Legislative Issues and Concerns 2011City of Hopkin
2011 LEGISLATIVE ISSUES AND CONCERNS
SOUTHWEST LIGHT RAIL TRANSITWAY
The Twin Cities Metropolitan Area needs a multi -modal regional transit system that
serves both commuters and the transit dependent. The transit system should be composed
of a mix of HOV lanes, express and regular route bus service, exclusive transit ways,
light rail transit and commuter rail corridors designed to connect residential, employment,
retail and entertainment centers. The system should be regularly monitored and adjusted
to ensure that routes of service correspond to the region's changing travel patterns.
In order to slow the growth in congestion and provide regional residents and visitors with
a realistic alternative to the automobile, the regional transit system needs a funding
source that is both stable and capable of growing with the region.
is An important part of the regional system is the proposed southwest light rail transitway.
The City of Hopkins strongly supports this project and its needed funding.
TRANSPORATATION AND TRANSIT FUNDING ISSUES
The City of Hopkins supported passage of the 2008 Transportation Finance bill. This
legislation allows for necessary resources for MnDOT, the county road system and the
MSA road system, and will help make up for the lack of state resources over the last
twenty years.
However, the resources contained in the transportation finance bill represent only half of
the need in our counties, cities and state. Hopkins recognizes the need for additional
transportation funding statewide, and will continue to advocate for additional resources to
maintain our transportation infrastructure. In addition, cities still lack the authority to use
additional tools for city street improvements; such resources continue to be restricted to
property taxes and special assessments. It is imperative that alternative authority be
granted to municipalities for this purpose to relieve the burden on the property tax
system.
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• TRANSIT IMPROVEMENT AREAS
In 2008 the Department of Employment and Economic Development (DEED) was
authorized to establish Transit Improvement Areas. Transit Improvement Areas include
parcels of land that are located in part within one-half mile of a transit station. A transit
station is defined as a physical structure or designated area which supports the
interconnection of various transportation modes, including light rail, commuter rail and
rapid bus transit, and which promotes and achieves the loading, discharging and
transporting of people. The commissioner of DEED may designate a Transit
Improvement Area if it will increase the effectiveness of a mass transit project by
incorporating one or more modes of public transportation with commercial and housing
development, as well as providing a clean and pleasant place for pedestrian use. The law
requires the commissioner to consult with other affected state or regional agencies. This
language was initiated by communities concerned about the lack of tools available to
shape development around major transit stations. Although the language passed and was
signed in law by the governor (Chapter 300), there was no funding put into place to
implement the new program.
The City of Hopkins supports the implementation of this program and urges the
Legislature to authorize various funding mechanisms for Transit Improvement Areas,
including tax increment financing, tax abatement, bonding and general fund
appropriations for a revolving loan program or for a grant program.
is HEALTH CARE
The City of Hopkins, like other employers in the state, is struggling with the rising costs
of health care insurance for their employees. In addition, cities must cope with unfunded
mandates imposed on them by the Legislature such as the requirement to pool
early retirees with active employees and the requirement to bargain over changes in the
"aggregate value" of benefits, even when the city's contribution has not changed.
The City of Hopkins supports legislative efforts to control health insurance costs while
maintaining quality health care services. However, cities have differing local needs and
circumstances and must retain the flexibility to provide unique and creative solutions to
the rising costs of health care insurance for their employees. The City of Hopkins:
• Opposes legislative action that undermines local flexibility to manage rising
health care costs.
• Supports group programs designed to provide post-retirement health insurance
benefits or health insurance plan benefits for public employees if participation
by cities is strictly voluntary.
• Encourages the Legislature to carefully examine any new, mandated
insurance -related benefit before imposing it upon city employers to make sure
it does not contribute to the rising cost of providing health insurance.
• • Supports changes to Minn. Stat.471.6161, subd. 5, that would clarify the
intent of the subdivision is to address changes in cost vs. changes in value. For
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• example: (1) a change in provider networks does not constitute a change in the
"aggregate value of benefits;" (2) a change in benefit levels required by an
incumbent insurance carrier does not constitute a change in "aggregate value."
• Supports changes to Minn. Stat.471.61 that would allow cities to pool all
retirees (those under or over age 65) separately from active employees to help
cities avoid the liabilities associated with the new Government Accounting
Standards Board (GASB).
UNFUNDED MANDATES
The cost of federal and state mandated programs substitute the judgment
of Congress, the president, the Minnesota 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 the Legislature of reporting
requirements for new state mandates, the recently -enacted Office of the State Auditor
program for local governments to register their ideas for mandates reform, and the
passage by Congress of legislation restraining new federal mandates, should help address
the problem, but other steps are necessary.
• 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 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.
• The legislative local impact note process should be modified to allow the
chairs or ranking minority member of the Senate Finance Committee and the
House Ways and Means Committee to make requests for local impact notes.
In addition, a prepared local impact note must be distributed to the chair or
ranking minority member of any committee considering the bill.
LEVY LIMITS
The City of Hopkins strongly opposes levy limits and urges the legislature to not continue
or re-enact them. This is especially vital in a time when the state is unalloting or cutting
state aids to cities such as LGA and MVHC.
We also oppose the imposition of artificial mechanisms such as valuation freezes, payroll
freezes, reverse referenda, super majority requirements for levy, or other limitations to
the local government budget and taxing process. Expenditures for capital improvements
such as infrastructure reconstruction should also not be subject to levy limits.
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• LOCAL GOVERNMENT AID (LGA)
Local Government Aid (LGA), the only remaining form of general purpose state aid to
Minnesota cities, has been systematically reduced and modified by previous legislatures,
at a significant cost to most metropolitan communities. As a result of these changes a
majority of the metropolitan area's 183 cities no longer receive any LGA.
• The City of Hopkins supports the restoration of previous LGA cuts to fully
fund the current LGA formula.
• The City of Hopkins supports the distribution of LGA in a manner that assists
those cities whose public service needs and costs exceed their ability to pay.
• The City of Hopkins supports modifications to the current LGA formula that
more adequately measures these needs and abilities to pay than does the
current formula.
• The City of Hopkins supports the development of a new LGA formula that
addresses current problems of volatility with year-to-year LGA distributions.
• The City of Hopkins recognizes that any new LGA formula must fairly
represent the public service needs and costs of older, first ring suburbs.
• The City of Hopkins supports the inclusion of inflationary factors in any
formula.
MARKET VALUE HOMESTEAD CREDIT
• The City of Hopkins supports the Market Value Homestead Credit Program, a state aid to
individual homestead property taxpayers, as a direct credit to the taxpayer, rather than a
reimbursement to local units of government. The current MVHC reimbursement structure
undermines accountability in a number of ways, most directly by enabling the state to
reduce or even eliminate the reimbursement to local units of government while
preserving the benefit of the credit to the homeowner. Further, any savings to the state
resulting from reductions in the MVHC should be spread proportionally to all benefiting
taxpayers.
STATE PROPERTY TAX RELIEF PROGRAMS
The City of Hopkins supports state funded property tax relief programs for homestead
property taxpayers such as the circuit breaker and enhanced targeting for special
circumstances. It also supports the update of the Department of Revenue's "Voss"
database to link income and property values, and the consideration of income relative to
property taxes paid in determining eligibility for state property tax relief programs.
The City of Hopkins supports an analysis of the State's property tax relief programs to
determine their effectiveness in providing property tax relief to individuals and families.
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• SALES TAX ON LOCAL GOVERNMENT PURCHASES
The Legislature should reinstate the sales tax exemption for all local government
purchases without requiring a reduction in other aids.
RESIDENTIAL CARE FACILITIES (GROUP HOMES)
Sufficient funding and oversight is needed to ensure that residents living in residential
care facilities have appropriate care and supervision, and that neighborhoods are not
disproportionately impacted by high concentrations of residential care facilities. Under
current law, operators of certain residential care facilities are not required to notify cities
when they intend to purchase single-family housing for this purpose. And cities do not
have authority to regulate the locations of group homes and residential care facilities.
Cities have reasonable concerns about high concentrations of these facilities in residential
neighborhoods, and additional traffic and service deliveries surrounding these facilities
when they are grouped closely together. Municipalities recognize and support the
services residential care facilities provide. However, cities also have an interest in
preserving balance between group homes and other uses in residential neighborhoods.
Cities should have statutory authority to require agencies and licensed providers that
operate residential care facilities to notify the city of properties being operated as
residential care facilities. The Legislature should also require establishment of non -
concentration standards for residential care facilities to prevent clustering. Finally,
licensing authorities must be responsible for removing any residents incapable of living
in such an environment, particularly if they become a danger to themselves or others.
TELECOMMUNICATIONS
Local residents, subscribers to cable/video services, the Federal Communications
Commission (FCC), and state and federal lawmakers have signaled growing interest and
support for measures to spur increased direct competition in the delivery of advanced
video and telecommunications services at the local level. In recent years, increasing
numbers of telecommunications service providers have begun offering competitive video
services and claim that local franchising can be a barrier to entry.
The City of Hopkins strongly disagrees with that viewpoint, and maintains there is no
evidence that local franchising is a barrier to competitive entry. Local franchising
authorities have promoted the benefits of competition and development of innovative
services as a primary source for deployment of broadband technology. In pursuing the
goal of providing increased consumer choice, city officials look for opportunities to
encourage competitive entry while ensuring community needs and interests are met.
Accordingly, the Legislature, FCC, and Congress should recognize, support, and
maintain flexible exercise of local franchising authority to encourage increased
competition between incumbent cable system operators and new wireline competitive
• video service providers.
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0 Fundamental reasons for retaining local franchise authority include:
• Consumer protection and enforcement of quality of service standards and
local accountability.
• Assessment and delivery of services to meet community needs and interests.
• Provision of channel capacity and related equipment, facilities, and other
support of public, educational, and government (PEG) use of that capacity.
• Production and development of diverse programming.
• Effective control and management of public rights-of-way.
• Provision of institutional networks (I -Nets) to service important community
needs, such as public safety communications, libraries, schools, and other
public institutions with access to state-of-the-art applications and the ability to
communicate effectively with their constituencies.
Maintaining local franchising also most effectively creates and preserves agreements that
guarantee broad access to services throughout the community, ensuring there is no digital
divide for access to available additional services such as access to IP voice and high-
speed Internet via infrastructure that delivers video programming services.
AFFORDABLE HOUSING- STATE ROLE
Primarily through the programs of the Minnesota Housing Finance Agency (MHFA), the
state establishes general direction and prioritization of housing issues. The state
financially supports a variety of housing types including homeless shelters, transitional
housing, supportive housing, senior housing, and family housing. The state must continue
to be an active partner in addressing lifecycle and affordable housing issues.
AFFORDBALE HOUSING- FEDERAL ROLE
The City of Hopkins encourages the federal government to maintain and increase current
levels of funding for affordable housing. Federal investment in affordable housing will
increase the supply of affordable and life cycle housing as well as increase the inter -
jurisdictional collaboration between the two levels of government. Federal funding plays
a critical role in aiding states and local governments in their efforts to maintain and
increase affordable housing throughout the state. The City strongly encourages the
following:
• To preserve and increase funding for the Community Development Block Grant
Program, which is a catalyst for creating more affordable housing;
• To create and implement a more streamlined procedural method for local units of
government to participate and access federal funding and services dealing with
grants, loans, and tax incentive programs for economic and community
development efforts; and
• To commit resources to Section 8 funding. It is a flexible, cost effective, and
• successful program that has helped nearly two million families find housing
through promotion of self-sufficiency and stability.
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0 REDEVELOPMENT
Redevelopment allows local communities to adjust to changing market conditions, better
utilize existing public infrastructure, and maintain a viable local tax base. However, due
to the higher up -front costs of redevelopment, as compared to greenfield development,
desirable redevelopment projects often require public assistance.
It should be the goal of the state Legislature to champion development and
redevelopment throughout the state by providing enough sustainable funding to assure
that the state remains competitive in a global marketplace. The City of Hopkins supports
increased funding and flexibility in the Metropolitan Council's Livable Communities
Programs. It strongly opposes funding reductions, transfers of Livable Communities
Program funds to other program areas and constraints on eligibility and program
requirements.
In addition, the City supports:
• Increased, flexible and sustained funding for the Contamination Cleanup and
Investigation Grant Program, administered by DEED;
• New financing and regulatory tools to nurture Transit Oriented Development,
including increased flexibility in the use of TIF for this purpose;
• Increased and sustained general fund and state bond funds for the
Redevelopment Grant Program, administered by DEED, dedicated to
• Metropolitan Area projects;
• The evaluation of SAC fees to determine if they hinder redevelopment;
• Expansion of existing tools or development of new funding mechanisms to
correct unstable soils; and
• State adoption of an income tax credit program to facilitate the preservation of
historic properties.
TAX INCREMENT FINANCING
Tax Increment Financing (TIF) has been and continues to be the primary tool available to
local communities for assisting economic development, redevelopment and housing.
Over time, several statutory changes have made this critical tool increasingly difficult to
use, while recent property tax reform has resulted in a decreased state financial stake in
city TIF decisions. At the same time that TIF has become more restrictive and difficult to
use, federal and state development and redevelopment resources have been steadily
shrinking. The 2006 eminent domain changes will make redevelopment significantly
more expensive in some cases, and impossible in others. The cumulative impact of TIF
restrictions, shrinking federal and state redevelopment resources, and changes to eminent
domain laws will restrict a city's ability to address problem properties and will accelerate
the decline of developed cities in the Metropolitan Area. Without proper tools and
resources to address decline, cities will be unable to stop it. At a minimum, the state
should authorize increased flexibility in local TIF decisions.
• The City of Hopkins urges the Legislature to:
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• Not adopt any statutory language that would further constrain or directly or
indirectly reduce the effectiveness of TIF;
• Incorporate the Soils Correction District criteria into the Redevelopment District
criteria so that a Redevelopment District can be comprised of blighted and
contaminated parcels in addition to railroad property;
• Expand the flexibility of TIF to support a broader range of redevelopment
projects;
• Increase the ability to pool increments from other districts to support projects;
• Continue to monitor the impacts of tax reform on TIF districts and if warranted
provide cities with additional authority to pay for possible TIF shortfalls;
• Allow for the creation of transit zones and transit related TIF districts to address
development and redevelopment issues associated with transit or transfer stations;
• Shift TIF redevelopment policy away from a focus on "blight" and "substandard"
to "functionally obsolete" or a focus on long range planning for a particular
community, reduction in green house gases or other criteria more relevant to
current needs;
• Encourage DEED to do an extensive cost -benefit analysis related to
redevelopment, including an analysis of the various funding mechanisms, and an
analysis of where the cost burden falls with each of the options compared the to
the distribution of the benefits of the redevelopment project; and
• Consider creating an inter -disciplinary TIF team to review local exception TIF
proposals, using established criteria, and make recommendations to the legislature
• on their passage.
In addition, for sites that do not meet the restrictive blight and contamination definitions
of the 2006 changes to eminent domain law, the Legislature should explore creating
incentives to encourage owners whose properties meet the blight definitions under M.S.,
Chapter 469, to voluntarily sell their land for redevelopment purposes. Incentives could
include income tax credits, capital gains deferrals or other incentives targeted at property
AWATIONCI
Finally, the City of Hopkins encourages the State Auditor to continue to work toward a
more efficient and streamlined reporting process.
EMINENT DOMAIN
Eminent domain reform actions of the 2006 Legislature resulted in a significant
philosophical and legal shift in Minnesota. Whereas prior to 2006, Minnesota law
provided extensive deference to local governments, statutory changes enacted in 2006
provide significantly greater deference to property owners. Eminent domain actions for
traditional public uses such as streets, parks or sewers will cost more. And except for the
most extreme cases of blight or contamination, eminent domain for redevelopment
purposes will be nearly impossible at any cost.
• The proper operation and long term economic vitality of our cities is dependent on the
ability of the city, its citizens and its businesses to continually reinvest and reinvent.
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• Reinvestment and reinvention strategies can occasionally conflict with the priorities of
individual residents or business owners. Eminent domain is a critical tool in the
reinvestment and reinvention process and without it; our cities will be allowed to
deteriorate to unprecedented levels before the public will be able to react. The City of
Hopkins strongly encourages the Governor and Minnesota Legislature to revisit the 2006
eminent domain reforms to allow local governments to address blight and contamination
problems before those conditions become financially impossible to address. Specifically,
the legislature should:
• Re -write the blight and contamination definitions and standard of review sections
to reflect the deterioration conditions that currently exist in the Metro Area.
• Allow for the assembly of multiple parcels in order to properly and appropriately
redevelop blighted or contaminated sites.
• Provide for the ability to acquire land from "holdouts" who will now view a
publicly funded project as an opportunity for personal gain at taxpayer expense.
• Review the new enhanced compensation provisions to determine whether
individuals are inappropriately enriched by the process.
• Allow for modifications to the effective date language in the 2006 legislation in
order to accommodate delays in project schedules that are beyond the control of
the acquiring authority.
MORTGAGE FORECLOSURE
• Sub -prime mortgages and predatory lending practices have resulted in thousands of
mortgage foreclosures throughout the state. Foreclosures are devastating to homeowners
and tenants and can be equally devastating to neighborhoods when the presence of vacant
housing results in reduced property values and increased crime. The additional public
safety and code enforcement costs of managing vacant properties are a financial strain on
cities.
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The City of Hopkins supported the 2007 Legislature's efforts to eliminate predatory
lending practices and the 2008 Legislature's efforts to reduce foreclosures among current
recipients of sub -prime mortgages, including technical changes to the foreclosure
process, increased financial support for mortgage foreclosure prevention activities, and
financial assistance to individuals. As solutions to address vacant housing are developed,
including assistance to cities for property management, neighborhood recovery and
public safety costs associated with foreclosures, The City of Hopkins urges the
Legislature to partner with cities and the private sector to adopt and implement those
solutions.
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0 METROPOLITAN COUNCIL HOUSING TARGETS
In advance of the 2008 Comprehensive Plan deadline, and in response to projected
growth in the Metro Area, the Metropolitan Council created a methodology to determine
how many affordable housing units would be needed and where those units should go.
From that process, each metro area city was assigned an affordable housing "target".
Further, Met Council Comprehensive Plan guidance instructs cities to guide sufficient
land to accommodate the "targets".
The City of Hopkins supports the creation of affordable and lifecycle housing in the
metro area. However, providing affordable and lifecycle housing is a shared
responsibility between the private sector and government at all levels, including the
federal government, state government and Metropolitan Council. Land economics,
construction costs and infrastructure needs create barriers to the creation of affordable
housing that cities cannot overcome without assistance.
Therefore, the City of Hopkins supports a Metropolitan Council affordable housing
policy that recognizes the following tenets:
• The Council's housing policies characterize individual city housing numbers as
"targets", not "goals".
• Cities need significant financial assistance from the federal and state government,
• as well as the Metropolitan Council, in order to make progress toward creating
additional affordable housing.
• Improved transportation infrastructure and transit service is required to make
progress toward creating affordable housing.
• Absent significant resources to assist cities, the Met Council will not hold cities
responsible if the "targets" can't be met.
THIS OLD HOUSE/ THIS OLD SHOP
The City of Hopkins supports the reenactment of the "This Old House" law, which
allowed owners of older homestead property to defer an increase in their tax capacity
resulting from repairs or improvements to the home. The City of Hopkins also supports
passage of similar legislation for owners of older commercial/industrial property that
make improvements that increase the property's market value by at least 12%.
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