employees ............................................................................. HR-7. Pensions ................................................................................................ HR-8. Public Employees Retirement Associafion (PERA) Coordinated Plan FundingDeficiency .............................................................................. HA-9. Age Certificates/I-9 Forms ................................................................... HR-10. Employer Reference Immunity ............................................................ HR-11. State Paid Police and Fire Medical Insurance ...................................... HR-12. Breathalyzers ........................................................................................ HR-13. Preservation of Local Decision-Making Authority on Employment RelatedIssues ....................................................................................... HR-14. Drug and Alcohol Rehabilitation ......................................................... AR-15. Health Caze Insurance Programs .......................................................... Data Practices � DP-1. Public Access to Information ........................................... DP-2. State Model Policies and Training ................................... DP-3. Tennessen Warning .......................................................... ' DP-4. Violations of Government Data Practices Act ................. DP-5. GDPA Complaance for Contracting ................................. ' Federal Employment Law FED-1. FLSAlOvertime Compensation ......................... FED-2. Peace Officer Bill of Rights .............................. ' FED-3. Portability of Deferred Compensation .............. FED-4. Medicaze/Medicaid Premium Disbursements ... IJ IJ r� 1� IJ Electric Restructuring .... Adequate Supply and Demand Consumer Protection ............... Environmental Concerns......... Fair Market Competition......... I,ocal Authority ....................... Suanded Cost Recovery ......... Property Tas ............................ a�-5 � 28 28 29 29 29 29 29 29 30 30 30 31 31 31 31 31 31 31 32 32 .......... 32 .......... 32 .......... 32 .......... 32 .......... 33 34 34 34 34 34 35 35 ' 2001 City Policies iii LEAGUE STAFF WORKING WITH STATE AND FEDERAL ISSUES Jim Miller, Executive Director Mandates, telecommunications Gary Carlson, Director of Intergovernmental Relations Aid to cifies, electric utitity restructuring, general revenue sources for cities, pensions, personnel, property tax system, tax increment financing, Anne Finn, Intergovernmental Relations Representative Housing, land use/annexation, public safety, transportation and transit Kevin Frazell, Director of Member Services Electric utility restructuring, government innovation and cooperation, Tom Grundhoefer, General Counsel General municipal governance, telecommunications Ann Higgins, Intergovernmental Relarions Representa�ve Elections and ethics, emergency management, housing, information policy, telecommunications, utility service districts Andrea Stearns, Intergovernmental Relations Representative Business subsidies, civil liability and criminal justice, economic development and redevelopment, general government, IocaUtribal relations, tas increment financing, Remi Stone, Senior Intergovernmental Relations Representative Civil liability, construction codes, environmenf, general government, insurance, labor relations/ personnel, land use/annexation iv League of Minnesota Cifies , 1 � 0�-5 Legislative Policy Committee Members 1 Improving Fiscal Futures Dennis Kraft, Chair, City Manager, Robbinsdale ' Richard Abraham, City Administrator, Lake City Kazen Anderson, Mayor, Minnetonka Bill Bamhart, Intergovernmental Relations, ' Minneapolis (alternate) Curt Boganey, City Manager, Brooklyn Park Tom Burt, City Administrator, Rosemount Gino Businazo, Finance Director, Mound � Dennis Cavanaugh, Mayor, St. Anthony Jane Chambers, Assistant City Manager, Brooklyn Center , ' C�� ' ' ' �] � ' ' r Tom Cran, Budget Office, St. Paul Reggie Edwards, City Administrator, Chisago City John Erar, City Administrator, Fazmington Richard Fursman, Ci[y Manager, Maplewood Jeff Haubrich, Assistant Council Adminstrator, Red Wing Terri Heaton, Chief Financial Officer, Bloomington Pat Hentges, City Manager, Mankato Elizabeth Kautz, Mayor, Burnsville 7ames Keinath, City AdminisVator, Circle Pines Linda Koblick, Councilmember, Minnetonka Tom Lawell, City Administrator, Apple Valley Dean Lotter, City Administrator, Janesville Paul McLaughlin, Counci3member, Internationai Falls Peter Meintsma, Mayor, Crystal Tom Melena, Ciry Administrator, Oak Pazk Heights Steve Mielke, City Manager, Hopkins David Minke, City Administrator, Priaceton 7ohn Moir, Finance Director, Minneapolis Gary Neumann, Assistant Administrator, Rochester Steve Okins, Finance Director, W illmar Tammy Omdal, Finance Department, Minneapolis Roger Peterson, Association of Metropolitan Municipalities Douglas Reeder, City Administzator, South St. Paul Michael Rietz, Ciry Administrator, Kasson Michael Robertson, City Administrator, Otsego Ryan Schroeder, Ciry AdminisVator, Cottage Grove James Smith, Councilmember, Independence Gerald Sorenson, Administrative Services Director, Moorhead Jerry Turnquist, Councilmember, Oak Park Heights David Mark Urbia, City Administrator, Blue Earth Dan Vogt, City AdminisVator, Brainerd Jim Willis, City Administrator, Inver Grove Heights Rick Wolfsteller, Ciry Administrator, Monucello Improving Local Economies Brenda Johnson, Chair, Councilmember, Chatfield Jon Hohenstein, Vice Chair, City Administrator, Mahtomedi Dick Allendorf, Councilmembec, Minnetonka David Beaudet, Councilmember, Oak Park Heighu Jerry Bohnsack, City Administrator, New Prague Doug Borglund, City Admi�isnator, Howard Lake Patrick Boylan, Assistant Manager, Lexington Geraid Brever, City Administrator, Staples Cathy Busho, Mayor, Rosemount Mike Campbell, Intergovermental Relations Director, St. Paul Kevin Carroll, City Administrator, Carver Tim Cruikshank, CiTy Administrator, Minnetrista Dan Donahue, City Manager, New Hope Michael Eastling, Public Works Director, Richfield Reggie Edwards, City Administrator, Chisago Ciry Karen Elhacd, Clerk-Treasurer, Northome Jim Elmquist, City Administrator, Mora Mark Erickson, City Administrator, Lakefield John Flora, Public Works Director, Fridley Roger Fraser, City Manager, Blaine Matt Fulton, City Manager, New Brighton Rick Getschow, City Administrator, Lauderdale Soh� Goedeke, Councilmember, Roseville Tom Goodwin, Councilmember, Apple Valley Mary Gover, Councilmember, St. Peter Chuck Groth, Mayor, Fairmont Tom Harmening, Community Development Director, St. Louis Park Desta Hunt, Councilmember, Fergus Falls Marvin Johnson, Mayor, Independence Steven Jones, City Manager, Montevideo Andrea Hart Kajer, Intergovernmental Relations Director, Minneapolis (alternate) Patrick Klaers, Ci[y Administrazor, Elk River Larcy Lee, Community Development Director, Bloomington Don Levens, Ciry Administrator, Cokato Nancy Mancino, Mayor, Cha�hassen Marcia Mazcoux, Councilmember, Rochester Mark Nagel, City Manager, Anoka Steve O'Malley, Deputy Manager, Burnsville Samantha Orduno, City Manager, Richfield Bruce Peterson, Director Planning and Development Services, Willmaz Roger Peterson, Association of Metropo]itan Mur,cipalities Dale Powers, Councilmember, Clear Iake Gene Ranieri, Association of Metropolitan Municipalities Stephen Sarvi, City Administrator, Vicioria Mark Sather, City Managec, White Bear Lake David Schaaf, Mayor, Oak Park Heights � 2001 City Policies v Terry Schneider, Councilmember, Minnetonka Mazy Sjodin, Information Technology Director, Red Wing Terry Spaeth, Administrative Assistant, Rochester Cathy Thurber, Councilmember, Minneapolis Craig Waldron, City Adminishator, Oakdale Jeff Weldon, City Administrator, Redwood Falls Mazk Winscn, Chief Administrative Officer, Dulu[h Heacher Worthington, City Administrator, Falcon Heights John Young, Jr., Councilmember, Hawley Improving Service Delivery Mark Karnowski, Chair, City Administrator, Lindstrom Judd Movrzy, Vice Chair, Councilmember, Tonka Bay Laarie Ahrens, Assistant City Manager, Plymouth Bevedy Aplikowski, Councilmember, Arden Hills Mike Campbell, Intergovernmental Relations Director, St. Paul Pat Crawford, Clerk-Treasurer, Modey Pam Dmynenko, Assistant to City Manager, RichField Mazy Hamann-Roland, Mayor, Apple Valley Tom Hansen, Deputy Manager, Burnsville Jcel Hanson, Ciry AdminisYrator, Lit[le Canada John Kysylyczyn, Mayor, Roseville Barrett Lane, Councilmember, Minneapolis Jan LeSuer, Councilmembec, Golden Valley Joe Lynch, City Adminis[tator, Arden Hills Larry Nicholson, Counciimember, Moorhead Desyl Peterson, City Attorney, Minnetonak Gene Ranieri, Association of Metropolitan Municipalities David Schaaf, Mayor, Oak Pazk Heights David Senjem, Councilmember, Rochester Chad Shryock, City Administraror, Wabasha Al Thomas, Councilmember, Minnetonka Kent Torve, Mayor, Loretto Kazen Lowery Wagner, Intergovernmenta] Relations, Minneapolis (alterrtate) Rena Weber, Clerk, Waite Pazk Human Resources & Data Practices Joyce Twistol, Chair, Clerk/Personnel Director, Blaine Ken Hanung, Vice Chair, City Adminishator, Bayport Mazk Anderson, Human Resource> Director, Brooklyn Park Geralyn Bazone, Assistant City Manager, Minnetonka Holly Duffy, Assistant to Manager, Crystal Theresa Goble, Finance Director, Brainerd Terry Haltiner, Labor Relations Manager, St. Pau] Bre[ Heitkamp, City Administrator, Champlin Kay Kuhlmann, Council Adminisnator, Red Wing Ed Lazson, City Manager, Morris Kay McAloney, Human Resources Director, Anoka Tim Madigan, City Administrator, Faribavlt Givona Reed, Assistant to City Administrator, Mounds View Cazol Rogers, Human Resources Senior Consultant, Minaeapolis Cazol SchmidT, Benefiu Manager, Minneapolis Ceil Smith, Assis[ant to Manager, Edina Jerry Splinter, City Manager, Coon Rapids Daniel Tesch, Direc[or of Administration, Lino Lakes Todd Torvinen, Finance Director, Duluth Karen Lowery Wagner, Intergovemmental Relations, Minneapolis Electric Restructuring Task Force Ron Jabs, Chair, Mayor, Jordan Bryan Adams, Geneta] Manager, Elk River Municipal Utilities Kazen Baker, House Research Larry Bakken, Covncilmember, Golden Valley Mike Bash, Councilmember, Long Lake David Berg, RW Beck, Minneapolis Troy Bonkowske, Communiiy Development Director, Caledonia Jim Brimeyer, Councilmember, St. Louis Park Chuck Canfield, Mayor, Rochester AI Crowser, Director, Alexandria Public Utilities Jim Elmquist, City Administrator, Mora Robert Filson, City Administrator, Worthington Paul Grabitske, City Adminishator, Janesville James Gromberg, City Administator, Isanti Delvin Haag, Councilmember, Buffalo JefFry Haubrich, Assistant to Council Administrator, Red Wing Elizabeth Kautz, Mayor, Burnsville Mark Larson, City Administrator, Glencoe Rebecca Law, Mintteapolis Pam Marshall, Energy Cents Coalition Kevin Maynard, General Manager, Austin Utilities Chazles Mertensotto, Mayor, Mendota Heights Mazk Nagel, City Manager, Anoka Mike Nitchals, General Manager, Willmaz Municipal Utilities Paul Osnow, Councilmember, Minneapolis Greg Oxley, MN Municipal Utilities Association John Remkus, Finance Director, West St. Pau1 Joe Rudberg, City Adminisnator, Becker Amy Rudolph, Flaherty & Hood, St. Paul Mazk Sather, City Manager, White Beaz Lake Jerry Splinter, City Manager, Coon Rapids Jim Willes, City Adrriinistrator, Inver Grove Heighu Wally Wysopal, Ciry ManagervClerk, North St. Paul vi League of Minnesota Cities i� � ' O\-S League of Minnesota Cities Policy Development Process ' The L.eague's policy development process has taken place over the past six months. The process began with a member survey of priority issues facing city officials. The process will not end with the Policy Adoption Conference. The committees will schedule additional meetings during the ' upcoming legislaUve session to discuss additional issues, develop altemative solutions, and discuss strategies to implement the League's policies. t Listed below is a brief chronology of the major events in the policy development process. At each step, members have the opportunity to participate in the development process. , ApriUMay , June � , C ' The League solicits members for ideas and problems. A survey at the Annual Conference allows members to formally suggest topics. The L,eague President accepts applications for committees and appoints policy committee members. The policy committees are: Improving Fiscal Futures Improving Local Economies Improving Service Delivery Fiuman Resources and Data Practices Electric Restructuring July Committees meet to discuss ]ssues raised in the member survey. Committees can also form task forces to more thoroughly study specific issues. Task forces can include noncity members with a knowledge of the focus issue. August ' through September � October ' November ' ' Committees and task forces meet to discuss issues and probiems, accept testimony and develop policy statements. The League Boazd of Directors meets with the chairs of the policy comsnittees to review policies. Policy Adoption Conference. Members have the opportunity to discuss the draft policies, propose changes, and suggest additional policies for member consideration. January L,egislative session. During the session, the policy committees and task forces through will continue to meet on issues and strategies. Members can assist the League's May legislative efforts by volunteering to contactiegislators on a variety ofissues of interest to our cities. 2001 City Policies vii General Policy Statement The L.eague of Minnesota Cities seroes as a forum for cities fo define common problems and deveIop policies and proposals to soIve those problems. The League of Minnesota Cities represents 818 of Minnesota's 854 cities as weIl as I2 urban towns and 27 special districts. AII sizes of communities aze represented among the League's members (the lazgest nonmember city has a population of 164) and all regions of the state aze represented. The policies that follow are directed at specific city issues. Two principles guide the development of all I,eague policies: L There is a need for a govemmental system that allows flexibility and authority for ciues to meet the challenges of governing and providing citizens with services while at the same time protecting cities from unfunded or underfunded mandates, liability or other financial risk, and restrictions on local control; and, 2. The financial and technical requirements for governing and providing services necessitate a continuing and strengthened partnership with federal, state, and local govemments. This partnership, particulazly in the areas of finance, development, housing, environment and uansportation, is critical for the successful operation of Minnesota s cities and the well- being of residents. viii League of Minnesota Cities , , ' , ' , , � 1 1 � � � ' ' � � � f GUIDELINE FOR BUILDING QUALITY COMMUNITIES o �-S To the greatest extent possible, legislation affecting communities at the state and federal level should enhance, not diminish, the ability of citizens, businesses, and local governments to work togethez in partnership to make every community "livable." ISSUE: Cities in Minnesota aze at various stages in meeting the goal of being "livable, healthy communities." RESPONSE: The definition of a"livable, heaithy community" below will be used to evaluate proposed legislation to determine whether or nat it advances the goal of enabling all Minnesota cities to become livable, healthy communities. It should also be used by cities to evaluate their progress toward the goal of becoming livable, healthy communities. A LNABLE, HEALTHY COMMUNITY IS: WHERE PEOPLE OF ALL AGES • share a core of common values including valuing diversity, respect for each other, and good citizenship • feel: * safe * a sense of belonging * welcome • engage in life-long leazning activities that: * promote responsible citizenship * enhance the enjoyment of life * prepaze them for changing job markets • participate in the decision-making process with community leaders • want to make their home • celebrate community • have accessto: * good payingjobs * adequate and affordable housing * choice of efficient transportation systems including transit, pedestrians, a�d bicycles �` gathering places * desired information � 2001 City Policies ix * choice of cultural and recreational activities * affordable goods and services, including health caze • are involved in the nurturing of youth • care about their homes, community, and the environment • get to know each other • have the beneft of strong family support and nurturing adults WHERE LOCAL GOVERNMENT • is responsive to the needs of its citizens • is actively supported by enthusiastic volunteers • is open and user friendly • encourages and imptements cooperatioa and collaboration • provides and maintains an adequate physical infrastructure and promotes social infrastructure to meet local needs • educates citizens of all ages on local, regional, and state issues and govemment processes • informs and communicates with citizens to foster participation in public policy decision-making • participates in youth development X League of Minnesota Cities ' � i �' ! 0 1 1 �� 2001 CITY POLICIES 01-5 � 1 1 ' , a�-5 IMPROVING FISCAL FUTURES FF-1. State-Local Fiscal Relations Zssue: Minnesota's state and local govem�ment finance system is complex and ' intertw9ned. This complexity has been the subject of ongoing legislative scrutiny and has most recenfly resulted in a governor's ' initiative to review the system with the goal of developing a reform proposal for the 2001 L,egislature. L_I ' , While cities rely on their partnership with the state to provide local services, they aiso must respond to the needs and desires of their residents. To that end, cities need flexibility in determining how to finance neededlocalservices. In 1997, the L.egislature began making ' changes to Minnesota's property ta�c system that have impacted the ability of cities to ' fund necessary services. Those changes, including the reimposition of levy limits, significant class rate compression, and ' changes to the limited market value law all have resulted in varying unintended consequences. lJ � C r! 1� � Response: To remedy existing and avoid potentialfuture unintended consequences of additional property taY changes, the League supports: • Reviewing the combined impacts of property taic changes since 1947 and changing economic circumstances for talcpayers and for local governments so that policy makers can better understand where the system may need further changes; • Expanding available city revenue sources to reduce the reliance on the property tax; and • Reducing the property tax burden for all classes of property by ittcreasing the state share of school funding. Any increase in the state share of school funding must guarantee a permanent reduction in the school property tax burden. The League supporfs paying for the increased state cost through income and sales taxes. The League opposes: • Reimposing levy limits, which are inef�cient, ineffective, interfere with local accountability, and ignore local circumstances; • Imposing reverse referenda requirements, which undermine the decisions of local elected officials, divert focus and resaurces from daily operations, and can disrupt the local budget process; � Replacing all or part of LGA or HACA with state-mandated categorical aid programs, or local option t�ing authority; • Switching from the classification system to a market value based system, which would cause tremendous shifts of tax burden between classes of property. The League also opposes applying all future levy increases to market value because this would further cornplicate the property tax system; • Expanding fhe limited market value law or enacting an acquisition value law; • Enacting proposals that would interfere in local decision-making regarding service delivery; • Imposing a state-levied property tax; and • Cutting LGA or HACA to finance an increased sfate role in school finance. ' 2001 City Policies FF-2. State Shared Revenues Issue: State revenue sharing programs address at least ttu�ee problems with a stand- alone local government finance system. First, the property tax base available to communities can vary dramatically. These programs use state resources to equalize the ability of communides to provide essetttial services without undue properry Yax burdens for local residents. Second, nonresidents can take advantage of local seroices or create additional demands for services without contributing to the taxes that support these services. LGA and HACA help address the free rider problem where nonpaying individuals cons¢me services without contributing to the local Ya1c base. Third, allowing local units of government in Minnesota to levy only the property taY has created an over-reliance on the property tax. LGA and HACA can reduce the overall reliance of local govemments on the property ta1c. Although historically the Legislature has generally supported LGA and HACA programs, the 1981 L.egislature reduced the number of LGA and HACA payments and the 1986 Legislature delayed the payments. Under carrent law, the first payment of LGA and HACA is made in July—fully 7 months into each city's fiscal yeaz. These changes have created cash flow problems for some cities. Response: LGA and l3ACA, or similar replacement revenues, must be continued and additional state resources greater than the rate of inflation must be allocated to prevenf rapid future property Yas increases. Tn addition, the HACA household growth factor for cities should be reinstated. Tf►e LegisIature shouId adjust the LGA aad HACA payment schedule to provide cities access to LGA and IiACA earlier in their fiscal year. k'F-3. Taxation of Municipal Bond Inferest Issue: The state law that grants a tax exemption for municipal bond interest lowers borrowing costs for cities and reduces properiy tax levies. 1Zesponse: The state should maintain the tax exemption for municipal bond interest income. FF-4. City Fiscal Year Issue: The fiscal yeaz for cities and counties cartently corresponds to the property tax cycle. Response: The state should maintain currenE Iaw and not change the city fiscat year to coincide with the state fiscal year. FF-5. Sales Tax on Local Government Purchases Issue: In 1992 when the state was experiencing a budget shortfall, the Legislature repealed the sales ta�c exemption for local government purchases. Local governments now pay state sales taac on purchases like road maintenance supplies and equipment, wastewater treatment facilities, and building maierials for affordable housing. This tax currently costs locai property taxpayers and ratepayers an estimated $100 million annually. In addition, proposals to extend the sales tax to services would have the effect of increasing local government costs and property taxes. 2 League of Minnesota Cities � 0 � Because no additional state aids were added to offset the additional cost, this repeal has effectively increased local property taaces to fmance state operations. ' Response: The state should reinstate the sales tax exemption for all local ' governmenf purchases. The exemption must not be coupied with cuts in LGA or HACA. � t � I l ' ' � ' i , , � ' ' FF-6. Payments for Services to Tax-Exempt Property Issue: Taxable property in many cities is being acquired by nonprofit and government entities, Converting the property to tax- exempt status can lead to a serious tas base erosion without any cortesponding reduction in the service needs created by the property. Response: Cities should have the authority to collect payments from statutorily exempt property owners to cover costs of service as cities have with special assessments. FF-7. Truth-in-Taxation Process Issue: Cities must set a preliminary levy by September 15 which, by law, becomes the ma�cimum that cities can levy for the foliowing yeaz. In recent years, cities have not received complete taac base and aid information in a timely manner. As a result, cities often either set a preliminazy levy that is artificially high or they aze unable to budget for unforeseen needs that azise after September 15. Response: The League supports changes to the Truth-in-Tasation process to provide more meaningful information to citizens. Cities should have the authority to increase the final levy from the preliminary levy to meet unforeseen and uncontrollable needs. 2001 City Policies a�-s FF-8. State Administrative Deductions from State Aid Issue: State administrative costs are deducted from the LGA appropriation. This reduces the property taac relief provided by I,GA and creates hidden appropriations for state agencies. Response: All appropriations from LGA resources that fund state operations should be repealed. FF-9. Reporting Requirements Issue: Budget and financial reporting requirements amposed on cities by the state often result in duplication and additional costs. Response: Requirements for reporting and advertising financial and budget in£ormation should be carefully weighed to balance the validity of fhe state's need for additional information with the costs and burdens of compiling and submitting this information. In addition, all state agencies should be aware of the information already required by others to avoid duplication of reporting requirements. FF-10. Federal Budget Cutbacks Issue: Congressional budget actions or devoluuon of program responsibilities may place fiscal burdens on the state and local governments. Response: The state should not reduce aids or increase fees to local governments as a means for dealing with cutbacks in federal revenues. The state should take responsibility for reductions in federal revenues rather than placing the burden on cities and their property taxpayers. ' FF-11. Price of Government infrastructure and facilities improvement also necessitated by new development. ' Issue: The price of government legislation enacted in 1994 was intended to measure the overall effect of state and local taxation over a long period of time. The targets measure government revenues as a percent of personal income. Unfortunately, the tazgets have been misinterpreted and used unfairly to criticize city t� and budget decisions. Response: The price of government statutes as fhey apply fo tocat governments should be repeaied. If the price of government law is to con�inue fo be applied to locat governments, price of government calculations should be based on the sum of levy and state aid, not just levy, and based on long-term trends, not single-year events. FF-12. Capital Improvement Fees Issue: New deve2opment and the resulting growth create an increased demand for gublic infrastructure and other public facilities. Severe constraints on local fscal resources and dramatic forecasts for population growth have prompted cities to critically reconsider ways to pay for the inevitable costs associated with new development. Traditional financing methods tend to subsidize new development at the expense of the existing community, discourage sound land use planning, place inefficient pressures on uublic facilities, and allow under utilization of eacisting infrastructure. Consequently, local communities are exploring methods to ensure that new development pays its fair shaze of the true costs of growth. Given the existing authorization to impose fees on new development for water, sanitary and storm sewer, and pazk purposes, it is reasonable to extend the concept to additional public Response: The Legislature should authorize cities to unpose capital improvement fees so new development pays ifs fair share of the off-site, as well as fhe on-site wsts of pubfic infrastructure and other public facilit3es needed to adequatety serve ttew developmen�. , � t FF-13. Deferred Assessments for , Roads Issue: Current law allows a city to recoup the costs for water, storm sewer, or sanitary sewer improvements by levying additional assessments on the property benefiting from the unprovement, but not previousIy assessed. Tlus authority for deferred assessment has not been extended to other infrastructure, such as road improvements, even though properties are benefiting from the improvements. Response: Cities should be abie to assess tke cost of infrastrucLure improvemeats for roads. Cities shoutd be allowed fo defer assessments against property located outside the city for road unprovements benefiting property abutting the improvement but not previously assessed for the improvement. For example, if a city makes improvements to a road that benefits city residents and township residents, the city should be able to defer the assessments to the township property until the property is brought into the cify. Once the township property is brought into the city, the city would then be able to assess that newly acquired property for road improvements previously done but not assessed at the time of the improvements. 4 League of Minnesota Cities �l � � ' , � � t � � , ' ' fJ ' I1 ' LJ FF-14. Taxation of Electronic Commerce Issue: Sales over the Intemet and through other electronic means are projected to increase exponentially over the next several yeazs. Electronic transactions pose significant tax policy challenges because of the difficulty of assigning a location to elecuonic sales, and because many Internet °goods" are not tangible property. Response: Federal taic policy should nof place main street businesses at a competitive disadvantage Eo electronic retailers, must not jeopardize repayment of bonds backed by state and local sales tas revenues, and should ensure stability in state and local revenues. To address the challenges created by the growth of e- commerce, the League supports the multi- state effort to develop a streamlined sales tax system. FF-15. Limited Market Value Issue: Rapidly rising property values in some parts of the state have fueled legisiative interest in expanding the current limited mazket value law. One proposal would establish the consumer price index as the ma�cimum annual mazket value increase and extend the limit to all classes of property. Further restricting mazket value increases would have several negative consequences: • It would unfairly shift tases from properties experiencing growth in value onto all other properties. � Over the long-term, similaz properties would be taYed at widely different rates merely due to when the properties were last sold. a�-5 • It could discourage the sale of property because sales would retum the property to full market value for taY purposes. • It would discourage improvements to property, which would trigger a return to full market value for tax purQoses. This could lead to degradation of housing and other types of property. • It could adversely affect the ability of cities to bond for infrastructure improvements or for tax increment fmancing since local t� bases would not reflect the growth in property values. • Once implemented, limited mazket value provisions are politically difficult to sunset due to the potential for lazge one- year tas shifts onto properties whose values were artificially capped by the program. Response: The League opposes any elcpansion of the limited market value law. FF'-16. State Charges for Administrative Services Zssue: Currently, some state agencies have wide discretion in setting the fees for special services they provide to local govemments. For example, the Minnesota Department of Revenue recenfly increased the fee for administering local sales taxes by 80 percent in the middle of a budget year with less than six weeks notice. The increase had no apparent relationship to the cost of providing the service. Response: State agencies shouid be required to demonstrate the need for Sncreases in service fees, and should give adequate notice of increases to allow local governments to budget for the increases. State agencies should set administrative service fees as close as possible to the marginal cost oF providing fhe service. , 2001 City Policies 5 Local government should be given the oprion to self-administer or contract with the private sector for the service if the state cannot provide the service at a reasonable cost IMPROVING LOCAL ECON011'IIES LE-1. Tax Increment Financing (TIF) Issue: In the context of any discussions regazding regional economic development strategies and "The $ig Plan," it must be recognized that the state has effectively delegated the responsibility for economic development and redevelopment to cities. Unfortunately, neighboring states have given their cities more development tools and, therefoze, cities in these states have a competitive advantage over Minnesota cities. In Minnesota, taz� increment financing is the most viable tool available to all cities in their economic development and redevelopment efforts. Additionally, tax increment allows cities to address the changing needs of their evolving communities. The state, whether based on a lack of information or misinformation, has been critical of cities' use of the tool and has implemented a series of restrictions over the pasY several years, rather tkan partnering with cities and encouraging their endeavors to improve and enhance the economic well- being of Minnesota and the growth and redevelopment of iis ci�es. Critics often claim that TiF is overused. Some of these critics have proposed TIF freezes or caps. This view fails to recognize the benefits received by counties and school districts, as well as cities, upon district expiration while only cities aze required to assume the financial risks associated with development decisions. Cities have used tax increment Fmancing responsibly and examples of these positive uses abound. Response: To effectively compete with other states, Minnesota must provide its cilies greater flexibility in fhe use of tax increment financing and other economic development programs. In implementing any sort of regional economic development strategy and objecfives contained in "The Big Plan," the state should partner with cities in economic deveIopment and redeveIopment activities, and encourage cities' use of tas increment in aclueving the laudable goals of long-term tax base stabilization and growth, job creation, devetopment of low- to-moderate income housing, remediation of pollution, elimination of blight, recycling and redevelopment of the infrastructure, and redevetopment of its communities. The League opposes proposaLs for TIF freezes or caps. Counties and school districts are appropriately involved in cities' development decisions through current "review and commentA requirements and should recognize the benefits they receive, without assuming any of the risk, due to cities' prudent uses of TIF. LE-2. TIF Reform Issue: Leaislative proposals to reform the ta�c increment financing laws will continue to be introduced and debated during upcoming legislative sessions. Response: As part of any TIF reform debates, the Legislature should consider: • Aufhorizing any taz� increment League of Minnesota Cities 1 ' f_I u , � ' C ' 1 ' �� i LJ ' 1 1 � districfs approved after Apri11,1990, to pool increments in the same manner as disfricfs certified prior to Apri11,1990; • Eliminating fhe LGAIHACA penalty currently imposed on districts or removing the restrictions on the sonrce of payment; • E�panding the use of taY increment financing to assist in the development of technological infrastructure, transit-oriented development, the restoration of historic structures, and for nonretail commercial projects (e.g., software companies, banks, and insurance companies); • Exempting redevelopment districts from the "five-year rule"; • Modifying the housing district income qualif5cation levei requirements to allow the levels to vary according to those speci�c to individual communities; • Authorizing the use of federal grants and otherfundsforlocal contributions; and • Removing the LGAJfiACA penalty imposed on housing districts established between the penalty years of 1990 and 1993. LE-3. Impact of Property Tax Reform on E�sting TIF Districts Issue: Jn addition to potential future action in light of "The Big Plan," recent I.egisiatures have compressed property tax class rates wluch, in turn, has jeopardized the repayment of outstanding debt or other obligations in existing TIF districts. Given the long-term nature of property tax reform, cities could not have anticipated the impact of these class rate changes, nor can cities project the impact of future changes. The I.egisiature has recognized its responsibility for the impacts of its actions 2001 City Policies C�-5 by creating a TIF grant program to address situations where the class rate changes cause TIF district deficits. The TIF grant program, currently funded at $6 million and scheduled to expire in 2002, is likely to be insufficient to cover every deficit. Some of the worst deficit situations may not surface for a number of yeazs. Additional pooling and special taxing district authority might be useful in certain cities but aze only partial solutions. Response: The Legislature should provide additional state resources to the TIk' grant program and extend the program indefinitely so that TIF obligations can be met and third party bondholders are protected if the current TIF grant program is insufficient to cover deficits caused by recent class rate changes. The Legislature should also explore additional options to address de�cits such as district duration extensions and eliminating or adjusting the original tas capacity rates. LE-4. Business Subsidies Issue: The 1999 Business Subsidies Act was clazified and modified during the 20001egislative session. In order fot development agencies to effectively implement the amended law, the law should be allowed to operate without further substantive legislative change. Response: The Legislature should not make any substantive changes to the 1999 Business Subsidies Act during the 2001 legislative session. LE-5. Economic Development Programs Issue: The Minnesota Tnvestment Fund is not adequately funded. Local governments do not have an adequate siate 7 of tools to assist job creation, redevelop blighted and decaying properties, and provide adeguate housing choices. Consequently, cities aze not well equipped to compete nationalty and internationaily for business development. Response: More state resources should continue to be contribufed fo fhe Minnesota Investment Fund. In addition, Congress should remove the caps that have been placed on Industrial Development Bonds and acknowIedge that the e�ctensive eligibility requirements now adequately limit their use. LE-6. Redevelopment Programs Issue: Communities across Minnesota aze faced with the unique circumstances of deteriorating, obsolete, and vacant structures in neighborhoods and downtowns and a lack of land for development. Redevelopment activities usually require large, up-front funds to address multi-phase projects of extensive dvrauon where site assemblage, demofition, relocation, or pollution clean-up must occur before private-sector interest can be generated. Additionally, deferioration threatens historic shvctures in cities across the state. While the redevelopment account administered by the Department of Trade aad Economic bevelopment is a critical component in establisbing a coherent statewide policy for redevelopment, cities do not have sufficient tools to utilize in local historic preservation efforts. Response: In recognition of the unique needs of redevelopment projects, the sfate should confinue its commitment to reinvest in its communities by increasing and committing to permanent base budget futtding for the redevelopment account administered by the Department of Trade and Economic Development. Additionally, as part of a comprehensive approach to redevelopment needs, the Legislature should consider the state income ta�c credit legisiation pursued by the Preservation Alliance of Minnesota, TIF subdistricts, and other taY incentives for local historic preservation efforts. LE-7. Property Tax Abatement Authority Issue: In an effort to increase the number of development tools available, the 1997 I.egislature authorized local units of government to graat pmperty tax abatements. Although TiF continues to be the primary financing mechanism for local development projects, tax abatements provide a good addition to a needed list of economic development tools. In order to provide maximum benefits, taz� abatements should be Iess restricflve in terms of funding caps and £mancing terms. Property tax abatements should not be considered a replacement for tax increment financing. Response: TIF is still the primary viable development tool available for cities. Abatement authority should coniinue fo be available, but not offered as a raYionale to eliminate TIF. Additionally, the Legislature should develop a state fund to facilitate state participafion in abafement projects. Finally, the fnnding caps should be increased or elitninated. LE-8. $rownfieIds Issue: Brownfieids are lands unsuitable for development due to the presence of chemical or other contaminants. Brownfields are a major cause of blight within communities across the state through loss of local tax base, jobs, housing qualiry, pubiic safety, and community confidence. ReviYalizing this land is cosfly and requires League of Minnesota Cities ' i � ' ' ' I_I I_I , � ' ' � � ' ' , � the cooperation of city, county, school, regional, state, and federal governments and the assistance of local economic • development organizations and citizens. As we move into an era where the mass creation of jobs is a necessity and where increased tas base is a requirement for local governments to adequately face growing financial pressures, efforts to revitalize brownfields must not only continue but be accelerated in the upcoming yeazs. Currendy, $7 million exists in ffie Department of Trade and Economic DevelopmenYs (DTED) base for the contaminated site clean-up fund. Additionally, $6.2 million is appropriated annually from the Petrofund to DTED to clean up sites that contain at least some petroleum-related contamination. Response: A comprehensive set of economic development programs mast be maintained for cities and other development agencies. The Legislature should: • Increase funding for the Department of Trade and Economic DevelopmenYs contaminated site clean-up fund and redevelopment account; • Strengthen enforcement and collection of revenues for the state contamination ta1c; • Continue support for and funding of local and regional programs to assist in the efforts to remediate brownfields; • Establish a fully-funded program to allow cities and other development authorities to gain control of and reclaim and revitalize brownfields; • Protect existing tas increment financing provisions that provide for the remediation of brownfields, and modify restrictions to allow the pooling of district revenues to assist in a�- s the financing of remediation of brownfields; Establish an indemnification fund fo provide financial security for instifutions and individuals as they invest in efforts to recycle brownfields in order to leverage private investment in cities' efforfs to increase their tas base and create jobs; and • Contiaue financing mechanisms for cleaning contaminated sites. LE-9. OSA Response Timelines Issue: The Office of the State Auditor (OSA) is responsible for TIF oversight. As part of their review of TiF districts, they identify alleged violations of the TIF laws and issue noncompllance notices to TIF authorities. After responding to these noncompliance notices within the required 60-day period, authorities often do not receive timely responses on the matter from the OSA. Additionally, TIF authorities aze often unclear about the final disposition of the matter upon receipt of a final noncompliance notice. Resporase: In the event that the OSA determines to issue a�nal noncompliance notice to a TIF authority, the Legislature should require the OSA to issue the notice within 60 days of receiving the authority's response. Any final noncompliance notice should contain the OSA's final position on the matter, the date upon which they forward the matter to the county attorney, and the next steps that are required to be taken according to state law. Upon expiration of the 60-day period, the authority should be deemed to be in compliance with the TIF laws if no finat noncompliance notice is received. ' 2001 City Policies y LE-10. O5A Time Limitations Issue: The Office of the State Auditor (OSA) has the authority to issue noncompliance notices for every existing TIF district in the state for alleged violations of the TIF laws. This authority extends retroactively to the inception of the district. Accordingly, TIF authorities can receive noncompliance notices for alIeged vioIarions that occurred twenty or more years ago. Often, staff and record-keeping procedures have changed and TIF authorities find it exceedingly difficult to reconstruct the past in order to identify and remedy these situations. SimiIazly, the OSA claims the authority, based on the state's records retention schedule, to audit TIF districts for up to ten years after decertification which requires cities to expend staff resources to maintain files and a working knowledge of old districts for an unreasonable period of time. Response: A reasonable timeframe wifhin which alleged violations are identified should be established. The Legislature should reasonably restrict the OSA's ability fo issue noncompliance notices fo the six-year period prior to the notice's issuance date. The Legislature should also require the OSA to coaduct any audits on decertified districts within one year of decert�cation. LE-11. Growth Management and Annexation Issue: Unplanned and uncontrolled urban growth has a negafive environmental, fiscal, and governmental impact on cities, counGies, and state govemments because it increases the cost of providing government services, and results in the loss of natural resource areas and prime agriculturat Iand. Response: The League believes the e�sting framework for guiding growth and development primarily through local plans and conYrols adopYed by local governments should form the basis of a statewide planning policy and that the state should not adopt a mandatory comprehensive statewide planning process. Rather, the state should: � Provide additional financxal and technical assistance to local • • • governments for cooperative planning and growth management issues, particularly where new comprehensive plans have been mandated by the Legislature; Clearly establish the public purposes served by existing statewide controts such as shore land zoning and wetlands conservafSon; clarify, simplify, and streamline these controls; eliminate duplication in their administration; and, fully defend and hold harmiess any locat governmenf sued for a"taking" as a result of executing state land use policies; Give cities broader aufhority to extend their zoning, subdivision, and other land use controls up to two miles oufside the cify's boundaries, regardless of the esistence of county or township controls, to ensure onformance with city facilities and services; Clearly deFne and differentiate between urban and rural development and restrict urban growth outside city boundaries; • Require the Metropolitan Council to seek cooperation from the state of Wisconsin and counties (both Minnesota and Wisconsin) surrounding the metropolitan area to ensure responsible and controlled development; study expansion of Metropolitan Council authority in surrounding counties; and, examine 10 League of Minnesota Cities ' ' � ' • , ' • � • ' ' ' � � � LJ L� Ll the positive and negative impacts of mandatory regional or local land use controls and state-imposed development standards; Facilitate the annexation of urban land to cities by amending sfate statutes that regulate annexation to make if easier for cities to anneic developed or developing land within unincorporated areas; Oppose legislation that would reinstate fhe election requirement in contested annexations; and Encourage ideas consistent with the long-term goal of allowing urban development only in urban areas. Density incentives such as sprawl reduction aid programs are more straightforward methods of rewarding and encouraging compact urban development than using LGA or HA CA for another new purpose. LE-12. Electric Service Extension Issue: Minnesota law currently protects the right of municipally-owned utilities to extend electric services to annexed azeas. Electric cooperatives have announced their intention to seek legislation that would eliminate the right of municipally-owned utilities to extend electric services to annexed areas. Eliminating the authority to extend services would interfere with the city's natural growth and with the ability of municipally- owned utilities to serve the entire coznmunity. Response: The League opposes any statutory change that would impede or eliminate the ability of municipally- owned utilities to extend electric services to any portion of their respective cities, including annexed areas. 2001 City Policies LE -13. State and/or County Licensed Residential Facilities (group homes) Issue: As the need for more residential- based care facilities increases, sufficient funding is also needed to ensure residents living in group homes and licensed facilities have appropriate care and supervision. In view of cities' responsibilities to accommodate group homes and residential- based facilities, it is important that state and county government work with local officials to address residential care and public safety issues. Cities have reasonable concerns for special care necessary for group home residents, particulazly in case of public safety emergencies. Since operators of certain residenUal facilifies and services are not required to notify cities when they intend to purchase housing for group homes, cities do not have opportunity to raise concerns and requirements regazding the special care and public safety measures these residences may expect. Response: The Legisiature should provide sufficient funding for snch residential-based services and require state and county agencies that manage those facilities or companies licensed to operate group homes to notify ciEies in a timely manner when licensed facility operators request to operate such facilities or to renew their license and allow cities to require such agencies and licensed operators to identify and take appropriate measures to respond to the special care residents need in case of emergencies. Legislation should also require establishment of nonconcentration standards for state or county-issued requests for proposals (RFPs) and direction to avoid clustering residential facilities. Licensing authorities must also 11 a�— 5 be responsible for removing any residents incapable of living in such an environmen�, parEicuiarIy if they become a danger to themselves or others. LE -14. Housing and Economic Vitality Issue: City officials recognize fhat Iow rentai vacancy rates and increased demand for housing, particularly for starter homes foz fust-time homebuyers, have had a dramatic impact on affordability and threaten to undermine strong neighborhoods, healthy communities, and local economic vitality. Decreased federal housing assistance art8 insufficient state resources for hoasing production place statewide economic expansion at risk. Changes in social services and family support, along with welfaze-to-work requirements, make it paramount for the Legislature and the federal government to identify and provide for additional resources for housing to strengthen family stability, improve workforce availability, and improve children's school perforatance. Response: The Legislature must increase state investment in housing production, at least doubling the current biennial housing budget, to help leverage private and local resources as well as federal funds. The Legislature should continue to make additiona] investment outside Yhe metropolitan area for production of single-fami2y hovsing affordable to working families, along with affordable rental units. In the metropolitan area, investing over the next biennium to carry out the goals of the Livable Communities Act is critical to meet the needs of many households in which working adults must now Yravet long distances to get to work 12 and face a losing baffle in trying to afford housing for fheir families. The federal govemment arust address its responsibiIity to assist communities in providing for production of affordable housing units and end over-reliance on housing vouchers to solve the growing gap befween rapidly increasing rents and the incomes af workers in lower-paid employment The Legislature should continue to provide incentives rather than mandates to lower housing construction costs and selling prices to encourage local government, builders, developers, housing agencies, and organizations Yo address housing design and construction costs, land use regulation, and other factors that affecf housing development costs. The Legislature should also give cities the authority to redevelop tax- forfeited property for housing. LE-15. Preservation of Federally- � Assisted Low-Income Housing Issue: I.oss of federally-assisted housing in communities throughout the state remains a serious threat to the well being of older city residents as well as other vuinerable populations. Cities do not have sufficient locai resources to purchase or provide equiry take-out loans to owners of subsidized rental units who are considering mortgage prepayment and conversion to market-rate rentals. Without such resources, properties originally built to provide housing for low- income residents will be converted to mazket-rate, worsening an already tight rental housiag market. Cities, neighborhood orgaaizations, and communiry development projects also do sometimes require demofition of League of Minnesota Cities ' � ' , ' t � ' ' � ' I_ J ' ' t � , LJ substandazd housing, which can compound housin; shortages and displace occupants. Response: The Legislature must continue to provide additional resources for fhe Minnesota Housing Finance Agency and community-based nonprofit housing organizations to buy nnits or make equity take-out loans to property owuers in return for maintaining rents affordable to low-income residents and agreeing to maintain the federaily subsidized morfgage to term. LE-16. Adequate Funding for Transportation Issue: Current funding for roads and transit systems across all government levels in the state is not adequate. The L.eague acknowledges that all Minnesota communities benefit from a sound and adequately funded transportation system. Response: More resources must be dedicated to the state's transportation system. The League supports constitutionally dedicating a portion of the sales tas on motor vetucles (also referred to as MVE1� or other new revenue sources to a transportation fund, which would fund both highway and transit projects. The League also supports an increase in the gas tax that would be dedicated under the existing highway user trust fund formula. Replacement funding for vehicle registration taYes (known as tab fees) must be constitutionally dedicated to the highway user trust fund. If adequate funding does not come from the sfate, cities should have funding options made available to them to raise the necessary dollars to adequately fund roads and transit Ot- 5 All nontransportation programs should be funded from sources other than the highway user distribution fund or other funds dedicated fo transportation. LE-17. State Aid for Urban Road Syst�� Issue: Current rules goveming municipal state aid expenditures are restricting the efficient use of these funds, and do not adequately acknowledge the constraints of road systems in urban city environments. Response: Rules affecting the municipal state aid system need to be changed to acknowledge the technical and practical resfrictions on construction and reconstruction of urban road systems. New municipal state aid design standards should not apply to reconstruction of eausting state aid streets originally cdnstructed under different standards. Future changes to state aid rules should ensure the involvement of elected officiais and engineering professionals in the decision-making process. LE-18. Turnbacks of County and State Roads Issue: As road funding becomes increasingly inadequate, more roads aze being "turned back" to cities from counties and the state. Response: Turnbacks should not occur without direct funding or transfer of a funding source. A process of negotiation and mediation should govern the timing, funding, and condition of turned-back roads. City taxpayers should receive the same treatment as township taxpayers. The requirement for a public hearing, standards about the conditions of turnbacks, and temporary � 2001 City Policies 13 maintenance funding should also apply to county turnbacks to cities. At a minimum, roads proposed to be turned back to a lower government level should be brought up to the standards of the receiving government or should be compensated with a direct payment Direct funding should be provided for smaller cifies that are not provided with turnback financing through the municipal state aid system. LE-19. Road Funding for Cities Under 5,000 Issue: Cities nnder 5,000 popalation do not receive any nonproperty ta�c funds for their collector and arterial streets. Response: Cities under 5,000 population that are not eligibie for Municipal State Aid (M.S.A.) should be able to use county municipal accounts and fhe 5 percent account of the highway user distribution fund. Uses of counfy municipaI accounfs should be statutorily modified so counties can dedicate these funds for local arterials and collector sfreefs wifhin cities under 5,000 population. In addition, the five percent set-aside account in the highway user distribution fund shouid be used fo meet this funding gap. LE-20. Railroad-Related Projects Issue: Cities are being presented with faz-reaching and long-term effects when railroad expansion and related projects eater their communities. Along with the concerns related to safety, environmental effects, and noise impacts on the communities, several issues have greater reaching effects. They aze: • The cost-shaze ratio related to roadway crossing improvements will be borne by the public sector to a substanfial degree, some estimates aze 80 percent pubIic to 20 percent private funding; • The financial burden faced by the public sector to deal with mitigation improvements, a cost that the Surface Transportation Boazd (STB) is not requiring the private sector to pay; • The issues associated with the length of trains moving through communities; • Liability associated with whistie- blowing ordinances; and • Preemption of local authority to regulate railroad activities. Response: The private sector must be required to pay a greater share of the improvements that benefit their industry. The public sector should not be expected Yo underwrite the costs of improvements sought by the private sector. The state and federal government must participate in adequately fnnding the mitigation of the negative impact of railroads on local government and its citizens. The federal government must exercise greater oversight of the STB to ensure that fair and equitable solutions are reached when dealing with cities in Minnesofa. LE-21. Right-of-Way Management Issue: Cities have fundamental responsibility for managing the safe and convenient use of public rights-of-way and hold local rights-of-way in trust for the public as a limited and valuable asset. As demand increases for use of riahts-of-way, cities must continue to have cleaz authority to allocate and coordinate that resource among competing uses. Local management responsibilities vary and are site speci£ic, underscoring the necessiry for maintaining local authoriry to recover actual management costs and to exercise local zoning and land use regulations. 14 League of Minnesota Cifies 1 , � t L I LI ' , ' Response: State and federal governments must: • Uphold local authority to manage and protect public rights-of-way, including reasonable zoning and subdivision regulation and the exercise of local police powers; • Recognize that municipalities have a paramount role in development, utility location, and implementation of construcfion and safety standards; • Support local authority to require full recovery of actual costs of managing use of public rights-of-way; • Allow cities to retain authority to franchise gas, electric and cable services and collect franchise fees or alternative revenue streams; and • Maintain the courts as the primary forum for resolving disputes over the exercise of such authority. t LE-22. Workforce Readiness , ' � ' ' t � 1 Issue: State and federal welfare reform efforts have focused on the importance of the welfare-to-work transition, and have recognized the challenge of ensuring individuals are qualified to work. Cities have an interest in the availability of qualified workers as part of their economic development efforts, and can serve as a catalyst with other public entities and the private se�tor to address workforce readiness issues. Response: The Legislature should continue to fuliy fund the job skills partnership and pathways programs administered by fhe Department of Trade and Economic Development. The Legislature shoutd provide additional funding to Local Workforce Councils for the purpose of upgrading the skills and productivity of the workforce. D1-5 LE-23. Platting Law Recodification Issue: The Minnesota Association of County Surveyors (MACS) is seeking to recodify Minnesota Statutes Chapter 505. Two issues raised by MACS that will likely impact cities aze the subdivision plat requirements, and the creation and amendment of road right-of-way acquisition maps. Additionally, there has been disagreement among plat law practitioners whether the MACS proposal is the appropriate document for achieving recodification. Response: It is not clear whether fhe platting statutes are in need of recodification. In the event practitioners of plat law develop a document that is sound and ready for legislative discussion, the Legislature should preserve local authority over plat approval and to iaclude language in the recodification legislation that will allow for pedestrian easements or thoroughfares to be dedicated by plat (sidewalks, public trails, etc.). LE-24. Economic Development Authorities Issue: The 2000 Legislature authorized counties outside the metropolitan azea to establish county economic development authorities (EDAs). The new law lacks specificity on certain process and limitations issues. County EDA activity in areas surrounding cides wili directly impact the adjacent city in terms of service provision and taxes. Response: The Legislature should establish reasonable limits on county EDA activities in unincorporated areas, including requiring city approval for proposed county EDA activities within two miles of a city. The Legislature ' 2001 City Policies 15 should reaisit the county EDA legislation and add specificity to other process and limitations issues suck as the local recommendation committee. LE-25. Infrastructure Funding Options fssue: Current infrastructure funding options available to cities aze inadequate. Existing special assessment law, Chapter 429, does not meet cities' £nancing needs because of the benefrt requirement. The law requires a minimum of ZO percent of such a project to be specially assessed against affected properties. In practice, however, proof of increased property vatue to this degree of benef t cau razely be pmven from regular repair or replacement of existing infrastructure, such as streets or sidewalks. Altematives to the Chapter 429 methods for financing infrastructure improvements are neazly nonexistent. The L.egislature has given cities the authority to operate utilities for waterworks, sanitary sewers, and storm sewers. The storm sewer authority, established in 1983, set the precedent for a workabie process of chazging a use fee on a utiliry biIl for a ciry service infrastructure thai is of value to all those in a city. Similaz to the storm sewer authority a transportation or sidewalk utility would use technical, well-founded measurements, aad woutd equitably distribute the costs of local infrastructure services. Response: The LegisIafure should aathorize cities to create, as a local option, additional utilities such as a transportation or sidewalk utility. Such authority woufd acknowledge: the effects of repeated levy limits and the general funding shift from the state to local governments for building and maintaining necessary infrastructure; the benefits to all taspayers of a properly maintained public infrastructure; and the limitations of existing special assessment authority. LE-26. Statutory Approval Timelines Issue: Since 1995, cities have been required to act on written requests relating to zoning, septic systems, the expansion of Metropolitan Urban Service Areas (MLTSA) and other lan@ use applications in accordance to a statutory time period generally refened to as the 60-day rule. Pursuant with Minn. Stat. § 15.99 state and local government agencies must approve or deny a permit within a statutory time frame, and failure by the agency to issue a specific denial of the application with contemporaneous written findings of fact shall be deemed an approval. Recent court decisions have made it cleaz the law needs to be clarified making it more efficient and to assist cities in providing accurate and timely responses to appiicants. Response: The Legislature should amend Minn. Stat § 15.99: To allow government agencies to provide final written fmdings of fact at the next official meeting of the governing body. To allow an automatic e�etension of the time limit an additional 60 days if the agency votes down a resolution granting the request, but does not vote on a resolution denying the reqaesG To make clear the 60-day time limit begins at the point when a formal complete written application is received on forms provided by fhe cify with appropriate addifional snpporting documents and including the payment of fees if necessary. 16 League of Minnesota Cities o�- 5 � To increase the initial time limit to 40 days for municipalities with less than 5,000 population. LE-27. Telecommunications Restructuring Issue: Facilities-based competition for telecommunications services has failed to emerge in many communities in Minnesota despite enactment of the 1996 Federal Telecommunications Act. Outside meuopolitan azeas and regional trade centers, there is little evidence of head-to- head competition. Further, there is a lack of coordination among federal, state, and locai policies aimed at encouraging competition. Respo�zse: The Legislature should recognize that lack of consumer choice is a serious disadvantage in obtaining advanced telecommunications services. State lawmakers should support measures to: telecommunications to strengthen local economies, eapand educational opportunities, and improve quality of life; • Give cities express authority to provide stafe-of-the-art telecommunications either as sole operators or in partnership with other providers; • Define a strategic leadership role for state government by setting standards and establishing goaLs for provision of these services, e&minating barriers to municipal entry, increasing customer choice, and allocating resources; and • Restrueture telecommunications regulation and subsidies to increase investment in state of the art telecommunicafions infrastructure and services in high-cost areas and low-income neighborhoods while taking into account the effect on cities' existing revenue streams. • Assure communities have affordable access to state-of-the-art IMPROVING SERVICE DELIVERY SD-1. Redesigning and Reinventing Government Issue: Every level of government is reevaluating, reprioritizing, redesigning, and renewing its organizational structure and programs in response to financial realities and citizens' needs and problems. Reforms, however, must be more than change for the sake of change, or a reshuffling of existing programs to appease the electorate. To be meaningful, reorganization and reassignments of governmental entities and services should save money where feasible, deliver improved services, serve essential needs,and be equitably structured. Cities have and will continue to pursue the use of cooperative agreements, the reevaluation of city programs and services, and changes to organizational structures. Response: The federal, state, and county governments should: • Ensure that in redesigning, reinventing, or reassigning government services and prograzns that the appropriate level of service to citizens is evaluated, and citizen demands and expectations are adequately addressed; • Promote local efforts through 2001 City Policies 17 incentives, rather thau mandates; • Communicate and esfablish a process of negotiation before shifting responsibility for delivering services from one level of government to another, or seeking to reduce service duplicatioa; • Transfer authority for use of revenues dedicated to such programs, or provide appropriate and adequate alternatives; • Identify and repeal programs or discontinue services that are no longer necessary, or which can readily and fairly be provfded by the private secfor; and • Employ e�sting government entities in redesign efforts rather than create new agencies or units. SD-2. Unfunded Mandates Issue: The cost of federal and state mandated programs substitute the judgment of Congress, the President, the I.egislature, and the govemor for local budget priorities. These mandates force ciues to reduce funding for other basic services or to increase taxes and service chazges. The passage by the Izgislature of reporCing requirements for new state mandates, and the passage by Congress of legislation restraining new federal mandates, should help address the problem, but other steps aze necessary. Response: • Existing unfunded mandafes shou[d be reviewed and modified or repealed where possible. • No addifional statewide mandates sbould be enacted, unless fuIl funding for the mandate is provided by the IeveI of government imposing it or a permanent stable revenue source is established. • Cities should not be forced to compiy with unfunded mandates. • Cities should be given the greatest fle�bility possible in implementing mandafes to ensure their cost is minimized. SD-3. Civil Liability of Local Governments Issue: One of the barriers to the delivery of governmental services and programs is the exposure of local governments and their officials to civiI damage claims. The state has acted to protect itself and its local govemments by enacting exceptions and limitations to liability suits, and authorizing self-insurance and other mechanisms to deal with claims allowed by law. Response: The League supporfs: • Creating an exception to municipal tort indemuification law (MN Stat. § • 466.0'n where an employee is defended and indemnified for ctaims under a contract of insurance carried by the employee. Elctending the protection o£ the state and municipal tort claims act to quasi- governmental entities when performing public services such as firefighting, E�sting constitutional safeguards for protecting public and private property interests without any statutory expansion of property rights; and Clarifying and maintaining the applicability of municipal irumunity in various areas including, but not limited to, park and recreational immunity, including the extension to entities providing a public service that have not traditionally been included within the immunify (e.g. sfate trails over municipal utility easements) and 18 League of Minnesota Cities ' � , , � ' � , � , � l_ J ' vicarious official immunity. SD-4. Environmental Protection Issue: Cities demonstrate strong stewazdship for the protection and preservation of the environment. Minnesota municipalifies have historically been the leading funding source for environmental protection and improvements. Municipal efforts include environmental protection through wastewater ueatment, wefland restorations, stormwater treatment, public utility emission reductions, brownf`ield cleanup, safe drinking water programs as well as others. However, at some point the diminishing or nonexistent environmental benefit received from addition efforts is fiscally irresponsible. Often, the programs are improperly designed to meet their stated goals. Additionally, the absence of funding by the state and federal governments has removed an essential restraining feature in program design and implementation. Agencies are less accountabie to the governments that mandate environmental programs when they do not have to find the money to implement the programs. Specific problems faced by cities include the following: • New programs or standards are continually adopted without regazd to the e�stence, attainability, or cost of existing programs an3 standards. • Regulatory bodies fail to consistently use good science and the most current and accurate data when establishing water quatity standards. � Regulatory bodies impose new pernut requirements without going through rulemaking. Instead, the agencies rely on internat documents, program strategies, and "best professional judgment of staff' when setting permit 2001 City Policies a�- s • • criteria. Regulatory bodies approve permits and programs that compete with traditional municipai services and encourage urban sprawl. This behavior puts at risk the public investments and growth management efforts cities have made when planning for future development. Pernut fees and other cost transfer elements of federal and state programs do not provide an incentive for environmental agency e�ciency, policy prioritization, or risk assessment. Third party environmental advocacy groups create significant hazdships on cities by threatening litigation even when hard science may not support the groups' positions. Response: • Alternative wastewater treatment and cooperative service systems should be prohibited From operating in areas that can reasonably and effectively be served by eacisting municipal systems unless: • The municipal system is proven to be substantially less cost-effective and substantially less beneficial to the environment; and • the operation of these systems will not create a stranded public investment in the existing system. • Sufficient state and federal �nancial assistance should be provided to assist local governments when complying with state and federal infrastructure requirements, particularly with regard to wastewater, stormwater, and drinking water faciIities. • The MPCA should streamline its permitting and reissuing processes to allow for effluent standards and permif requirements to be known earlier, thereby giving communities more time to defend against contested 19 case hearings. • The Legislature should require the MPCA to make its aetermination regarding the re-issuance of a permit witftin a reasonable set time period and require the MPCA to reissue the permit within a reasonable set time frame. • Legistation should be passed that requires state agencies to establisk permit requirements oaly when the criteria they are using is developed through the rule making process. • The LMC should join with other like- minded organizations to contesf though jndicial means various regulatory activities of state agencies and advocacy groups. SD-5. Election Issues Tssue: Delays and lack of funding at the state level have prolonged the wait for cities to have direct access to the statewide voter registration system. Lack of access increases the time and cost to process new voter registrations, update voter files and verify voter information in a timely manner. Response: The LegisIature should provide funding to a11ow more cities direct access to ttee statewide voter registration system. SD-6. Local Elecfion Authority Tssue: Previous legislatures restricted city authority to schedule ciry elections and establish terms of o�ce for local elected officials, thereby diminislung regard for the zole of local self-govemment, particularIy when state policy preempts home rule authority governing city elections. Statutory cities currendy lack authority to create wazds. Response: The Legislature shoutd oppose further limits on either the number or the tength of terms city elected ofFiciaLs may serve, particularly when those terms have been established by voters in home rnle charter cities. State poHcy on uniform elections should continue to recognize and uphold Iocal authority to schedule city elections in November of either even- or odd- numbered years. The Legislature should support provisions fo give sfafufory cifies general aathority to create wards. SD Election Judge Appointment Issue: It is increasingly difficult for locai election officiais to comply with statutory requirements that election judges serving at precinct polling places be persons identified as members of major politicai parties. The requirement presents a growing concern in obtaining quatified election judges and a serious obstacle to efficient election administration at the local level. Response: The Legislature should eliminate election judge appointment criteria requiring persons seeking appointment as local election judges to designate a political party. SD-8. Election Judge Compensation Issue: People willing to serve as election judges are often discouraged from doing so becaase the ciry is not authorized to accept their service as a volunteer or to contribute their compensation to local charities or community nonprofit organizations. Response: The Lebislature should authorize cities to allow election judges to direct thaf their pay be donaYed fo a Iocat 2� League of Minnesota Cities o�- S charity or community nonprofit organization of their choice. SD-9. Counting Write-In Votes Issue: Requirements for recording and reporting votes cast for fictitious and undeclared write-in candidates are unproductive, time consuming and do not serve to increase voter confidence in the outcome of the election. Despite actions of the 2000 I.egislature requiring write-in candidates for state offices to file an affidavit of candidacy prior to election day in order for votes for such candidates to be reported, election judges continue to be required to count write-in votes for candidates for judicial offices. Response: There should be no requirement to tabulafe or report write-in votes cast for fictional or celebrity write- in candidates or for those other write-in candidates for judicial offices who have not officially declared their interest in seeking office. SD-10. City Costs for Enforcing State and Local Laws Issue: Cities experience substantial costs enforcing state and locai laws, particularly those related to tra�c, controlled . substances, and incarceration of prisoners. The current method in our criminal justice system of recovering costs for law enforcement and prosecution through fines is insufficient to meet the costs incurred by local governments. Response: The LegisIafure should review this issue and adopt measures that provide for complete reimbursement of the costs incurred by local governments in enforcing state and local laws. Solutions that should be considered include the following: • Increasing fine amounts; � Removing or modifying county and state surcharges fhat conflict with cost recovery principles; and • Requiring fhe defendant to pay the full costs of enforcement and prosecution as part of any sentence. SD-11. Design-build Issue: The standazd bid procedure cities aze required to use in selecting contractors for municipal buildings can be quite costly. Private sector development uses a process known as "design-build" in which vazious firms submit project proposals that-include both a design and the construction costs for that design. The selection is then based on the total package. By granting specific statutory authority to use the design-build alternative to the Metropolitan Sports Facilities Commission and state agencies, including the Department of Revenue, the Legislature has recognized the financial savings it can provide. In documented instances, cities have saved taxpayers up to 10 percent of the total project cost by using the design-build alternative. The design-build process also pernuts improved project management and oversight. However, absent statutory authorization to use this alternative, cities aze vulnerable to lawsuits from unsuccessful bidders. In addition, the design-build process for piayground equipment can encourage greater creativity while maintaining cost controls. Special legislation was enacted for the city of Chanhassen in 1995 to experiment using tlus process for purchasing playground equipment. Response: The Legislature should authorize an extension of the design-build procedure to cities as a less expensive alternative to the standard bid procedure. 2001 City Policies 21 SD-12. Providing Information to Citizens Issue: To keep the public updated and informed, state law requires local units of government to publish various notification documents in newspapers, and often dictates which newspapers receive cities' publication business. The number and variety of documents required to be published and the costs of publication aze burdensome. Technological advancements have expanded the ways govemment can provide information to citizens. In many cases, these new technologies aze more efficient and cost effective. Response: Cities should be authorized to take advantage of new technologies to increase the dissemination of information to citizens and potentially lower the associated costs. SpecificalIy, the Legislature should authorize local units of government to designate an appropriate daily/weekiy publication, elect aIternative means of communication such as city newsletters, cable television, and the Internef, and expand the use of sammaries where information is technical or lengthy. Additionally, the Legislature should eliminate outdated or unnecessary publication requirements. SD-13. Creating a Minnesota GIS Program Issue: I,ocal govenunents are finding geographic infortnation systems (GIS) au essential tool for comprehensive land use, real estate, environmental, and other land management information. In many counties, maintenance of official land records has not been automated, creating a barrier to GIS development. In addition, We start-up costs of GIS impiementation can be prohibitive. Response: The Legislature should encourage local government implementation oF GIS through grants and/or the dedication of a revenue source such as real estate transactiott fees. In addition, cities should be involved in the development of county land records modernization plans. SD-14. State Regulation of Massage Therapists Issue: The state does not cunenfly regulate massage therapy, an emerging and rapidly growing profession. In order to control prostitution and to provide for health and sanitation standards, several cities have entered the traditional state domain of health-care licensure by enacting ordinances that require all massage therapists to obtain a local professional license. These ordinances allow local law enforcement o�cers to differentiate between legitimate massage therapists, who have a city license, and prostitution businesses fronting as massage therapy establishments. The lack of statewide regulation of massage therapists has hampered law enforcement techniques, and has caused problems for cities attempting to regulate an entire heaith-caze profession without any statewide standazds. Currently, 25 states regulate massage therapists on a statewide level. Statewide regulation of massage therapists would provide a cleaz set of educational standards that massage therapists must meet, and would provide local law enforcement agencies with an easy tool to distinguish between prostitution and legitimate massage therapy. Statewide regulation would not disturb traditional powers over land use and business licensure. Response: The League supports the stafewide regulation of massage therapists in order to aid local law enforcement 22 League of Minnesota Cities � � ' � efforts at controlling prostitution attd other criminal activity. SD-15. Private Property Rights and Takings Issue: The L,egislature has been ' introducing an increasing number of bills designed to diminish or control local governments' ability to exercise traditional ' planning and zoning authority and eminent domain powers. I.egislation to control cities' abilities to perform regulatory acts , such as road right of way condemnation, shooting range zoning and amortization received strong support from legislators. In 1 addition, bills have been introduced to codify the property rights section of Minnesota's Constitu6on. The Federal Swamp Buster/Sod Buster programs, the Army Corps of Engineers' dredge and fiil programs, and the State's Wetlands Conserva6on Act and Community Based Pianning Act, appear to be the nexus for much of the property rights and takings legislation proponents. The I,eague supports local govemments' ability to balance the rights of private landowners with the interest of the public. However, the League is concerned various legislative initiatives wili adversely impact cities in three ways. First, such legisiative initiatives undermine the fundamental authority of cities to protect the public health, safety, and welfaze of its citizens. Second, if the L,egislature acts to codify part of the Minnesota Constitution, an argument may be made that the I,egislature intended to create new causes of action against cities. This would encourage more lawsuits and expose cities to the expense of defending those cases. Third, by changing the state's eminent domain law, including "quick take" provisions, municipal condemnation will be o�-s come more costly and take longer to conclude. Response: The League encourages the state and federal governmenfs to improve fheir regulatory programs by eliminating property rights issues that were raused by the adoption of such laws as the Wetlands Conservation Act or Swamp Buster/Sod Buster. The League opposes legislation that diminishes the ability of cities to act in the best interests of the health, safety, and welfare of its citizens, that increases the cost of doing business for the public good, or that creates the possibility of addifional lawsuits against cities. SD-16. Construction Codes Issue: Each year the Legislature addresses consuuction codes issues that have some impact on local govemments. For example, the L.egislature mandated bleacher safety code requirements and is exploring the idea of having both the fire and building officials approve building permits. In addition, the Construction Codes Advisory Council has indicated it may be recommending legislation to institute an appeais process for disagreements over the application or interpretation of various construction codes and to establish a statewide building code. The Intemational Organization for Standardization (ISO) has been evaluating Minnesota's building codes and enforcement. There is some expectation on the part of council members that ISO will act as the catalyst for a statewide building code. While all cities must enforce certain codes, such as the accessibility code, the electrical code and the bleacher safety code, the state's building code remains a locai option for cities outside the meuopolitan azea Many Greater Minnesota cities have 2001 City Policies 23 adopted the state building code and all cities within the seven-county metropofitan area are required to adhere to the state building code. Response: A building code provides inany benefits inc�udiag uniformity of construction standards in the building industry, consistency in code interpretation and enforcement, and life safety guidance. A statewide-enforced building code may have benefits, but requiring it would result in an unfunded mandate. The enforcement of a building code can be cost prohi6itive for many cities due to the expenses and overhead related to staffing vs. the limited building activity occurring in some communities. The League supports adoption of a state building code so long as there is not mandatory enforcement at the local level. The adoption oF an enforced state building code should remain a local op[ion for municipalities outside ffie seven-county metropolitan area, unless the state fully funds the costs of enforcement and inspection services necessary to enforce a statewide building code. In the evenf the LegisIature requires an enforced statewide building code, local governments must have the option to hire or select a building official oF their choice and set the appropriate level of service, even if the stafe fuIly funds code enforcemert activities. An appeals process would provide an excellent forum to resolve code disputes. To fhe ea�tenf ffie insurance industry is concemed about insuring structures not built to code, the industry should drive code compliance by issuittg policies or setting rates based on whether the strucfure meets various code requirements. Finaily, the Legislature should work with cities attd the Department of Administration in determining the best method to designate a municipality's building official and in clarifying the distinction between administez�ing and enforcing the building code and the administrative duties of a city when operating a building code departinent or managing staff. SD-17. Fees for Service Issue: Interest is increasing at the Legislature and among interest groups to mandate to local governments specific fee limitations for various municipal services. Examples of legislation include building permit fee legislation and coin operated amusement macfiine license fee Iegislafion, both designed to rigorously control local fee setting authority. This stems, in part, from a belief of some that pian check fees, license fees, and other municipal fees for service do not reftect the actual benefits received. Additionally, other groups have begun discussing the value of fees for providing services. Recently, the Citizens Jury expIored the value of fees for service and gave limited acknowledgment of the value fees may have in providing core manicipal services. The media has entered the discussion, as well, urging the public and policy makers to monitor fee-setting processes. Response: While the state has a role in providing a generaI statewide funding policy, the state should not interfere in the simple budgetary decision-making functions performed by cities. The League supports the Legislature endorsing local goverament authority to charge fees that are reasonably related to the cost of providing the service, permit, � League of Minnesota Cities L� �l ' L 1 Cl L I ' ' � i � ' IJ 1! ' ' � r� or license and acknowledging there are other associated costs inherent in the provision of those services, permits, or licenses. However, cities oppose any move to legislate specific methods to pay for municipal services or place caps on license fees or other fees. General services such as permitting, inspecfions, or enforcement are best funded out of a city's general fund. Cities are better prepared than the state to make local budgetary decisions when providing local services. SD-18. State Appropriation for Government Training Service Issue: In 1977, the Government Training Service was created in order to provide a coordinated response to Che training needs of state and local governments. GTS was chazged with coordinating the needs of the state, cities, counties, townships, and school districts, with the delivery capability of the state's institutions of higher learning and other continuing education service providers. State financial support of GTS is important. Many cides and other local governments find it difficult to adequately fund official and staff training. GTS provides a cost-effective mechanism for taking advantage of the efficiencies of cooperation. Response: The League supports the state general fund appropriation for the Governmenf Training Service. SD-19. Public Safety Spectrum Needs Issue: Cities have benefited from successful efforts at the federai level to gain access to exclusive radio and wireless communications capacity for state and local public safety spectrum. For future interoperability, cities will need additional spectrum to ensure public safety agencies can communicate with each other and with surrounding jurisdictions. Unless secured for public safety purposes, allocation of spectrum in the 138- 144 MHz band is likely to be auctioned off to the highest bidder for private use. Spectrum in the 800 MHz range requires many more sites to cover the same geographic range and uses more expensive radio eguipment. Although many local public safety agencies aze moving to new 8�0 MHz systems, others will need to remain in lower frequency bands. Equipment in 800 MHz range does not communicate with many of the existing public safety systems that operate at lower frequencies. Response: The federal government must make sufficient spectrum available to allow public safety agencies that require multi-agency communications to respond to accidents, disasters, and criminal activity that cross jurisdictional boundaries. The Legislature should not force cities to modify current public safety communications or become part of the 800 MHz radio system until the city chooses to do so. Rather, the Legislature should provide for a transition that guarantees uninterrupted service that is capable of communicating among local public safety agencies, while allowing cifies to form coordinated dispatch and services. Regional funding of such systetns should be considered taking into account the useful life of current systems. 01-5 ' 2001 City Policies 25 SD-20. Joint and Several Liability Reform Issue: Under joint and several liability, a party named in a lawsuit can be held liable for an entire damage award even if they are not found to be substantially at fault. Accordingly, citi�s as"deep pockets" often aze brought into lawsuits where it is IikeIy that other named defendants are uninsared or othenvise unable to pay. Cities will often settle these cases due to the high degree of exposure and, at minimum, are almost atways responsible for their defense attorney's fees. 7oint and several liabiliry results in cities paying for others' negligence. Response: The Legislature should eliminate or severely restrict the application of joint and several iiability to sitaations where private and pubIic entities are substantially at faulY for the damages incurred. SD-21. Competitive Bid ThreshoId Increase Issue: The 2000 Legislature passed and the Governor signed into law an increase in the spending threshold under the uniform municipal contracling law. Under the uniform municipal contracting law, a city must bid out all purchases of supplies, materials, eguipment, rental of equipment, as well as construction, alieration, repair or maintenance of real or personal property when the estimated amount of the contract exceeds $35,000 for municipatities of Iess than 2,500 population, or $50,000 for all others. The law also requires that purchases between $10,000 and $25,000 be let with either sealed bids or ttu�ough direct negotiation by obtaining two or more quotations. However, this increase does not apply to other Iocai contracting provisions in 26 the special assessment and public improvement statutes. Response: The Legislature should pass legislation to make the contracting threshold provisions consistent among ail local govemment contracting provisions retroactive to August 1, 2000. SD-22. Membership in Watershed Management Organizations Issue: In 1999, the Legislature enacted a restriction that will prevent city employees from serving on watershed management organization boards. The restriction will prevent city staff, who may have an interesf and expertise in watershed management issues from serving on a watershed management boazd. Response: Elecfed city councils have ultimate oversighY of the functions of watershed management organizations. The state should repeal the membership restrictions for watershed management organization boards. In addition, the state should provide an exception to the watershed district law to allow cities to recommend individuats who do not live in the watershed to serve on the watershed district boards when a portion of the watershed is located in the cify but no one tives in that area. SD-23. Legalization of Fireworks Issue: Fireworks products can cause serious injuries and fue loss. Fireworks have been illegal in Minnesota since 1941, and legalizing them would undermine fire prevention efforts. Legalizing fseworks would increase public safety enforcement, emergency response, and fire-suppression costs, League oF Minnesota Cities ' ' LI , LI L I , , , , � , , � ' � ' � Response: The League opposes the legalization of fireworks. SD-24. 911 Funding Issue: As cities struggle to afford to maintain and improve the hardwaze, softwaze, and training to provide 911 services, costs continue to rise, and many cities are forced to choose between bearing all costs or making incremental improvements to their systems. Response: The League supports an adequate state funding source for fhe upgrades and mod�cations of 911 and related systems that will alIow cities to provide effecfive, reliable emergency communications services. SD-25. On-Sale Liquor or Wine Licenses to Performing Theaters and Cultural Centers Issue: Perfomung theaters and cultural centers are not one of the qualifying entities to which municipalities may issue on-sale liquor or wine licenses. Several theaters have received speciallegislation that allows their municipalities to issue on- sale liquor or wine licenses to them. This practice interferes with the ability of municigalities to control the placement and operating manner of these entides. Response: The Legislature should authorize municipalities to issue on-sale liquor or wine licenses to performing theaters and cultural centers subject to restrictions imposed by Ehe municipality. SD-26. City Use of Credit Cards Issue: Minnesota Law currently pzovides implied authority for city use of credit cards. During the 20001egisiative session, the I.egisiature granted explicit 2001 City Policies p�-5 statutory authorization for county boazds to authorize o�cers or employees othenvise authorized to make purchases to use credit cazds. Response: The Legislature should clarify state stafute to eltplicitly aufhorize city councils to authorize city officers and staff ofherwise authorized to make purchases to use credit cards. SD-27. Youth Access to Alcohol & Tobacco Issue: The minimum age to purchase tobacco in Minnesota is 18. Cities have an interest in preventing their youth from obtaining these products. To this end, many cities operate compllance check programs in an effort to discern the cunent level of youth access and to reduce youth access. Xesponse: The League opposes any proposal that could result in increased risks of youth access to alcohol and tobacco products and expanded off- sale venues for the sale of such products. The League supports statutory changes that assist in reducing youth access to alcohol and tobacco products. The League supports mandatory alcohol compliance checks with state funding initiatives fo support locally-determined compliance efforts. SD-28. Library Funding Issue: Many community libraries in Minnesota are city owned. Although located in an individual community, city librazies serve a much wider azea. Local libraries need to be improved in order to provide access to both written and electronic media to enhance the educational capacity of both adults and children. 27 ' L� Response: The League supports a state matching grant program to provide dollars to assist communities to work in � partnership to build and improve tibraries. HUMAN RESOURCES & DATA PRACTICES Human Resources Issue: Many state laws increase the cost ofproviding city services to residents by reqniring ciry governments to provide certain levels of compensation or benefits to public employees, by specifying certain working conditions, or by litniting city governments' abiIity to effectively manage their personnel resources. For instance, existing state laws limit govemmenu' abiliry to effectively address incompetence or misconduct of city employees specifying certain procedures to be followed or standazds of conduct. federal government's labor and personnel laws were in their infancy. It is likely the Legislature will fmd parts of the law need modertuizafion. HR Discipline and Discharge • Veterans' Preference. The state should modiFy veterans' preference and civil service laws that restrict the ability of local governments to effectively discipline public employees. The LMC arges Legislature to make it a prioriYy to amend the law to address the following two points: Response: The sfate government should refrain from passing laws that regulate the public sector workpiace, and should repeai or modify problematic existing laws and regalations to encourage full local accountability. The League of Minnesota Cities proposes the following initiatives and reforms: HR-1. Veterans' Preference • The Legislature should cond►cct a study of Minnesota's veterans' preference law to determine its effectiveness and efficiency in light of today's employment laws, statutes, and regulations. Minnesota's veterans' preference protections were created at the turn of the 19� Century. These protections were designed to assist veteran employees at a time when Minnesota's and the remove the right to mnitiple, dupGcafive disciptinary proceedings; and exclude probationary period employees from veterans preference termination law protections. In addition the law should be amended to limit any back-pay claims to a maximum of $100,000; to limit the period in which to request a hearing to 20 days (from the currenf 60 days}; to require parties to select their hearing panel representative withitt 10 days after notice has been given to the employer that the veteran employee is seeking a veterans' preference hearing; and, fo require the panel to hear the petition within 30 days after the third panel representative is selected and issue a decision within 30 days following the hearing. 28 League of Minnesota Cities ' L � L I I_ I ' � t � t � C [I L_ L � �; l� L J � HR-3. Compensation Limits • The Legisiature should acknowledge that all state and local governments, not just scfiooLs districts, must be competitive in recruiting and retaining upper level management employees. In addition, there is no correlation between the compensation of citizen volunteers and career pubiic sector professionals. Therefore, the state should repeal laws limiting the compensation of a person employed by a statutory or home rule charter city fo fhe governor's salary. • The Legislature should repeal laws limiting the compensation of all public employees. The Governor's salary cap limits the ability of public sector employers to aftract and retain qualified employees. HR-4. Pablic Employees Labor Relations Act (PELRA) • The state should modify tbe de�nition of public employee under PELRA by removing the existing 14-hour ! 67 day requirement and replace it with a defmition in which employees must work more than an annual average of 20 hours per week. • Temporary or seasonal employees should be excIuded from the PELRA definition of pubiic employee in Minn. Stat. § 179A. HR-5. Re-employment Benefits • Public sector temporazy or seasonaI employees should nof be eligible for re-employment bene�ts. HR Essential Employees • Cities must balance the health, welfare, and safety of the public with the costs to t�payers. Therefore, the Legislature should carefuliy examine requests from interesf groups seeking essential employee status under Minn. Sta� § 179A (PELRA). The League opposes legislation that mandates arbitration that increases costs and removes local decision-making authority. HR-7. Pensions • The state should amend the open meeting law to clarify that the open meeting law applies to volunteer firefighter relief associations and local salaried police and firefighter relief associations. • The state should adjust the eligibility thresholds for public pensions to reflect real dollars in today's economy and index the threshold for automatic future adjustments. • The League opposes special legislation for individual employee pension bene�t increases unless they are initiated and approved by the city council of the impacted city. HR-8: Public Employees Retirement Association (PERA) Coordinated Plan Funding Deficiency Issue: Recent analysis has demonstrated that the PERA coordinated plan has been using overly optimistic actuarial assumptions for several yeazs. The plan is expected to need addidonal funding of more than $100 million a year over the next 25 years to cover projected pension benefats. If the additional funding comes exclusively from employer and empioyee payroll contributions, the increased contributions would be 30 percent higher than cunent levels. Contribution rate increases may reduce employee's take-home pay, strain local budgets, and result in property tax increases. D\—S ' 2001 City Policies 29 Response: City officials recognize that employer and employee contribution rate increases are an important part of the funding solution. To reduce the magnitude of the increases, the Legislafive Commission on Pensions and Refirement shouid: • Suppty PERA with state aid funded through reduced contributions to the Teachers' Retirement Association and the Minnesota State Retirement System. In 1984, PERA and MSRS sufficiencies were sia►ilarly transferred to TRA when it was under-funded. • Implement pro-rated service credit PERA is the only major Minnesota pension plan that awards a full-year's service credit to part-fime employees. • Exclude all seasonal employees from participation in PERA. • Explore the possibility of former employees taking refunds by offering a portion of employer contributions as part of the refund. • Reduce the guaranteed interest for deferred members' benefifs. • Increase fhe plan's vesfing period from 3 to 5 years prospectiveiy. • Increase the amorfizafion period for the plan's unfanded tiability from 20 to 30 years. • Restructure the POST fund in one or more of the following ways: 1. Eliminate the POST fe2nd aad combine the assets and liabilities of retirees with the active fund. 2. Redirect some excess POST fund earnings to the active funds. Currently, retirees are given all the benefifs of lugh rates of investment return, and are also guaranteed annualincreases even in qears of poor investment performance. 3. Pay excess mortality costs (when pensioners live longer than expected) out of the post- retirement fund rather than the active pension funds. 4. Spread POST fund invesfinenf returns over a 10-year period rather than a 5-year period. • Not approve any benefit changes that increase the ongoing cost of the plan. HR-9. Age Certificates/I-9 �'orms • The federal I-9 form requires employers and empIoyees to report the same information required by Minnesota's age cerfificate. The state should repeal Minn. Stat. § 18IA.06 and endorse the federal I-9 form to verify age information, and elitninate redundancy for employers and employees when reporting information. HR-10. Employer Reference Immunity • The Legislature should enact legislation that provides limited immunity to cities when giving accurate written disclosure of information regarding employment related references. Tlus legisiation shouId not undermine the immunity found in the Data Practices Ac� HR-11. State Paid Police and Fire Medical Insurance • The state should fully fund programs that pay for health insurance for police and fire employees required under Minn. Sta� § 299A.465, as amended in 1997, for police and fire employees hurt or kiIled in the Iine of duty. • The Legislature should clarify whether Minn. Stat. § 299A.465 30 League of Minnesota Cities 1 � ' �_I Il� � � � ' � t �J LJ lJ Il ' ' LJ applies to injuries incurred prior to June 1,1997 (the effective date of the law). • The Legislature should clarify the amount of an employer's contribution under Minn. Stat § 299A.465 and whether it changes over time. HR-12. Breathalyzers • Minn. Sta� § 181.950-.957 should be amended to permit the use of breathalyzers as an acceptable technology for determining alcohol use. Currently, breathalyzer use is permitted under federal and state commercial drivers' laws. HR-13. Preservation of Local Decision-Making Authority on Employment Related Issues • The League supports local decision- making authority, and opposes legislation intended to interfere in local decisions. HR-14. Drug and Alcohol Rehabilitation • Minn. Sta� § 181.953, subd.l0(b), an empioyer cannot terminate an employee for a positive controlled substance test without first providing the employee a chance for rehabilitation and treatment. Itecenfly, some cities have been advised that this law applies to "probationary" employees as well as permanent employees. Therefore, the League supports a legislative change to clarify that the state law on drug and alcohol rehabilitation and treatment does not apply to probationary employees. p�_ S HIt-15. Health Care Insurance Programs • The League supports voluntary participafion in programs designed to provide for post-retirement health insurance benefits or in health insurance pians structured to pool all public employees. Data Practices DP-1. Public Access to Information • Cities (and other state and local units of government) are required to establish policies and make clear to the public procedures for obtaining access to data classified as government public data. These requirements must accord local of�cials flexibility to estabiish policies and procedures that reflect the availability of resources and existing formats in which information is maintained and organized. DP-2. State Model Policies and Training • The Department of Administration is required to provide model policies and training assistance to cities in complying with the Government Data Practices Act (GAPA). The Legislature must continue to fully fund the on-going costs of GPDA compliance training and education and directly involve local officials in the development and implementation of training activities. DP-3. Tennessen Warning • Changes enacted in 1999 addressed only the school district portion of the issues facing local government employers when complying with the � 2001 City Policies 31 employee notice requiremenfs o£ the Tennessen warning. The Legislature should limit compliance with notice requirement to initial hiring procedures. The initial hiring nofice witl cover su6sequent disciptinary or other personnel-related actions that are likely to adversely afFect the individual's employment status. DP-4. Violations of Government Data Practaces Act � In some circamstances, local government compliance with the Government Data Pracrices Act is hampered by fears of punitive legal action against pubtic employees responsible far responding to requesfs for information while also protecting data classified as private or nonpublic. The Legislature should maintain current damage award requirements for willful violations of the GDPA. DP-5. GDPA Compliattce in Contracting • The 1999 T.egislature imposed requirements on the private sector to comply with the Govemment Data Practices Act when under contrac� Despite assurances to the contrary, testimony in support of these new requirements generaIIy supporfed imposing these obligations whenever government contracts with the private sector fo provide pubiic services. The Legislature should clarify that tke 1999 changes in GDPA requirements for access to public government data pertain soleIy to the contract product delivered by the private sector. THE LEAGUE SUPPORTS THE FOLLOWING POLICIES REGARDING FEDERAL EMPLOYMENT LAW: FED-1. FLSA/Overtime Compensation • The Fair Labor Standards Act (FLSA} was designed for private employer - employee relatioas. Government employees were egempt for over 100 years. Through a series of court decisions, this statute is now applied to local governments. Certain exceptions for state and local government employees should be reinstated by statute to allow for principles of pubIic accountabiIity and record keeping. FED-2. Peace Officer Bill of Rights • Congress should oppose a federal peace officer bill of rights because it will only compound the difficutties with internal investigations, local enforcement and diminish local accountability. FED-3. Portability of Deferred Compensation • Public sector employees are increasingly changing jobs between the public and private sectors. Congress shouid enact legislation that would permit faY deferred roIlovers between public and/or private deferred compensation plans to improve the portability of funds. FED-4. Medicare/Medicaid Premium Disbursements • Minnesota continues to be a net loser in federal Medicare and Medicaid premium disbursements. Congress should recognize this disparity and 32 League of Minnesota Cities ' � , provide Minnesota with a more the costs of providing healfh care balanced and representative share of under Medicaid and Medicare. a�- s ELECTRIC RESTRUCTURING , ' � � � ' ' IJ � � � � ' � ' Introduction: Cities have a strong interest _ in the public policy debate about electric restructuring or deregulation. Minnesota already enjoys some of the lowest average electric rates in the nation. The case has yet to be made that deregulation will result in either lower rates or improved service for consumers. Issue: For many decades, electric service to Minnesota citizens has been delivered through a combina6on of investor- owned utilides (IOUs), municipal utilities, and rural electric cooperatives. This system has served Minnesota well, delivering reliable, universal service at rates among the lowest in the country. In recent yeazs, many have begun to promote "deregulation" or "restructuring" of the industry, meaning that electric service would no longer be a franchised monopoly. A number of states, primarily those with high electric rates, have taken steps to move towazd such restructuring. In most of these cases, transmission and distribution remain regulated, with retail competition allowed for generation source. Advocates of restructuring argue that such competition will lead to lower rates. However, estunates by the federal Energy Information Agency* aze that while the upper Midwest, including Minnesota, wlll experience slighfly lower rates in the short term, longer-term rates may actuatly be higher under restructuring. Concerns have also been expressed as to whether residentiai customers, and those in rural and other * EIA is the nonpartisan research azm of the U.S. Department of Energy hazder-to-serve areas will actually experience decreased reliability and increased rates. L.ocal elected officials have the primary responsibility to the citizens of their cities to make certain restructuring that ailows retaii competition is as beneficial to the citizens as it is to the industry. Beneficial to the citizen means that all Minnesotans experience the same reliable, high-quality, universai, and low-cost service they experience under the current system of electric power delivery. City residents have a strong interest in the outcome of this important public policy debate. Cities are substantial consumers of electric power. Over 180 cities have 10 percent or more of their property tax base in electric industry property, while others collect franchise fees andlor sales taates on electric purchases within their boundaries. Citizens in 126 Minnesota communities currently receive economical electric service from municipal utilities, which make payments-in-lieu of ta�ces to help support city services. Significant increases in the cost of electric power for city operations or losses of these traditional sources of revenue will result in property tax increases. Response: The federal government should not mandate restructuring; the decision should be left to the states. The Lesislature should continue to follow a slow, deliberative approach, taking time to consider how alternative models for delivering electric power will affect the state's traditional benefits of 2001 City Policies 33 reliable, universal, high-quality and low- cost service. The public policy discussion should be focused on actual benefits to citizens, rather than on ideological arguments, stakeholder interests, and over-reliance on simplistic objectives like "consumer choice." Those advocating a change should bear the burden of proof to demonstrate that restructuring and deregulation will, at a inimum, mainfain Minnesota's high-quality, low- cost, and reliable service. Only when that burden of proof has 6een met should restrucEuring occur. T8e foIIowing pubIic policy goals should be incorporated into any Iegislation resfxucturing fhe etectric indusfry: Adequate Supply and Demand The state's current generation and transmission capacity is inadequate to meet projected future needs. No new significant capacity has been bui[t since the 1980's (Sherco 3). Current regulatory and other govemmental poIicies serve as a disincentive to meet cusfomer demand. The stafe shouId review and amend f6ese policies as necessary fo encourage development of adequate capacity and reliability. Consumer Protection Consumer interests musf continue to be protecfed, especialIy for the mosf wlnerable populations. Reiiable service mvst be universally available and programs such as cold-weather shut-off rules should be continued either as requirements for all market participants or as separate state pmgrams. Environmental Concerns The environment must be adequately protected, with conservation and renewable energy efforts increased. The federal government must review the appropriateness of current environmental regulations and their effect in a deregulated market; for e�mple, exemptions from the Clean Air Act for some generatioa facilities. Fair Market Compefition To ensure fair market competition, the federal and state governments must have the authority to review mergers to prevent abuse of market power. Cities must remain viable competitors in the electric marke� Municipal utilities must be granted exemptions from rules like the open meeting law and data practices requirements where they hamper the ability to effectivelq compete with private companies. To ensure adequate service to every citizen, cities and other local governments must maintain their ability to issue tas-exempt bonds for construction of electric infrastructure, and be given explicit authority to aggregate or municipalize provision of electricity. Locai Authority Cities must maintain their traditional authority over land use, zoning, rights-of-way management and cost recovery, as well as the ability to franchise providers and to receive payments-in-lieu of t�es from municipal utilities. Cities' authority to negotiate 34 League of iVTinnesota Cities �� _I , , � L � � ' ' I_J 11 � � siting fees and agreements for proposed generating facilities should be enhanced. To avoid unnecessary demand for the limited space in public righfs of way, open access to transmission and distribution facilities should be mainfaiued through regulation. As the electric market is opened to interstate competition, the federal gavernment must preserve the application of Minnesota's state and local sales taxes to the sale of electricity, regardless of the place of origin. Stranded Cost Recovery Issue: Regulated utilities have traditionally made operating decisions based on needs of consumers within their service territories. Many decisions, therefore, have been based more on need than on economics. In the transition from a regulated to a restructured competitive environment, electric generators' investments in fixed assets and other obligations may or may not remain as economically viable. Estimates of these "stranded costs" vary gready, with some andicating no stranded costs or possibly even negative stranded costs resulting from increased prices after deregulation in Minnesota. Response: Tf regulatory actions have contribufed to investment by e�sting reguiated utilities that are not economically viable in a competitive market, and if restructuring occurs, the League supports fransition mechanisms that will allow utilities to collect revenues for those particular stranded costs. However, these charges must be carefulIy monitored to ensure that only eligible and verifiable costs are covered and that over- collections do not occur. Taxpayers and 2001 City Policies a�-s ratepayers should not be expected to cover the cost of investments that were made for business reasons, apart from the requirement to serve under the regulated system. If negative stranded costs for the regulafed utility as a whole can be established, and are solely the result of transition to a restructured environment, these regulated utilities should be required to contribute some limited percentage of established amounts to offset tax breaks given to these utilities as a result of restructuring. Property Tax Issue: Part of the discussion regazding possible deregulation of the electric power industry has centered on electric utility tasation. Proponents of restructuring assert that if effective free mazket competition is to replace governmental regulation, state tax policy must be changed. The main focus of the Investor Owned Utilities (IOUs) so far has been removai of the attached machinery or personal property tax. Utilities subject to the tas azgue it piaces them at a competitive d'asadvantage to non-Minnesota companies, rural electric cooperatives (co-opsj, and municipals. However, accurate comparisons of taz� burden are difficult, as other states use completely different taxing systems. Additionally, co-ops and municipals do pay dizect tases on some of their property and indirectly when they purchase wholesale power from sources that aze taxed, such as IOUs. Municipals make substantial payinents-in-lieu of taxes. Utility personal property can be a significant portion of the local tax base in all cifies. Most obviously affected are cities that have power plants; however, transmission and distribution equipment 35 ' accoeent for over half of the personal property ta�ces paid by the IOUs and eJCist in neazly every city. Replacing the revenue that would be iost to cities, counties, school districts and other local talcing jurisdictions is a stated goal of the IOUs; however, the mechanics and funding sources of such a replacement revenue would be difFicult to develop and administer, and could be subject to reductions or elimination over time. Furthermore, replacemenY revenues or aids may not fully address the problems created by a targe tax base reduction. Response: CiEies oppose proposaIs for exempting the IOUs from the personal property tax, apart from tHe decision fo � resfrucfure fhe elecfric industry in Minnesota. t If and when restructuring occurs, ' a trulq independent review of the overall tax burden should be conducted to determine whether Minnesota utilities are ' at a competitive disadvantage. If an overall tax disadvantage is identified, the state should correct i� Under no � circumstances should locai units of governmenf or fheir cifizens be required to shoulder the burden of tas relief for , IOUs. ' LJ , � � , , , , , � 36 League of Minnesota Cities Counoil File # O�� rj Green Sheet # (O �{ 9 �� RESOLUTION CITY OF SAINT PAUL, MTNNESOTA `� Presented By Referred To Committeen Date i WHEREAS, the League ofMinnesota Cities, which represents 811 ofMinnesota's 856 z cities, as weil as 10 urban towns and special districts, has led the coordination of inember cities in 3 the development of the 2001 City Policies for Le�islative and Administrative Action which 4 identifies issues as priorities for action during the`2001 legislative session; and s 6 WHEREAS, the City of Saint Pau] was an active participant in this coordinated effort and � the City approves generally of these priorities. a 9 NOW,1`AEREFORE, BE IT RESOLVED that the Saint Paul City Council does hereby so recommend for consideration by the Minnesota State Le�islature, 2001 City Policies for si Legislative and Administrative action, submitted by the Lea�ue ofMinnesota Cities and does iz hereby request that these issues be addressed by the Le�islature durin� the 2001 session. 13 14 , Requested by Department of: By: Adopted by Council: Date ba,,,�_ 3 �.pf�l T�.. � � Adoption Certified by Council Secretary gy: � � �.� Approved b Mayor: Date � F/ By' Form Approved by City Attorney B C� t-- r� ,�� Approved by Mayor for Submission to Council Sy : �/C��vG � � Coleman's Office Mike Campbell 266-8537 IST BE IXJ COIAJqL AGBQl461' (QST9 January 3, 2001 , o�-. 5 00o GREEN SHEET No 1 G�!� 91 ; wurm.rs � ■ oa�unrenc.mcr« 3 rnrcwca anwno.av wuuoru.a[aMttso¢ TOTAL # OF SIGNATURE PAGES The City needs to have Council approval of its legislative support items with respect to the League of Minnesota Cities (LMC)in order to pursue those support items at the 2001 Legislature. PLANNING COMMISSION CIB COMMITfEE CML SERVICE COMMISSION �� G�� " �E� � � 26Q6 When approved, the LNC support package can be pe�rsued at�the State Legislature during session. None �SraanWR+�sravn � (CLIP ALL LOCATIONS FOR SIGNATUR� �s a� ce�avrm, e�erwa�a w�aer e w�aa�cra n,� a�mre�n YES NO tfes tAis P��rm ever been a dty emPbY�'r YES NO Doec Uus YersoNfirm P� a siull nat normalbD�sessed bY anY wrteM city empbyee? VES NO k thia persaMmm a tarpMad vendoR YES,- NO ❑ arcaatnc ❑ wwxcuia[mractta The City would not be able to proceed with supporting the LMC policies. AMOUNT OF TRANSACTION f CAST/REVENUE BUDGEfED (CIRCLE ON� YES NO ACiNRV qUMBER �0 ... .4...r . . . t �.. ., a' � :ty fy ' � �9 � .� i i�. 4 � � 1 ! � �� l ( `�� .�.. � . � + 5 �'r e � � nV r : ,��,�'✓� , �. :�., . ._. ., . � _ , . . ' - " _ . . . , , , .� ' k n ��nY .' � ' - � . ' . . " . � . . . . H " �� . .. . . '�` , . a . . .i . . ' . . . .. ..... . . .. . { ' .. . . ' r . ' �........ - , . p.�' '°4 t:;, .. . , , . �. . ��, l.eague of .. Minn:esota Ci#ies � . � o.. ,� � �� q . : . . . ... _. „ • , � wm • , ,.,.,: . .._ . .. .�_.� .�-„ - , , . ,. � . . _ ,' . �.�r , � , . . . � ' , ,. ..,, , ., ,., _ ' , ' . ,dg, . r ... " .. _. �� ° � r , , , ' , - � , . � �� Z � Q � . � � � � ��. �� ,� � �� . � � � � � .�� t�� . �� . � {. . � �� . ..�� s � �Po 1��c��es� �� _ � � �. , . � �� :. . � _ � �� u s _ �� _ . v �. �: . � � . _ �� , � � � • F r > � �,�vi. b �, ..,:�� "Y ° r . . � �_. _ . ' .. � �y� a'.F ' ,� . . . , � . ::. . . _ ' , . � y ti v i. � �4�' �� , ,.' k: ;. .' � � � r .' .. � �' �� °>For �l.e islative>and �:� , . � � � g . .:. ��{` 2S k ad�ministrative' action , t u � , ` �_ , , - .' . ` '.: - �'�� "�Adopted November 17, �200D �,� �� _ � � _� � _ � , �,� , �� ° � ,.. r � � �� s� � � . � � � � � � �� b � ti „„ �. ,,. . Y j� ' '. �.' , . 4 ��i1C�Of.�lAhCSO��dtr2,4 �,�� ` -� � Y; � � °� - � � ' _ ` , 145 UniversicyAvenue Wesc , - .. ,' � � St. Paul, MN; 55103-2044 -.'� � _ �M �� KES o s-a a s r � e s� �� : .(651),281-1200ac (80Q) 925-1122 ; . ��$Wl.�d�ng r � _ , � Fa�c (65 t) �281-1299;:, � � � q(.1 a � It�/ � �, " -� � I�"e °f'K'""�"t° C�'r°e �.., TDD (651) 281-1290 � �. , �� . � �r��.or � Cornmun�tres *,x .� ,... ;-, + - � �.�. i ' . f. y x ��" `� X � 3 ` `rr. �° � r `��',�... _. ,. .. , _ .. ,.... ,... , ,.,.. . . __ ,. ,.._, r , . , ,_, �... > .. . . .. , , � � , , � ' , , � � ' CONTENTS ................... ................... ................... ................... ................... ................... ................... I.eague Staff ........................................................................................................................ iv I,egislative Policy Committee Members .............................................................................. v Policy Development Process ................................................................................................ vri GeneralPolicy Statement ..................................................................................................... vin Building Quality Communities Guideline ................................................... ix 2001 CITY POLICIE5 Improving Fiscal Futures ................................................................................... FF-1. State-L.ocal Fiscal Relations .................................................................... FF-2. 3tate Shared Revenues .................................................................. FF-3. Ta�cation of Municipal Bond Interest ............................................ FF-4. City Fiscal Yeaz ............................................................................. FF-5. Sales Tax on L.ocal Government Purchases .................................. FF-6. Payments for Services to Tax-Exempt Property ........................... FF-7. Truth-in-Taxation Process ............................................................. F�-8. State Administrative Deductions from State Aid .......................... FF-9. Reporting Requirements ................................................................. FF-10. Federal Budget Cutbacks ................................................................ FF-11. Price of Government ...................................................................... FF-12. Capital Improvement Fees .............................................................. FF-13. Deferred Assessments for Roads ................................................... FF-14. Taxation of Electronic Commerce ....................................................................... FF-15. Limited Market Value ........................................................................................... FF-16. State Charges for Administrative Services ........................................................... Improving Local Economies ....................................................................... ' LE-1. Taac Incement Financing ................................................................ I,�2. TIF Reform .................................................................................... I.E-3. Impact of Properry TaY Reform on Existing TIF Districts ............ ' LE-4. Business Subsidies ........................................................................ LE-5. Economic Development Programs ................................................ LE-6. Redevelapment Programs .............................................................. f L.E-7. Property Tas Abatement Authority ................................................ I.E-8. Brownfields ................................................................................... LE-9. OSA Response Timelines ............................................................... I LE-10. OSA Time Limitations ................................................................... LE-11. Growth Management and Annexation .......................................... I LE-12. Electric Service Extension ............................................................. LE-13. State and/or County Licensed Residendal Facilities ...................... 2001 City Policies 6\—S 1 I 2 2 2 2 3 3 3 3 3 4 4 4 5 5 5 � .................... 6 .................... 6 .................... 7 .................... 7 .................... 7 .................... 8 .................... 8 .................... 8 ................... 9 ................... 10 ................... 10 ................... 11 ................... 11 i I.E-14. LE-15. LE-16. LE-17. LE-18. L.E-19. LE-20. LE-21. LE-22. LE-23. LE-24. LE-25. LE-26. LE-27. Housing and Economic Viability ..................................................... Preservauon of Federally-Assisted I.ow-Income Housing ............... Adequate Funding for Transportation .............................................. State Aid for Urban Road Systems ................................................... Turnbacks of County and State Roads ............................................. Road Funding for Cities Under 5,000 .............................................. Railroad-Related Projects ................................................................ Right of Way Management ............................................................. Workforce Readiness ....................................................................... Platting Law Recodification ............................................................. Econoauc Development Authorities ................................................ Infrastructure Funding Options ........................................................ Statutory Approval Timelines .......................................................... Telecommunications Restructuring .................................................. Improving Service Delivery ........................................................................... SD-1. SD-2. SD-3. SD-4. SD-5. SD-6. Sb-7. SD-8. SD-4. SD-10. SD-1 I. SD-12. SD-13. SD-14. SD-15. SD-16. SD-17. SD-18. SD-19. SD-20. SD-21. SD-22. SD-23. SD-24. SD-25. SD-26. SD-27. SD-28. Redesigning and Reinventing Government ..................................... Unfunded Mandates ........................................................................ Civil Liability of Local Governments ............................................. Environmental Protecfion ................................................................ ElectionIssues ................................................................................. Local Election Authority .................................................................. Election Judge Appointrnent ............................................................ Election Judge Compensation .......................................................... Counting Write-in Votes .................................................................. City Costs for Enforcin State and I.ocal I.aws .......... 12 .......... 12 .......... 13 .......... 13 .......... 13 .......... 14 .......... 14 .......... 14 .......... 15 .......... 15 .......... 15 .......... 16 .......... 16 .......... 17 ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... ............. ........ g................................................... Design-Build ......................................................................................................... Providing Information to Citizens ......................................................................... Creating a Minnesota GLS Program ..................................................................... State Regnlation of Massage Therapists ............................................................... Private Property Rights and Takings ..................................................................... ConstructionCodes ............................................................................................... Feesfor Service .................................................................................................... State Appropriation for Govemment Training Service ........................................ Public Safety Spectrum Needs .............................................................................. Joint and Several Liability Reform ...................................................................... Competitive Bid Threshold .................................................................................. Membership in Watershed Management Organizations ....................................... Legalization of Fireworks ..................................................................................... 911 Funding ........................................................................................................... On-Sale Liquor and Wine Licenses to Performing Theaters and CulturalCenters ..................................................................................................... CityUse of Credit Cards ....................................................................................... Youth Access to Alcohol and Tobacco ................................................................. LibraryFunding ..................................................................................................... 17 17 18 18 I9 20 20 20 20 21 21 21 22 22 22 23 23 24 25 25 26 26 26 26 27 27 27 27 27 ii League of 1VTinnesota Cities ' ' Human Resources & Data Practices ............................................................ , ' ' � L I , , Human Resources HR-1. Veterans' Preference ............................................................................. HR-2. Discipline and Discharge ...................................................................... HR-3. Compensation Limits ........................................................................... HR-4. Public Employees Labor Relations Act (PELRA) ............................... HR-5. Re-employment Benefits ...................................................................... HR-6. Essential Employees ............................................................................. HR-7. Pensions ................................................................................................ HR-8. Public Employees Retirement Associafion (PERA) Coordinated Plan FundingDeficiency .............................................................................. HA-9. Age Certificates/I-9 Forms ................................................................... HR-10. Employer Reference Immunity ............................................................ HR-11. State Paid Police and Fire Medical Insurance ...................................... HR-12. Breathalyzers ........................................................................................ HR-13. Preservation of Local Decision-Making Authority on Employment RelatedIssues ....................................................................................... HR-14. Drug and Alcohol Rehabilitation ......................................................... AR-15. Health Caze Insurance Programs .......................................................... Data Practices � DP-1. Public Access to Information ........................................... DP-2. State Model Policies and Training ................................... DP-3. Tennessen Warning .......................................................... ' DP-4. Violations of Government Data Practices Act ................. DP-5. GDPA Complaance for Contracting ................................. ' Federal Employment Law FED-1. FLSAlOvertime Compensation ......................... FED-2. Peace Officer Bill of Rights .............................. ' FED-3. Portability of Deferred Compensation .............. FED-4. Medicaze/Medicaid Premium Disbursements ... IJ IJ r� 1� IJ Electric Restructuring .... Adequate Supply and Demand Consumer Protection ............... Environmental Concerns......... Fair Market Competition......... I,ocal Authority ....................... Suanded Cost Recovery ......... Property Tas ............................ a�-5 � 28 28 29 29 29 29 29 29 30 30 30 31 31 31 31 31 31 31 32 32 .......... 32 .......... 32 .......... 32 .......... 32 .......... 33 34 34 34 34 34 35 35 ' 2001 City Policies iii LEAGUE STAFF WORKING WITH STATE AND FEDERAL ISSUES Jim Miller, Executive Director Mandates, telecommunications Gary Carlson, Director of Intergovernmental Relations Aid to cifies, electric utitity restructuring, general revenue sources for cities, pensions, personnel, property tax system, tax increment financing, Anne Finn, Intergovernmental Relations Representative Housing, land use/annexation, public safety, transportation and transit Kevin Frazell, Director of Member Services Electric utility restructuring, government innovation and cooperation, Tom Grundhoefer, General Counsel General municipal governance, telecommunications Ann Higgins, Intergovernmental Relarions Representa�ve Elections and ethics, emergency management, housing, information policy, telecommunications, utility service districts Andrea Stearns, Intergovernmental Relations Representative Business subsidies, civil liability and criminal justice, economic development and redevelopment, general government, IocaUtribal relations, tas increment financing, Remi Stone, Senior Intergovernmental Relations Representative Civil liability, construction codes, environmenf, general government, insurance, labor relations/ personnel, land use/annexation iv League of Minnesota Cifies , 1 � 0�-5 Legislative Policy Committee Members 1 Improving Fiscal Futures Dennis Kraft, Chair, City Manager, Robbinsdale ' Richard Abraham, City Administrator, Lake City Kazen Anderson, Mayor, Minnetonka Bill Bamhart, Intergovernmental Relations, ' Minneapolis (alternate) Curt Boganey, City Manager, Brooklyn Park Tom Burt, City Administrator, Rosemount Gino Businazo, Finance Director, Mound � Dennis Cavanaugh, Mayor, St. Anthony Jane Chambers, Assistant City Manager, Brooklyn Center , ' C�� ' ' ' �] � ' ' r Tom Cran, Budget Office, St. Paul Reggie Edwards, City Administrator, Chisago City John Erar, City Administrator, Fazmington Richard Fursman, Ci[y Manager, Maplewood Jeff Haubrich, Assistant Council Adminstrator, Red Wing Terri Heaton, Chief Financial Officer, Bloomington Pat Hentges, City Manager, Mankato Elizabeth Kautz, Mayor, Burnsville 7ames Keinath, City AdminisVator, Circle Pines Linda Koblick, Councilmember, Minnetonka Tom Lawell, City Administrator, Apple Valley Dean Lotter, City Administrator, Janesville Paul McLaughlin, Counci3member, Internationai Falls Peter Meintsma, Mayor, Crystal Tom Melena, Ciry Administrator, Oak Pazk Heights Steve Mielke, City Manager, Hopkins David Minke, City Administrator, Priaceton 7ohn Moir, Finance Director, Minneapolis Gary Neumann, Assistant Administrator, Rochester Steve Okins, Finance Director, W illmar Tammy Omdal, Finance Department, Minneapolis Roger Peterson, Association of Metropolitan Municipalities Douglas Reeder, City Administzator, South St. Paul Michael Rietz, Ciry Administrator, Kasson Michael Robertson, City Administrator, Otsego Ryan Schroeder, Ciry AdminisVator, Cottage Grove James Smith, Councilmember, Independence Gerald Sorenson, Administrative Services Director, Moorhead Jerry Turnquist, Councilmember, Oak Park Heights David Mark Urbia, City Administrator, Blue Earth Dan Vogt, City AdminisVator, Brainerd Jim Willis, City Administrator, Inver Grove Heights Rick Wolfsteller, Ciry Administrator, Monucello Improving Local Economies Brenda Johnson, Chair, Councilmember, Chatfield Jon Hohenstein, Vice Chair, City Administrator, Mahtomedi Dick Allendorf, Councilmembec, Minnetonka David Beaudet, Councilmember, Oak Park Heighu Jerry Bohnsack, City Administrator, New Prague Doug Borglund, City Admi�isnator, Howard Lake Patrick Boylan, Assistant Manager, Lexington Geraid Brever, City Administrator, Staples Cathy Busho, Mayor, Rosemount Mike Campbell, Intergovermental Relations Director, St. Paul Kevin Carroll, City Administrator, Carver Tim Cruikshank, CiTy Administrator, Minnetrista Dan Donahue, City Manager, New Hope Michael Eastling, Public Works Director, Richfield Reggie Edwards, City Administrator, Chisago Ciry Karen Elhacd, Clerk-Treasurer, Northome Jim Elmquist, City Administrator, Mora Mark Erickson, City Administrator, Lakefield John Flora, Public Works Director, Fridley Roger Fraser, City Manager, Blaine Matt Fulton, City Manager, New Brighton Rick Getschow, City Administrator, Lauderdale Soh� Goedeke, Councilmember, Roseville Tom Goodwin, Councilmember, Apple Valley Mary Gover, Councilmember, St. Peter Chuck Groth, Mayor, Fairmont Tom Harmening, Community Development Director, St. Louis Park Desta Hunt, Councilmember, Fergus Falls Marvin Johnson, Mayor, Independence Steven Jones, City Manager, Montevideo Andrea Hart Kajer, Intergovernmental Relations Director, Minneapolis (alternate) Patrick Klaers, Ci[y Administrazor, Elk River Larcy Lee, Community Development Director, Bloomington Don Levens, Ciry Administrator, Cokato Nancy Mancino, Mayor, Cha�hassen Marcia Mazcoux, Councilmember, Rochester Mark Nagel, City Manager, Anoka Steve O'Malley, Deputy Manager, Burnsville Samantha Orduno, City Manager, Richfield Bruce Peterson, Director Planning and Development Services, Willmaz Roger Peterson, Association of Metropo]itan Mur,cipalities Dale Powers, Councilmember, Clear Iake Gene Ranieri, Association of Metropolitan Municipalities Stephen Sarvi, City Administrator, Vicioria Mark Sather, City Managec, White Bear Lake David Schaaf, Mayor, Oak Park Heights � 2001 City Policies v Terry Schneider, Councilmember, Minnetonka Mazy Sjodin, Information Technology Director, Red Wing Terry Spaeth, Administrative Assistant, Rochester Cathy Thurber, Councilmember, Minneapolis Craig Waldron, City Adminishator, Oakdale Jeff Weldon, City Administrator, Redwood Falls Mazk Winscn, Chief Administrative Officer, Dulu[h Heacher Worthington, City Administrator, Falcon Heights John Young, Jr., Councilmember, Hawley Improving Service Delivery Mark Karnowski, Chair, City Administrator, Lindstrom Judd Movrzy, Vice Chair, Councilmember, Tonka Bay Laarie Ahrens, Assistant City Manager, Plymouth Bevedy Aplikowski, Councilmember, Arden Hills Mike Campbell, Intergovernmental Relations Director, St. Paul Pat Crawford, Clerk-Treasurer, Modey Pam Dmynenko, Assistant to City Manager, RichField Mazy Hamann-Roland, Mayor, Apple Valley Tom Hansen, Deputy Manager, Burnsville Jcel Hanson, Ciry AdminisYrator, Lit[le Canada John Kysylyczyn, Mayor, Roseville Barrett Lane, Councilmember, Minneapolis Jan LeSuer, Councilmembec, Golden Valley Joe Lynch, City Adminis[tator, Arden Hills Larry Nicholson, Counciimember, Moorhead Desyl Peterson, City Attorney, Minnetonak Gene Ranieri, Association of Metropolitan Municipalities David Schaaf, Mayor, Oak Pazk Heights David Senjem, Councilmember, Rochester Chad Shryock, City Administraror, Wabasha Al Thomas, Councilmember, Minnetonka Kent Torve, Mayor, Loretto Kazen Lowery Wagner, Intergovernmenta] Relations, Minneapolis (alterrtate) Rena Weber, Clerk, Waite Pazk Human Resources & Data Practices Joyce Twistol, Chair, Clerk/Personnel Director, Blaine Ken Hanung, Vice Chair, City Adminishator, Bayport Mazk Anderson, Human Resource> Director, Brooklyn Park Geralyn Bazone, Assistant City Manager, Minnetonka Holly Duffy, Assistant to Manager, Crystal Theresa Goble, Finance Director, Brainerd Terry Haltiner, Labor Relations Manager, St. Pau] Bre[ Heitkamp, City Administrator, Champlin Kay Kuhlmann, Council Adminisnator, Red Wing Ed Lazson, City Manager, Morris Kay McAloney, Human Resources Director, Anoka Tim Madigan, City Administrator, Faribavlt Givona Reed, Assistant to City Administrator, Mounds View Cazol Rogers, Human Resources Senior Consultant, Minaeapolis Cazol SchmidT, Benefiu Manager, Minneapolis Ceil Smith, Assis[ant to Manager, Edina Jerry Splinter, City Manager, Coon Rapids Daniel Tesch, Direc[or of Administration, Lino Lakes Todd Torvinen, Finance Director, Duluth Karen Lowery Wagner, Intergovemmental Relations, Minneapolis Electric Restructuring Task Force Ron Jabs, Chair, Mayor, Jordan Bryan Adams, Geneta] Manager, Elk River Municipal Utilities Kazen Baker, House Research Larry Bakken, Covncilmember, Golden Valley Mike Bash, Councilmember, Long Lake David Berg, RW Beck, Minneapolis Troy Bonkowske, Communiiy Development Director, Caledonia Jim Brimeyer, Councilmember, St. Louis Park Chuck Canfield, Mayor, Rochester AI Crowser, Director, Alexandria Public Utilities Jim Elmquist, City Administrator, Mora Robert Filson, City Administrator, Worthington Paul Grabitske, City Adminishator, Janesville James Gromberg, City Administator, Isanti Delvin Haag, Councilmember, Buffalo JefFry Haubrich, Assistant to Council Administrator, Red Wing Elizabeth Kautz, Mayor, Burnsville Mark Larson, City Administrator, Glencoe Rebecca Law, Mintteapolis Pam Marshall, Energy Cents Coalition Kevin Maynard, General Manager, Austin Utilities Chazles Mertensotto, Mayor, Mendota Heights Mazk Nagel, City Manager, Anoka Mike Nitchals, General Manager, Willmaz Municipal Utilities Paul Osnow, Councilmember, Minneapolis Greg Oxley, MN Municipal Utilities Association John Remkus, Finance Director, West St. Pau1 Joe Rudberg, City Adminisnator, Becker Amy Rudolph, Flaherty & Hood, St. Paul Mazk Sather, City Manager, White Beaz Lake Jerry Splinter, City Manager, Coon Rapids Jim Willes, City Adrriinistrator, Inver Grove Heighu Wally Wysopal, Ciry ManagervClerk, North St. Paul vi League of Minnesota Cities i� � ' O\-S League of Minnesota Cities Policy Development Process ' The L.eague's policy development process has taken place over the past six months. The process began with a member survey of priority issues facing city officials. The process will not end with the Policy Adoption Conference. The committees will schedule additional meetings during the ' upcoming legislaUve session to discuss additional issues, develop altemative solutions, and discuss strategies to implement the League's policies. t Listed below is a brief chronology of the major events in the policy development process. At each step, members have the opportunity to participate in the development process. , ApriUMay , June � , C ' The League solicits members for ideas and problems. A survey at the Annual Conference allows members to formally suggest topics. The L,eague President accepts applications for committees and appoints policy committee members. The policy committees are: Improving Fiscal Futures Improving Local Economies Improving Service Delivery Fiuman Resources and Data Practices Electric Restructuring July Committees meet to discuss ]ssues raised in the member survey. Committees can also form task forces to more thoroughly study specific issues. Task forces can include noncity members with a knowledge of the focus issue. August ' through September � October ' November ' ' Committees and task forces meet to discuss issues and probiems, accept testimony and develop policy statements. The League Boazd of Directors meets with the chairs of the policy comsnittees to review policies. Policy Adoption Conference. Members have the opportunity to discuss the draft policies, propose changes, and suggest additional policies for member consideration. January L,egislative session. During the session, the policy committees and task forces through will continue to meet on issues and strategies. Members can assist the League's May legislative efforts by volunteering to contactiegislators on a variety ofissues of interest to our cities. 2001 City Policies vii General Policy Statement The L.eague of Minnesota Cities seroes as a forum for cities fo define common problems and deveIop policies and proposals to soIve those problems. The League of Minnesota Cities represents 818 of Minnesota's 854 cities as weIl as I2 urban towns and 27 special districts. AII sizes of communities aze represented among the League's members (the lazgest nonmember city has a population of 164) and all regions of the state aze represented. The policies that follow are directed at specific city issues. Two principles guide the development of all I,eague policies: L There is a need for a govemmental system that allows flexibility and authority for ciues to meet the challenges of governing and providing citizens with services while at the same time protecting cities from unfunded or underfunded mandates, liability or other financial risk, and restrictions on local control; and, 2. The financial and technical requirements for governing and providing services necessitate a continuing and strengthened partnership with federal, state, and local govemments. This partnership, particulazly in the areas of finance, development, housing, environment and uansportation, is critical for the successful operation of Minnesota s cities and the well- being of residents. viii League of Minnesota Cities , , ' , ' , , � 1 1 � � � ' ' � � � f GUIDELINE FOR BUILDING QUALITY COMMUNITIES o �-S To the greatest extent possible, legislation affecting communities at the state and federal level should enhance, not diminish, the ability of citizens, businesses, and local governments to work togethez in partnership to make every community "livable." ISSUE: Cities in Minnesota aze at various stages in meeting the goal of being "livable, healthy communities." RESPONSE: The definition of a"livable, heaithy community" below will be used to evaluate proposed legislation to determine whether or nat it advances the goal of enabling all Minnesota cities to become livable, healthy communities. It should also be used by cities to evaluate their progress toward the goal of becoming livable, healthy communities. A LNABLE, HEALTHY COMMUNITY IS: WHERE PEOPLE OF ALL AGES • share a core of common values including valuing diversity, respect for each other, and good citizenship • feel: * safe * a sense of belonging * welcome • engage in life-long leazning activities that: * promote responsible citizenship * enhance the enjoyment of life * prepaze them for changing job markets • participate in the decision-making process with community leaders • want to make their home • celebrate community • have accessto: * good payingjobs * adequate and affordable housing * choice of efficient transportation systems including transit, pedestrians, a�d bicycles �` gathering places * desired information � 2001 City Policies ix * choice of cultural and recreational activities * affordable goods and services, including health caze • are involved in the nurturing of youth • care about their homes, community, and the environment • get to know each other • have the beneft of strong family support and nurturing adults WHERE LOCAL GOVERNMENT • is responsive to the needs of its citizens • is actively supported by enthusiastic volunteers • is open and user friendly • encourages and imptements cooperatioa and collaboration • provides and maintains an adequate physical infrastructure and promotes social infrastructure to meet local needs • educates citizens of all ages on local, regional, and state issues and govemment processes • informs and communicates with citizens to foster participation in public policy decision-making • participates in youth development X League of Minnesota Cities ' � i �' ! 0 1 1 �� 2001 CITY POLICIES 01-5 � 1 1 ' , a�-5 IMPROVING FISCAL FUTURES FF-1. State-Local Fiscal Relations Zssue: Minnesota's state and local govem�ment finance system is complex and ' intertw9ned. This complexity has been the subject of ongoing legislative scrutiny and has most recenfly resulted in a governor's ' initiative to review the system with the goal of developing a reform proposal for the 2001 L,egislature. L_I ' , While cities rely on their partnership with the state to provide local services, they aiso must respond to the needs and desires of their residents. To that end, cities need flexibility in determining how to finance neededlocalservices. In 1997, the L.egislature began making ' changes to Minnesota's property ta�c system that have impacted the ability of cities to ' fund necessary services. Those changes, including the reimposition of levy limits, significant class rate compression, and ' changes to the limited market value law all have resulted in varying unintended consequences. lJ � C r! 1� � Response: To remedy existing and avoid potentialfuture unintended consequences of additional property taY changes, the League supports: • Reviewing the combined impacts of property taic changes since 1947 and changing economic circumstances for talcpayers and for local governments so that policy makers can better understand where the system may need further changes; • Expanding available city revenue sources to reduce the reliance on the property tax; and • Reducing the property tax burden for all classes of property by ittcreasing the state share of school funding. Any increase in the state share of school funding must guarantee a permanent reduction in the school property tax burden. The League supporfs paying for the increased state cost through income and sales taxes. The League opposes: • Reimposing levy limits, which are inef�cient, ineffective, interfere with local accountability, and ignore local circumstances; • Imposing reverse referenda requirements, which undermine the decisions of local elected officials, divert focus and resaurces from daily operations, and can disrupt the local budget process; � Replacing all or part of LGA or HACA with state-mandated categorical aid programs, or local option t�ing authority; • Switching from the classification system to a market value based system, which would cause tremendous shifts of tax burden between classes of property. The League also opposes applying all future levy increases to market value because this would further cornplicate the property tax system; • Expanding fhe limited market value law or enacting an acquisition value law; • Enacting proposals that would interfere in local decision-making regarding service delivery; • Imposing a state-levied property tax; and • Cutting LGA or HACA to finance an increased sfate role in school finance. ' 2001 City Policies FF-2. State Shared Revenues Issue: State revenue sharing programs address at least ttu�ee problems with a stand- alone local government finance system. First, the property tax base available to communities can vary dramatically. These programs use state resources to equalize the ability of communides to provide essetttial services without undue properry Yax burdens for local residents. Second, nonresidents can take advantage of local seroices or create additional demands for services without contributing to the taxes that support these services. LGA and HACA help address the free rider problem where nonpaying individuals cons¢me services without contributing to the local Ya1c base. Third, allowing local units of government in Minnesota to levy only the property taY has created an over-reliance on the property tax. LGA and HACA can reduce the overall reliance of local govemments on the property ta1c. Although historically the Legislature has generally supported LGA and HACA programs, the 1981 L.egislature reduced the number of LGA and HACA payments and the 1986 Legislature delayed the payments. Under carrent law, the first payment of LGA and HACA is made in July—fully 7 months into each city's fiscal yeaz. These changes have created cash flow problems for some cities. Response: LGA and l3ACA, or similar replacement revenues, must be continued and additional state resources greater than the rate of inflation must be allocated to prevenf rapid future property Yas increases. Tn addition, the HACA household growth factor for cities should be reinstated. Tf►e LegisIature shouId adjust the LGA aad HACA payment schedule to provide cities access to LGA and IiACA earlier in their fiscal year. k'F-3. Taxation of Municipal Bond Inferest Issue: The state law that grants a tax exemption for municipal bond interest lowers borrowing costs for cities and reduces properiy tax levies. 1Zesponse: The state should maintain the tax exemption for municipal bond interest income. FF-4. City Fiscal Year Issue: The fiscal yeaz for cities and counties cartently corresponds to the property tax cycle. Response: The state should maintain currenE Iaw and not change the city fiscat year to coincide with the state fiscal year. FF-5. Sales Tax on Local Government Purchases Issue: In 1992 when the state was experiencing a budget shortfall, the Legislature repealed the sales ta�c exemption for local government purchases. Local governments now pay state sales taac on purchases like road maintenance supplies and equipment, wastewater treatment facilities, and building maierials for affordable housing. This tax currently costs locai property taxpayers and ratepayers an estimated $100 million annually. In addition, proposals to extend the sales tax to services would have the effect of increasing local government costs and property taxes. 2 League of Minnesota Cities � 0 � Because no additional state aids were added to offset the additional cost, this repeal has effectively increased local property taaces to fmance state operations. ' Response: The state should reinstate the sales tax exemption for all local ' governmenf purchases. The exemption must not be coupied with cuts in LGA or HACA. � t � I l ' ' � ' i , , � ' ' FF-6. Payments for Services to Tax-Exempt Property Issue: Taxable property in many cities is being acquired by nonprofit and government entities, Converting the property to tax- exempt status can lead to a serious tas base erosion without any cortesponding reduction in the service needs created by the property. Response: Cities should have the authority to collect payments from statutorily exempt property owners to cover costs of service as cities have with special assessments. FF-7. Truth-in-Taxation Process Issue: Cities must set a preliminary levy by September 15 which, by law, becomes the ma�cimum that cities can levy for the foliowing yeaz. In recent years, cities have not received complete taac base and aid information in a timely manner. As a result, cities often either set a preliminazy levy that is artificially high or they aze unable to budget for unforeseen needs that azise after September 15. Response: The League supports changes to the Truth-in-Tasation process to provide more meaningful information to citizens. Cities should have the authority to increase the final levy from the preliminary levy to meet unforeseen and uncontrollable needs. 2001 City Policies a�-s FF-8. State Administrative Deductions from State Aid Issue: State administrative costs are deducted from the LGA appropriation. This reduces the property taac relief provided by I,GA and creates hidden appropriations for state agencies. Response: All appropriations from LGA resources that fund state operations should be repealed. FF-9. Reporting Requirements Issue: Budget and financial reporting requirements amposed on cities by the state often result in duplication and additional costs. Response: Requirements for reporting and advertising financial and budget in£ormation should be carefully weighed to balance the validity of fhe state's need for additional information with the costs and burdens of compiling and submitting this information. In addition, all state agencies should be aware of the information already required by others to avoid duplication of reporting requirements. FF-10. Federal Budget Cutbacks Issue: Congressional budget actions or devoluuon of program responsibilities may place fiscal burdens on the state and local governments. Response: The state should not reduce aids or increase fees to local governments as a means for dealing with cutbacks in federal revenues. The state should take responsibility for reductions in federal revenues rather than placing the burden on cities and their property taxpayers. ' FF-11. Price of Government infrastructure and facilities improvement also necessitated by new development. ' Issue: The price of government legislation enacted in 1994 was intended to measure the overall effect of state and local taxation over a long period of time. The targets measure government revenues as a percent of personal income. Unfortunately, the tazgets have been misinterpreted and used unfairly to criticize city t� and budget decisions. Response: The price of government statutes as fhey apply fo tocat governments should be repeaied. If the price of government law is to con�inue fo be applied to locat governments, price of government calculations should be based on the sum of levy and state aid, not just levy, and based on long-term trends, not single-year events. FF-12. Capital Improvement Fees Issue: New deve2opment and the resulting growth create an increased demand for gublic infrastructure and other public facilities. Severe constraints on local fscal resources and dramatic forecasts for population growth have prompted cities to critically reconsider ways to pay for the inevitable costs associated with new development. Traditional financing methods tend to subsidize new development at the expense of the existing community, discourage sound land use planning, place inefficient pressures on uublic facilities, and allow under utilization of eacisting infrastructure. Consequently, local communities are exploring methods to ensure that new development pays its fair shaze of the true costs of growth. Given the existing authorization to impose fees on new development for water, sanitary and storm sewer, and pazk purposes, it is reasonable to extend the concept to additional public Response: The Legislature should authorize cities to unpose capital improvement fees so new development pays ifs fair share of the off-site, as well as fhe on-site wsts of pubfic infrastructure and other public facilit3es needed to adequatety serve ttew developmen�. , � t FF-13. Deferred Assessments for , Roads Issue: Current law allows a city to recoup the costs for water, storm sewer, or sanitary sewer improvements by levying additional assessments on the property benefiting from the unprovement, but not previousIy assessed. Tlus authority for deferred assessment has not been extended to other infrastructure, such as road improvements, even though properties are benefiting from the improvements. Response: Cities should be abie to assess tke cost of infrastrucLure improvemeats for roads. Cities shoutd be allowed fo defer assessments against property located outside the city for road unprovements benefiting property abutting the improvement but not previously assessed for the improvement. For example, if a city makes improvements to a road that benefits city residents and township residents, the city should be able to defer the assessments to the township property until the property is brought into the cify. Once the township property is brought into the city, the city would then be able to assess that newly acquired property for road improvements previously done but not assessed at the time of the improvements. 4 League of Minnesota Cities �l � � ' , � � t � � , ' ' fJ ' I1 ' LJ FF-14. Taxation of Electronic Commerce Issue: Sales over the Intemet and through other electronic means are projected to increase exponentially over the next several yeazs. Electronic transactions pose significant tax policy challenges because of the difficulty of assigning a location to elecuonic sales, and because many Internet °goods" are not tangible property. Response: Federal taic policy should nof place main street businesses at a competitive disadvantage Eo electronic retailers, must not jeopardize repayment of bonds backed by state and local sales tas revenues, and should ensure stability in state and local revenues. To address the challenges created by the growth of e- commerce, the League supports the multi- state effort to develop a streamlined sales tax system. FF-15. Limited Market Value Issue: Rapidly rising property values in some parts of the state have fueled legisiative interest in expanding the current limited mazket value law. One proposal would establish the consumer price index as the ma�cimum annual mazket value increase and extend the limit to all classes of property. Further restricting mazket value increases would have several negative consequences: • It would unfairly shift tases from properties experiencing growth in value onto all other properties. � Over the long-term, similaz properties would be taYed at widely different rates merely due to when the properties were last sold. a�-5 • It could discourage the sale of property because sales would retum the property to full market value for taY purposes. • It would discourage improvements to property, which would trigger a return to full market value for tax purQoses. This could lead to degradation of housing and other types of property. • It could adversely affect the ability of cities to bond for infrastructure improvements or for tax increment fmancing since local t� bases would not reflect the growth in property values. • Once implemented, limited mazket value provisions are politically difficult to sunset due to the potential for lazge one- year tas shifts onto properties whose values were artificially capped by the program. Response: The League opposes any elcpansion of the limited market value law. FF'-16. State Charges for Administrative Services Zssue: Currently, some state agencies have wide discretion in setting the fees for special services they provide to local govemments. For example, the Minnesota Department of Revenue recenfly increased the fee for administering local sales taxes by 80 percent in the middle of a budget year with less than six weeks notice. The increase had no apparent relationship to the cost of providing the service. Response: State agencies shouid be required to demonstrate the need for Sncreases in service fees, and should give adequate notice of increases to allow local governments to budget for the increases. State agencies should set administrative service fees as close as possible to the marginal cost oF providing fhe service. , 2001 City Policies 5 Local government should be given the oprion to self-administer or contract with the private sector for the service if the state cannot provide the service at a reasonable cost IMPROVING LOCAL ECON011'IIES LE-1. Tax Increment Financing (TIF) Issue: In the context of any discussions regazding regional economic development strategies and "The $ig Plan," it must be recognized that the state has effectively delegated the responsibility for economic development and redevelopment to cities. Unfortunately, neighboring states have given their cities more development tools and, therefoze, cities in these states have a competitive advantage over Minnesota cities. In Minnesota, taz� increment financing is the most viable tool available to all cities in their economic development and redevelopment efforts. Additionally, tax increment allows cities to address the changing needs of their evolving communities. The state, whether based on a lack of information or misinformation, has been critical of cities' use of the tool and has implemented a series of restrictions over the pasY several years, rather tkan partnering with cities and encouraging their endeavors to improve and enhance the economic well- being of Minnesota and the growth and redevelopment of iis ci�es. Critics often claim that TiF is overused. Some of these critics have proposed TIF freezes or caps. This view fails to recognize the benefits received by counties and school districts, as well as cities, upon district expiration while only cities aze required to assume the financial risks associated with development decisions. Cities have used tax increment Fmancing responsibly and examples of these positive uses abound. Response: To effectively compete with other states, Minnesota must provide its cilies greater flexibility in fhe use of tax increment financing and other economic development programs. In implementing any sort of regional economic development strategy and objecfives contained in "The Big Plan," the state should partner with cities in economic deveIopment and redeveIopment activities, and encourage cities' use of tas increment in aclueving the laudable goals of long-term tax base stabilization and growth, job creation, devetopment of low- to-moderate income housing, remediation of pollution, elimination of blight, recycling and redevelopment of the infrastructure, and redevetopment of its communities. The League opposes proposaLs for TIF freezes or caps. Counties and school districts are appropriately involved in cities' development decisions through current "review and commentA requirements and should recognize the benefits they receive, without assuming any of the risk, due to cities' prudent uses of TIF. LE-2. TIF Reform Issue: Leaislative proposals to reform the ta�c increment financing laws will continue to be introduced and debated during upcoming legislative sessions. Response: As part of any TIF reform debates, the Legislature should consider: • Aufhorizing any taz� increment League of Minnesota Cities 1 ' f_I u , � ' C ' 1 ' �� i LJ ' 1 1 � districfs approved after Apri11,1990, to pool increments in the same manner as disfricfs certified prior to Apri11,1990; • Eliminating fhe LGAIHACA penalty currently imposed on districts or removing the restrictions on the sonrce of payment; • E�panding the use of taY increment financing to assist in the development of technological infrastructure, transit-oriented development, the restoration of historic structures, and for nonretail commercial projects (e.g., software companies, banks, and insurance companies); • Exempting redevelopment districts from the "five-year rule"; • Modifying the housing district income qualif5cation levei requirements to allow the levels to vary according to those speci�c to individual communities; • Authorizing the use of federal grants and otherfundsforlocal contributions; and • Removing the LGAJfiACA penalty imposed on housing districts established between the penalty years of 1990 and 1993. LE-3. Impact of Property Tax Reform on E�sting TIF Districts Issue: Jn addition to potential future action in light of "The Big Plan," recent I.egisiatures have compressed property tax class rates wluch, in turn, has jeopardized the repayment of outstanding debt or other obligations in existing TIF districts. Given the long-term nature of property tax reform, cities could not have anticipated the impact of these class rate changes, nor can cities project the impact of future changes. The I.egisiature has recognized its responsibility for the impacts of its actions 2001 City Policies C�-5 by creating a TIF grant program to address situations where the class rate changes cause TIF district deficits. The TIF grant program, currently funded at $6 million and scheduled to expire in 2002, is likely to be insufficient to cover every deficit. Some of the worst deficit situations may not surface for a number of yeazs. Additional pooling and special taxing district authority might be useful in certain cities but aze only partial solutions. Response: The Legislature should provide additional state resources to the TIk' grant program and extend the program indefinitely so that TIF obligations can be met and third party bondholders are protected if the current TIF grant program is insufficient to cover deficits caused by recent class rate changes. The Legislature should also explore additional options to address de�cits such as district duration extensions and eliminating or adjusting the original tas capacity rates. LE-4. Business Subsidies Issue: The 1999 Business Subsidies Act was clazified and modified during the 20001egislative session. In order fot development agencies to effectively implement the amended law, the law should be allowed to operate without further substantive legislative change. Response: The Legislature should not make any substantive changes to the 1999 Business Subsidies Act during the 2001 legislative session. LE-5. Economic Development Programs Issue: The Minnesota Tnvestment Fund is not adequately funded. Local governments do not have an adequate siate 7 of tools to assist job creation, redevelop blighted and decaying properties, and provide adeguate housing choices. Consequently, cities aze not well equipped to compete nationalty and internationaily for business development. Response: More state resources should continue to be contribufed fo fhe Minnesota Investment Fund. In addition, Congress should remove the caps that have been placed on Industrial Development Bonds and acknowIedge that the e�ctensive eligibility requirements now adequately limit their use. LE-6. Redevelopment Programs Issue: Communities across Minnesota aze faced with the unique circumstances of deteriorating, obsolete, and vacant structures in neighborhoods and downtowns and a lack of land for development. Redevelopment activities usually require large, up-front funds to address multi-phase projects of extensive dvrauon where site assemblage, demofition, relocation, or pollution clean-up must occur before private-sector interest can be generated. Additionally, deferioration threatens historic shvctures in cities across the state. While the redevelopment account administered by the Department of Trade aad Economic bevelopment is a critical component in establisbing a coherent statewide policy for redevelopment, cities do not have sufficient tools to utilize in local historic preservation efforts. Response: In recognition of the unique needs of redevelopment projects, the sfate should confinue its commitment to reinvest in its communities by increasing and committing to permanent base budget futtding for the redevelopment account administered by the Department of Trade and Economic Development. Additionally, as part of a comprehensive approach to redevelopment needs, the Legislature should consider the state income ta�c credit legisiation pursued by the Preservation Alliance of Minnesota, TIF subdistricts, and other taY incentives for local historic preservation efforts. LE-7. Property Tax Abatement Authority Issue: In an effort to increase the number of development tools available, the 1997 I.egislature authorized local units of government to graat pmperty tax abatements. Although TiF continues to be the primary financing mechanism for local development projects, tax abatements provide a good addition to a needed list of economic development tools. In order to provide maximum benefits, taz� abatements should be Iess restricflve in terms of funding caps and £mancing terms. Property tax abatements should not be considered a replacement for tax increment financing. Response: TIF is still the primary viable development tool available for cities. Abatement authority should coniinue fo be available, but not offered as a raYionale to eliminate TIF. Additionally, the Legislature should develop a state fund to facilitate state participafion in abafement projects. Finally, the fnnding caps should be increased or elitninated. LE-8. $rownfieIds Issue: Brownfieids are lands unsuitable for development due to the presence of chemical or other contaminants. Brownfields are a major cause of blight within communities across the state through loss of local tax base, jobs, housing qualiry, pubiic safety, and community confidence. ReviYalizing this land is cosfly and requires League of Minnesota Cities ' i � ' ' ' I_I I_I , � ' ' � � ' ' , � the cooperation of city, county, school, regional, state, and federal governments and the assistance of local economic • development organizations and citizens. As we move into an era where the mass creation of jobs is a necessity and where increased tas base is a requirement for local governments to adequately face growing financial pressures, efforts to revitalize brownfields must not only continue but be accelerated in the upcoming yeazs. Currendy, $7 million exists in ffie Department of Trade and Economic DevelopmenYs (DTED) base for the contaminated site clean-up fund. Additionally, $6.2 million is appropriated annually from the Petrofund to DTED to clean up sites that contain at least some petroleum-related contamination. Response: A comprehensive set of economic development programs mast be maintained for cities and other development agencies. The Legislature should: • Increase funding for the Department of Trade and Economic DevelopmenYs contaminated site clean-up fund and redevelopment account; • Strengthen enforcement and collection of revenues for the state contamination ta1c; • Continue support for and funding of local and regional programs to assist in the efforts to remediate brownfields; • Establish a fully-funded program to allow cities and other development authorities to gain control of and reclaim and revitalize brownfields; • Protect existing tas increment financing provisions that provide for the remediation of brownfields, and modify restrictions to allow the pooling of district revenues to assist in a�- s the financing of remediation of brownfields; Establish an indemnification fund fo provide financial security for instifutions and individuals as they invest in efforts to recycle brownfields in order to leverage private investment in cities' efforfs to increase their tas base and create jobs; and • Contiaue financing mechanisms for cleaning contaminated sites. LE-9. OSA Response Timelines Issue: The Office of the State Auditor (OSA) is responsible for TIF oversight. As part of their review of TiF districts, they identify alleged violations of the TIF laws and issue noncompllance notices to TIF authorities. After responding to these noncompliance notices within the required 60-day period, authorities often do not receive timely responses on the matter from the OSA. Additionally, TIF authorities aze often unclear about the final disposition of the matter upon receipt of a final noncompliance notice. Resporase: In the event that the OSA determines to issue a�nal noncompliance notice to a TIF authority, the Legislature should require the OSA to issue the notice within 60 days of receiving the authority's response. Any final noncompliance notice should contain the OSA's final position on the matter, the date upon which they forward the matter to the county attorney, and the next steps that are required to be taken according to state law. Upon expiration of the 60-day period, the authority should be deemed to be in compliance with the TIF laws if no finat noncompliance notice is received. ' 2001 City Policies y LE-10. O5A Time Limitations Issue: The Office of the State Auditor (OSA) has the authority to issue noncompliance notices for every existing TIF district in the state for alleged violations of the TIF laws. This authority extends retroactively to the inception of the district. Accordingly, TIF authorities can receive noncompliance notices for alIeged vioIarions that occurred twenty or more years ago. Often, staff and record-keeping procedures have changed and TIF authorities find it exceedingly difficult to reconstruct the past in order to identify and remedy these situations. SimiIazly, the OSA claims the authority, based on the state's records retention schedule, to audit TIF districts for up to ten years after decertification which requires cities to expend staff resources to maintain files and a working knowledge of old districts for an unreasonable period of time. Response: A reasonable timeframe wifhin which alleged violations are identified should be established. The Legislature should reasonably restrict the OSA's ability fo issue noncompliance notices fo the six-year period prior to the notice's issuance date. The Legislature should also require the OSA to coaduct any audits on decertified districts within one year of decert�cation. LE-11. Growth Management and Annexation Issue: Unplanned and uncontrolled urban growth has a negafive environmental, fiscal, and governmental impact on cities, counGies, and state govemments because it increases the cost of providing government services, and results in the loss of natural resource areas and prime agriculturat Iand. Response: The League believes the e�sting framework for guiding growth and development primarily through local plans and conYrols adopYed by local governments should form the basis of a statewide planning policy and that the state should not adopt a mandatory comprehensive statewide planning process. Rather, the state should: � Provide additional financxal and technical assistance to local • • • governments for cooperative planning and growth management issues, particularly where new comprehensive plans have been mandated by the Legislature; Clearly establish the public purposes served by existing statewide controts such as shore land zoning and wetlands conservafSon; clarify, simplify, and streamline these controls; eliminate duplication in their administration; and, fully defend and hold harmiess any locat governmenf sued for a"taking" as a result of executing state land use policies; Give cities broader aufhority to extend their zoning, subdivision, and other land use controls up to two miles oufside the cify's boundaries, regardless of the esistence of county or township controls, to ensure onformance with city facilities and services; Clearly deFne and differentiate between urban and rural development and restrict urban growth outside city boundaries; • Require the Metropolitan Council to seek cooperation from the state of Wisconsin and counties (both Minnesota and Wisconsin) surrounding the metropolitan area to ensure responsible and controlled development; study expansion of Metropolitan Council authority in surrounding counties; and, examine 10 League of Minnesota Cities ' ' � ' • , ' • � • ' ' ' � � � LJ L� Ll the positive and negative impacts of mandatory regional or local land use controls and state-imposed development standards; Facilitate the annexation of urban land to cities by amending sfate statutes that regulate annexation to make if easier for cities to anneic developed or developing land within unincorporated areas; Oppose legislation that would reinstate fhe election requirement in contested annexations; and Encourage ideas consistent with the long-term goal of allowing urban development only in urban areas. Density incentives such as sprawl reduction aid programs are more straightforward methods of rewarding and encouraging compact urban development than using LGA or HA CA for another new purpose. LE-12. Electric Service Extension Issue: Minnesota law currently protects the right of municipally-owned utilities to extend electric services to annexed azeas. Electric cooperatives have announced their intention to seek legislation that would eliminate the right of municipally-owned utilities to extend electric services to annexed areas. Eliminating the authority to extend services would interfere with the city's natural growth and with the ability of municipally- owned utilities to serve the entire coznmunity. Response: The League opposes any statutory change that would impede or eliminate the ability of municipally- owned utilities to extend electric services to any portion of their respective cities, including annexed areas. 2001 City Policies LE -13. State and/or County Licensed Residential Facilities (group homes) Issue: As the need for more residential- based care facilities increases, sufficient funding is also needed to ensure residents living in group homes and licensed facilities have appropriate care and supervision. In view of cities' responsibilities to accommodate group homes and residential- based facilities, it is important that state and county government work with local officials to address residential care and public safety issues. Cities have reasonable concerns for special care necessary for group home residents, particulazly in case of public safety emergencies. Since operators of certain residenUal facilifies and services are not required to notify cities when they intend to purchase housing for group homes, cities do not have opportunity to raise concerns and requirements regazding the special care and public safety measures these residences may expect. Response: The Legisiature should provide sufficient funding for snch residential-based services and require state and county agencies that manage those facilities or companies licensed to operate group homes to notify ciEies in a timely manner when licensed facility operators request to operate such facilities or to renew their license and allow cities to require such agencies and licensed operators to identify and take appropriate measures to respond to the special care residents need in case of emergencies. Legislation should also require establishment of nonconcentration standards for state or county-issued requests for proposals (RFPs) and direction to avoid clustering residential facilities. Licensing authorities must also 11 a�— 5 be responsible for removing any residents incapable of living in such an environmen�, parEicuiarIy if they become a danger to themselves or others. LE -14. Housing and Economic Vitality Issue: City officials recognize fhat Iow rentai vacancy rates and increased demand for housing, particularly for starter homes foz fust-time homebuyers, have had a dramatic impact on affordability and threaten to undermine strong neighborhoods, healthy communities, and local economic vitality. Decreased federal housing assistance art8 insufficient state resources for hoasing production place statewide economic expansion at risk. Changes in social services and family support, along with welfaze-to-work requirements, make it paramount for the Legislature and the federal government to identify and provide for additional resources for housing to strengthen family stability, improve workforce availability, and improve children's school perforatance. Response: The Legislature must increase state investment in housing production, at least doubling the current biennial housing budget, to help leverage private and local resources as well as federal funds. The Legislature should continue to make additiona] investment outside Yhe metropolitan area for production of single-fami2y hovsing affordable to working families, along with affordable rental units. In the metropolitan area, investing over the next biennium to carry out the goals of the Livable Communities Act is critical to meet the needs of many households in which working adults must now Yravet long distances to get to work 12 and face a losing baffle in trying to afford housing for fheir families. The federal govemment arust address its responsibiIity to assist communities in providing for production of affordable housing units and end over-reliance on housing vouchers to solve the growing gap befween rapidly increasing rents and the incomes af workers in lower-paid employment The Legislature should continue to provide incentives rather than mandates to lower housing construction costs and selling prices to encourage local government, builders, developers, housing agencies, and organizations Yo address housing design and construction costs, land use regulation, and other factors that affecf housing development costs. The Legislature should also give cities the authority to redevelop tax- forfeited property for housing. LE-15. Preservation of Federally- � Assisted Low-Income Housing Issue: I.oss of federally-assisted housing in communities throughout the state remains a serious threat to the well being of older city residents as well as other vuinerable populations. Cities do not have sufficient locai resources to purchase or provide equiry take-out loans to owners of subsidized rental units who are considering mortgage prepayment and conversion to market-rate rentals. Without such resources, properties originally built to provide housing for low- income residents will be converted to mazket-rate, worsening an already tight rental housiag market. Cities, neighborhood orgaaizations, and communiry development projects also do sometimes require demofition of League of Minnesota Cities ' � ' , ' t � ' ' � ' I_ J ' ' t � , LJ substandazd housing, which can compound housin; shortages and displace occupants. Response: The Legislature must continue to provide additional resources for fhe Minnesota Housing Finance Agency and community-based nonprofit housing organizations to buy nnits or make equity take-out loans to property owuers in return for maintaining rents affordable to low-income residents and agreeing to maintain the federaily subsidized morfgage to term. LE-16. Adequate Funding for Transportation Issue: Current funding for roads and transit systems across all government levels in the state is not adequate. The L.eague acknowledges that all Minnesota communities benefit from a sound and adequately funded transportation system. Response: More resources must be dedicated to the state's transportation system. The League supports constitutionally dedicating a portion of the sales tas on motor vetucles (also referred to as MVE1� or other new revenue sources to a transportation fund, which would fund both highway and transit projects. The League also supports an increase in the gas tax that would be dedicated under the existing highway user trust fund formula. Replacement funding for vehicle registration taYes (known as tab fees) must be constitutionally dedicated to the highway user trust fund. If adequate funding does not come from the sfate, cities should have funding options made available to them to raise the necessary dollars to adequately fund roads and transit Ot- 5 All nontransportation programs should be funded from sources other than the highway user distribution fund or other funds dedicated fo transportation. LE-17. State Aid for Urban Road Syst�� Issue: Current rules goveming municipal state aid expenditures are restricting the efficient use of these funds, and do not adequately acknowledge the constraints of road systems in urban city environments. Response: Rules affecting the municipal state aid system need to be changed to acknowledge the technical and practical resfrictions on construction and reconstruction of urban road systems. New municipal state aid design standards should not apply to reconstruction of eausting state aid streets originally cdnstructed under different standards. Future changes to state aid rules should ensure the involvement of elected officiais and engineering professionals in the decision-making process. LE-18. Turnbacks of County and State Roads Issue: As road funding becomes increasingly inadequate, more roads aze being "turned back" to cities from counties and the state. Response: Turnbacks should not occur without direct funding or transfer of a funding source. A process of negotiation and mediation should govern the timing, funding, and condition of turned-back roads. City taxpayers should receive the same treatment as township taxpayers. The requirement for a public hearing, standards about the conditions of turnbacks, and temporary � 2001 City Policies 13 maintenance funding should also apply to county turnbacks to cities. At a minimum, roads proposed to be turned back to a lower government level should be brought up to the standards of the receiving government or should be compensated with a direct payment Direct funding should be provided for smaller cifies that are not provided with turnback financing through the municipal state aid system. LE-19. Road Funding for Cities Under 5,000 Issue: Cities nnder 5,000 popalation do not receive any nonproperty ta�c funds for their collector and arterial streets. Response: Cities under 5,000 population that are not eligibie for Municipal State Aid (M.S.A.) should be able to use county municipal accounts and fhe 5 percent account of the highway user distribution fund. Uses of counfy municipaI accounfs should be statutorily modified so counties can dedicate these funds for local arterials and collector sfreefs wifhin cities under 5,000 population. In addition, the five percent set-aside account in the highway user distribution fund shouid be used fo meet this funding gap. LE-20. Railroad-Related Projects Issue: Cities are being presented with faz-reaching and long-term effects when railroad expansion and related projects eater their communities. Along with the concerns related to safety, environmental effects, and noise impacts on the communities, several issues have greater reaching effects. They aze: • The cost-shaze ratio related to roadway crossing improvements will be borne by the public sector to a substanfial degree, some estimates aze 80 percent pubIic to 20 percent private funding; • The financial burden faced by the public sector to deal with mitigation improvements, a cost that the Surface Transportation Boazd (STB) is not requiring the private sector to pay; • The issues associated with the length of trains moving through communities; • Liability associated with whistie- blowing ordinances; and • Preemption of local authority to regulate railroad activities. Response: The private sector must be required to pay a greater share of the improvements that benefit their industry. The public sector should not be expected Yo underwrite the costs of improvements sought by the private sector. The state and federal government must participate in adequately fnnding the mitigation of the negative impact of railroads on local government and its citizens. The federal government must exercise greater oversight of the STB to ensure that fair and equitable solutions are reached when dealing with cities in Minnesofa. LE-21. Right-of-Way Management Issue: Cities have fundamental responsibility for managing the safe and convenient use of public rights-of-way and hold local rights-of-way in trust for the public as a limited and valuable asset. As demand increases for use of riahts-of-way, cities must continue to have cleaz authority to allocate and coordinate that resource among competing uses. Local management responsibilities vary and are site speci£ic, underscoring the necessiry for maintaining local authoriry to recover actual management costs and to exercise local zoning and land use regulations. 14 League of Minnesota Cifies 1 , � t L I LI ' , ' Response: State and federal governments must: • Uphold local authority to manage and protect public rights-of-way, including reasonable zoning and subdivision regulation and the exercise of local police powers; • Recognize that municipalities have a paramount role in development, utility location, and implementation of construcfion and safety standards; • Support local authority to require full recovery of actual costs of managing use of public rights-of-way; • Allow cities to retain authority to franchise gas, electric and cable services and collect franchise fees or alternative revenue streams; and • Maintain the courts as the primary forum for resolving disputes over the exercise of such authority. t LE-22. Workforce Readiness , ' � ' ' t � 1 Issue: State and federal welfare reform efforts have focused on the importance of the welfare-to-work transition, and have recognized the challenge of ensuring individuals are qualified to work. Cities have an interest in the availability of qualified workers as part of their economic development efforts, and can serve as a catalyst with other public entities and the private se�tor to address workforce readiness issues. Response: The Legislature should continue to fuliy fund the job skills partnership and pathways programs administered by fhe Department of Trade and Economic Development. The Legislature shoutd provide additional funding to Local Workforce Councils for the purpose of upgrading the skills and productivity of the workforce. D1-5 LE-23. Platting Law Recodification Issue: The Minnesota Association of County Surveyors (MACS) is seeking to recodify Minnesota Statutes Chapter 505. Two issues raised by MACS that will likely impact cities aze the subdivision plat requirements, and the creation and amendment of road right-of-way acquisition maps. Additionally, there has been disagreement among plat law practitioners whether the MACS proposal is the appropriate document for achieving recodification. Response: It is not clear whether fhe platting statutes are in need of recodification. In the event practitioners of plat law develop a document that is sound and ready for legislative discussion, the Legislature should preserve local authority over plat approval and to iaclude language in the recodification legislation that will allow for pedestrian easements or thoroughfares to be dedicated by plat (sidewalks, public trails, etc.). LE-24. Economic Development Authorities Issue: The 2000 Legislature authorized counties outside the metropolitan azea to establish county economic development authorities (EDAs). The new law lacks specificity on certain process and limitations issues. County EDA activity in areas surrounding cides wili directly impact the adjacent city in terms of service provision and taxes. Response: The Legislature should establish reasonable limits on county EDA activities in unincorporated areas, including requiring city approval for proposed county EDA activities within two miles of a city. The Legislature ' 2001 City Policies 15 should reaisit the county EDA legislation and add specificity to other process and limitations issues suck as the local recommendation committee. LE-25. Infrastructure Funding Options fssue: Current infrastructure funding options available to cities aze inadequate. Existing special assessment law, Chapter 429, does not meet cities' £nancing needs because of the benefrt requirement. The law requires a minimum of ZO percent of such a project to be specially assessed against affected properties. In practice, however, proof of increased property vatue to this degree of benef t cau razely be pmven from regular repair or replacement of existing infrastructure, such as streets or sidewalks. Altematives to the Chapter 429 methods for financing infrastructure improvements are neazly nonexistent. The L.egislature has given cities the authority to operate utilities for waterworks, sanitary sewers, and storm sewers. The storm sewer authority, established in 1983, set the precedent for a workabie process of chazging a use fee on a utiliry biIl for a ciry service infrastructure thai is of value to all those in a city. Similaz to the storm sewer authority a transportation or sidewalk utility would use technical, well-founded measurements, aad woutd equitably distribute the costs of local infrastructure services. Response: The LegisIafure should aathorize cities to create, as a local option, additional utilities such as a transportation or sidewalk utility. Such authority woufd acknowledge: the effects of repeated levy limits and the general funding shift from the state to local governments for building and maintaining necessary infrastructure; the benefits to all taspayers of a properly maintained public infrastructure; and the limitations of existing special assessment authority. LE-26. Statutory Approval Timelines Issue: Since 1995, cities have been required to act on written requests relating to zoning, septic systems, the expansion of Metropolitan Urban Service Areas (MLTSA) and other lan@ use applications in accordance to a statutory time period generally refened to as the 60-day rule. Pursuant with Minn. Stat. § 15.99 state and local government agencies must approve or deny a permit within a statutory time frame, and failure by the agency to issue a specific denial of the application with contemporaneous written findings of fact shall be deemed an approval. Recent court decisions have made it cleaz the law needs to be clarified making it more efficient and to assist cities in providing accurate and timely responses to appiicants. Response: The Legislature should amend Minn. Stat § 15.99: To allow government agencies to provide final written fmdings of fact at the next official meeting of the governing body. To allow an automatic e�etension of the time limit an additional 60 days if the agency votes down a resolution granting the request, but does not vote on a resolution denying the reqaesG To make clear the 60-day time limit begins at the point when a formal complete written application is received on forms provided by fhe cify with appropriate addifional snpporting documents and including the payment of fees if necessary. 16 League of Minnesota Cities o�- 5 � To increase the initial time limit to 40 days for municipalities with less than 5,000 population. LE-27. Telecommunications Restructuring Issue: Facilities-based competition for telecommunications services has failed to emerge in many communities in Minnesota despite enactment of the 1996 Federal Telecommunications Act. Outside meuopolitan azeas and regional trade centers, there is little evidence of head-to- head competition. Further, there is a lack of coordination among federal, state, and locai policies aimed at encouraging competition. Respo�zse: The Legislature should recognize that lack of consumer choice is a serious disadvantage in obtaining advanced telecommunications services. State lawmakers should support measures to: telecommunications to strengthen local economies, eapand educational opportunities, and improve quality of life; • Give cities express authority to provide stafe-of-the-art telecommunications either as sole operators or in partnership with other providers; • Define a strategic leadership role for state government by setting standards and establishing goaLs for provision of these services, e&minating barriers to municipal entry, increasing customer choice, and allocating resources; and • Restrueture telecommunications regulation and subsidies to increase investment in state of the art telecommunicafions infrastructure and services in high-cost areas and low-income neighborhoods while taking into account the effect on cities' existing revenue streams. • Assure communities have affordable access to state-of-the-art IMPROVING SERVICE DELIVERY SD-1. Redesigning and Reinventing Government Issue: Every level of government is reevaluating, reprioritizing, redesigning, and renewing its organizational structure and programs in response to financial realities and citizens' needs and problems. Reforms, however, must be more than change for the sake of change, or a reshuffling of existing programs to appease the electorate. To be meaningful, reorganization and reassignments of governmental entities and services should save money where feasible, deliver improved services, serve essential needs,and be equitably structured. Cities have and will continue to pursue the use of cooperative agreements, the reevaluation of city programs and services, and changes to organizational structures. Response: The federal, state, and county governments should: • Ensure that in redesigning, reinventing, or reassigning government services and prograzns that the appropriate level of service to citizens is evaluated, and citizen demands and expectations are adequately addressed; • Promote local efforts through 2001 City Policies 17 incentives, rather thau mandates; • Communicate and esfablish a process of negotiation before shifting responsibility for delivering services from one level of government to another, or seeking to reduce service duplicatioa; • Transfer authority for use of revenues dedicated to such programs, or provide appropriate and adequate alternatives; • Identify and repeal programs or discontinue services that are no longer necessary, or which can readily and fairly be provfded by the private secfor; and • Employ e�sting government entities in redesign efforts rather than create new agencies or units. SD-2. Unfunded Mandates Issue: The cost of federal and state mandated programs substitute the judgment of Congress, the President, the I.egislature, and the govemor for local budget priorities. These mandates force ciues to reduce funding for other basic services or to increase taxes and service chazges. The passage by the Izgislature of reporCing requirements for new state mandates, and the passage by Congress of legislation restraining new federal mandates, should help address the problem, but other steps aze necessary. Response: • Existing unfunded mandafes shou[d be reviewed and modified or repealed where possible. • No addifional statewide mandates sbould be enacted, unless fuIl funding for the mandate is provided by the IeveI of government imposing it or a permanent stable revenue source is established. • Cities should not be forced to compiy with unfunded mandates. • Cities should be given the greatest fle�bility possible in implementing mandafes to ensure their cost is minimized. SD-3. Civil Liability of Local Governments Issue: One of the barriers to the delivery of governmental services and programs is the exposure of local governments and their officials to civiI damage claims. The state has acted to protect itself and its local govemments by enacting exceptions and limitations to liability suits, and authorizing self-insurance and other mechanisms to deal with claims allowed by law. Response: The League supporfs: • Creating an exception to municipal tort indemuification law (MN Stat. § • 466.0'n where an employee is defended and indemnified for ctaims under a contract of insurance carried by the employee. Elctending the protection o£ the state and municipal tort claims act to quasi- governmental entities when performing public services such as firefighting, E�sting constitutional safeguards for protecting public and private property interests without any statutory expansion of property rights; and Clarifying and maintaining the applicability of municipal irumunity in various areas including, but not limited to, park and recreational immunity, including the extension to entities providing a public service that have not traditionally been included within the immunify (e.g. sfate trails over municipal utility easements) and 18 League of Minnesota Cities ' � , , � ' � , � , � l_ J ' vicarious official immunity. SD-4. Environmental Protection Issue: Cities demonstrate strong stewazdship for the protection and preservation of the environment. Minnesota municipalifies have historically been the leading funding source for environmental protection and improvements. Municipal efforts include environmental protection through wastewater ueatment, wefland restorations, stormwater treatment, public utility emission reductions, brownf`ield cleanup, safe drinking water programs as well as others. However, at some point the diminishing or nonexistent environmental benefit received from addition efforts is fiscally irresponsible. Often, the programs are improperly designed to meet their stated goals. Additionally, the absence of funding by the state and federal governments has removed an essential restraining feature in program design and implementation. Agencies are less accountabie to the governments that mandate environmental programs when they do not have to find the money to implement the programs. Specific problems faced by cities include the following: • New programs or standards are continually adopted without regazd to the e�stence, attainability, or cost of existing programs an3 standards. • Regulatory bodies fail to consistently use good science and the most current and accurate data when establishing water quatity standards. � Regulatory bodies impose new pernut requirements without going through rulemaking. Instead, the agencies rely on internat documents, program strategies, and "best professional judgment of staff' when setting permit 2001 City Policies a�- s • • criteria. Regulatory bodies approve permits and programs that compete with traditional municipai services and encourage urban sprawl. This behavior puts at risk the public investments and growth management efforts cities have made when planning for future development. Pernut fees and other cost transfer elements of federal and state programs do not provide an incentive for environmental agency e�ciency, policy prioritization, or risk assessment. Third party environmental advocacy groups create significant hazdships on cities by threatening litigation even when hard science may not support the groups' positions. Response: • Alternative wastewater treatment and cooperative service systems should be prohibited From operating in areas that can reasonably and effectively be served by eacisting municipal systems unless: • The municipal system is proven to be substantially less cost-effective and substantially less beneficial to the environment; and • the operation of these systems will not create a stranded public investment in the existing system. • Sufficient state and federal �nancial assistance should be provided to assist local governments when complying with state and federal infrastructure requirements, particularly with regard to wastewater, stormwater, and drinking water faciIities. • The MPCA should streamline its permitting and reissuing processes to allow for effluent standards and permif requirements to be known earlier, thereby giving communities more time to defend against contested 19 case hearings. • The Legislature should require the MPCA to make its aetermination regarding the re-issuance of a permit witftin a reasonable set time period and require the MPCA to reissue the permit within a reasonable set time frame. • Legistation should be passed that requires state agencies to establisk permit requirements oaly when the criteria they are using is developed through the rule making process. • The LMC should join with other like- minded organizations to contesf though jndicial means various regulatory activities of state agencies and advocacy groups. SD-5. Election Issues Tssue: Delays and lack of funding at the state level have prolonged the wait for cities to have direct access to the statewide voter registration system. Lack of access increases the time and cost to process new voter registrations, update voter files and verify voter information in a timely manner. Response: The LegisIature should provide funding to a11ow more cities direct access to ttee statewide voter registration system. SD-6. Local Elecfion Authority Tssue: Previous legislatures restricted city authority to schedule ciry elections and establish terms of o�ce for local elected officials, thereby diminislung regard for the zole of local self-govemment, particularIy when state policy preempts home rule authority governing city elections. Statutory cities currendy lack authority to create wazds. Response: The Legislature shoutd oppose further limits on either the number or the tength of terms city elected ofFiciaLs may serve, particularly when those terms have been established by voters in home rnle charter cities. State poHcy on uniform elections should continue to recognize and uphold Iocal authority to schedule city elections in November of either even- or odd- numbered years. The Legislature should support provisions fo give sfafufory cifies general aathority to create wards. SD Election Judge Appointment Issue: It is increasingly difficult for locai election officiais to comply with statutory requirements that election judges serving at precinct polling places be persons identified as members of major politicai parties. The requirement presents a growing concern in obtaining quatified election judges and a serious obstacle to efficient election administration at the local level. Response: The Legislature should eliminate election judge appointment criteria requiring persons seeking appointment as local election judges to designate a political party. SD-8. Election Judge Compensation Issue: People willing to serve as election judges are often discouraged from doing so becaase the ciry is not authorized to accept their service as a volunteer or to contribute their compensation to local charities or community nonprofit organizations. Response: The Lebislature should authorize cities to allow election judges to direct thaf their pay be donaYed fo a Iocat 2� League of Minnesota Cities o�- S charity or community nonprofit organization of their choice. SD-9. Counting Write-In Votes Issue: Requirements for recording and reporting votes cast for fictitious and undeclared write-in candidates are unproductive, time consuming and do not serve to increase voter confidence in the outcome of the election. Despite actions of the 2000 I.egislature requiring write-in candidates for state offices to file an affidavit of candidacy prior to election day in order for votes for such candidates to be reported, election judges continue to be required to count write-in votes for candidates for judicial offices. Response: There should be no requirement to tabulafe or report write-in votes cast for fictional or celebrity write- in candidates or for those other write-in candidates for judicial offices who have not officially declared their interest in seeking office. SD-10. City Costs for Enforcing State and Local Laws Issue: Cities experience substantial costs enforcing state and locai laws, particularly those related to tra�c, controlled . substances, and incarceration of prisoners. The current method in our criminal justice system of recovering costs for law enforcement and prosecution through fines is insufficient to meet the costs incurred by local governments. Response: The LegisIafure should review this issue and adopt measures that provide for complete reimbursement of the costs incurred by local governments in enforcing state and local laws. Solutions that should be considered include the following: • Increasing fine amounts; � Removing or modifying county and state surcharges fhat conflict with cost recovery principles; and • Requiring fhe defendant to pay the full costs of enforcement and prosecution as part of any sentence. SD-11. Design-build Issue: The standazd bid procedure cities aze required to use in selecting contractors for municipal buildings can be quite costly. Private sector development uses a process known as "design-build" in which vazious firms submit project proposals that-include both a design and the construction costs for that design. The selection is then based on the total package. By granting specific statutory authority to use the design-build alternative to the Metropolitan Sports Facilities Commission and state agencies, including the Department of Revenue, the Legislature has recognized the financial savings it can provide. In documented instances, cities have saved taxpayers up to 10 percent of the total project cost by using the design-build alternative. The design-build process also pernuts improved project management and oversight. However, absent statutory authorization to use this alternative, cities aze vulnerable to lawsuits from unsuccessful bidders. In addition, the design-build process for piayground equipment can encourage greater creativity while maintaining cost controls. Special legislation was enacted for the city of Chanhassen in 1995 to experiment using tlus process for purchasing playground equipment. Response: The Legislature should authorize an extension of the design-build procedure to cities as a less expensive alternative to the standard bid procedure. 2001 City Policies 21 SD-12. Providing Information to Citizens Issue: To keep the public updated and informed, state law requires local units of government to publish various notification documents in newspapers, and often dictates which newspapers receive cities' publication business. The number and variety of documents required to be published and the costs of publication aze burdensome. Technological advancements have expanded the ways govemment can provide information to citizens. In many cases, these new technologies aze more efficient and cost effective. Response: Cities should be authorized to take advantage of new technologies to increase the dissemination of information to citizens and potentially lower the associated costs. SpecificalIy, the Legislature should authorize local units of government to designate an appropriate daily/weekiy publication, elect aIternative means of communication such as city newsletters, cable television, and the Internef, and expand the use of sammaries where information is technical or lengthy. Additionally, the Legislature should eliminate outdated or unnecessary publication requirements. SD-13. Creating a Minnesota GIS Program Issue: I,ocal govenunents are finding geographic infortnation systems (GIS) au essential tool for comprehensive land use, real estate, environmental, and other land management information. In many counties, maintenance of official land records has not been automated, creating a barrier to GIS development. In addition, We start-up costs of GIS impiementation can be prohibitive. Response: The Legislature should encourage local government implementation oF GIS through grants and/or the dedication of a revenue source such as real estate transactiott fees. In addition, cities should be involved in the development of county land records modernization plans. SD-14. State Regulation of Massage Therapists Issue: The state does not cunenfly regulate massage therapy, an emerging and rapidly growing profession. In order to control prostitution and to provide for health and sanitation standards, several cities have entered the traditional state domain of health-care licensure by enacting ordinances that require all massage therapists to obtain a local professional license. These ordinances allow local law enforcement o�cers to differentiate between legitimate massage therapists, who have a city license, and prostitution businesses fronting as massage therapy establishments. The lack of statewide regulation of massage therapists has hampered law enforcement techniques, and has caused problems for cities attempting to regulate an entire heaith-caze profession without any statewide standazds. Currently, 25 states regulate massage therapists on a statewide level. Statewide regulation of massage therapists would provide a cleaz set of educational standards that massage therapists must meet, and would provide local law enforcement agencies with an easy tool to distinguish between prostitution and legitimate massage therapy. Statewide regulation would not disturb traditional powers over land use and business licensure. Response: The League supports the stafewide regulation of massage therapists in order to aid local law enforcement 22 League of Minnesota Cities � � ' � efforts at controlling prostitution attd other criminal activity. SD-15. Private Property Rights and Takings Issue: The L,egislature has been ' introducing an increasing number of bills designed to diminish or control local governments' ability to exercise traditional ' planning and zoning authority and eminent domain powers. I.egislation to control cities' abilities to perform regulatory acts , such as road right of way condemnation, shooting range zoning and amortization received strong support from legislators. In 1 addition, bills have been introduced to codify the property rights section of Minnesota's Constitu6on. The Federal Swamp Buster/Sod Buster programs, the Army Corps of Engineers' dredge and fiil programs, and the State's Wetlands Conserva6on Act and Community Based Pianning Act, appear to be the nexus for much of the property rights and takings legislation proponents. The I,eague supports local govemments' ability to balance the rights of private landowners with the interest of the public. However, the League is concerned various legislative initiatives wili adversely impact cities in three ways. First, such legisiative initiatives undermine the fundamental authority of cities to protect the public health, safety, and welfaze of its citizens. Second, if the L,egislature acts to codify part of the Minnesota Constitution, an argument may be made that the I,egislature intended to create new causes of action against cities. This would encourage more lawsuits and expose cities to the expense of defending those cases. Third, by changing the state's eminent domain law, including "quick take" provisions, municipal condemnation will be o�-s come more costly and take longer to conclude. Response: The League encourages the state and federal governmenfs to improve fheir regulatory programs by eliminating property rights issues that were raused by the adoption of such laws as the Wetlands Conservation Act or Swamp Buster/Sod Buster. The League opposes legislation that diminishes the ability of cities to act in the best interests of the health, safety, and welfare of its citizens, that increases the cost of doing business for the public good, or that creates the possibility of addifional lawsuits against cities. SD-16. Construction Codes Issue: Each year the Legislature addresses consuuction codes issues that have some impact on local govemments. For example, the L.egislature mandated bleacher safety code requirements and is exploring the idea of having both the fire and building officials approve building permits. In addition, the Construction Codes Advisory Council has indicated it may be recommending legislation to institute an appeais process for disagreements over the application or interpretation of various construction codes and to establish a statewide building code. The Intemational Organization for Standardization (ISO) has been evaluating Minnesota's building codes and enforcement. There is some expectation on the part of council members that ISO will act as the catalyst for a statewide building code. While all cities must enforce certain codes, such as the accessibility code, the electrical code and the bleacher safety code, the state's building code remains a locai option for cities outside the meuopolitan azea Many Greater Minnesota cities have 2001 City Policies 23 adopted the state building code and all cities within the seven-county metropofitan area are required to adhere to the state building code. Response: A building code provides inany benefits inc�udiag uniformity of construction standards in the building industry, consistency in code interpretation and enforcement, and life safety guidance. A statewide-enforced building code may have benefits, but requiring it would result in an unfunded mandate. The enforcement of a building code can be cost prohi6itive for many cities due to the expenses and overhead related to staffing vs. the limited building activity occurring in some communities. The League supports adoption of a state building code so long as there is not mandatory enforcement at the local level. The adoption oF an enforced state building code should remain a local op[ion for municipalities outside ffie seven-county metropolitan area, unless the state fully funds the costs of enforcement and inspection services necessary to enforce a statewide building code. In the evenf the LegisIature requires an enforced statewide building code, local governments must have the option to hire or select a building official oF their choice and set the appropriate level of service, even if the stafe fuIly funds code enforcemert activities. An appeals process would provide an excellent forum to resolve code disputes. To fhe ea�tenf ffie insurance industry is concemed about insuring structures not built to code, the industry should drive code compliance by issuittg policies or setting rates based on whether the strucfure meets various code requirements. Finaily, the Legislature should work with cities attd the Department of Administration in determining the best method to designate a municipality's building official and in clarifying the distinction between administez�ing and enforcing the building code and the administrative duties of a city when operating a building code departinent or managing staff. SD-17. Fees for Service Issue: Interest is increasing at the Legislature and among interest groups to mandate to local governments specific fee limitations for various municipal services. Examples of legislation include building permit fee legislation and coin operated amusement macfiine license fee Iegislafion, both designed to rigorously control local fee setting authority. This stems, in part, from a belief of some that pian check fees, license fees, and other municipal fees for service do not reftect the actual benefits received. Additionally, other groups have begun discussing the value of fees for providing services. Recently, the Citizens Jury expIored the value of fees for service and gave limited acknowledgment of the value fees may have in providing core manicipal services. The media has entered the discussion, as well, urging the public and policy makers to monitor fee-setting processes. Response: While the state has a role in providing a generaI statewide funding policy, the state should not interfere in the simple budgetary decision-making functions performed by cities. The League supports the Legislature endorsing local goverament authority to charge fees that are reasonably related to the cost of providing the service, permit, � League of Minnesota Cities L� �l ' L 1 Cl L I ' ' � i � ' IJ 1! ' ' � r� or license and acknowledging there are other associated costs inherent in the provision of those services, permits, or licenses. However, cities oppose any move to legislate specific methods to pay for municipal services or place caps on license fees or other fees. General services such as permitting, inspecfions, or enforcement are best funded out of a city's general fund. Cities are better prepared than the state to make local budgetary decisions when providing local services. SD-18. State Appropriation for Government Training Service Issue: In 1977, the Government Training Service was created in order to provide a coordinated response to Che training needs of state and local governments. GTS was chazged with coordinating the needs of the state, cities, counties, townships, and school districts, with the delivery capability of the state's institutions of higher learning and other continuing education service providers. State financial support of GTS is important. Many cides and other local governments find it difficult to adequately fund official and staff training. GTS provides a cost-effective mechanism for taking advantage of the efficiencies of cooperation. Response: The League supports the state general fund appropriation for the Governmenf Training Service. SD-19. Public Safety Spectrum Needs Issue: Cities have benefited from successful efforts at the federai level to gain access to exclusive radio and wireless communications capacity for state and local public safety spectrum. For future interoperability, cities will need additional spectrum to ensure public safety agencies can communicate with each other and with surrounding jurisdictions. Unless secured for public safety purposes, allocation of spectrum in the 138- 144 MHz band is likely to be auctioned off to the highest bidder for private use. Spectrum in the 800 MHz range requires many more sites to cover the same geographic range and uses more expensive radio eguipment. Although many local public safety agencies aze moving to new 8�0 MHz systems, others will need to remain in lower frequency bands. Equipment in 800 MHz range does not communicate with many of the existing public safety systems that operate at lower frequencies. Response: The federal government must make sufficient spectrum available to allow public safety agencies that require multi-agency communications to respond to accidents, disasters, and criminal activity that cross jurisdictional boundaries. The Legislature should not force cities to modify current public safety communications or become part of the 800 MHz radio system until the city chooses to do so. Rather, the Legislature should provide for a transition that guarantees uninterrupted service that is capable of communicating among local public safety agencies, while allowing cifies to form coordinated dispatch and services. Regional funding of such systetns should be considered taking into account the useful life of current systems. 01-5 ' 2001 City Policies 25 SD-20. Joint and Several Liability Reform Issue: Under joint and several liability, a party named in a lawsuit can be held liable for an entire damage award even if they are not found to be substantially at fault. Accordingly, citi�s as"deep pockets" often aze brought into lawsuits where it is IikeIy that other named defendants are uninsared or othenvise unable to pay. Cities will often settle these cases due to the high degree of exposure and, at minimum, are almost atways responsible for their defense attorney's fees. 7oint and several liabiliry results in cities paying for others' negligence. Response: The Legislature should eliminate or severely restrict the application of joint and several iiability to sitaations where private and pubIic entities are substantially at faulY for the damages incurred. SD-21. Competitive Bid ThreshoId Increase Issue: The 2000 Legislature passed and the Governor signed into law an increase in the spending threshold under the uniform municipal contracling law. Under the uniform municipal contracting law, a city must bid out all purchases of supplies, materials, eguipment, rental of equipment, as well as construction, alieration, repair or maintenance of real or personal property when the estimated amount of the contract exceeds $35,000 for municipatities of Iess than 2,500 population, or $50,000 for all others. The law also requires that purchases between $10,000 and $25,000 be let with either sealed bids or ttu�ough direct negotiation by obtaining two or more quotations. However, this increase does not apply to other Iocai contracting provisions in 26 the special assessment and public improvement statutes. Response: The Legislature should pass legislation to make the contracting threshold provisions consistent among ail local govemment contracting provisions retroactive to August 1, 2000. SD-22. Membership in Watershed Management Organizations Issue: In 1999, the Legislature enacted a restriction that will prevent city employees from serving on watershed management organization boards. The restriction will prevent city staff, who may have an interesf and expertise in watershed management issues from serving on a watershed management boazd. Response: Elecfed city councils have ultimate oversighY of the functions of watershed management organizations. The state should repeal the membership restrictions for watershed management organization boards. In addition, the state should provide an exception to the watershed district law to allow cities to recommend individuats who do not live in the watershed to serve on the watershed district boards when a portion of the watershed is located in the cify but no one tives in that area. SD-23. Legalization of Fireworks Issue: Fireworks products can cause serious injuries and fue loss. Fireworks have been illegal in Minnesota since 1941, and legalizing them would undermine fire prevention efforts. Legalizing fseworks would increase public safety enforcement, emergency response, and fire-suppression costs, League oF Minnesota Cities ' ' LI , LI L I , , , , � , , � ' � ' � Response: The League opposes the legalization of fireworks. SD-24. 911 Funding Issue: As cities struggle to afford to maintain and improve the hardwaze, softwaze, and training to provide 911 services, costs continue to rise, and many cities are forced to choose between bearing all costs or making incremental improvements to their systems. Response: The League supports an adequate state funding source for fhe upgrades and mod�cations of 911 and related systems that will alIow cities to provide effecfive, reliable emergency communications services. SD-25. On-Sale Liquor or Wine Licenses to Performing Theaters and Cultural Centers Issue: Perfomung theaters and cultural centers are not one of the qualifying entities to which municipalities may issue on-sale liquor or wine licenses. Several theaters have received speciallegislation that allows their municipalities to issue on- sale liquor or wine licenses to them. This practice interferes with the ability of municigalities to control the placement and operating manner of these entides. Response: The Legislature should authorize municipalities to issue on-sale liquor or wine licenses to performing theaters and cultural centers subject to restrictions imposed by Ehe municipality. SD-26. City Use of Credit Cards Issue: Minnesota Law currently pzovides implied authority for city use of credit cards. During the 20001egisiative session, the I.egisiature granted explicit 2001 City Policies p�-5 statutory authorization for county boazds to authorize o�cers or employees othenvise authorized to make purchases to use credit cazds. Response: The Legislature should clarify state stafute to eltplicitly aufhorize city councils to authorize city officers and staff ofherwise authorized to make purchases to use credit cards. SD-27. Youth Access to Alcohol & Tobacco Issue: The minimum age to purchase tobacco in Minnesota is 18. Cities have an interest in preventing their youth from obtaining these products. To this end, many cities operate compllance check programs in an effort to discern the cunent level of youth access and to reduce youth access. Xesponse: The League opposes any proposal that could result in increased risks of youth access to alcohol and tobacco products and expanded off- sale venues for the sale of such products. The League supports statutory changes that assist in reducing youth access to alcohol and tobacco products. The League supports mandatory alcohol compliance checks with state funding initiatives fo support locally-determined compliance efforts. SD-28. Library Funding Issue: Many community libraries in Minnesota are city owned. Although located in an individual community, city librazies serve a much wider azea. Local libraries need to be improved in order to provide access to both written and electronic media to enhance the educational capacity of both adults and children. 27 ' L� Response: The League supports a state matching grant program to provide dollars to assist communities to work in � partnership to build and improve tibraries. HUMAN RESOURCES & DATA PRACTICES Human Resources Issue: Many state laws increase the cost ofproviding city services to residents by reqniring ciry governments to provide certain levels of compensation or benefits to public employees, by specifying certain working conditions, or by litniting city governments' abiIity to effectively manage their personnel resources. For instance, existing state laws limit govemmenu' abiliry to effectively address incompetence or misconduct of city employees specifying certain procedures to be followed or standazds of conduct. federal government's labor and personnel laws were in their infancy. It is likely the Legislature will fmd parts of the law need modertuizafion. HR Discipline and Discharge • Veterans' Preference. The state should modiFy veterans' preference and civil service laws that restrict the ability of local governments to effectively discipline public employees. The LMC arges Legislature to make it a prioriYy to amend the law to address the following two points: Response: The sfate government should refrain from passing laws that regulate the public sector workpiace, and should repeai or modify problematic existing laws and regalations to encourage full local accountability. The League of Minnesota Cities proposes the following initiatives and reforms: HR-1. Veterans' Preference • The Legislature should cond►cct a study of Minnesota's veterans' preference law to determine its effectiveness and efficiency in light of today's employment laws, statutes, and regulations. Minnesota's veterans' preference protections were created at the turn of the 19� Century. These protections were designed to assist veteran employees at a time when Minnesota's and the remove the right to mnitiple, dupGcafive disciptinary proceedings; and exclude probationary period employees from veterans preference termination law protections. In addition the law should be amended to limit any back-pay claims to a maximum of $100,000; to limit the period in which to request a hearing to 20 days (from the currenf 60 days}; to require parties to select their hearing panel representative withitt 10 days after notice has been given to the employer that the veteran employee is seeking a veterans' preference hearing; and, fo require the panel to hear the petition within 30 days after the third panel representative is selected and issue a decision within 30 days following the hearing. 28 League of Minnesota Cities ' L � L I I_ I ' � t � t � C [I L_ L � �; l� L J � HR-3. Compensation Limits • The Legisiature should acknowledge that all state and local governments, not just scfiooLs districts, must be competitive in recruiting and retaining upper level management employees. In addition, there is no correlation between the compensation of citizen volunteers and career pubiic sector professionals. Therefore, the state should repeal laws limiting the compensation of a person employed by a statutory or home rule charter city fo fhe governor's salary. • The Legislature should repeal laws limiting the compensation of all public employees. The Governor's salary cap limits the ability of public sector employers to aftract and retain qualified employees. HR-4. Pablic Employees Labor Relations Act (PELRA) • The state should modify tbe de�nition of public employee under PELRA by removing the existing 14-hour ! 67 day requirement and replace it with a defmition in which employees must work more than an annual average of 20 hours per week. • Temporary or seasonal employees should be excIuded from the PELRA definition of pubiic employee in Minn. Stat. § 179A. HR-5. Re-employment Benefits • Public sector temporazy or seasonaI employees should nof be eligible for re-employment bene�ts. HR Essential Employees • Cities must balance the health, welfare, and safety of the public with the costs to t�payers. Therefore, the Legislature should carefuliy examine requests from interesf groups seeking essential employee status under Minn. Sta� § 179A (PELRA). The League opposes legislation that mandates arbitration that increases costs and removes local decision-making authority. HR-7. Pensions • The state should amend the open meeting law to clarify that the open meeting law applies to volunteer firefighter relief associations and local salaried police and firefighter relief associations. • The state should adjust the eligibility thresholds for public pensions to reflect real dollars in today's economy and index the threshold for automatic future adjustments. • The League opposes special legislation for individual employee pension bene�t increases unless they are initiated and approved by the city council of the impacted city. HR-8: Public Employees Retirement Association (PERA) Coordinated Plan Funding Deficiency Issue: Recent analysis has demonstrated that the PERA coordinated plan has been using overly optimistic actuarial assumptions for several yeazs. The plan is expected to need addidonal funding of more than $100 million a year over the next 25 years to cover projected pension benefats. If the additional funding comes exclusively from employer and empioyee payroll contributions, the increased contributions would be 30 percent higher than cunent levels. Contribution rate increases may reduce employee's take-home pay, strain local budgets, and result in property tax increases. D\—S ' 2001 City Policies 29 Response: City officials recognize that employer and employee contribution rate increases are an important part of the funding solution. To reduce the magnitude of the increases, the Legislafive Commission on Pensions and Refirement shouid: • Suppty PERA with state aid funded through reduced contributions to the Teachers' Retirement Association and the Minnesota State Retirement System. In 1984, PERA and MSRS sufficiencies were sia►ilarly transferred to TRA when it was under-funded. • Implement pro-rated service credit PERA is the only major Minnesota pension plan that awards a full-year's service credit to part-fime employees. • Exclude all seasonal employees from participation in PERA. • Explore the possibility of former employees taking refunds by offering a portion of employer contributions as part of the refund. • Reduce the guaranteed interest for deferred members' benefifs. • Increase fhe plan's vesfing period from 3 to 5 years prospectiveiy. • Increase the amorfizafion period for the plan's unfanded tiability from 20 to 30 years. • Restructure the POST fund in one or more of the following ways: 1. Eliminate the POST fe2nd aad combine the assets and liabilities of retirees with the active fund. 2. Redirect some excess POST fund earnings to the active funds. Currently, retirees are given all the benefifs of lugh rates of investment return, and are also guaranteed annualincreases even in qears of poor investment performance. 3. Pay excess mortality costs (when pensioners live longer than expected) out of the post- retirement fund rather than the active pension funds. 4. Spread POST fund invesfinenf returns over a 10-year period rather than a 5-year period. • Not approve any benefit changes that increase the ongoing cost of the plan. HR-9. Age Certificates/I-9 �'orms • The federal I-9 form requires employers and empIoyees to report the same information required by Minnesota's age cerfificate. The state should repeal Minn. Stat. § 18IA.06 and endorse the federal I-9 form to verify age information, and elitninate redundancy for employers and employees when reporting information. HR-10. Employer Reference Immunity • The Legislature should enact legislation that provides limited immunity to cities when giving accurate written disclosure of information regarding employment related references. Tlus legisiation shouId not undermine the immunity found in the Data Practices Ac� HR-11. State Paid Police and Fire Medical Insurance • The state should fully fund programs that pay for health insurance for police and fire employees required under Minn. Sta� § 299A.465, as amended in 1997, for police and fire employees hurt or kiIled in the Iine of duty. • The Legislature should clarify whether Minn. Stat. § 299A.465 30 League of Minnesota Cities 1 � ' �_I Il� � � � ' � t �J LJ lJ Il ' ' LJ applies to injuries incurred prior to June 1,1997 (the effective date of the law). • The Legislature should clarify the amount of an employer's contribution under Minn. Stat § 299A.465 and whether it changes over time. HR-12. Breathalyzers • Minn. Sta� § 181.950-.957 should be amended to permit the use of breathalyzers as an acceptable technology for determining alcohol use. Currently, breathalyzer use is permitted under federal and state commercial drivers' laws. HR-13. Preservation of Local Decision-Making Authority on Employment Related Issues • The League supports local decision- making authority, and opposes legislation intended to interfere in local decisions. HR-14. Drug and Alcohol Rehabilitation • Minn. Sta� § 181.953, subd.l0(b), an empioyer cannot terminate an employee for a positive controlled substance test without first providing the employee a chance for rehabilitation and treatment. Itecenfly, some cities have been advised that this law applies to "probationary" employees as well as permanent employees. Therefore, the League supports a legislative change to clarify that the state law on drug and alcohol rehabilitation and treatment does not apply to probationary employees. p�_ S HIt-15. Health Care Insurance Programs • The League supports voluntary participafion in programs designed to provide for post-retirement health insurance benefits or in health insurance pians structured to pool all public employees. Data Practices DP-1. Public Access to Information • Cities (and other state and local units of government) are required to establish policies and make clear to the public procedures for obtaining access to data classified as government public data. These requirements must accord local of�cials flexibility to estabiish policies and procedures that reflect the availability of resources and existing formats in which information is maintained and organized. DP-2. State Model Policies and Training • The Department of Administration is required to provide model policies and training assistance to cities in complying with the Government Data Practices Act (GAPA). The Legislature must continue to fully fund the on-going costs of GPDA compliance training and education and directly involve local officials in the development and implementation of training activities. DP-3. Tennessen Warning • Changes enacted in 1999 addressed only the school district portion of the issues facing local government employers when complying with the � 2001 City Policies 31 employee notice requiremenfs o£ the Tennessen warning. The Legislature should limit compliance with notice requirement to initial hiring procedures. The initial hiring nofice witl cover su6sequent disciptinary or other personnel-related actions that are likely to adversely afFect the individual's employment status. DP-4. Violations of Government Data Practaces Act � In some circamstances, local government compliance with the Government Data Pracrices Act is hampered by fears of punitive legal action against pubtic employees responsible far responding to requesfs for information while also protecting data classified as private or nonpublic. The Legislature should maintain current damage award requirements for willful violations of the GDPA. DP-5. GDPA Compliattce in Contracting • The 1999 T.egislature imposed requirements on the private sector to comply with the Govemment Data Practices Act when under contrac� Despite assurances to the contrary, testimony in support of these new requirements generaIIy supporfed imposing these obligations whenever government contracts with the private sector fo provide pubiic services. The Legislature should clarify that tke 1999 changes in GDPA requirements for access to public government data pertain soleIy to the contract product delivered by the private sector. THE LEAGUE SUPPORTS THE FOLLOWING POLICIES REGARDING FEDERAL EMPLOYMENT LAW: FED-1. FLSA/Overtime Compensation • The Fair Labor Standards Act (FLSA} was designed for private employer - employee relatioas. Government employees were egempt for over 100 years. Through a series of court decisions, this statute is now applied to local governments. Certain exceptions for state and local government employees should be reinstated by statute to allow for principles of pubIic accountabiIity and record keeping. FED-2. Peace Officer Bill of Rights • Congress should oppose a federal peace officer bill of rights because it will only compound the difficutties with internal investigations, local enforcement and diminish local accountability. FED-3. Portability of Deferred Compensation • Public sector employees are increasingly changing jobs between the public and private sectors. Congress shouid enact legislation that would permit faY deferred roIlovers between public and/or private deferred compensation plans to improve the portability of funds. FED-4. Medicare/Medicaid Premium Disbursements • Minnesota continues to be a net loser in federal Medicare and Medicaid premium disbursements. Congress should recognize this disparity and 32 League of Minnesota Cities ' � , provide Minnesota with a more the costs of providing healfh care balanced and representative share of under Medicaid and Medicare. a�- s ELECTRIC RESTRUCTURING , ' � � � ' ' IJ � � � � ' � ' Introduction: Cities have a strong interest _ in the public policy debate about electric restructuring or deregulation. Minnesota already enjoys some of the lowest average electric rates in the nation. The case has yet to be made that deregulation will result in either lower rates or improved service for consumers. Issue: For many decades, electric service to Minnesota citizens has been delivered through a combina6on of investor- owned utilides (IOUs), municipal utilities, and rural electric cooperatives. This system has served Minnesota well, delivering reliable, universal service at rates among the lowest in the country. In recent yeazs, many have begun to promote "deregulation" or "restructuring" of the industry, meaning that electric service would no longer be a franchised monopoly. A number of states, primarily those with high electric rates, have taken steps to move towazd such restructuring. In most of these cases, transmission and distribution remain regulated, with retail competition allowed for generation source. Advocates of restructuring argue that such competition will lead to lower rates. However, estunates by the federal Energy Information Agency* aze that while the upper Midwest, including Minnesota, wlll experience slighfly lower rates in the short term, longer-term rates may actuatly be higher under restructuring. Concerns have also been expressed as to whether residentiai customers, and those in rural and other * EIA is the nonpartisan research azm of the U.S. Department of Energy hazder-to-serve areas will actually experience decreased reliability and increased rates. L.ocal elected officials have the primary responsibility to the citizens of their cities to make certain restructuring that ailows retaii competition is as beneficial to the citizens as it is to the industry. Beneficial to the citizen means that all Minnesotans experience the same reliable, high-quality, universai, and low-cost service they experience under the current system of electric power delivery. City residents have a strong interest in the outcome of this important public policy debate. Cities are substantial consumers of electric power. Over 180 cities have 10 percent or more of their property tax base in electric industry property, while others collect franchise fees andlor sales taates on electric purchases within their boundaries. Citizens in 126 Minnesota communities currently receive economical electric service from municipal utilities, which make payments-in-lieu of ta�ces to help support city services. Significant increases in the cost of electric power for city operations or losses of these traditional sources of revenue will result in property tax increases. Response: The federal government should not mandate restructuring; the decision should be left to the states. The Lesislature should continue to follow a slow, deliberative approach, taking time to consider how alternative models for delivering electric power will affect the state's traditional benefits of 2001 City Policies 33 reliable, universal, high-quality and low- cost service. The public policy discussion should be focused on actual benefits to citizens, rather than on ideological arguments, stakeholder interests, and over-reliance on simplistic objectives like "consumer choice." Those advocating a change should bear the burden of proof to demonstrate that restructuring and deregulation will, at a inimum, mainfain Minnesota's high-quality, low- cost, and reliable service. Only when that burden of proof has 6een met should restrucEuring occur. T8e foIIowing pubIic policy goals should be incorporated into any Iegislation resfxucturing fhe etectric indusfry: Adequate Supply and Demand The state's current generation and transmission capacity is inadequate to meet projected future needs. No new significant capacity has been bui[t since the 1980's (Sherco 3). Current regulatory and other govemmental poIicies serve as a disincentive to meet cusfomer demand. The stafe shouId review and amend f6ese policies as necessary fo encourage development of adequate capacity and reliability. Consumer Protection Consumer interests musf continue to be protecfed, especialIy for the mosf wlnerable populations. Reiiable service mvst be universally available and programs such as cold-weather shut-off rules should be continued either as requirements for all market participants or as separate state pmgrams. Environmental Concerns The environment must be adequately protected, with conservation and renewable energy efforts increased. The federal government must review the appropriateness of current environmental regulations and their effect in a deregulated market; for e�mple, exemptions from the Clean Air Act for some generatioa facilities. Fair Market Compefition To ensure fair market competition, the federal and state governments must have the authority to review mergers to prevent abuse of market power. Cities must remain viable competitors in the electric marke� Municipal utilities must be granted exemptions from rules like the open meeting law and data practices requirements where they hamper the ability to effectivelq compete with private companies. To ensure adequate service to every citizen, cities and other local governments must maintain their ability to issue tas-exempt bonds for construction of electric infrastructure, and be given explicit authority to aggregate or municipalize provision of electricity. Locai Authority Cities must maintain their traditional authority over land use, zoning, rights-of-way management and cost recovery, as well as the ability to franchise providers and to receive payments-in-lieu of t�es from municipal utilities. Cities' authority to negotiate 34 League of iVTinnesota Cities �� _I , , � L � � ' ' I_J 11 � � siting fees and agreements for proposed generating facilities should be enhanced. To avoid unnecessary demand for the limited space in public righfs of way, open access to transmission and distribution facilities should be mainfaiued through regulation. As the electric market is opened to interstate competition, the federal gavernment must preserve the application of Minnesota's state and local sales taxes to the sale of electricity, regardless of the place of origin. Stranded Cost Recovery Issue: Regulated utilities have traditionally made operating decisions based on needs of consumers within their service territories. Many decisions, therefore, have been based more on need than on economics. In the transition from a regulated to a restructured competitive environment, electric generators' investments in fixed assets and other obligations may or may not remain as economically viable. Estimates of these "stranded costs" vary gready, with some andicating no stranded costs or possibly even negative stranded costs resulting from increased prices after deregulation in Minnesota. Response: Tf regulatory actions have contribufed to investment by e�sting reguiated utilities that are not economically viable in a competitive market, and if restructuring occurs, the League supports fransition mechanisms that will allow utilities to collect revenues for those particular stranded costs. However, these charges must be carefulIy monitored to ensure that only eligible and verifiable costs are covered and that over- collections do not occur. Taxpayers and 2001 City Policies a�-s ratepayers should not be expected to cover the cost of investments that were made for business reasons, apart from the requirement to serve under the regulated system. If negative stranded costs for the regulafed utility as a whole can be established, and are solely the result of transition to a restructured environment, these regulated utilities should be required to contribute some limited percentage of established amounts to offset tax breaks given to these utilities as a result of restructuring. Property Tax Issue: Part of the discussion regazding possible deregulation of the electric power industry has centered on electric utility tasation. Proponents of restructuring assert that if effective free mazket competition is to replace governmental regulation, state tax policy must be changed. The main focus of the Investor Owned Utilities (IOUs) so far has been removai of the attached machinery or personal property tax. Utilities subject to the tas azgue it piaces them at a competitive d'asadvantage to non-Minnesota companies, rural electric cooperatives (co-opsj, and municipals. However, accurate comparisons of taz� burden are difficult, as other states use completely different taxing systems. Additionally, co-ops and municipals do pay dizect tases on some of their property and indirectly when they purchase wholesale power from sources that aze taxed, such as IOUs. Municipals make substantial payinents-in-lieu of taxes. Utility personal property can be a significant portion of the local tax base in all cifies. Most obviously affected are cities that have power plants; however, transmission and distribution equipment 35 ' accoeent for over half of the personal property ta�ces paid by the IOUs and eJCist in neazly every city. Replacing the revenue that would be iost to cities, counties, school districts and other local talcing jurisdictions is a stated goal of the IOUs; however, the mechanics and funding sources of such a replacement revenue would be difFicult to develop and administer, and could be subject to reductions or elimination over time. Furthermore, replacemenY revenues or aids may not fully address the problems created by a targe tax base reduction. Response: CiEies oppose proposaIs for exempting the IOUs from the personal property tax, apart from tHe decision fo � resfrucfure fhe elecfric industry in Minnesota. t If and when restructuring occurs, ' a trulq independent review of the overall tax burden should be conducted to determine whether Minnesota utilities are ' at a competitive disadvantage. If an overall tax disadvantage is identified, the state should correct i� Under no � circumstances should locai units of governmenf or fheir cifizens be required to shoulder the burden of tas relief for , IOUs. ' LJ , � � , , , , , � 36 League of Minnesota Cities Counoil File # O�� rj Green Sheet # (O �{ 9 �� RESOLUTION CITY OF SAINT PAUL, MTNNESOTA `� Presented By Referred To Committeen Date i WHEREAS, the League ofMinnesota Cities, which represents 811 ofMinnesota's 856 z cities, as weil as 10 urban towns and special districts, has led the coordination of inember cities in 3 the development of the 2001 City Policies for Le�islative and Administrative Action which 4 identifies issues as priorities for action during the`2001 legislative session; and s 6 WHEREAS, the City of Saint Pau] was an active participant in this coordinated effort and � the City approves generally of these priorities. a 9 NOW,1`AEREFORE, BE IT RESOLVED that the Saint Paul City Council does hereby so recommend for consideration by the Minnesota State Le�islature, 2001 City Policies for si Legislative and Administrative action, submitted by the Lea�ue ofMinnesota Cities and does iz hereby request that these issues be addressed by the Le�islature durin� the 2001 session. 13 14 , Requested by Department of: By: Adopted by Council: Date ba,,,�_ 3 �.pf�l T�.. � � Adoption Certified by Council Secretary gy: � � �.� Approved b Mayor: Date � F/ By' Form Approved by City Attorney B C� t-- r� ,�� Approved by Mayor for Submission to Council Sy : �/C��vG � � Coleman's Office Mike Campbell 266-8537 IST BE IXJ COIAJqL AGBQl461' (QST9 January 3, 2001 , o�-. 5 00o GREEN SHEET No 1 G�!� 91 ; wurm.rs � ■ oa�unrenc.mcr« 3 rnrcwca anwno.av wuuoru.a[aMttso¢ TOTAL # OF SIGNATURE PAGES The City needs to have Council approval of its legislative support items with respect to the League of Minnesota Cities (LMC)in order to pursue those support items at the 2001 Legislature. PLANNING COMMISSION CIB COMMITfEE CML SERVICE COMMISSION �� G�� " �E� � � 26Q6 When approved, the LNC support package can be pe�rsued at�the State Legislature during session. None �SraanWR+�sravn � (CLIP ALL LOCATIONS FOR SIGNATUR� �s a� ce�avrm, e�erwa�a w�aer e w�aa�cra n,� a�mre�n YES NO tfes tAis P��rm ever been a dty emPbY�'r YES NO Doec Uus YersoNfirm P� a siull nat normalbD�sessed bY anY wrteM city empbyee? VES NO k thia persaMmm a tarpMad vendoR YES,- NO ❑ arcaatnc ❑ wwxcuia[mractta The City would not be able to proceed with supporting the LMC policies. AMOUNT OF TRANSACTION f CAST/REVENUE BUDGEfED (CIRCLE ON� YES NO ACiNRV qUMBER �0 ... .4...r . . . t �.. ., a' � :ty fy ' � �9 � .� i i�. 4 � � 1 ! � �� l ( `�� .�.. � . � + 5 �'r e � � nV r : ,��,�'✓� , �. :�., . ._. ., . � _ , . . ' - " _ . . . , , , .� ' k n ��nY .' � ' - � . ' . . " . � . . . . H " �� . .. . . '�` , . a . . .i . . ' . . . .. ..... . . .. . { ' .. . . ' r . ' �........ - , . p.�' '°4 t:;, .. . , , . �. . ��, l.eague of .. Minn:esota Ci#ies � . � o.. ,� � �� q . : . . . ... _. „ • , � wm • , ,.,.,: . .._ . .. .�_.� .�-„ - , , . ,. � . . _ ,' . �.�r , � , . . . � ' , ,. ..,, , ., ,., _ ' , ' . ,dg, . r ... " .. _. �� ° � r , , , ' , - � , . � �� Z � Q � . � � � � ��. �� ,� � �� . � � � � � .�� t�� . �� . � {. . � �� . ..�� s � �Po 1��c��es� �� _ � � �. , . � �� :. . � _ � �� u s _ �� _ . v �. �: . � � . _ �� , � � � • F r > � �,�vi. b �, ..,:�� "Y ° r . . � �_. _ . ' .. � �y� a'.F ' ,� . . . , � . ::. . . _ ' , . � y ti v i. � �4�' �� , ,.' k: ;. .' � � � r .' .. � �' �� °>For �l.e islative>and �:� , . � � � g . .:. ��{` 2S k ad�ministrative' action , t u � , ` �_ , , - .' . ` '.: - �'�� "�Adopted November 17, �200D �,� �� _ � � _� � _ � , �,� , �� ° � ,.. r � � �� s� � � . � � � � � � �� b � ti „„ �. ,,. . Y j� ' '. �.' , . 4 ��i1C�Of.�lAhCSO��dtr2,4 �,�� ` -� � Y; � � °� - � � ' _ ` , 145 UniversicyAvenue Wesc , - .. ,' � � St. Paul, MN; 55103-2044 -.'� � _ �M �� KES o s-a a s r � e s� �� : .(651),281-1200ac (80Q) 925-1122 ; . ��$Wl.�d�ng r � _ , � Fa�c (65 t) �281-1299;:, � � � q(.1 a � It�/ � �, " -� � I�"e °f'K'""�"t° C�'r°e �.., TDD (651) 281-1290 � �. , �� . � �r��.or � Cornmun�tres *,x .� ,... ;-, + - � �.�. i ' . f. y x ��" `� X � 3 ` `rr. �° � r `��',�... _. ,. .. , _ .. ,.... ,... , ,.,.. . . __ ,. ,.._, r , . , ,_, �... > .. . . .. , , � � , , � ' , , � � ' CONTENTS ................... ................... ................... ................... ................... ................... ................... I.eague Staff ........................................................................................................................ iv I,egislative Policy Committee Members .............................................................................. v Policy Development Process ................................................................................................ vri GeneralPolicy Statement ..................................................................................................... vin Building Quality Communities Guideline ................................................... ix 2001 CITY POLICIE5 Improving Fiscal Futures ................................................................................... FF-1. State-L.ocal Fiscal Relations .................................................................... FF-2. 3tate Shared Revenues .................................................................. FF-3. Ta�cation of Municipal Bond Interest ............................................ FF-4. City Fiscal Yeaz ............................................................................. FF-5. Sales Tax on L.ocal Government Purchases .................................. FF-6. Payments for Services to Tax-Exempt Property ........................... FF-7. Truth-in-Taxation Process ............................................................. F�-8. State Administrative Deductions from State Aid .......................... FF-9. Reporting Requirements ................................................................. FF-10. Federal Budget Cutbacks ................................................................ FF-11. Price of Government ...................................................................... FF-12. Capital Improvement Fees .............................................................. FF-13. Deferred Assessments for Roads ................................................... FF-14. Taxation of Electronic Commerce ....................................................................... FF-15. Limited Market Value ........................................................................................... FF-16. State Charges for Administrative Services ........................................................... Improving Local Economies ....................................................................... ' LE-1. Taac Incement Financing ................................................................ I,�2. TIF Reform .................................................................................... I.E-3. Impact of Properry TaY Reform on Existing TIF Districts ............ ' LE-4. Business Subsidies ........................................................................ LE-5. Economic Development Programs ................................................ LE-6. Redevelapment Programs .............................................................. f L.E-7. Property Tas Abatement Authority ................................................ I.E-8. Brownfields ................................................................................... LE-9. OSA Response Timelines ............................................................... I LE-10. OSA Time Limitations ................................................................... LE-11. Growth Management and Annexation .......................................... I LE-12. Electric Service Extension ............................................................. LE-13. State and/or County Licensed Residendal Facilities ...................... 2001 City Policies 6\—S 1 I 2 2 2 2 3 3 3 3 3 4 4 4 5 5 5 � .................... 6 .................... 6 .................... 7 .................... 7 .................... 7 .................... 8 .................... 8 .................... 8 ................... 9 ................... 10 ................... 10 ................... 11 ................... 11 i I.E-14. LE-15. LE-16. LE-17. LE-18. L.E-19. LE-20. LE-21. LE-22. LE-23. LE-24. LE-25. LE-26. LE-27. Housing and Economic Viability ..................................................... Preservauon of Federally-Assisted I.ow-Income Housing ............... Adequate Funding for Transportation .............................................. State Aid for Urban Road Systems ................................................... Turnbacks of County and State Roads ............................................. Road Funding for Cities Under 5,000 .............................................. Railroad-Related Projects ................................................................ Right of Way Management ............................................................. Workforce Readiness ....................................................................... Platting Law Recodification ............................................................. Econoauc Development Authorities ................................................ Infrastructure Funding Options ........................................................ Statutory Approval Timelines .......................................................... Telecommunications Restructuring .................................................. Improving Service Delivery ........................................................................... SD-1. SD-2. SD-3. SD-4. SD-5. SD-6. Sb-7. SD-8. SD-4. SD-10. SD-1 I. SD-12. SD-13. SD-14. SD-15. SD-16. SD-17. SD-18. SD-19. SD-20. SD-21. SD-22. SD-23. SD-24. SD-25. SD-26. SD-27. SD-28. Redesigning and Reinventing Government ..................................... Unfunded Mandates ........................................................................ Civil Liability of Local Governments ............................................. Environmental Protecfion ................................................................ ElectionIssues ................................................................................. Local Election Authority .................................................................. Election Judge Appointrnent ............................................................ Election Judge Compensation .......................................................... Counting Write-in Votes .................................................................. City Costs for Enforcin State and I.ocal I.aws .......... 12 .......... 12 .......... 13 .......... 13 .......... 13 .......... 14 .......... 14 .......... 14 .......... 15 .......... 15 .......... 15 .......... 16 .......... 16 .......... 17 ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... ............. ........ g................................................... Design-Build ......................................................................................................... Providing Information to Citizens ......................................................................... Creating a Minnesota GLS Program ..................................................................... State Regnlation of Massage Therapists ............................................................... Private Property Rights and Takings ..................................................................... ConstructionCodes ............................................................................................... Feesfor Service .................................................................................................... State Appropriation for Govemment Training Service ........................................ Public Safety Spectrum Needs .............................................................................. Joint and Several Liability Reform ...................................................................... Competitive Bid Threshold .................................................................................. Membership in Watershed Management Organizations ....................................... Legalization of Fireworks ..................................................................................... 911 Funding ........................................................................................................... On-Sale Liquor and Wine Licenses to Performing Theaters and CulturalCenters ..................................................................................................... CityUse of Credit Cards ....................................................................................... Youth Access to Alcohol and Tobacco ................................................................. LibraryFunding ..................................................................................................... 17 17 18 18 I9 20 20 20 20 21 21 21 22 22 22 23 23 24 25 25 26 26 26 26 27 27 27 27 27 ii League of 1VTinnesota Cities ' ' Human Resources & Data Practices ............................................................ , ' ' � L I , , Human Resources HR-1. Veterans' Preference ............................................................................. HR-2. Discipline and Discharge ...................................................................... HR-3. Compensation Limits ........................................................................... HR-4. Public Employees Labor Relations Act (PELRA) ............................... HR-5. Re-employment Benefits ...................................................................... HR-6. Essential Employees ............................................................................. HR-7. Pensions ................................................................................................ HR-8. Public Employees Retirement Associafion (PERA) Coordinated Plan FundingDeficiency .............................................................................. HA-9. Age Certificates/I-9 Forms ................................................................... HR-10. Employer Reference Immunity ............................................................ HR-11. State Paid Police and Fire Medical Insurance ...................................... HR-12. Breathalyzers ........................................................................................ HR-13. Preservation of Local Decision-Making Authority on Employment RelatedIssues ....................................................................................... HR-14. Drug and Alcohol Rehabilitation ......................................................... AR-15. Health Caze Insurance Programs .......................................................... Data Practices � DP-1. Public Access to Information ........................................... DP-2. State Model Policies and Training ................................... DP-3. Tennessen Warning .......................................................... ' DP-4. Violations of Government Data Practices Act ................. DP-5. GDPA Complaance for Contracting ................................. ' Federal Employment Law FED-1. FLSAlOvertime Compensation ......................... FED-2. Peace Officer Bill of Rights .............................. ' FED-3. Portability of Deferred Compensation .............. FED-4. Medicaze/Medicaid Premium Disbursements ... IJ IJ r� 1� IJ Electric Restructuring .... Adequate Supply and Demand Consumer Protection ............... Environmental Concerns......... Fair Market Competition......... I,ocal Authority ....................... Suanded Cost Recovery ......... Property Tas ............................ a�-5 � 28 28 29 29 29 29 29 29 30 30 30 31 31 31 31 31 31 31 32 32 .......... 32 .......... 32 .......... 32 .......... 32 .......... 33 34 34 34 34 34 35 35 ' 2001 City Policies iii LEAGUE STAFF WORKING WITH STATE AND FEDERAL ISSUES Jim Miller, Executive Director Mandates, telecommunications Gary Carlson, Director of Intergovernmental Relations Aid to cifies, electric utitity restructuring, general revenue sources for cities, pensions, personnel, property tax system, tax increment financing, Anne Finn, Intergovernmental Relations Representative Housing, land use/annexation, public safety, transportation and transit Kevin Frazell, Director of Member Services Electric utility restructuring, government innovation and cooperation, Tom Grundhoefer, General Counsel General municipal governance, telecommunications Ann Higgins, Intergovernmental Relarions Representa�ve Elections and ethics, emergency management, housing, information policy, telecommunications, utility service districts Andrea Stearns, Intergovernmental Relations Representative Business subsidies, civil liability and criminal justice, economic development and redevelopment, general government, IocaUtribal relations, tas increment financing, Remi Stone, Senior Intergovernmental Relations Representative Civil liability, construction codes, environmenf, general government, insurance, labor relations/ personnel, land use/annexation iv League of Minnesota Cifies , 1 � 0�-5 Legislative Policy Committee Members 1 Improving Fiscal Futures Dennis Kraft, Chair, City Manager, Robbinsdale ' Richard Abraham, City Administrator, Lake City Kazen Anderson, Mayor, Minnetonka Bill Bamhart, Intergovernmental Relations, ' Minneapolis (alternate) Curt Boganey, City Manager, Brooklyn Park Tom Burt, City Administrator, Rosemount Gino Businazo, Finance Director, Mound � Dennis Cavanaugh, Mayor, St. Anthony Jane Chambers, Assistant City Manager, Brooklyn Center , ' C�� ' ' ' �] � ' ' r Tom Cran, Budget Office, St. Paul Reggie Edwards, City Administrator, Chisago City John Erar, City Administrator, Fazmington Richard Fursman, Ci[y Manager, Maplewood Jeff Haubrich, Assistant Council Adminstrator, Red Wing Terri Heaton, Chief Financial Officer, Bloomington Pat Hentges, City Manager, Mankato Elizabeth Kautz, Mayor, Burnsville 7ames Keinath, City AdminisVator, Circle Pines Linda Koblick, Councilmember, Minnetonka Tom Lawell, City Administrator, Apple Valley Dean Lotter, City Administrator, Janesville Paul McLaughlin, Counci3member, Internationai Falls Peter Meintsma, Mayor, Crystal Tom Melena, Ciry Administrator, Oak Pazk Heights Steve Mielke, City Manager, Hopkins David Minke, City Administrator, Priaceton 7ohn Moir, Finance Director, Minneapolis Gary Neumann, Assistant Administrator, Rochester Steve Okins, Finance Director, W illmar Tammy Omdal, Finance Department, Minneapolis Roger Peterson, Association of Metropolitan Municipalities Douglas Reeder, City Administzator, South St. Paul Michael Rietz, Ciry Administrator, Kasson Michael Robertson, City Administrator, Otsego Ryan Schroeder, Ciry AdminisVator, Cottage Grove James Smith, Councilmember, Independence Gerald Sorenson, Administrative Services Director, Moorhead Jerry Turnquist, Councilmember, Oak Park Heights David Mark Urbia, City Administrator, Blue Earth Dan Vogt, City AdminisVator, Brainerd Jim Willis, City Administrator, Inver Grove Heights Rick Wolfsteller, Ciry Administrator, Monucello Improving Local Economies Brenda Johnson, Chair, Councilmember, Chatfield Jon Hohenstein, Vice Chair, City Administrator, Mahtomedi Dick Allendorf, Councilmembec, Minnetonka David Beaudet, Councilmember, Oak Park Heighu Jerry Bohnsack, City Administrator, New Prague Doug Borglund, City Admi�isnator, Howard Lake Patrick Boylan, Assistant Manager, Lexington Geraid Brever, City Administrator, Staples Cathy Busho, Mayor, Rosemount Mike Campbell, Intergovermental Relations Director, St. Paul Kevin Carroll, City Administrator, Carver Tim Cruikshank, CiTy Administrator, Minnetrista Dan Donahue, City Manager, New Hope Michael Eastling, Public Works Director, Richfield Reggie Edwards, City Administrator, Chisago Ciry Karen Elhacd, Clerk-Treasurer, Northome Jim Elmquist, City Administrator, Mora Mark Erickson, City Administrator, Lakefield John Flora, Public Works Director, Fridley Roger Fraser, City Manager, Blaine Matt Fulton, City Manager, New Brighton Rick Getschow, City Administrator, Lauderdale Soh� Goedeke, Councilmember, Roseville Tom Goodwin, Councilmember, Apple Valley Mary Gover, Councilmember, St. Peter Chuck Groth, Mayor, Fairmont Tom Harmening, Community Development Director, St. Louis Park Desta Hunt, Councilmember, Fergus Falls Marvin Johnson, Mayor, Independence Steven Jones, City Manager, Montevideo Andrea Hart Kajer, Intergovernmental Relations Director, Minneapolis (alternate) Patrick Klaers, Ci[y Administrazor, Elk River Larcy Lee, Community Development Director, Bloomington Don Levens, Ciry Administrator, Cokato Nancy Mancino, Mayor, Cha�hassen Marcia Mazcoux, Councilmember, Rochester Mark Nagel, City Manager, Anoka Steve O'Malley, Deputy Manager, Burnsville Samantha Orduno, City Manager, Richfield Bruce Peterson, Director Planning and Development Services, Willmaz Roger Peterson, Association of Metropo]itan Mur,cipalities Dale Powers, Councilmember, Clear Iake Gene Ranieri, Association of Metropolitan Municipalities Stephen Sarvi, City Administrator, Vicioria Mark Sather, City Managec, White Bear Lake David Schaaf, Mayor, Oak Park Heights � 2001 City Policies v Terry Schneider, Councilmember, Minnetonka Mazy Sjodin, Information Technology Director, Red Wing Terry Spaeth, Administrative Assistant, Rochester Cathy Thurber, Councilmember, Minneapolis Craig Waldron, City Adminishator, Oakdale Jeff Weldon, City Administrator, Redwood Falls Mazk Winscn, Chief Administrative Officer, Dulu[h Heacher Worthington, City Administrator, Falcon Heights John Young, Jr., Councilmember, Hawley Improving Service Delivery Mark Karnowski, Chair, City Administrator, Lindstrom Judd Movrzy, Vice Chair, Councilmember, Tonka Bay Laarie Ahrens, Assistant City Manager, Plymouth Bevedy Aplikowski, Councilmember, Arden Hills Mike Campbell, Intergovernmental Relations Director, St. Paul Pat Crawford, Clerk-Treasurer, Modey Pam Dmynenko, Assistant to City Manager, RichField Mazy Hamann-Roland, Mayor, Apple Valley Tom Hansen, Deputy Manager, Burnsville Jcel Hanson, Ciry AdminisYrator, Lit[le Canada John Kysylyczyn, Mayor, Roseville Barrett Lane, Councilmember, Minneapolis Jan LeSuer, Councilmembec, Golden Valley Joe Lynch, City Adminis[tator, Arden Hills Larry Nicholson, Counciimember, Moorhead Desyl Peterson, City Attorney, Minnetonak Gene Ranieri, Association of Metropolitan Municipalities David Schaaf, Mayor, Oak Pazk Heights David Senjem, Councilmember, Rochester Chad Shryock, City Administraror, Wabasha Al Thomas, Councilmember, Minnetonka Kent Torve, Mayor, Loretto Kazen Lowery Wagner, Intergovernmenta] Relations, Minneapolis (alterrtate) Rena Weber, Clerk, Waite Pazk Human Resources & Data Practices Joyce Twistol, Chair, Clerk/Personnel Director, Blaine Ken Hanung, Vice Chair, City Adminishator, Bayport Mazk Anderson, Human Resource> Director, Brooklyn Park Geralyn Bazone, Assistant City Manager, Minnetonka Holly Duffy, Assistant to Manager, Crystal Theresa Goble, Finance Director, Brainerd Terry Haltiner, Labor Relations Manager, St. Pau] Bre[ Heitkamp, City Administrator, Champlin Kay Kuhlmann, Council Adminisnator, Red Wing Ed Lazson, City Manager, Morris Kay McAloney, Human Resources Director, Anoka Tim Madigan, City Administrator, Faribavlt Givona Reed, Assistant to City Administrator, Mounds View Cazol Rogers, Human Resources Senior Consultant, Minaeapolis Cazol SchmidT, Benefiu Manager, Minneapolis Ceil Smith, Assis[ant to Manager, Edina Jerry Splinter, City Manager, Coon Rapids Daniel Tesch, Direc[or of Administration, Lino Lakes Todd Torvinen, Finance Director, Duluth Karen Lowery Wagner, Intergovemmental Relations, Minneapolis Electric Restructuring Task Force Ron Jabs, Chair, Mayor, Jordan Bryan Adams, Geneta] Manager, Elk River Municipal Utilities Kazen Baker, House Research Larry Bakken, Covncilmember, Golden Valley Mike Bash, Councilmember, Long Lake David Berg, RW Beck, Minneapolis Troy Bonkowske, Communiiy Development Director, Caledonia Jim Brimeyer, Councilmember, St. Louis Park Chuck Canfield, Mayor, Rochester AI Crowser, Director, Alexandria Public Utilities Jim Elmquist, City Administrator, Mora Robert Filson, City Administrator, Worthington Paul Grabitske, City Adminishator, Janesville James Gromberg, City Administator, Isanti Delvin Haag, Councilmember, Buffalo JefFry Haubrich, Assistant to Council Administrator, Red Wing Elizabeth Kautz, Mayor, Burnsville Mark Larson, City Administrator, Glencoe Rebecca Law, Mintteapolis Pam Marshall, Energy Cents Coalition Kevin Maynard, General Manager, Austin Utilities Chazles Mertensotto, Mayor, Mendota Heights Mazk Nagel, City Manager, Anoka Mike Nitchals, General Manager, Willmaz Municipal Utilities Paul Osnow, Councilmember, Minneapolis Greg Oxley, MN Municipal Utilities Association John Remkus, Finance Director, West St. Pau1 Joe Rudberg, City Adminisnator, Becker Amy Rudolph, Flaherty & Hood, St. Paul Mazk Sather, City Manager, White Beaz Lake Jerry Splinter, City Manager, Coon Rapids Jim Willes, City Adrriinistrator, Inver Grove Heighu Wally Wysopal, Ciry ManagervClerk, North St. Paul vi League of Minnesota Cities i� � ' O\-S League of Minnesota Cities Policy Development Process ' The L.eague's policy development process has taken place over the past six months. The process began with a member survey of priority issues facing city officials. The process will not end with the Policy Adoption Conference. The committees will schedule additional meetings during the ' upcoming legislaUve session to discuss additional issues, develop altemative solutions, and discuss strategies to implement the League's policies. t Listed below is a brief chronology of the major events in the policy development process. At each step, members have the opportunity to participate in the development process. , ApriUMay , June � , C ' The League solicits members for ideas and problems. A survey at the Annual Conference allows members to formally suggest topics. The L,eague President accepts applications for committees and appoints policy committee members. The policy committees are: Improving Fiscal Futures Improving Local Economies Improving Service Delivery Fiuman Resources and Data Practices Electric Restructuring July Committees meet to discuss ]ssues raised in the member survey. Committees can also form task forces to more thoroughly study specific issues. Task forces can include noncity members with a knowledge of the focus issue. August ' through September � October ' November ' ' Committees and task forces meet to discuss issues and probiems, accept testimony and develop policy statements. The League Boazd of Directors meets with the chairs of the policy comsnittees to review policies. Policy Adoption Conference. Members have the opportunity to discuss the draft policies, propose changes, and suggest additional policies for member consideration. January L,egislative session. During the session, the policy committees and task forces through will continue to meet on issues and strategies. Members can assist the League's May legislative efforts by volunteering to contactiegislators on a variety ofissues of interest to our cities. 2001 City Policies vii General Policy Statement The L.eague of Minnesota Cities seroes as a forum for cities fo define common problems and deveIop policies and proposals to soIve those problems. The League of Minnesota Cities represents 818 of Minnesota's 854 cities as weIl as I2 urban towns and 27 special districts. AII sizes of communities aze represented among the League's members (the lazgest nonmember city has a population of 164) and all regions of the state aze represented. The policies that follow are directed at specific city issues. Two principles guide the development of all I,eague policies: L There is a need for a govemmental system that allows flexibility and authority for ciues to meet the challenges of governing and providing citizens with services while at the same time protecting cities from unfunded or underfunded mandates, liability or other financial risk, and restrictions on local control; and, 2. The financial and technical requirements for governing and providing services necessitate a continuing and strengthened partnership with federal, state, and local govemments. This partnership, particulazly in the areas of finance, development, housing, environment and uansportation, is critical for the successful operation of Minnesota s cities and the well- being of residents. viii League of Minnesota Cities , , ' , ' , , � 1 1 � � � ' ' � � � f GUIDELINE FOR BUILDING QUALITY COMMUNITIES o �-S To the greatest extent possible, legislation affecting communities at the state and federal level should enhance, not diminish, the ability of citizens, businesses, and local governments to work togethez in partnership to make every community "livable." ISSUE: Cities in Minnesota aze at various stages in meeting the goal of being "livable, healthy communities." RESPONSE: The definition of a"livable, heaithy community" below will be used to evaluate proposed legislation to determine whether or nat it advances the goal of enabling all Minnesota cities to become livable, healthy communities. It should also be used by cities to evaluate their progress toward the goal of becoming livable, healthy communities. A LNABLE, HEALTHY COMMUNITY IS: WHERE PEOPLE OF ALL AGES • share a core of common values including valuing diversity, respect for each other, and good citizenship • feel: * safe * a sense of belonging * welcome • engage in life-long leazning activities that: * promote responsible citizenship * enhance the enjoyment of life * prepaze them for changing job markets • participate in the decision-making process with community leaders • want to make their home • celebrate community • have accessto: * good payingjobs * adequate and affordable housing * choice of efficient transportation systems including transit, pedestrians, a�d bicycles �` gathering places * desired information � 2001 City Policies ix * choice of cultural and recreational activities * affordable goods and services, including health caze • are involved in the nurturing of youth • care about their homes, community, and the environment • get to know each other • have the beneft of strong family support and nurturing adults WHERE LOCAL GOVERNMENT • is responsive to the needs of its citizens • is actively supported by enthusiastic volunteers • is open and user friendly • encourages and imptements cooperatioa and collaboration • provides and maintains an adequate physical infrastructure and promotes social infrastructure to meet local needs • educates citizens of all ages on local, regional, and state issues and govemment processes • informs and communicates with citizens to foster participation in public policy decision-making • participates in youth development X League of Minnesota Cities ' � i �' ! 0 1 1 �� 2001 CITY POLICIES 01-5 � 1 1 ' , a�-5 IMPROVING FISCAL FUTURES FF-1. State-Local Fiscal Relations Zssue: Minnesota's state and local govem�ment finance system is complex and ' intertw9ned. This complexity has been the subject of ongoing legislative scrutiny and has most recenfly resulted in a governor's ' initiative to review the system with the goal of developing a reform proposal for the 2001 L,egislature. L_I ' , While cities rely on their partnership with the state to provide local services, they aiso must respond to the needs and desires of their residents. To that end, cities need flexibility in determining how to finance neededlocalservices. In 1997, the L.egislature began making ' changes to Minnesota's property ta�c system that have impacted the ability of cities to ' fund necessary services. Those changes, including the reimposition of levy limits, significant class rate compression, and ' changes to the limited market value law all have resulted in varying unintended consequences. lJ � C r! 1� � Response: To remedy existing and avoid potentialfuture unintended consequences of additional property taY changes, the League supports: • Reviewing the combined impacts of property taic changes since 1947 and changing economic circumstances for talcpayers and for local governments so that policy makers can better understand where the system may need further changes; • Expanding available city revenue sources to reduce the reliance on the property tax; and • Reducing the property tax burden for all classes of property by ittcreasing the state share of school funding. Any increase in the state share of school funding must guarantee a permanent reduction in the school property tax burden. The League supporfs paying for the increased state cost through income and sales taxes. The League opposes: • Reimposing levy limits, which are inef�cient, ineffective, interfere with local accountability, and ignore local circumstances; • Imposing reverse referenda requirements, which undermine the decisions of local elected officials, divert focus and resaurces from daily operations, and can disrupt the local budget process; � Replacing all or part of LGA or HACA with state-mandated categorical aid programs, or local option t�ing authority; • Switching from the classification system to a market value based system, which would cause tremendous shifts of tax burden between classes of property. The League also opposes applying all future levy increases to market value because this would further cornplicate the property tax system; • Expanding fhe limited market value law or enacting an acquisition value law; • Enacting proposals that would interfere in local decision-making regarding service delivery; • Imposing a state-levied property tax; and • Cutting LGA or HACA to finance an increased sfate role in school finance. ' 2001 City Policies FF-2. State Shared Revenues Issue: State revenue sharing programs address at least ttu�ee problems with a stand- alone local government finance system. First, the property tax base available to communities can vary dramatically. These programs use state resources to equalize the ability of communides to provide essetttial services without undue properry Yax burdens for local residents. Second, nonresidents can take advantage of local seroices or create additional demands for services without contributing to the taxes that support these services. LGA and HACA help address the free rider problem where nonpaying individuals cons¢me services without contributing to the local Ya1c base. Third, allowing local units of government in Minnesota to levy only the property taY has created an over-reliance on the property tax. LGA and HACA can reduce the overall reliance of local govemments on the property ta1c. Although historically the Legislature has generally supported LGA and HACA programs, the 1981 L.egislature reduced the number of LGA and HACA payments and the 1986 Legislature delayed the payments. Under carrent law, the first payment of LGA and HACA is made in July—fully 7 months into each city's fiscal yeaz. These changes have created cash flow problems for some cities. Response: LGA and l3ACA, or similar replacement revenues, must be continued and additional state resources greater than the rate of inflation must be allocated to prevenf rapid future property Yas increases. Tn addition, the HACA household growth factor for cities should be reinstated. Tf►e LegisIature shouId adjust the LGA aad HACA payment schedule to provide cities access to LGA and IiACA earlier in their fiscal year. k'F-3. Taxation of Municipal Bond Inferest Issue: The state law that grants a tax exemption for municipal bond interest lowers borrowing costs for cities and reduces properiy tax levies. 1Zesponse: The state should maintain the tax exemption for municipal bond interest income. FF-4. City Fiscal Year Issue: The fiscal yeaz for cities and counties cartently corresponds to the property tax cycle. Response: The state should maintain currenE Iaw and not change the city fiscat year to coincide with the state fiscal year. FF-5. Sales Tax on Local Government Purchases Issue: In 1992 when the state was experiencing a budget shortfall, the Legislature repealed the sales ta�c exemption for local government purchases. Local governments now pay state sales taac on purchases like road maintenance supplies and equipment, wastewater treatment facilities, and building maierials for affordable housing. This tax currently costs locai property taxpayers and ratepayers an estimated $100 million annually. In addition, proposals to extend the sales tax to services would have the effect of increasing local government costs and property taxes. 2 League of Minnesota Cities � 0 � Because no additional state aids were added to offset the additional cost, this repeal has effectively increased local property taaces to fmance state operations. ' Response: The state should reinstate the sales tax exemption for all local ' governmenf purchases. The exemption must not be coupied with cuts in LGA or HACA. � t � I l ' ' � ' i , , � ' ' FF-6. Payments for Services to Tax-Exempt Property Issue: Taxable property in many cities is being acquired by nonprofit and government entities, Converting the property to tax- exempt status can lead to a serious tas base erosion without any cortesponding reduction in the service needs created by the property. Response: Cities should have the authority to collect payments from statutorily exempt property owners to cover costs of service as cities have with special assessments. FF-7. Truth-in-Taxation Process Issue: Cities must set a preliminary levy by September 15 which, by law, becomes the ma�cimum that cities can levy for the foliowing yeaz. In recent years, cities have not received complete taac base and aid information in a timely manner. As a result, cities often either set a preliminazy levy that is artificially high or they aze unable to budget for unforeseen needs that azise after September 15. Response: The League supports changes to the Truth-in-Tasation process to provide more meaningful information to citizens. Cities should have the authority to increase the final levy from the preliminary levy to meet unforeseen and uncontrollable needs. 2001 City Policies a�-s FF-8. State Administrative Deductions from State Aid Issue: State administrative costs are deducted from the LGA appropriation. This reduces the property taac relief provided by I,GA and creates hidden appropriations for state agencies. Response: All appropriations from LGA resources that fund state operations should be repealed. FF-9. Reporting Requirements Issue: Budget and financial reporting requirements amposed on cities by the state often result in duplication and additional costs. Response: Requirements for reporting and advertising financial and budget in£ormation should be carefully weighed to balance the validity of fhe state's need for additional information with the costs and burdens of compiling and submitting this information. In addition, all state agencies should be aware of the information already required by others to avoid duplication of reporting requirements. FF-10. Federal Budget Cutbacks Issue: Congressional budget actions or devoluuon of program responsibilities may place fiscal burdens on the state and local governments. Response: The state should not reduce aids or increase fees to local governments as a means for dealing with cutbacks in federal revenues. The state should take responsibility for reductions in federal revenues rather than placing the burden on cities and their property taxpayers. ' FF-11. Price of Government infrastructure and facilities improvement also necessitated by new development. ' Issue: The price of government legislation enacted in 1994 was intended to measure the overall effect of state and local taxation over a long period of time. The targets measure government revenues as a percent of personal income. Unfortunately, the tazgets have been misinterpreted and used unfairly to criticize city t� and budget decisions. Response: The price of government statutes as fhey apply fo tocat governments should be repeaied. If the price of government law is to con�inue fo be applied to locat governments, price of government calculations should be based on the sum of levy and state aid, not just levy, and based on long-term trends, not single-year events. FF-12. Capital Improvement Fees Issue: New deve2opment and the resulting growth create an increased demand for gublic infrastructure and other public facilities. Severe constraints on local fscal resources and dramatic forecasts for population growth have prompted cities to critically reconsider ways to pay for the inevitable costs associated with new development. Traditional financing methods tend to subsidize new development at the expense of the existing community, discourage sound land use planning, place inefficient pressures on uublic facilities, and allow under utilization of eacisting infrastructure. Consequently, local communities are exploring methods to ensure that new development pays its fair shaze of the true costs of growth. Given the existing authorization to impose fees on new development for water, sanitary and storm sewer, and pazk purposes, it is reasonable to extend the concept to additional public Response: The Legislature should authorize cities to unpose capital improvement fees so new development pays ifs fair share of the off-site, as well as fhe on-site wsts of pubfic infrastructure and other public facilit3es needed to adequatety serve ttew developmen�. , � t FF-13. Deferred Assessments for , Roads Issue: Current law allows a city to recoup the costs for water, storm sewer, or sanitary sewer improvements by levying additional assessments on the property benefiting from the unprovement, but not previousIy assessed. Tlus authority for deferred assessment has not been extended to other infrastructure, such as road improvements, even though properties are benefiting from the improvements. Response: Cities should be abie to assess tke cost of infrastrucLure improvemeats for roads. Cities shoutd be allowed fo defer assessments against property located outside the city for road unprovements benefiting property abutting the improvement but not previously assessed for the improvement. For example, if a city makes improvements to a road that benefits city residents and township residents, the city should be able to defer the assessments to the township property until the property is brought into the cify. Once the township property is brought into the city, the city would then be able to assess that newly acquired property for road improvements previously done but not assessed at the time of the improvements. 4 League of Minnesota Cities �l � � ' , � � t � � , ' ' fJ ' I1 ' LJ FF-14. Taxation of Electronic Commerce Issue: Sales over the Intemet and through other electronic means are projected to increase exponentially over the next several yeazs. Electronic transactions pose significant tax policy challenges because of the difficulty of assigning a location to elecuonic sales, and because many Internet °goods" are not tangible property. Response: Federal taic policy should nof place main street businesses at a competitive disadvantage Eo electronic retailers, must not jeopardize repayment of bonds backed by state and local sales tas revenues, and should ensure stability in state and local revenues. To address the challenges created by the growth of e- commerce, the League supports the multi- state effort to develop a streamlined sales tax system. FF-15. Limited Market Value Issue: Rapidly rising property values in some parts of the state have fueled legisiative interest in expanding the current limited mazket value law. One proposal would establish the consumer price index as the ma�cimum annual mazket value increase and extend the limit to all classes of property. Further restricting mazket value increases would have several negative consequences: • It would unfairly shift tases from properties experiencing growth in value onto all other properties. � Over the long-term, similaz properties would be taYed at widely different rates merely due to when the properties were last sold. a�-5 • It could discourage the sale of property because sales would retum the property to full market value for taY purposes. • It would discourage improvements to property, which would trigger a return to full market value for tax purQoses. This could lead to degradation of housing and other types of property. • It could adversely affect the ability of cities to bond for infrastructure improvements or for tax increment fmancing since local t� bases would not reflect the growth in property values. • Once implemented, limited mazket value provisions are politically difficult to sunset due to the potential for lazge one- year tas shifts onto properties whose values were artificially capped by the program. Response: The League opposes any elcpansion of the limited market value law. FF'-16. State Charges for Administrative Services Zssue: Currently, some state agencies have wide discretion in setting the fees for special services they provide to local govemments. For example, the Minnesota Department of Revenue recenfly increased the fee for administering local sales taxes by 80 percent in the middle of a budget year with less than six weeks notice. The increase had no apparent relationship to the cost of providing the service. Response: State agencies shouid be required to demonstrate the need for Sncreases in service fees, and should give adequate notice of increases to allow local governments to budget for the increases. State agencies should set administrative service fees as close as possible to the marginal cost oF providing fhe service. , 2001 City Policies 5 Local government should be given the oprion to self-administer or contract with the private sector for the service if the state cannot provide the service at a reasonable cost IMPROVING LOCAL ECON011'IIES LE-1. Tax Increment Financing (TIF) Issue: In the context of any discussions regazding regional economic development strategies and "The $ig Plan," it must be recognized that the state has effectively delegated the responsibility for economic development and redevelopment to cities. Unfortunately, neighboring states have given their cities more development tools and, therefoze, cities in these states have a competitive advantage over Minnesota cities. In Minnesota, taz� increment financing is the most viable tool available to all cities in their economic development and redevelopment efforts. Additionally, tax increment allows cities to address the changing needs of their evolving communities. The state, whether based on a lack of information or misinformation, has been critical of cities' use of the tool and has implemented a series of restrictions over the pasY several years, rather tkan partnering with cities and encouraging their endeavors to improve and enhance the economic well- being of Minnesota and the growth and redevelopment of iis ci�es. Critics often claim that TiF is overused. Some of these critics have proposed TIF freezes or caps. This view fails to recognize the benefits received by counties and school districts, as well as cities, upon district expiration while only cities aze required to assume the financial risks associated with development decisions. Cities have used tax increment Fmancing responsibly and examples of these positive uses abound. Response: To effectively compete with other states, Minnesota must provide its cilies greater flexibility in fhe use of tax increment financing and other economic development programs. In implementing any sort of regional economic development strategy and objecfives contained in "The Big Plan," the state should partner with cities in economic deveIopment and redeveIopment activities, and encourage cities' use of tas increment in aclueving the laudable goals of long-term tax base stabilization and growth, job creation, devetopment of low- to-moderate income housing, remediation of pollution, elimination of blight, recycling and redevelopment of the infrastructure, and redevetopment of its communities. The League opposes proposaLs for TIF freezes or caps. Counties and school districts are appropriately involved in cities' development decisions through current "review and commentA requirements and should recognize the benefits they receive, without assuming any of the risk, due to cities' prudent uses of TIF. LE-2. TIF Reform Issue: Leaislative proposals to reform the ta�c increment financing laws will continue to be introduced and debated during upcoming legislative sessions. Response: As part of any TIF reform debates, the Legislature should consider: • Aufhorizing any taz� increment League of Minnesota Cities 1 ' f_I u , � ' C ' 1 ' �� i LJ ' 1 1 � districfs approved after Apri11,1990, to pool increments in the same manner as disfricfs certified prior to Apri11,1990; • Eliminating fhe LGAIHACA penalty currently imposed on districts or removing the restrictions on the sonrce of payment; • E�panding the use of taY increment financing to assist in the development of technological infrastructure, transit-oriented development, the restoration of historic structures, and for nonretail commercial projects (e.g., software companies, banks, and insurance companies); • Exempting redevelopment districts from the "five-year rule"; • Modifying the housing district income qualif5cation levei requirements to allow the levels to vary according to those speci�c to individual communities; • Authorizing the use of federal grants and otherfundsforlocal contributions; and • Removing the LGAJfiACA penalty imposed on housing districts established between the penalty years of 1990 and 1993. LE-3. Impact of Property Tax Reform on E�sting TIF Districts Issue: Jn addition to potential future action in light of "The Big Plan," recent I.egisiatures have compressed property tax class rates wluch, in turn, has jeopardized the repayment of outstanding debt or other obligations in existing TIF districts. Given the long-term nature of property tax reform, cities could not have anticipated the impact of these class rate changes, nor can cities project the impact of future changes. The I.egisiature has recognized its responsibility for the impacts of its actions 2001 City Policies C�-5 by creating a TIF grant program to address situations where the class rate changes cause TIF district deficits. The TIF grant program, currently funded at $6 million and scheduled to expire in 2002, is likely to be insufficient to cover every deficit. Some of the worst deficit situations may not surface for a number of yeazs. Additional pooling and special taxing district authority might be useful in certain cities but aze only partial solutions. Response: The Legislature should provide additional state resources to the TIk' grant program and extend the program indefinitely so that TIF obligations can be met and third party bondholders are protected if the current TIF grant program is insufficient to cover deficits caused by recent class rate changes. The Legislature should also explore additional options to address de�cits such as district duration extensions and eliminating or adjusting the original tas capacity rates. LE-4. Business Subsidies Issue: The 1999 Business Subsidies Act was clazified and modified during the 20001egislative session. In order fot development agencies to effectively implement the amended law, the law should be allowed to operate without further substantive legislative change. Response: The Legislature should not make any substantive changes to the 1999 Business Subsidies Act during the 2001 legislative session. LE-5. Economic Development Programs Issue: The Minnesota Tnvestment Fund is not adequately funded. Local governments do not have an adequate siate 7 of tools to assist job creation, redevelop blighted and decaying properties, and provide adeguate housing choices. Consequently, cities aze not well equipped to compete nationalty and internationaily for business development. Response: More state resources should continue to be contribufed fo fhe Minnesota Investment Fund. In addition, Congress should remove the caps that have been placed on Industrial Development Bonds and acknowIedge that the e�ctensive eligibility requirements now adequately limit their use. LE-6. Redevelopment Programs Issue: Communities across Minnesota aze faced with the unique circumstances of deteriorating, obsolete, and vacant structures in neighborhoods and downtowns and a lack of land for development. Redevelopment activities usually require large, up-front funds to address multi-phase projects of extensive dvrauon where site assemblage, demofition, relocation, or pollution clean-up must occur before private-sector interest can be generated. Additionally, deferioration threatens historic shvctures in cities across the state. While the redevelopment account administered by the Department of Trade aad Economic bevelopment is a critical component in establisbing a coherent statewide policy for redevelopment, cities do not have sufficient tools to utilize in local historic preservation efforts. Response: In recognition of the unique needs of redevelopment projects, the sfate should confinue its commitment to reinvest in its communities by increasing and committing to permanent base budget futtding for the redevelopment account administered by the Department of Trade and Economic Development. Additionally, as part of a comprehensive approach to redevelopment needs, the Legislature should consider the state income ta�c credit legisiation pursued by the Preservation Alliance of Minnesota, TIF subdistricts, and other taY incentives for local historic preservation efforts. LE-7. Property Tax Abatement Authority Issue: In an effort to increase the number of development tools available, the 1997 I.egislature authorized local units of government to graat pmperty tax abatements. Although TiF continues to be the primary financing mechanism for local development projects, tax abatements provide a good addition to a needed list of economic development tools. In order to provide maximum benefits, taz� abatements should be Iess restricflve in terms of funding caps and £mancing terms. Property tax abatements should not be considered a replacement for tax increment financing. Response: TIF is still the primary viable development tool available for cities. Abatement authority should coniinue fo be available, but not offered as a raYionale to eliminate TIF. Additionally, the Legislature should develop a state fund to facilitate state participafion in abafement projects. Finally, the fnnding caps should be increased or elitninated. LE-8. $rownfieIds Issue: Brownfieids are lands unsuitable for development due to the presence of chemical or other contaminants. Brownfields are a major cause of blight within communities across the state through loss of local tax base, jobs, housing qualiry, pubiic safety, and community confidence. ReviYalizing this land is cosfly and requires League of Minnesota Cities ' i � ' ' ' I_I I_I , � ' ' � � ' ' , � the cooperation of city, county, school, regional, state, and federal governments and the assistance of local economic • development organizations and citizens. As we move into an era where the mass creation of jobs is a necessity and where increased tas base is a requirement for local governments to adequately face growing financial pressures, efforts to revitalize brownfields must not only continue but be accelerated in the upcoming yeazs. Currendy, $7 million exists in ffie Department of Trade and Economic DevelopmenYs (DTED) base for the contaminated site clean-up fund. Additionally, $6.2 million is appropriated annually from the Petrofund to DTED to clean up sites that contain at least some petroleum-related contamination. Response: A comprehensive set of economic development programs mast be maintained for cities and other development agencies. The Legislature should: • Increase funding for the Department of Trade and Economic DevelopmenYs contaminated site clean-up fund and redevelopment account; • Strengthen enforcement and collection of revenues for the state contamination ta1c; • Continue support for and funding of local and regional programs to assist in the efforts to remediate brownfields; • Establish a fully-funded program to allow cities and other development authorities to gain control of and reclaim and revitalize brownfields; • Protect existing tas increment financing provisions that provide for the remediation of brownfields, and modify restrictions to allow the pooling of district revenues to assist in a�- s the financing of remediation of brownfields; Establish an indemnification fund fo provide financial security for instifutions and individuals as they invest in efforts to recycle brownfields in order to leverage private investment in cities' efforfs to increase their tas base and create jobs; and • Contiaue financing mechanisms for cleaning contaminated sites. LE-9. OSA Response Timelines Issue: The Office of the State Auditor (OSA) is responsible for TIF oversight. As part of their review of TiF districts, they identify alleged violations of the TIF laws and issue noncompllance notices to TIF authorities. After responding to these noncompliance notices within the required 60-day period, authorities often do not receive timely responses on the matter from the OSA. Additionally, TIF authorities aze often unclear about the final disposition of the matter upon receipt of a final noncompliance notice. Resporase: In the event that the OSA determines to issue a�nal noncompliance notice to a TIF authority, the Legislature should require the OSA to issue the notice within 60 days of receiving the authority's response. Any final noncompliance notice should contain the OSA's final position on the matter, the date upon which they forward the matter to the county attorney, and the next steps that are required to be taken according to state law. Upon expiration of the 60-day period, the authority should be deemed to be in compliance with the TIF laws if no finat noncompliance notice is received. ' 2001 City Policies y LE-10. O5A Time Limitations Issue: The Office of the State Auditor (OSA) has the authority to issue noncompliance notices for every existing TIF district in the state for alleged violations of the TIF laws. This authority extends retroactively to the inception of the district. Accordingly, TIF authorities can receive noncompliance notices for alIeged vioIarions that occurred twenty or more years ago. Often, staff and record-keeping procedures have changed and TIF authorities find it exceedingly difficult to reconstruct the past in order to identify and remedy these situations. SimiIazly, the OSA claims the authority, based on the state's records retention schedule, to audit TIF districts for up to ten years after decertification which requires cities to expend staff resources to maintain files and a working knowledge of old districts for an unreasonable period of time. Response: A reasonable timeframe wifhin which alleged violations are identified should be established. The Legislature should reasonably restrict the OSA's ability fo issue noncompliance notices fo the six-year period prior to the notice's issuance date. The Legislature should also require the OSA to coaduct any audits on decertified districts within one year of decert�cation. LE-11. Growth Management and Annexation Issue: Unplanned and uncontrolled urban growth has a negafive environmental, fiscal, and governmental impact on cities, counGies, and state govemments because it increases the cost of providing government services, and results in the loss of natural resource areas and prime agriculturat Iand. Response: The League believes the e�sting framework for guiding growth and development primarily through local plans and conYrols adopYed by local governments should form the basis of a statewide planning policy and that the state should not adopt a mandatory comprehensive statewide planning process. Rather, the state should: � Provide additional financxal and technical assistance to local • • • governments for cooperative planning and growth management issues, particularly where new comprehensive plans have been mandated by the Legislature; Clearly establish the public purposes served by existing statewide controts such as shore land zoning and wetlands conservafSon; clarify, simplify, and streamline these controls; eliminate duplication in their administration; and, fully defend and hold harmiess any locat governmenf sued for a"taking" as a result of executing state land use policies; Give cities broader aufhority to extend their zoning, subdivision, and other land use controls up to two miles oufside the cify's boundaries, regardless of the esistence of county or township controls, to ensure onformance with city facilities and services; Clearly deFne and differentiate between urban and rural development and restrict urban growth outside city boundaries; • Require the Metropolitan Council to seek cooperation from the state of Wisconsin and counties (both Minnesota and Wisconsin) surrounding the metropolitan area to ensure responsible and controlled development; study expansion of Metropolitan Council authority in surrounding counties; and, examine 10 League of Minnesota Cities ' ' � ' • , ' • � • ' ' ' � � � LJ L� Ll the positive and negative impacts of mandatory regional or local land use controls and state-imposed development standards; Facilitate the annexation of urban land to cities by amending sfate statutes that regulate annexation to make if easier for cities to anneic developed or developing land within unincorporated areas; Oppose legislation that would reinstate fhe election requirement in contested annexations; and Encourage ideas consistent with the long-term goal of allowing urban development only in urban areas. Density incentives such as sprawl reduction aid programs are more straightforward methods of rewarding and encouraging compact urban development than using LGA or HA CA for another new purpose. LE-12. Electric Service Extension Issue: Minnesota law currently protects the right of municipally-owned utilities to extend electric services to annexed azeas. Electric cooperatives have announced their intention to seek legislation that would eliminate the right of municipally-owned utilities to extend electric services to annexed areas. Eliminating the authority to extend services would interfere with the city's natural growth and with the ability of municipally- owned utilities to serve the entire coznmunity. Response: The League opposes any statutory change that would impede or eliminate the ability of municipally- owned utilities to extend electric services to any portion of their respective cities, including annexed areas. 2001 City Policies LE -13. State and/or County Licensed Residential Facilities (group homes) Issue: As the need for more residential- based care facilities increases, sufficient funding is also needed to ensure residents living in group homes and licensed facilities have appropriate care and supervision. In view of cities' responsibilities to accommodate group homes and residential- based facilities, it is important that state and county government work with local officials to address residential care and public safety issues. Cities have reasonable concerns for special care necessary for group home residents, particulazly in case of public safety emergencies. Since operators of certain residenUal facilifies and services are not required to notify cities when they intend to purchase housing for group homes, cities do not have opportunity to raise concerns and requirements regazding the special care and public safety measures these residences may expect. Response: The Legisiature should provide sufficient funding for snch residential-based services and require state and county agencies that manage those facilities or companies licensed to operate group homes to notify ciEies in a timely manner when licensed facility operators request to operate such facilities or to renew their license and allow cities to require such agencies and licensed operators to identify and take appropriate measures to respond to the special care residents need in case of emergencies. Legislation should also require establishment of nonconcentration standards for state or county-issued requests for proposals (RFPs) and direction to avoid clustering residential facilities. Licensing authorities must also 11 a�— 5 be responsible for removing any residents incapable of living in such an environmen�, parEicuiarIy if they become a danger to themselves or others. LE -14. Housing and Economic Vitality Issue: City officials recognize fhat Iow rentai vacancy rates and increased demand for housing, particularly for starter homes foz fust-time homebuyers, have had a dramatic impact on affordability and threaten to undermine strong neighborhoods, healthy communities, and local economic vitality. Decreased federal housing assistance art8 insufficient state resources for hoasing production place statewide economic expansion at risk. Changes in social services and family support, along with welfaze-to-work requirements, make it paramount for the Legislature and the federal government to identify and provide for additional resources for housing to strengthen family stability, improve workforce availability, and improve children's school perforatance. Response: The Legislature must increase state investment in housing production, at least doubling the current biennial housing budget, to help leverage private and local resources as well as federal funds. The Legislature should continue to make additiona] investment outside Yhe metropolitan area for production of single-fami2y hovsing affordable to working families, along with affordable rental units. In the metropolitan area, investing over the next biennium to carry out the goals of the Livable Communities Act is critical to meet the needs of many households in which working adults must now Yravet long distances to get to work 12 and face a losing baffle in trying to afford housing for fheir families. The federal govemment arust address its responsibiIity to assist communities in providing for production of affordable housing units and end over-reliance on housing vouchers to solve the growing gap befween rapidly increasing rents and the incomes af workers in lower-paid employment The Legislature should continue to provide incentives rather than mandates to lower housing construction costs and selling prices to encourage local government, builders, developers, housing agencies, and organizations Yo address housing design and construction costs, land use regulation, and other factors that affecf housing development costs. The Legislature should also give cities the authority to redevelop tax- forfeited property for housing. LE-15. Preservation of Federally- � Assisted Low-Income Housing Issue: I.oss of federally-assisted housing in communities throughout the state remains a serious threat to the well being of older city residents as well as other vuinerable populations. Cities do not have sufficient locai resources to purchase or provide equiry take-out loans to owners of subsidized rental units who are considering mortgage prepayment and conversion to market-rate rentals. Without such resources, properties originally built to provide housing for low- income residents will be converted to mazket-rate, worsening an already tight rental housiag market. Cities, neighborhood orgaaizations, and communiry development projects also do sometimes require demofition of League of Minnesota Cities ' � ' , ' t � ' ' � ' I_ J ' ' t � , LJ substandazd housing, which can compound housin; shortages and displace occupants. Response: The Legislature must continue to provide additional resources for fhe Minnesota Housing Finance Agency and community-based nonprofit housing organizations to buy nnits or make equity take-out loans to property owuers in return for maintaining rents affordable to low-income residents and agreeing to maintain the federaily subsidized morfgage to term. LE-16. Adequate Funding for Transportation Issue: Current funding for roads and transit systems across all government levels in the state is not adequate. The L.eague acknowledges that all Minnesota communities benefit from a sound and adequately funded transportation system. Response: More resources must be dedicated to the state's transportation system. The League supports constitutionally dedicating a portion of the sales tas on motor vetucles (also referred to as MVE1� or other new revenue sources to a transportation fund, which would fund both highway and transit projects. The League also supports an increase in the gas tax that would be dedicated under the existing highway user trust fund formula. Replacement funding for vehicle registration taYes (known as tab fees) must be constitutionally dedicated to the highway user trust fund. If adequate funding does not come from the sfate, cities should have funding options made available to them to raise the necessary dollars to adequately fund roads and transit Ot- 5 All nontransportation programs should be funded from sources other than the highway user distribution fund or other funds dedicated fo transportation. LE-17. State Aid for Urban Road Syst�� Issue: Current rules goveming municipal state aid expenditures are restricting the efficient use of these funds, and do not adequately acknowledge the constraints of road systems in urban city environments. Response: Rules affecting the municipal state aid system need to be changed to acknowledge the technical and practical resfrictions on construction and reconstruction of urban road systems. New municipal state aid design standards should not apply to reconstruction of eausting state aid streets originally cdnstructed under different standards. Future changes to state aid rules should ensure the involvement of elected officiais and engineering professionals in the decision-making process. LE-18. Turnbacks of County and State Roads Issue: As road funding becomes increasingly inadequate, more roads aze being "turned back" to cities from counties and the state. Response: Turnbacks should not occur without direct funding or transfer of a funding source. A process of negotiation and mediation should govern the timing, funding, and condition of turned-back roads. City taxpayers should receive the same treatment as township taxpayers. The requirement for a public hearing, standards about the conditions of turnbacks, and temporary � 2001 City Policies 13 maintenance funding should also apply to county turnbacks to cities. At a minimum, roads proposed to be turned back to a lower government level should be brought up to the standards of the receiving government or should be compensated with a direct payment Direct funding should be provided for smaller cifies that are not provided with turnback financing through the municipal state aid system. LE-19. Road Funding for Cities Under 5,000 Issue: Cities nnder 5,000 popalation do not receive any nonproperty ta�c funds for their collector and arterial streets. Response: Cities under 5,000 population that are not eligibie for Municipal State Aid (M.S.A.) should be able to use county municipal accounts and fhe 5 percent account of the highway user distribution fund. Uses of counfy municipaI accounfs should be statutorily modified so counties can dedicate these funds for local arterials and collector sfreefs wifhin cities under 5,000 population. In addition, the five percent set-aside account in the highway user distribution fund shouid be used fo meet this funding gap. LE-20. Railroad-Related Projects Issue: Cities are being presented with faz-reaching and long-term effects when railroad expansion and related projects eater their communities. Along with the concerns related to safety, environmental effects, and noise impacts on the communities, several issues have greater reaching effects. They aze: • The cost-shaze ratio related to roadway crossing improvements will be borne by the public sector to a substanfial degree, some estimates aze 80 percent pubIic to 20 percent private funding; • The financial burden faced by the public sector to deal with mitigation improvements, a cost that the Surface Transportation Boazd (STB) is not requiring the private sector to pay; • The issues associated with the length of trains moving through communities; • Liability associated with whistie- blowing ordinances; and • Preemption of local authority to regulate railroad activities. Response: The private sector must be required to pay a greater share of the improvements that benefit their industry. The public sector should not be expected Yo underwrite the costs of improvements sought by the private sector. The state and federal government must participate in adequately fnnding the mitigation of the negative impact of railroads on local government and its citizens. The federal government must exercise greater oversight of the STB to ensure that fair and equitable solutions are reached when dealing with cities in Minnesofa. LE-21. Right-of-Way Management Issue: Cities have fundamental responsibility for managing the safe and convenient use of public rights-of-way and hold local rights-of-way in trust for the public as a limited and valuable asset. As demand increases for use of riahts-of-way, cities must continue to have cleaz authority to allocate and coordinate that resource among competing uses. Local management responsibilities vary and are site speci£ic, underscoring the necessiry for maintaining local authoriry to recover actual management costs and to exercise local zoning and land use regulations. 14 League of Minnesota Cifies 1 , � t L I LI ' , ' Response: State and federal governments must: • Uphold local authority to manage and protect public rights-of-way, including reasonable zoning and subdivision regulation and the exercise of local police powers; • Recognize that municipalities have a paramount role in development, utility location, and implementation of construcfion and safety standards; • Support local authority to require full recovery of actual costs of managing use of public rights-of-way; • Allow cities to retain authority to franchise gas, electric and cable services and collect franchise fees or alternative revenue streams; and • Maintain the courts as the primary forum for resolving disputes over the exercise of such authority. t LE-22. Workforce Readiness , ' � ' ' t � 1 Issue: State and federal welfare reform efforts have focused on the importance of the welfare-to-work transition, and have recognized the challenge of ensuring individuals are qualified to work. Cities have an interest in the availability of qualified workers as part of their economic development efforts, and can serve as a catalyst with other public entities and the private se�tor to address workforce readiness issues. Response: The Legislature should continue to fuliy fund the job skills partnership and pathways programs administered by fhe Department of Trade and Economic Development. The Legislature shoutd provide additional funding to Local Workforce Councils for the purpose of upgrading the skills and productivity of the workforce. D1-5 LE-23. Platting Law Recodification Issue: The Minnesota Association of County Surveyors (MACS) is seeking to recodify Minnesota Statutes Chapter 505. Two issues raised by MACS that will likely impact cities aze the subdivision plat requirements, and the creation and amendment of road right-of-way acquisition maps. Additionally, there has been disagreement among plat law practitioners whether the MACS proposal is the appropriate document for achieving recodification. Response: It is not clear whether fhe platting statutes are in need of recodification. In the event practitioners of plat law develop a document that is sound and ready for legislative discussion, the Legislature should preserve local authority over plat approval and to iaclude language in the recodification legislation that will allow for pedestrian easements or thoroughfares to be dedicated by plat (sidewalks, public trails, etc.). LE-24. Economic Development Authorities Issue: The 2000 Legislature authorized counties outside the metropolitan azea to establish county economic development authorities (EDAs). The new law lacks specificity on certain process and limitations issues. County EDA activity in areas surrounding cides wili directly impact the adjacent city in terms of service provision and taxes. Response: The Legislature should establish reasonable limits on county EDA activities in unincorporated areas, including requiring city approval for proposed county EDA activities within two miles of a city. The Legislature ' 2001 City Policies 15 should reaisit the county EDA legislation and add specificity to other process and limitations issues suck as the local recommendation committee. LE-25. Infrastructure Funding Options fssue: Current infrastructure funding options available to cities aze inadequate. Existing special assessment law, Chapter 429, does not meet cities' £nancing needs because of the benefrt requirement. The law requires a minimum of ZO percent of such a project to be specially assessed against affected properties. In practice, however, proof of increased property vatue to this degree of benef t cau razely be pmven from regular repair or replacement of existing infrastructure, such as streets or sidewalks. Altematives to the Chapter 429 methods for financing infrastructure improvements are neazly nonexistent. The L.egislature has given cities the authority to operate utilities for waterworks, sanitary sewers, and storm sewers. The storm sewer authority, established in 1983, set the precedent for a workabie process of chazging a use fee on a utiliry biIl for a ciry service infrastructure thai is of value to all those in a city. Similaz to the storm sewer authority a transportation or sidewalk utility would use technical, well-founded measurements, aad woutd equitably distribute the costs of local infrastructure services. Response: The LegisIafure should aathorize cities to create, as a local option, additional utilities such as a transportation or sidewalk utility. Such authority woufd acknowledge: the effects of repeated levy limits and the general funding shift from the state to local governments for building and maintaining necessary infrastructure; the benefits to all taspayers of a properly maintained public infrastructure; and the limitations of existing special assessment authority. LE-26. Statutory Approval Timelines Issue: Since 1995, cities have been required to act on written requests relating to zoning, septic systems, the expansion of Metropolitan Urban Service Areas (MLTSA) and other lan@ use applications in accordance to a statutory time period generally refened to as the 60-day rule. Pursuant with Minn. Stat. § 15.99 state and local government agencies must approve or deny a permit within a statutory time frame, and failure by the agency to issue a specific denial of the application with contemporaneous written findings of fact shall be deemed an approval. Recent court decisions have made it cleaz the law needs to be clarified making it more efficient and to assist cities in providing accurate and timely responses to appiicants. Response: The Legislature should amend Minn. Stat § 15.99: To allow government agencies to provide final written fmdings of fact at the next official meeting of the governing body. To allow an automatic e�etension of the time limit an additional 60 days if the agency votes down a resolution granting the request, but does not vote on a resolution denying the reqaesG To make clear the 60-day time limit begins at the point when a formal complete written application is received on forms provided by fhe cify with appropriate addifional snpporting documents and including the payment of fees if necessary. 16 League of Minnesota Cities o�- 5 � To increase the initial time limit to 40 days for municipalities with less than 5,000 population. LE-27. Telecommunications Restructuring Issue: Facilities-based competition for telecommunications services has failed to emerge in many communities in Minnesota despite enactment of the 1996 Federal Telecommunications Act. Outside meuopolitan azeas and regional trade centers, there is little evidence of head-to- head competition. Further, there is a lack of coordination among federal, state, and locai policies aimed at encouraging competition. Respo�zse: The Legislature should recognize that lack of consumer choice is a serious disadvantage in obtaining advanced telecommunications services. State lawmakers should support measures to: telecommunications to strengthen local economies, eapand educational opportunities, and improve quality of life; • Give cities express authority to provide stafe-of-the-art telecommunications either as sole operators or in partnership with other providers; • Define a strategic leadership role for state government by setting standards and establishing goaLs for provision of these services, e&minating barriers to municipal entry, increasing customer choice, and allocating resources; and • Restrueture telecommunications regulation and subsidies to increase investment in state of the art telecommunicafions infrastructure and services in high-cost areas and low-income neighborhoods while taking into account the effect on cities' existing revenue streams. • Assure communities have affordable access to state-of-the-art IMPROVING SERVICE DELIVERY SD-1. Redesigning and Reinventing Government Issue: Every level of government is reevaluating, reprioritizing, redesigning, and renewing its organizational structure and programs in response to financial realities and citizens' needs and problems. Reforms, however, must be more than change for the sake of change, or a reshuffling of existing programs to appease the electorate. To be meaningful, reorganization and reassignments of governmental entities and services should save money where feasible, deliver improved services, serve essential needs,and be equitably structured. Cities have and will continue to pursue the use of cooperative agreements, the reevaluation of city programs and services, and changes to organizational structures. Response: The federal, state, and county governments should: • Ensure that in redesigning, reinventing, or reassigning government services and prograzns that the appropriate level of service to citizens is evaluated, and citizen demands and expectations are adequately addressed; • Promote local efforts through 2001 City Policies 17 incentives, rather thau mandates; • Communicate and esfablish a process of negotiation before shifting responsibility for delivering services from one level of government to another, or seeking to reduce service duplicatioa; • Transfer authority for use of revenues dedicated to such programs, or provide appropriate and adequate alternatives; • Identify and repeal programs or discontinue services that are no longer necessary, or which can readily and fairly be provfded by the private secfor; and • Employ e�sting government entities in redesign efforts rather than create new agencies or units. SD-2. Unfunded Mandates Issue: The cost of federal and state mandated programs substitute the judgment of Congress, the President, the I.egislature, and the govemor for local budget priorities. These mandates force ciues to reduce funding for other basic services or to increase taxes and service chazges. The passage by the Izgislature of reporCing requirements for new state mandates, and the passage by Congress of legislation restraining new federal mandates, should help address the problem, but other steps aze necessary. Response: • Existing unfunded mandafes shou[d be reviewed and modified or repealed where possible. • No addifional statewide mandates sbould be enacted, unless fuIl funding for the mandate is provided by the IeveI of government imposing it or a permanent stable revenue source is established. • Cities should not be forced to compiy with unfunded mandates. • Cities should be given the greatest fle�bility possible in implementing mandafes to ensure their cost is minimized. SD-3. Civil Liability of Local Governments Issue: One of the barriers to the delivery of governmental services and programs is the exposure of local governments and their officials to civiI damage claims. The state has acted to protect itself and its local govemments by enacting exceptions and limitations to liability suits, and authorizing self-insurance and other mechanisms to deal with claims allowed by law. Response: The League supporfs: • Creating an exception to municipal tort indemuification law (MN Stat. § • 466.0'n where an employee is defended and indemnified for ctaims under a contract of insurance carried by the employee. Elctending the protection o£ the state and municipal tort claims act to quasi- governmental entities when performing public services such as firefighting, E�sting constitutional safeguards for protecting public and private property interests without any statutory expansion of property rights; and Clarifying and maintaining the applicability of municipal irumunity in various areas including, but not limited to, park and recreational immunity, including the extension to entities providing a public service that have not traditionally been included within the immunify (e.g. sfate trails over municipal utility easements) and 18 League of Minnesota Cities ' � , , � ' � , � , � l_ J ' vicarious official immunity. SD-4. Environmental Protection Issue: Cities demonstrate strong stewazdship for the protection and preservation of the environment. Minnesota municipalifies have historically been the leading funding source for environmental protection and improvements. Municipal efforts include environmental protection through wastewater ueatment, wefland restorations, stormwater treatment, public utility emission reductions, brownf`ield cleanup, safe drinking water programs as well as others. However, at some point the diminishing or nonexistent environmental benefit received from addition efforts is fiscally irresponsible. Often, the programs are improperly designed to meet their stated goals. Additionally, the absence of funding by the state and federal governments has removed an essential restraining feature in program design and implementation. Agencies are less accountabie to the governments that mandate environmental programs when they do not have to find the money to implement the programs. Specific problems faced by cities include the following: • New programs or standards are continually adopted without regazd to the e�stence, attainability, or cost of existing programs an3 standards. • Regulatory bodies fail to consistently use good science and the most current and accurate data when establishing water quatity standards. � Regulatory bodies impose new pernut requirements without going through rulemaking. Instead, the agencies rely on internat documents, program strategies, and "best professional judgment of staff' when setting permit 2001 City Policies a�- s • • criteria. Regulatory bodies approve permits and programs that compete with traditional municipai services and encourage urban sprawl. This behavior puts at risk the public investments and growth management efforts cities have made when planning for future development. Pernut fees and other cost transfer elements of federal and state programs do not provide an incentive for environmental agency e�ciency, policy prioritization, or risk assessment. Third party environmental advocacy groups create significant hazdships on cities by threatening litigation even when hard science may not support the groups' positions. Response: • Alternative wastewater treatment and cooperative service systems should be prohibited From operating in areas that can reasonably and effectively be served by eacisting municipal systems unless: • The municipal system is proven to be substantially less cost-effective and substantially less beneficial to the environment; and • the operation of these systems will not create a stranded public investment in the existing system. • Sufficient state and federal �nancial assistance should be provided to assist local governments when complying with state and federal infrastructure requirements, particularly with regard to wastewater, stormwater, and drinking water faciIities. • The MPCA should streamline its permitting and reissuing processes to allow for effluent standards and permif requirements to be known earlier, thereby giving communities more time to defend against contested 19 case hearings. • The Legislature should require the MPCA to make its aetermination regarding the re-issuance of a permit witftin a reasonable set time period and require the MPCA to reissue the permit within a reasonable set time frame. • Legistation should be passed that requires state agencies to establisk permit requirements oaly when the criteria they are using is developed through the rule making process. • The LMC should join with other like- minded organizations to contesf though jndicial means various regulatory activities of state agencies and advocacy groups. SD-5. Election Issues Tssue: Delays and lack of funding at the state level have prolonged the wait for cities to have direct access to the statewide voter registration system. Lack of access increases the time and cost to process new voter registrations, update voter files and verify voter information in a timely manner. Response: The LegisIature should provide funding to a11ow more cities direct access to ttee statewide voter registration system. SD-6. Local Elecfion Authority Tssue: Previous legislatures restricted city authority to schedule ciry elections and establish terms of o�ce for local elected officials, thereby diminislung regard for the zole of local self-govemment, particularIy when state policy preempts home rule authority governing city elections. Statutory cities currendy lack authority to create wazds. Response: The Legislature shoutd oppose further limits on either the number or the tength of terms city elected ofFiciaLs may serve, particularly when those terms have been established by voters in home rnle charter cities. State poHcy on uniform elections should continue to recognize and uphold Iocal authority to schedule city elections in November of either even- or odd- numbered years. The Legislature should support provisions fo give sfafufory cifies general aathority to create wards. SD Election Judge Appointment Issue: It is increasingly difficult for locai election officiais to comply with statutory requirements that election judges serving at precinct polling places be persons identified as members of major politicai parties. The requirement presents a growing concern in obtaining quatified election judges and a serious obstacle to efficient election administration at the local level. Response: The Legislature should eliminate election judge appointment criteria requiring persons seeking appointment as local election judges to designate a political party. SD-8. Election Judge Compensation Issue: People willing to serve as election judges are often discouraged from doing so becaase the ciry is not authorized to accept their service as a volunteer or to contribute their compensation to local charities or community nonprofit organizations. Response: The Lebislature should authorize cities to allow election judges to direct thaf their pay be donaYed fo a Iocat 2� League of Minnesota Cities o�- S charity or community nonprofit organization of their choice. SD-9. Counting Write-In Votes Issue: Requirements for recording and reporting votes cast for fictitious and undeclared write-in candidates are unproductive, time consuming and do not serve to increase voter confidence in the outcome of the election. Despite actions of the 2000 I.egislature requiring write-in candidates for state offices to file an affidavit of candidacy prior to election day in order for votes for such candidates to be reported, election judges continue to be required to count write-in votes for candidates for judicial offices. Response: There should be no requirement to tabulafe or report write-in votes cast for fictional or celebrity write- in candidates or for those other write-in candidates for judicial offices who have not officially declared their interest in seeking office. SD-10. City Costs for Enforcing State and Local Laws Issue: Cities experience substantial costs enforcing state and locai laws, particularly those related to tra�c, controlled . substances, and incarceration of prisoners. The current method in our criminal justice system of recovering costs for law enforcement and prosecution through fines is insufficient to meet the costs incurred by local governments. Response: The LegisIafure should review this issue and adopt measures that provide for complete reimbursement of the costs incurred by local governments in enforcing state and local laws. Solutions that should be considered include the following: • Increasing fine amounts; � Removing or modifying county and state surcharges fhat conflict with cost recovery principles; and • Requiring fhe defendant to pay the full costs of enforcement and prosecution as part of any sentence. SD-11. Design-build Issue: The standazd bid procedure cities aze required to use in selecting contractors for municipal buildings can be quite costly. Private sector development uses a process known as "design-build" in which vazious firms submit project proposals that-include both a design and the construction costs for that design. The selection is then based on the total package. By granting specific statutory authority to use the design-build alternative to the Metropolitan Sports Facilities Commission and state agencies, including the Department of Revenue, the Legislature has recognized the financial savings it can provide. In documented instances, cities have saved taxpayers up to 10 percent of the total project cost by using the design-build alternative. The design-build process also pernuts improved project management and oversight. However, absent statutory authorization to use this alternative, cities aze vulnerable to lawsuits from unsuccessful bidders. In addition, the design-build process for piayground equipment can encourage greater creativity while maintaining cost controls. Special legislation was enacted for the city of Chanhassen in 1995 to experiment using tlus process for purchasing playground equipment. Response: The Legislature should authorize an extension of the design-build procedure to cities as a less expensive alternative to the standard bid procedure. 2001 City Policies 21 SD-12. Providing Information to Citizens Issue: To keep the public updated and informed, state law requires local units of government to publish various notification documents in newspapers, and often dictates which newspapers receive cities' publication business. The number and variety of documents required to be published and the costs of publication aze burdensome. Technological advancements have expanded the ways govemment can provide information to citizens. In many cases, these new technologies aze more efficient and cost effective. Response: Cities should be authorized to take advantage of new technologies to increase the dissemination of information to citizens and potentially lower the associated costs. SpecificalIy, the Legislature should authorize local units of government to designate an appropriate daily/weekiy publication, elect aIternative means of communication such as city newsletters, cable television, and the Internef, and expand the use of sammaries where information is technical or lengthy. Additionally, the Legislature should eliminate outdated or unnecessary publication requirements. SD-13. Creating a Minnesota GIS Program Issue: I,ocal govenunents are finding geographic infortnation systems (GIS) au essential tool for comprehensive land use, real estate, environmental, and other land management information. In many counties, maintenance of official land records has not been automated, creating a barrier to GIS development. In addition, We start-up costs of GIS impiementation can be prohibitive. Response: The Legislature should encourage local government implementation oF GIS through grants and/or the dedication of a revenue source such as real estate transactiott fees. In addition, cities should be involved in the development of county land records modernization plans. SD-14. State Regulation of Massage Therapists Issue: The state does not cunenfly regulate massage therapy, an emerging and rapidly growing profession. In order to control prostitution and to provide for health and sanitation standards, several cities have entered the traditional state domain of health-care licensure by enacting ordinances that require all massage therapists to obtain a local professional license. These ordinances allow local law enforcement o�cers to differentiate between legitimate massage therapists, who have a city license, and prostitution businesses fronting as massage therapy establishments. The lack of statewide regulation of massage therapists has hampered law enforcement techniques, and has caused problems for cities attempting to regulate an entire heaith-caze profession without any statewide standazds. Currently, 25 states regulate massage therapists on a statewide level. Statewide regulation of massage therapists would provide a cleaz set of educational standards that massage therapists must meet, and would provide local law enforcement agencies with an easy tool to distinguish between prostitution and legitimate massage therapy. Statewide regulation would not disturb traditional powers over land use and business licensure. Response: The League supports the stafewide regulation of massage therapists in order to aid local law enforcement 22 League of Minnesota Cities � � ' � efforts at controlling prostitution attd other criminal activity. SD-15. Private Property Rights and Takings Issue: The L,egislature has been ' introducing an increasing number of bills designed to diminish or control local governments' ability to exercise traditional ' planning and zoning authority and eminent domain powers. I.egislation to control cities' abilities to perform regulatory acts , such as road right of way condemnation, shooting range zoning and amortization received strong support from legislators. In 1 addition, bills have been introduced to codify the property rights section of Minnesota's Constitu6on. The Federal Swamp Buster/Sod Buster programs, the Army Corps of Engineers' dredge and fiil programs, and the State's Wetlands Conserva6on Act and Community Based Pianning Act, appear to be the nexus for much of the property rights and takings legislation proponents. The I,eague supports local govemments' ability to balance the rights of private landowners with the interest of the public. However, the League is concerned various legislative initiatives wili adversely impact cities in three ways. First, such legisiative initiatives undermine the fundamental authority of cities to protect the public health, safety, and welfaze of its citizens. Second, if the L,egislature acts to codify part of the Minnesota Constitution, an argument may be made that the I,egislature intended to create new causes of action against cities. This would encourage more lawsuits and expose cities to the expense of defending those cases. Third, by changing the state's eminent domain law, including "quick take" provisions, municipal condemnation will be o�-s come more costly and take longer to conclude. Response: The League encourages the state and federal governmenfs to improve fheir regulatory programs by eliminating property rights issues that were raused by the adoption of such laws as the Wetlands Conservation Act or Swamp Buster/Sod Buster. The League opposes legislation that diminishes the ability of cities to act in the best interests of the health, safety, and welfare of its citizens, that increases the cost of doing business for the public good, or that creates the possibility of addifional lawsuits against cities. SD-16. Construction Codes Issue: Each year the Legislature addresses consuuction codes issues that have some impact on local govemments. For example, the L.egislature mandated bleacher safety code requirements and is exploring the idea of having both the fire and building officials approve building permits. In addition, the Construction Codes Advisory Council has indicated it may be recommending legislation to institute an appeais process for disagreements over the application or interpretation of various construction codes and to establish a statewide building code. The Intemational Organization for Standardization (ISO) has been evaluating Minnesota's building codes and enforcement. There is some expectation on the part of council members that ISO will act as the catalyst for a statewide building code. While all cities must enforce certain codes, such as the accessibility code, the electrical code and the bleacher safety code, the state's building code remains a locai option for cities outside the meuopolitan azea Many Greater Minnesota cities have 2001 City Policies 23 adopted the state building code and all cities within the seven-county metropofitan area are required to adhere to the state building code. Response: A building code provides inany benefits inc�udiag uniformity of construction standards in the building industry, consistency in code interpretation and enforcement, and life safety guidance. A statewide-enforced building code may have benefits, but requiring it would result in an unfunded mandate. The enforcement of a building code can be cost prohi6itive for many cities due to the expenses and overhead related to staffing vs. the limited building activity occurring in some communities. The League supports adoption of a state building code so long as there is not mandatory enforcement at the local level. The adoption oF an enforced state building code should remain a local op[ion for municipalities outside ffie seven-county metropolitan area, unless the state fully funds the costs of enforcement and inspection services necessary to enforce a statewide building code. In the evenf the LegisIature requires an enforced statewide building code, local governments must have the option to hire or select a building official oF their choice and set the appropriate level of service, even if the stafe fuIly funds code enforcemert activities. An appeals process would provide an excellent forum to resolve code disputes. To fhe ea�tenf ffie insurance industry is concemed about insuring structures not built to code, the industry should drive code compliance by issuittg policies or setting rates based on whether the strucfure meets various code requirements. Finaily, the Legislature should work with cities attd the Department of Administration in determining the best method to designate a municipality's building official and in clarifying the distinction between administez�ing and enforcing the building code and the administrative duties of a city when operating a building code departinent or managing staff. SD-17. Fees for Service Issue: Interest is increasing at the Legislature and among interest groups to mandate to local governments specific fee limitations for various municipal services. Examples of legislation include building permit fee legislation and coin operated amusement macfiine license fee Iegislafion, both designed to rigorously control local fee setting authority. This stems, in part, from a belief of some that pian check fees, license fees, and other municipal fees for service do not reftect the actual benefits received. Additionally, other groups have begun discussing the value of fees for providing services. Recently, the Citizens Jury expIored the value of fees for service and gave limited acknowledgment of the value fees may have in providing core manicipal services. The media has entered the discussion, as well, urging the public and policy makers to monitor fee-setting processes. Response: While the state has a role in providing a generaI statewide funding policy, the state should not interfere in the simple budgetary decision-making functions performed by cities. The League supports the Legislature endorsing local goverament authority to charge fees that are reasonably related to the cost of providing the service, permit, � League of Minnesota Cities L� �l ' L 1 Cl L I ' ' � i � ' IJ 1! ' ' � r� or license and acknowledging there are other associated costs inherent in the provision of those services, permits, or licenses. However, cities oppose any move to legislate specific methods to pay for municipal services or place caps on license fees or other fees. General services such as permitting, inspecfions, or enforcement are best funded out of a city's general fund. Cities are better prepared than the state to make local budgetary decisions when providing local services. SD-18. State Appropriation for Government Training Service Issue: In 1977, the Government Training Service was created in order to provide a coordinated response to Che training needs of state and local governments. GTS was chazged with coordinating the needs of the state, cities, counties, townships, and school districts, with the delivery capability of the state's institutions of higher learning and other continuing education service providers. State financial support of GTS is important. Many cides and other local governments find it difficult to adequately fund official and staff training. GTS provides a cost-effective mechanism for taking advantage of the efficiencies of cooperation. Response: The League supports the state general fund appropriation for the Governmenf Training Service. SD-19. Public Safety Spectrum Needs Issue: Cities have benefited from successful efforts at the federai level to gain access to exclusive radio and wireless communications capacity for state and local public safety spectrum. For future interoperability, cities will need additional spectrum to ensure public safety agencies can communicate with each other and with surrounding jurisdictions. Unless secured for public safety purposes, allocation of spectrum in the 138- 144 MHz band is likely to be auctioned off to the highest bidder for private use. Spectrum in the 800 MHz range requires many more sites to cover the same geographic range and uses more expensive radio eguipment. Although many local public safety agencies aze moving to new 8�0 MHz systems, others will need to remain in lower frequency bands. Equipment in 800 MHz range does not communicate with many of the existing public safety systems that operate at lower frequencies. Response: The federal government must make sufficient spectrum available to allow public safety agencies that require multi-agency communications to respond to accidents, disasters, and criminal activity that cross jurisdictional boundaries. The Legislature should not force cities to modify current public safety communications or become part of the 800 MHz radio system until the city chooses to do so. Rather, the Legislature should provide for a transition that guarantees uninterrupted service that is capable of communicating among local public safety agencies, while allowing cifies to form coordinated dispatch and services. Regional funding of such systetns should be considered taking into account the useful life of current systems. 01-5 ' 2001 City Policies 25 SD-20. Joint and Several Liability Reform Issue: Under joint and several liability, a party named in a lawsuit can be held liable for an entire damage award even if they are not found to be substantially at fault. Accordingly, citi�s as"deep pockets" often aze brought into lawsuits where it is IikeIy that other named defendants are uninsared or othenvise unable to pay. Cities will often settle these cases due to the high degree of exposure and, at minimum, are almost atways responsible for their defense attorney's fees. 7oint and several liabiliry results in cities paying for others' negligence. Response: The Legislature should eliminate or severely restrict the application of joint and several iiability to sitaations where private and pubIic entities are substantially at faulY for the damages incurred. SD-21. Competitive Bid ThreshoId Increase Issue: The 2000 Legislature passed and the Governor signed into law an increase in the spending threshold under the uniform municipal contracling law. Under the uniform municipal contracting law, a city must bid out all purchases of supplies, materials, eguipment, rental of equipment, as well as construction, alieration, repair or maintenance of real or personal property when the estimated amount of the contract exceeds $35,000 for municipatities of Iess than 2,500 population, or $50,000 for all others. The law also requires that purchases between $10,000 and $25,000 be let with either sealed bids or ttu�ough direct negotiation by obtaining two or more quotations. However, this increase does not apply to other Iocai contracting provisions in 26 the special assessment and public improvement statutes. Response: The Legislature should pass legislation to make the contracting threshold provisions consistent among ail local govemment contracting provisions retroactive to August 1, 2000. SD-22. Membership in Watershed Management Organizations Issue: In 1999, the Legislature enacted a restriction that will prevent city employees from serving on watershed management organization boards. The restriction will prevent city staff, who may have an interesf and expertise in watershed management issues from serving on a watershed management boazd. Response: Elecfed city councils have ultimate oversighY of the functions of watershed management organizations. The state should repeal the membership restrictions for watershed management organization boards. In addition, the state should provide an exception to the watershed district law to allow cities to recommend individuats who do not live in the watershed to serve on the watershed district boards when a portion of the watershed is located in the cify but no one tives in that area. SD-23. Legalization of Fireworks Issue: Fireworks products can cause serious injuries and fue loss. Fireworks have been illegal in Minnesota since 1941, and legalizing them would undermine fire prevention efforts. Legalizing fseworks would increase public safety enforcement, emergency response, and fire-suppression costs, League oF Minnesota Cities ' ' LI , LI L I , , , , � , , � ' � ' � Response: The League opposes the legalization of fireworks. SD-24. 911 Funding Issue: As cities struggle to afford to maintain and improve the hardwaze, softwaze, and training to provide 911 services, costs continue to rise, and many cities are forced to choose between bearing all costs or making incremental improvements to their systems. Response: The League supports an adequate state funding source for fhe upgrades and mod�cations of 911 and related systems that will alIow cities to provide effecfive, reliable emergency communications services. SD-25. On-Sale Liquor or Wine Licenses to Performing Theaters and Cultural Centers Issue: Perfomung theaters and cultural centers are not one of the qualifying entities to which municipalities may issue on-sale liquor or wine licenses. Several theaters have received speciallegislation that allows their municipalities to issue on- sale liquor or wine licenses to them. This practice interferes with the ability of municigalities to control the placement and operating manner of these entides. Response: The Legislature should authorize municipalities to issue on-sale liquor or wine licenses to performing theaters and cultural centers subject to restrictions imposed by Ehe municipality. SD-26. City Use of Credit Cards Issue: Minnesota Law currently pzovides implied authority for city use of credit cards. During the 20001egisiative session, the I.egisiature granted explicit 2001 City Policies p�-5 statutory authorization for county boazds to authorize o�cers or employees othenvise authorized to make purchases to use credit cazds. Response: The Legislature should clarify state stafute to eltplicitly aufhorize city councils to authorize city officers and staff ofherwise authorized to make purchases to use credit cards. SD-27. Youth Access to Alcohol & Tobacco Issue: The minimum age to purchase tobacco in Minnesota is 18. Cities have an interest in preventing their youth from obtaining these products. To this end, many cities operate compllance check programs in an effort to discern the cunent level of youth access and to reduce youth access. Xesponse: The League opposes any proposal that could result in increased risks of youth access to alcohol and tobacco products and expanded off- sale venues for the sale of such products. The League supports statutory changes that assist in reducing youth access to alcohol and tobacco products. The League supports mandatory alcohol compliance checks with state funding initiatives fo support locally-determined compliance efforts. SD-28. Library Funding Issue: Many community libraries in Minnesota are city owned. Although located in an individual community, city librazies serve a much wider azea. Local libraries need to be improved in order to provide access to both written and electronic media to enhance the educational capacity of both adults and children. 27 ' L� Response: The League supports a state matching grant program to provide dollars to assist communities to work in � partnership to build and improve tibraries. HUMAN RESOURCES & DATA PRACTICES Human Resources Issue: Many state laws increase the cost ofproviding city services to residents by reqniring ciry governments to provide certain levels of compensation or benefits to public employees, by specifying certain working conditions, or by litniting city governments' abiIity to effectively manage their personnel resources. For instance, existing state laws limit govemmenu' abiliry to effectively address incompetence or misconduct of city employees specifying certain procedures to be followed or standazds of conduct. federal government's labor and personnel laws were in their infancy. It is likely the Legislature will fmd parts of the law need modertuizafion. HR Discipline and Discharge • Veterans' Preference. The state should modiFy veterans' preference and civil service laws that restrict the ability of local governments to effectively discipline public employees. The LMC arges Legislature to make it a prioriYy to amend the law to address the following two points: Response: The sfate government should refrain from passing laws that regulate the public sector workpiace, and should repeai or modify problematic existing laws and regalations to encourage full local accountability. The League of Minnesota Cities proposes the following initiatives and reforms: HR-1. Veterans' Preference • The Legislature should cond►cct a study of Minnesota's veterans' preference law to determine its effectiveness and efficiency in light of today's employment laws, statutes, and regulations. Minnesota's veterans' preference protections were created at the turn of the 19� Century. These protections were designed to assist veteran employees at a time when Minnesota's and the remove the right to mnitiple, dupGcafive disciptinary proceedings; and exclude probationary period employees from veterans preference termination law protections. In addition the law should be amended to limit any back-pay claims to a maximum of $100,000; to limit the period in which to request a hearing to 20 days (from the currenf 60 days}; to require parties to select their hearing panel representative withitt 10 days after notice has been given to the employer that the veteran employee is seeking a veterans' preference hearing; and, fo require the panel to hear the petition within 30 days after the third panel representative is selected and issue a decision within 30 days following the hearing. 28 League of Minnesota Cities ' L � L I I_ I ' � t � t � C [I L_ L � �; l� L J � HR-3. Compensation Limits • The Legisiature should acknowledge that all state and local governments, not just scfiooLs districts, must be competitive in recruiting and retaining upper level management employees. In addition, there is no correlation between the compensation of citizen volunteers and career pubiic sector professionals. Therefore, the state should repeal laws limiting the compensation of a person employed by a statutory or home rule charter city fo fhe governor's salary. • The Legislature should repeal laws limiting the compensation of all public employees. The Governor's salary cap limits the ability of public sector employers to aftract and retain qualified employees. HR-4. Pablic Employees Labor Relations Act (PELRA) • The state should modify tbe de�nition of public employee under PELRA by removing the existing 14-hour ! 67 day requirement and replace it with a defmition in which employees must work more than an annual average of 20 hours per week. • Temporary or seasonal employees should be excIuded from the PELRA definition of pubiic employee in Minn. Stat. § 179A. HR-5. Re-employment Benefits • Public sector temporazy or seasonaI employees should nof be eligible for re-employment bene�ts. HR Essential Employees • Cities must balance the health, welfare, and safety of the public with the costs to t�payers. Therefore, the Legislature should carefuliy examine requests from interesf groups seeking essential employee status under Minn. Sta� § 179A (PELRA). The League opposes legislation that mandates arbitration that increases costs and removes local decision-making authority. HR-7. Pensions • The state should amend the open meeting law to clarify that the open meeting law applies to volunteer firefighter relief associations and local salaried police and firefighter relief associations. • The state should adjust the eligibility thresholds for public pensions to reflect real dollars in today's economy and index the threshold for automatic future adjustments. • The League opposes special legislation for individual employee pension bene�t increases unless they are initiated and approved by the city council of the impacted city. HR-8: Public Employees Retirement Association (PERA) Coordinated Plan Funding Deficiency Issue: Recent analysis has demonstrated that the PERA coordinated plan has been using overly optimistic actuarial assumptions for several yeazs. The plan is expected to need addidonal funding of more than $100 million a year over the next 25 years to cover projected pension benefats. If the additional funding comes exclusively from employer and empioyee payroll contributions, the increased contributions would be 30 percent higher than cunent levels. Contribution rate increases may reduce employee's take-home pay, strain local budgets, and result in property tax increases. D\—S ' 2001 City Policies 29 Response: City officials recognize that employer and employee contribution rate increases are an important part of the funding solution. To reduce the magnitude of the increases, the Legislafive Commission on Pensions and Refirement shouid: • Suppty PERA with state aid funded through reduced contributions to the Teachers' Retirement Association and the Minnesota State Retirement System. In 1984, PERA and MSRS sufficiencies were sia►ilarly transferred to TRA when it was under-funded. • Implement pro-rated service credit PERA is the only major Minnesota pension plan that awards a full-year's service credit to part-fime employees. • Exclude all seasonal employees from participation in PERA. • Explore the possibility of former employees taking refunds by offering a portion of employer contributions as part of the refund. • Reduce the guaranteed interest for deferred members' benefifs. • Increase fhe plan's vesfing period from 3 to 5 years prospectiveiy. • Increase the amorfizafion period for the plan's unfanded tiability from 20 to 30 years. • Restructure the POST fund in one or more of the following ways: 1. Eliminate the POST fe2nd aad combine the assets and liabilities of retirees with the active fund. 2. Redirect some excess POST fund earnings to the active funds. Currently, retirees are given all the benefifs of lugh rates of investment return, and are also guaranteed annualincreases even in qears of poor investment performance. 3. Pay excess mortality costs (when pensioners live longer than expected) out of the post- retirement fund rather than the active pension funds. 4. Spread POST fund invesfinenf returns over a 10-year period rather than a 5-year period. • Not approve any benefit changes that increase the ongoing cost of the plan. HR-9. Age Certificates/I-9 �'orms • The federal I-9 form requires employers and empIoyees to report the same information required by Minnesota's age cerfificate. The state should repeal Minn. Stat. § 18IA.06 and endorse the federal I-9 form to verify age information, and elitninate redundancy for employers and employees when reporting information. HR-10. Employer Reference Immunity • The Legislature should enact legislation that provides limited immunity to cities when giving accurate written disclosure of information regarding employment related references. Tlus legisiation shouId not undermine the immunity found in the Data Practices Ac� HR-11. State Paid Police and Fire Medical Insurance • The state should fully fund programs that pay for health insurance for police and fire employees required under Minn. Sta� § 299A.465, as amended in 1997, for police and fire employees hurt or kiIled in the Iine of duty. • The Legislature should clarify whether Minn. Stat. § 299A.465 30 League of Minnesota Cities 1 � ' �_I Il� � � � ' � t �J LJ lJ Il ' ' LJ applies to injuries incurred prior to June 1,1997 (the effective date of the law). • The Legislature should clarify the amount of an employer's contribution under Minn. Stat § 299A.465 and whether it changes over time. HR-12. Breathalyzers • Minn. Sta� § 181.950-.957 should be amended to permit the use of breathalyzers as an acceptable technology for determining alcohol use. Currently, breathalyzer use is permitted under federal and state commercial drivers' laws. HR-13. Preservation of Local Decision-Making Authority on Employment Related Issues • The League supports local decision- making authority, and opposes legislation intended to interfere in local decisions. HR-14. Drug and Alcohol Rehabilitation • Minn. Sta� § 181.953, subd.l0(b), an empioyer cannot terminate an employee for a positive controlled substance test without first providing the employee a chance for rehabilitation and treatment. Itecenfly, some cities have been advised that this law applies to "probationary" employees as well as permanent employees. Therefore, the League supports a legislative change to clarify that the state law on drug and alcohol rehabilitation and treatment does not apply to probationary employees. p�_ S HIt-15. Health Care Insurance Programs • The League supports voluntary participafion in programs designed to provide for post-retirement health insurance benefits or in health insurance pians structured to pool all public employees. Data Practices DP-1. Public Access to Information • Cities (and other state and local units of government) are required to establish policies and make clear to the public procedures for obtaining access to data classified as government public data. These requirements must accord local of�cials flexibility to estabiish policies and procedures that reflect the availability of resources and existing formats in which information is maintained and organized. DP-2. State Model Policies and Training • The Department of Administration is required to provide model policies and training assistance to cities in complying with the Government Data Practices Act (GAPA). The Legislature must continue to fully fund the on-going costs of GPDA compliance training and education and directly involve local officials in the development and implementation of training activities. DP-3. Tennessen Warning • Changes enacted in 1999 addressed only the school district portion of the issues facing local government employers when complying with the � 2001 City Policies 31 employee notice requiremenfs o£ the Tennessen warning. The Legislature should limit compliance with notice requirement to initial hiring procedures. The initial hiring nofice witl cover su6sequent disciptinary or other personnel-related actions that are likely to adversely afFect the individual's employment status. DP-4. Violations of Government Data Practaces Act � In some circamstances, local government compliance with the Government Data Pracrices Act is hampered by fears of punitive legal action against pubtic employees responsible far responding to requesfs for information while also protecting data classified as private or nonpublic. The Legislature should maintain current damage award requirements for willful violations of the GDPA. DP-5. GDPA Compliattce in Contracting • The 1999 T.egislature imposed requirements on the private sector to comply with the Govemment Data Practices Act when under contrac� Despite assurances to the contrary, testimony in support of these new requirements generaIIy supporfed imposing these obligations whenever government contracts with the private sector fo provide pubiic services. The Legislature should clarify that tke 1999 changes in GDPA requirements for access to public government data pertain soleIy to the contract product delivered by the private sector. THE LEAGUE SUPPORTS THE FOLLOWING POLICIES REGARDING FEDERAL EMPLOYMENT LAW: FED-1. FLSA/Overtime Compensation • The Fair Labor Standards Act (FLSA} was designed for private employer - employee relatioas. Government employees were egempt for over 100 years. Through a series of court decisions, this statute is now applied to local governments. Certain exceptions for state and local government employees should be reinstated by statute to allow for principles of pubIic accountabiIity and record keeping. FED-2. Peace Officer Bill of Rights • Congress should oppose a federal peace officer bill of rights because it will only compound the difficutties with internal investigations, local enforcement and diminish local accountability. FED-3. Portability of Deferred Compensation • Public sector employees are increasingly changing jobs between the public and private sectors. Congress shouid enact legislation that would permit faY deferred roIlovers between public and/or private deferred compensation plans to improve the portability of funds. FED-4. Medicare/Medicaid Premium Disbursements • Minnesota continues to be a net loser in federal Medicare and Medicaid premium disbursements. Congress should recognize this disparity and 32 League of Minnesota Cities ' � , provide Minnesota with a more the costs of providing healfh care balanced and representative share of under Medicaid and Medicare. a�- s ELECTRIC RESTRUCTURING , ' � � � ' ' IJ � � � � ' � ' Introduction: Cities have a strong interest _ in the public policy debate about electric restructuring or deregulation. Minnesota already enjoys some of the lowest average electric rates in the nation. The case has yet to be made that deregulation will result in either lower rates or improved service for consumers. Issue: For many decades, electric service to Minnesota citizens has been delivered through a combina6on of investor- owned utilides (IOUs), municipal utilities, and rural electric cooperatives. This system has served Minnesota well, delivering reliable, universal service at rates among the lowest in the country. In recent yeazs, many have begun to promote "deregulation" or "restructuring" of the industry, meaning that electric service would no longer be a franchised monopoly. A number of states, primarily those with high electric rates, have taken steps to move towazd such restructuring. In most of these cases, transmission and distribution remain regulated, with retail competition allowed for generation source. Advocates of restructuring argue that such competition will lead to lower rates. However, estunates by the federal Energy Information Agency* aze that while the upper Midwest, including Minnesota, wlll experience slighfly lower rates in the short term, longer-term rates may actuatly be higher under restructuring. Concerns have also been expressed as to whether residentiai customers, and those in rural and other * EIA is the nonpartisan research azm of the U.S. Department of Energy hazder-to-serve areas will actually experience decreased reliability and increased rates. L.ocal elected officials have the primary responsibility to the citizens of their cities to make certain restructuring that ailows retaii competition is as beneficial to the citizens as it is to the industry. Beneficial to the citizen means that all Minnesotans experience the same reliable, high-quality, universai, and low-cost service they experience under the current system of electric power delivery. City residents have a strong interest in the outcome of this important public policy debate. Cities are substantial consumers of electric power. Over 180 cities have 10 percent or more of their property tax base in electric industry property, while others collect franchise fees andlor sales taates on electric purchases within their boundaries. Citizens in 126 Minnesota communities currently receive economical electric service from municipal utilities, which make payments-in-lieu of ta�ces to help support city services. Significant increases in the cost of electric power for city operations or losses of these traditional sources of revenue will result in property tax increases. Response: The federal government should not mandate restructuring; the decision should be left to the states. The Lesislature should continue to follow a slow, deliberative approach, taking time to consider how alternative models for delivering electric power will affect the state's traditional benefits of 2001 City Policies 33 reliable, universal, high-quality and low- cost service. The public policy discussion should be focused on actual benefits to citizens, rather than on ideological arguments, stakeholder interests, and over-reliance on simplistic objectives like "consumer choice." Those advocating a change should bear the burden of proof to demonstrate that restructuring and deregulation will, at a inimum, mainfain Minnesota's high-quality, low- cost, and reliable service. Only when that burden of proof has 6een met should restrucEuring occur. T8e foIIowing pubIic policy goals should be incorporated into any Iegislation resfxucturing fhe etectric indusfry: Adequate Supply and Demand The state's current generation and transmission capacity is inadequate to meet projected future needs. No new significant capacity has been bui[t since the 1980's (Sherco 3). Current regulatory and other govemmental poIicies serve as a disincentive to meet cusfomer demand. The stafe shouId review and amend f6ese policies as necessary fo encourage development of adequate capacity and reliability. Consumer Protection Consumer interests musf continue to be protecfed, especialIy for the mosf wlnerable populations. Reiiable service mvst be universally available and programs such as cold-weather shut-off rules should be continued either as requirements for all market participants or as separate state pmgrams. Environmental Concerns The environment must be adequately protected, with conservation and renewable energy efforts increased. The federal government must review the appropriateness of current environmental regulations and their effect in a deregulated market; for e�mple, exemptions from the Clean Air Act for some generatioa facilities. Fair Market Compefition To ensure fair market competition, the federal and state governments must have the authority to review mergers to prevent abuse of market power. Cities must remain viable competitors in the electric marke� Municipal utilities must be granted exemptions from rules like the open meeting law and data practices requirements where they hamper the ability to effectivelq compete with private companies. To ensure adequate service to every citizen, cities and other local governments must maintain their ability to issue tas-exempt bonds for construction of electric infrastructure, and be given explicit authority to aggregate or municipalize provision of electricity. Locai Authority Cities must maintain their traditional authority over land use, zoning, rights-of-way management and cost recovery, as well as the ability to franchise providers and to receive payments-in-lieu of t�es from municipal utilities. Cities' authority to negotiate 34 League of iVTinnesota Cities �� _I , , � L � � ' ' I_J 11 � � siting fees and agreements for proposed generating facilities should be enhanced. To avoid unnecessary demand for the limited space in public righfs of way, open access to transmission and distribution facilities should be mainfaiued through regulation. As the electric market is opened to interstate competition, the federal gavernment must preserve the application of Minnesota's state and local sales taxes to the sale of electricity, regardless of the place of origin. Stranded Cost Recovery Issue: Regulated utilities have traditionally made operating decisions based on needs of consumers within their service territories. Many decisions, therefore, have been based more on need than on economics. In the transition from a regulated to a restructured competitive environment, electric generators' investments in fixed assets and other obligations may or may not remain as economically viable. Estimates of these "stranded costs" vary gready, with some andicating no stranded costs or possibly even negative stranded costs resulting from increased prices after deregulation in Minnesota. Response: Tf regulatory actions have contribufed to investment by e�sting reguiated utilities that are not economically viable in a competitive market, and if restructuring occurs, the League supports fransition mechanisms that will allow utilities to collect revenues for those particular stranded costs. However, these charges must be carefulIy monitored to ensure that only eligible and verifiable costs are covered and that over- collections do not occur. Taxpayers and 2001 City Policies a�-s ratepayers should not be expected to cover the cost of investments that were made for business reasons, apart from the requirement to serve under the regulated system. If negative stranded costs for the regulafed utility as a whole can be established, and are solely the result of transition to a restructured environment, these regulated utilities should be required to contribute some limited percentage of established amounts to offset tax breaks given to these utilities as a result of restructuring. Property Tax Issue: Part of the discussion regazding possible deregulation of the electric power industry has centered on electric utility tasation. Proponents of restructuring assert that if effective free mazket competition is to replace governmental regulation, state tax policy must be changed. The main focus of the Investor Owned Utilities (IOUs) so far has been removai of the attached machinery or personal property tax. Utilities subject to the tas azgue it piaces them at a competitive d'asadvantage to non-Minnesota companies, rural electric cooperatives (co-opsj, and municipals. However, accurate comparisons of taz� burden are difficult, as other states use completely different taxing systems. Additionally, co-ops and municipals do pay dizect tases on some of their property and indirectly when they purchase wholesale power from sources that aze taxed, such as IOUs. Municipals make substantial payinents-in-lieu of taxes. Utility personal property can be a significant portion of the local tax base in all cifies. Most obviously affected are cities that have power plants; however, transmission and distribution equipment 35 ' accoeent for over half of the personal property ta�ces paid by the IOUs and eJCist in neazly every city. Replacing the revenue that would be iost to cities, counties, school districts and other local talcing jurisdictions is a stated goal of the IOUs; however, the mechanics and funding sources of such a replacement revenue would be difFicult to develop and administer, and could be subject to reductions or elimination over time. Furthermore, replacemenY revenues or aids may not fully address the problems created by a targe tax base reduction. Response: CiEies oppose proposaIs for exempting the IOUs from the personal property tax, apart from tHe decision fo � resfrucfure fhe elecfric industry in Minnesota. t If and when restructuring occurs, ' a trulq independent review of the overall tax burden should be conducted to determine whether Minnesota utilities are ' at a competitive disadvantage. If an overall tax disadvantage is identified, the state should correct i� Under no � circumstances should locai units of governmenf or fheir cifizens be required to shoulder the burden of tas relief for , IOUs. ' LJ , � � , , , , , � 36 League of Minnesota Cities