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Memo- Legislative Issues ReviewMemorandum To: Honorable Mayor and Members of the City Council From: Steven C. Mielke, City Manager Date: October 10, 1997 Subject: Legislative Issues Review The 1998 legislative session will begin in January. In preparation for the legislative session, staff is often contacted by legislators, as well as by organizations Hopkins is affiliated with, asking if there are any specific issues which should be addressed during the upcoming legislative session. As a way of preparing and being able to answer these questions, staff would like to discuss with the Council, whether or not there are any specific issues that should be addressed during the session. If so, staff would initiate discussions with our local legislators and determine whether or not we need to initiate any special legislation. Attached is a copy of the League of Minnesota Cities legislative positions for 1997. The League has various committees working on a legislative platform for 1998, but it is not ready for distribution. There have also been several other issues relative to legislative topics that have been discussed by the Council, or others, which I would like specifics on. Some of the things that have been discussed for potential city action include an automobile sales tax to pay for arts related costs. Youth initiatives, state bonding bill, and economic development initiatives are other issues. Staff would appreciate the Council's input on whether or not we wish to pursue any specific Hopkins legislation for 1998. mayorcclegislativeissuesreview Office of the City Manager 1996 League of Minnesota Cities Research Foundation All rights reserve Printed in the United States of Americ League of Minnesota Cities 145 University Avenue West St. Paul, MN 55103-2044 (612) 281 -1200 (800) 925-1122 Fax (612) 281 -1299 CONTENTS League Staff Legislative Policy Committee Members iv Policy Development Process vi Statement of Intent vii PART I - -1997 POLICY GUIDELINE Improving Community Life CL -1. Livable Communities PART II - -1997 CITY POLICIES General Policy Statement Improving Fiscal Futures Improving Local Economies 1997 City Policies FF -1. Property Tax Reform 4 FF -2. State Shared Revenues 5 FF -3. Circuit Breaker and Targeting on the Property Tax Statement 5 FF-4. Taxation of Municipal Bond Interest 5 FF -5. City Fiscal Year 5 FF -6. Sales Tax on Local Government Purchases 6 FF -7. Delinquent Property Tax Penalties and Interest 6 FF -8. Payments for Services to Tax - Exempt Property 6 FF -9 Truth -in- Taxation 6 FF -10. State Deductions from LGA 6 FF -11. Reporting Requirements 7 FF -12. Federal Budget Cutbacks 7 FF -13. Local Performance Aid 7 FF -14. Price of Government 7 LE -1. Tax Incement Financing 8 LE-2. Property Tax Reform and TIF 8 LE -3. Economic Development Programs 9 LE -4. Pre -1990 Tax Increment Financing Districts 10 LE -5. City Cooperation With Counties and Schools in Economic Development 10 LE -6. Brownfields 10 LE -7. Growth Management and Annexation LE -8. State and /or County Licensed Residential Facilities (group homes) LE -9. A f f o r d a b l e . Housing .. .... • LE -10. City Role hi Telecommunications LE -11 Redesign of 'Electric Utility Regulation LE -12. Adequate Funding for Transportation LE -13 State Aid for Urban Road Systems .. LE -14. State Aid Roads for Contiguous Cities Under 5,000 LE -15. Turnbacks of County and State Roads ... .. .. . LE -16. Cooperation Between Counties and Cities Over County Roads Within Cities .... . LE -17 Management of Public Rights-of-Way Improving 'Service Deliver SD -1 Redesigning and Reinventing Government .. . SD -2. Unfunded Mandates .. SD -3. Civil Liability of Local Governments • SD-4. Environmental Protection .. . SD -5. Personnel, Pensions, and Labor Relations . SD -6. Election :Issues .. ... • . . D=7. Local Election Authority . SD -8. City Costs for Enforcing State and Local Laws SD -9. Access to Information Technology and ;Services Leagueof Mi Cities . 17 17 11 12 1 . 2 . 13 15 15 16 16 17 18 19 20 20 21 22 23 23 23 LEAGUE STAFF WORKING WITH STATE AND FEDERAL ISSUES Jim Miller, Executive Director Mandates Gary Carlson, Director of Intergovernmental Relations General revenue sources for cities including aid to cities and the property tax system, fiscal administration of cities, economic development and redevelopment, transportation Duke Addicks, Director of Member Services Policy formulation, fiscal issues, government innovation and cooperation Joel Jamnik, Senior Intergovernmental Relations Representative Growth management and land use, environmental protection, personnel and labor relations, public safety, general municipal governance, transportation Ann Higgins, Intergovernmental Relations Representative Telecommunications, housing, elections and ethics, utility service districts, transportation Andrea Atherton, Intergovernmental Relations Representative Tax increment financing, land use, ethics, economic development and redevelopment, fiscal issues, housing Eric Willette, Legislative Policy Analyst General revenue sources for cities including aid to cities and the property tax system, fiscal administration of cities 1997 City Policies Improving Community Life Fran Hesch, Chair, Councilmember, Hopkins Sue Gehrz, Vice Chair, Mayor, Falcon Heights Jean Andre, Assistant to Manager /HRA Coordinator, Golden Valley Jack Barlow, Councilmember, Lauderdale Bill Barnhart, Intergovernmental Relations, Minneapolis Robert Benke, Mayor, New Brighton John Blahna, Mayor, Landfall Lorraine Browne, Mayor, Atwater Cathy Busho, Mayor, Rosemount Jan Callison, Councilmember, Minnetonka Kathleen Carmody, Councilmember, Brooklyn Center Peter Connor, Mayor, Owatonna Lorenzo Davis, Administrative Intern, Eagan John Doyle, Councilmember, Marshall Pat Farrell, Chief of Police, Rochester Sharon Feess, Councilmember, Brooklyn Park Evelyn Fox, Councilmember, Breckenridge Kevin Frazell, City Administrator, Cottage Grove Wendy Gorham, Councilmember, Mora James Hurm, City Administrator, Shorewood Sandra Masin, Councilmember, Eagan Mac McBride, Finance Director, St. Louis Park Mamie McGrath, Administrative Assistant, Shoreview Roberta Megard, Councilmember, St. Paul Nancy Mikitta, Council President, Red Wing James Mladek, Mayor, Montgomery Ed Mylnar, Mayor, Lester Prairie Mari Moen, Councilmember, Oakdale Deb Moran, Councilmember, Burnsville. Larry Nicholson, Councilmember, Moorhead Isobel Rapaich, Councilmember, Duluth Joy Robb, Mayor, Robbinsdale Char Samuelson, Councilmember, New Brighton Jolie Sasseville, Public Information Officer, Fergus Falls Betty Sindt, Councilmember, Lakeville Grant Thorstad, Police Officer /DARE Instructor, Rosemount Dawn Weitzel, Interim Deputy Clerk, Mounds View Duane Zaun, Mayor, Lakeville Improving Fiscal Futures Joy Tierney, Chair, Mayor, Plymouth Steve Okins, Vice Chair, Finance Director, Willmar Dick Abraham, City Administrator, Lake City Karen Anderson, Mayor, Minnetonka iv Legislative Policy Committee Members Chuck Armstrong, Intergovernmental Relations. Director, St. Paul Steve Bjork, City Planner /Coordinator, St. Franc is. Thomas Burt, City Administrator, Rosemount Gino Businaro, Finance Director, Mound Dave Callister, City Administrator, Osseo Henry A. Duitsman, Mayor, Elk River Gary Eitel, City Administrator, Rogers Charlotte Erickson, Administrator /Clerk, Minnetrista Terry Dussault, Assistant to Manager, Blaine (altemate) Jerry Faust, Councilmember, St. Anthony Roger W. Fraser, City Manager, Blaine Rick Getschow, City Administrator, Hector John Gretz, City Administrator, Apple Valley Rod Hale, Councilmember, Cottage Grove Steve Helget, City Clerk/Administrator, Tyler Patrick Hentges, City Manager, Mankato Susan Hoyt, City Administrator, Falcon Heights Greg Isaackson, Clerk- Administrator, Cottonwood Barbara Jeanetta, Assistant to Manager, New Brighton Elizabeth Kautz, Mayor, Burnsville Bob Larson, City Administrator, Deephaven Ann Lenczewski, Councilmember, Bloomington Kathy Lueckert, Assistant City Manager, Plymouth Wes Mader, Councilmember, Prior Lake Michael McGuire, City Manager, Maplewood Charles W. Meyer, City Manager, St. Louis .Park. Steve Mielke, City Manager, Hopkins Ed Mlynar, Mayor, Lester Prairie John Moir, Finance Department, Minneapolis Ruth Nelsen, City Clerk, Hilltop Gary Neumann, Assistant Administrator, Rochester John Perino, Mayor, Alexandria David Pokorny, City Administrator, Chaska Bryan Read, City Administrator, Montgomery Douglas Reeder, City Administrator, South St. Paul John W. Remkus, Finance Director, West St. Paul Robert Rys, City Administrator, Minnesota Lake Ryan Schroeder, City Administrator, Ramsey Scott Schulte, Shared City Administrator, Danvers/ Holloway /Murdock Alfred Schumann, Mayor, Eyota James Smith, Councilmember, Independence Gerald Sorenson, Administrative Services Director, Moorhead Pete Stolley, Public Works, Northfield Malcolm Tilberg, City Manager, St. James David Urbia, City Administrator, Blue Earth Gene VanOverbeke, Finance Director, Eagan Jeff VanWychen, Intergovernmental Relations, Minneapolis (altemate) League of Minnesota Cities Daniel Vogt, City Administrator, Brainerd Bill Waller, City Administrator, LaCrescent Chuck Whiting, Clerk Administrator, Mounds View James Willis, City Administrator, Inver Grove Heights Donn Wiski, Councilmember, Roseville Improving Local Economies Bonnie Cumberland, Chair, Mayor, Brainerd Duane Zahn, Vice Chair, Mayor, Lakeville Chuck Armstrong, Intergovernmental Relations Director, St. Paul Jerry Bohnsack, City Administrator, New Prague Gerald Breuer, City Administrator, Staples Kevin Carroll, Councilmember, Rosemount James Daniels, Administrator, Lake Minnetonka Communications Commission Leo W. Eldred, Councilmember, Moorhead Michael Ericson, City Administrator, Watertown Keith Ford, Community Development Agency, Minneapolis Matt Fulton, City Manager, New Brighton Allen Greenfield, Councilmember, Prior Lake Tom Hansen, Deputy Manager Administrative Enterprises, Burnsville Duane Hebert, City Administrator, Renville Pat Heldt, Councilmember, Alexandria Jon Hohenstein, Assistant to Administrator, Eagan Marvin Johnson, Mayor, Independence Ronald Johnson, City Administrator, Zumbrota Steven C. Jones, City Administrator, Mora Andrea Hart Kajer, Intergovernmental Relations Director, Minneapolis (alternate) Randy A. Kolb, Councilmember, Blaine Edward R. Larson, City Manager, Morris Larry Lee, Community Development Director, Bloomington Greg Lerud, City Manager, Milaca Don Levens, City Administrator, Cokato James L. Mladek, Mayor, Montgomery Ron Moorse, City Administrator, Orono E. Craig Morris, Mayor, Lakeland Mark Nagel, City Manager, Anoka James Norman, City Manager, Montevideo Barb O'Neal, Mayor, Oak Park Heights Bruce Peterson, Planning /Development Services Director, Willmar 1997 City Policies Dan Rogness, Community Development Director, Rosemount Joe Rudberg, Administrator, Becker Terry Schneider, Councilmember, Minnetonka Doug Schulze, City Administrator, Sandstone Chad Shryock, City Administrator, Eagle Lake Robert Therres, City Administrator, Sartell Craig J. Wainio, City Administrator, Wabasha Brian Wagner, City Coordinator, Lakefield Craig Waldron, City Administrator, Oakdale Daniel Wall, Mayor, Roseville David B. Wheeler, Councilmember, Duluth Denny Wilde, City Administrator, Paynesville Betty Zachmann, City Clerk- Treasurer, Winsted Improving Service Delivery David M. Senjem, Chair, Councilmember, Rochester Jerry Dulgar, Vice Chair, City Manager, Crystal Jane Chambers, Assistant to Manager, Burnsville Patricia Crawford, Clerk - Treasurer, Motley Lillian Eid, Councilmember, Fertile Brian Fritsinger, City Administrator, Arden Hills Theresa Goble, Finance Director, Brainerd Mary Helen Guzek, IGR Assistant, St. Paul Andrea Hart Kajer, Intergovernmental Relations Director, Minneapolis (alternate) Ken Hartung, City Administrator, Bayport Joe Lynch, City Administrator, Long Lake Myrna Maikkula, City Clerk, Brooklyn Park Kay McAloney, Personnel Director, Anoka Desyl Peterson, City Attorney, Minnetonka Isabel Rapaich, Councilmember, Duluth Dan Scott, City Manager, North St. Paul Glenda Spiotta, City Administrator, Carver Joyce Swadner, Elections Office, Minneapolis Blair Tremere, Assistant City Manager, Prior Lake Joyce Twistol, Personnel Director /City Clerk, Blaine Kurt Ulrich, City Administrator, Champlin Susan Walsh, Administrative Assistant, Rosemount Rena Weber, Clerk/Coordinator, Cold Spring Liz Witt, Administrative Assistant, Eagan Krista Witty., MVCOG Director, Mankato Wally Wysopal, Assistant to Manager /Personnel Officer, St. Louis Park vi League of Minnesota Cities Policy Development Process The League's policy development process has taken place over the past five months. Each policy committee met three times from July to September. The process did not end with the policy adoption conference. The committees will schedule additional meetings as needed during the upcoming legislative session to discuss additional issues, develop alternative solutions and to discuss strategies to implement 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 opportunity to participate in the development process. April/May The League solicits members for ideas and problems. A survey at the Annual Conference allows members to formally suggest topics. June The League President accepts applications for committees and appoints policy committee members. The policy committees are: Improving Community Life Committee Improving Fiscal Futures Committee Improving Local Economies Improving Service Delivery July Committees meet to discuss issues raised in member survey. Commitees 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 Legislative Committee meets to finalize policies. The Legislative Committee is comprised of the League's Board of Directors and the chairs of the four League policy committees. November Policy Adoption Conference. Members hae the opportunity to discuss the draft policies, propose changes, and suggest additional policies for membership consideration. December The Board adopts the Legislative Action Plan, based on input from the Policy Adoption. Conference. January Legislative Session. During the session, the policy committees and task forces through will continue to meet on issues and strategies. Members can assist the League's May legislative efforts by volunteering to contact legislators on the variety of issues of interest to our cities. League of Minnesota Cities Statement of Intent There are many problems which limit the effectiveness of city government to improve community life, improve the fiscal future and service delivery of city government, and to improve the local economy. What follows are issue statements of the problems facing cities and the response solutions proposed to help resolve these problems. These statements of issues and proposed responses form the policy of the League of Minnesota Cities. Additional and alternative solutions to these problems may be proposed after the Policy Adoption Conference and the members of the League authorize its Board of Directors to consider and support additional or alternative solutions, if necessary, to resolve the problems identified in this policy statement. 1997 City Policies vii Part I 1997 Policy Guidelines IMPROVING LIFE ® IoTG Co ITY L� � • r CL -1. Livable Communities To the greatest extent possible, legislation affecting communities at the state and federal level should enhance, not diminish, the ability of citizens, businesses, and local governments to work together in partnership to make every community "livable." ISSUE: Cities in Minnesota are at various stages in meeting the goal of being "livable communities." RESPONSE: The definition of a "livable community" below will be used to evaluate proposed legislation to determine whether or not it advances the goal of enabling all Minnesota cities to become livable communities. It should also be used by cities to evaluate their progress toward the goal of becoming livable communities. A LIVABLE COMMUNITY IS: WHERE PEOPLE OF ALL AGES share a core of common values including valuing diversity, respect for each other, and good citizenship feel: * safe * a sense of belonging * welcome engage in life -long learning activities that: * prepare them for responsible citizenship * enhance the enjoyment of life * prepare them for changing job markets participate in the decision - making process of community leaders celebrate community want to make their home have access to: * good paying jobs * adequate and affordable housing 1997 City Policies are involved in the nurturing of children O care about their homes, community and the environment get to know each other have the benefit of strong family,support and nurturing adults • WHERE LOCAL GOVE is responsive to the needs of its citizens * choice of efficient transportation systems including transit, pedestrians, and bicycles * gathering places * desired information * choice of cultural and recreational activities * affordable goods and services, including health care is actively supported by enthusiastic volunteers is open and user friendly O encourages and implements cooperation and collaboration provides and maintains an adequate infrastructure to meet local needs educates citizens on local, regional, and state issues: informs and communicates with citizens to foster participation in public policy decision- making participates in youth development League of 1Wirmesota Cities Part II 1997 Policies One of the most important purposes of the League of Minnesota Cities is to serve as a vehicle for cities to define common problems and develop policies and proposals to solve ` those problems. The League of Minnesota Cities represents 812 of Minnesota's 855 cities as well as 11 urban towns and 22 special districts. All sizes of communities are represented among the League's members (the largest nonmember city has a population of 163) and each region of the state is represented. The policies that follow are directed at specific city issues. Two principles guide the development of all League policies. . There is a need for a governmental system which allows flexibility and 1997 City Policies General Policy Statement authority for cities to meet challenges of governing and providing citizens with services while at the same time protecting cities from unfunded or underfunded mandates, liability or other financial risk, and restrictions on local control; and 2. The financial and technical requirements for governing and providing services necessitate a continuing and strengthened partnership with federal, state, and local governments. This partnership particularly in the areas of finance, development, housing, environment, and transportation is critical for the successful operation of Minnesota's cities and the well- being of city residents. FF -1. Property Tax Reform Issue: Changing economic and political circumstances have created the motivation to revisit our property tax system. For example, reductions in state aid and the proliferation of unfunded mandates have increased local governments' reliance upon property taxes to fund basic services, making the property tax the largest source of state and local government revenue. In addition, changes to the property tax laws over the past 25 years have created a very complex system which frustrates public officials and citizens alike. Response: As the legislature addresses property tax reform, it must provide local officials with the ability to fund the services their citizens demand. Local governments must be a partner with the state in developing changes to the property tax system. Specifically, the League supports: Reducing the property tax burden for all classes of property by increasing the state share of school funding. Any increase in the state share of school funding must guarantee a permanent reduction in the local property tax burden. The League supports paying for the increased state costs through income and sales taxes. Modification to property tax class rates where the property tax burden has created a demonstrated problem for a class of property and where class rate reduction is an appropriate IMPROVING FISCAL FUTURES policy response. Class rate changes should be phased in over several years and must not result in shifts burden from one class to another. Class rate simplification. The state should consider reducing the number of property classifications to make the system more easily understandable. The legislature must understand, H owever, that accentuating simplicity ay adversely affect the fairness of e system. o Local revenue diversification. The state must ensure that disparities in ax revenue sources are mitigated. The League opposes: evy limits and property tax freezes. These simplistic measures are not reform and would be ineffective and inefficient means to limiting property growth. • Replacing all or part of LGA and HACA with state - mandated categorical aid programs. • Switching from the classification system to a market value based system, which would cause tremendous shifts of tax burden between classes of property. The League also opposes applying all future levy increases to market value because this would further complicate the property tax system. State intervention in local decision making regarding service delivery. League of Minnesota Cities A state - levied property tax. Cuts in LGA and HACA to finance an increased state role in school finance. FF -2. State Shared Revenues Issue: In four of the last seven years, LGA and HACA appropriations have been cut and resources have been redirected to other state programs. In addition, the Local Government Trust Fund, which was created to provide growth to programs such as LGA and HACA, was repealed and the local option 2 cent sales tax was redirected to the state's general fund. At the same time, the property tax has become the largest source of state and local tax revenue in Minnesota. Without programs such as LGA and HACA and the appropriation of additional state resources to these programs, the property tax will continue to escalate, thus these programs will not accomplish their intended goals. Response: LGA and HACA, or similar replacement revenues, must be continued and additional state resources greater than the rate of inflation must be allocated to prevent rapid future property tax increases. FF -3. Circuit Breaker and Targeting on the Property Tax Statement Issue: Beginning in 1998, the circuit breaker and targeting payments which are currently made directly to individuals will be converted to a property tax statement credit and payments will be made directly to local units of government. As a reimbursement to local government rather 1997 City Policies than a direct payment to the taxpayer, the funding for the program could be reduced without directly impacting the taxpayer but with substantial financial impact on local units of government. Response: The circuit breaker should remain a direct payment to taxpayers. The 1995 law should be repealed. FF -4. Taxation of Municipal Bond Interest Issue: The state law that grants a tax exemption for municipal bond interest is being reviewed and could be repealed. A repeal of this exemption will raise borrowing costs for cities at a time when budgets are extremely tight and property tax increases are unacceptable to the taxpayer. Response: The state should maintain the tax exemption for municipal bond interest income. FF - 5. City Fiscal Year Issue: The fiscal years for the state and cities are offset by 6 months. The state fiscal year begins on July 1 while the city fiscal year begins on January 1. Lawmakers have proposed changing the city fiscal year to coincide with the state. Such a change, while providing questionable benefits for cities, would conflict with the current property tax cycle, impair historical comparisons of data, force cities to retool accounting systems, adversely impact city credit ratings, and could result in state funding gaps. Response: The state should maintain current law and not change the city fiscal year to coincide with the state fiscal year. 5 FF -6. Sales Tax on Local Government Purchases Issue: In 1992, the legislature repealed the sales tax exemption for local government purchases. This action increased the costs for local governments and local property taxes by an estimated $76.8 million for the state's 1997 fiscal year. This repeal has effectively increased local property taxes to finance state operations. Response: The state should reinstate the sales tax exemption for all local government purchases. FF -7. Delinquent Property Tax Penalties and Interest Issue: Although city finances are affected by property tax delinquencies, cities do not receive any associated penalties and interest on these delinquencies. Penalties and interest are split evenly between counties and schools. Response: Cities and counties should receive a pro -rata distribution of 50 percent of the penalties and interest collected on delinquent property taxes with the remaining 50 percent to be distributed to schools. FF -8. Payments for Services to Tax - Exempt Property Issue: Taxable property in many cities is being acquired by nonprofit and government entities. Converting the property to tax - exempt status can lead to a serious tax base erosion without any corresponding reduction in the service needs created by the property. Response: Cities should be allowed to collect payments in -lieu of property taxes or special assessments from statutorily exempt property owners. FF -9. Truth -in- Taxation Issue: The legislature has mandated how property tax relief is calculated on tax statements. These calculations have no relationship to actual local receipts for Homestead and Agricultural Credit Aid. While. the 1996 reforms relaxed some of the more onerous requirements for certain cities, , many: still find the process to be a waste of resources primarily due to little citizen response at the hearings. Response: In the spirit of real truth - „in- taxation, property tax statements should accurately reflect the actual amount of HACA benefiting each individual property owner. Cities should be able to schedule their initial hearings on dates that ma y confl with others' hearing if no other dates are available. Citi should have the authority to increase the final levy from the preliminary levy. .FF -10. State Deductions from LG A Issue: State administrative costs are 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. League of Minnesota Cities 40, .410 FF -11. Reporting Requirements Issue: Budget and financial reporting requirements imposed on cities by the state often result in duplication and additional costs. Response: Additional 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 information already required by others to avoid duplication of reporting requirements. FF -12. Federal Budget Cutbacks Issue: Congressional actions to balance the federal budget will reduce federal assistance to the state and to local governments. Response: The state should not reduce aids or increase fees to local governments as a means for dealing with cutback s in federal revenues. The state should take responsibility for reductions in federal revenues rather than placing the burden on cities and their property taxpayers. FF -13. Local Performance Aid Issue: When the 1996 legislature created the local performance aid program, the legislation was vague and the program was partially funded by cuts in HACA. In the future the requirements for applying for the aid could become an onerous mandate on cities and undermine local decision- making. 1997 City Policies Response: The League strongly supports efforts by cities to improve the efficiency and effectiveness of their operations, including exercises such as performance measurement systems. However, these efforts should be local initiatives rather than state mandated actions. Therefore, the League opposes LPA. If local performance aid is to be continued: • the law must be clarified and the qualification requirements must be attainable by all cities regardless of city size or staffing levels; • all additional funding must come from new revenue sources rather than shifts of aid from other programs such as LGA and HACA; • the program must not become an onerous mandate requiring additional city resources; and • any information on individual cities that is collected from the program must not be used to simplistically compare cities. FF -14. Price of Government Issue: The price of government legislation enacted in 1994 was intended to measure the overall effect of state and local taxation over a long period of time. The targets measure government revenues as a percent of personal income. Unfortunately, the targets have been misinterpreted and used unfairly to criticize city tax and budget decisions. Response: The price of government statutes as they apply to local governments should be repealed. LE -1. Tax Increment Financing Issue: The State of Minnesota has effectively delegated the responsibility for economic development and redevelopment to cities. Unfortunately, neighboring states have given their cities more economic development tools and, therefore, cities in these states have a competitive advantage over Minnesota cities. In Minnesota, tax increment financing is the only tool . available to all cities in their economic development and redevelopment efforts. The state, whether based on a lack of information or misinformation, has been critical of cities' use of the tool and has restricted the permitted uses instead of partnering with cities and encouraging their endeavors to improve and enhance the economic well -being of Minnesota and the growth and redevelopment of its cities. Cities have used tax increment financing responsibly and examples of these positive uses abound. Response: To effectively compete with other. states, Minnesota must provide its cities greater flexibility in the use of tax increment financing and other economic development programs. The legislature should not make further restrictive changes to the tax increment statutes. The state should partner with cities in economic development and redevelopment and encourage cities' use of tax increment in achieving the laudable goals of long -term tax base stabilization and growth, job creation, development of low -to- moderate income housing, remediation of pollution, elimination of blight, recycling and redevelopment of the infrastructure, and IMPROVING LOCAL ECONOMIES redevelopment of its communities. Cities should be given more flexibility in the use of tax increment financing as they are in the best position to evaluate what is best for the economic health of their communities. The legislature should: remove existing restrictions to property included in a deferred assessment program within the last five years (e.g., green acres; agricultural preserves); • eliminate the inflation adjusted base for economic development districts; authorize any tax increment districts approved after April 1, 1990 to pool increments in the same manner as i istricts certified prior to April 1, 1990; • eliminate the LGA /HACA penalty currently imposed on newly created districts or, if the penalty is not e remove the restrictions on e source of payment; and expand the use of tax increment fin ancing to assist in the development of technological infrastructure, job training, and the restoration of historic structures. LE 2.. Property Tax Reform and TIF Issue: The 1997 legislature is likely to consider several property tax reform proposals. Any changes to the property tax system could have significant implications for tax increment financing districts. For League of Minnesota Cities example, if property class rates are compressed, existing tax increment financing districts could experience revenue shortfalls which, in turn, could jeopardize the repayment of outstanding debt or other obligations. Response: Discussions about how to reform the property tax system must take into account the potential impacts on tax increment districts. All property tax reform proposals must include a provision to hold harmless existing tax increment financing districts and provide sufficient state resources so that TIF obligations can be met. LE -3. Economic Development Programs Issue: The Minnesota Investment Fund is not adequately funded. The state does not authorize an adequate slate of tools for local governments to assist job creation, redevelop blight and decay, and provide adequate housing choices. Cities are not well equipped to compete nationally and internationally for business development. Response: More state resources should be contributed to the Minnesota Investment Fund. In the event that the LGA /HACA penalty is not eliminated, a portion of the revenues should be contributed to the Minnesota Investment Fund. These funds would then be available for cities to retain businesses in the state and to attract business looking to relocate from other states. 1997 City Policies The Minnesota Investment Fund should be continued and clear rules established to govern its use. The state and federal funds that fund this program should also be allocated throughout the year to help ensure that projects across the state have access to the grants. • In addition to existing authority under the tax increment financing law, cities should be given authority for property tax abatements as another economic development tool. • The state should establish a new grant program that would provide funds to cities to establish a Revolving Loan Fund targeted to gap financing for manufacturing projects. The funds would be awarded to cities through a competitive grant program in which the award is based on community need, local development capacity, as well as past experience and expertise in managing a Revolving Loan Fund and the general ability /experience of the individual community to get the job of economic development completed. The approved applications would be funded strictly on the aforementioned criteria as well as the city's development program and development priorities. The State would not be in the business of reviewing projects with respect to specific companies and specific loans. These grants would be in the range of $200,000 to $250,000 and would facilitate four to five initial local loan projects. Local governments should be given the flexibility to utilize these funds throughout the city without any geographical restrictions. The funds to the communities would be used to Issue: The 1996 Legislative Auditor's report reflects the concern that cities are using tax increments from pre- 1990 districts to fund general public improvements that do not meet the objectives of the tax increment plans. Restrictions on cities' use of these increments would disrupt cities' plans made in reliance on current law and create various inequities. develop subordinated mortgages that are integrated with the primary financing of a particular manufacturing project. The loan could be utilized for retention as well as new jobs. The respective community would be required to "recapture" the funds and also to develop the appropriate collateral to protect the integrity of the Revolving Loan Fund. In the event that the LGA /HACA penalty is not eliminated, a portion of the revenues should also be contributed to the Revolving Loan Fund. • Congress should remove the caps that have been placed on Industrial Development Bonds and acknowledge that the extensive eligibility requirements now adequately limit their use. LE -4. Pre -1990 Tax Increment Financing Districts Response: The general public improvements made with pre -1990 district tax increment dollars are consistent with legitimate development goals and meet the objectives of the plans. Additionally, the public improvements are essential to the economic development of a community. 10 The League urges the legislature not to adopt further restrictions on the use of tax increment financing that would limit cities' abilities to complete development and redevelopment objectives with ....... ,.. increments from pre -1990 districts. LE -5. City Cooperation With Counties and Schools in Economic Development Issue: At times, counties and schools want to play a greater role in cities' development decisions. Response : The current "review and comment" requirements are an appropriate mechanism to involve schools and counties in city economic development efforts. LE -6. Brownfields Issue: Brownfields are lands that are not suitable for development due to the presence of chemical or other contaminants. Brownfields are a major cause of blight within communities across the state through loss of local tax base, jobs, housing quality, public safety and community confidence. Revitalizing this land is costly and requires the cooperation of city, county, school, regional, state and federal governments and the assistance of local economic development organizations and citizens. As we move into an era where the mass creation of jobs is a necessity and where increased tax base is a requirement for local governments to adequately face growing financial pressures, efforts to revitalize brownfields must not only continue but be accelerated in the upcoming years. League of Minnesota Cities Response: A comprehensive set of economic development programs must be made available to cities and other development agencies. The legislature should: increase funding for the Department of Trade and Economic Development's contaminated site clean -up fund; act to strengthen enforcement and collection of revenues for the state contamination tax; • continue support for and funding of local and regional programs to assist in the efforts to remediate brownfields; establish a fully- funded program to allow cities and other development authorities to gain control of and reclaim and revitalize brownfields; protect existing tax increment financing provisions that provide for the remediation of brownfields and modify restrictions to allow the pooling of district revenues to assist in the financing of iemediation of brownfields; establish an indemnification fund to provide financial security for institutions and individuals as they invest in efforts to recycle brownfields in order to leverage private investment in cities' efforts to increase their tax base and create jobs; and continue the petrofund as a financing mechanism for cleaning contaminated sites. LE-7. Growth Management and Annexation Issue: Unplanned and uncontrolled urban growth has a negative environmental, fiscal, and governmental impact for cities, counties, and state governments because it increases the costs of providing government services and results in the loss of natural resource areas and prime agricultural land. Response: The League believes that the existing framework for guiding growth and development primarily through local plans and controls adopted by local governments should form the basis of a statewide planning policy and that the state should not adopt a comprehensive statewide planning process. Rather, the state should: • provide additional financial and . technical assistance to local governments for cooperative planning and growth management issues, particularly where new comprehensive plans have been mandated by the legislature; • clearly establish the public purposes served by existing statewide controls such as shoreland zoning and wetlands conservation; clarify, simplify, and streamline these controls; eliminate duplication in their administration; and fully defend and hold harmless any local government sued for a "taking" as a result of executing state land use policies; • give cities broader authority to extend their zoning, subdivision, and other land use controls up to two miles outside the city's boundaries 1997 City Policies 11 12 regardless of the existence of county or township controls, in order to ensure conformance with city facilities and services; clearly define and differentiate between urban and rural development and restrict urban growth outside city boundaries; repeal the authority of the pollution control commissioner to require cities to provide city services absent full inclusion of the affected property within the community through annexation; require the Metropolitan Council to seek cooperation from the State of Wisconsin and counties (both Minnesota and Wisconsin) surrounding the metropolitan area to ensure responsible and controlled development, study expansion of Metropolitan Council authority in surrounding counties, and examine the positive and negative impacts of mandatory regional or local land use controls and state- imposed development standards; and facilitate the annexation of urban land to cities by amending state statutes regulating annexation to make it easier for cities to annex developed or developing land within unincorporated areas. LE -8. State and /or County Licensed Residential Facilities (group homes) Issue: Operators of certain residential facilities and services are not required to notify cities when they intend to purchase housing. Response: The legislature should adopt legislation and regulations to assure that state and county agencies which license companies to operate residential -based facilities notify cities in a timely manner regarding the status` of facility license requests and renewals and the special care needed by residents in case of public safety emergencies. LE -9. Affordable Housing Issue: Many families are unable to afford housing, and cities often lack resources at the local level to provide housing for families or to develop housing alternatives for aging populations that are within their means, particularly in smaller cities. The resulting circumstances limit economic development and weaken the city's tax base. In areas outside the five MSA regions, housing stock is aging and generally older than in more urban locations. U.S. Census figures for 1990 indicate that more than 30 percent of housing units in those areas were built prior to 1940, as compared with the high rate of new housing construction within MSA locations, particularly in the twin cities metro area where 59 percent of housing units built in the `80's are located. The ratio of housing affordability for low - income renters is also increasing, raising more concern at the local level about the prospect that this circumstance indicates that there is little likelihood that this portion of the city population will become homeowners. Almost half the households in the state paying median rental housing costs exceeded the level of affordability, according to the latest census. League of Minnesota Cities Older homeowners often reside in housing that is affordable to first -time homebuyers, but often want to remain in their homes as long as possible. By the time they do move, the property may have become run -down. As a result, the home often becomes rental property with minimal improvements undertaken by the new owners. Response: Federal, state, and local government must pursue policies which encourage public - private partnerships to make it possible for cities, lending institutions, and developers to initiate both public and private housing projects that meet local needs. The state should continue to provide grants and loans from state revenue sources and streamline multiple MHFA- administered programs to create a larger pool of state funding with more flexible criteria and guidelines to make it easier for cities to apply for and make use of state housing assistance programs. The state can also assist by establishing priorities for the use of those funds on the basis of state housing policy for which cities and developers can apply based on their specific project activities. More also needs to be done to reduce the cost to older homeowners of moving into assisted living or other housing designed for the elderly, such as patio homes. More also needs to be done to match up first -time homebuyers with affordable properties and to make more "fix -up" programs available at the local level. Among the state- sponsored initiatives and policies the League supports to encourage production of affordable housing are: exemption from state sales tax for construction of low- income housing; • a state low- income housing tax credit program; and • measures that make it easier for cities with affordable housing programs to use tax increment financing or tax- exempt revenue bonds (IRBs). Cities must also have sufficient local authority and the flexibility to undertake housing projects to meet their unique housing needs and must be able to leverage federal and state resources to do so. Cities must also bring together crime prevention specialists and those working to develop new affordable housing units in support of on -going efforts to improve access to affordable housing while supporting neighborhood safety and community livability. LE -10. City Role in Telecommunications Issue: Cities are facing increasingly complex challenges in responding to and planning their own telecommunications futures. While cities are prepared to assert authority to manage and obtain compensation for private use of public rights -of -way, they also are faced with actions at the state and federal level that are changing the way cities carry out strategies for both community development and strengthening local and regional economies. Cities need support at the state level to assure that community residents benefit from the convergence of electronic information technology, telecommunications, communications, video, and cable tv service delivery. 1997 City Policies 13 Response: The legislature should support and encourage actions by local . government to plan for how to provide public services and assure the benefits of broadband telecommunications and wireless communications for their communities and residents by: • recognizing the changing nature of the 'public- private partnership in which multiple providers may compete to deliver emerging telecommunications services : and the importance of upholding local authority to establish telecommunications policies and plans that are responsive to community needs; supporting preservation of city authority over matters directly affecting communities, including: construction standards, permitting, installation methods, construction scheduling and coordination, degradation of rights -of -ways, cost recovery, city use of telecommunications resources for local public, education, government access and I -Nets; • aiding cities to develop community- based information services to make it possible for residents with limited income to benefit from access to local and wide -area broadband networks and information services. making it easier for cities to own and operate telecommunications utilities, in part by amending Minn. Stat. § 237.19 to authorize cities to construct and operate a telephone exchange by a simple majority vote of its electorate, rather than the current supermajority vote of 65 %; • broadening local authority to' providers of open video -systems :to provide public, educational: and government access to make it ;.possible to provide a :community -based information infrastructure and aid cities to develop advanced telecommunications networks to meet local needs; • making sure cities are allocated adequate spectrum on the 800 MHZ radio ''frequency for public safety and emergency response. Cities are encouraged to: • develop a telecommunications plan identifying :community; prioritiesnd values and setting forth how the .city intends to encourage competition in the local market while ensuring taxpayer :.investment in 'public infrastructure is protected; • determine how to implement new federal and state telecommunications laws and regulations : to .create conditions to attract telecommunications at low cost to make them widely available to city residents and businesses; • examine current ordinances to take into account how to respond to multiple requests to install conduit or erect cellular phone (or personal communications service) towers and antennas; • comply with federal (and state) policies to treat all providers on a neutral and nondiscriminatory basis 14 League of Minnesota Cities while differentiating between types of providers; negotiate for necessary advanced telecommunications resources including bandwidth on broadband networks, fiber -optic wiring and spectrum for public safety and emergency response for use by local units of government, community centers, libraries, police and fire protection, etc; • make use of cable franchise agreements that provide for institutional networks (I -Nets) to acquire a portion of a broadband network and other advance telecommunications resources; consider installing city -owned and operated broadband networks or forming partnerships to do so; investigate and develop applications for those networks to deliver public services using advanced telecommunications to put resources to work to meet local needs; take an inventory of unused, underused and /or abandoned conduit in the right -of -way, in easements, or on city -owned property to make use of those resources in developing needed local information infrastructure. LE -11. Redesign of Electric Utility Regulation Issue: Policymakers at the state and federal levels are considering ways in which to bring competition into the electric utility industry. Without a cautious 1997 City Policies approach which incorporates careful consideration of the implications of any deregulation scheme for all consumers of electric energy, it is possible that only the largest consumers of electric energy, primarily big business interests, would experience true cost savings and other benefits often associated with competition while the small customers, individuals and small businesses, may actually see rate increases. Additionally, city interests in managing and obtaining compensation for the use of public rights of way by utility companies are often overlooked in electric utility restructuring discussions. Response: A cautious, deliberative approach to restructuring the electric utility industry is necessary to preserve the level of service to which Minnesota consumers of electric energy have become accustomed. Additionally, it is crucial that cities have a place at the table in deregulation discussions and that they retain their local authority to manage and obtain compensation for the use of public rights of way. Finally, every effort should be made to ensure that additional responsibilities and financial burdens are not shifted to the local level. LE -12. Adequate Funding for Transportation Issue: Current funding for roads and for transit systems across all government levels in the state is not adequate. Response: Minnesota should value, and adequately fund, all transportation systems in the state. The state needs to provide an objective basis to determine the complete needs of the road and transit systems, their present condition, 15 and their impact on the economic health of the state. This should include acknowledgment that delaying current expenditures will increase costs in the future. The League of Minnesota Cities supports an increase in the gas tax and urges removing the existing restrictions on its use so that gas tax revenues can be used for all transportation projects and programs, not just road construction and maintenance. The legislature should institute additional revenue sources that can be dedicated to all transportation programs. Cities should receive revenues necessary to meet present and future transportation needs. If funding does not come from the state, cities should have funding options available to them to raise the dollars necessary to adequately fund roads and transit. With the exception of funding for the state patrol, all nontransportation programs should be funded from a source other than the highway user distribution fund. The revenues of the highway user distribution fund are collected from transportation users and should be dedicated to transportation - related services. LE -13. State Aid for Urban Road Systems Issue: Current rules governing municipal state aid expenditures are restricting the efficient use of these funds and do not adequately acknowledge the constraints of road systems in urban city environments. Response: Rules affecting the municipal state aid system need to be changed to acknowledge the technical and practical 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 that were originally constructed under different standards. Future changes to state aid rules should ensure the involvement of elected officials and engineering professionals in the decision making process. LE -14. State Aid Roads in Contiguous Cities Under 5,000 Issue: Cities under 5,000 population do not receive any nonproperty tax funds for their collector and arterial streets. Response: State statute should be modified to encourage cooperation and improved transportation systems by allowing contiguous cities that jointly represent a combined population of 5,000 or more to be eligible for Municipal State Aid (M.S.A.). Participating cities would enter into a formal joint powers agreement and establish a joint budget that would be governed by a board of elected officials. Cities that participated in this joint entity would not be required to undertake any formal consolidation activities. Cities under 5,000 population that were not eligible for M.S.A. through this cooperative agreement practice should be able to use county municipal accounts and the five percent account of the highway user distribution fund. Uses of county municipal accounts should be statutorily modified so that counties can dedicate these funds for local arterials and collector streets within cities under 5,000 population. In 16 League of Minnesota Cities addition, the five percent set -aside account in the highway user distribution fund should be used to meet this funding gap. LE -15. Turnbacks of County and State Roads Issue: . As road funding becomes increasingly inadequate, more roads are being "turned back" to cities from counties and the state. Response: Turnbacks should not occur without direct funding or transfer of a funding source. A process of negotiation and mediation should govern the timing, funding, and condition of turned -back roads. City taxpayers should receive the same treatment as township taxpayers. The requirement for a public hearing, standards about the conditions of turnbacks, and temporary maintenance funding should also apply to county turnbacks to cities. At a minimum, proposed roads to be turned back to a lower government level should be brought up to the standards of the receiving government or should be compensated with a direct payment. Direct funding should be provided for smaller cities that are not provided with turnback financing through the municipal state aid system. LE -16. Cooperation Between Counties and Cities Over County Roads Within Cities Issue: Some counties want increased control over county roads that lie within city boundaries. Response: A formal system of mediation should be implemented to help resolve technical and aesthetic decisions about county and county state -aid roads within cities. A negotiated system of review will offer both governments the opportunity to produce better road projects. Local city and county officials should use available opportunities for alternate dispute resolution of the issues. Universal arbitration by unaffected parties should not supersede local authority. LE -17. Management of Rights-of- Way Issue: Demand for all types of uses of rights -of -way, both surface and subsurface, is increasing exponentially, forcing consideration by cities of how best to allocate this very limited resource. Because public rights -of -way have been acquired at public expense through local property tax sources or other local action, cities have traditionally had the fundamental responsibility and attendant liability for facilitating the safety and convenience of all right-of-way users. Rights -of -way management responsibilities are complex, numerous, and site specific, as are the particular interests of cities in establishing a value for private use of public space in the local rights -of -way. These factors underscore the fact that rational and expeditious decisions can only be made at the local level. Cities support existing federal nondiscrimination requirements that local administration not impose unreasonable delays or burdens on access, entry, or other reasonable use of rights -of -way. Cities should be authorized, as provided in federal law, to require telecommunications providers to meet local requirements for 1997 City Policies 17 public, educational, and government access to their networks as well as financial and technical support for such actions. The federal government has been auctioning the limited number of public radio frequencies, which effectively illustrates the value of that asset to competitive service providers in an unregulated marketplace. Unlike other businesses which pay for the use of public rights -of -way, telephone companies currently pay property taxes only on a fraction of their facilities located in public rights -of -way and nothing for the value of the right to use them. Response: The responsibility for managing and protecting public rights -of -way must remain with cities and other units of government entrusted with protecting the health, safety, and convenience of the community. IMPROVING SERVICE DELIVERY SD -1. Redesigning and Reinventing Government Issue: Every level of government is reevaluating, 'reprioritizing, redesigning, and renewing its organizational structure and programs in response to financial realities and citizens' needs and problems. Reforms, however, must be more than simply change for the sake of change or a reshuffling of existing programs to appease the electorate. To be ` meaningful, reorganization and reassignments of governmental entities and services should save money where ' feasible, deliver 18 Construction and safety standards are of paramount importance to cities, and consistent with respective industries' desire for uniformity, should be developed by the .municipal engineering community for adoption by cities to ensure effective rights -of- way management. • Cities and other governmental units responsible for the protection and management of public rights-of-way should be authorized to require reasonable compensation which reflects the policy and fiscal objectives of their community. . • The courts should remain the primary forum for resolution of allegations that communities have exercised their authority in an unreasonable, arbitrary, or capricious manner. improved services, serve essential needs and be equitably structured. Cities have and will continue to pursue the use of cooperative agreements, the reevaluation of city programs and services, and changes to organizational structures. Response: The federal, state, and county governments should: • ensure that in redesigning, reinventing or reassigning government services and programs that the appropriate level of service to citizens is evaluated and citizen demands and expectations are League of Minnesota Cities adequately addressed; structure of Regional Development Commissions can be improved; promote local efforts through incentives rather than mandates; communicate and establish a process of negotiation before shifting responsibility for delivering services from one level of government to another or seeking to reduce service duplication; transfer authority for use of revenues dedicated to such programs or provide appropriate and adequate alternatives; identify and repeal programs or discontinue services which are no longer necessary or which can readily and fairly be provided by the private sector; and employ existing government entities in redesign efforts rather than create new agencies or units. The League supports cooperative studies of the following issues: whether the enforcement of hurnan rights laws can best be accomplished by a single state system which would allow local governments to discontinue local enforcement programs; whether there should be greater use of statewide or consolidated business licensing, including licensing of sign contractors, to eliminate the need for some businesses to obtain a permit in each city or county; whether the existing use and 1997 City Policies • whether greater use can be made of block grants to distribute funds related to transportation, sewage treatment, and public water facilities; • whether human services and health programs can be improved by further consolidating their administration at the state and county levels of government; and • whether state and federal environmental and water agencies can be combined or eliminated to avoid inconsistent standards and duplication of responsibilities. SD -2. Unfunded Mandates Issue: The cost of federal and state mandated programs substitute the judgment of Congress and the President and the legislature and the Governor for local budget priorities. These mandates force cities to reduce funding for other basic services or to increase taxes and service charges. The passage by Congress of legislation restraining new federal mandates should help address the problem, but other steps are still necessary. Response: • Existing unfunded mandates should be reviewed and modified or repealed where possible. • No additional 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 19 established. Cities should not be forced to comply with unfunded mandates. Cities should be given the greatest flexibility possible in implementing mandates to ensure that their cost is minimized. SD -3. Civil Liability of Local Governments Issue: One of the barriers to the delivery of governmental services and programs is the exposure of local governments and their officials to civil damage claims. The state has acted to protect itself and its local governments by enacting exceptions and limitations to liability suits and authorizing self - insurance and other mechanisms to deal with claims allowed by law. Response: The League supports: retaining dollar limitations on governmental Liability and periodically reviewing and adjusting them in order to ensure market adequacy (the League supports increasing the tort liability limits for both the state and its political subdivisions to $250,000 for any single claimant and $750,000 for all claimants in a single occurrence effective January 1, 1998, and increasing the occurrence limitation to $1,000,000 effective January 1, 2001; eliminating joint and several liability, or severely restricting its application to situations where private or public tortfeasors are substantially at fault for the damages incurred; • extending the protection of the state and municipal tort claims act to quasi- governmental entities when performing public services such as firefighting; and • existing constitutional safeguards for protecting public and private property interests without any statutory expansion of property rights. SD -4. Environmental Protection Issue: State and federal environmental programs are improperly designed to meet their stated goals, and impose an undue burden on local governments because of a lack of federal or state financial assistance. The refusal to finance these programs by the governments which pass them has eliminated an essential restraining feature in program design and implementation. Specific problems include: • New programs or standards are continually adopted without regard to the existence, attainability, or cost of existing programs and standards. • Fragmented program adoption and implementation does not ensure prioritization of environmental matters or the establishment of comprehensive environmental protection strategies. • "One size fits all" implementation programs force remedial efforts by local governments for nonexistent environmental problems. 20 League of Minnesota Cities Permit fees and other cost transfer elements of federal and state programs do not provide an incentive for environmental agency efficiency, policy prioritization, or risk assessment. Response: A comprehensive effort to consolidate, reorganize, and manage state and federal environmental agencies and programs should be undertaken and a partial or full moratorium on new programs or requirements should be considered. Permit fees should be limited to fifty percent of the agency's direct operating costs in order to promote efficient agency operation and sufficient legislative oversight. Sufficient state and federal financial assistance should be provided to comply with state and federal infrastructure requirements, particularly with regard to sewer and . water facilities. SD -5. Personnel, Pensions, and Labor Relations Issue: Many state and federal laws increase the cost of providing city service to residents by requiring city governments to provide . certain levels of compensation or benefits to public employees, specify certain working conditions, or limit city governments' ability to effectively manage their personnel resources. For instance, many existing state and federal laws limit governments' ability to effectively address incompetence or misconduct of city employees specifying certain procedures to be followed or standards of conduct. Recent state proposals to impose salary limits or to increase public pension benefits for military service, and Congressional proposals to adopt a national discipline procedure to insulate police officers from local and state disciplinary action similarly would only worsen the existing situation. Response: The federal and state governments should refrain from passing laws which regulate the private and public sector workplace and should repeal or modify existing laws and regulations which prevent full local accountability. The League of Minnesota Cities proposes the following state and federal reforms: Discipline and Discharge • The state should eliminate or modify veterans' preference and civil service laws which restrict the ability of local governments to effectively discipline public employees. If a total repeal is not politically acceptable, at least the legislature should amend the law to: remove the right to multiple, duplicative disciplinary proceedings; • limit any back -pay claims to a maximum of $100,000, and; • limit the period in which to request a hearing to 14 days (from the current 60 days). • The state should discontinue state and local civil service systems which are no longer needed to ensure fair and accountable hiring and firing 1997 City Policies 21 practices. Pensions • The state should revise public employee pension laws to facilitate consolidation of local pension plans and the transition to more attractive and fiscally -sound pension programs such as defined contribution plans. The state should study initiatives to reform and make uniform pension plans for local government employees. However, the League opposes increasing public employer contribution levels or any proposal to have the public employer contribution level exceed the contribution level required from employees. The state should adjust the eligibility thresholds for public pensions to reflect inflation, adopt a process for automatic future adjustments, and limit eligibility for defined benefit plans to employees working an average of at least 20 hours per week. The League opposes special legislation related to pension benefit increases that are not initiated by a previously adopted resolution of the city council of the affected city, even if the legislation provides an option that requires subsequent local approval. PELRA • The state should modify the definition of public employee to limit the application of PELRA to employees working more than an annual average of 20 hours per week other than on a temporary or seasonal basis. The state should change public sector bargaining laws to restrain arbitration awards which exceed other internal class comparisons or outside cost of living limitations. Overtime compensation • Congress should amend the Fair Labor Standards Act to eliminate its applicability to the public sector or at least recognize unique circumstances in the public sector such as accounting for all hours worked by salaried employees and allowing regular employees to serve as volunteers, paid on -call firefighters, referees, coaches, and other community service- oriented positions. Compensation limits • The state should repeal or modify laws limiting local government employee compensation levels to the governor's salary. Data Practices • In light of security concerns, the state should amend the data practices act to reclassify all employee address data as private data. SD -6. Election Issues Issue: Needed changes and improvements in absentee voting, voter registration, and the operation of our election process at the polls have not been enacted due to partisan differences over issues such as mail 'balloting. Response: The `97 legislature should 22 League of Minnesota Cities develop a bipartisan election reform proposal that simplifies absentee voting; provides more cities direct access to the statewide voter registration system; simplifies tabulation and reporting of votes cast for fictional or celebrity write- in candidates; clarifies restrictions on locating campaign signs within 100 feet of polling places; and allows cities more flexibility in appointing and compensating election judges. SD -7. Local Election Authority Issue: Legislation that overrides local authority to establish the schedule of city elections and the terms of office for local elected officials diminishes the regard for and the role of local self- government, particularly when it restricts cities' authority over elections or disregards home rule authority for local elections. Response: The legislature must not set limits on the number of terms local elected officials may serve, particularly when those terms have been established by the electorate through their home rule charter. State policy on uniform elections should continue to recognize and uphold local authority to schedule city elections in November of either even- or odd- numbered years. SD -8. City Costs for Enforcing State and Local Laws Issue: Cities experience substantial costs enforcing state and local laws, particularly those related to traffic, controlled substances, and incarceration of prisoners. The current method in our criminal justice system of recovering costs for law enforcement and prosecution through fines is insufficient to meet the costs incurred by local governments. Response: The 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 which should be considered include the following: • increasing fine amounts; • removing or modifying state surcharges which conflict with cost recovery principles; • requiring the defendant to pay the full costs of enforcement and prosecution as part of any sentence; and • amending state laws to allow local jails and state correctional facilities to receive distressed food donations. SD -9. Access to Information Technology and Services Issue: The roles that state and local government will play in developing and supporting access to information technology and services need to be defined. Response: The legislature should support the following recommendations of the Government Information Access Council: • encourage cities to collaborate with community organizations, schools, libraries, and nonprofit organizations and telecommunications service providers to make training available to community residents; 1997 City Policies 23 24 encourage collaboration between cities and information service providers to strengthen local economies and ability of local businesses to access advanced broadband networks; provide grants and technical assistance to encourage cities to expand use of information technology to provide citizen access to government information and deliver services; require telecommunications service providers to make access to information technology for government and the public available at a discount to provide capacity for interactive forums to encourage citizen participation; • encourage expanded use of interactive teleconferencing, public access channels, and public broadcast facilities to provide public access to government meetings; and • support federal, state, and local authority to charge providers of cable and cable -like services reasonable fees to support that capacity. League of Minnesota Cities