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02-50Council File # Od —S� RESOLUTION Presented Referted To Committee Date WHEREAS, the League of Minnesota Cities, which represents 811 of Minnesota's 856 cities, as well as 10 urban towns and special districts, has led the coardination of inember cities in the development of the 2002 City Policies for Legislative and Aduiiiustrative Action which identifies issues as priorities for action during the 2002 legislative session; and WAEREAS, the CityofSaintPaulwas an active participant in this coordinated effort and the City approves generally of these priorities. NOW, TI3EREFORE, BE IT RESOLVED that the Saint Paul City Council does hereby recommend for consideration by the Minnesota State I,egislature, 2002 City Policies for Legislative and Administrative action, submitted by the League of Minnesota Cities and does hereby request that these issues be addressed by the legislature during the 2002 session. Adopted by Council: Date �`4 i,e e a t Adoption Certified by Council S etary Green Sheet # a.o o O�, E OF SAINT PAUL, MINNESOTA � i 14 Mayor Randy-Kelly's Office Nancy Haas 266-8527 Januarp 16, 2002 1-10-02 TOTAL # OF SIGNATURE PAGES GREEN SHEET ��.;�-� _�r•.., o�.-..s a No 200Q21 u,zz•: .� � or..neeE. ❑ onamc ❑wNwo.�a�axccsoc ❑wux�u� � r�vdtlatAtart4R) ❑ (CLlP ALL LOCATIONS FOR SIGNATURE) 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 aC the 2002 Legilsature. or PLANNING COMMISSION CIB COMMITTEE CIVIL SERVICE COMMISSION Has this Pe�soMim ever varked uMer a conGac[ farthis dePeMient? rES No Has Mis veBOnlfrm ever been a dry empbyee9 YES NO Ocec ihis Ga��rtn P� a sldll nat nartWNG�ssed M any aineM cilY emobyee4 YE3 NO k ihis P��rm a tarpeted vendoY7 YE3 NO dain ali ves a�weis an seDarate sheet and attach to afeen sheet When approved, the LMC support package can be pursued at the State Legislature during session. None The City would not be able to proceed with supporting the LMC policies. COSTRtEVEMUEBUD6ETED(GRCL60N� SOURCE ACTNT'NUMBER VES NO MFORMAiiON (IXPWN) a�_so League of Minnesota Cities 2002 City Policies� For legislative and administrative actian Adopted November.i6, 200Z I�M� Le� �rL•n..�eo� c;s� C;s� �,,,osna �ll�ce League of Minnesota Cities 145 University Avenue West St. Paal, MN SSI03-2044 (651) 281-1200 or (800) 925-1122 Fax (G51) 281-1299 TDD (G51) 281-1290 www.lmnc.org MINNESO7A CI71E5 Building Quality Communities Copyrigfit � 2000 Ieague of Minnesota Cities Research Foundarion. All righcs reserved � � i("� League of Minnesota Cities jv� 145 UniversityAvenue West • St. Paul, MN 55103-2044 �� (G51) 281-1200 • (80Q) 925-1122 • Fax (651) 281-1299 �v��,�,»os��„� TDD (651) 281-1290 • www.Lnnc.org aa-so CONTENTS LeagueStaff .................................................................. Legislative Policy Committee Members ........................ Policy Development Process .......................................... GeneraI Policy Statement ............................................... Statement of Intent ........................................................ ..................................... iv ...................................... v .. ...................................... vu ...................................... Vlll ...................................... viii Building Quality Communities Guideline ................................................... iY 2002 CITY POLTCIES Iraproving Fiscal Futures ................................................................................... 1 FF-1. FF-2. FF-3. FF-4. FF-5. FF-6. FF-7. FF-8. FF-9. FF-10. FF-11. FF-12. FF-13. FF-14. FF-15. FF-16. FF-17. FF-18. FF-19. State-Local Fiscal Relations ................................................................................. 1 State Shared Revenues ......................................................................................... 1 Taxation of Municipal Bond Interest ................................................................... 2 CityFiscal Year ................................................................................................... 2 Sales TaY on Local Government Purchases ......................................................... 2 Payments for Services to Tax-Exempt Property .................................................. 3 Truth-in-TaYation Process ................................................................................... 3 State Administrative Deductions from State Aid ................................................. 3 Reporting Requirements ....................................................................................... 3 Federal Budget Cutbacks ...................................................................................... 3 Priceof Government ............................................................................................. 4 ImpactFees ........................................................................................................... 4 Delayed Assessments for Roads .......................................................................... 4 Taxation of Electronic Commerce ....................................................................... 5 LimitedMazket Value ........................................................................................... 5 State Chazges for Adminisirative Services .......................................................... 5 LevyLimits ........................................................................................................... 5 ReverseReferendum ............................................................................................. 6 City Revenue Diversification ................................................................................ 6 Improving Local Economies ........................................................................ b LE-1. LE-2. LE-3. LE-4. LE-5. LE-6. LE-7. LE-8. LE-9. LE-10. Growth Management and Annexation .............................. Electric Service Extension ................................................. Statutory Approval Timelines ............................................ Public Infrastructure Utilities ............................................ Development Fee Disputes ............................................... Housing............................................................................. State and/or County Licensed Residential Facilities ......... Inclusion Housin ................................ 6 ................................ 7 ................................ 7 ................................ 8 ................................ 8 ................................ 8 ................................ 9 azY ...........................................................................................10 CommunityLand Trusts ......................................................................................11 Municipal Telecommunications Authority ..........................................................11 2�02 City Policies i LE-11. LE-12. LE-13. LE-14. LE-15. LE-16. LE-17. LE-I8. LE-19. LE-20. LE-21. LE-22. LE-23. LE-24. LE-25. LE-26. LE-27. LE-28. LE-29. LE-30. State Telecommunications Policy ................................................... Right-of-Way Management ............................................................ FranchisingAuthority ..................................................................... Financing Community Reinvestment Efforts ................................. Tas Incement Financing (TIF) ......................................................... TIF Grant Program, Special Deficit, and Pooling Authority .......... BusinessSubsidies .......................................................................... Minnesota Investment Fund ............................................................ Redevelopment Programs ................................................................ Property Tas Abatement Authority ................................................. Brownfields..................................................................................... OSA Response Timelines ................................................................ OSA Time Limitations ..................................................................... Economic Development Authorities ................................................ Workforce Readiness ....................................................................... 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 ............................................................... ....................11 ....................12 ....................13 ....................13 ....................14 ....................14 ....................1 S ....................15 ....................15 ....................16 ....................16 ....................17 ....................17 ....................18 ....................18 ....................18 ....................19 ....................19 ....................19 ....................19 Improving Delivery ..........................................................................20 SD-1. Redes a�ning and Reinventing Government .........................................................20 SD-2. Unfunded Mandates ............................................................................................. 21 SD-3. City Costs for Enforcing State and Local Laws ................................................... 21 SD-4. Design-Build .........................................................................................................21 SD-5. Providing Infomiationxo Citizens _._._...__._......_.._..___.-_••_•-_°---°-____.--°--�......22_ - - - SD-6. Construction Codes ............................................................................................... 22 SD-7. National Fire Protection Association (NFPA) Standards .................................... 23 SD-8. Fees for Service ....................................................................................................23 SD-9. Library Funding .................................................................................................... 24 SD-10. Civil LiabiIity of Local Governments ..................................................................24 SD-11. Private Property Rights and Takings ....................................................................25 SD-12. Election Issues .....................................................................................................25 SD-13. Local Election Authority .......................................................................................26 SD-14. Environmental Protection ....................................................................................26 SD-15. Sale of Lawn Fertilizers Containing Phosphorus .................................................27 SD-16. Creating a Minnesota GIS Program .....................................................................28 SD-17. State Appropriation for Government Training Service ........................................28 qr�_iu nat�s�a�'��3 �ges��F�s .�...�..,:,�:..�>n�9 ____ . ..... .. SD-19. Legalization of Fireworks .....................................................................................29 SD-2p. 91 I Funding ..........................................................................................................29 SD-21. Racial Profiling ...............................................................................................•.... 30 SD-22. 0.08 DWI ..............................................................................................................30 SD-23. CriMNet ............................................................................................................... 31 ll League of Minnesota Cities 6a-so SD-24. Red Light Cameras ............................................................................. SD-25. Misdemeanor Fines ............................................................................. SD-26. State Regulation of Massage Therapists .............................................. SD-27. On-Sale Liquor and Wine Licenses to Perfomung Theaters and CulturalCenters .................•••-•--........................................................... SD-28. Youth Access to Alcohol and Tobacco ................................................ .........31 ......... 32 .........32 ........32 ........32 Human Resources & Data Praetices ............................................................33 Human Resources HR-1. Preservation of Local Decision-Making Authority on Employment RelatedIssues ........................................................................................................33 HR-2. Veterans' Preference ..............................................................................................33 HR-3. Compensation Limits ............................................................................................ 34 HR-4. Public Employees Labor Relations Act (PELRA) ................................................ 34 HR-5. Re-employment Benefits ...................................................................................... 34 HR-6. Essential Employees ............................................................................................. 34 HR-7. Pension Benefits ................................................................................................... 34 HR-8. Public Employees Retirement Association (PERA) Coordinated Plan FundingDeficiency ............................................................................................... 34 HR-9. State Paid Police and Fire Medical Insurance ........................:.............................. 35 HR-10. Breathalyzers .........................................................................................................35 HR-11. Drug and Alcohol Rehabilitation ..........................................................................35 HR-12. Health Care Insurance Programs ........................................................................... 35 HR-13. Electronic Tixnekeeping .......................................................................................35 HR-14. Volunteer Fire Relief Pension .............................................................................. 35 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........... Federal Employment Law FED-1. FLSA/Overtime Compensarion ..................... FED-42 Medicare/Medicaid Premium Disbursements Electric Restructuring Adequate Supply and Demand ......................................... Consumer Protection ........................................................ Environmentai Concerns .................................................. Fair Mazket Competition .................................................. LocalAuthority ................................................................ Stranded Recovery Cost ................................................... PropertyTax ..................................................................... ................ ................ ................ ................ ................ ................ ................ ............................ 35 ............................ 36 ............................ 36 ............................ 3 6 .......................... 36 .......................... 36 ....................... 3 8 ....................... 3 8 ....................... 3 8 ....................... 3 8 ....................... 3 8 ....................... 39 ....................... 3 9 2002 City Policies iii LEAGUE STAFF WORKING WITH STATE AND FEDERAL ISSUES Jim Miller, Execu�ive Director Gary Carlson, Director of Intergovernmental Relations Aid to cities, electric utility restructuring, general revenue sources for cities, pensions, personnel, property tax system, tag increment financing Remi Stone, Senior Intergovernmentai Relations Representative Civil liability, construction codes, environment, general government, insurance, labor relations, land use/annexation, personnel, public fivance Anne Finn, Iutergovernmental Relations Representative Housing, land use/annexation, public safety, transporfation and transit Kevin Frazell, Director of Member Services Electric utility restructuring, government innovation and cooperation Andrea Hedtke, Intergovernmental Relations Representative Business subsidies, civiI liabitify and criminaI justice, economic development and redevelopment, general government, lawful gambling, liquor, localltribal relations, taa increment financing Ann Higgins, Intergovernmental Relations Representative Elecfions and efliics; elecfric ufility restructu7"ing; emergency managemenf; -- housing, information policy, telecommunications Jennifer O'Rourke, Intergovernmental Relations Liaison Generai government, general taxation, personnel, unfunded mandates, transportation and transi#, legislative listserve and bill tracker manager iv League of Minnesota Cities 6,.... s o Legislative Policy Committee Members Improving Fiscal Futures Richazd Abraham, City Adminishator, Lake City Kazen Anderson, Mayor, Minnetonka Bill Barnhart, Intergovernmental Relations, Minneapolis C�rt Bo�aney, City Manager, Brooklyn Park Pat Born, Finance Director, Minneapolis Laura Brod, Councilmember, 23ew Prawe Tom Burt, City Administrator, Rosemount Gino Businazo, Finance D'uector, Mound Dennis Cavanaugh, Mayor, St. Anthony Jane Chambers, Assistant City Manager, Brooklyn Center Tom Cran, Budget Office, St. Pau3 Reggie Edwards, City Administrator, Chisago City John Eraz, Ciry Administrator, Andover Richazd Fursman, Ciry Manager, Maplewood Pat Harris, Councilmember, St. Paul Jeff Aaubrich, Assistant Council Adminstrator, Red Wing Terri Heaton, Chief Financial Officer, Bloomina on Pat Hentges, City Manager, Mankato Kim Kamper, Acting Administrator, Oak Pazk Heights Elizabeth Kautz, Mayor, Burnsville James Keinath, City Administrator, Circle Pines Linda Koblick, Councilmember, Minnetonka Tom Lawell, City Administrator, Apple Valley Dean Lotter, City Adminisfrator, Janesville Mary McComber, Councilmember, Oak Pazk Heights Paul McLaughlin, Councilmember, Intemational Falls Peter Meintsma, Mayor, Crystal Steve Miellce, City Manager, Hopkins David Minke, City Administrator, Princeton Gary Neumann, Assistant Adminisfrator, Rochester Steve Okins, Finance Director, Willmaz Tammy Omdal, Finance Department, Minneapolis Roger Peterson, Legislative Affairs Director, Association of Metropolitan Municipaliries Douglas Reeder, City Administrator, South St. Paul Michael Rietz, City Administrator, Kasson Michael Robertson, City Administrator, Otsego Ryan Schroeder, City Administrator, Cottage Grove Mark Sievert, Ciry Administrator, Fergus Falls James Smith, Councilmember, Independence Gerald Sorenson, Adminisnative Services Director, Moorhead David Mark Urbia, Ciry Administrator, Blue Earth Dan Voa , City Administrator, Brainerd Jim Willis, City Administrator, Inver Grove Heights Rick Wolfsteller, CiTy Administrator, MonticelSo Improving Local Economies Brenda Johnson, Chau, Councilmember, Chatfield Jon Hohenstein, Vice Chair, City Administrator, Mahtomedi Margaret Amundson, Committee Adminisaator St. Paul David Beaudet, Mayor, Oak Pazk Hei�hu Jerry Bohnsack, City Adminisu�ator, New Prague Doug Borglund, City Adminisirator, Howazd Lake Patrick Boylan, Assistant Manager, Lexina on Gerald Brever, City Administrator, Staples Jim Brimeyer, Councilmember, St. Louis Pazk Cathy Busho, Mayor, Rosemount Mike Campbell, Intergovermental Relations Director, St. Paul Kevin Carroll, City Administrator, Carver Tim Cruikshank, City Manager, Anoka Dan Donahue, Ciry Manager, New Hope Michael Eastling, Public Works Director, Richfield Reggie Edwards, Ciry Administrator, Chisago City Karen Elhard, Clerk-Treasurer, Northome Jim Elmquist, City Administrator, Mora Mark Erickson, City Administrator, Lakefield Roger Fraser, City Manager, Blaine Matt Fulton, City Manager, New Brighton Rick Geuchow, City Administrator, Lauderdale John Goedeke, Councilmember, Roseville Tom Goodwin, Councilmember, Apple Valley Mary Gover, Councilmember, St. Peter Chuck Groth, Mayor, Fairmont Tom Harmenin„ Community Development Director, St. Louis Pazk Desta Hunt, Counciimember, Fergus Falls Marvin Johnson, Mayor, Independence Steven Jones, City Manager, Montevideo Ryan Kaess, Mayor's Office, St. Paul Andrea Hart Kajer, Intergovemmental Relations Director, Minneapolis Patrick Klaers, City Administrator, Elk River Larry Lee, Communiry Development Director, Bloomina on Don Levens, Ciry Administrator, Cokato Marcia Mazcoux, Councilmember, Rochester Steve O'Malley, Deputy Mana�er, Burnsville Samantha Orduno, City Manager, Richfield Bruce Peterson, Director Planning and Development Services, Willmar Roger Peterson, Legislative Affairs Director, Associatioo of Metropolitan Muncipalities Dale Powers, Councilmember, Cleaz Lake 2002 City Policies � Gene Ranieri, Executive Director, Association of Meh�opolitan Municipalities Stephen Sarvi, Ciry Administrator, Victoria Mazk Sather, City Manager, White Beaz Lake Terry Schneider, Councilmember, Minnetonka Terry Spaeth, Administrative Assistant, Rochester Kathy Thurber, Councilmember, Minneapolis Craig Waldron, City Administrator, Oakdale Jeff Weldon, City Adminis4ator, Redwood Falls Mark Winson, Chief Adminisu�ative Officer, Duluth Heather Worthington, City Administrator, Falcon Heights John Young, Jr., Councilmember, Hawley Improving Service Delivery Mazk Kamowski, Chau, City Administrator, Lindstrom John Kysylyczyn, Vice Chair, Mayor, Roseville Laurie Ahrens, Assistam Ciry Manager, Plymouth Beverly Aplikowski, Councilmember, Arden Hills Mike Campbell, Intergovemmental Relations Director, St. Pau] Paz Cmwford, Clerk-Treasurer, Motley Craig Dawson, City Administrator, Shorewood Pam Dmytrenko, Assistant to City Mana�er, Richfield John Foschi, City Administrator, Proctor Mazy Hamann-Roland, Mayor, Apple Valley Tom Hansen, Deputy Manager, Bumsville Joel Hanson, City Administrator, Little Canada Linda Koblick, Councilmember, Minnetonka Barrett Lane, Councilmember, Minneapolis Jan LeSuer, Councilmember, Golden Val]ey Joe Lynch, City Adminis�ator, Arden Hills � �Nfa'ry McComtier; Councilmember, Oak Pazk Heights Larry Nicholson, Councilmember, Moorhead Desyl Peterson, City Attomey, Minnetonak Gene Ranieri, Executive Director, Association of Metropolitan Municipalities David Senjem, Councilmember, Rochester Kent Torve, Mayor, Loretto Karen Lowery Wagner, Interaovemmental Relations, Minneapolis Rena Weber, Clerk-Treasurer, Waite Pazk Terry HaItiner, Labor Relations Mana�er, St. Paul Bret Heitkamp, City Administrator, Champlin Kay Kuhlmann, Council Administrator, Red Wing Ed Lazson, City Manager, Morris Kay McAloney, Human Resources D'uector, Brooklyn Pazk Tim Madigan, City Adminisuator, Faribault Teri Osterman, CIerk-Treasurer, Frazee Givona Reed, Assistant to Administrator, Mounds View Ceil Smith, Assistant To Manager, Edina Jerry Splinter, City Manager, Coon Rapids Todd Torvinen, Finance Director, Duluth Electric Restructuring Ron Jabs, Chair, Mayor, Jordan Bryan Adams, Uuliry Superintendent, Elk River Kazen Baker, State Legislarive Analyst, St Paul Larry Bakken, Councilmember, Golden Val]ey Jim Brimeyer, Councilmember, St. Louis Pazk Chuck Canfield, Mayor, Rochester Al Crowser, Utility General Manager, Alexandria Jim Elmquist, City Administrator, Mora Robert Filson, City Adminish�ator, Worthington Del Haag, Councilmember, Buffalo Ken Hartung, City Adminisuator, Bayport Jeff Haubrich, Assistant to Council Administrator, Red WIRa Elizabeth Kautz, Mayor, Burnsville Mazk Larson, Adminish�ator-Clerk, Glencoe Rebecca Lau, Management Analyst, Minneapolis _._ Pam Marshall, Energy Cents. Coalition, St_Pau1_ _. ._ Charles Mertensotto, Mayor, Mendota Heights Mike Nitcha]s, Utilities General Manager, Willmaz Paul Ostrow, Councilmember, Minneapo]is Greg Oxley, MN Municipal Utilities Association, Plymouth Ro�er Peterson, Legislative Affairs Director, Association of Mehopolitan Municipaliries 7ohn Remkus, Finance Director, West St. Paui Joe Rudber�, City Administrator, Becker Mazk Sather, City Manager, White Beaz Lake Kathleen Sheran, Coalition of Greater MN Ciries, Human Resources & Data Practices Mankato Jerry Splinter, City Mananer, Coon Rapids Ken Hartung, Chair, City AdminisRator, Bayport Jim Willis, City Administrator, Inver Grove Heights Geralyn Barone, Assistant City Manager, Minnetonka Wally Wysopal, City Manager, North St. Paul Theresa Goble, Finance Director, Brainerd vi League of Minnesota Cities League of Minnesofa Cifies Policy Development Process p �.._ so The League's policy development process has taken place over the past six months. The process began with a member survey of priority issues facing city officials. The process will not end with fhe Policy Adoption Conference. The committees will schedule additional meetings during the upcoming legislative session to discuss additional issues, develop altemative solutions, and discuss strategies to impiement the League's policies. Listed below is a brief chronology of the major events in the policy development process. At each step, members have the oppommity to participate in the development process. ApriUMay June The League solicits members for ideas and problems. A survey at the Annual Conference allows members to formally suggest topics. The League President accepts appiications for committees and appoints policy committee members. The policy committees aze: Improving Fiscal Futures Improving Local Economies Improving Service Delivery Human Resources and Data Practices Electric Restructuring July Committees meet to discuss issues raised in the member survey. Committees can also form task forces to more thoroughly study specific issues. Task forces can include noncity members with a knowledge of the focus issue. August Committees and task forces meet to discuss issues and problems, accept through testimony and develop policy statements. September October The League Boazd of Directors meets with the chairs of the policy committees to review policies. November Policy Adoption Conference. Members have the opportunity to discuss the draft policies, propose changes, and suggest additional policies for member consideration. January Legislative session. During the session, the policy committees and task forces through will continue to meet on issues and sh�ategies. Members can assist the League's May legislative efforts by volunteering to contact legislators on a variety of issues of interest to our cities. 2002 City Policies vii General Policy Statement The League of Minnesota Cifies serves as a forum for cities to define common problems and develop policies and proposals to solve those problems. The League of Minnesota Cities represents 819 of Minnesota's 854 cities as well as 11 urban towns and 29 special districts. All sizes of communities aze represented among the League's members (the largest nonmember ciry has a population of 163) and atl regions of the state are represented. The policies that follow aze d'uected at specific city issues. Two principles guide the development of all League policies: There is a need for a governmental system that allows fleatibility and authority for cities to meet the challenges of governing and providing cirizens 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 goveming and providing services necessitate a continuing and strengthened partriership with federal, state, and local governments. This parinership, particulazly in the areas of finance, development, housing, environment and transportation, is critical for the successful operatiou of Minnesota's cities and the well-being of residents. _ . _ . -- __ _ - __.______... ._. __. atement of Inferit -- - There aze many issues affecting the effectiveness of city govetnment to improve community life, improve the fiscal future and service delivery of city govemment, and improve the locat economy. What follows aze statements of the issues facing cifies and the League of Minnesota Cifies' proposed responses to these issues. These statements of issues and proposed responses form the policy of the League of Minnesota Cities. Additional and alternative responses to those issues may be proposed after the Policy Adoption Conference, and the members of Yhe League authorize its Boazd of Diiectors to consider and support additional or alternative responses, if necessary, to resolve the issues identified in this policy statement. viii League of Minnesota Cities GUIDELINE FOR BUILDING QUALITY COMMUNITIES 6a-- so To the greatest extent possible, legislation affecting communities at the state and federat level should enhance, not diminish, the ability of citizens, businesses, and local governments to work together in parniership to make every community "livable." ISSUE: Cities in Minnesota are at various stages in meeting the goal of being "livable, healthy communities." RESPONSE: The definition of a"livable, healthy community" below will be used to evaluafe proposed legislation to determine whether or not it advances the goal of enabling all Minnesota cities to become livable, healthy communities. It should also be used by cities to evaluate their progress toward the goal of becoming livable, healthy communities. A LIVABLE, HEALTHY COMMU1vITY IS: WHERE PEOPLE OF ALL AGES • shaze a core of common values including valuing diversity, respect for each other, and good citizenship • feel: * safe a sense of belonging welcome • engage in life-long learning activities that: * promote responsible citizenship * enhance the enjoyment of life * prepare them for changing job mazkets • participate in the decision-making process with community leaders • celebrate community • want to make their home • have access to: * good payingjobs * adequate and affordable housing * choice of efficient transportation systems including transit, pedestrians, and bicycles * gathering places * desired information 2002 City Policies ix * choice of cultural and recreational activities * affordable goods and services, including health caze • are involved in the nurturing of youth • caze about their homes, couununity, and the environment • get to know each other • have the benefit of strong family support and nuriuring 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 'unplements cooperation and collaboration • provides and maintains an adequate physical infrastructure and promotes social infrastructure to meet local needs • educates citizens of atl ages on local, regional, and state issues and government processes _ __ ---- -- _- - ------- - - - _ _ _ ---- • informs and communicates with citizens to foster participation in public policy decision-making • participates in youth development x League of Minnesota Cities pa-so 2002 CITY POLICIES ��so IMPROVING FISCAL FUTURES FF-1. State-Local Fiscal Relations Issue: The govemor and Legislature enacted major changes to Minnesota's state and local government finance system in 2001. The elimination of the general education properry taa� levy will provide tax relief to ali properties. Additional relief is targeted to business, apartment, and higher- valued residential property through class rate compression. Lower-valued homes will receive a new market value homestead credit. Properry tax levies for transit aze replaced with state aid. The state will levy a property t� on business and cabin property, reducing the tax relief for those types of properiy. Levy limits wili be in place for two yeazs for cities over 2,500 in population and for ali counties. Homestead and Agricultural Credit Aid (HACA) was eliminated. Local Government Aid (LGA) to cities was increased and the formula was revised. The 2001 Legislature reduced state aid to ciries by $60 million, although some cities will receive increases and others will see reductions in state aid. The governor and Legislature made changes in state aid programs in an attempt to distribute property tax relief more equitably statewide. Proponents of the tax bill claim the property tax will now be more of a local tas. However, under the tax bill, the state wiil levy a properiy tax for the first time since 1968, and the state will maintain control over city levies through levy limits. Pro- ponents also claim that since cities will be more reliant on the property taac and because tax increases will fali more heavily on homestead property, cities will be more accountable to taxpayers. However, the tax bill increases state aid to some ciries and the combined 'unpact of the tax bilI wili reduce taYes for homes more than most other types of properties. Response: In an effort to clearly outlfne and understand the implications of the 2001 tax bill, to remedy e�sting problems, and to avoid potenfial, unintended consequences of additional property tax changes, the Legislature should avoid enacting any major changes to the current system. The League supports a comprehensive review, analysis, and educational effort of the combined impacts of the 2001 tax bill, property tax changes since 1997, and changes in economic circumstances for faxpayers and governments. FF-2. State Shared Revenues Issue: The state's system of sharing revenues with local units of government addresses many problems with a system that relies solely on local property t�es. First, the properiy taY base available to communities can vary dramatically. State revenue sharing programs use state re- sources to equalize the ability of com- munities to pro-vide essential services with- out undue properiy tas burdens for local residents. Second, nonresidents and t�-exempt entities benefit from local services or create additional demands for services without contributing to the property taxes that support these services. LGA heIps address the problem where nonpaying entities consume services without contributing to the local tax base. 2002 City Policies Third, allowing local units of govemment in Minnesota to levy only the property tax has created an over-reliance on the properiy tas. LGA can reduce fhe overall reliance of local governments on the property tax. Although historically the Legislature has supported LGA, the 1981 Legislature reduced the number of LGA and HACA payments and the 1986 Legislature delayed the payments. Under current law, the first payment of LGA is made in July--fully seven months into each city's fiscal yeaz. These changes have created cash flow problems for some cities. In addition, Opast Legislatures have reduced state aid to cities inciuding a net $60 million reduction enacted in 2001, which included the eIimination of HACA and changes to the LGA formula and appropriation. The 2001 Legisiature also set aside $14 million into an LGA reform account in prepazation for future review and modifications to the LGA system. Response: If.changes are . considered, the LGA system must: • Reduce tax burden disparities among communities and between cities and adjacent townships; • Compensate ciries and their t�payers for overburden and Yax egempt property; and, • Compensate for state imposed mandates. lowers borrowing costs for cities and re- duces property tas levies. Resporrse: The state should maintain the tax exemption for municipal bond interest income. FF-4. City Fiscal Year Issue: The fiscal year for cities aud counties currently corresponds to the property taa� cycle. Response: The state should maintain current Iaw and not change the city fiscal year to coincide with the state fiscal year. FF-5. Sales Tax on Locai Gov- ernment Purchases Issue: In 1992 when the state was experiencing a budget shortfall, the Legislature repealed the sales taaf exemption for local government purchases. Local govemments now pay state sales taat on purchases-like road.maintenancesupp�ies -- and equipment, wasYewater treaYment facilities, and some public safety equipment. This taac currenfly costs local property taic- payers and ratepayers an estimated $100 million annually. In addition, proposals to extend the sales tas to services would have the effect of increasing local govemment costs and property taaces. Because no additional state aids were added to of£set the additional cost, this repeal has effectively increased local property t�es to fmance state operations. FF-3. Tagation of Municipal Bond esponse: e stafe should fe- � instate the sales tax exemption for all Issue: The state law that grants a locaI government purchases. The ex- tax exemption for municipal bond interest e�Ption must not be coupled with cuts in LGA. 2 League of Minnesota Cifies oa.- sa FF-6. Payments for Services to Tax-E%empt Property Issue: Taacable properiy in many cities is being acquired by nonprofit and govemment entities. Converting the prop- erty to tax-exempt status can lead to serious taY base erosion without any corresponding 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. £F-7. Truth-in-Taxation Process Issue: Cities must set a preliminary levy by Sept. 15, which, by law, becomes the maYimum that cities can levy the following yeaz. In recent years, cities have not received complete tas base and aid information in a timely manner. As a result, cities often either set a preliminary levy that is artificially high or they aze unabie to budget for unforeseen needs that arise after Sept. 15. Response: The League supports changes to the Truth-in-Taxation process to pravide more meaningful information to citizens, including the exemptions enacted in 2001 for ciries that propose levy increases less than the implicit price deflators. However, this calculation should account for the impact of state aid cuts on proposed levies. Cities should have the authority to increase the final levy from the preliminary levy to meet unforeseen and uncontrollable needs. FF-8. State Administrative Deductions from State Aid Issue: State administrative costs aze deducted from the LGA appropriation. This reduces the property tax relief provided by LGA 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 imposed on cities by the state ofren result in duplication and additional costs. Response: Requirements for reporting and advertising financial and budget information should be carefully weighed to balance the validity of the 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 informafion already re- quired by others to avoid duplication of reporting requirements. FF-10. Federal Budget Cutbacks Issue: Congressional budget actions or devolution of program responsibilities may place fiscal burdens on the state and on 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 2002 City Policies 3 the burden on cities and on their property taxpayers. FF-11. Price of Government Issue: The price of governxnent legislation enacted in 1994 was xntended to measure the overall effect of state and Ioca1 taxarion over a long period of time. The tazgets measure government revenues as a percent of personal income. Unfortunately, the targets have been misinterpreted and used unfairly to crificize city taae and budget decisions. Response: The price of government statutes, as they apply to local govem- ments, should be repealed. If the price of government law is to continue to be applied to local 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. Impact Fees Issue: New development and the authorization to unpose fees on new development for water, sanitary and storm sewer, and park purposes, it is reasonable to eaRend the concegt to additional public infrastructure and facilities improvement also necessitated by new development. Response: The Legislature should autLorize cities to impose impact fees so new development pays its fair share of tbe off-site, as weII as the on-site costs of public infrastructure and other public facilities needed to adequately serve new development. FF-13. Delayed 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 improvement, but not previously assessed. This authority for delayed assessment has not been extended to other infrastructure, such as road im- provements, even thoughproperties_aze _ __- ___ benefiting from the improvements. resulting growth create an increased demand for public infrastructure and other public Response: Cities should be allowed facilities. Severe constraints on locai fiscal to delay assessments against property resources and dramatic forecasts for pop- located outside the city for road improve- ulation a owth have prompted cifies to ments benefiting property abutting the criticalIy reconsider ways to pay for the improvement but not previously assessed inevitable costs associated with new de- for the improvement. For example, if a velopment. Traditional financing methods city makes improvements to a road �that tend to subsidize new development at the benefits city residents and township expense of the existing community, dis- residents, the city should be able to re- courage sound land use plauning, place cover costs through future assessments to inefficient pressures on public facilities, the township property when the property _________"—�d'�}Ow_ n- infrastructure. Consequenfly, local com- ship property is brought into the city, munities aze exploring methods to ensure the city would then be able to assess that new development pays its fair share of the property for road improvements pre- true costs of growth. Given the existing 4 League of Minnesota Cities pZ_ so viously done but not assessed at the rime of the improvements. FF-14. Taxation of Electronic Commerce Issue: Sates over the Intemet and through other electronic means aze projected to increase exponentially over the next several years. Electronic transactions pose significant tax policy challenges because of the difficulty of assigning a location to electronic sales, and because many Internet goods aze not tangible property. Response: Federal tax policy should not place main street businesses at a competitive disadvantage to electronic retailers, must not jeopardize repayment of bonds backed by state and locai sales tax 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 muiti-state effort to develop a streamlined sales tax system. FF-15. Limited Market Value Issue: The 2001 Legislature enacted a phase-out of the state's limited mazket value (LMV) system. Under limited mazket value, homeowners and cabin owners who experience rapid escalation in their prop- eriy's value effectively have a temporary exemption of taxes on a portion of that growth. This exemption has grown rapidly over the past several years and now shiRs substantial properiy tax burdens to other types of property. On the other hand, a rapid phase-out of the program could dramatically shift tax burdens back to homes and cabins. Response: The Legislature should closely monitor the effects of the phase- out of LMV to avoid excessive tax burden increases for currently benefiting prop- erties. If the phase-out schedule results in excessive tax increases, the Legislature should increase funding for the targeting prob am, which will buffer the tas burden increases. FF-16. State Charges for Admin- istrative Services Issue: Currently, some state agencies have wide discretion in setting the fees for special services they provide to local governments. For example, the Minnesota Department of Revenue recently increased the fee for administerina local sales taxes by 80 percent in the middle of a budget yeaz with less than six weeks notice. The increase had no appazent relationship to the cost of providin� the service. Response: State agencies should be required to demonstrate the need for increases 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 the service. Local government should be given the option to self-administer or contract with the private sector for the service if the state cannot provide the service at a reasonable cost. FF-17. Levy Limits Issue: As a part of the 2001 omnibus tas bill, the Legislature enacted levy limits for cities over 2,500 population for two years. Although the levy limit formula provides some growth for local budgets, levy limits replace local account- ability with a state jud�nent about the 2002 City Policies g appropriate level of local taxation and ultimately locai services. Two of the stated goais of advocates of the 20Q1 tax bill were to make the prop- erty tax more of a local tax and to increase Tocal accountability for the property tax. However, levy limits clearly violate these goals by invoiving the state in local budget decisions. Response: City counciIs must be allowed to decide how to respond to community needs. The League supports the immediate repeal of levy limits. FF-18. Reverse Referendum Issue: Proposals to impose a reverse referendum requirement on municipal prop- erry tax increases would diminish the ability of elected local officials to respond to the needs of their community. In addition, the reverse referendum proposals that have been recentIy offered would dismpt the local budget process by potentially requiring a public referendum in late January, nearly one month into the city's fiscal yeaz. Response: The Leagne supports the principle of representative democracy and opposes reverse referendum requirements. FF-19. City Revenue Diversification dssue: Under current state law, the property tax is the only generally accessible form of local tax revenue for cities. Recent retrenchment in state aid prograxns will likely increase city reliance on properiy taxes in the future. Allowing cities to diversify their revenue stream would prevent rapid risesin property taxes. Response: Cities should be able to diversify their sources of tax revenues. IMPROVING LOCAL_ECONQMIE� LE-1. Growth Management and Annexation Issue: Unplanned and uncontrolled urban growth has a negative environmental, fiscal, and govemmental impact on cities, counYies, and state governments because it increases the cost of providing govemment services, and results in the loss of natural resource azeas and prune agricultural land. statewide pianning policy and that the state shouid not adopt a mandatory comprehensive statewide planning process. Rather, the state should: • Provide additional financial and technical assistance fo local govemments for cooperative planning and growth management issues, particularly where new comprehensive pIans have been mandated by the Legislature; Recnnrs.cv� The T eag�ie heliavnc *h •('lParlv nctaht'ch the,pulalu purp�sgs existing framework for guiding growth served by existing statewide controIs � and development primarily through locai such as shore land zoning and wet- plans and controls adopted by Iocal lands conservation; clarify, simplify, governments should form the basis of a and streamline fhese controls; elimin- ate duplication in their administra- League of Minnesota Cities fl1— so tion; and fully defend and hold harm- less any local govemment sued for a "taking" as a result of executing state land use policies; • Give cities broader authority to eg- tend their zoning, subdivision, and other land use controls up to two miles outside the city's boundaries, regard- less of the eustence of county or township controls, to ensure conform- ance with city facilities and services; • Clearly define and differentiate between urban and rural development and restrict urban growth outside city boundaries; • Facilitate the annexation of urban land to cities by amending state statutes that regulate annexation to make it easier for ciries to annex developed or developing land within unincorporated areas; • Oppose legislation that would re- instate the election requirement in contested annexations; and Encourase ideas consistent with the long-term goal of allowing urban develapment 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 HACA for another new purpose. authority to extend services would interfere with cities' natural growth and with the ability of municipally-owned utilities to serve the entire community. Response: The League opposes any statutory change that would impede or eliminate the abiIity of municipally- owned utilities to extend electric services to any portion of their respective cities, including annexed areas. LE-3. 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 (MLJSA) and other land use applications in accord- ance to a statutory tnne period generally referred to as the 60-day rule. Pursuant to Minn. Stat. § 15.99 state and local govern- ment agencies must approve or deny a pernut within a statutory time frame, and failure by the agency to issue a specific denial of the application with contempor- aneous 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 e�cient and to assist cifies in providing accurate and fimely responses to applicants. LE-2. Electric Service Extension Issue: Minnesota law currently protects the right of municipally-owned utilities to e�end electric services to annexed areas. Electric cooperatives have announced their intention to seek legislation that would eluninate the right of munic- ipally-owned utilities to extend electric services to annexed areas. Eliminating the Response: The Legislature should amend Minn. Stat. § 15.99: _ • To allow government ageneies to provide final written findings of fact at the next official meeting of the goveming body. • To allow an automatic 60-day extension of the time limit if the agency votes down a resolution 2002 City Policies granfina the request, but does not vote on a resolation denyiag the requesY. • To make clear the 60-day time limit begins at the point when a formal complete written application is received on forms provided by the city with appropriate additional supporting documents and including the payment of fees if necessary. • To increase the initial time limit to 90 days for municipalifies with less than 5,000 population. LE-4. Public Infrastructure Utilities Issue: Current infrastructure funding options available to cities aze inadequate. Existing special assessment law, Chapter 429, does not meet ciries' fmancing needs because of the benefit requirement. The law requires a minimum of 20 percent of such a projectto be specially assessed against affected properties. In practice, however, proof of increased properiy value to this degree of benefit can rarely be proven from regulaz repair or repIacement of existing infrastructure, such as sh - eets or sidewallcs. Alternatives to the Chapter 429 methods for financing infrastructure improvements aze nearly nonexistent. Response: The Legislature should authorize cities to create, as a iocaI option, additional utilifies such as a transportation or sidewalk utility. Such authority woutd acknowledge: the effects of repeated levy limits and the general funding shift from the state to local governments for building and maintain- ing necessary infrastructure; the benefits to all taxpayers of a properIy maintained public infrastructure; and the limitations of existing special assessment authority. LE-5. Development Fee Disputes Issue: State law is clear that fees collected under Minn. Stat. § 462 aze eligible for judicial review in tiie event a dispute over the fee arises. The law is not cleaz what notice requirements to the municipality are necessary relative to the timing for an aggrieved person to seek review. Response: The Legislature should amend Minn. Stat. § 462.361 to establish a 60-day time limitation in which an aggrieved person may bring an action againsf flie mnnicipa7fEy: - __ ___ --- -- LE-6. Housing The Legislature has given cities the Issue: The roles of federal and state authority to operate utilities for watenvorks, govemment in the provision of affordable sanitary sewers, and storm sewers. The housing have emerged as critical issues as storm sewer authoriTy, established in 1983, cities respond to the critical Iack of both set the precedent for a workable process of rental and single-family hotising for those chazging a use fee on a utility bill for a city who aze currently priced out of the mazket. service infrastructure that is of value to all The federal govemment has lazgely removed those in a city. Similar to the storm sewer itself from its previous role in providing authority, a transportation or sidewalk utility direct funding and subsidies for housing , - e- . en use one- ments, and would equitably distribute the time housing appropriafion increases, in- costs of local infrastructure services. cluding directing federal welfare reform and increased federal tax-exempt bond funding to increase canstruction of low-income League of Minnesota Ciries by_ So rental and entry-level owner-occupied housing; enacted substantial apartment property tax relief; increased funding for homeless prevention and services; and threatened to impose restrictions on local land use authority in order to create con- ditions in which cities would make more affordabie housing available. Response: Federal and state levels of government have critical roles to play in assisting local units of govemment to - meet fhe challenge of increasing the production and access to affordable rental and entry-level single family housing. The League recommends the following actions: • Cities, as welI as the govemor and the state Legislature, should use every means at their disposal, including memorializing resolutions, public forums, citizen action committees, and press coverage, to alert members of the Minnesota Congressionai Dele- gation to the critical housing problems facing communities throughout the state. • The state Legislature must raise the level of permanent funding for affordable housing production by increasing the base budget of the Minnesota Housing Finance Agency to equal 20 percent of the agency's current bienniai spending, and undertake the following initiatives: 1. Leverage federal and state housing investments from non-state sources, such as the Economic Development & Chalienge Grant Program; 2. Exempt construction supplies and materials used to construct afford- able new or rehabilitafed housing from the state sales tax; 3. Grant an exemption from the state mortgage and registry deed tas to public agencies and developers who agree to produce affordable housing; 4. Create a state affordable housing tax credit; 5. Continue funding to preserve fed- erally subsidized housing that is threatened by mortgage prepay- ments; 6. Make permanent the policy of not deducting from the MFIP monthly grant either the public housing or Section 8 support payments to individuals or families. • Federal and state government must respond to the urgent need for more coordination and sharing of financial resources among numerous agencies that assist homeless individuais and families to develop continuum of care plans and increase the supply of permanent supportive and assisted housing, including single room occupancy (SRO) units. LE -7. 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 caze and super- vision. In view of cities' responsibilities to accommodate group homes and residential- based facilities, it is unportant state and county government work with local officials to address residential caze and public safety issues. Cities have reasonable concerns for 2002 City Policies 9 special caze necessary for group home resi- dents, particularly in case of public safety emergencies. Since operators of certain residentiai facilities and services aze 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 caze and public safety measures these residences may expect. Response: The Legislature should provide sufficient funding for such residential-based services and require state and county agencies that mattage those facilities or companies licensed to operate group homes to notify ciEies in a timely manner when licensed facitity operators request fo operate such faciliries ar to renew their license and aitow cities fo require such asencies and Iicensed operators fo identify and take appropriate measures to respond to the special care residents need in case of emergencies. Legislation should also require establishment.ofnonconcentration-__-._ _ standards for state or county-issued requests for proposals (RFPs) and direction to avoid clustering residential facilities. Licensing authorities must also be responsible for removing any residents incapable of living in such an environ- ment, particularly if they become a danger to themselves or others. LE-8. Inclusionary Housing and demand for afFordable housing account for a far greater proportion of the problem. Ciries responded to these challenges and have drafted ordinances tfiat would require developers to include affordable units in their development in retum for regulatory relief. Cities have also urged both the Attorney General and the Legislature to clarify local authority to enact such local requirements. Instead, the 2001 Legislature attempted to mandate tfiat cities grant developers specific regulatory relief, incln- ding density bonuses, in return for including affordable units in their projects. In the end, the Legislature agreed to consider recom- mendations on these issues in the 2002 session. Response: The League will monitor and participate in the develop- ment of recommendations by the Office of State Pianning and the Minnesota Housing Finance Agency on how to encourage development of inclusionary housing for a range of incomes and urge them to consider supporting the following: • EsfabHsh a sfate incIusionary po&cy that strengthens cities authority to carry out policies that offer developers a range of incentives in return for inciuding a designated number of affordable units in their projects; • Identify strategies that ensure Iong- term affordability of rental and owner-occupied housing produced as a resulE of such poIicies and practices; • Focus attention on the local assess- Issue: Housing advocates and ment of housing needs and direct state develo ers have ointed to local zoning„�a _ land use regulations as a source of increased affordable rental units and financing housing construc6on costs. Steeply rising to increase access to entry-level land prices, building materials, and labor owner-occupied housing; costs as weil as the imbalance in the supply 10 League of Minnesota Cities oa-� Oppose restrictions on or removal of the local authority to adopt and carry out land use pians, activities, and regulations. LE-9. Community Land Trusts Issue: T'he steeply increasing price of land available for housing development is a growing concern throughout the state. Action is needed to create more permanently affordable owner-occupied housing by max- imizing the cost-effectiveness of taxpayer investments. IvIHFA had one-time authority to assist cities to fund the establislunent of community land trusts for affordable housing. Response: The 2002 Legisiature should authorize a land trust capacity- building program to provide gap fi- nancing, interest-rate write-downs, and predevelopment financing, and to cover fmancial underwriting costs. LE-10. Manicipal Telecommunications Authority Issue: Cities clearly recognize the necessity of broadband connections to fhe Internet and piay a key role in assessing local needs, developing plans, and under- takui; initiatives to brin� advanced tele- communications services to their com- munities. In cariying out their role, cities must have the authority and the tools to put in place the necessary infrastructure, educational resources, appiications, and skill-sets to become connected communities. Response: State government must recognize that cities play a critical role in enabling communities to take advantage of legislative and other government in- itiatives designed to provide affordable access to broadband services by: • Maintaining cities' egpress authority to provide advanced telecommuni- cafions services either as sole pro- viders or in joint ventures with public or private sector entities; • Defming a strategic leadership role for cities by eliminating barriers to muni- cipal entry; • Supporting the efforts of communifies to carry out plans to bring advanced services to local residents and bus- inesses, and encourage collaboration among communities and institutions to expand education, health care, and economic opportunities at the locai and regional level; and • Allowing cities and municipal utilities to join with other entities, such as cooperative associations, investor- owned utilities, or other municipal utilities or power agencies to provide telecommunications service. LE-�1. State Telecommunications Policy Issue: Since 1999, the state Legis- lature and government agencies have un- successfully sought to make wide-ranging changes to state telecommunications policy to encoura�e competition and increase access to broadband services. Opposition to these measures makes it appazent that substantial changes to the direction and extent of reform aze needed. There may be an opporiunity for progress next session in addressing pressing consumer protection and affordability issues. 2002 City Policies 11 Response: The League supports the following measures to address suct� concerns: • Allow incumbent local service pro- viders to raise rates that have been capped if the provider demonstrates that restructuring measures make it necessary to do so; • Adopt new retail consumer protecrion measures that allow consumers representing at least 5 percent of the access lines within the locai service area to complain directly to the MinnesoYa Public Ufilities Commi- ssion (MPUC) about either current or proposed local telecommunications service rates and authorize state agencies to conduct investigations of those compiaints; • Give the MPUC sufficient authority to intervene if it fmds that the local provider market is not protecting consumers; • Require providers to give advance written notice to customers with _ .__ . _ _ ___—billingsthat.prominentl.y_indicate -- -- the notice of changes in terms or conditions or increases in service rates; • Compensate telecommunications service resellers for failure of the local service provider to comply with wholesale quality of service standards; • Consider revenues from state or federal universai service funds when determining whether prices charged for essential locai services exceed the cost of providing such service and state universal service funding for providers in High-cost service areas; • Support efforts to espand toll-free local calling areas outside the metro- politan area, where appropriate, if revenues of the local service provider would be sufficient if such expansion took place; and • Allow a city to become a local ex- change provider upon approval of the city council and allow the city to offer services beyond city limits upon authorization of the Minnesota Public Utilities Commission. LE-12. 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 1'united and valuable asset. As demand increases for use of rights-of-way for underground and overhead wireless facilities, cities must continue to have cleaz authority to allocate and coordinate that - _ _ ___resourcz_amang-competi�g-uses.-�,oca�------ - management responsibilities vary and are site specific, underscoring the necessity for maintaining local authority to recover actual management costs and to exercise local zoning and land use regutarions. Response: State and federal governments must: Uphold local authority to manage and protect public rights-of-way, including reasonable zoning and subdivision reEUlation and the exercise nf inr�i revenues in excess of tbose costs; • Make sure that the impact of technology advances on the cost of providing services is incorporated into 12 pouce powers; Recognize municipalities have a paramount role in development, util- ity location, and implementation of construction and safety standards for League of Minnesota Cifies Da- � o underground and overhead wireless facilities; • 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 to collect franchise fees or altemative revenue streams; • Maintain the courts as the primary forum for resolving disputes over the exercise of such authority; • Uphold the exercise of local land use controls by clarifying that cities have authority to set terms and conditions and regulate where providers of cellular or ofher wireless services locate facilities in the public right-of- way to protect public safety and provide for convenient public use of such sites; and • Maintain city authority to review and approve or deny installation of additional wires or cables on in-place utility poles. In the alternative, cities should have broader authority to require the undergrounding of new and/or existing services at the cost of the utility or telecommunications entity. LE-13. Franchising Authority Issue: Municipal franchising authority allows municipalities to require cable operators to meet their communities' unique needs and interests including ade- quate customer service standazds, valuable public, educational and govemmental pro- gramming, and institutional networks for voice, video, and data needs. Tlus fran- chising process, in its current form, works well. However, as technologies converge and expand, municipalities are facing new challenges, such as how to franchise com- peritive cable overbuilders, local exchange carriers (LECs) providing video services and open video systems. It is uncieaz what certain statutory requirements mean and which statutory provisions apply to the different providers. Respanse: Municipalities must continue to maintain their existing franchise authority over all cable and video services, regardless of the provider. Municipalities need discretion and fles- ibility to work with competitive providers regardless of how they provide the ser- vices, so that the intent of the 1996 Tele- communications Act can be implemented to the maximum extend permitted under Title VI of the federal Communications Act, as amended, and other applicabie law including the ability to require PEG support, institutional networks, customer service standards, and franchise fees or similar compensation. LE-14. Financing Community Yteinvestment Efforts Issue: The 2001 property tax reform package couid have a dramatic impact on how the state of Minnesota's community reinvestment needs are addressed. These impacts bring into question the future via- bility of tas increment financing (TIF) as the primary tool to fund community reinvest- ment efforts. Activities that cities have historically been able to undertake, but wiil likely be less able to achieve in the future given the likely diminished effectiveness of TIF include: long term tas base stabili- zation and growth, job creation, develop- ment of low-to-moderate income and workforce housing, remediation of pollution, elimination of blight, recycling and redevel- 2002 City Policies 13 opment of the infrastructure, and redevelop- ment of its communities. Resporrse: To ensure Minnesota is able to continue to effectively compete with other states, the Legislature has a responsibility to partner with cities, state agencies, and other community reinvest- ment organizations Yo develop a statewide community reinvestment strategy and identify and implement additional tools to fund community reinvestment efforts. The state should partner with cities in community reinvestment activities. StaEe acknowledgement of the need for com- munity reinvestment and economic development is essentiat to the state's prosperity and legislation is needed to generate resources sufficient to address these critical needs at the local level. LE-15. Tax Increment Financing (T�') Issue: Untii the state identifies and implements additional development tools, TIF likely remains the most viable tool _ - -- avat a6Ie to fun3 community reinvestment efforts despite the significant impacts of the 2001 property tax reform package. Cities and development authorities will be required to devote considerable efforts in order to understand and address the impacts of the 2001 property taY reform package on exist- ing TIF districts and poteniial future projects. Respnnse: So as to nof fnrther complicate this process, the Legislature should not enact future TIF law restric- In order to allow TIF to maintain the effectiveness that remains in the wake of the 2001 property tax reform package, the Legislature should consider: 14 Authorizing any tazc increment districts approved after April 1, 1990, to pool increments in the same manner as districts certified prior to Aprii i, 1990 for affordable housing and pollution remediation; • Expanding the use of tax increment finaacing to assist in the development oftechnolod calinfrastructure, transit-oriented development, the restoration of designated historic structures, for nonretail commercial projects, and in nonwetland areas where unstable/nonbuildable soils e�st; • Exempting redevelopment districts from the five-year rule; and • Modifying the housing district income qualification level requirements to allow the levels to vary according to those specific to individual communities. LE-16. TIF Grant Program, Special Deficit, and Pooling Authority Issue: The 2001 Legislature -- -- committed sianificant resource "s ori an -- - - ongoing basis to the "ITF Grant Program in order to address the impacts of property tax reform on e�sting TIF districts. Since the 1997 Legislature began compressing prop- erty ta�c class rates, the TIF Crrant Program has existed to address the resulting impacts on TIF districts. In terms of application to the TIF Grant Program to address impacts from the 1997 through 1999 tax reform efforts, the TIF Grant Program is scheduled to expire in 2002. Some cities that were impacted by the 1997 through 1999 taY Grant Program yet, but will need to access the fund over the nea�t few yeazs. Prior to accessing the TIF Grant Program, cities often explore, and may be legally required to implement, internal solutions to address League of Minnesota Cifies oa-sa the impacts of properry tax reform on their e�sting TIF districts. This can result in TIF Grant Program applications being compara- tively lower in the initial years than the application level in future yeazs. It is possible that the application demand could exceed the available resources in the future. In addition to the TTF Grant Program, the 2001 Legislature implemented new and expanded special deficit and pooling authority and requirements. Response: The Legislature should extend TIF Grant Program eligibility for impacts from the 1997 through 1999 tax reform efforts until those impacts are addressed. If the resources available in the TIF Grant Program become insuffi- cient to meet the application demand, the Legislature should increase the program's funding level. Applications to the Grant Program in the first few years should not be viewed as indicative of future demands on the fund as these may likely increase with time. In order to address any prac- tical difficulties or unintended conse- quences that are discovered, the Legis- lature should act swiftly to make neces- sary modifications to the TIF Grant Program, special deficit, and pooling Authority provisions. LE-17. Business Subsidies Issue: Business subsidy grantors aze still getting accustomed to the relatively new Business Subsidies Act. The 1999 Business Subsidies Act was clarified and modified during the 20001egislative session. In order for development agencies to effectively unplement the amended law, the law should be allowed to operate without further sub- stantive legislative change. Response: Without thorough study, the Legislature should not make any substantive changes to the 1999 Business Subsidies Act during the 2002 legislative session. LE-18. Minnesota Investment �und Issue: The Minnesota Investment Fund is not adequately funded. In light of recent legislative action, local governments increasingly do not have an adequate slate of tools to assist job creation and training, redevelop blighted and decaying properties, and provide adequate housing choices. Consequently, cities aze not well equipped to compete nationally and internationally for business development. Response: More state resources should continue to be contributed to the Minnesota Investment Fund. LE-19. Redevelopment Programs Issue: Communities across Min- nesota are faced with unique circumstances of deteriorating, obsolete, and vacant struc- tures in neighborhoods and downtowns and a lack of land for development. Redevelop- ment activities usually require lazge, up- front funds to address multi-phase projects of extensive duration where site assemblage, demolition, relocation, or pollution cleanup must occur before private-sector interest can be generated. Additionally, deterioration threatens historic structures in cities across the state. While fihe redevelopment account administered by the Department of Trade and Economic Development is a critical component in establishing a coherent state- wide policy for redevelopment, cities do not have sufficient tools to utilize in local historic preservation efforts. 2002 City Policies 15 Response: In recognition of the unique needs of redevelopment projects, the state should continue its commitment to reinvest in its communities by increase- ing and committing to permanent base budget funding for the redevelopment account administered by the Department of Trade and Economic Developmenk Additionally as part of a com rehen i tionally, the Legislature should deveIop a state fund to facilitate state partici- pation in abatement projects. Finaily, the funding caps should be increased or elxminated. L�-21. Brownfields � p s ve Issue: Brownfields aze lands approach to redevelopment needs, the �S��ble for development due to the Legislature should consider the state presence of chemical or other contaminants. income tax credit legisiation pursued by Brownfields aze a major cause of blight the Preservation Alliance of Minnesota, �� communities across the state through TIF subdistricts, and other tax incentives loss of local tax base, jobs, housing qualiry, for local historic preservation effotts. The public safety, and community confidence. Legislature should also enact authority Revitalizing this land is costly and requires similar to the This Old House law that � cooperafion of city, county, school, would provide a tax deferral on improve- regional, state, and federal govemments and ments to commercial buildings located in � assistance of local economic develop- designated rehabilitation or historic ment organizations and citizens. preservation districts. As we move into an era where the mass creation of jobs is a necessity and LE-20. Property Tax Abatement where increased tax base is a requirement Authority for local govemments to adequately face " growing financial pressures, efforts to Issue: In an effort to increase the revitalize brownfields must not only con- number of development tools available, the tinue but be accelerated in the upcoming -------------- ----- �-- - egisTafure autfiorized local units of Y�s. Currently, $7 million exists in the government to o ant properiy tax abate- Deparhnent of Trade and Economic ments. Although TIF continues to be the Development's (DTED) base for the primary financing mechanism for local contaminated site clean-up fund. Addi- development projects, tax abatements tionally, $6.2 million is appropriated provide a good addition to a needed list of ��11y from the Petrofund to DTED to economic development tools. In order to clean up sites that contain at least some provide maximum benefits, tax abatements petroleum-related contamination. should be less reshictive in terms of fitnding _ caps and fmancing terms. Property ta�c Response: A comprehensive set of abatements shouid not be considered a economic development programs must be replacement for tax increment financing. maintained for cities and other develop- ment agencies. The Legislature should: _.., .. .. , _ viabie development tool available for • Increase funding for the Department cities. Abatement authority should of T'rade and Economic Develop- continue to be available, but not offered ment's contaminated site clean-up as a rationale to eliminate TIF. Addi- fund and redevelopment account; 16 League of Minnesota Cities fla- so • Strengthen enforcement and collection of revenues for the state contamin- ation taz; • Continue support for and funding of local and regional programs to assist in the efforts to remediate brown- fields; • Establish a fully-funded program to allow cities and other development authorities to gain control of and reclaim and revitalize brownfields; • Protect existing tax increment financing provisions that provide for the remediation of brownfields, and modify restrictions to allow the pool- ing of district revenues to assist in the financing of remediation of brown- fields; • Establish an indemnificafion fund to provide financial security for institutions and individuals as they invest in efforts to recycle brownfields in order to leverage private invest- ment in cities' efforts to increase their tax base and create jobs; and • Continue financing mechanisms for cleaning contaminated sites. LE-22. OSA Response Timelines Issue: The Office of the State Auditor (OSA) is responsible for TIF oversight. As part of their review of T'IF districts, they identify alleged violations of the TIF laws and issue noncompliance notices to TIF authorities. After responding to these noncompliance notices within the required 60-day period, authorities o8en 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. Response: In the event that the OSA determines to issue a final non- compliance notice to a TIF authority, the Lea slature should require the OSA to issue the notice within 60 days of re- ceiving 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 £nal noncompliance notice is received. LE-23. OSA 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 alleged violations that occurred 20 or more years ago. Often, staffand record-keeping procedures have changed and TIF authorities find it ex- ceedingly difficult to reconstruct the past in order to identify and remedy these situa- tions. Similarly, the OSA claims the authority, based on the state's records retention schedule, to audit TIF districts for up to 10 years a$er 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 within which alleged violations are identi- fied shouid be established. The Legisla- ture should reasonably restrict the OSA's ability to issue noncompliance notices to 2002 City Policies 1� the six-year period prior to the notice's issuance date. The Legislature should also require Ehe OSA to conduct any audits on decertified districts within one year of decertification. LE-24. Economic Development Authorities Issue: The 2000 Legislature author- ized counties outside the metropolitan azea to establish county economic development authorities (EDAs). The new law lacks specificity on certaiu process and limitations issues. County EDA activity in azeas sur- rounding cities will directly unpact the adjacent city in terms of seroice provision and taxes. Response: The Legislature should continue to fully fund the job skilts parf- nership and pathways prob ams admin- istered by the Department of Trade and Economic Development. The Legislature shouId provide additionai funding to local workforce councils for the purpose of upgrading the skills and productivity of the workforce. LE-26. Adequate Funding for Transportation Issue: Current funding for roads and iransit systems across all government levels in the state is not adequate. The League acknowiedges that all Minnesota communities benefit from a sound and adeauately funded transportation system. Response: The Legisiature should establish reasonable limits on county Resporue: More resources must EDA activities in unincorporated areas, be dedicated to the state's transportaHon including requiring city approval for system. The League supports constitu- proposed county EDA activities within tionally dedicating a portion of the sales two miles of a city. The Legislature should tag on motor vehicles (also referred to as revisit the county EDA Tegislation and MVET� or other new revenue sources to add specifici to oth er process and a transportation fund, which would fund _ ....._._------- --- ------ ------------------ . _ mi ahons issues suc as t e local both highway and transiY projects. The recommendation committee. League also supports an increase in the gas taa that would be dedicated under the LE-25 WoTkforce Readlness ezisting highway user trust fund formnla. Replacement funding for vehicle registra- Issue: State and federal welfaze tion tases (known as tab fees) must be reform efforts have focused on the impor- constitutionally dedicated to the highway tance of the welfare-to-work transition, and user trust fund. have recognized the challenge of ensuring - individuals are qualified to work. Cities If adequate funding does not come have an interest in the availability of qual- from the state, cities should have funding ified workers as part of their economic options made available to them to raise development efforts, and can serve as a the necessary dollars to adequately fund ' er i en ies an e ' . . . .. _ _ .,.. - private sector to address workforce readiness issues. All nontransportation programs should be funded from sources other than 18 League of Minnesota Cities oa-s� the highway user disiribution fund or other funds dedicated to transportation. LE-27. State Aid for Urban Road Systems Issue: Current rules governing municipal state aid expenditures aze re- stricting 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 acla�owledge the technical and practical restrictions on construction and reconstruction of urban road systems. New municipal state aid design standards should not apply to reconstruction of existing state aid streets originally con- structed under different standards. Future changes to state aid rules shouid ensure the involvement of elected officials and engineering professionals in the decision-making process. LE-28. 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 nego- tiafion and mediation should govem the timing, funding, and condition of turned- back roads. City tazpayers should receive the same treatment as township tax- payers. The requirement for a public hearing, standards about the conditions of turnbacks, and temporary mainten- ance funding should also apply to county tumbacks to cifies. 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 pro- vided for smailer ciYies that are not pro- vided with turnback financing through the municipal state aid system. LE-29. Road Funding for Cities Under 5,000 Issue: Cities under 5,000 population do not receive any nonproperty tax funds for their collector and arterial streets. Response: Cities under 5,000 pop- ulation that are not eligible for Municipal State Aid (1VISA) should be able to use county municipal accounts and the 5 per- cent account of fhe highway user distrib- ution fund. Uses of county municipal accounts should be statutorily modified so counties can dedicate these funds for local arterials and collector streets within cities under 5,000 population. In addition, the 5 per- cent set-aside account in the highway user distriburion fund should be used to meet this funding gap. LE-30. Railroad-Related Projects Issue: Cities are being presented with far-reaching and long-term effects when railroad expansion and related projects enter their communities. Along with the concerns related to safety, environxnental effects, and noise impacts on the communi- ties, several issues have greater reaching effects. They aze: 2002 City Policies 19 • The cost-shaze ratio related to roadway crossing improvements will be borne by tfie public sector to a substantial degree, some estimates are 80 percent public to 20 percent private funding; • The fmancial burden faced by the public sector to deai with mifigation 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 whistle- 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 to underwrite tke costs of improvements sought by the private sector. The state and federal govemment must participate in adequately funding the mitigation of the negative impact of railroads on local government and its citizens. The federal government must exercise greater over- sight of the STB to ensure fair and equitable solutions are reached when dealing with cities in Minnesota. IMPROVING SERVICE DELIVERY SD-1. Redesigning and Reinventing Government Issue: Every level of govemment is - ---------reevaIuaiing,-repriori�izing redesigmng, renewing its organizational structure and programs in response to financial reatities 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, reorgani�ation and reassign- ments of governmental entities and services should save money where feasible, deIiver improved services, serve essential needs, and be equitably structured. Cities have and wIll continue to pursue the use of coopera- tive a�reements, the reevaluation of citv • Ensure that in redesigning, reinvent- ing, or reassigning govemmenY ser- vices and programs that the appro- -- ----pr5ate-level-a�service-to-ctttzens-is------ -- evaluated, and citizen demands and eapectations are adequately addressed; • Promote local efforts through incentives, rather than mandates; • Communicate and establish a process of negotiation before shifting responsi- bility for delivering services from one level of government to another, or seeldng to reduce service duplication; • Transfer authority for use of revenues dedicated to such programs, or pro- organizational structures. Response: The federal, state, and county govemments should: 20 alternatives; • Identify and repeal programs or discontinue services that are no longer necessary, or which can readily and Leawe of Minnesota Cities O1-So fairly be provided by the private sector; and Employ e�sting govemment entities in redesign efforts rathet than create new agencies or units. SD-2. Unfunded Mandates ticulazly those related to traffic, controiled substances, and incazceration of prisoners. The current method in our criminal justice system of recovering costs for law enforce- ment and prosecution through fines is insufficient to meet the costs incurred by local govemments. Issue: The cost of federal and state mandated programs substitute the judgment of Congress, the President, the Legislature, and the govemor for local budget priorities. These mandates force cities to reduce fund- ing for other basic services or to increase taxes and service chazges. The passage by the Legislature of reporting requirements for new state mandates, and the passage by Congress of legislation restraining new federal mandates,should help addressthe problem, but other steps are necessary. Response: • Existing unfunded mandates shouid be reviewed and modified or repealed where possible. • No additionai statewide mandates should be enacted, unless full funding for the mandate is provided by the level of government imposing it or a permanent stable revenue source is established. • Cities should not be forced to comply with unfunded mandates. • Cities should be given the greatest flexibility possible in implementing mandates to ensure their cost is minimized. SD-3. City Costs for Enforcing State and Local Laws Issue: Cities experience substantial costs enforcing state and local laws, paz- Response: The Legislature 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 that conflict with cost recovery principles; and Requiring the defendant to pay the full costs of enforcement and pros- ecution as part of any sentence. SD-4. Design-build Issue: The standard bid procedure cities are required to use in selecting con- tractors for municipal buildings can be quite costly. Private sector development uses a process known as"design-build" in which various 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 altemative to the Metropolitan Sports Facilities Commission and state agencies, including the Department of Revenue, the Legislature has recognized the fmancial 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. 2002 City Policies 21 The design-build process also per- mits improved project management and oversight. However, absent statutory authorization to use this alternadve, cities aze vulnerable to lawsuits from unsuccessful bidders. In addition, the design-build process for playground equipment can encourage greater creativity while main- taining cost controls. Special legislation was enacted for the city of Chanhassen in 1995 to experiment using this process for pur- chasing playground equipment. Response: The Legislature should authorize an eatension of the design-build procedure to cities as a less expensive altemative to the standard bid procedure. SD-5. Providing Information to Citizens Issue: To keep the public updated and informed, state law requires local units of govemment to publish various notifica- tion documents in newspapers, and often dictates which newspapers receive cities' publication business. The number and variety of documents required to be pub- lished and the costs of publicafion aze burdensome. Technological advancements have expanded the ways govemment can provide information to citizens. In many cases, these new technologies are more efficient and cost effective. and fhe Internet, and expand the use of summaries where information is technical or lengtfiy. Additionally, the Legislature should eliminate outdated or unnecessary publication requirements. SD-6. Construction Codes Issue: Each yeaz the Legislature addresses construction codes issues that have some impact on local governments. In addition, the Constzuction Codes Advisory Council and Builders' Association of Minnesota have indicated they may be recommending legislation to require state- wide enforcement of the 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 local option for cities outside the metropolitan azea. Many Greater Minnesota cities have adopted the state building code and all cities within the seven-counry metropolitan area aze required to adhere to the state building code. Response: A building code pro- vides many benefits including uniformity of construction standards in the building industry, consistency in code interpre- tation and enforcement, and life-safety guidance. Response: Cifies should be A statewide-enforced building authorized to take advantage of new code may have benefits, but requiring it technologies to increase the dissemination would result in an unfunded mandate. of information to citizens and potentially The enforcement of a building code can lower the associated costs. Specifically, be cost prohibitive for many cities due to e es an over ea re a e o —"' units of govemment to designate an staffing vs. the limited building activity appropriate daily/weekly publicafion, occurring in some communities. elect alternative means of communication such as city newsletEers, cable television, 22 League of Minnesota Cities b� —$'o 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 stafe build- ing code should remain a local option for municipalities outside the seven-county metropolitan area, unless the state fully funds the costs of enforcement and in- spection services necessary to enforce a statewide building code. In the event the Legislature re- quires 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 state fully funds code enforcement activities. To the extent the insurance industry is concerned about insuring structures not built to code, the industry should drive code compliance by issuing policies or setting rafes based on whether the structure meets various code requirements. SD-7. National Fire Protection Association (NFPA) Standards Issue: The National Fire Protection Association (NFPA) is an international association of individuals and trade and professional organizations that deals with fire and life safety. The NFPA has adopted two new standazds: NFPA 1710, Organ- ization and Deployment ofFire Suppression Operations, Emergency Medical Opera- tions, and Special Operations to the Public by Career Fire Departments, and NFPA 1720, Organization and Deployment of Fire Suppression, Emergency Medical Opera- tions, and Special Operations to the Public by Trolunteer Fire Departments. NFPA standazds 1710 and 1720 define m;n;r„um response times, minnnum fue company staffmg levels, initial full alarm response levels, and ea alazm response levels. Although NFPA codes and standazds aze voluntary, they aze usually adopted by local jurisdictions. NFPA standards 1710 and 1720 preempt local authority and place a one-size-fits-all mandate on all cities and towns. Response: Levels of service de- Iivery for fire and emergency medical services (EMS) have always been deter- mined by local jurisdictions. The NFPA has clearly gone outside its authority in proposing these national minimum manning, response, and staffing stan- dards. If adopted and issued, these pro- posed NFPA standards would force local governments to shift dollars from fire prevention programs to fire suppression activities, potentially increasing the risk cf fire and the danger to local firefighters. The League of Minnesota Cities opposes any attempt by the NFPA to impose stan- dards for staffing or minimum manning levels of fire, specialized, or emergency medical services vehicies controlled by units of local government. The League also opposes any attempt by the NFPA to adopt a standard dictating or affecting the response time of any fire, specialized, or emergency medical services vehicle. SD-8. Fees for Service Issue: The Legislature and interest groups often seek to mandate specific fee limitations for various city services. Exatn- ples of such mandates include building permit fee legislation and coin operated amusement machine license fee legislation, both designed to rigorously control local fee setting authority. Additionally, starting in 2002 City Policies 23 2003, all city development fees and related expendihues wiil be reported to the state. Other groups, like the Citizens Jury and the media, aze discussing the value of fees for providing services. The Citizens Jury gave limited acknowledgment of the value fees may have in providing core ciry services. The media often urges the public and policy makers to monitor city use of fees. Response: While the state has a roIe in providing a general statewide funding policy, the state should not interfere in the decision-making functions performed by cities when setting city budgets fo provide city services. General services such as permitting, inspections, or enforcement are besf funded out of a city's general fund. The League supports fhe Legis- lature endorsing city authority to charge fees that are reasonably relaYed to the cost of providing the service, permit, or license and aclrnowledging there are other asso- ____ciated_costs inher-enL-in-the-prfrvisioa-of-- those services, permits, or licenses. However, cities oppose any move to legislate specific methods to pay for city services or place caps on city fees. SD-9. Library Funding Response: The Leagae supports a state matching grant program to provide doIlars to assist communities to work in partnership to build and improve libraries. SD-10. Civil Liability of Local Governments Issue: One of the barriers to the delivery of governmental services and programs is the exposure of local govern- ments and their officials to civil damage claims. The state has acted to protect itself and its Iocal govemments by enacting ex- ceptions and limitations to liability suits, and authorizing self-insurance and other mech- anisms to deal with claims allowed by law. Response: The League supports: • Creating an exception to municipal tort indemnification law, Minn. Stat. § 466.07, where an employee is de- fended and indemnified for claims under a contract of insurance carried __1�y_the.emplay_ee.----------------------__. __. • Extending the protection of the state and municipal tort claims act to quasi- governmentai entities when perform- ing public services such as fire- �ighhng; • Existing constitutional safeguards for protecting public and private property interests without any statutory Issue: Many community libraries in egpansion of property rights; and Minnesota aze city owned. Although located • Clarifying and maintaining the in an individual community, city libraries applicability of municipal immunity serve a much wider azea. Local iibraties in various areas including, but not � 4T1C P{�lI{L7 V V! Cd{'(p'IF[[]. � �•'-•'� . . ,_ . _ �.. , _ . access to both written and electronic media immunity, including the extension to to enhance the educational capacity of both entities providing a public service that adults and children. have not traditionally been included within the immunity (e.g. state trails 24 League of Minnesota Cities oa-so over municipal utility easements) and vicarious official immunity. SD-11. Private Property Rights and Takings Issue: The Legislature has been introducing an increasing number of bills designed to dinunish or contro21oca1 gov- ernments' ability to exercise traditional planning and zoning authority and eminent domain powers. Legislation 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 addition, bills have been introduced to codify the properiy rights section of Minnesota's Constitution. provisions, municipal condemnation will become more costly and talce longer to conciude. Response: The League encourages the state and federal govemments to improve their regulatory programs by eliminating property rights issues that were caused 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, safefy, and welfare of its citizens, that increases the cost of doing business for the public good, or that creates the possibility of additional lawsuits against cities. SD-12. Election Issues The federal swamp buster/sod buster programs, the Army Corps of Engineers' dredge and fill programs, and the state's Wetlands Conservation Act and Community Based Plamung Act, appeaz to be the nexus for much of the property rights and takings legislation. The League supports local govern- ments' ability to baIance the rights of private landowners with the interest of the public. However, the League is concerned various legislative initiatives will adversely impact cities in three ways. First, such legislative initiatives undermine the fundamental authority of cities to protect the public health, safety, and welfaze of its citizens. Second, if the Legislature acts fo codify part of the Minnesota Constitution, an argument may be made that the Legislature 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" Issue: At a time when state policymakers are considering election re- forms, it is important to address the role of cities in administering state election law and conducting absentee balloting and voting activities. Response: Tn view of the import- ance of improving the efficiency and responsiveness of local election adminis- tration, the League recommends the Legislature: • Support enhancements to the state Voter and Election Management System (VEMS) to give cities direct access to VEMS; • Allow cities to appoint at least one election judge per precinct from at least two major political parties, while waiving the potitical party preference requirement for 50 percent of the election judges at each precinct; and 2002 City Policies Zg • Authorize cities to enact an ordinance no more than 90 days prior to the opening of filings to require write-in candidates for city elective of�ices to file a written request with the 51ing offcer no later than the day before the elecrion in the same manner as candi- dates for state and federal offices are now required; Minn. Stat. 204B.09, Subd. 3, in order for votes cast to be tabulated and reported in the official canvass. SD-13. Local Election Authority Issue: Previous Legislatures reshicted city authority to schedule city elecrions and establish terms of office for local elected officials, thereby diminishing regazd far the role of local self-government, particulazly when state policy preempts home rule authority governing city elections. Statutory cities currenfly lack authority to create wards. Response: The Legislature should oppose further Iimits on either the num- 6er or the lenb h of terms city elected officials may serve, particularly when those terms have been established by voters in home rule charter cifies. State policy on uniform elections should continue to recognize and uphold local authority to schedule city elections in • Regulatory bodies fail to consistently use good science and the most current and accurate data when establishing water quality standazds. November of either even- or odd- • Regulatory bodies impose new permit numbered years. The Legis(ature should requirements without going through support provisions to give statutory cities rulemaking. Instead, the agencies rely on general authority to create wards. internal documents, program s�ategies, and "best professional judgment of stafY' SD-14. Environmental Protection when setting perm criteria. " • Regulafory bodies approve perniits and Issue: Cities demonslrate strong programs that compete with traditional stewazdship for the protection and preser- municipal services and encourage urban vation of the environment. Minnesota sprawl. T'his behavior puts at risk the municipalities have historically been the public invesiments and growth leading funding source for environmental protection and improvements. Municipal efforts include environmental protection through wastewater �eatment, wetland restorations, stormwater treatment, public utility emission reductions, brownfield cleanup, safe drinking water programs as well as others. However, at some point the dimin- ishing or nonexistent environmental benefit received from addition efforts is fiscally iaesponsible. Often, the programs aze improperly designed to meet their stated goals. Additionally, the absence of funding by the state and federal govemments has removed an essential restraining feature in program design and ixnplementation. Agencies are less accountable to the governments that mandate environmental programs when they do not have to find the money to implement the prograxns. Specific problems faced by cities include: • New programs or staudards aze ------__ - - " "corifuiva y adopte�wittiout regard to the existence, attainability, or cost of exisking programs and standards. 26 League of Minnesota Cities o�-sa management efforts cities have made when planning for future development. • Pernut fees and other cost transfer elements of federal and state progranvs do not provide an incentive for environ- mental agency efficiency, policy priori- tization, or risk assessment. • Third party environmental advocacy groups create significant hardships on cities by threatening litigation even when hazd science may not support the groups' positions. Response: within a reasonable set time period and require the MPCA to reissue the permit within a reasonable set time frame. • Legislation should be passed that requires state agencies to establish permit requirements only when the criteria they are using is developed through the rule making process. • The LMC should join with other like- minded organizations to contest through judicial means various reg- ulatory achvities of state agencies and advocacy groups. • Alternative wastewater trea#ment and cooperative service systems should be prohibited from operating in areas fhat can reasonably and ef£ectively be served by existing municipal systems unless: --The municipal system is proven fo be subsfanriaily Iess 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 financial assistance should be provided to assist local governments when complying with state and federal infrastructure requirements, particularly with re- gard to wastewater, stormwater, and drinking water facilities. • The MPCA should streamline its permitting and reissuing processes to allow for effluent standards and permit requirements to be known earlier, thereby giving communities more time to defend against contested case hearings. • The Legislature should require the MPCA to make its determination regarding the re-issuance of a permit SD-15. Sale of Lawn Fertilizers Containing Phosphorus Issue: Cities aze required by several levels of government to improve and en- hance the quality of surface waters. Surface water runs through watersheds that razely aze wholly within a city's boundaries. And to be effective, measures for water quality improvements need to be regional or statewide. Phosphorus is a nutrient that can have a tremendous negative effect on surface and ground water quality. One pound of phosphorus produces 300 to 500 pounds of algae. The cost to remove one pound of phosphorus ranges between $200 and $500. Phosphorus is commonly added in lawn fertilizers sold tiuoughout the state even though it naturally occurs in sufficient quantities in Mimiesota soils to provide for healthy plant growth. Excess phosphorus from lawn fertilizers is not needed and it is carried by rain and lawn sprinkling into our storm water systems, lakes, wetlands, and streams. 2002 City Policies 27 City residents shoulder millions of dollazs in eacpenses to complete and imple- ment their surface water management plans and to provide municipai wastewater treat- ment systems. Reducing the amount of phosphorus entering these systems and water bodies would result in significant savings in capital and operating costs. The most cost-effective way to reduce phosphorus in our lakes, weflands, and streams is to prevent it from entering these systems. Additionally, cities believe the state is the appropriate levei of govemment for effective and economical administration and enforcement responsibility. Response: The Leb slature should adopt legislafion that: • Restricts the sale of lawn fertilizers containing phosphorus, and requires "zero" phosphorus content; SD-16. Creating a Minnesota GIS Program Issue: Local governments aze finding geographic informafion systems (GIS) an essentiai tool for comprehensive land use, real estate, environmental, and other land management information. In many counties, maintenance of officialland records has not been automated, creating a barrier to GIS development. In addition, the start-up costs of GIS implementation can be prohibitive. Response: The Legislature should encourage local government impleme- ntation of GIS through grants and/or the dedication of a revenue source such as real estate transaction fees. In addition, cities should be involved in the develop- ment of county land records modern- ization plans. SD-17. State Appropriation for Government Training Service -_._..__.___ . --- - -- ssuee Tu I97T, Government " -" "�"" nc d es escepfions for establishment of new turf and for properEies demon- Training Service (GTS) was created in order strating a deficiency of phosphorus in to provide a coordinated response to the their soils; training needs of state and local govern- • Exempts the naturally-occurring ments. GTS was chazged with coordinating presence of phosphorus in organic �e needs of the state, cities, counties, town- fertilizers; ships, and school districts, with the delivery • Is statewide in sco e reco capability of the state's institutions of higher p, gnizing that learning and other continuing education watersheds do not observe political service providers. boundaries; and State financiat support of GTS is • Provides appropriations for the state important. Many cities and other local to fund and enforce this law. governments find it difficult to adequately vides a cost-effective mechanism for taking advantage of the efficiencies of cooperation. 28 League of Minnesota Cities oa-so Response: The League supports the state general fund appropriation for the Government Training Service. SD-18. Public Safety Spectrum Needs Issue: Cities have benefited from successful efforts at the federal level to gain access to exclusive radio and wireless com- munications capacity for state and local pubiic safety spectrum. For fizture interop- erability, cities will need additional spec- trum 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. Specmxm in the 800 MHz range requires many more sites to cover the same geographic range and uses more expensive radio equipment. Although many local public safety agencies are moving to new 800 MHz systems, others will need to re- main 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 govemment must make sufficient spectrum available to allow public safety agencies that re- quire mulri-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, whiie allowing ciries to form coordinated dispatch and services. Regional funding of such systems shouId be consfdered taking into account the useful life of current systems. SD-19. Legalization of Ffreworks �ssue: Fireworks products can cause serious injuries and fire loss. Fireworks have been illegal in Minnesota since 1941, and legalizing them would undermine fue pre- vention efforts. Legalizing fireworks would increase public safety enforcement, emer- gency response,and fire-suppression costs. Response: The League opposes the legalization of fireworks. SD 911 Funding Issue: Many cities struggle to afford routine maintenance and improvements to the hazdwaze and sofiwaze of their 911 services. In addition, cities strive to allocate adequate training dollazs for the personnel who operate the 911 centers. New tech- nologies continue to emerge and the Federal Communications Comxnission has mandated new compliance with automated location identification for cell phones. These factors continue to increase operating expenses and the current telephone surcharge formula is not keeping pace with the escalating ex- penses. Cities are forced to choose between bearin� all costs or making only incremental improvements to their systems. During the 2001 legislative session, the Legislature capped the 911 telephone surchazge at the cunent 27-cent level, rejectin� proposals to increase the surchazge 2002 City Policies 29 and provide additional funding to the 911 centers located throughout the states. The 27-cent level is inadequate to meet the demands of the current systems, and does not address future funding requirements. In addition, the Legislature removed the authority of the Commissioner of Admin- istration to set the surcharge amount. The Commissioner requires such authority to deal with escalating technological advances and to ensure a dependable statewide 911 system. Respnnse: The League supports an increase in the current 911 surcharge. The increase is needed for upgrades and modifications of 911 systems located throughout Minnesota to allow for effective, reliable emergency commun- icarions services. The public safety,, answering points, and the entire 911 system must be maintained and remain in excellent working condition in order for the systems to save lives, assist in reduc- ing crime and reduce properiy damage. The Legislature should also restore the Commissioner of Administration's auth- ority-to establish the sarcharge amount SD-21. Raciai Profiling Issue: The League of Minnesota Cities reco� ;�es that where racial profiling e�sts it must be eliminated. The League supports action by the state of Minnesota to fund and implement effective and mean- ingful responses to racial profiling that will effectuate fair treatment of all people. must have confidence that each member of the community is being treated fairly and respectfuliy and that the race or ethnicity of the driver is not used as a factor in deciding to stop a motor vehicle. The League sup- ports training programs to support these goals and recommends that the state of Minnesota develop, fund, and present such training programs to all law enforcement agencies in the state. The League opposes the mandatory collection of traffic stop data as being counterproductive and ineffective in ad- equately responding to those members of our communities who do not feel a part of the community by virtue of their concems about racial profiling. In an effort to ascer- tain the scope and degree of the problem, the Lea�ue would support objective, well form- ulated statisticai sampiing by third parties under the auspices of a state funded study that would develop documentation of traffic stops and an analysis of those stops, coupled with an effective means of enforcing sanc- tions against documented 'uvstances of in- appropriate treatment of citizens. Addition- aYty; the �eague supports s3ate fiuidmg for video cameras in police cazs. SD-22. 0.08 DWI Issue: The state of Minnesota is considering a statutory amendment to reduce the blood alcohol level from 0.10 to 0.08. Analyses anticipating the fiscal impact of the 0.08 threshold on cities have been inconclusive. Under current driving Response: The League supports a while impaired (DWI) law, the arresting meaqing�ui an — concems of our residents that police traffic suspected DWI offenders. A reduced stops reflect an objective demonstration of threshold may result in more DWI arrests probable cause to believe that a law has been by city law enforcement o�cers and, thus, violated. All members of the community increased prosecution costs for cities. 30 League of Minnesota Cities OS— � Response: The League of Min- nesota Cifies is committed to building quality communities and to increased public safety. By adopting and imple- menting the 0.08 percent BAC level threshold, the sfafe wili secure exisfing federal highway funds that will assist in the maintenance and upgrade of a safe transportation system. Prior to adopting this initiative, the Legislature should carefully study the costs associated wifh a reduced DWI threshold. The state of Minnesota should provide the necessary funding to compen- sate local units of government for related cost increases. SD-23. CriMNet Issue: Public safety is compromised by the lack of centralized, complete and accurate criminal history data about indiv- iduals, incidents and cases. And, without an integrated cruninal justice information sys- tem, Minnesota cannot always hold serious criminais accountable for their crimes. CriMNet, Minnesota's effort to integrate the 1,100 criminal justice information systems operated by agencies at all leveis, will irnprove access io relevant criminal history data for public safety and criminal justice authorities. Over 500 cities operate police departments. These departments vary dramatically in fiscal capacity, staffing resources and technical expertise. Further, each municipal law enforcement agency has unique operating procedures, strengths and needs based on the community it serves. The League of Minnesota Cities knows CriMNet will have a significant impact on municipal police business practices, and could mean increased staffing needs, training and equip- ment purchases. The League also recognizes that every agency must participate fully in GriMNet to make the system effective. Response: The League of Minne- sota Cities supporfs efforfs by fhe stafe of Minnesota to integrate criminal justice information systems. The League also supports cooperation between legislators, Iaw enforcement and corrections agents, court offcials, pmsecutors, community groups and businesses that 6uild public support for CriNPi iet. If CriMNet is to be implemented statewide, the Legislature must consider the different capacities of municipal law enforcement agencies to participate. The League requests that the Legislature fund CriMNet planning and implementation at 4he local level. SID-24. Red Light Cameras Issue: Drivers who run red lights can cause serious traffc accidents and con- tribute to gridlock. In spite of the severity of this problem, cities cannot afford continuous monitoring of intersections by peace offi- cers. The technology exists to enforce traffic signal laws with photographic evidence. When installed at tr�c signals, motion imaging recording systems (M[RS) have been shown to reduce red light numing. Resportse: Local law enforcement agencies should have the authority to use the MIRS technology to allow a vehicle, not its occupants, to be identified when the vehicle has violated a traffic signal law. Local law enforcement officers should have the authority to issue ciYa- tions for violations of traffic signals by mail, where the violation is detected with photographic evidence. 2002 City Policies 31 SD-25, Misdemeanor Fines Issue: There is an inconsistency in the amount that a city can charge for misdemeanor violations under Minn. Stat. §§ 412.231 and 609.02, subd 3. Minn. Stat. § 609.02, subd. 3, establishes maximum fines at $1,000. Minn. Stat. § 412.231 establishes maximum fines at $700. Al- though the Legislature has established that the provision in Minn. Stat. § 602 super- cedes the fine in § 412, the inconsistency has resulted in confusion in applying the laws. Response: The Legislature shou(d amend Minn. Stat. § 412 to mirror the amount of the fine estabiished in Minn. Stat. § 602. SD-26. State Regulation of Massage Therapists Issue: The state does not currenUy regulate massage therapy, an emerging and rapidly growing profession. In order to con- trol prostitntion and to provide for health and saai4ation staudardsz several cifres 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 ordin- ances aliow local law enforcement officers to differentiate between legitimate massage therapists, who have a city license, and prostitution businesses fronting as massage therapy establishments. level. Statewide regulation of massage thera- pists wouid provide a cIeaz set of educa- tional standazds that massage therapists must meet, and would provide local iaw enforce- ment agencies with an easy tool to distin- guish between prostitution and legitimate massage therapy. Statewide regulation � would not disturb traditional powers over land use and business licensure. Response: The League supports the statewide regulation of massage therapists in order to aid locaI law enforcement efforts to control prosti- tution and other criminal activity. SD-27. On-Sale Liquor or Wine Licenses to Performing Theaters and Cultural Centers Issue: Performing theaters and cultural centers aze not one of the qualifying enrities 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 'iriteif"eres with tiie ability of muni- cipaliries to control the placement and operating manner of these entiries. 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 the municipality. SD-28. Youth Access to Alcohol & The lack of statewide regularion of Tobacco massage therapists has hampered law en- forcement techniques, and has caus�d.piob- age o ^--� lems for cities attempting to regulate an purchase alcohol in Mimiesota is 21. The entire health-care profession without any � age to purchase tobacco in statewide standards. Currently, 25 states Minnesota is 18. The minimum age to sell reeulate massage therapists on a statewide aicohol and tobacco products in Minnesota 32 League of Minnesota Cities oa-so is 18. Cities have an interest in preventing their youth from obtaining these products. To this end, many cities operate compliance check proa ams in an effort to discem the current level of youth access and to reduce youth access. environments. The League supports staiutory changes that assist in reducing youth access to alcohol and tobacco products. The League supports mandatory alcohol compliance checks with state funding initiatives to support locally-determined compliance ef£orts. Response: The League opposes any proposal that could result in increased risks of youth access to alcohoi and tobacco products and expanded off- sale venues for the sale of such products. The League supports the sale of alcohol and tobacco products only in controlled HUMAN RESOURCES & DATA PRACTICES Human Resources Issue: Many state laws increase the cost ofproviding city services to residents by requiring city govemments to provide certain levels of compensation or benefits to public employees, by specifying certain working conditions, or by limiting city governments' ability to effectively manage their personnel resources. For instance, existing state laws limit govemments' ability to effectively address incompetence or misconduct of city employees specifying certain procedures to be followed or standards of conduct. Resporue: 'The state government shouid refrain from passing laws that regulate the public sector workplace, and should repeal or modify problematic existing taws and reguiations to encour- age fuil local accountability. The League of Minnesota Cities proposes the following initiatives and reforms: HR-1. Preservation of Local Decision-Making Authority on Employment Related Issues • The League supports local decision- making authority, and opposes legis- lation intended to interfere in local decisions. HR Veterans' Preference • Minnesota's veterans' preference protections were created at the turn of the 19�' Centtuy. These protections were designed to assist veteran employees at a tune when Minnesota's and the federal government's labor and personnel laws were in their infancy. The Legislature should conduct a study of Minnesota's veterans' preference law to determine its effectiveness and e�ciency in light of today's employment laws, statutes, and regulations. It is likely the Legislatura will find parts of the law need modern- ization. For example, compressing the 2002 City Policies 33 time in which to request a heating to 20 days from the current 60 days would result in more efficient resolution of disputes. AR-3. Compensation Limits • The Legislature should acknowledge that all state and local govemments, not just schools districts, must be competitive in recruiting and retaining upper level man- agement employees. In addition, there is no correlation between the compensafion of citizen volunteers and career public sector professionals. Therefore, the state should repeal or modify laws Iimiring the compensation of a person employed by a statutory or home rule charter city to the govemor's salary. HR-4. Public Employees Labor Relations Act (PELRA) • The state should modify the definition of public employee under PELRA by re- moving the existing 14-hour/67-day requirement and replace it with a defin- ition in wkich must work more than an annual average of 20 hours per week. • Temporary or seasonal employees should be excluded from the PELRA definition of public employee in Minn. Stat. § 179A. HR-5. Re-employment Benefits HR-6. Essential Employees Cities must balance the health, welfaze, and safety of the public with the costs to taspayers. Therefore, the Legislature should cazefully examine requests from interest groups seeking essential employ- ee status under Miim. Stat. § 179A (PELRA). The League opposes legis- lation that mandates azbitration that increases costs and removes local decision-making authority. HR-7. Pension Benefits The Lea�ue opposes special legislation for individual employee pension benefit increases unless they aze initiated and approved by the city councii of the impacted city. HR-8. Pubiic Employees Retirement Association (PERA) Coordinated Plan Funding Deficiency • PERA had idenfified a significant long-term funding deficiency in its coordinated plan in 2000 that was the result of changing demographic pattems. T'he 2001 Leb slature adopted employer and employee contribution rates in- creases and plan modifications to address the deficiency. Recent analysis has indicated that some of the cosfly demographic trends that led to the deficiency may be slowing or reversin • Public sector tem or g � p ary or seasonal •'I'he state should carefully analyze future empIoyees should not be eligible for actuarial reports and experience studies re-employment benefits. +� �g�� gA� eanFribt3tionrate -- increases and plan modifications aze sufficient to cover the plan's deficiency. The state should assist local govern- ments in covering any deficiency that 34 League of Minnesota Cities �.- So still may exist. The state shouid recon- sider the 2001 changes to eIigibiIity that eliininated the full-rime student exclu- sion and the $425 per month salary threshold. The state should allow for city managers to opt-in to PERA provided there is no employer buy-taack obligation. Recently, some cities have been advised tfiat this faw appIies to "probationary" employees as well as permanent empioy- ees. Therefore, the Leaa e supports a legislative change to clarify that the state law on drug and alcohol rehabilitation and treahnent does not apply to proba- tionary employees. HR-9. State Paid Police and Fire Medical Insurance • The state should fixlly fund programs that pay for health insurance for police and fire employees required under Minn. Stat. § 299A.465, as amended in 1997, for police and fire employees hurt or killed in the line of duty. • The Legisiature should clarify whether Minn. Stat. § 299A.465 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-10. Breathalyzers • Minn. Stat. § 181.950-.957 should be amended to permit the use of breath- alyzers as an acceptable technology for determining alcohol use. Currently, breathalyzer use is pernutted under federal commercial drivers' laws. FIR-11. Drug and Alcohoi Rehabilitation • Minn. Stat. § 181.953, subd. 10(b), an employer cannot terminate an employee for a positive controlled substance test without first providing the employee a chance for rehabilitation and treahnent. HR-12. Health Care Tnsurance Programs • The League supports voluntary partici- pation in programs designed to provide for post-retirement health insurance benefits or in health insurance planc strucrixred to pool all public employees. HR-13. Electronic Timekeeping • The League supports amending Minn. Stat. § 412.271 to reflect modern technologies and timekeeping practices. Changes must inctude an oprion for cities to employ paperless time recording systems. �3R-14. Volunteer Fire Relief Pension • The League supports studying the feasi- bility of creating a voluntary statewide relief association for volunteer fire- fighters. Data Practices DP-1. Public Access to Information • Cities (and other state and local units of govemment) are reguired to establish policies and make cleaz to the public procedures for obtaining access to data 2Q62 City Policies 35 classified as government public data. These requirements must accord local officials flexibility to establish policies and procedures that reflect the availa- bility of resources and existing formats in whicfi information is maintained and organized. DP-2. State Model Policies and Training The Deparnnent of Administration is required to provide model policies and training assistance to cities in complying with the Government Data Pracfices Act (GDPA). The Legislature must fully fund the costs of on-going GPDA com- pliance tranung and education and direcfly involve local officials in the development and implementation of training acfivities. DP-3. Tennessen Warning • Changes enacted in 1999 addressed only the school district portion of the issues facing local govemment employers when complying with the notice requirements of the Tennessen Waming. The Legislature should lunit compliance with notice requirement to initial hiring procedures. The initial hiring notice will cover subsequent disciplinary or other personnel-related actions that aze likely to adversely affect the individual's employment status. DP-4. Violations of Government Data Practices Act Data Practices Act is hampered by feazs of punitive legal acrion against pubiic employees responsible for responding to requests for information while also pro- tecting data classified as private or non- public. The Legislature should maintain current damage award requirements for willful violations ofthe GDPA. THE LEAGUE SUPPORTS TI3E FOLLOWING POLICIES REGARDING FEDERAL EMPLOYMENT LAW: FED-1. FLSA/Overtime Compensation • The Fair Labor Standazds Act (FLSA) was designed for private employers. The definitions of "exempP' and "non- exempP' aze difficult to administer in the pubiic sector and do not reflect public sector operations. The regulations should be clarified to better allow public sector employers to appropriately classify employees as "exempP' vs. "non- exempt." FED-2. Medicare/Medicaid Premium Disbursements Minnesota continues to be a net loser in federal Medicare and Medicaid premium disbursements. Congress should recog- ni� this disparity and provide Minne- sota with a more balanced and repre- sentative share of the costs of providing heaith caze under Medicaid and Medi- care. , oc govem- ment compliance with the Government 36 League of Minnesota Cities oi- so ELECTRIC RESTRUCTURING Introduction: Cities have a strong interest in the public policy debate about electric restruchuing or deregulation. Minnesota already enjoys some ofthe lowest average electric rates in tha nation. The case has yet to be made that dereg- ulation will resutt in either lower rates or improved service for consumers. cities to make certain restructuring that allows retail competition is as beneficial to the citizens as it is to the industry. Beneficial to the citizen means that all Minnesotans experience the sazne reliable, high-quality, nni versal, and low-cost service they ex- perience under the current system of eiectric power delivery. Issue: For many decades, electric service to Minnesota citizens has been delivered through a combination of investor- owned utilities (IOUs), municipal utilities, and rural electric cooperarives. This system has served Minnesota well, delivering reliable, univezsal service at rates among the lowest in the counhy. In recent yeazs, many have begun to promote "deregulation" or "restruchuing" of the industry, meaning that electric service would no longer be a franchised monopoly. A number of states, primazily 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 azgue that sack competition wiil lead to lower rates. However, estnnates by the federal Energy Infozmation Agency* are that while the uppar Midwest, including Minnesota, will experience slightly lower rates in the short- term, longer-term rates may actually be higher under restructuiing. Concerns have atso been expressed as to whether residential customers, and those in rural and other hazder-to-serve areas will actually experi- ence decreased reliability and increased rates. Local elected officiais have the primary responsibility to the citizens of their City residenu have a strong interest in the outcome of this important public policy debate. Cities aze substantial con- sumers of electric power. Many cities have a significant portion of their property tax base in electric industry property, while others collect franchise fees and/or sales taxes on electric purchases within their boundaries. Citizens in 126 Minnesota communities currently receive economical electric service from municipal utilities, which make pay- ments-in-lieu of taxes to heip support city services. Significant increases in the cost of electric power for city operations or losses of these traditional sources of revenue wiil result in property tas increases. Response: The federal government should not mandate restructuring; the decision should be left to the states. The Legislature shoutd continue to follow a slow, deliberarive approach, taking time to consider how alternative models for delivering electric power will affect the state's traditional benefits of reliable, universal, high-quality and low- cost service. The public policy discussion should be focused on actual benefits to eitiaens, rather than on ideologicai argu- ments, 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 minimum, main- 2002 City Policies 3� tain Minnesota's high-quality, low-cost, and reliable service. pnly when that burden of proof has been met shouid restructuring occur. The following public policy goals should be incorporated into any legis- lation restructuring the electric industry: Adequafe Supply and Demand The state's current generation and transmission capacity is inadequate to meet projected future needs. No new significant capacity has been built since the 1980's (Sherco 3). In the past, regu- latory and other governmental policies served as a disincentive to meet customer demand. The Minnesota Ener� Security and Reliability Act enacted by the 2001 Legislature took significant steps to re- duce these disincentives. The experience of other states would strongly suggest that deregulation prior to the development and mainfenance of adequate reserve capacity can lead to price spikes and compromise service reliabiIity. The state should_continue to revie�. anrLamend -- - these poIicies as necessary to encourage further development and maintenance of adequate capacity and reliability. Consumer Protecfion Consumer interests must continue to be protected, especially for the most vulnerable populations. Reliable service must 6e universally available and pro- grams such as cold-weather shut-off rules should be continued either as require- ments for all market participants or as i�: Environmental Concerns The environment must be ade- quately protected, with conservation and renewable energy efforts maintained. The federal govemment must review the appropriateness of current environmental regulations and their effect in a deregu- lated market; for example, exemptions from the Clean Air Act for some generation facilities. Fair Market Competition To ensure fair market competition, the federal and state governments must have the authority to review mergers to prevent abuse of market power. Cifies must remain viable compet- itors in the electric market. Municipal utilities must be ganted egemptions from rules like the open meeting law and data practices requirements where they ham- per the abiHfy to effectively comgete with private companies. To ensure adequate service to every citizen, cities and other 1ocaLgo�ernmenta mus�-maintaia fiheir- — ability to issue tax-exempt bonds for construcfion of electric infrastructure, and be given elcpIicit suthority to aggregate or municipalize provision of electricity. i,ocal Authority Cifies must maintain their tradirional authority over land use, zoning, rights of way management and cost recovery, as well as the ability to ments-in-lieu of tages from municipal utilities. Cities' authority to negotiate siting fees and agreements for proposed generating facilities should be enhanced. League of Minnesota Cities o Z'S'o To avoid unnecessaty demand for the limited space in public rights of way, open access to transmission and distribu- tion facilities should be maintained through regulation. As the electric market is opened to interstate competition, the federal government must preserve the application of Minnesota's state and local sales taxes to the sale of electricify, regardless of the place of origin. Stranded Cost Recovery Issue: Re�ulated 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, eleciric generators' investrnents in fixed assets and other obligations may or may not remain as economically viable. Estimates of these "suanded costs" vary greatly, with some indicating no stranded costs or possibly even negative stranded costs resulting from increased prices after dereg- ulation in Minnesota. Response: If regulatory actions have contributed to investment by existing regulated utilities that are not econamically viable in a competitive markef, and if restructuring occurs, the League supports transition mechanisms that will aliow utilities to collect revenues for those particular stranded costs. $ow- ever, these charges must be carefully monitored to ensure that only eligible and verifiable costs are covered and that over- coliections do not occur. Taxpayers and 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 regulated utility as a whole can be estab- lished, and are solely the result of tran- sition to a restructured environment, these regulated utilities should be re- quired to contribute some limited percen- tage of established amounts to offset tax breaks given to these utilities as a result of restructuring. Property Tax Issue: Part of the discussion regard- ing possible deregulation of the electric power industry has centered on electric utility taxation. Proponents of restructuring assert that if effective free market competi- tion is to replace governmental regulation, state tax policy must be changed. The main focus of the investor owned utilities (IOUs) so far has been removal of the attached machinery or personal property tax. Utilities subj ect to the tax argue it places them at a competitive disadvantage to non-Minnesota companies, rural electric cooperatives (co- ops), and municipals. However, accurate comparisons of taac burden aze di�cult, as other states use completely different taxing systems. Municipals make substantial pay- ments-in-lieu of taxes. Additionally, co-ops and municipals do pay direct taxes on some of their property and indirectly when they purchase wholesale power from souroes that aze taxed, such as IOUs. Utility personal property can be a sig- nificant portion of tlie Iocal taY base in all cities. Most obviously affected aze cities that haue power plants; however, transmission and distribution equipment account for over half of the personal property taxes paid by 2002 City Policies 39 the IOUs and exist in nearly every city. Replacing the revenue that would be lost to cities, counties, school districts, and other locai ta�cing 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 couid be subject to reduc- tions or elimination over time. Furthermore, replacement revenues or aids may not fully address the problems created by a lazge taY base reduction. Response: Cities oppose proposals for esempting the IOUs from the personal property tax, apart from the decision to restructure the electric industry in Minnesota. If and when restructuring occurs, a truly independent review of the overall tax burden should be tonducted to de- termine whether Minnesota utilities are at a competitive disadvantage. If an overall tax disadvantage is identified, the state should correct it. Under no circumstances shouId local units of government or their citizens be required ----_ __._ —- o-s ou ert e ea tax relief�r "- -- - __ - — - --- - IOUs. 40 League of Minnesota Cifies Council File # Od —S� RESOLUTION Presented Referted To Committee Date WHEREAS, the League of Minnesota Cities, which represents 811 of Minnesota's 856 cities, as well as 10 urban towns and special districts, has led the coardination of inember cities in the development of the 2002 City Policies for Legislative and Aduiiiustrative Action which identifies issues as priorities for action during the 2002 legislative session; and WAEREAS, the CityofSaintPaulwas an active participant in this coordinated effort and the City approves generally of these priorities. NOW, TI3EREFORE, BE IT RESOLVED that the Saint Paul City Council does hereby recommend for consideration by the Minnesota State I,egislature, 2002 City Policies for Legislative and Administrative action, submitted by the League of Minnesota Cities and does hereby request that these issues be addressed by the legislature during the 2002 session. Adopted by Council: Date �`4 i,e e a t Adoption Certified by Council S etary Green Sheet # a.o o O�, E OF SAINT PAUL, MINNESOTA � i 14 Mayor Randy-Kelly's Office Nancy Haas 266-8527 Januarp 16, 2002 1-10-02 TOTAL # OF SIGNATURE PAGES GREEN SHEET ��.;�-� _�r•.., o�.-..s a No 200Q21 u,zz•: .� � or..neeE. ❑ onamc ❑wNwo.�a�axccsoc ❑wux�u� � r�vdtlatAtart4R) ❑ (CLlP ALL LOCATIONS FOR SIGNATURE) 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 aC the 2002 Legilsature. or PLANNING COMMISSION CIB COMMITTEE CIVIL SERVICE COMMISSION Has this Pe�soMim ever varked uMer a conGac[ farthis dePeMient? rES No Has Mis veBOnlfrm ever been a dry empbyee9 YES NO Ocec ihis Ga��rtn P� a sldll nat nartWNG�ssed M any aineM cilY emobyee4 YE3 NO k ihis P��rm a tarpeted vendoY7 YE3 NO dain ali ves a�weis an seDarate sheet and attach to afeen sheet When approved, the LMC support package can be pursued at the State Legislature during session. None The City would not be able to proceed with supporting the LMC policies. COSTRtEVEMUEBUD6ETED(GRCL60N� SOURCE ACTNT'NUMBER VES NO MFORMAiiON (IXPWN) a�_so League of Minnesota Cities 2002 City Policies� For legislative and administrative actian Adopted November.i6, 200Z I�M� Le� �rL•n..�eo� c;s� C;s� �,,,osna �ll�ce League of Minnesota Cities 145 University Avenue West St. Paal, MN SSI03-2044 (651) 281-1200 or (800) 925-1122 Fax (G51) 281-1299 TDD (G51) 281-1290 www.lmnc.org MINNESO7A CI71E5 Building Quality Communities Copyrigfit � 2000 Ieague of Minnesota Cities Research Foundarion. All righcs reserved � � i("� League of Minnesota Cities jv� 145 UniversityAvenue West • St. Paul, MN 55103-2044 �� (G51) 281-1200 • (80Q) 925-1122 • Fax (651) 281-1299 �v��,�,»os��„� TDD (651) 281-1290 • www.Lnnc.org aa-so CONTENTS LeagueStaff .................................................................. Legislative Policy Committee Members ........................ Policy Development Process .......................................... GeneraI Policy Statement ............................................... Statement of Intent ........................................................ ..................................... iv ...................................... v .. ...................................... vu ...................................... Vlll ...................................... viii Building Quality Communities Guideline ................................................... iY 2002 CITY POLTCIES Iraproving Fiscal Futures ................................................................................... 1 FF-1. FF-2. FF-3. FF-4. FF-5. FF-6. FF-7. FF-8. FF-9. FF-10. FF-11. FF-12. FF-13. FF-14. FF-15. FF-16. FF-17. FF-18. FF-19. State-Local Fiscal Relations ................................................................................. 1 State Shared Revenues ......................................................................................... 1 Taxation of Municipal Bond Interest ................................................................... 2 CityFiscal Year ................................................................................................... 2 Sales TaY on Local Government Purchases ......................................................... 2 Payments for Services to Tax-Exempt Property .................................................. 3 Truth-in-TaYation Process ................................................................................... 3 State Administrative Deductions from State Aid ................................................. 3 Reporting Requirements ....................................................................................... 3 Federal Budget Cutbacks ...................................................................................... 3 Priceof Government ............................................................................................. 4 ImpactFees ........................................................................................................... 4 Delayed Assessments for Roads .......................................................................... 4 Taxation of Electronic Commerce ....................................................................... 5 LimitedMazket Value ........................................................................................... 5 State Chazges for Adminisirative Services .......................................................... 5 LevyLimits ........................................................................................................... 5 ReverseReferendum ............................................................................................. 6 City Revenue Diversification ................................................................................ 6 Improving Local Economies ........................................................................ b LE-1. LE-2. LE-3. LE-4. LE-5. LE-6. LE-7. LE-8. LE-9. LE-10. Growth Management and Annexation .............................. Electric Service Extension ................................................. Statutory Approval Timelines ............................................ Public Infrastructure Utilities ............................................ Development Fee Disputes ............................................... Housing............................................................................. State and/or County Licensed Residential Facilities ......... Inclusion Housin ................................ 6 ................................ 7 ................................ 7 ................................ 8 ................................ 8 ................................ 8 ................................ 9 azY ...........................................................................................10 CommunityLand Trusts ......................................................................................11 Municipal Telecommunications Authority ..........................................................11 2�02 City Policies i LE-11. LE-12. LE-13. LE-14. LE-15. LE-16. LE-17. LE-I8. LE-19. LE-20. LE-21. LE-22. LE-23. LE-24. LE-25. LE-26. LE-27. LE-28. LE-29. LE-30. State Telecommunications Policy ................................................... Right-of-Way Management ............................................................ FranchisingAuthority ..................................................................... Financing Community Reinvestment Efforts ................................. Tas Incement Financing (TIF) ......................................................... TIF Grant Program, Special Deficit, and Pooling Authority .......... BusinessSubsidies .......................................................................... Minnesota Investment Fund ............................................................ Redevelopment Programs ................................................................ Property Tas Abatement Authority ................................................. Brownfields..................................................................................... OSA Response Timelines ................................................................ OSA Time Limitations ..................................................................... Economic Development Authorities ................................................ Workforce Readiness ....................................................................... 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 ............................................................... ....................11 ....................12 ....................13 ....................13 ....................14 ....................14 ....................1 S ....................15 ....................15 ....................16 ....................16 ....................17 ....................17 ....................18 ....................18 ....................18 ....................19 ....................19 ....................19 ....................19 Improving Delivery ..........................................................................20 SD-1. Redes a�ning and Reinventing Government .........................................................20 SD-2. Unfunded Mandates ............................................................................................. 21 SD-3. City Costs for Enforcing State and Local Laws ................................................... 21 SD-4. Design-Build .........................................................................................................21 SD-5. Providing Infomiationxo Citizens _._._...__._......_.._..___.-_••_•-_°---°-____.--°--�......22_ - - - SD-6. Construction Codes ............................................................................................... 22 SD-7. National Fire Protection Association (NFPA) Standards .................................... 23 SD-8. Fees for Service ....................................................................................................23 SD-9. Library Funding .................................................................................................... 24 SD-10. Civil LiabiIity of Local Governments ..................................................................24 SD-11. Private Property Rights and Takings ....................................................................25 SD-12. Election Issues .....................................................................................................25 SD-13. Local Election Authority .......................................................................................26 SD-14. Environmental Protection ....................................................................................26 SD-15. Sale of Lawn Fertilizers Containing Phosphorus .................................................27 SD-16. Creating a Minnesota GIS Program .....................................................................28 SD-17. State Appropriation for Government Training Service ........................................28 qr�_iu nat�s�a�'��3 �ges��F�s .�...�..,:,�:..�>n�9 ____ . ..... .. SD-19. Legalization of Fireworks .....................................................................................29 SD-2p. 91 I Funding ..........................................................................................................29 SD-21. Racial Profiling ...............................................................................................•.... 30 SD-22. 0.08 DWI ..............................................................................................................30 SD-23. CriMNet ............................................................................................................... 31 ll League of Minnesota Cities 6a-so SD-24. Red Light Cameras ............................................................................. SD-25. Misdemeanor Fines ............................................................................. SD-26. State Regulation of Massage Therapists .............................................. SD-27. On-Sale Liquor and Wine Licenses to Perfomung Theaters and CulturalCenters .................•••-•--........................................................... SD-28. Youth Access to Alcohol and Tobacco ................................................ .........31 ......... 32 .........32 ........32 ........32 Human Resources & Data Praetices ............................................................33 Human Resources HR-1. Preservation of Local Decision-Making Authority on Employment RelatedIssues ........................................................................................................33 HR-2. Veterans' Preference ..............................................................................................33 HR-3. Compensation Limits ............................................................................................ 34 HR-4. Public Employees Labor Relations Act (PELRA) ................................................ 34 HR-5. Re-employment Benefits ...................................................................................... 34 HR-6. Essential Employees ............................................................................................. 34 HR-7. Pension Benefits ................................................................................................... 34 HR-8. Public Employees Retirement Association (PERA) Coordinated Plan FundingDeficiency ............................................................................................... 34 HR-9. State Paid Police and Fire Medical Insurance ........................:.............................. 35 HR-10. Breathalyzers .........................................................................................................35 HR-11. Drug and Alcohol Rehabilitation ..........................................................................35 HR-12. Health Care Insurance Programs ........................................................................... 35 HR-13. Electronic Tixnekeeping .......................................................................................35 HR-14. Volunteer Fire Relief Pension .............................................................................. 35 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........... Federal Employment Law FED-1. FLSA/Overtime Compensarion ..................... FED-42 Medicare/Medicaid Premium Disbursements Electric Restructuring Adequate Supply and Demand ......................................... Consumer Protection ........................................................ Environmentai Concerns .................................................. Fair Mazket Competition .................................................. LocalAuthority ................................................................ Stranded Recovery Cost ................................................... PropertyTax ..................................................................... ................ ................ ................ ................ ................ ................ ................ ............................ 35 ............................ 36 ............................ 36 ............................ 3 6 .......................... 36 .......................... 36 ....................... 3 8 ....................... 3 8 ....................... 3 8 ....................... 3 8 ....................... 3 8 ....................... 39 ....................... 3 9 2002 City Policies iii LEAGUE STAFF WORKING WITH STATE AND FEDERAL ISSUES Jim Miller, Execu�ive Director Gary Carlson, Director of Intergovernmental Relations Aid to cities, electric utility restructuring, general revenue sources for cities, pensions, personnel, property tax system, tag increment financing Remi Stone, Senior Intergovernmentai Relations Representative Civil liability, construction codes, environment, general government, insurance, labor relations, land use/annexation, personnel, public fivance Anne Finn, Iutergovernmental Relations Representative Housing, land use/annexation, public safety, transporfation and transit Kevin Frazell, Director of Member Services Electric utility restructuring, government innovation and cooperation Andrea Hedtke, Intergovernmental Relations Representative Business subsidies, civiI liabitify and criminaI justice, economic development and redevelopment, general government, lawful gambling, liquor, localltribal relations, taa increment financing Ann Higgins, Intergovernmental Relations Representative Elecfions and efliics; elecfric ufility restructu7"ing; emergency managemenf; -- housing, information policy, telecommunications Jennifer O'Rourke, Intergovernmental Relations Liaison Generai government, general taxation, personnel, unfunded mandates, transportation and transi#, legislative listserve and bill tracker manager iv League of Minnesota Cities 6,.... s o Legislative Policy Committee Members Improving Fiscal Futures Richazd Abraham, City Adminishator, Lake City Kazen Anderson, Mayor, Minnetonka Bill Barnhart, Intergovernmental Relations, Minneapolis C�rt Bo�aney, City Manager, Brooklyn Park Pat Born, Finance Director, Minneapolis Laura Brod, Councilmember, 23ew Prawe Tom Burt, City Administrator, Rosemount Gino Businazo, Finance D'uector, Mound Dennis Cavanaugh, Mayor, St. Anthony Jane Chambers, Assistant City Manager, Brooklyn Center Tom Cran, Budget Office, St. Pau3 Reggie Edwards, City Administrator, Chisago City John Eraz, Ciry Administrator, Andover Richazd Fursman, Ciry Manager, Maplewood Pat Harris, Councilmember, St. Paul Jeff Aaubrich, Assistant Council Adminstrator, Red Wing Terri Heaton, Chief Financial Officer, Bloomina on Pat Hentges, City Manager, Mankato Kim Kamper, Acting Administrator, Oak Pazk Heights Elizabeth Kautz, Mayor, Burnsville James Keinath, City Administrator, Circle Pines Linda Koblick, Councilmember, Minnetonka Tom Lawell, City Administrator, Apple Valley Dean Lotter, City Adminisfrator, Janesville Mary McComber, Councilmember, Oak Pazk Heights Paul McLaughlin, Councilmember, Intemational Falls Peter Meintsma, Mayor, Crystal Steve Miellce, City Manager, Hopkins David Minke, City Administrator, Princeton Gary Neumann, Assistant Adminisfrator, Rochester Steve Okins, Finance Director, Willmaz Tammy Omdal, Finance Department, Minneapolis Roger Peterson, Legislative Affairs Director, Association of Metropolitan Municipaliries Douglas Reeder, City Administrator, South St. Paul Michael Rietz, City Administrator, Kasson Michael Robertson, City Administrator, Otsego Ryan Schroeder, City Administrator, Cottage Grove Mark Sievert, Ciry Administrator, Fergus Falls James Smith, Councilmember, Independence Gerald Sorenson, Adminisnative Services Director, Moorhead David Mark Urbia, Ciry Administrator, Blue Earth Dan Voa , City Administrator, Brainerd Jim Willis, City Administrator, Inver Grove Heights Rick Wolfsteller, CiTy Administrator, MonticelSo Improving Local Economies Brenda Johnson, Chau, Councilmember, Chatfield Jon Hohenstein, Vice Chair, City Administrator, Mahtomedi Margaret Amundson, Committee Adminisaator St. Paul David Beaudet, Mayor, Oak Pazk Hei�hu Jerry Bohnsack, City Adminisu�ator, New Prague Doug Borglund, City Adminisirator, Howazd Lake Patrick Boylan, Assistant Manager, Lexina on Gerald Brever, City Administrator, Staples Jim Brimeyer, Councilmember, St. Louis Pazk Cathy Busho, Mayor, Rosemount Mike Campbell, Intergovermental Relations Director, St. Paul Kevin Carroll, City Administrator, Carver Tim Cruikshank, City Manager, Anoka Dan Donahue, Ciry Manager, New Hope Michael Eastling, Public Works Director, Richfield Reggie Edwards, Ciry Administrator, Chisago City Karen Elhard, Clerk-Treasurer, Northome Jim Elmquist, City Administrator, Mora Mark Erickson, City Administrator, Lakefield Roger Fraser, City Manager, Blaine Matt Fulton, City Manager, New Brighton Rick Geuchow, City Administrator, Lauderdale John Goedeke, Councilmember, Roseville Tom Goodwin, Councilmember, Apple Valley Mary Gover, Councilmember, St. Peter Chuck Groth, Mayor, Fairmont Tom Harmenin„ Community Development Director, St. Louis Pazk Desta Hunt, Counciimember, Fergus Falls Marvin Johnson, Mayor, Independence Steven Jones, City Manager, Montevideo Ryan Kaess, Mayor's Office, St. Paul Andrea Hart Kajer, Intergovemmental Relations Director, Minneapolis Patrick Klaers, City Administrator, Elk River Larry Lee, Communiry Development Director, Bloomina on Don Levens, Ciry Administrator, Cokato Marcia Mazcoux, Councilmember, Rochester Steve O'Malley, Deputy Mana�er, Burnsville Samantha Orduno, City Manager, Richfield Bruce Peterson, Director Planning and Development Services, Willmar Roger Peterson, Legislative Affairs Director, Associatioo of Metropolitan Muncipalities Dale Powers, Councilmember, Cleaz Lake 2002 City Policies � Gene Ranieri, Executive Director, Association of Meh�opolitan Municipalities Stephen Sarvi, Ciry Administrator, Victoria Mazk Sather, City Manager, White Beaz Lake Terry Schneider, Councilmember, Minnetonka Terry Spaeth, Administrative Assistant, Rochester Kathy Thurber, Councilmember, Minneapolis Craig Waldron, City Administrator, Oakdale Jeff Weldon, City Adminis4ator, Redwood Falls Mark Winson, Chief Adminisu�ative Officer, Duluth Heather Worthington, City Administrator, Falcon Heights John Young, Jr., Councilmember, Hawley Improving Service Delivery Mazk Kamowski, Chau, City Administrator, Lindstrom John Kysylyczyn, Vice Chair, Mayor, Roseville Laurie Ahrens, Assistam Ciry Manager, Plymouth Beverly Aplikowski, Councilmember, Arden Hills Mike Campbell, Intergovemmental Relations Director, St. Pau] Paz Cmwford, Clerk-Treasurer, Motley Craig Dawson, City Administrator, Shorewood Pam Dmytrenko, Assistant to City Mana�er, Richfield John Foschi, City Administrator, Proctor Mazy Hamann-Roland, Mayor, Apple Valley Tom Hansen, Deputy Manager, Bumsville Joel Hanson, City Administrator, Little Canada Linda Koblick, Councilmember, Minnetonka Barrett Lane, Councilmember, Minneapolis Jan LeSuer, Councilmember, Golden Val]ey Joe Lynch, City Adminis�ator, Arden Hills � �Nfa'ry McComtier; Councilmember, Oak Pazk Heights Larry Nicholson, Councilmember, Moorhead Desyl Peterson, City Attomey, Minnetonak Gene Ranieri, Executive Director, Association of Metropolitan Municipalities David Senjem, Councilmember, Rochester Kent Torve, Mayor, Loretto Karen Lowery Wagner, Interaovemmental Relations, Minneapolis Rena Weber, Clerk-Treasurer, Waite Pazk Terry HaItiner, Labor Relations Mana�er, St. Paul Bret Heitkamp, City Administrator, Champlin Kay Kuhlmann, Council Administrator, Red Wing Ed Lazson, City Manager, Morris Kay McAloney, Human Resources D'uector, Brooklyn Pazk Tim Madigan, City Adminisuator, Faribault Teri Osterman, CIerk-Treasurer, Frazee Givona Reed, Assistant to Administrator, Mounds View Ceil Smith, Assistant To Manager, Edina Jerry Splinter, City Manager, Coon Rapids Todd Torvinen, Finance Director, Duluth Electric Restructuring Ron Jabs, Chair, Mayor, Jordan Bryan Adams, Uuliry Superintendent, Elk River Kazen Baker, State Legislarive Analyst, St Paul Larry Bakken, Councilmember, Golden Val]ey Jim Brimeyer, Councilmember, St. Louis Pazk Chuck Canfield, Mayor, Rochester Al Crowser, Utility General Manager, Alexandria Jim Elmquist, City Administrator, Mora Robert Filson, City Adminish�ator, Worthington Del Haag, Councilmember, Buffalo Ken Hartung, City Adminisuator, Bayport Jeff Haubrich, Assistant to Council Administrator, Red WIRa Elizabeth Kautz, Mayor, Burnsville Mazk Larson, Adminish�ator-Clerk, Glencoe Rebecca Lau, Management Analyst, Minneapolis _._ Pam Marshall, Energy Cents. Coalition, St_Pau1_ _. ._ Charles Mertensotto, Mayor, Mendota Heights Mike Nitcha]s, Utilities General Manager, Willmaz Paul Ostrow, Councilmember, Minneapo]is Greg Oxley, MN Municipal Utilities Association, Plymouth Ro�er Peterson, Legislative Affairs Director, Association of Mehopolitan Municipaliries 7ohn Remkus, Finance Director, West St. Paui Joe Rudber�, City Administrator, Becker Mazk Sather, City Manager, White Beaz Lake Kathleen Sheran, Coalition of Greater MN Ciries, Human Resources & Data Practices Mankato Jerry Splinter, City Mananer, Coon Rapids Ken Hartung, Chair, City AdminisRator, Bayport Jim Willis, City Administrator, Inver Grove Heights Geralyn Barone, Assistant City Manager, Minnetonka Wally Wysopal, City Manager, North St. Paul Theresa Goble, Finance Director, Brainerd vi League of Minnesota Cities League of Minnesofa Cifies Policy Development Process p �.._ so The League's policy development process has taken place over the past six months. The process began with a member survey of priority issues facing city officials. The process will not end with fhe Policy Adoption Conference. The committees will schedule additional meetings during the upcoming legislative session to discuss additional issues, develop altemative solutions, and discuss strategies to impiement the League's policies. Listed below is a brief chronology of the major events in the policy development process. At each step, members have the oppommity to participate in the development process. ApriUMay June The League solicits members for ideas and problems. A survey at the Annual Conference allows members to formally suggest topics. The League President accepts appiications for committees and appoints policy committee members. The policy committees aze: Improving Fiscal Futures Improving Local Economies Improving Service Delivery Human Resources and Data Practices Electric Restructuring July Committees meet to discuss issues raised in the member survey. Committees can also form task forces to more thoroughly study specific issues. Task forces can include noncity members with a knowledge of the focus issue. August Committees and task forces meet to discuss issues and problems, accept through testimony and develop policy statements. September October The League Boazd of Directors meets with the chairs of the policy committees to review policies. November Policy Adoption Conference. Members have the opportunity to discuss the draft policies, propose changes, and suggest additional policies for member consideration. January Legislative session. During the session, the policy committees and task forces through will continue to meet on issues and sh�ategies. Members can assist the League's May legislative efforts by volunteering to contact legislators on a variety of issues of interest to our cities. 2002 City Policies vii General Policy Statement The League of Minnesota Cifies serves as a forum for cities to define common problems and develop policies and proposals to solve those problems. The League of Minnesota Cities represents 819 of Minnesota's 854 cities as well as 11 urban towns and 29 special districts. All sizes of communities aze represented among the League's members (the largest nonmember ciry has a population of 163) and atl regions of the state are represented. The policies that follow aze d'uected at specific city issues. Two principles guide the development of all League policies: There is a need for a governmental system that allows fleatibility and authority for cities to meet the challenges of governing and providing cirizens 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 goveming and providing services necessitate a continuing and strengthened partriership with federal, state, and local governments. This parinership, particulazly in the areas of finance, development, housing, environment and transportation, is critical for the successful operatiou of Minnesota's cities and the well-being of residents. _ . _ . -- __ _ - __.______... ._. __. atement of Inferit -- - There aze many issues affecting the effectiveness of city govetnment to improve community life, improve the fiscal future and service delivery of city govemment, and improve the locat economy. What follows aze statements of the issues facing cifies and the League of Minnesota Cifies' proposed responses to these issues. These statements of issues and proposed responses form the policy of the League of Minnesota Cities. Additional and alternative responses to those issues may be proposed after the Policy Adoption Conference, and the members of Yhe League authorize its Boazd of Diiectors to consider and support additional or alternative responses, if necessary, to resolve the issues identified in this policy statement. viii League of Minnesota Cities GUIDELINE FOR BUILDING QUALITY COMMUNITIES 6a-- so To the greatest extent possible, legislation affecting communities at the state and federat level should enhance, not diminish, the ability of citizens, businesses, and local governments to work together in parniership to make every community "livable." ISSUE: Cities in Minnesota are at various stages in meeting the goal of being "livable, healthy communities." RESPONSE: The definition of a"livable, healthy community" below will be used to evaluafe proposed legislation to determine whether or not it advances the goal of enabling all Minnesota cities to become livable, healthy communities. It should also be used by cities to evaluate their progress toward the goal of becoming livable, healthy communities. A LIVABLE, HEALTHY COMMU1vITY IS: WHERE PEOPLE OF ALL AGES • shaze a core of common values including valuing diversity, respect for each other, and good citizenship • feel: * safe a sense of belonging welcome • engage in life-long learning activities that: * promote responsible citizenship * enhance the enjoyment of life * prepare them for changing job mazkets • participate in the decision-making process with community leaders • celebrate community • want to make their home • have access to: * good payingjobs * adequate and affordable housing * choice of efficient transportation systems including transit, pedestrians, and bicycles * gathering places * desired information 2002 City Policies ix * choice of cultural and recreational activities * affordable goods and services, including health caze • are involved in the nurturing of youth • caze about their homes, couununity, and the environment • get to know each other • have the benefit of strong family support and nuriuring 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 'unplements cooperation and collaboration • provides and maintains an adequate physical infrastructure and promotes social infrastructure to meet local needs • educates citizens of atl ages on local, regional, and state issues and government processes _ __ ---- -- _- - ------- - - - _ _ _ ---- • informs and communicates with citizens to foster participation in public policy decision-making • participates in youth development x League of Minnesota Cities pa-so 2002 CITY POLICIES ��so IMPROVING FISCAL FUTURES FF-1. State-Local Fiscal Relations Issue: The govemor and Legislature enacted major changes to Minnesota's state and local government finance system in 2001. The elimination of the general education properry taa� levy will provide tax relief to ali properties. Additional relief is targeted to business, apartment, and higher- valued residential property through class rate compression. Lower-valued homes will receive a new market value homestead credit. Properry tax levies for transit aze replaced with state aid. The state will levy a property t� on business and cabin property, reducing the tax relief for those types of properiy. Levy limits wili be in place for two yeazs for cities over 2,500 in population and for ali counties. Homestead and Agricultural Credit Aid (HACA) was eliminated. Local Government Aid (LGA) to cities was increased and the formula was revised. The 2001 Legislature reduced state aid to ciries by $60 million, although some cities will receive increases and others will see reductions in state aid. The governor and Legislature made changes in state aid programs in an attempt to distribute property tax relief more equitably statewide. Proponents of the tax bill claim the property tax will now be more of a local tas. However, under the tax bill, the state wiil levy a properiy tax for the first time since 1968, and the state will maintain control over city levies through levy limits. Pro- ponents also claim that since cities will be more reliant on the property taac and because tax increases will fali more heavily on homestead property, cities will be more accountable to taxpayers. However, the tax bill increases state aid to some ciries and the combined 'unpact of the tax bilI wili reduce taYes for homes more than most other types of properties. Response: In an effort to clearly outlfne and understand the implications of the 2001 tax bill, to remedy e�sting problems, and to avoid potenfial, unintended consequences of additional property tax changes, the Legislature should avoid enacting any major changes to the current system. The League supports a comprehensive review, analysis, and educational effort of the combined impacts of the 2001 tax bill, property tax changes since 1997, and changes in economic circumstances for faxpayers and governments. FF-2. State Shared Revenues Issue: The state's system of sharing revenues with local units of government addresses many problems with a system that relies solely on local property t�es. First, the properiy taY base available to communities can vary dramatically. State revenue sharing programs use state re- sources to equalize the ability of com- munities to pro-vide essential services with- out undue properiy tas burdens for local residents. Second, nonresidents and t�-exempt entities benefit from local services or create additional demands for services without contributing to the property taxes that support these services. LGA heIps address the problem where nonpaying entities consume services without contributing to the local tax base. 2002 City Policies Third, allowing local units of govemment in Minnesota to levy only the property tax has created an over-reliance on the properiy tas. LGA can reduce fhe overall reliance of local governments on the property tax. Although historically the Legislature has supported LGA, the 1981 Legislature reduced the number of LGA and HACA payments and the 1986 Legislature delayed the payments. Under current law, the first payment of LGA is made in July--fully seven months into each city's fiscal yeaz. These changes have created cash flow problems for some cities. In addition, Opast Legislatures have reduced state aid to cities inciuding a net $60 million reduction enacted in 2001, which included the eIimination of HACA and changes to the LGA formula and appropriation. The 2001 Legisiature also set aside $14 million into an LGA reform account in prepazation for future review and modifications to the LGA system. Response: If.changes are . considered, the LGA system must: • Reduce tax burden disparities among communities and between cities and adjacent townships; • Compensate ciries and their t�payers for overburden and Yax egempt property; and, • Compensate for state imposed mandates. lowers borrowing costs for cities and re- duces property tas levies. Resporrse: The state should maintain the tax exemption for municipal bond interest income. FF-4. City Fiscal Year Issue: The fiscal year for cities aud counties currently corresponds to the property taa� cycle. Response: The state should maintain current Iaw and not change the city fiscal year to coincide with the state fiscal year. FF-5. Sales Tax on Locai Gov- ernment Purchases Issue: In 1992 when the state was experiencing a budget shortfall, the Legislature repealed the sales taaf exemption for local government purchases. Local govemments now pay state sales taat on purchases-like road.maintenancesupp�ies -- and equipment, wasYewater treaYment facilities, and some public safety equipment. This taac currenfly costs local property taic- payers and ratepayers an estimated $100 million annually. In addition, proposals to extend the sales tas to services would have the effect of increasing local govemment costs and property taaces. Because no additional state aids were added to of£set the additional cost, this repeal has effectively increased local property t�es to fmance state operations. FF-3. Tagation of Municipal Bond esponse: e stafe should fe- � instate the sales tax exemption for all Issue: The state law that grants a locaI government purchases. The ex- tax exemption for municipal bond interest e�Ption must not be coupled with cuts in LGA. 2 League of Minnesota Cifies oa.- sa FF-6. Payments for Services to Tax-E%empt Property Issue: Taacable properiy in many cities is being acquired by nonprofit and govemment entities. Converting the prop- erty to tax-exempt status can lead to serious taY base erosion without any corresponding 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. £F-7. Truth-in-Taxation Process Issue: Cities must set a preliminary levy by Sept. 15, which, by law, becomes the maYimum that cities can levy the following yeaz. In recent years, cities have not received complete tas base and aid information in a timely manner. As a result, cities often either set a preliminary levy that is artificially high or they aze unabie to budget for unforeseen needs that arise after Sept. 15. Response: The League supports changes to the Truth-in-Taxation process to pravide more meaningful information to citizens, including the exemptions enacted in 2001 for ciries that propose levy increases less than the implicit price deflators. However, this calculation should account for the impact of state aid cuts on proposed levies. Cities should have the authority to increase the final levy from the preliminary levy to meet unforeseen and uncontrollable needs. FF-8. State Administrative Deductions from State Aid Issue: State administrative costs aze deducted from the LGA appropriation. This reduces the property tax relief provided by LGA 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 imposed on cities by the state ofren result in duplication and additional costs. Response: Requirements for reporting and advertising financial and budget information should be carefully weighed to balance the validity of the 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 informafion already re- quired by others to avoid duplication of reporting requirements. FF-10. Federal Budget Cutbacks Issue: Congressional budget actions or devolution of program responsibilities may place fiscal burdens on the state and on 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 2002 City Policies 3 the burden on cities and on their property taxpayers. FF-11. Price of Government Issue: The price of governxnent legislation enacted in 1994 was xntended to measure the overall effect of state and Ioca1 taxarion over a long period of time. The tazgets measure government revenues as a percent of personal income. Unfortunately, the targets have been misinterpreted and used unfairly to crificize city taae and budget decisions. Response: The price of government statutes, as they apply to local govem- ments, should be repealed. If the price of government law is to continue to be applied to local 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. Impact Fees Issue: New development and the authorization to unpose fees on new development for water, sanitary and storm sewer, and park purposes, it is reasonable to eaRend the concegt to additional public infrastructure and facilities improvement also necessitated by new development. Response: The Legislature should autLorize cities to impose impact fees so new development pays its fair share of tbe off-site, as weII as the on-site costs of public infrastructure and other public facilities needed to adequately serve new development. FF-13. Delayed 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 improvement, but not previously assessed. This authority for delayed assessment has not been extended to other infrastructure, such as road im- provements, even thoughproperties_aze _ __- ___ benefiting from the improvements. resulting growth create an increased demand for public infrastructure and other public Response: Cities should be allowed facilities. Severe constraints on locai fiscal to delay assessments against property resources and dramatic forecasts for pop- located outside the city for road improve- ulation a owth have prompted cifies to ments benefiting property abutting the criticalIy reconsider ways to pay for the improvement but not previously assessed inevitable costs associated with new de- for the improvement. For example, if a velopment. Traditional financing methods city makes improvements to a road �that tend to subsidize new development at the benefits city residents and township expense of the existing community, dis- residents, the city should be able to re- courage sound land use plauning, place cover costs through future assessments to inefficient pressures on public facilities, the township property when the property _________"—�d'�}Ow_ n- infrastructure. Consequenfly, local com- ship property is brought into the city, munities aze exploring methods to ensure the city would then be able to assess that new development pays its fair share of the property for road improvements pre- true costs of growth. Given the existing 4 League of Minnesota Cities pZ_ so viously done but not assessed at the rime of the improvements. FF-14. Taxation of Electronic Commerce Issue: Sates over the Intemet and through other electronic means aze projected to increase exponentially over the next several years. Electronic transactions pose significant tax policy challenges because of the difficulty of assigning a location to electronic sales, and because many Internet goods aze not tangible property. Response: Federal tax policy should not place main street businesses at a competitive disadvantage to electronic retailers, must not jeopardize repayment of bonds backed by state and locai sales tax 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 muiti-state effort to develop a streamlined sales tax system. FF-15. Limited Market Value Issue: The 2001 Legislature enacted a phase-out of the state's limited mazket value (LMV) system. Under limited mazket value, homeowners and cabin owners who experience rapid escalation in their prop- eriy's value effectively have a temporary exemption of taxes on a portion of that growth. This exemption has grown rapidly over the past several years and now shiRs substantial properiy tax burdens to other types of property. On the other hand, a rapid phase-out of the program could dramatically shift tax burdens back to homes and cabins. Response: The Legislature should closely monitor the effects of the phase- out of LMV to avoid excessive tax burden increases for currently benefiting prop- erties. If the phase-out schedule results in excessive tax increases, the Legislature should increase funding for the targeting prob am, which will buffer the tas burden increases. FF-16. State Charges for Admin- istrative Services Issue: Currently, some state agencies have wide discretion in setting the fees for special services they provide to local governments. For example, the Minnesota Department of Revenue recently increased the fee for administerina local sales taxes by 80 percent in the middle of a budget yeaz with less than six weeks notice. The increase had no appazent relationship to the cost of providin� the service. Response: State agencies should be required to demonstrate the need for increases 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 the service. Local government should be given the option to self-administer or contract with the private sector for the service if the state cannot provide the service at a reasonable cost. FF-17. Levy Limits Issue: As a part of the 2001 omnibus tas bill, the Legislature enacted levy limits for cities over 2,500 population for two years. Although the levy limit formula provides some growth for local budgets, levy limits replace local account- ability with a state jud�nent about the 2002 City Policies g appropriate level of local taxation and ultimately locai services. Two of the stated goais of advocates of the 20Q1 tax bill were to make the prop- erty tax more of a local tax and to increase Tocal accountability for the property tax. However, levy limits clearly violate these goals by invoiving the state in local budget decisions. Response: City counciIs must be allowed to decide how to respond to community needs. The League supports the immediate repeal of levy limits. FF-18. Reverse Referendum Issue: Proposals to impose a reverse referendum requirement on municipal prop- erry tax increases would diminish the ability of elected local officials to respond to the needs of their community. In addition, the reverse referendum proposals that have been recentIy offered would dismpt the local budget process by potentially requiring a public referendum in late January, nearly one month into the city's fiscal yeaz. Response: The Leagne supports the principle of representative democracy and opposes reverse referendum requirements. FF-19. City Revenue Diversification dssue: Under current state law, the property tax is the only generally accessible form of local tax revenue for cities. Recent retrenchment in state aid prograxns will likely increase city reliance on properiy taxes in the future. Allowing cities to diversify their revenue stream would prevent rapid risesin property taxes. Response: Cities should be able to diversify their sources of tax revenues. IMPROVING LOCAL_ECONQMIE� LE-1. Growth Management and Annexation Issue: Unplanned and uncontrolled urban growth has a negative environmental, fiscal, and govemmental impact on cities, counYies, and state governments because it increases the cost of providing govemment services, and results in the loss of natural resource azeas and prune agricultural land. statewide pianning policy and that the state shouid not adopt a mandatory comprehensive statewide planning process. Rather, the state should: • Provide additional financial and technical assistance fo local govemments for cooperative planning and growth management issues, particularly where new comprehensive pIans have been mandated by the Legislature; Recnnrs.cv� The T eag�ie heliavnc *h •('lParlv nctaht'ch the,pulalu purp�sgs existing framework for guiding growth served by existing statewide controIs � and development primarily through locai such as shore land zoning and wet- plans and controls adopted by Iocal lands conservation; clarify, simplify, governments should form the basis of a and streamline fhese controls; elimin- ate duplication in their administra- League of Minnesota Cities fl1— so tion; and fully defend and hold harm- less any local govemment sued for a "taking" as a result of executing state land use policies; • Give cities broader authority to eg- tend their zoning, subdivision, and other land use controls up to two miles outside the city's boundaries, regard- less of the eustence of county or township controls, to ensure conform- ance with city facilities and services; • Clearly define and differentiate between urban and rural development and restrict urban growth outside city boundaries; • Facilitate the annexation of urban land to cities by amending state statutes that regulate annexation to make it easier for ciries to annex developed or developing land within unincorporated areas; • Oppose legislation that would re- instate the election requirement in contested annexations; and Encourase ideas consistent with the long-term goal of allowing urban develapment 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 HACA for another new purpose. authority to extend services would interfere with cities' natural growth and with the ability of municipally-owned utilities to serve the entire community. Response: The League opposes any statutory change that would impede or eliminate the abiIity of municipally- owned utilities to extend electric services to any portion of their respective cities, including annexed areas. LE-3. 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 (MLJSA) and other land use applications in accord- ance to a statutory tnne period generally referred to as the 60-day rule. Pursuant to Minn. Stat. § 15.99 state and local govern- ment agencies must approve or deny a pernut within a statutory time frame, and failure by the agency to issue a specific denial of the application with contempor- aneous 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 e�cient and to assist cifies in providing accurate and fimely responses to applicants. LE-2. Electric Service Extension Issue: Minnesota law currently protects the right of municipally-owned utilities to e�end electric services to annexed areas. Electric cooperatives have announced their intention to seek legislation that would eluninate the right of munic- ipally-owned utilities to extend electric services to annexed areas. Eliminating the Response: The Legislature should amend Minn. Stat. § 15.99: _ • To allow government ageneies to provide final written findings of fact at the next official meeting of the goveming body. • To allow an automatic 60-day extension of the time limit if the agency votes down a resolution 2002 City Policies granfina the request, but does not vote on a resolation denyiag the requesY. • To make clear the 60-day time limit begins at the point when a formal complete written application is received on forms provided by the city with appropriate additional supporting documents and including the payment of fees if necessary. • To increase the initial time limit to 90 days for municipalifies with less than 5,000 population. LE-4. Public Infrastructure Utilities Issue: Current infrastructure funding options available to cities aze inadequate. Existing special assessment law, Chapter 429, does not meet ciries' fmancing needs because of the benefit requirement. The law requires a minimum of 20 percent of such a projectto be specially assessed against affected properties. In practice, however, proof of increased properiy value to this degree of benefit can rarely be proven from regulaz repair or repIacement of existing infrastructure, such as sh - eets or sidewallcs. Alternatives to the Chapter 429 methods for financing infrastructure improvements aze nearly nonexistent. Response: The Legislature should authorize cities to create, as a iocaI option, additional utilifies such as a transportation or sidewalk utility. Such authority woutd acknowledge: the effects of repeated levy limits and the general funding shift from the state to local governments for building and maintain- ing necessary infrastructure; the benefits to all taxpayers of a properIy maintained public infrastructure; and the limitations of existing special assessment authority. LE-5. Development Fee Disputes Issue: State law is clear that fees collected under Minn. Stat. § 462 aze eligible for judicial review in tiie event a dispute over the fee arises. The law is not cleaz what notice requirements to the municipality are necessary relative to the timing for an aggrieved person to seek review. Response: The Legislature should amend Minn. Stat. § 462.361 to establish a 60-day time limitation in which an aggrieved person may bring an action againsf flie mnnicipa7fEy: - __ ___ --- -- LE-6. Housing The Legislature has given cities the Issue: The roles of federal and state authority to operate utilities for watenvorks, govemment in the provision of affordable sanitary sewers, and storm sewers. The housing have emerged as critical issues as storm sewer authoriTy, established in 1983, cities respond to the critical Iack of both set the precedent for a workable process of rental and single-family hotising for those chazging a use fee on a utility bill for a city who aze currently priced out of the mazket. service infrastructure that is of value to all The federal govemment has lazgely removed those in a city. Similar to the storm sewer itself from its previous role in providing authority, a transportation or sidewalk utility direct funding and subsidies for housing , - e- . en use one- ments, and would equitably distribute the time housing appropriafion increases, in- costs of local infrastructure services. cluding directing federal welfare reform and increased federal tax-exempt bond funding to increase canstruction of low-income League of Minnesota Ciries by_ So rental and entry-level owner-occupied housing; enacted substantial apartment property tax relief; increased funding for homeless prevention and services; and threatened to impose restrictions on local land use authority in order to create con- ditions in which cities would make more affordabie housing available. Response: Federal and state levels of government have critical roles to play in assisting local units of govemment to - meet fhe challenge of increasing the production and access to affordable rental and entry-level single family housing. The League recommends the following actions: • Cities, as welI as the govemor and the state Legislature, should use every means at their disposal, including memorializing resolutions, public forums, citizen action committees, and press coverage, to alert members of the Minnesota Congressionai Dele- gation to the critical housing problems facing communities throughout the state. • The state Legislature must raise the level of permanent funding for affordable housing production by increasing the base budget of the Minnesota Housing Finance Agency to equal 20 percent of the agency's current bienniai spending, and undertake the following initiatives: 1. Leverage federal and state housing investments from non-state sources, such as the Economic Development & Chalienge Grant Program; 2. Exempt construction supplies and materials used to construct afford- able new or rehabilitafed housing from the state sales tax; 3. Grant an exemption from the state mortgage and registry deed tas to public agencies and developers who agree to produce affordable housing; 4. Create a state affordable housing tax credit; 5. Continue funding to preserve fed- erally subsidized housing that is threatened by mortgage prepay- ments; 6. Make permanent the policy of not deducting from the MFIP monthly grant either the public housing or Section 8 support payments to individuals or families. • Federal and state government must respond to the urgent need for more coordination and sharing of financial resources among numerous agencies that assist homeless individuais and families to develop continuum of care plans and increase the supply of permanent supportive and assisted housing, including single room occupancy (SRO) units. LE -7. 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 caze and super- vision. In view of cities' responsibilities to accommodate group homes and residential- based facilities, it is unportant state and county government work with local officials to address residential caze and public safety issues. Cities have reasonable concerns for 2002 City Policies 9 special caze necessary for group home resi- dents, particularly in case of public safety emergencies. Since operators of certain residentiai facilities and services aze 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 caze and public safety measures these residences may expect. Response: The Legislature should provide sufficient funding for such residential-based services and require state and county agencies that mattage those facilities or companies licensed to operate group homes to notify ciEies in a timely manner when licensed facitity operators request fo operate such faciliries ar to renew their license and aitow cities fo require such asencies and Iicensed operators fo identify and take appropriate measures to respond to the special care residents need in case of emergencies. Legislation should also require establishment.ofnonconcentration-__-._ _ standards for state or county-issued requests for proposals (RFPs) and direction to avoid clustering residential facilities. Licensing authorities must also be responsible for removing any residents incapable of living in such an environ- ment, particularly if they become a danger to themselves or others. LE-8. Inclusionary Housing and demand for afFordable housing account for a far greater proportion of the problem. Ciries responded to these challenges and have drafted ordinances tfiat would require developers to include affordable units in their development in retum for regulatory relief. Cities have also urged both the Attorney General and the Legislature to clarify local authority to enact such local requirements. Instead, the 2001 Legislature attempted to mandate tfiat cities grant developers specific regulatory relief, incln- ding density bonuses, in return for including affordable units in their projects. In the end, the Legislature agreed to consider recom- mendations on these issues in the 2002 session. Response: The League will monitor and participate in the develop- ment of recommendations by the Office of State Pianning and the Minnesota Housing Finance Agency on how to encourage development of inclusionary housing for a range of incomes and urge them to consider supporting the following: • EsfabHsh a sfate incIusionary po&cy that strengthens cities authority to carry out policies that offer developers a range of incentives in return for inciuding a designated number of affordable units in their projects; • Identify strategies that ensure Iong- term affordability of rental and owner-occupied housing produced as a resulE of such poIicies and practices; • Focus attention on the local assess- Issue: Housing advocates and ment of housing needs and direct state develo ers have ointed to local zoning„�a _ land use regulations as a source of increased affordable rental units and financing housing construc6on costs. Steeply rising to increase access to entry-level land prices, building materials, and labor owner-occupied housing; costs as weil as the imbalance in the supply 10 League of Minnesota Cities oa-� Oppose restrictions on or removal of the local authority to adopt and carry out land use pians, activities, and regulations. LE-9. Community Land Trusts Issue: T'he steeply increasing price of land available for housing development is a growing concern throughout the state. Action is needed to create more permanently affordable owner-occupied housing by max- imizing the cost-effectiveness of taxpayer investments. IvIHFA had one-time authority to assist cities to fund the establislunent of community land trusts for affordable housing. Response: The 2002 Legisiature should authorize a land trust capacity- building program to provide gap fi- nancing, interest-rate write-downs, and predevelopment financing, and to cover fmancial underwriting costs. LE-10. Manicipal Telecommunications Authority Issue: Cities clearly recognize the necessity of broadband connections to fhe Internet and piay a key role in assessing local needs, developing plans, and under- takui; initiatives to brin� advanced tele- communications services to their com- munities. In cariying out their role, cities must have the authority and the tools to put in place the necessary infrastructure, educational resources, appiications, and skill-sets to become connected communities. Response: State government must recognize that cities play a critical role in enabling communities to take advantage of legislative and other government in- itiatives designed to provide affordable access to broadband services by: • Maintaining cities' egpress authority to provide advanced telecommuni- cafions services either as sole pro- viders or in joint ventures with public or private sector entities; • Defming a strategic leadership role for cities by eliminating barriers to muni- cipal entry; • Supporting the efforts of communifies to carry out plans to bring advanced services to local residents and bus- inesses, and encourage collaboration among communities and institutions to expand education, health care, and economic opportunities at the locai and regional level; and • Allowing cities and municipal utilities to join with other entities, such as cooperative associations, investor- owned utilities, or other municipal utilities or power agencies to provide telecommunications service. LE-�1. State Telecommunications Policy Issue: Since 1999, the state Legis- lature and government agencies have un- successfully sought to make wide-ranging changes to state telecommunications policy to encoura�e competition and increase access to broadband services. Opposition to these measures makes it appazent that substantial changes to the direction and extent of reform aze needed. There may be an opporiunity for progress next session in addressing pressing consumer protection and affordability issues. 2002 City Policies 11 Response: The League supports the following measures to address suct� concerns: • Allow incumbent local service pro- viders to raise rates that have been capped if the provider demonstrates that restructuring measures make it necessary to do so; • Adopt new retail consumer protecrion measures that allow consumers representing at least 5 percent of the access lines within the locai service area to complain directly to the MinnesoYa Public Ufilities Commi- ssion (MPUC) about either current or proposed local telecommunications service rates and authorize state agencies to conduct investigations of those compiaints; • Give the MPUC sufficient authority to intervene if it fmds that the local provider market is not protecting consumers; • Require providers to give advance written notice to customers with _ .__ . _ _ ___—billingsthat.prominentl.y_indicate -- -- the notice of changes in terms or conditions or increases in service rates; • Compensate telecommunications service resellers for failure of the local service provider to comply with wholesale quality of service standards; • Consider revenues from state or federal universai service funds when determining whether prices charged for essential locai services exceed the cost of providing such service and state universal service funding for providers in High-cost service areas; • Support efforts to espand toll-free local calling areas outside the metro- politan area, where appropriate, if revenues of the local service provider would be sufficient if such expansion took place; and • Allow a city to become a local ex- change provider upon approval of the city council and allow the city to offer services beyond city limits upon authorization of the Minnesota Public Utilities Commission. LE-12. 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 1'united and valuable asset. As demand increases for use of rights-of-way for underground and overhead wireless facilities, cities must continue to have cleaz authority to allocate and coordinate that - _ _ ___resourcz_amang-competi�g-uses.-�,oca�------ - management responsibilities vary and are site specific, underscoring the necessity for maintaining local authority to recover actual management costs and to exercise local zoning and land use regutarions. Response: State and federal governments must: Uphold local authority to manage and protect public rights-of-way, including reasonable zoning and subdivision reEUlation and the exercise nf inr�i revenues in excess of tbose costs; • Make sure that the impact of technology advances on the cost of providing services is incorporated into 12 pouce powers; Recognize municipalities have a paramount role in development, util- ity location, and implementation of construction and safety standards for League of Minnesota Cifies Da- � o underground and overhead wireless facilities; • 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 to collect franchise fees or altemative revenue streams; • Maintain the courts as the primary forum for resolving disputes over the exercise of such authority; • Uphold the exercise of local land use controls by clarifying that cities have authority to set terms and conditions and regulate where providers of cellular or ofher wireless services locate facilities in the public right-of- way to protect public safety and provide for convenient public use of such sites; and • Maintain city authority to review and approve or deny installation of additional wires or cables on in-place utility poles. In the alternative, cities should have broader authority to require the undergrounding of new and/or existing services at the cost of the utility or telecommunications entity. LE-13. Franchising Authority Issue: Municipal franchising authority allows municipalities to require cable operators to meet their communities' unique needs and interests including ade- quate customer service standazds, valuable public, educational and govemmental pro- gramming, and institutional networks for voice, video, and data needs. Tlus fran- chising process, in its current form, works well. However, as technologies converge and expand, municipalities are facing new challenges, such as how to franchise com- peritive cable overbuilders, local exchange carriers (LECs) providing video services and open video systems. It is uncieaz what certain statutory requirements mean and which statutory provisions apply to the different providers. Respanse: Municipalities must continue to maintain their existing franchise authority over all cable and video services, regardless of the provider. Municipalities need discretion and fles- ibility to work with competitive providers regardless of how they provide the ser- vices, so that the intent of the 1996 Tele- communications Act can be implemented to the maximum extend permitted under Title VI of the federal Communications Act, as amended, and other applicabie law including the ability to require PEG support, institutional networks, customer service standards, and franchise fees or similar compensation. LE-14. Financing Community Yteinvestment Efforts Issue: The 2001 property tax reform package couid have a dramatic impact on how the state of Minnesota's community reinvestment needs are addressed. These impacts bring into question the future via- bility of tas increment financing (TIF) as the primary tool to fund community reinvest- ment efforts. Activities that cities have historically been able to undertake, but wiil likely be less able to achieve in the future given the likely diminished effectiveness of TIF include: long term tas base stabili- zation and growth, job creation, develop- ment of low-to-moderate income and workforce housing, remediation of pollution, elimination of blight, recycling and redevel- 2002 City Policies 13 opment of the infrastructure, and redevelop- ment of its communities. Resporrse: To ensure Minnesota is able to continue to effectively compete with other states, the Legislature has a responsibility to partner with cities, state agencies, and other community reinvest- ment organizations Yo develop a statewide community reinvestment strategy and identify and implement additional tools to fund community reinvestment efforts. The state should partner with cities in community reinvestment activities. StaEe acknowledgement of the need for com- munity reinvestment and economic development is essentiat to the state's prosperity and legislation is needed to generate resources sufficient to address these critical needs at the local level. LE-15. Tax Increment Financing (T�') Issue: Untii the state identifies and implements additional development tools, TIF likely remains the most viable tool _ - -- avat a6Ie to fun3 community reinvestment efforts despite the significant impacts of the 2001 property tax reform package. Cities and development authorities will be required to devote considerable efforts in order to understand and address the impacts of the 2001 property taY reform package on exist- ing TIF districts and poteniial future projects. Respnnse: So as to nof fnrther complicate this process, the Legislature should not enact future TIF law restric- In order to allow TIF to maintain the effectiveness that remains in the wake of the 2001 property tax reform package, the Legislature should consider: 14 Authorizing any tazc increment districts approved after April 1, 1990, to pool increments in the same manner as districts certified prior to Aprii i, 1990 for affordable housing and pollution remediation; • Expanding the use of tax increment finaacing to assist in the development oftechnolod calinfrastructure, transit-oriented development, the restoration of designated historic structures, for nonretail commercial projects, and in nonwetland areas where unstable/nonbuildable soils e�st; • Exempting redevelopment districts from the five-year rule; and • Modifying the housing district income qualification level requirements to allow the levels to vary according to those specific to individual communities. LE-16. TIF Grant Program, Special Deficit, and Pooling Authority Issue: The 2001 Legislature -- -- committed sianificant resource "s ori an -- - - ongoing basis to the "ITF Grant Program in order to address the impacts of property tax reform on e�sting TIF districts. Since the 1997 Legislature began compressing prop- erty ta�c class rates, the TIF Crrant Program has existed to address the resulting impacts on TIF districts. In terms of application to the TIF Grant Program to address impacts from the 1997 through 1999 tax reform efforts, the TIF Grant Program is scheduled to expire in 2002. Some cities that were impacted by the 1997 through 1999 taY Grant Program yet, but will need to access the fund over the nea�t few yeazs. Prior to accessing the TIF Grant Program, cities often explore, and may be legally required to implement, internal solutions to address League of Minnesota Cifies oa-sa the impacts of properry tax reform on their e�sting TIF districts. This can result in TIF Grant Program applications being compara- tively lower in the initial years than the application level in future yeazs. It is possible that the application demand could exceed the available resources in the future. In addition to the TTF Grant Program, the 2001 Legislature implemented new and expanded special deficit and pooling authority and requirements. Response: The Legislature should extend TIF Grant Program eligibility for impacts from the 1997 through 1999 tax reform efforts until those impacts are addressed. If the resources available in the TIF Grant Program become insuffi- cient to meet the application demand, the Legislature should increase the program's funding level. Applications to the Grant Program in the first few years should not be viewed as indicative of future demands on the fund as these may likely increase with time. In order to address any prac- tical difficulties or unintended conse- quences that are discovered, the Legis- lature should act swiftly to make neces- sary modifications to the TIF Grant Program, special deficit, and pooling Authority provisions. LE-17. Business Subsidies Issue: Business subsidy grantors aze still getting accustomed to the relatively new Business Subsidies Act. The 1999 Business Subsidies Act was clarified and modified during the 20001egislative session. In order for development agencies to effectively unplement the amended law, the law should be allowed to operate without further sub- stantive legislative change. Response: Without thorough study, the Legislature should not make any substantive changes to the 1999 Business Subsidies Act during the 2002 legislative session. LE-18. Minnesota Investment �und Issue: The Minnesota Investment Fund is not adequately funded. In light of recent legislative action, local governments increasingly do not have an adequate slate of tools to assist job creation and training, redevelop blighted and decaying properties, and provide adequate housing choices. Consequently, cities aze not well equipped to compete nationally and internationally for business development. Response: More state resources should continue to be contributed to the Minnesota Investment Fund. LE-19. Redevelopment Programs Issue: Communities across Min- nesota are faced with unique circumstances of deteriorating, obsolete, and vacant struc- tures in neighborhoods and downtowns and a lack of land for development. Redevelop- ment activities usually require lazge, up- front funds to address multi-phase projects of extensive duration where site assemblage, demolition, relocation, or pollution cleanup must occur before private-sector interest can be generated. Additionally, deterioration threatens historic structures in cities across the state. While fihe redevelopment account administered by the Department of Trade and Economic Development is a critical component in establishing a coherent state- wide policy for redevelopment, cities do not have sufficient tools to utilize in local historic preservation efforts. 2002 City Policies 15 Response: In recognition of the unique needs of redevelopment projects, the state should continue its commitment to reinvest in its communities by increase- ing and committing to permanent base budget funding for the redevelopment account administered by the Department of Trade and Economic Developmenk Additionally as part of a com rehen i tionally, the Legislature should deveIop a state fund to facilitate state partici- pation in abatement projects. Finaily, the funding caps should be increased or elxminated. L�-21. Brownfields � p s ve Issue: Brownfields aze lands approach to redevelopment needs, the �S��ble for development due to the Legislature should consider the state presence of chemical or other contaminants. income tax credit legisiation pursued by Brownfields aze a major cause of blight the Preservation Alliance of Minnesota, �� communities across the state through TIF subdistricts, and other tax incentives loss of local tax base, jobs, housing qualiry, for local historic preservation effotts. The public safety, and community confidence. Legislature should also enact authority Revitalizing this land is costly and requires similar to the This Old House law that � cooperafion of city, county, school, would provide a tax deferral on improve- regional, state, and federal govemments and ments to commercial buildings located in � assistance of local economic develop- designated rehabilitation or historic ment organizations and citizens. preservation districts. As we move into an era where the mass creation of jobs is a necessity and LE-20. Property Tax Abatement where increased tax base is a requirement Authority for local govemments to adequately face " growing financial pressures, efforts to Issue: In an effort to increase the revitalize brownfields must not only con- number of development tools available, the tinue but be accelerated in the upcoming -------------- ----- �-- - egisTafure autfiorized local units of Y�s. Currently, $7 million exists in the government to o ant properiy tax abate- Deparhnent of Trade and Economic ments. Although TIF continues to be the Development's (DTED) base for the primary financing mechanism for local contaminated site clean-up fund. Addi- development projects, tax abatements tionally, $6.2 million is appropriated provide a good addition to a needed list of ��11y from the Petrofund to DTED to economic development tools. In order to clean up sites that contain at least some provide maximum benefits, tax abatements petroleum-related contamination. should be less reshictive in terms of fitnding _ caps and fmancing terms. Property ta�c Response: A comprehensive set of abatements shouid not be considered a economic development programs must be replacement for tax increment financing. maintained for cities and other develop- ment agencies. The Legislature should: _.., .. .. , _ viabie development tool available for • Increase funding for the Department cities. Abatement authority should of T'rade and Economic Develop- continue to be available, but not offered ment's contaminated site clean-up as a rationale to eliminate TIF. Addi- fund and redevelopment account; 16 League of Minnesota Cities fla- so • Strengthen enforcement and collection of revenues for the state contamin- ation taz; • Continue support for and funding of local and regional programs to assist in the efforts to remediate brown- fields; • Establish a fully-funded program to allow cities and other development authorities to gain control of and reclaim and revitalize brownfields; • Protect existing tax increment financing provisions that provide for the remediation of brownfields, and modify restrictions to allow the pool- ing of district revenues to assist in the financing of remediation of brown- fields; • Establish an indemnificafion fund to provide financial security for institutions and individuals as they invest in efforts to recycle brownfields in order to leverage private invest- ment in cities' efforts to increase their tax base and create jobs; and • Continue financing mechanisms for cleaning contaminated sites. LE-22. OSA Response Timelines Issue: The Office of the State Auditor (OSA) is responsible for TIF oversight. As part of their review of T'IF districts, they identify alleged violations of the TIF laws and issue noncompliance notices to TIF authorities. After responding to these noncompliance notices within the required 60-day period, authorities o8en 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. Response: In the event that the OSA determines to issue a final non- compliance notice to a TIF authority, the Lea slature should require the OSA to issue the notice within 60 days of re- ceiving 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 £nal noncompliance notice is received. LE-23. OSA 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 alleged violations that occurred 20 or more years ago. Often, staffand record-keeping procedures have changed and TIF authorities find it ex- ceedingly difficult to reconstruct the past in order to identify and remedy these situa- tions. Similarly, the OSA claims the authority, based on the state's records retention schedule, to audit TIF districts for up to 10 years a$er 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 within which alleged violations are identi- fied shouid be established. The Legisla- ture should reasonably restrict the OSA's ability to issue noncompliance notices to 2002 City Policies 1� the six-year period prior to the notice's issuance date. The Legislature should also require Ehe OSA to conduct any audits on decertified districts within one year of decertification. LE-24. Economic Development Authorities Issue: The 2000 Legislature author- ized counties outside the metropolitan azea to establish county economic development authorities (EDAs). The new law lacks specificity on certaiu process and limitations issues. County EDA activity in azeas sur- rounding cities will directly unpact the adjacent city in terms of seroice provision and taxes. Response: The Legislature should continue to fully fund the job skilts parf- nership and pathways prob ams admin- istered by the Department of Trade and Economic Development. The Legislature shouId provide additionai funding to local workforce councils for the purpose of upgrading the skills and productivity of the workforce. LE-26. Adequate Funding for Transportation Issue: Current funding for roads and iransit systems across all government levels in the state is not adequate. The League acknowiedges that all Minnesota communities benefit from a sound and adeauately funded transportation system. Response: The Legisiature should establish reasonable limits on county Resporue: More resources must EDA activities in unincorporated areas, be dedicated to the state's transportaHon including requiring city approval for system. The League supports constitu- proposed county EDA activities within tionally dedicating a portion of the sales two miles of a city. The Legislature should tag on motor vehicles (also referred to as revisit the county EDA Tegislation and MVET� or other new revenue sources to add specifici to oth er process and a transportation fund, which would fund _ ....._._------- --- ------ ------------------ . _ mi ahons issues suc as t e local both highway and transiY projects. The recommendation committee. League also supports an increase in the gas taa that would be dedicated under the LE-25 WoTkforce Readlness ezisting highway user trust fund formnla. Replacement funding for vehicle registra- Issue: State and federal welfaze tion tases (known as tab fees) must be reform efforts have focused on the impor- constitutionally dedicated to the highway tance of the welfare-to-work transition, and user trust fund. have recognized the challenge of ensuring - individuals are qualified to work. Cities If adequate funding does not come have an interest in the availability of qual- from the state, cities should have funding ified workers as part of their economic options made available to them to raise development efforts, and can serve as a the necessary dollars to adequately fund ' er i en ies an e ' . . . .. _ _ .,.. - private sector to address workforce readiness issues. All nontransportation programs should be funded from sources other than 18 League of Minnesota Cities oa-s� the highway user disiribution fund or other funds dedicated to transportation. LE-27. State Aid for Urban Road Systems Issue: Current rules governing municipal state aid expenditures aze re- stricting 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 acla�owledge the technical and practical restrictions on construction and reconstruction of urban road systems. New municipal state aid design standards should not apply to reconstruction of existing state aid streets originally con- structed under different standards. Future changes to state aid rules shouid ensure the involvement of elected officials and engineering professionals in the decision-making process. LE-28. 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 nego- tiafion and mediation should govem the timing, funding, and condition of turned- back roads. City tazpayers should receive the same treatment as township tax- payers. The requirement for a public hearing, standards about the conditions of turnbacks, and temporary mainten- ance funding should also apply to county tumbacks to cifies. 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 pro- vided for smailer ciYies that are not pro- vided with turnback financing through the municipal state aid system. LE-29. Road Funding for Cities Under 5,000 Issue: Cities under 5,000 population do not receive any nonproperty tax funds for their collector and arterial streets. Response: Cities under 5,000 pop- ulation that are not eligible for Municipal State Aid (1VISA) should be able to use county municipal accounts and the 5 per- cent account of fhe highway user distrib- ution fund. Uses of county municipal accounts should be statutorily modified so counties can dedicate these funds for local arterials and collector streets within cities under 5,000 population. In addition, the 5 per- cent set-aside account in the highway user distriburion fund should be used to meet this funding gap. LE-30. Railroad-Related Projects Issue: Cities are being presented with far-reaching and long-term effects when railroad expansion and related projects enter their communities. Along with the concerns related to safety, environxnental effects, and noise impacts on the communi- ties, several issues have greater reaching effects. They aze: 2002 City Policies 19 • The cost-shaze ratio related to roadway crossing improvements will be borne by tfie public sector to a substantial degree, some estimates are 80 percent public to 20 percent private funding; • The fmancial burden faced by the public sector to deai with mifigation 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 whistle- 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 to underwrite tke costs of improvements sought by the private sector. The state and federal govemment must participate in adequately funding the mitigation of the negative impact of railroads on local government and its citizens. The federal government must exercise greater over- sight of the STB to ensure fair and equitable solutions are reached when dealing with cities in Minnesota. IMPROVING SERVICE DELIVERY SD-1. Redesigning and Reinventing Government Issue: Every level of govemment is - ---------reevaIuaiing,-repriori�izing redesigmng, renewing its organizational structure and programs in response to financial reatities 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, reorgani�ation and reassign- ments of governmental entities and services should save money where feasible, deIiver improved services, serve essential needs, and be equitably structured. Cities have and wIll continue to pursue the use of coopera- tive a�reements, the reevaluation of citv • Ensure that in redesigning, reinvent- ing, or reassigning govemmenY ser- vices and programs that the appro- -- ----pr5ate-level-a�service-to-ctttzens-is------ -- evaluated, and citizen demands and eapectations are adequately addressed; • Promote local efforts through incentives, rather than mandates; • Communicate and establish a process of negotiation before shifting responsi- bility for delivering services from one level of government to another, or seeldng to reduce service duplication; • Transfer authority for use of revenues dedicated to such programs, or pro- organizational structures. Response: The federal, state, and county govemments should: 20 alternatives; • Identify and repeal programs or discontinue services that are no longer necessary, or which can readily and Leawe of Minnesota Cities O1-So fairly be provided by the private sector; and Employ e�sting govemment entities in redesign efforts rathet than create new agencies or units. SD-2. Unfunded Mandates ticulazly those related to traffic, controiled substances, and incazceration of prisoners. The current method in our criminal justice system of recovering costs for law enforce- ment and prosecution through fines is insufficient to meet the costs incurred by local govemments. Issue: The cost of federal and state mandated programs substitute the judgment of Congress, the President, the Legislature, and the govemor for local budget priorities. These mandates force cities to reduce fund- ing for other basic services or to increase taxes and service chazges. The passage by the Legislature of reporting requirements for new state mandates, and the passage by Congress of legislation restraining new federal mandates,should help addressthe problem, but other steps are necessary. Response: • Existing unfunded mandates shouid be reviewed and modified or repealed where possible. • No additionai statewide mandates should be enacted, unless full funding for the mandate is provided by the level of government imposing it or a permanent stable revenue source is established. • Cities should not be forced to comply with unfunded mandates. • Cities should be given the greatest flexibility possible in implementing mandates to ensure their cost is minimized. SD-3. City Costs for Enforcing State and Local Laws Issue: Cities experience substantial costs enforcing state and local laws, paz- Response: The Legislature 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 that conflict with cost recovery principles; and Requiring the defendant to pay the full costs of enforcement and pros- ecution as part of any sentence. SD-4. Design-build Issue: The standard bid procedure cities are required to use in selecting con- tractors for municipal buildings can be quite costly. Private sector development uses a process known as"design-build" in which various 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 altemative to the Metropolitan Sports Facilities Commission and state agencies, including the Department of Revenue, the Legislature has recognized the fmancial 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. 2002 City Policies 21 The design-build process also per- mits improved project management and oversight. However, absent statutory authorization to use this alternadve, cities aze vulnerable to lawsuits from unsuccessful bidders. In addition, the design-build process for playground equipment can encourage greater creativity while main- taining cost controls. Special legislation was enacted for the city of Chanhassen in 1995 to experiment using this process for pur- chasing playground equipment. Response: The Legislature should authorize an eatension of the design-build procedure to cities as a less expensive altemative to the standard bid procedure. SD-5. Providing Information to Citizens Issue: To keep the public updated and informed, state law requires local units of govemment to publish various notifica- tion documents in newspapers, and often dictates which newspapers receive cities' publication business. The number and variety of documents required to be pub- lished and the costs of publicafion aze burdensome. Technological advancements have expanded the ways govemment can provide information to citizens. In many cases, these new technologies are more efficient and cost effective. and fhe Internet, and expand the use of summaries where information is technical or lengtfiy. Additionally, the Legislature should eliminate outdated or unnecessary publication requirements. SD-6. Construction Codes Issue: Each yeaz the Legislature addresses construction codes issues that have some impact on local governments. In addition, the Constzuction Codes Advisory Council and Builders' Association of Minnesota have indicated they may be recommending legislation to require state- wide enforcement of the 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 local option for cities outside the metropolitan azea. Many Greater Minnesota cities have adopted the state building code and all cities within the seven-counry metropolitan area aze required to adhere to the state building code. Response: A building code pro- vides many benefits including uniformity of construction standards in the building industry, consistency in code interpre- tation and enforcement, and life-safety guidance. Response: Cifies should be A statewide-enforced building authorized to take advantage of new code may have benefits, but requiring it technologies to increase the dissemination would result in an unfunded mandate. of information to citizens and potentially The enforcement of a building code can lower the associated costs. Specifically, be cost prohibitive for many cities due to e es an over ea re a e o —"' units of govemment to designate an staffing vs. the limited building activity appropriate daily/weekly publicafion, occurring in some communities. elect alternative means of communication such as city newsletEers, cable television, 22 League of Minnesota Cities b� —$'o 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 stafe build- ing code should remain a local option for municipalities outside the seven-county metropolitan area, unless the state fully funds the costs of enforcement and in- spection services necessary to enforce a statewide building code. In the event the Legislature re- quires 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 state fully funds code enforcement activities. To the extent the insurance industry is concerned about insuring structures not built to code, the industry should drive code compliance by issuing policies or setting rafes based on whether the structure meets various code requirements. SD-7. National Fire Protection Association (NFPA) Standards Issue: The National Fire Protection Association (NFPA) is an international association of individuals and trade and professional organizations that deals with fire and life safety. The NFPA has adopted two new standazds: NFPA 1710, Organ- ization and Deployment ofFire Suppression Operations, Emergency Medical Opera- tions, and Special Operations to the Public by Career Fire Departments, and NFPA 1720, Organization and Deployment of Fire Suppression, Emergency Medical Opera- tions, and Special Operations to the Public by Trolunteer Fire Departments. NFPA standazds 1710 and 1720 define m;n;r„um response times, minnnum fue company staffmg levels, initial full alarm response levels, and ea alazm response levels. Although NFPA codes and standazds aze voluntary, they aze usually adopted by local jurisdictions. NFPA standards 1710 and 1720 preempt local authority and place a one-size-fits-all mandate on all cities and towns. Response: Levels of service de- Iivery for fire and emergency medical services (EMS) have always been deter- mined by local jurisdictions. The NFPA has clearly gone outside its authority in proposing these national minimum manning, response, and staffing stan- dards. If adopted and issued, these pro- posed NFPA standards would force local governments to shift dollars from fire prevention programs to fire suppression activities, potentially increasing the risk cf fire and the danger to local firefighters. The League of Minnesota Cities opposes any attempt by the NFPA to impose stan- dards for staffing or minimum manning levels of fire, specialized, or emergency medical services vehicies controlled by units of local government. The League also opposes any attempt by the NFPA to adopt a standard dictating or affecting the response time of any fire, specialized, or emergency medical services vehicle. SD-8. Fees for Service Issue: The Legislature and interest groups often seek to mandate specific fee limitations for various city services. Exatn- ples of such mandates include building permit fee legislation and coin operated amusement machine license fee legislation, both designed to rigorously control local fee setting authority. Additionally, starting in 2002 City Policies 23 2003, all city development fees and related expendihues wiil be reported to the state. Other groups, like the Citizens Jury and the media, aze discussing the value of fees for providing services. The Citizens Jury gave limited acknowledgment of the value fees may have in providing core ciry services. The media often urges the public and policy makers to monitor city use of fees. Response: While the state has a roIe in providing a general statewide funding policy, the state should not interfere in the decision-making functions performed by cities when setting city budgets fo provide city services. General services such as permitting, inspections, or enforcement are besf funded out of a city's general fund. The League supports fhe Legis- lature endorsing city authority to charge fees that are reasonably relaYed to the cost of providing the service, permit, or license and aclrnowledging there are other asso- ____ciated_costs inher-enL-in-the-prfrvisioa-of-- those services, permits, or licenses. However, cities oppose any move to legislate specific methods to pay for city services or place caps on city fees. SD-9. Library Funding Response: The Leagae supports a state matching grant program to provide doIlars to assist communities to work in partnership to build and improve libraries. SD-10. Civil Liability of Local Governments Issue: One of the barriers to the delivery of governmental services and programs is the exposure of local govern- ments and their officials to civil damage claims. The state has acted to protect itself and its Iocal govemments by enacting ex- ceptions and limitations to liability suits, and authorizing self-insurance and other mech- anisms to deal with claims allowed by law. Response: The League supports: • Creating an exception to municipal tort indemnification law, Minn. Stat. § 466.07, where an employee is de- fended and indemnified for claims under a contract of insurance carried __1�y_the.emplay_ee.----------------------__. __. • Extending the protection of the state and municipal tort claims act to quasi- governmentai entities when perform- ing public services such as fire- �ighhng; • Existing constitutional safeguards for protecting public and private property interests without any statutory Issue: Many community libraries in egpansion of property rights; and Minnesota aze city owned. Although located • Clarifying and maintaining the in an individual community, city libraries applicability of municipal immunity serve a much wider azea. Local iibraties in various areas including, but not � 4T1C P{�lI{L7 V V! Cd{'(p'IF[[]. � �•'-•'� . . ,_ . _ �.. , _ . access to both written and electronic media immunity, including the extension to to enhance the educational capacity of both entities providing a public service that adults and children. have not traditionally been included within the immunity (e.g. state trails 24 League of Minnesota Cities oa-so over municipal utility easements) and vicarious official immunity. SD-11. Private Property Rights and Takings Issue: The Legislature has been introducing an increasing number of bills designed to dinunish or contro21oca1 gov- ernments' ability to exercise traditional planning and zoning authority and eminent domain powers. Legislation 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 addition, bills have been introduced to codify the properiy rights section of Minnesota's Constitution. provisions, municipal condemnation will become more costly and talce longer to conciude. Response: The League encourages the state and federal govemments to improve their regulatory programs by eliminating property rights issues that were caused 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, safefy, and welfare of its citizens, that increases the cost of doing business for the public good, or that creates the possibility of additional lawsuits against cities. SD-12. Election Issues The federal swamp buster/sod buster programs, the Army Corps of Engineers' dredge and fill programs, and the state's Wetlands Conservation Act and Community Based Plamung Act, appeaz to be the nexus for much of the property rights and takings legislation. The League supports local govern- ments' ability to baIance the rights of private landowners with the interest of the public. However, the League is concerned various legislative initiatives will adversely impact cities in three ways. First, such legislative initiatives undermine the fundamental authority of cities to protect the public health, safety, and welfaze of its citizens. Second, if the Legislature acts fo codify part of the Minnesota Constitution, an argument may be made that the Legislature 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" Issue: At a time when state policymakers are considering election re- forms, it is important to address the role of cities in administering state election law and conducting absentee balloting and voting activities. Response: Tn view of the import- ance of improving the efficiency and responsiveness of local election adminis- tration, the League recommends the Legislature: • Support enhancements to the state Voter and Election Management System (VEMS) to give cities direct access to VEMS; • Allow cities to appoint at least one election judge per precinct from at least two major political parties, while waiving the potitical party preference requirement for 50 percent of the election judges at each precinct; and 2002 City Policies Zg • Authorize cities to enact an ordinance no more than 90 days prior to the opening of filings to require write-in candidates for city elective of�ices to file a written request with the 51ing offcer no later than the day before the elecrion in the same manner as candi- dates for state and federal offices are now required; Minn. Stat. 204B.09, Subd. 3, in order for votes cast to be tabulated and reported in the official canvass. SD-13. Local Election Authority Issue: Previous Legislatures reshicted city authority to schedule city elecrions and establish terms of office for local elected officials, thereby diminishing regazd far the role of local self-government, particulazly when state policy preempts home rule authority governing city elections. Statutory cities currenfly lack authority to create wards. Response: The Legislature should oppose further Iimits on either the num- 6er or the lenb h of terms city elected officials may serve, particularly when those terms have been established by voters in home rule charter cifies. State policy on uniform elections should continue to recognize and uphold local authority to schedule city elections in • Regulatory bodies fail to consistently use good science and the most current and accurate data when establishing water quality standazds. November of either even- or odd- • Regulatory bodies impose new permit numbered years. The Legis(ature should requirements without going through support provisions to give statutory cities rulemaking. Instead, the agencies rely on general authority to create wards. internal documents, program s�ategies, and "best professional judgment of stafY' SD-14. Environmental Protection when setting perm criteria. " • Regulafory bodies approve perniits and Issue: Cities demonslrate strong programs that compete with traditional stewazdship for the protection and preser- municipal services and encourage urban vation of the environment. Minnesota sprawl. T'his behavior puts at risk the municipalities have historically been the public invesiments and growth leading funding source for environmental protection and improvements. Municipal efforts include environmental protection through wastewater �eatment, wetland restorations, stormwater treatment, public utility emission reductions, brownfield cleanup, safe drinking water programs as well as others. However, at some point the dimin- ishing or nonexistent environmental benefit received from addition efforts is fiscally iaesponsible. Often, the programs aze improperly designed to meet their stated goals. Additionally, the absence of funding by the state and federal govemments has removed an essential restraining feature in program design and ixnplementation. Agencies are less accountable to the governments that mandate environmental programs when they do not have to find the money to implement the prograxns. Specific problems faced by cities include: • New programs or staudards aze ------__ - - " "corifuiva y adopte�wittiout regard to the existence, attainability, or cost of exisking programs and standards. 26 League of Minnesota Cities o�-sa management efforts cities have made when planning for future development. • Pernut fees and other cost transfer elements of federal and state progranvs do not provide an incentive for environ- mental agency efficiency, policy priori- tization, or risk assessment. • Third party environmental advocacy groups create significant hardships on cities by threatening litigation even when hazd science may not support the groups' positions. Response: within a reasonable set time period and require the MPCA to reissue the permit within a reasonable set time frame. • Legislation should be passed that requires state agencies to establish permit requirements only when the criteria they are using is developed through the rule making process. • The LMC should join with other like- minded organizations to contest through judicial means various reg- ulatory achvities of state agencies and advocacy groups. • Alternative wastewater trea#ment and cooperative service systems should be prohibited from operating in areas fhat can reasonably and ef£ectively be served by existing municipal systems unless: --The municipal system is proven fo be subsfanriaily Iess 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 financial assistance should be provided to assist local governments when complying with state and federal infrastructure requirements, particularly with re- gard to wastewater, stormwater, and drinking water facilities. • The MPCA should streamline its permitting and reissuing processes to allow for effluent standards and permit requirements to be known earlier, thereby giving communities more time to defend against contested case hearings. • The Legislature should require the MPCA to make its determination regarding the re-issuance of a permit SD-15. Sale of Lawn Fertilizers Containing Phosphorus Issue: Cities aze required by several levels of government to improve and en- hance the quality of surface waters. Surface water runs through watersheds that razely aze wholly within a city's boundaries. And to be effective, measures for water quality improvements need to be regional or statewide. Phosphorus is a nutrient that can have a tremendous negative effect on surface and ground water quality. One pound of phosphorus produces 300 to 500 pounds of algae. The cost to remove one pound of phosphorus ranges between $200 and $500. Phosphorus is commonly added in lawn fertilizers sold tiuoughout the state even though it naturally occurs in sufficient quantities in Mimiesota soils to provide for healthy plant growth. Excess phosphorus from lawn fertilizers is not needed and it is carried by rain and lawn sprinkling into our storm water systems, lakes, wetlands, and streams. 2002 City Policies 27 City residents shoulder millions of dollazs in eacpenses to complete and imple- ment their surface water management plans and to provide municipai wastewater treat- ment systems. Reducing the amount of phosphorus entering these systems and water bodies would result in significant savings in capital and operating costs. The most cost-effective way to reduce phosphorus in our lakes, weflands, and streams is to prevent it from entering these systems. Additionally, cities believe the state is the appropriate levei of govemment for effective and economical administration and enforcement responsibility. Response: The Leb slature should adopt legislafion that: • Restricts the sale of lawn fertilizers containing phosphorus, and requires "zero" phosphorus content; SD-16. Creating a Minnesota GIS Program Issue: Local governments aze finding geographic informafion systems (GIS) an essentiai tool for comprehensive land use, real estate, environmental, and other land management information. In many counties, maintenance of officialland records has not been automated, creating a barrier to GIS development. In addition, the start-up costs of GIS implementation can be prohibitive. Response: The Legislature should encourage local government impleme- ntation of GIS through grants and/or the dedication of a revenue source such as real estate transaction fees. In addition, cities should be involved in the develop- ment of county land records modern- ization plans. SD-17. State Appropriation for Government Training Service -_._..__.___ . --- - -- ssuee Tu I97T, Government " -" "�"" nc d es escepfions for establishment of new turf and for properEies demon- Training Service (GTS) was created in order strating a deficiency of phosphorus in to provide a coordinated response to the their soils; training needs of state and local govern- • Exempts the naturally-occurring ments. GTS was chazged with coordinating presence of phosphorus in organic �e needs of the state, cities, counties, town- fertilizers; ships, and school districts, with the delivery • Is statewide in sco e reco capability of the state's institutions of higher p, gnizing that learning and other continuing education watersheds do not observe political service providers. boundaries; and State financiat support of GTS is • Provides appropriations for the state important. Many cities and other local to fund and enforce this law. governments find it difficult to adequately vides a cost-effective mechanism for taking advantage of the efficiencies of cooperation. 28 League of Minnesota Cities oa-so Response: The League supports the state general fund appropriation for the Government Training Service. SD-18. Public Safety Spectrum Needs Issue: Cities have benefited from successful efforts at the federal level to gain access to exclusive radio and wireless com- munications capacity for state and local pubiic safety spectrum. For fizture interop- erability, cities will need additional spec- trum 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. Specmxm in the 800 MHz range requires many more sites to cover the same geographic range and uses more expensive radio equipment. Although many local public safety agencies are moving to new 800 MHz systems, others will need to re- main 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 govemment must make sufficient spectrum available to allow public safety agencies that re- quire mulri-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, whiie allowing ciries to form coordinated dispatch and services. Regional funding of such systems shouId be consfdered taking into account the useful life of current systems. SD-19. Legalization of Ffreworks �ssue: Fireworks products can cause serious injuries and fire loss. Fireworks have been illegal in Minnesota since 1941, and legalizing them would undermine fue pre- vention efforts. Legalizing fireworks would increase public safety enforcement, emer- gency response,and fire-suppression costs. Response: The League opposes the legalization of fireworks. SD 911 Funding Issue: Many cities struggle to afford routine maintenance and improvements to the hazdwaze and sofiwaze of their 911 services. In addition, cities strive to allocate adequate training dollazs for the personnel who operate the 911 centers. New tech- nologies continue to emerge and the Federal Communications Comxnission has mandated new compliance with automated location identification for cell phones. These factors continue to increase operating expenses and the current telephone surcharge formula is not keeping pace with the escalating ex- penses. Cities are forced to choose between bearin� all costs or making only incremental improvements to their systems. During the 2001 legislative session, the Legislature capped the 911 telephone surchazge at the cunent 27-cent level, rejectin� proposals to increase the surchazge 2002 City Policies 29 and provide additional funding to the 911 centers located throughout the states. The 27-cent level is inadequate to meet the demands of the current systems, and does not address future funding requirements. In addition, the Legislature removed the authority of the Commissioner of Admin- istration to set the surcharge amount. The Commissioner requires such authority to deal with escalating technological advances and to ensure a dependable statewide 911 system. Respnnse: The League supports an increase in the current 911 surcharge. The increase is needed for upgrades and modifications of 911 systems located throughout Minnesota to allow for effective, reliable emergency commun- icarions services. The public safety,, answering points, and the entire 911 system must be maintained and remain in excellent working condition in order for the systems to save lives, assist in reduc- ing crime and reduce properiy damage. The Legislature should also restore the Commissioner of Administration's auth- ority-to establish the sarcharge amount SD-21. Raciai Profiling Issue: The League of Minnesota Cities reco� ;�es that where racial profiling e�sts it must be eliminated. The League supports action by the state of Minnesota to fund and implement effective and mean- ingful responses to racial profiling that will effectuate fair treatment of all people. must have confidence that each member of the community is being treated fairly and respectfuliy and that the race or ethnicity of the driver is not used as a factor in deciding to stop a motor vehicle. The League sup- ports training programs to support these goals and recommends that the state of Minnesota develop, fund, and present such training programs to all law enforcement agencies in the state. The League opposes the mandatory collection of traffic stop data as being counterproductive and ineffective in ad- equately responding to those members of our communities who do not feel a part of the community by virtue of their concems about racial profiling. In an effort to ascer- tain the scope and degree of the problem, the Lea�ue would support objective, well form- ulated statisticai sampiing by third parties under the auspices of a state funded study that would develop documentation of traffic stops and an analysis of those stops, coupled with an effective means of enforcing sanc- tions against documented 'uvstances of in- appropriate treatment of citizens. Addition- aYty; the �eague supports s3ate fiuidmg for video cameras in police cazs. SD-22. 0.08 DWI Issue: The state of Minnesota is considering a statutory amendment to reduce the blood alcohol level from 0.10 to 0.08. Analyses anticipating the fiscal impact of the 0.08 threshold on cities have been inconclusive. Under current driving Response: The League supports a while impaired (DWI) law, the arresting meaqing�ui an — concems of our residents that police traffic suspected DWI offenders. A reduced stops reflect an objective demonstration of threshold may result in more DWI arrests probable cause to believe that a law has been by city law enforcement o�cers and, thus, violated. All members of the community increased prosecution costs for cities. 30 League of Minnesota Cities OS— � Response: The League of Min- nesota Cifies is committed to building quality communities and to increased public safety. By adopting and imple- menting the 0.08 percent BAC level threshold, the sfafe wili secure exisfing federal highway funds that will assist in the maintenance and upgrade of a safe transportation system. Prior to adopting this initiative, the Legislature should carefully study the costs associated wifh a reduced DWI threshold. The state of Minnesota should provide the necessary funding to compen- sate local units of government for related cost increases. SD-23. CriMNet Issue: Public safety is compromised by the lack of centralized, complete and accurate criminal history data about indiv- iduals, incidents and cases. And, without an integrated cruninal justice information sys- tem, Minnesota cannot always hold serious criminais accountable for their crimes. CriMNet, Minnesota's effort to integrate the 1,100 criminal justice information systems operated by agencies at all leveis, will irnprove access io relevant criminal history data for public safety and criminal justice authorities. Over 500 cities operate police departments. These departments vary dramatically in fiscal capacity, staffing resources and technical expertise. Further, each municipal law enforcement agency has unique operating procedures, strengths and needs based on the community it serves. The League of Minnesota Cities knows CriMNet will have a significant impact on municipal police business practices, and could mean increased staffing needs, training and equip- ment purchases. The League also recognizes that every agency must participate fully in GriMNet to make the system effective. Response: The League of Minne- sota Cities supporfs efforfs by fhe stafe of Minnesota to integrate criminal justice information systems. The League also supports cooperation between legislators, Iaw enforcement and corrections agents, court offcials, pmsecutors, community groups and businesses that 6uild public support for CriNPi iet. If CriMNet is to be implemented statewide, the Legislature must consider the different capacities of municipal law enforcement agencies to participate. The League requests that the Legislature fund CriMNet planning and implementation at 4he local level. SID-24. Red Light Cameras Issue: Drivers who run red lights can cause serious traffc accidents and con- tribute to gridlock. In spite of the severity of this problem, cities cannot afford continuous monitoring of intersections by peace offi- cers. The technology exists to enforce traffic signal laws with photographic evidence. When installed at tr�c signals, motion imaging recording systems (M[RS) have been shown to reduce red light numing. Resportse: Local law enforcement agencies should have the authority to use the MIRS technology to allow a vehicle, not its occupants, to be identified when the vehicle has violated a traffic signal law. Local law enforcement officers should have the authority to issue ciYa- tions for violations of traffic signals by mail, where the violation is detected with photographic evidence. 2002 City Policies 31 SD-25, Misdemeanor Fines Issue: There is an inconsistency in the amount that a city can charge for misdemeanor violations under Minn. Stat. §§ 412.231 and 609.02, subd 3. Minn. Stat. § 609.02, subd. 3, establishes maximum fines at $1,000. Minn. Stat. § 412.231 establishes maximum fines at $700. Al- though the Legislature has established that the provision in Minn. Stat. § 602 super- cedes the fine in § 412, the inconsistency has resulted in confusion in applying the laws. Response: The Legislature shou(d amend Minn. Stat. § 412 to mirror the amount of the fine estabiished in Minn. Stat. § 602. SD-26. State Regulation of Massage Therapists Issue: The state does not currenUy regulate massage therapy, an emerging and rapidly growing profession. In order to con- trol prostitntion and to provide for health and saai4ation staudardsz several cifres 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 ordin- ances aliow local law enforcement officers to differentiate between legitimate massage therapists, who have a city license, and prostitution businesses fronting as massage therapy establishments. level. Statewide regulation of massage thera- pists wouid provide a cIeaz set of educa- tional standazds that massage therapists must meet, and would provide local iaw enforce- ment agencies with an easy tool to distin- guish between prostitution and legitimate massage therapy. Statewide regulation � would not disturb traditional powers over land use and business licensure. Response: The League supports the statewide regulation of massage therapists in order to aid locaI law enforcement efforts to control prosti- tution and other criminal activity. SD-27. On-Sale Liquor or Wine Licenses to Performing Theaters and Cultural Centers Issue: Performing theaters and cultural centers aze not one of the qualifying enrities 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 'iriteif"eres with tiie ability of muni- cipaliries to control the placement and operating manner of these entiries. 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 the municipality. SD-28. Youth Access to Alcohol & The lack of statewide regularion of Tobacco massage therapists has hampered law en- forcement techniques, and has caus�d.piob- age o ^--� lems for cities attempting to regulate an purchase alcohol in Mimiesota is 21. The entire health-care profession without any � age to purchase tobacco in statewide standards. Currently, 25 states Minnesota is 18. The minimum age to sell reeulate massage therapists on a statewide aicohol and tobacco products in Minnesota 32 League of Minnesota Cities oa-so is 18. Cities have an interest in preventing their youth from obtaining these products. To this end, many cities operate compliance check proa ams in an effort to discem the current level of youth access and to reduce youth access. environments. The League supports staiutory changes that assist in reducing youth access to alcohol and tobacco products. The League supports mandatory alcohol compliance checks with state funding initiatives to support locally-determined compliance ef£orts. Response: The League opposes any proposal that could result in increased risks of youth access to alcohoi and tobacco products and expanded off- sale venues for the sale of such products. The League supports the sale of alcohol and tobacco products only in controlled HUMAN RESOURCES & DATA PRACTICES Human Resources Issue: Many state laws increase the cost ofproviding city services to residents by requiring city govemments to provide certain levels of compensation or benefits to public employees, by specifying certain working conditions, or by limiting city governments' ability to effectively manage their personnel resources. For instance, existing state laws limit govemments' ability to effectively address incompetence or misconduct of city employees specifying certain procedures to be followed or standards of conduct. Resporue: 'The state government shouid refrain from passing laws that regulate the public sector workplace, and should repeal or modify problematic existing taws and reguiations to encour- age fuil local accountability. The League of Minnesota Cities proposes the following initiatives and reforms: HR-1. Preservation of Local Decision-Making Authority on Employment Related Issues • The League supports local decision- making authority, and opposes legis- lation intended to interfere in local decisions. HR Veterans' Preference • Minnesota's veterans' preference protections were created at the turn of the 19�' Centtuy. These protections were designed to assist veteran employees at a tune when Minnesota's and the federal government's labor and personnel laws were in their infancy. The Legislature should conduct a study of Minnesota's veterans' preference law to determine its effectiveness and e�ciency in light of today's employment laws, statutes, and regulations. It is likely the Legislatura will find parts of the law need modern- ization. For example, compressing the 2002 City Policies 33 time in which to request a heating to 20 days from the current 60 days would result in more efficient resolution of disputes. AR-3. Compensation Limits • The Legislature should acknowledge that all state and local govemments, not just schools districts, must be competitive in recruiting and retaining upper level man- agement employees. In addition, there is no correlation between the compensafion of citizen volunteers and career public sector professionals. Therefore, the state should repeal or modify laws Iimiring the compensation of a person employed by a statutory or home rule charter city to the govemor's salary. HR-4. Public Employees Labor Relations Act (PELRA) • The state should modify the definition of public employee under PELRA by re- moving the existing 14-hour/67-day requirement and replace it with a defin- ition in wkich must work more than an annual average of 20 hours per week. • Temporary or seasonal employees should be excluded from the PELRA definition of public employee in Minn. Stat. § 179A. HR-5. Re-employment Benefits HR-6. Essential Employees Cities must balance the health, welfaze, and safety of the public with the costs to taspayers. Therefore, the Legislature should cazefully examine requests from interest groups seeking essential employ- ee status under Miim. Stat. § 179A (PELRA). The League opposes legis- lation that mandates azbitration that increases costs and removes local decision-making authority. HR-7. Pension Benefits The Lea�ue opposes special legislation for individual employee pension benefit increases unless they aze initiated and approved by the city councii of the impacted city. HR-8. Pubiic Employees Retirement Association (PERA) Coordinated Plan Funding Deficiency • PERA had idenfified a significant long-term funding deficiency in its coordinated plan in 2000 that was the result of changing demographic pattems. T'he 2001 Leb slature adopted employer and employee contribution rates in- creases and plan modifications to address the deficiency. Recent analysis has indicated that some of the cosfly demographic trends that led to the deficiency may be slowing or reversin • Public sector tem or g � p ary or seasonal •'I'he state should carefully analyze future empIoyees should not be eligible for actuarial reports and experience studies re-employment benefits. +� �g�� gA� eanFribt3tionrate -- increases and plan modifications aze sufficient to cover the plan's deficiency. The state should assist local govern- ments in covering any deficiency that 34 League of Minnesota Cities �.- So still may exist. The state shouid recon- sider the 2001 changes to eIigibiIity that eliininated the full-rime student exclu- sion and the $425 per month salary threshold. The state should allow for city managers to opt-in to PERA provided there is no employer buy-taack obligation. Recently, some cities have been advised tfiat this faw appIies to "probationary" employees as well as permanent empioy- ees. Therefore, the Leaa e supports a legislative change to clarify that the state law on drug and alcohol rehabilitation and treahnent does not apply to proba- tionary employees. HR-9. State Paid Police and Fire Medical Insurance • The state should fixlly fund programs that pay for health insurance for police and fire employees required under Minn. Stat. § 299A.465, as amended in 1997, for police and fire employees hurt or killed in the line of duty. • The Legisiature should clarify whether Minn. Stat. § 299A.465 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-10. Breathalyzers • Minn. Stat. § 181.950-.957 should be amended to permit the use of breath- alyzers as an acceptable technology for determining alcohol use. Currently, breathalyzer use is pernutted under federal commercial drivers' laws. FIR-11. Drug and Alcohoi Rehabilitation • Minn. Stat. § 181.953, subd. 10(b), an employer cannot terminate an employee for a positive controlled substance test without first providing the employee a chance for rehabilitation and treahnent. HR-12. Health Care Tnsurance Programs • The League supports voluntary partici- pation in programs designed to provide for post-retirement health insurance benefits or in health insurance planc strucrixred to pool all public employees. HR-13. Electronic Timekeeping • The League supports amending Minn. Stat. § 412.271 to reflect modern technologies and timekeeping practices. Changes must inctude an oprion for cities to employ paperless time recording systems. �3R-14. Volunteer Fire Relief Pension • The League supports studying the feasi- bility of creating a voluntary statewide relief association for volunteer fire- fighters. Data Practices DP-1. Public Access to Information • Cities (and other state and local units of govemment) are reguired to establish policies and make cleaz to the public procedures for obtaining access to data 2Q62 City Policies 35 classified as government public data. These requirements must accord local officials flexibility to establish policies and procedures that reflect the availa- bility of resources and existing formats in whicfi information is maintained and organized. DP-2. State Model Policies and Training The Deparnnent of Administration is required to provide model policies and training assistance to cities in complying with the Government Data Pracfices Act (GDPA). The Legislature must fully fund the costs of on-going GPDA com- pliance tranung and education and direcfly involve local officials in the development and implementation of training acfivities. DP-3. Tennessen Warning • Changes enacted in 1999 addressed only the school district portion of the issues facing local govemment employers when complying with the notice requirements of the Tennessen Waming. The Legislature should lunit compliance with notice requirement to initial hiring procedures. The initial hiring notice will cover subsequent disciplinary or other personnel-related actions that aze likely to adversely affect the individual's employment status. DP-4. Violations of Government Data Practices Act Data Practices Act is hampered by feazs of punitive legal acrion against pubiic employees responsible for responding to requests for information while also pro- tecting data classified as private or non- public. The Legislature should maintain current damage award requirements for willful violations ofthe GDPA. THE LEAGUE SUPPORTS TI3E FOLLOWING POLICIES REGARDING FEDERAL EMPLOYMENT LAW: FED-1. FLSA/Overtime Compensation • The Fair Labor Standazds Act (FLSA) was designed for private employers. The definitions of "exempP' and "non- exempP' aze difficult to administer in the pubiic sector and do not reflect public sector operations. The regulations should be clarified to better allow public sector employers to appropriately classify employees as "exempP' vs. "non- exempt." FED-2. Medicare/Medicaid Premium Disbursements Minnesota continues to be a net loser in federal Medicare and Medicaid premium disbursements. Congress should recog- ni� this disparity and provide Minne- sota with a more balanced and repre- sentative share of the costs of providing heaith caze under Medicaid and Medi- care. , oc govem- ment compliance with the Government 36 League of Minnesota Cities oi- so ELECTRIC RESTRUCTURING Introduction: Cities have a strong interest in the public policy debate about electric restruchuing or deregulation. Minnesota already enjoys some ofthe lowest average electric rates in tha nation. The case has yet to be made that dereg- ulation will resutt in either lower rates or improved service for consumers. cities to make certain restructuring that allows retail competition is as beneficial to the citizens as it is to the industry. Beneficial to the citizen means that all Minnesotans experience the sazne reliable, high-quality, nni versal, and low-cost service they ex- perience under the current system of eiectric power delivery. Issue: For many decades, electric service to Minnesota citizens has been delivered through a combination of investor- owned utilities (IOUs), municipal utilities, and rural electric cooperarives. This system has served Minnesota well, delivering reliable, univezsal service at rates among the lowest in the counhy. In recent yeazs, many have begun to promote "deregulation" or "restruchuing" of the industry, meaning that electric service would no longer be a franchised monopoly. A number of states, primazily 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 azgue that sack competition wiil lead to lower rates. However, estnnates by the federal Energy Infozmation Agency* are that while the uppar Midwest, including Minnesota, will experience slightly lower rates in the short- term, longer-term rates may actually be higher under restructuiing. Concerns have atso been expressed as to whether residential customers, and those in rural and other hazder-to-serve areas will actually experi- ence decreased reliability and increased rates. Local elected officiais have the primary responsibility to the citizens of their City residenu have a strong interest in the outcome of this important public policy debate. Cities aze substantial con- sumers of electric power. Many cities have a significant portion of their property tax base in electric industry property, while others collect franchise fees and/or sales taxes on electric purchases within their boundaries. Citizens in 126 Minnesota communities currently receive economical electric service from municipal utilities, which make pay- ments-in-lieu of taxes to heip support city services. Significant increases in the cost of electric power for city operations or losses of these traditional sources of revenue wiil result in property tas increases. Response: The federal government should not mandate restructuring; the decision should be left to the states. The Legislature shoutd continue to follow a slow, deliberarive approach, taking time to consider how alternative models for delivering electric power will affect the state's traditional benefits of reliable, universal, high-quality and low- cost service. The public policy discussion should be focused on actual benefits to eitiaens, rather than on ideologicai argu- ments, 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 minimum, main- 2002 City Policies 3� tain Minnesota's high-quality, low-cost, and reliable service. pnly when that burden of proof has been met shouid restructuring occur. The following public policy goals should be incorporated into any legis- lation restructuring the electric industry: Adequafe Supply and Demand The state's current generation and transmission capacity is inadequate to meet projected future needs. No new significant capacity has been built since the 1980's (Sherco 3). In the past, regu- latory and other governmental policies served as a disincentive to meet customer demand. The Minnesota Ener� Security and Reliability Act enacted by the 2001 Legislature took significant steps to re- duce these disincentives. The experience of other states would strongly suggest that deregulation prior to the development and mainfenance of adequate reserve capacity can lead to price spikes and compromise service reliabiIity. The state should_continue to revie�. anrLamend -- - these poIicies as necessary to encourage further development and maintenance of adequate capacity and reliability. Consumer Protecfion Consumer interests must continue to be protected, especially for the most vulnerable populations. Reliable service must 6e universally available and pro- grams such as cold-weather shut-off rules should be continued either as require- ments for all market participants or as i�: Environmental Concerns The environment must be ade- quately protected, with conservation and renewable energy efforts maintained. The federal govemment must review the appropriateness of current environmental regulations and their effect in a deregu- lated market; for example, exemptions from the Clean Air Act for some generation facilities. Fair Market Competition To ensure fair market competition, the federal and state governments must have the authority to review mergers to prevent abuse of market power. Cifies must remain viable compet- itors in the electric market. Municipal utilities must be ganted egemptions from rules like the open meeting law and data practices requirements where they ham- per the abiHfy to effectively comgete with private companies. To ensure adequate service to every citizen, cities and other 1ocaLgo�ernmenta mus�-maintaia fiheir- — ability to issue tax-exempt bonds for construcfion of electric infrastructure, and be given elcpIicit suthority to aggregate or municipalize provision of electricity. i,ocal Authority Cifies must maintain their tradirional authority over land use, zoning, rights of way management and cost recovery, as well as the ability to ments-in-lieu of tages from municipal utilities. Cities' authority to negotiate siting fees and agreements for proposed generating facilities should be enhanced. League of Minnesota Cities o Z'S'o To avoid unnecessaty demand for the limited space in public rights of way, open access to transmission and distribu- tion facilities should be maintained through regulation. As the electric market is opened to interstate competition, the federal government must preserve the application of Minnesota's state and local sales taxes to the sale of electricify, regardless of the place of origin. Stranded Cost Recovery Issue: Re�ulated 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, eleciric generators' investrnents in fixed assets and other obligations may or may not remain as economically viable. Estimates of these "suanded costs" vary greatly, with some indicating no stranded costs or possibly even negative stranded costs resulting from increased prices after dereg- ulation in Minnesota. Response: If regulatory actions have contributed to investment by existing regulated utilities that are not econamically viable in a competitive markef, and if restructuring occurs, the League supports transition mechanisms that will aliow utilities to collect revenues for those particular stranded costs. $ow- ever, these charges must be carefully monitored to ensure that only eligible and verifiable costs are covered and that over- coliections do not occur. Taxpayers and 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 regulated utility as a whole can be estab- lished, and are solely the result of tran- sition to a restructured environment, these regulated utilities should be re- quired to contribute some limited percen- tage of established amounts to offset tax breaks given to these utilities as a result of restructuring. Property Tax Issue: Part of the discussion regard- ing possible deregulation of the electric power industry has centered on electric utility taxation. Proponents of restructuring assert that if effective free market competi- tion is to replace governmental regulation, state tax policy must be changed. The main focus of the investor owned utilities (IOUs) so far has been removal of the attached machinery or personal property tax. Utilities subj ect to the tax argue it places them at a competitive disadvantage to non-Minnesota companies, rural electric cooperatives (co- ops), and municipals. However, accurate comparisons of taac burden aze di�cult, as other states use completely different taxing systems. Municipals make substantial pay- ments-in-lieu of taxes. Additionally, co-ops and municipals do pay direct taxes on some of their property and indirectly when they purchase wholesale power from souroes that aze taxed, such as IOUs. Utility personal property can be a sig- nificant portion of tlie Iocal taY base in all cities. Most obviously affected aze cities that haue power plants; however, transmission and distribution equipment account for over half of the personal property taxes paid by 2002 City Policies 39 the IOUs and exist in nearly every city. Replacing the revenue that would be lost to cities, counties, school districts, and other locai ta�cing 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 couid be subject to reduc- tions or elimination over time. Furthermore, replacement revenues or aids may not fully address the problems created by a lazge taY base reduction. Response: Cities oppose proposals for esempting the IOUs from the personal property tax, apart from the decision to restructure the electric industry in Minnesota. If and when restructuring occurs, a truly independent review of the overall tax burden should be tonducted to de- termine whether Minnesota utilities are at a competitive disadvantage. If an overall tax disadvantage is identified, the state should correct it. Under no circumstances shouId local units of government or their citizens be required ----_ __._ —- o-s ou ert e ea tax relief�r "- -- - __ - — - --- - IOUs. 40 League of Minnesota Cifies