CR 91-44 Special Service District
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February 13, 1991 Councll Report 91:44
SPECIAL SERVICE DISTRICT
Proposed Action
staff recommends the adoption of the following motion:"Move
to direct staff to begin working with the Hopkins Business
Council for the purpose of reviewing and implementinq a
special service district."
This motion would allow staff to begin discussions with the
business community on the possible implementation of a
service district. In order for the district to be put in
place, the business community must petition the City
Council.
overview
In recent years the City has seen increased cost in the area
of parking maintenance within the CBD area. The
establishment of the service district would allow the City
to levy taxes within this area to meet the increasing costs
associated with operating the parking system.
. While parking is the most prominent service that the City
provides, several other services are provided which could be ~
paid for by the business community. Lighting, street & lot
cleaning, garbage pick up are examples of other services
which are provided to a much greater extent in the CBD.
In 1989, the City Council adopted Resolution NO:89-18, which
gave support to a Bill which would permit the City to adopt
an ordinance establishing a special service district. This
Bill was enacted by the state Legislature.
Analvsis
o What is a special service district?
o What are the provisions of the law?
o What is Hopkin's background with this law?
o Why is staff suggesting that a district be discussed now?
supporting Information
o Resolution Number 89-18
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Brian Fritsin er
Economic Development Specialist
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Analvsis
Based on the above information, the City Council must
consider the following items:
0 What is a special service district?
A special service district is a defined area within the
city, which is essentially composed of property zoned for
commercial, business, or industrial use, where special
services are provided and the cost of providing the service
is paid from revenues collected from special taxes or
service charges imposed within the district.
The idea is that certain services or an increased level of
certain services usually provided by a city may be furnished
to businesses located within the district and the cost of
providing the additional services borne by those receiving
. the services. In the case of Hopkins, this increased level
of services would be parking.
Examples of other special services are the removal of snow,
ice, litter, street and sidewalk cleaning, installation and
maintenance of a special street lighting system, etc. In
most cases, the law broadly defines the term "special
services". However, if the special services are ones
ordinarily provided throughout the city from general revenue
funds, the services furnished must be at a greater level
within the district.
0 What are the provisions of the law?
A special service district may be established, subject to a
petition, by adoption of an ordinance by the City Council
after a public hearing is held on the proposal. This
petition requires owners of 25% or more of the land area of
property that would be serviced and 25% or more of the net
tax capacity of property to be serviced to request the
hearing.
If owners of 35% or more of businesses, of the same
requirements listed above, within the service area file an
objection to the adoption of the district, the ordinance
. creating the district does not become valid.
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A special service district can levy taxes within the
district to pay for the special services. This levy is
treated as a typical Ad Valorem levy. However, this levy
does fall outside normal levy limits. This levy is based
upon the tax capacity of properties within the district.
0 What is Hopkin's background with this law?
Discussions of first undertaking this district began in late
1988. It was determined that the city needed to get
Legislative authority to undertake a district such as this.
Thus, after months of working with Sally Olson, the State
Legislature passed a bill in late 1989 which gave the city
of Hopkins the authority to utilize special service district
laws.
0 Why is staff suggesting that a district be discussed now?
During 1990, staff met with the City council to discuss the
parking system and its financial status. It became in
apparent during the past year that the system could not
e support itself using only parking fine and permit sales
revenues.
with the potential budget limits being placed on the city by
the state, the city must consider every option available to
keep services operating. staff believes that the adoption
of a special service district is a reasonable approach to
paying for the parking provided in the CBD.
Alternatives
1. Direct staff to begin working with the Hopkins Business
Council for the purpose of reviewing and implementing a
special service district for parking.
2 . Direct staff to take no further action at this time.
3. Countinue the item for further information.
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