2003-05-06PLEASE TURN OFF ALL CELL PHONES & PAGERS IN COUNCIL CHAMBERS.
CITY OF MOUND MISSION STATEMENT: The City of Mound, through teamwork and cooperation, provides at a reasonable
cost, quality services that respond to the needs of all citizens, fostering a safe, attractive and flourishing community.
MOUND CITY COUNCIL
TUESDAY, MAY 6, 2003, 6:30 PM
MOUND CITY COUNCIL CHAMBERS
AGENDA
*** THIS IS THE REVISED AGENDA FOR 5/6 - PLEASE DESTROY FIRST ONE***
1. Open Meeting
Page
2. Consideration of bids for 2003 Street Reconstruction Project - 1742-1746
Resolution Accepting Bid for 2003 Street Reconstruction Project
3. Discussion Regarding 2003 Budget Shortfall and Revenue Options
1747-1801
4. Adjourn
May 2, 2003
Honorable Mayor and Members of the City Council
City of Mound
5341 Maywood Road
Mound, Minnesota 55364
SUBJECT:
City of Mound
2003 Street Reconstruction Project
MFRA #14121
Dear Mayor and Council Members:
Enclosed is a tabulation of the eight (8) bids received on April 30, 2003 for the street reconstruction
project in the Three Points area. The bids ranged from a low of $327,932.10, submitted by Valley
Paving, Inc. of Shakopee, to a high of $529,918.60. The Engineer' s estimate was $350,425.00. The
estimated construction cost used in the feasibility report and at the Public Hearing was $342,000.00.
Valley Paving is one of the older, reputable road contractors in the area; therefore we are
recommending that a contract in the amount of $327,932.10 be awarded to Valley Paving, Inc.
If you have any questions or need additional information, please contact us.
Sincerely,
MFRA
John Cameron, City Engineer
JC:rth
s:~nain:\mbul4121\correspondence\mayor-councilS'l
-1742-
- 1743-
- 1744-
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- 1745-
CITY OF MOUND
RESOLUTION NO. 03-.~
RESOLUTION ACCEPTING BID FOR 2003 STREET RECONSTRUCTION PROJECT
WHEREAS, pursuant to an advertisement for bids for the improvement of:
Shorewood Lane - from Three Points Boulevard to Quail Road
Glen Elyn Road - from Three Points Boulevard to Paradise Lane
Paradise Lane -from Glen Elyn Road to Heron Lane
Heron Lane -from Crestview Road to Enchanted Road
Crestview Road -from Heron Lane to Gull Lane
Woodland Road - from Heron Lane to Gull Lane
Enchanted Road - from Heron Lane to Gull Lane
Gull Lane -from Crestview Road to Enchanted Road,
bids were received, opened and tabulated according to law, and the following bids were
received complying with the advertisement:
Valley Paving, Inc.
Buffalo Bituminous, Inc.
Northwest Asphalt, Inc.
Bituminous Roadways, Inc.
Frattalone Paving, Inc.
GMH Asphalt Corp.
Hardrives, Inc.
Midwest Asphalt Corp.
$ 327,932.10
$ 343,003.40
$ 368,365.00
$ 387,860.00
$ 390,461.00
$ 394,645.OO
$ 416,218.00
$ 529,918.60
AND WHEREAS, it appears that Valley Paving, Inc., of Shakopee, MN, is the lowest
responsible bidder,
NOW, THEREFORE BE IT RESOLVED by the City Council of Mound, Minnesota:
1. The Mayor and Clerk are hereby authorized and directed to enter into the
attached contract with Valley Paving, Inc., of Shakopee, MN, for the 2003 Street
Reconstruction Project according to the plans and specifications therefore
approved by the City Council and on file in the office of the City Clerk.
2. The City Clerk is hereby authorized and directed to return forthwith to all bidders
the deposits made with their bids, except that the deposits of the successful
bidder and the next lowest bidder shall be retained until a contract has been
signed.
Adopted by the City Council this 6th day of May, 2003.
Attest: Bonnie Ritter, City Clerk
Mayor Pat Meisel
- 1746-
April 30, 2003'
CI'TY OF MOUND
5341 MAYWOOD ROAD
MOUND, MN 55364-1687
PH: (952) 472-0600
FAX: (952) 472-0620
WEB: www. cityofmound.com
Dear Mayor and Council Members,
Policy making proposed at the State level has certainly complicated the lives of City officials. In reaction,
many cities have already completed their contingency plans through drastic budget cutting measures. At
the City of Mound, years and years of frugal spending.barely allows for further cutting back. Cutting into
an already lean budget can only result in serious reductions in service levels. As a review, some programs
considered for cutbacks that have been discussed include the following:
--designating several parks as natural, eliminating mowing them
--grass and weed trimming citywide
--mowing grass at 6-8"~ instead of 4"
--weed spraying on sidewalks and roadsides
--snowplowing after 4" of snow instead of 2"
--lifeguards
--kid recreation programs
--beach maintenance
--beach and park weed spraying
-port-a,potties in parks
--Mound City Days contribution
--Music in the Park
--garbage pickup downtown
.--CBD parking program, and the services that it provides
--sidewalk repair
--pothole repair
--signage repair, replacement and additions
--PD response to car lockouts
--PD response to property damage accidents
--police programs, such as Triad or others (eliminating an officer)
Reduclng service levels being a matter of Policy would require council consensus' on which programs to
modify or eliminate. Staff is happy to assist in that discussion or d9 any pertinent research.
Attrition has also been considered as a means of significant budget cuts. The recent exiting of two
officers left two openings. It was my first thought that Chief Kurtz's first challenge be to adopt new
scheduling, such as 12 hour shifts that require fewer.officers. Upon closer scrutiny, it was determined that
we are under a six year agreement with the Federal Government for each of the three COPS grants we
accepted. To not comply with the terms of the agreement will preclude the City from being awarded a
grant in the future, ruling out the possibility of.not filling those vacancies.
With these tba:eats looming, department heads have been directed to 'only spend on those things considered
essential. As a result, certain budgeted spending has not occurred as planned, reducing our 2003 shortfall
significantly. Savings have been realized thus far by not spending on:
~ prinled on recycled paper
- 17~47-
~ ~,000
Engineer .~
Sign maker :~:::.: :~!: $ 8,500
Dump boxes ":'::; $13,000
Dock at Mound $10,000
Paint a~(;ga~ks Gfiafie $ 81000
Police Chief $20,000
Patrol Officer $11,250
Patrol Officer $11,250
Document imaging equip $ 6,000
$93,000
With redevelopment and countlesS other programs and projects well underway, all of which require
ongoing financing to continue, it is the' recommendation of Staff~and management'that ~revenue generation
be seriously considered as the preferred amendment to our budget. What follows: are some bullets' with
revenue ideas and short explanations, where` needed. Staff will go iht6 more detail on thOse in'Which you
show interest.
o Review and sale of underutilized properties located in the City limits. There are abOUt 233
properties not on the tax roles that act as dump sites. Several benefits coUld be realized by
transferring their ownership to abutting owners, for little Or no fee. '1) They would become tax
generating parcels to the city and the county. 2) They would be Cleaned up md remain clem,
enhancing their neighborhoods. 3) Demands for cleanup placed on staff and volunteers WoUld be
eliminated.
Implementation of electric and gas franchise fees. Numerous cities have historically tapped intO
local and state provisions allowing the collection of fees under a franchise agreement With electric
and gas utilities. The utilities prefer a fee per meter, for ease of admini~§tration. A Simple $2100
per month fee against each meter holder will net approximately $190,000 annually 'frd~ the tWo
utilities. See attached spreadSheet.
Water rates based on use. As we proceed with the construction of a well and a well hmXse;~and
look closely at the value of radio read meters, getting Water rates in line with those of 0ther citi6s
seems a prudent thing to consider. Other utilities also warrant revieW:
Recycling. The Recycling fund balance has declined con~'idembly fo~ th'e last few yearg. AlthoUgh
we did not reflect revenue increases f0f file year 2003~i it is'st~ S opiniOn':that the fe~..Sl~ould be
increased by at least 5%, if the intent is to continue to provide the current level of service.
AllocationS' ef.p~0fess'~6nal S~ time t6 the:~ btidget,~ I~ is a comm6n practice fora eiB' to
allocate time for the City Manager, Finance Director, Community Development Director and the
CitY Cler~'to the:.~':b~dg~t~. EaCh has a hand in either 'the management,of the pubti~ housing or
redewlopm~nt'0~ the ~t~blie: safety 'facility;.~ which is oWn6d by the tlR.Az The HRA levy c~uld
tak6 ih'about'$120,~0'0~0~ ~ally. 'We levied$8.3~000 fOr~
an entei'prise ~d. The Di)dk Pi~gr~, if operated as a bUginess, %uld be
revenue generating to the p'~int that i~' acuity offse~ taxes,: as does the Liquor' FUnd: A muniCiPal
dock program cannot be compared to a marina, but a well-maintained system would be a sought-
after ~erfity; for which peoiSle ~e willing to pay fo~ the privilege. ~'fusing,
- 1748-
Fees for professional services. Inthe past year huge strides were made in reducing planning
consulting. By the end of this year, the City will also offer'in-house engineering. Day,to-day
engineering consulting will then be weaned away as'the new engineer gets a full sense of the
community's infrastructure and a full command of our projects. In order that our in-house staff
does.not become an added expense to the taxpayers, it is recommended that a system be created to
charge in-house professional staff time back to developers and planning commission cases, as it is
now with our consultant time. Doing this is essential in avoiding adding to our costs.
Re-evaluate cell phones and usage. The cost of off site communications has been a topic of
discussion in the past. Within the last month, staff has reevaluated the current system, neXt to a
proposed system, and recognized the potential for considerable savings. · We are in the midst of
moving to the new system, which will save the City approximately $2,000.
Planning and Inspections.
Real estate research fee - property file review and analysis
Building permit deposit to offset review charges and non-pickup
Driveway/landscaping deposits to offset additional site inspections
City staff hourly charge for meetings/report writing, etc. (i.e., similar to MPC& City of Wayzata)
Building permit fee increase
Roofing/siding/fireplaces - creation of fee schedule
Authorized construction / no permits issued - double fee fine
Fine(s) schedule - violation(s) other than building permit
Building permit dedication fee to offset special projects (i.e., Comp. Plan update)
License home occupations $25 to $100/year
Sexually oriented business license $7,500 to $10,000/year
Investigation fee for above $500 to 1,500
Plan review
Public Safety.
False alarms
Rental property inspections
Day care inspection
Vehicle impound processing fee - $500 - $1,000 a year
Administrative Citation program
Alarm ordinance program
Parks Department. We have 30 parks that are undeveloped and underutilized. With
redevelopment, Mound will have needs that go well beyond today's needs if we are to maintain
our new downtown. Those include: maintenance of the greenway and streetscape; maintenance of
the trails, and maintenance of holding ponds..This will require: mowers, snow removal
equipment, front end loaders, storage space and people power, just to scratch the surface. These
are the indirect costs of redevelopment.
Innovativeness is the only answer to not only improving and maintaining what we have and what
is to come. Innovativeness is essential to staying out in front of the needs, as redevelopment
occurs. One of the innovative ways cities may fund parks is through charitable gambling
proceeds. Although not viewed popularly by our neighboring community, the 10% contribution
requirement allowed by the State can be an answer to funding some basic needs for cities~ See
attachment.
-17-49-
Apply for grants
Increase citizen volunteerism - (i.e.,) mowing of parks through "Adopt a Park" program
Public Works Department.
Assess for snow removal from sidewalks
Assess for sidewalk repairs
Assess for seal coat projects
Reverse the charges for the CBD: charge the businesses 75%, with the City paylng ~25%
Charge for tree trimming in the right-of-way
Charge back for costs, including electricity, for customers benefiting from addition of streetlights
Assess for street lights
Share equipment with other cities
Administration Departments
Reduction in hours (i.e., 4-10 hour days)
Unpaid leave - 1 day per month/employee
InCreasing fees
Increasing utility fees
Allocate more or ALL overhead to Enterprise funds
Cut back or limit overtime (use flex time)
Share services with neighboring cities (i.e., safety and other training)
Evaluation of current benefit(s) package (i.e., insurance, etc.)
Opt-out of health insurance policy
Higher deductibles on all insurance
Do newsletter in house (maybe not as fancy, but effective)
Fees that Could Go Up.
Tree trimming licenses (15)
Depot rental
Mound Bay Park - big events
now $50/year up to
$15 O/year
o Liquor Store.
Wine club, including membership fee
Mayor and Council, this is a very comprehensive list of suggested areas for revenues. They are all a
matter of policy and require your consensus. The combination of these could be what preserves, and even
enhances, our financial status at the City of Mound. My suggestion is that we go through this letter point
by point, first discussing your questions with staff, and secondly, getting your consensus on either more
study or the creation of documents for consideration at an upcoming meeting. Our quick turnaround 'and
instatement of these matters of policy are critical to making up the shortage for the balance of the year.
Thank you for your consideration of what we consider to be creative ideas for financial development and
security for our city, which will enable our progress to continue.
Sincerely,
Kand~s Hanson '
City Manager
- 1750-
Governor Releases LGA Reform Proposal Page 1 of 2
League of Minnesota Cities
Governor Releases LGA Reform Proposal
Gov. Pawlenty formally announced his proposal for new distribution formulas, Wednesday, April 30. The proposal
includes a new formula for cities over 2,500 population and an update of the existing formula for small cities. The
governor had expressed concern over the current LGA distribution, criticizing the existence of the grandfather
provision and expressing his desire for a new formula.
The commissioner of revenue has indicated the administration believes LGA shoUld equalize cities' ability to provide
average level services at reasonable property tax rates. The administration also wants a program that does not have
..... `/ii.Tn-/d~`~t~h-~-e/~-aid.~.~5~¥a-a~h-ei~-di~strb-~e~-~5¥fi~-/~5p¥6~5~i6h-~-6~h-~e~6~-u-~.~e commi~-iBner o~v~ni/~-h~~ ......
indicated the administration may consider transitional mechanisms to help cities adjust their budgets to the new
distrribution.
The administration proposes the new formula, when implemented in 2005, should distribute $352 million to cities.
The current LGA program would distribute about $608 million to cities in 2004. This reduction alone means most
cities, if not all,' will receive less LGA under the governor's proposal than Under current law.
The spreadsheet posted below compares the distribution of the governor's proposal to current law using the full $608
million 2004 appropriation amoUnt. This was done to show the relative changes from changing the formula. It does not
reflect loss of aid from cutting the LGA program to $352 million. The spreadsheet also shOws the distribution of LGA
under current law if the grandfather and caps were eliminated.
Variables included in formula for cities over 2,500
1. Pre-40 housing percentage
2. Population decline 1990-2000
3. Household size
4. 3-year average of accidents per capita
5. Adjusted net tax capacity per capita
6. Metro or non-metro
variables included in formula for cities under 2,500
1. Pre-40 housing percentage f
2. Population decline 1990-2000
3. Commercial/industrial percentage
4. Population
Model description
For each city over 2,500, expenditure need is calculated using a formula containing the six variables listed above.
Household size is calculated bY dividing the total city population over the number of households in the city. The three-
year average of accidents per capita includes all accidents that occurred within a jurisdiction. Each city is categorized
as metro or non-metro.
For cities under 2,500, the formula proposed by the govemor is an updated version of the current law formula.
For all cities, expenditure need is compared to revenue-raising capacity. The definition of revenue-raising capacity, or
ability to pay, is different from current law. In the governor's proposal, the revenue- raising capacity is calculated by
multiplying a city's net tax capacity by the statewide average tax rate, and then adding the city's taconite aids. Unde
current law, taconite aids are not included as part of the ability to pay measure. The difference between need and
capacity is the city's LGA payment, adjusted so that the total amount distributed to all cities equals the current
appropriation.
http://www.lmnc.org/main/lmcstoryl.cfm 4/30/2003
- 1 751 -
Governor Releases LGA Reform Proposal
Page 2 of 2
Discussion
The calculation of household size poses some problems for cities where there are large populations in prisons and
other mtituti0n that are not households. In these cities, household size will be inflated, An ongoing concern with the
housing measure is that the pre-40 housing data from the Census is sample data.
Distributional impacts
The governor's proposal would reduce the LGA program to $352 million in 2005 from the current law that would
distribute about $608 million in 2004. Most of the changes in LGA distribution would therefore be the result of the cut
in appropriation rather than the new formula. But the impact of the new formula can be measured by comparing
current law to how the governor's formula would distribute the same amount of money. (See the spreadsheet posted
below for city-specific amounts and cluster totals.)
from metro cities to greater Minnesota cities. In greater Minnesota, high-income cities and regional centers would lose
aid while all other clusters would receive more aid. For metro city clusters, most would lose aid. The high-income city
cluster would see a slight increase in aid. Minneapolis would see a slight decrease, while St. Paul would see an
increase of about $1.2 million. Overall, the formula changes would send less LGA to cities over 2,500 and more to
cities with fewer than 2,500 population. Approximately $29 million shifts from large cities to small cities.
NOTE: The following file is from the Dept. of Revenue and shows the current law distribution of LGA
(3rd column of numbers) and the governor's proposal (5th column of numbers) both based on a $608
million appropriation. The governor's budget proposal would actually distribute only $352 million in
LGA.
(League staff will prepare a spreadsheet showing the governor's proposal under a $352 million
distribution as soon as possible.)
Download Spreadsheet: City-Specific LGA Amounts (pdf document)
Return to LMC Home
4/30/2003
http://www.lrrmc.org/main/lmcstory 1.cfm
-1752-
April 29, 2003
Cy2004 City LGA Comparisoh
Governor's Proposal vs Current Law (based on current law appropriation level of $608M)
(Formula Distribution Analysis)
Source: Minnesota Department of Revenue
CurrentLaw i CurrentLaw CurrentLaw
200t 20O4 LGA I 2004 LGA 2004 LGA
Population Grandfathe~ed I (w~th sr~dr.t~-) (.o St~ndf. m~)
TOTALS 3,995,004 3667737,6981 608,143r082 608,143,08~
Ism M~PAH Cl~ OF 74 2,~j 4,565 19,937
,ge, MONTEVIDEO Cl~ OF 5,~2 999,889~ ~,777,2~ 1,8~,17,
;es MONTGOMERY Cl~ OF 2,821 ~9,836i 696,895 719,767
ges MONTROSE CI~ OF 1A~; 68,552 195 t30 296 707
grc MOORHEAD C~ OF 32,37E ,779,584 8 723 312 6 900,292
ges MOOSE ~KE CITY OF
166,257~ 415,682 1,274,19~
gSb MO~ CI~ OF 3,23~ 395,500 7t9 1t2 758,568
ges MORGAN C]~ OF 90~ 2~,714 357 538 316,037
ges MORRIS CI~ OF 5,08~ 990,969~ t,8~,85~ 2,096 130
g. MO~mSTOW~ C~ O~ ~,oo~ ~ ,
S7,231 186,156 322 ~
gsm MORTON CI~ OF ~ . 83,299~ ~38,672 129,798
gsb MOTLEY CI~ OF 594 63,376~ t09,801 ~08,823
ms~ M~UND CiTM OF 9,4~ 297,016J 297,016
roam MOUNDS VIEW Cl~ OF 12,750 e35,562 ee4,8ss ~,360
ges MURDOCK CITY oFMT ~KE CI~ OF 2,095 , ~ ,
377 031 808 005
gsm 304 47,098j 76,747 82,150
gsm MYRTLE CI~ OF 6t 4,74t 9 794
gsm NASHUA CI~ OF ~ 401 401 0
ges NASHWAUK CI~ OF 941 32,838 596,512 396,664
'gsm NELSON CI~ OF 170 5,092 17613 29,351
gsm NERST~ND CI~ OF 236 21 6~ 23 797
gsm NEVI$ CI~ OF 358 ",3921 74,929 59,861
gsm NEW AUBURN CI~ OF 499 28,8521 76,310 111,2~
~mol N~ BmGHTON CI~ O! 22,215 793 905~ 793 905 0
mol NEW HOPE Cl~ OF 20,910 1,288 2~! 1,520,884
~. .~w uo.~o, c~ o~ ~,o~ ~ osoi ~ se~
mhg NEW MARKET Cl~ OF 535 10,983~ 10,983 0
gsm NEW MUNICH CI~ OF 34{ 29 550 52 258 60 742
msm NEW P~GUE CI~ OF 4,72~ 479,903 709,656 538,557
ges NEW RICHLAND CI~ OF 1,182 127,789 303,177 413,337
grc NEW ULM Cl~ OF 13,~7 2,~1,011 4,499,927 3,6~ 203
ges NEW YORK MILLS Cl~ ( 1,162 232,~0 400,416 399 936
msm NEWPORT CI~ OF 3,725 330,977 386,391 129 894
gsm N~ELSWLLE C~ OF as ~,733~ 22 4~, ~S,765
gsm NIMROD VIL~GE OF 74 1,0~ 1,84t 1,889
ghi NISSWA CI~ OF 1,974 0 0 0
gsm NORCROSS CI~ OF 59 t9 408 25,308 13,829
guf NORTH B~NCH CI~ O~ 8,574 200,970 409,816 4ee,sso
ghl NORTH MAN,TO CI~ 12,054 1,911,152J 2,371,615 1,079,356
=,, .O.TH OAKS C~ O~ 4,000 .6224 ~ S22 0
=r= .O.TH~ELD C~ O~ ~7,50, 2,.7,~021 3,.2,~20 2,~7~
gsm NORTHROP CI~ OF 258 18,147 36 132 42.158
msm NORW~D YOUNG AME 3,139 160,452 350,810 ~6 211
,.m o.~ssA c~w oF .~ ~a,~a .,o~a ams
gsm ODIN ClW OF 12~ 12,006! 20,719 20,42S
gsm OGEMA CI~ OF 14= 23,832 37,427 31,868
gsm OGILVIE CI~ OF 472 92,514 132 1t2
gsm O~BENA CI~ OF 18~ 31,957~ 54,344 62,476
gsm OKLEE CI~ OF 40t 86,949 ~35 464 113,723
ges OL~ CI~ OF 2,56C 532 5461
' ' I ~,gg8 967,~7
ges ONAMIA CI~ OF 862 75 ~54 180,070 267 310
mhl ORONO Cl~ OF 7,592 9,289 g 289 0
ghl ORONOCO CI~OF 877 52,642! 9~,787 9t,758
Current Law Current Law Proposed
2004 LGA 2004 LGA 2004 LGA
MI~ =am) (no capeI Ino =ape)
152.2 152.2 t52) ~
6t .7 269.~ 254.7
324.2 332.4 379.3
247.0 255.1 336.9
2~2 0~0 0.0
[ 156.6 238.1 317.~
269.4 213.1 231.1
177.4 543.! 597.]
222.3 234.5 262.~
396.4 350.4 373.1
365.1 412.5 504.~
184.5 319.5 368.~
313.0 293.0 352.8
184.9 163.; 264.2
31.4 O,C 0.~
69.4 45.E 7.5
201.3 3245 108.:
385.7 501. 523.0
252.5 270.~ 346.5
160.6 t94: 243.2
6.3 0.0 0.0
633.9 421.5 243/
152.0 200.8 270.5
103.6 172.~ 233.9
t00.~ 2t.4 t03.5
209.3 167.2 208.0
152.9 222.9 277.6
35.7 0.0 0.0
49.1 11.7 68.2
72.7 26.1 34.4
232.8 275.7 320 7
20.5 0.0 99.61
149.7 174.0 22g..
150.4 114.1 1254
255.2 347.9 372.~
14.5 0.0 51.2
332.2 269.71 308.~
344.6 344.~ 389.,
245.7 287. 321.3
103.7 34.~ 149.8
172.6 194.3 249.6
252.3 177.1 213.0
24.9 25.3 80.1
0.0 0.0 0.0
428.9 234.4 225.9
47.8 57.1 80.'
196.7 89.5 120.3
2.4 0.0 0.0
97.6 91.2 172.9
190.9 t64.0 110,4
320.6 346.7 349.3
140.0 163.4 200.5
111.8 142,2 128.0
30.7 0.0 0.0
5.1 0.0 0.0i
24.1 0.0 0.01
486.6 390.4 369.1
164.4 162.1 234.E
261.7 222.~ 262.~
276.4 31t.t 351.8
295.3 285.; 300.2
337.8 283.~ 317.8
367.6 374.~ 375,3
208.9 310.1 365.8
153.7 209.7 269.7
1.2 O.G 0.0
104.7 104.1 145.8
Iga-old-new.xls
- 1753-
-1754-
g
- 1755-
- 1756-
- 1757-
53~i ~wood Road
Mound, MN 55364
(952) 472-3190
Memorandum
To: Honorable Mayor and City Coun~
From: Sarah Smith
Date: 4/30/2003
Re: Franchise Ordinance Fee Information
As the City Council is aware, City staff has been evaluating possible revenue generating
options due to pending budget cuts to LGA from the State of Minnesota.
One option currently under strong consideration is the implementation of electric and gas
franchise fees as allowed by local ordinance as well as state statute. In short, a franchise fee is
charged to the utility by the municipality and subsequently is passed through to the customer
and/or consumer on the monthly bill. According to Jim Strommen of Kennedy & Graven,
many communities have recently enacted franchise fees including Deephaven and Cottage
Grove. As the City Council may be aware, a new gas franchise ordinance was adopted in
2002 and a draft electric franchise ordinance is currently under review by City staff.
Based on information supplied Reliant Energy and Excel, City staff has prepared some
preliminary revenue estimates which could be generated by enactment of a franchise fee.
According to Arne Hendrickson of Reliant and Pat Kline of Excel, both utility companies have
been receiving numerous requests from cities for the proposed rate information and are
contemplating the enactment of franchise ordinances.
Members of the Council are advised that City staff recently met with Mr. Hendrickson and Mr.
Kline to discuss the possible enactment ora franchise fee. In the event you have any questions,
please do not hesitate to contact either Kandis or myselfi
-1758-
, Re_liant
Energy. Minnegasco
~inlnegasco.com
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.... H~NNEAPOL~S,
MINNEAPOLIS
E]H 05
'-':'~.-:~e r~,:urr, ~hi~ ~ar[ '.vi~.h 7r. ur payment,
Date Due In Our Office: Account Number:
May 29, 02
See other side for late payment details.
Amounts Due: . Gas ~q7.
qS0
Other
98q75 Charges .' ~. O0
Aznount $q7'; 63' '~: · -
Due:
ge did no~ bill your budge~
amoun~ th:is month because
ac'l:ua[ gas baZ'ance is [ess
'l:han ,yOUr~ budg~. Your bud;
sacar~:s again in Augus-I:.
I,hh,hh,h,l,,,llh,h,,li,l,IRfl~,llthR,,Tl~l~aLd~oun, Da-..
H73500098690r408000Doq76.300D000000
9q9
Aecour
Bill
May
2, OZ
Account Summary
Previous Balance
Pay~flL~nta Re~ei~ed
Adjustments
S;ll~nce .......
Current Billing
N~w Balance
May 29, 02
· 'O PLIC TE
Other ~h~argesA~eta'll COPY,,
We appreciate ~ha~ you
pay your bi[is promptly.
Thank You.
Other Charg~ Gas Charges
$;00
' .00 - 9.66
O0 .00
$.00 ~,00
+ .OO + ~7.65
,2%
Apr 9 - Thank You
To~a! Am~. Due:
Reading'ha Ma~ 1 0531
Reading on Apr g 0Z 0~65
66 CCF Times The~m Fa¢*o~,0f
0.9'96 =' THer~s USed in Z9'Days 66
Res~den~a[..Ra(e.
Basic Cha'~ge. ~5.00
Delivery Charge ~0.[2857 per Therm
Cos~ of ~as * $0.q8650
To,al Cos~ $0.61q87
(66 Therms g $0.61q87) ~qO.SB
City Franchise Fee [.gq
Sakes Tax .[[
To,al Curren~ Billing ~47.6~
*Includes a Purchased Gas Adjustment of $.
0. lq059 /Therm from the base cost of gas established in 1995.
Average Dally Temperature:
This Period This Year:
This .Period Las'l: Year:
elian
% Energy. Minnegasco
Mail correspondence to or pay bills at:
P.O. BOX 1297
MINNEAPOLIS, MN 55q72006[
NQTXS7Z
q6 Degrees F
q9 Degrees F
Ifyouh~equesfionsorcommenmple~e~ll:
M-F 7AM-8PM SAT 8AH-SPM
Bill Info 612-S72-q727
Moving 612-$72-4720
Credi~ .612-$7Z-q680
- 1 759=innegasc° ' corn
Average Daily Gas Usage:
This Period This Year:
This Period Las~ Year:
Next Mater Reading:
May $1 ~ OZ
Next Billing Date:
Jun -~, 02
1' See other side
for more information
Z. 5 Therm:
2.1
- 1760-
z
- 1761 -
CiTY OF MOUND
12/27/2002
2003 WATER, 'SEWER AND RECYCLING RATE SCHEDULE
RESIDENTIAL
Quarterly Base Water Charge
Each Additional 1,000 gallons
RESIDENTIAL
Quarterly Sewer Cha. rge
For t':0,000 .gallOns Or less
All 6Vet' t0,000 gallons, per
.' 1;000-g'ai!On~ :.'
Mii~!mum Quarterly Bill
COMMERClAE
'Monthly Sewer .Charges.(Large Users)
For 3,000 gallons or less
All over 3,000 gallons, per
1,000 gallons
Note: Minimum Monthly Bill Per Apt.
~r~,.,[,:,,<,B ....... , ..... N....,. ...........
QUARTERLY CHARGE
$4.S5
$1.3s
QUARTERLY CHARGE
MonthlY HouseholdRecycling Charge
Quarterly HoUsehold Recycling Charge
gallons
$44.10
$2.70
$44.1o
MONTHLY CHARGES
$14.70
$2.70
$14.70
$2.00.
$6.00:
Single FamilY DWelling' The sewer rate Shall be based on the actual
usage or the first quarter actual water usage, whichever is !ess,
Late Fee penalty. FO~' 'all bills not paid on or bef~re~the .due date
.' sPed~fied ~ {h~ bili~ a ~0% i~te fee willb& added.
Liens are applied to the properties for Ci&linquent bills aftar notification
to property owners, public hearihg and.cOuncil actibn.~:
- 1762-
, capacity twice in the last few implementing', sprinkJi~g':~i~
';~:-~,~, The water sho~ages have
. . threatened public~safe~ says. ~' Water rate
Ci~ Manager. John GunyoU,~
~;' and ale~ed the ci~ council to:~ .-~ure] .is ~a~
the need to encourage water
conse~atiom ;.. Under t
In the last year, the city has is
has taken sever~ steps to encour- council in' April~ ~resid
'i~ w~ll~ and n~ a age conse~ation, including will no longer pay. the
~ge '.'/areaS,~ r~sidents have Min~et~n'~a Wafer~b
..... ~;..
appre b fo 'nt cti prolect
C ty' ' '
· ives itl erseon.
'.while the state is pr, ovi.ding charge.of $20~ w~ich covered Brad Wiersum. k'Believe mc,
CO rag"
e/i 12 es water' · ,280,60o..'~ ,' al~out 15,000 gallons of water, this, will cause us to change
~ Mirmet0nka's share.ls esti-' Insteadl a quarterly charge of the way we use water as resi-
CO'YlgeFVihIt~O with mated at $~.85,000, which SI'will cover account mai.ute- dents."
includes engineering· and 'nance; Beyond that, residents
new..tieredrate' 'right:of-way ' 'acq'uisiti.on. will pay only 'for. the, Water City charter changes ahead
· . " Approximately $1.5,000 Will .they use. In other business, the
}-Jaime Hunt ~ come from .the city'S utility '.The rate for Water'up to council considered changes to
Assistant Editor '" fund, With the remainder 25,000 gallons will be $1.45 the city's charter.
At ,its Mai:ch. 17 meetin~i being paid from the 'Munici- per 1,000 'gallons. For gallons On Jan, 9, the city's charter
the Mirmetonka Ci.tyC0utici!' pal State Aid Street 'account, 25~001 through 40,000, the commission, recommended
awarded it contract fo/: $'1:t6. according, to' information rate'will be $1.65. For gallons four changes to the c!ty char-
from the city. 40,00t 'through 70,000, the ten The first would add !an-
million for ~econstrnction of The prbjech which will rate.will be $1 95. All ga}Ions guage~to the charter's compet-
the inters~0tion, at C0urity begin in mid-June, indludes' over 70,000 .will' be billed at itive ,bidding section that
Road.73 and Highway 7. ' the reconstruction of the $2.35 per i,000 gallons. . would ensure fair, unbiased
· The bid, subrh.itted'by Park intersection and 'a new signal The goal 'is to targe.t high-' and reason, able'contracting,
Construction. Co., iS about · ' The second would give the
$200,000 over the engineer's light" volume, water· users., .and
· 'The ci(T is working ·with encou.rage them to use less . mayor the power to appo~.nt
cost estimate for the project. ' Xcel Energy tq. corisider bury- . water,.The city will b'e among members to any bqard and
'However, it 'is significantly, lng the Overhead power lines, the first to implement a tiered commissibn serving'the city.
lower than the'bids made ,last from 'the south" side df High- structure, said Gun¥ou. The third change would
· In July, the council consid- i w~, 7 to just'south of.ih~ pm- "Ifs. 'not common,, ,so we 'ad~l language that would ter-
jects northern border. The are leading the way," he said. minute a council member's
ered bids for the project. The .: cost is estimated at. $74,372; ,"[The council decided] if we Position if he or she was
low bid'came in. at over $1.66 Hermepin Comity has agreed are going to 'do '.l.t; .do it to elected io another public
million -- about $:715,00'0 . . .
· to':fUnd half'o! .the cost,, make a difference and no~ office.
., higher than the :engineer's according to a staff report. 'just go through the motions." .' The final 'change' all°ws the
estimate. The council voted to The' remainder will come ' ' GunyOu added that in' the council- to de~ermine the.
· rejec~ the 'bids and. directed'from Minne~onka"s' stre?et .summer months, l0 percent qualifications and eligibility
. the city, staff' to' solicit new ~'. improvement fund. ' ' · · of the' city's WaYer customers of lts own members,
bids' for the project iff 2003~ ": The 'project is expected to.. use 33 percent of the water A vote o.n the changes
supply, creatib-g, a danger of planhed for 'April. An .unanD
Although the current bid is ':.h~ n,~mnl~.f~fl i~
still higher than the,,estimated i~'*'-~ ..... .~. ---c,,~. moils vote is required to
c6st of the project, stall feels I" ',,a~ ra~a-~ ,,,r"~a water shortages
_ . . ...... ~ater m .... ~ ..... ?~Nt~at we're'trying to do is chang~ the city's charter.
the ~ow mcr' m' stin very Also at the' meeiing, 'the ' Shave off that peak," he said. The next Minnetonka City
.competitive,I' said.City Man- council, approved a modified Council. members agreed Council meeting will be at.
ager John. Gunyou. ' ' water rate 'structure' that is that tl{~ structure could have 6:30 p.m. Monday, March ~1,
The. Cost for the projedt, designed to encourage water a .significant .effect on high- ~t~he Minnetonka Commu-
will be ~hared .among.h/lin- . conservation.' volume users. ' Center.
netonka, Hopkins, -Hennepin Under the' .new' plan. "~-~6zi "[Mir ,f, amily] looke, d at .our
County and. the .state. 3/he 'dents .Will no' longei t,-~ '~-7:'aterbill and we"re' the bad ....
Revenues/Fee Schedule
Administrative'Fees:
In 2002 we charged other funds for administrative fees as follows:
Area Fire Services Fund $10,500
· Commons Docks Fund 6,360
TIF 1-2 Kandis 5,708
TIF 1-2 Sarah 22,355
Water Fund 20,000
Sewer Fund 14,870
Liquor Store Fund 24,480
Recycling Fund. .
Total: $110,'~3~
We. could revisit the Administrative Fees in 2003-2004 and increase them. In addition,
we Should charge Other funds for their share of these services, including the Capital and
Debt Service Funds.
HRA LeVy
The estimated balance as of the end of December 31, 2002, was $ 280,000. For 2003 the
levy is'$ 83,000.
At .the same ,time, ~e.ad~ance ,of $1.00,000 to Indian Knoll ,Manor was spent and will be
returned over the next ten years. In addition, as .part of the overall Public Improvement
Budgef; We have designated $150,000 for Municipal Parking Eot Construction and
$50;'000'for COntan~atii0ia Confmgency' HRA Levy mOri~y: can'b~' spent only.for the
purposes of sections 469.001 m 469.047 of the State Statutes.-
The le-Cy for the year 2004 COuld be.increased to the maximin allowed by law~ namely
.0144 pereem of the Taxable M~ket Value or approximately $.! l 0,000-$120,000.
Franchise Fees
The Cable FranchiSe,'Mediacom, has an agreement W/th the Ci~ ofMOund;-We receive
five percent.of the gross reveniies on a. quarterly basi~'i The Access Fee is remitted to'the
City on a quarterly basis and itis based on .84c per subscriber per month. WePay ,the
LMCC $1.~$1 per S~lbscriber per month.
I do not know if we can increase revenues.on the cable franchise, but perhaps We could
renegOtiate the services provided by LMCC.
- 1765-
~esota Statutes 2001, 469 033 /~tz",.-- ' ' ~:~ .... ~
deemed to be benefited by projects tO!i.` extent of'the special
taxes levied under this subdivision..! bject to the consent by
resolution of the governing body in and for which it
~. was created, an authority may levy a )on all taxable
property within that taxing district.. 'The tax..$ha!1 be .
extended, spread, and inclu~ed~ith and'as a. part of the .general
taxes for state, county, and municipal purposes by the county
auditor, to be collected and enforced therewith, together with
the penalty, interest, and costs. As the tax,, including any
penalties, interest, and costs, is c01~ected bY the county
treasurer it shall be accumulated and kept in a separate fund to
be known as the "housing and redevelopment project fund." The
money in the'fund shall be turned over to the authority a~...thM...
same time and in the same manner that the tax collections for
the city are turned over to the city, and shall be expended only
to 469'/047'. "It`shall.be
for the purposes of sections ~.~ ..........
paid out upon vouchers signed by the chai. r 'of ~h~e' auth6ri~y or
an authorized representative. The amount of the levy shall be
an amount approved by the governing body of the city, but shall.
__.'.~ot exceed 0.0144.,~percent of taxabl~ marke~ value~ ~he ~3~(~'~
accordance with the budget procedure of the city in 'the same
manner as required of executive departments of the city or, if
no budge~s are ~e~uired~t0 be filed', bY AuguSt 1. ThO"amount of ,]~ ~'~
the tax levy.for the following year shall be based on that
budget. ,
Subd. 7. InactiVe authorities;,t~ansfer or. funds; .,
dissolution. The authority may transfer to the city in and
for which it was created alt property, .assets, cash or other
-- ,funds hel.~ or,used bY the authority which ~e, re ~erived from the,
subdivision 6 prior tO March 6, 1953, whenever collected, Upon
any such transf:ef,' an':auth°rity shall not thereafter levy the
tax or exercise the redevelopment powers of sections
469.047. Ail cash or.other funds transferred to the city shall
be used exclusively for permanent improvements in the city or
~he ~etiremen= of debts or bonds incurred: for permanent
im~'~vements in t~'e'6ity. An authoPitY Which transfers
property, assets, cash or other funds derived from t~e: Sp'ecial
benefit tax for redevelopment and which has not entered into a
contract with the federal government with respect to any low
rent public housing project prior t9 March 6, 19.53, shall be
dissolved as herein provided. After a public hearing after ~en
da~s published notice thereof in a newS~aper of general
circulation in the city, the govern~ng:i body of a city in and for
wh.ieh an authority has been created may dissolve the authority
if the authority has not. entered into any contract with
federal governmen~ or'any agency or ~i. nstrumentality ~here~'~ for
a loan or a grant with respect to aDY urban redevelopment or low
rent public housing project. The resoluti°n or ordinance
dissolving the authority shall be pUbliShed in the same manner
in which ordinances are published &~the'City and ~he a'u~h~riCy
shall be dissolved when ~he resolution or. ordinance becomes
final%Y effective. The clerk of the governing body of the
municipality shall furnish to the commissioner of trade and
economic development a certified copy of the resolution or
ordinance of the governing body dissolving the authority. All
property, records, assets, cash or other funds held or used by
http ://www.revisor.leg.state.mu.us/stats/469/O3~1h~~ _
6/27/2002
CITY' OF MOUND
MEMORANDUM
534.1 MAYWOOD ROAD
MOUND, M_.~ 55364~1687
PH: (952) 472-0600
FAX: (952) 472:r0620
WEE[: www. ci/ydfmoUnd.com
To:
From:
Date:
Re:
Kandis Hanson
Jim Facklet,~ Parks DirectOr
Katie Hoff, Docks Administrator
March 23, 2003.
Possible Dock/Slip Revenue
POSSIBLE DOCK/SLIP RE~N~
TOtal Increase
162 AbuSers $100.00 $200,00 $300.00
169 Non-Abu~e~
418
- 1768-
- 1769-
-177d:
LINE ITEM· DESCRIPTION
PROPOSED DOCiKS 2003 BUDGET 45210
101 Salaries, Reg,
Secretary
102 'Overtim.e
103 Salaries Temp.
12,7.50 DOCk I'nspec.
17,:~bO!/Mainteha~ce
121 Fica/P~ra
131 Hospital/Dental .
200 OffiCe Suppli'~S
OffiCe Equipment
202 Copy. Mgchine & Fees
210 Ope~at. ing SupPlies
Misc~
220 Repair & Maint. Supplies
Mist sitair/dOck, repair
300 Prof~Ssional~Services
500~ii~n~'r°~chme~~t re~oyal
307 ami~/Comp~tor ~harge
3.22 pos~ag~ ·
321 TelePhone
One Cetl Phone
331 USe ~f/.ge~Sona~ Aut. o
3.51 Lega~ ~'~blicatlons
151 Worker's Comp. Ins.
361 Gen~ L~ab~lity ins.'
440 Other Contractual Services
DOC~: In/Out~ .
500
1,00:0 Computor
2,000 DOck Deck Replace
533
~T~ees ~n all dock p~operties'
5.25 Other Improvements
- 5.0,000 Rip Rap/Steps/Docks
- 1 771 -
TBD
July 11, 2002
PROPOSED
7,.020
500
-30,~50
Gino to figure
Gino to figure
Gino to figure
560
1,600
350
1,500
500
Gino to figure
Gin'o to, figure
1,200.
600
350
~00
Gino to figure
Gino to~ifigure
5~O00~
12,000
3,.000
'8,000
50,000
~ODE
34725
34705
36210
.36200
101
102
103
140
121
131
134
136
200
202
210
212
22O
30O
307
301
322
DOCKS
DOCK PERMITS
. LMCD FEE
INTEREST
OTHER
TOTAL REVENUE
SALARIES, REG.
OVERTIME, REG.
SALARI ES, TEMP.
UNEMPLOYMENT
PEP, A/FICA
HOSP.tDENTAL
LIFE INS./DISABILI3'Y
POST RETIREMENT:
OFFICE SUPPLIES
OOPY MACHINE FEES
OPERATING SUPPLIES
MOTOR FUELS
REPAI PJMAINT. SUPPLI ES
PROFESSIONAL SERVl CES
ADMIN SUPPORT & OVERHEAD
AUDIT AND FINANCIAL
POSTAGE
281-45210
2000 200 t 2002 .2003 2003
ACTUAL ACTUAL APPROVED REQUES'F'ED PROPOSED
63~635 '65,584 ~ · 91,800' 91,800
5;098 5,319 5~000 5,O00 5,000
i8,930 9,047 9,640 5,600 5,500
~ 6.990 1.100 .I~L~_' 1,100
~ 86.940 ~ 103.4.00 J03,400
0
93
21,009
3,360
2,703
0'
183
1,292
344
0
411
2,615
0
0
569
0
1,138
27,000
3,630
1,751
93
2
0
63
896
1,191
0
39
32,154
8,500
1,040
660
6,170
1,800
27,000
3,640
1 ~6o
30
0
560
1,600
350
0
1,500
500
6,360
760
7,O20
~00
30,450
0
4,330
1,530
40
70
560
1,600
350 '.
0
1,500
6,550
780
1,200
7,020
5OO
30,450
0
4,330
1;530
4O
7O
56O
1,600
35O
0
1,500
5OO
6,550
78O
1,200
-1772-
DOCKS
2000 2001
CODE .
; : ACTUAL ACTUAL
321 TELEPHONE 895 1,146
331 USE OF PERSONAI~ AUTO 244 57
351 LEGAL PUBLICATIONS 18: 442
15t WORKER'S COMP. INS. 0 · 660
361 GEN,' LIABILITY INS. 0 14,874
430 LMCD FEES 8,300 0
MISCELLANEOUS 0 1,229
440 OTHER CONTRACTUAL SERVICES 5,373 9,284
500 CAPITAL OUTLAY 15,225 56,222
533 TREE REMOVAL 6,795 9,485
OTHER IMPROVEMENTS
525 (RIP'PAP/DREDGING/STAIRS) 0
TOTAL 69.229
REVENUE OVER(UNDER) EXPENDITURES 18,434'
FUND BALANCE - JANUARY 1 237.657
FUND BALANCE - DECEMBER 31 258.091
43.884
2t5.440
(128,500)
· 256.091
127.591
2002
APPROVED
1,000
350
100
930
2,190
5,000
12,000
4OO
8,000
50.000
132.7Q0
(3,340)
189.480
2003
REQUESTED
600
;.350
100
1 ~020
2,410.'
5,000
0
12,000
3,000
B,O00
(37~830)
281-48210
2003
PROPOSED
600
350
100
1,020
2,410
5,000
0
12,000
3,000
8,000
(37,830~
86.420
*MUST BE APPROVED BY
COUNCIL.'PER'F~0JECT
- 1773-.
Speclal 4ssessments Highlights
1. What are special aSsessments?
Special assessments are an indirect form of taxation. They axe a
way for cities to charge certain properties for the cost of making a
local improvement, or to collect certain charges that will benefit
those properties.
Local Improvement Guide
2. What improvements can be paid for with special
assessments?
Special assessments can be used to finance many different types
of local improvements, including the following:
Street and sidewalk improvements.
Storm and sanitary sewer systems.
Steam heating mains.
Street lighting systems.
Waterworks systems.
· Parks, playgrounds, and recreational facilities.
· Planting, mainteaance, and trimming of street trees.
· Nuisance. abatement.
· Dikes and flood control works.
Retaining walls and area walls..
Highway noise barriers.
Pedestrian skyway Systems.
Underground pedestrian concourses.
Public malls, plazas, and courtyards.
-1774-
Some fire protection systems.
~ighway soun~ barriers.,
O~ ~d electric'di~trib~ion fac~fies'
Enhanced 911 markers.
· Interaet access ~..itities under certain circumstances.
;3. Can special assessments be used to collect serviee
:,~ ~ .: charges?~, :
Cities may use special assessments to recOVer the coSt of the
foUowing s~vice cha~es if the cityhas .
provide fOr it~ ~, :.:-,;. adopted an orct|naqce to
SNOW, ice~ and msbish rrmoval fi'om sidewalks.
Weed e im tion and prop .
I~hfion or'~pa~ or.mr s~e lines.
~et sp~g ~dd~ ~a~
Trm~t ~d ~°va o
' dor
T~g ~d c~ ~f~es ~d ~ov~'of ~sound
Repa~ of sid~w~ ~d
~tioa ~d ~~e of a f~ ~o~on sys~.
League of Minnesota Cities
- 1775- ·
See Minn. Stats. ~
mbd. 2 (a) and ,~$~I13, tub&
3
Mln~- St~ S 429.011,
sub&. 2 and 2b
~lmn. Sf~t- S 429.021, subd.
!
charter, may .resuk in an invalid assessment. However, where the local
improvement code is siient, such as with regard to the procedures for
adopting r~solutio~s and ord'manc~s, acity must use both its charter
and the improvement code.
C. Use of the code.by counties and towns
Counties may utilize the provisions of Chap~ 429 in connection with
~ conStru~ion, reccmstruc~tion~ or improvement of a county sta~-aid
highway, including curbs, gu~, storm sewers and, except in
metropolitan area counties, waterwo~ and. sewer syst~ns as
des~b~d in ~ S~a~ § 444.075, sukl. 1. ~s authority is limited
to areas located outside the corpor~ limits of cities.) Counties may
also use Chapter 429 in conn~tion with enhanced 91! services for
ce~ain exp~nses that are not paid under other statutes.
Any town with urban pew, s under ~i~ Sta~ § 368.01 may
special assessments to the sa~¢ extent as. statutory ciQ~s. Oth~r towns
may use special assessm~ts for the construction, recons~'uction, or
improvement of a.tov~ road --' i~clUdi~g cut~os, ~u-~r.s, and s~rm
sewers ,- and~ for the local improv~ts numbered 1., 2, 4, 5,
and t0 ~ the.following section.
In cases where the local improv~n~nt code is used by a town or
county, the phras~ "town board" or "county board" should be
sub~t~d for "council" wh¢~ sppropfia~ in the various noQces and
resoluQons.
D. Improvements cities may finance with special
assessments
As a g~neral' ru.Ie, oi~ies may use special assessments to finance public
improvements but not privat~ improvements such as private
drive, rays, However, cities mawr use assessments ~o f'mance certain
current services and other p~grm~s as authorized by sm~um. Also, the
L~gislatur~ s~ems to be b~ad~ain§ the~us¢ of special assessments for
proje~cs ~t pfim~ 'ly benefit' a. pardcular parcel, of property.
Public improvements that cities may fmanc~ through special
· assessment levi~ 'm¢lu& the following:
Local Improvement Guide
15
776-
1(2) nd 444,16.444.21
Minn. St~S 429~21, subd. r]
~0)
Minn. Sm. S 4~0~1, ~ul,~
Minn- Sta~
Minn. Sm. S 429.021, subd.
1(6)
Mbm. Sm.S 429.02/,snbd. [1
SWeat and'ddm~al~, ia~rovement.v. A~. quisition, op~nlng,
and widening, of, imy sleet and:improvement 'ofstxmts and
sidewalks.' by conm~cting~ reoonslracting, and maintaining
sidewalks, pavement, guttered.curbs,and.vehicle parking
strips of any material or by grading, gravoling, oiling, or
Oth~e,~rov/ng them. Included are.oharges~for
' .and i~l~'tion' of co~oi~ Mm sewer;water, or similar
Sto~: ami sanltar~ se~er systems. Ae~ition,
d~elopmen% e~ction~ ~.e, onstm. ~;iextznsio~ and
main~nance ofs~nn and sahib/s~er s~s~ms Cities
include o~tlea?hPlding areas: andpondS,,~r~.tmcnt plants,
~pom~s, I~ stations, servioe o~imections,~and other
appurtenances o£a sewer system within and outside the
co~'ra~ limits., (Special .~' Sewer imprO¥~ment di~cts
~citi~ :are ~/~o~ fOt~storm sewer-sy/t,~ms and
r~la~ ~iliti%.~thi~ the~i~ct~, includingstorm water
OMmg areas~aad pond~;~eed bya dis~rict::wide tax. See.
· l~tter discussion. O~Yl~lternatit,~s to Special d.s~essments.)
Steam heatin~ mains. Construction, ~eeonstmction,
c~,~n, a~.~¢e ~f~ hea~§ maim.
S~regt:~iEltting-systems.. :Iastal, la.tion, replacem~nt~ extension,
and mainmmnce of steer Iights, s~teet ligh~g:~systems, and
special lighting ~st~ms.
~Fater~vorks systems. Constru~ion~.~ons~ruction, extension,
and main~nance of waterworks rystems. This includes ail
aPp~~aof:a watetw~ks ~::ev~ th~ treatment
plan~ wl~er inSide'or
faogtti~,:~, ~is/tion and tmprevsment ,of land, and' purchase
of e~i~ent and/'eai/i~ies, ei~hor~i~tin~)r outside the
corporate l~mits.
Street trees.. Plafi~ing, ~g~;~oar~ :and removal.
Nuisanc~ abatam~nt, Includes, bat not limited to, draining
and/it.ling swamps, marshes, and ponds on public or private
Pmp~7.
16
League of Minnesota Cities
- ~ 777-
Minn. StscS 429~21,~ubd. ~
429.021, ~ubd.
~ Stsc
1(1~)
Minn. Stat. S 429.021, subd. ~
1(12) -.
Minn. Stat. S 429.0'11'subd* ~
1(13)
Mln~sut. S 4~V.~,,,,bd. F!
1(14)
Mi_ n,,- Stnt. J 429.0~1, sulxl. ~
~(lS)
Minn. Stai. S 429.021, sub(L ~
1(1'0
Minn. Stat. § 429.021, mhd. $
1(lS) ~
Dikes and other flood' control works..Coustruotion,
recons~ctiou, extensiou~ ~nd maintcuumce.
Ret~inin~ and area Walls, inblU~ing h~gs way n~iS~
~nin~,'
Pe~an s~ ~ms, C~~ ~co~~
i~mv~, ~~ e~io~ option, m~~,
~d p~mo~ of~, cymose, ~s, pl~, ,.
eleven, ~d ~e~to~. (Such ~v~t may ~ m~
~a~p~fi~ p~t ~ ~on 429.0~ 1~ ~. 3.)
Under~ound ~e~tdan concou~e~ C~c~ou,
~p~v~ ~~ e~iou, op~Ho~ ~t~ce,
and p~moIion of public m~ts, pl~, ~d ~u~.
District heating, systems, Consmaetion, reeonsmaction,
ex/6n~'iou, aad' im~ovemem of dis~ct head/ag systems.
Fire protection systema Construction of fire protex:tion
systems in cxist~ buildings, but only upon petition of the
ownors.
sound bar~ters. AoqmSmon, cous~ruc~iou~
I~gAway ................
reconstru~on/~pmv~t ~~i~, eX~mi~:, ~d
~as and el~c di~bu~on fa~ili~es. ~~g,
~d ele~ d~bu~ion ~i~es o~ by s municip~ g~
Enhanced 911 mar~r~ ~~ ~g, ~d
Locsl Improvement Guide
17
-1778-
DEPOT RENTAL AGREEMENT
City of Mound
5341 Maywood Road, Mound, MN 55364
Phone 472-0600, Fax 472-0620
ORGANIZATION:
RENTER'S NAME:
The renter must be 18 years or older.
ADDRESS:
PHONE: ~ (H) ,,
DEPOT TO BE USED FO, R:;
DEPOSIT:,.
THE L~DERSIGNED ~ES. TO OBSERVE:~LLEi~ ~ ' '
ORD!N3(]NC:E AND STATE L~WS AND .IS '~SPONS~LE FOR
ANY DA~GE DONE TO TH~ ABOvB PU.~EiC ;F~CILIW,,:~NO FOR P~OPER~ CLE~N-UP OF THE BUILDING AND
SU~OUNDiNG GROUNVS AS DESCmB~D IN THE RENTAL POLICY, ' '
DEPOT REN~ AG~EMENT RESERVES. THE D;EPOT DEGK AND BUmD~NG ONLY ' (DOES~O~ iNCEOD~PXR~'N~~ LOT AND Oyfl~R. PA'~K FAcILiTieS) ....
RENTER'S SIGNATURE ' ~ ~ ~ DATE.~ ' ~
DATE OF INSPECTION: "~':: ...... : :'.~ : ' , .~:. APPROVED. BY
REASON FOR NOT RETURNING DEPOSIT: .
DATE DEPOSIT RETURNED/RECEIVED: ... . ":. ::::::": :': :::: ~
RENTAL FEES
$400
$200 per day
$100 per day
$75 per day
gREE
DONATIONS
DAMAGE AND-CLEAN,UP DEPOSIT, Your deposi~ check will be held by the:CityofMound and returned to
you by mail afr"er inspection °fih~l~e~t by the P:~rks ~[r%iori' :'"
NON-MOUND RESIDENTS for sample sales, plus the purch:~ 0fa P~ddlers License.
CIVIC AND NoN'pROFIT cH~A~¥ABEE ORGANiZA?iONS PR0:~ OTHER coMMUNITies for rummage
sales, pa~ieSi ~i-:a~ s'aies
MOUND RESIDENTS for private use, parties, rumma~ ~al~.% Craft ~al~s, etc. Also for churches and Sunday
schools on approval of the City Council
MOUND WES'TON~' COMMUNI~ CIVIC AND NON<PROFIT CHARITABLE ORGANIZATIQ~S
(,provided clean-upis made afie~ the meeting) such~aS;'but'not limited {°.the following: Jayeeea, K.C's; Lions,
Rotary~ Free B~s, Women's Sewing Guild, Garden Clubs, Women's Clubs, Westonka Chamber of Commerce,
Hisforieal Society. '
NOTE One ~lay is considered 7:00 a.m. to Midnight
CA~CELLA'~iON$:' $'.$.0 of the r~n'iai fe~ wil[b.~ refitnd~d ifa ~esdr.vat[on is canceled wHh
less than 30 day notice.
- 1779-
IVl/an~m.S~V2t~s D/splay Document 1 of 1
Page 1 of 2
Minnesota Statutes 2000 Display Document I of I
Chapter Title: LAWFUL GAMBLING AND GAMBLING DEVICES
Section: 34'9~213
Text:
349.213 Local autho.rity~
Subdivision 1. LOcal regulation. (a) A statutory or
home ruie city or county has the authority to adopt more
stringent regulation of lawful gambling within its jurisdiction,
including the p'rohibi%ion of lawful gambling, and may require a
permit for the conduct of gambling exempt from licensing under
section 349~166. The fee for a permit issued under this
subdivision ma~ not exceed $100. The authority granted by this
subdivision does not in=lude the authority to require a license
or permit to conduct gambling by organizations, or sales by
distributors licensed by t,he board. The authority granted by
this subdivision does not include the authority to require an
organization to make specific expenditures of more than ten
pc.trent from its net profits derived from lawful gambling. For
the purposes of this subdivision~ net profits are gross profits
less amounts expended for allowable expenses and paid in taxes
assessed on lawful gambling. A statutory or home rule charter
city or a coaR~, may not require an organizatlon conducting
lawfu~ ga~b.~i~.g wi~hi~ its jurisdicti,on to make aR expenditure
%o %h~ ~i~y or coun~ as a condition to operate within that cit~
or c~un~, ex~e~ as au~ho'~iz, ed ~nder. s.e~gion 349.16,
s~:~3iViai.on 8~ or 29~E.,.02; p~o=ide~-~ howeuer, that an ordinance
re~re, ment tha~ su~ch o=ga,niza~ons must contribute ten percent
~f their ne~ p~of£~s deri=ed from lawful gambling c:onducged at
p-re~mises w£~hiR %he city's or county's jurisdiction %0 a fund
ackminiStemed a~nd r.e,gulate~ by %he responsible local unit of
go~er~m~n~ withou~ cost to such fund, for disbursement by the
reaR. onsib~e l~:al umit of government of the receipts for (i)
lawful p~rpo:s:~s~ or (ii) p~lice:, f~.re~ and other emergency or
p,ub-l~¢ sa~et~-retated ser~.i~es, equipment, and. trainingt
e~c~Rdi~g pen~:i~n obligations, is not-considered an expenditure
to' the city or county nor a tax under section 297E.02, and is
va.l~d..aRd lawf, ul. A city or county making expenditures
authorize~ un,er this paragraph must by March 15 of each year
fi~e a =epo:rt with the board, on a ~orm the board p~escribes,
that lists all such revenues collected and expenditures for the
previous calendar year.
(b) A s~a~ory o~ home ~ute cit.y or county may by
ord~nancereq~ire that a licensed organization conducting lawful
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Page 2.of2
e~,~e~. ~ taw~a~ ~u~O.~,es ~0~', lawful purposes ~o~d~e;~: :~r~:'
g=~.es pr~f&.ts derived from lawful galling conducted at p=e~ses
wk. thin =,he c~.ty.'s o~ coun.=F'~s jurisdiction,, mus= define =he
~f l'awf~ pu.~ose ex~e~t~es:~ ~whi=h must be e~pe~ed .wi~hi~ the
(c) A mo=e stringent regular.ion or prohibition of lawful
gamb~.ing adoP~e~ by a politic.alsUbdiviS£On under, this..
s~b~ivi.s~o~ mu,s.= apply equally to all forms of lawful gambling
wi,th-~n ~.he Jurisdiction cf the political subdivision, except a
politi.cat s~diVi:slon may prohibit the use of paddlewheels.
SUbd, 2. Local approval. Before' issuing or renewing
a pren~Lses peLm~Lt or bingo hal.1 license, the board must notify
the cit.y ¢o~n=il Of ~he s.tatu~ory or home rule city in which the
o~ganization~s premises or the bingo hall is l~cated or, if the
p=emises o= hail is 1moated outside a city, the county board of
t-he county an'd. the town board of the .town where t~ premises cT
halt is located. T~e boa=d may ~equire organizations or bingo
halls to notify the appropriate local government at the time of
application. This req~.red notification is sufficient to
co:nstitute the notice required by this subdivision. The
may not issue or renew a pr:emises permit or bingo hall license
um.tess the organi, zation submits a resolution f=om the city
council or county board approving the p=emises permit or bingo
hall license.
~#J'~re~i~,o. vjOg..'state.mn,u~g~l~gl/SE.AR(:- '178~ -$~mns~at/publio/wvcw/DDW?W% 05~'13/2001
· ~,maes.ota S~mte, s Di~plaF I~ment 1 of 1'
Page Iofl
Minnesota Statutes 2000 Display Document 1 of 1
Section:' ~2~3 ¢on~ed,..
The ~eso~utionmust ~ave been adopted within 60
days of the date of application for the new or renewed permit or
license.
Subd. 3. L°~~al gar~b~i:ng tax., A statutory or home
rule chartem city th~at has one or more licensed organizations
operating lawful, gambling, and a county that has one or more
licensed o~g:a~&,zati0ns, outside incorporated areas operating
lawful gambling., may impose a local gambling tax on each
ti~en.sed o~ga~iza.tion wi%bin %he city's or county's
jum.£sdiCt~on, The t~ax may be impo:sed only if the amount to be
reCeive~ bY ~e city o~ c~u~ is necessary to cover the' costs
i~c~r=e~b¥~ city or ¢~u-nty to regulate lawful gambling. The
tax imposed by this subdivision may not exceed three percent of
the gross ~ece~p~ts of a license~ organization from all lawful
garabiin~ ~ess prizes aCtua&ly paid out by the organization. A
city or' ¢~u~n~¥ may not m.se m~ney collected under this
s~b~£=i, sion ~or any purpose other than to regulate lawful
glaI~b.tin~. A tax imposed ~nder this subdivision is in lieu of
all o~her !~¢al %axes an~ local investigation fees on lawful
ga~bl~.n~, A. ci~.y or ooua~y-that imposes a tax under this
su~&ivis~on s~ha.tl annually, bY March 15, file a report with the
b°mmd i~ a f~rm. prescri~ed by the board showing (1) the amount
of r~ve.Rue p~ro,~mced by t'he %ax during the preceding calendar.
year, and (2) the use of the proceeds of the tax.
H~ST: 1984 c 502 art 12 s 18; 1986 c 467 s 25; 1987 c 327 s
21.~ 1988 c 1~5 s 1; 1989 ¢ 209 art 1 s 35; 1989 c. 334 art 2 s
4-4,%5; 1989 ¢ 335 art I s 220; 1990 c 590 art 1 s 37; 1991 c 199
a~ 2 s 1; ~991 ¢ 33~6 art 2 s 34; 1994 c 633 art 2 s 19; art 5 s
965 199~ c 6~3 am% 2 s 2;. 1995 c 264 art 17 s 11; 1998 c 322 s
6: 20,00. c 3'0.0 s 8
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-' ' Paget of'8
Stat ~ ~9..1;2, =ubd. 24; 349,13; Mim~ S~at.
gemming =d gambling de~=.s. CaSino
~ap g~ .~eille8~. ~ sat i ~.]~. Only qu~ified organizations may condu~ Ia~q! gambling.
Te-.q~i~, m er~fion must be a reli~ous, fr~tem~, veter~s, or
enfi~ ~at has.been in ~sten~ for at least ~ree ye~s, has at least 15 a~ive members, ~d is not in
;ssel ~ for me p~ose sf eon.d~ag gambling.,.
m,~ oep~mti e..g,~ me fire Oepamem. A firefighters relief assOCiation, however, may -
m~ I~I gambhng because it is sep~ately inco~orated,.. -'
Ltv. Licensing procedure
lyf_mn. Sat. § 349:16; Is, rna. Stat § 349,166.
~,r.~. ?~t,034o. Mo~t organizations must be Iicensed in order'to conduct laWfUl ambling Th G-amblino
Con.~-ol Di~isio.a. (overseen by the, Gambling COntrol Board) !s ~e state agency that licenses anfl:~
re~tlates gambhng. (Note that
bo~l for an, exemption,)~,,, stat §' 349,516, ,aM. 6. Under state law there are four blasse~'~of:org~zafitn ·
li~en.s ~at. the.di~4sion.¢an ~sue.'. C ClaSs Xauth0r~Zes ali ~o~:i:'.'0f!a.~l gam:~iing;' '~!C Ci~sB
~merize-s alt ferm:s of gambling except bing0;i'i' ~ Class C' au~0rlzeS;biiig~.o~y; 0r.N-ng0 and' puli-.
t~sif aombin.~d D:oss receipts, do,net exceed $50~000; and~ .: C ::ClassD authoriz~iraffiss onlyl.
a ~4~.z~ ~9,w;. ~ erganization applying for renewal of its: gambling licensemust .apply for an
organization heense, ,a. pre~iies"p~mii (i~ued and effective'f0r ~/he sam? ~m~'p~riod. a~ the 0rg~Zati0n
license..), and a gambhng m~ag~i~ s li.~ense. The~e is no fee"fOr an':org~l'~itg:'iieefise;'~gt ~i~,r~i
permit fees am eu. ~rently as follO~S? ~iass :A, $:466; ci,aSs B;'$2 50,;.~lasi 0,.$21~; ~d,
The gambling manager lleense fee is $200 and is valid f~0r one year, although the fee drops to $100 in
the second year. fe~ a new manager, Itte organization desiring a gambling lieense.mustob~n an;....,~
appll~afien, from. the Gem bling Control Divi si0ni Suite 3 00;, RosewoOd Plaza:~ $o~th, 1711 W.
te,. MN 55-I.' i3. Teleph%e (65-1) 639-4:000....TM ~ambiing CorieOl Divi~iofi :~tist~en
aeti~ ~ ~ eoandl.~fthe city i.n Which the org~izafioh"'Spre~ises or biiig~.iiat:l is ltcated, Or '
requir~ the ~ganization er bingo hall. to nofif~ the appropriate local government at' the fim~ of
aptaltc~tioa, ~ s,~ § ~4~.m,.,~t z The dMsion may not issue or renew a premises permit or bingo hail Ii
ee~. unless the.organization submits a resolution from the city council approving ~the premises, permit
or bingo hall lioense, The resolution must have been adopted within 60 days of the date of application
principles tlmt go,vom.l.t~nsing, and tt may not arbitrarilY or capriciously disapprove a lie,ns,. ~r~.
~,.t~,,~. a. A license is vali-d for two years. The renewal process is th,-same as the initial application
process,
u~.-~ ~r~,~,~ ~,~. ~, ca> o~ In the ease of bingo licenses, and most likely other gambling situations,
£atl~, Canada and~.Kdo., 1~., 7!
nd-*~S(Sn.C~'. ~)s), the licensee does not hold a property interest in the license. Thus, the
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Page 2 of 8
ei~] hms a fair amount of discretion in. denying'the renewal request of a
Iioensee, of'course, the ¢i~ still could not act arbitrarily of'capriclously.
LV. Gambling exempt from State
licensing
~,.~ s~'s ~a~ Them ~,e certain types-of [awOl gambling,, however, tMt may be
conduo~d wi:thout obtaining a state license. The following five types of _
C iBingocenductedin conjunction with a county fair, state fair, or a
civic celebration for less than 12 consecutive days in a year, and no
more tha~ foUr ~pplications Per'Yearl '~ '
C Bingo gon~cted'by a~ orga~Lizati'on that holds four or fewer bingo
C It. afl;es ~nfluoted by an organization that does no~ award raffle
.. p~izes -in excess ora total value of $750 ina calendar year. Raffles
: conducted, by an organization that. dkecfly, or under eontxact with the
sta~e ova political subdivision, delivers health or social services and that
is a 501..(a)(~).0rganization are exempt from other .gambling regul~tions,
such as pfiz~ !im~ts' and employee requirements~ if the prizes awa, rded
are real or personal property donated :by an individual, firm, or other
organization. It uppers., however, that such an organization would still
ne~d a Pr°per liC~nse'if the prize. ;~;alfies exceed $750.
C La.wfut gambllngthat is eonductedby an eligible organization if all
ofthe,.following six ~onditions are met:
. Theorganization conducts laWful gambling on five or fewer days
in a eal:endav., year;
, 'C The ~.r.~,~adon does not award.moi:e th~n$50,000in prizes for
la~ g~mbiihg i~ any. 6alehdai' yea~, ·
?.!_:~ C' T.h~, orgg~ii:Zafi,o~' P~ys' th'e'reqUked'~ej(~u~enfiy $25) to the
~thng ¢$ntroi Divg~oh; notifies the diWlsi'eh ? !ess.than 30 days
(~,.0-daYS i~ a y~fClaSs ei~)'priOr tO each gambling pccasi.on of the
~late a.~ii 1.ocation.of~e e-~.gi{i, the ~pes of l'iw~-ui .gi~bling ~o be.
c0fla~e~efiaad, ae/3ri.~e.s to be aw~aaa~ and, ree~i~es a exemption
~denfifieafi0n nUm. beri '
· C The org~iza~ofi notifies'~ loeai' ~ovemment~unR 30 days (60
d~ys ia a.Ek~t Cl:~s ai:W)~ before ~e ta~ul gambling occasion;
. .C'~ T~h~':otg~iZ~fion p~Chag~S fll gambling equipmen~ ~d supplies
from a llaens~ diStflbutOr~ ~nd~
· ' C :The °~i.z~an eomPlieg' ~h reposing reqmreme ts to
· C Bingo eondueted ~ a nursing ho~e or senior citizens housing
projea,' o~Sh-y'a :s~ov afiz~n
, ~. prizes fo~.a siagi8 bi'ngo game do no~ eXt~ed $10;
~::7g~;Im.~¢~o}r~searah97C~Is97is, dlt":3ac~i.i 1 f§'4-'&Vdl~VgwKey=E%3A%SCVefitg: 08113/2001
Page 3 of 8
· C Total prizes awarded at a single bingo occasion do not exceed
$200;
. C No more than t~o bingo occasions are held by the organization or
at. the facility each week;
. C Only members of the organization or residents of the nursing
home or housing project are allowed to play;
· C No compensation is paid to any people who conduct the bingo
· C A manager is appointed to supervise the bingo; and,
· C The'manager registers with the gambling board,
· A city mey generally impose regulations on lawful gambling within
the city that ar e more stringent than those imposed by state law. Cities
can also gene~ly require a permit for organizations that conduct
gambling exemp~ from slate licensing. The permi.t fee may not exceed
$I..00. Th. us, even though state statutes may exempt certain gambling
operations from. the general requi~rnents oft he state law, cities .may
impose their, own regulations and permit requirements.. However,
beeanse of some specific eross-referen~es in the law, it is not clear
.whether all the slate,exempt forms of gambling must obtain a.local
permit or be subject to local regulations.
· ~ regard, to raffles exempt from state licensing because, total, annual
prizes awarded do not. exceed' $750 and exempt bingo operations in
nursing .hemes and other senior centers-the statutes indicate those
~ular types of lawful gambling may be conducted without
eomply~iag with certain gambling statutes, including the statute
authoriZing, local regulations, B'ecause of inconsistent drafting
concerning ,the use °fth. e word "inclusive" when liSfi'ng a number of
smtutes,..it i,s unclear whether the Legislature inmnded these types of
gambling opet~ons to'.be exempt from local regulatio:n as well as state
lio.ensing. The conservative, inte~retation, however, is that because the
Legislature oited, the number of the statute authorizing local regulations,
even thigh it did so as the endpoint of the list of statutes from which
these operations were exempt, it intended the s-tatum to be included and,
thus,, exempt these gambling operations from' local regt/lafions. Cities
that ch'ecsc to. regulate these types of raffles and hinge operations should
be aware their, regulations are .highly susceptible to ehallenge. ..
Local regulation.
· The state statutes and. gambling control board rules do not necessarily
constitute the ovJ¥ restrictions on lawful gambling. Cities have a great
deal. of'authofi~.~, to establish their own regulations. The statute s~ys a
ei$-y.. '"..,has the. authoriw t~ adopt more stringent regulation of lawful
gambling,.." Any mor~ stringent regulation must apply equally to all
lomas, of'l~.wgut gambhng.
· Wi:th o~¢r 1,900 organizations operating, in 3,900 locations, some
cities ~gh~ find it necessary to help the division ~ontrol lawful
gambling by ena~,ng and chroming local ordinances. City regulations
m. ish~: ~pl,.y. to. ~eas ~:~o ad'dressed by. s~te law, but the ¢iW regdafions
must b~' strleter. ~.so~ a city might adopt regulations in areas in which
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Page 4 of 8
, Lo,al. regulations commonly require: quarterly revenue reports, copies
of reports the gambling manager is required to send to the division, and
copies af checks sent to the charities.
· ' Following are. some other regulations a city might establish. (This list
is not exhaustive.)
Fz. Restricting eligibility to local organizations
~9.~.w, aa.m.(~B~ organizations, It should be noted that dlscr~mination against non-
· st,, ~ ,,t. or,,,~oo,~,, residents i.n licensing is generally not favored. To sustain the validity of
~rol,,,., ~0s~, m, ~.-,~w. zs~ a provision restricting licenses to residents, the city would have to show
(~o~). the: special- n.attwe of gambling, as compared to other licensed
occupations, supports more restrictive treatment,
· While discrimination against non-residents for licensing purposes is
generally not valid, it is arguable that gambling, like liquor, should be
an. exception to this rule. The authority for local regulation of gambling
is. similar to the.authority for local regulation of liquor. It seems
reaSOnable, that gambling, like li. quor, is a nuisance-prone activity and,
as such,, is subject to more restrictive regulation than other occupations.
. ~,o.o~ axa{(~¢,,~ ~ 1.~:). · Histofi:eally, it has been a common practice in liquor licensing
. ~:~r~ ~. m~, o,~U~r~-,o,~, S~0 ordinances to require licensees to be city residents. While' such
v.. s,pp. 9n (~. ~ ~>. restrictions.have not been. tested in court in Minnesota, the attorney
general has indicated they are valid. The Minnesota statutory
reqmremea¢ that hquor,-heensees b citizens, however, was invalidated
in' federal. court. Unlike a citi. zenship requirement, a residency
requirement would seem to be rationally related to valid purposes, such
as' fa¢~1t~ati,ng the investigation of applicants, and the investigation and
an'e~t afviolators of the applicable laws and regulations. It should be
noteflv howe~er, that the trend in the courts, including those in
Mianesoat~ is to strike down discfiminat°ry practices that had previously
been upheld.
on. Restricting the use of gambling proceeds
· ~,sm.c~ ~.m~.a · Statelaw restricts the use of gross profits, from lawful gambling to
,u~a, z~ iaW~l pure°scs or allowable expenses. That statute requires that no
" more.,tll.'aa. 6:0 pement, of'gross profits from bingo, and 50 percent. Of
graSm Profits from all other forms, of gambling, may be used for
expenses..-related to lawful gambling. The statute also requires the
re~nde~: of'the profits only to he used for lawful purpose expenditures.
1.69; Specific expenditures
· ~..~i~..m,a.'F.r~/qVi?...~ o~g~zatio~ t~ make sp.~oi.flc ex~e.n?ituues of
. m l ,ea ga bl,'ng.
· ~e p. ra~t~¢e of requiring specific expenditures could be a
¢on'sliafional v,i~l, afion, at least whet e the city designates too specific a
cause, and where' approval of the gambling license or. pemait is
~nfliti~nal on the ~rganizafion.abiding by the ~egulation,
· m~¢~.,~,~.~'~,s.. · The ~ir~st Amendment.of the U.S. Consiitufion. provides that
,~,.~s.s. a ~tlgss~ '"COngress, shah make ac law.....abfidgi.ng the freedom of speech, or of the
press~ ar. tlae fi.gkt ~f people to peaceably assemble .... "Tko Supreme
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Page 5 of 8
Court has held the First Amendment implies a freedom of association
right,, This freedom to associate also contains an implied right not to
associate. ' ''
· /,t:~,t,,', orit~o~,~,, st,~t.. The: Supron· Court has made it clear that.compelling an individual to
.wt u,s. ?~0.8~ s..e~.~,~.a~ .su~?ort..an orga, nizationor cause heor she doesn't agree with is a n
infringement of Fkst Amendment rights. In some instances, the Supreme
Coati has helg..i't:~is impr0per for a ci~ to eon~tion a benefit on the
. .!t~ier!$. li~ing, to,.re!ihq~sh .an//~.onstimfiOi~l
might apply'.in..the'speoifi e ~xPenditure e0ritext~~ ,;vhere a city ,O~6hdifl 0nS
approval of~iiie:.gambling license on' the organizafi6ii contributing to a
cause i~ may not SUpport
17'0, City administei-ed funds',
· ~ st~t § :~;2I~. A 6.~ ..... :' .'.. " ' "~ : ' '.- , .,.
· ~.may accept d~nafi, ons from, a gambhng orgam.zation, but it
~.at r.~l.~r~' a d.onation, t?'the ~iV (~esid? no~ fees! as a con~tion
_.fi'~iii~_]... gamb!ag-.to., a '~d ami.riistered and '~/!tited'bv th~,
~m') °°st. m:-suel~iixnd~. 'for diSbmem~n.t by ~e '.O ..fY' to law~'ul _
~u.,lt!.os~s:
· ~r,,~,.s't,t ~ ~,2~.3~a2, , ~e' f0~e, al>though .a eib.may not require direct paymen.t,s ~om a
.,~,~'(lo). gamtfling 0rganization tO' anY ci.ty department, a' ei~ 0an es~bii'sh a
~d.ang-~li*b, urSe a p°rti6n ~t' the nixie%·ds .of that: f~ind
7de/~ai~i~. su'eh as a:P~k Sy~tem~' ~: a lawful pu~.°s~' expenditure.'
-ma. 1~*~,~ ,~. that. ha. di:r~. ¢onaq0U~Ori, 0r ~ay~ents. oe gambling
mo~ may.be mate m a lave enfOr%ment or proseeutorial agency.
1..7,l, Trade,areas
· ~ sa[ {.~az~;.,~i,.a), · Aei,~. may. also, bY 'ordinance, require gambling: organizations to
c~). expend alt or a portion of their,gambling revenues·.on..lawful purposes
o~ndue.:~', orlooated within the-ci.ty ;s trade area. The ordinance must
define the trade .area. (such,definition must in¢t.ude al.l cities contiguous
to the oi.~ enaoting the ordinance) and mUstspecify;the percentage that
must, be ~a~d:,wi.thi,:n the trade area. :.
O~ _Other mstrictio0s · ",; ,~ . ,:
· ~,~s~.34~ma, · A ~i.~.:may'p~ol~i:bit laW~lgambling altoget hen Alternatively, it
railer rostri,t.the conduct of'gambling.to certain hours or to certain days
et' ~e w%k~,.~ ;s°~ a city might limit the prizes to be awarded more
· est~.~ety thim stat[ law~:oi, prohibit the. employment of people other
than-momber~ et'the hcensed organization. A ci~.might also prohibit
gambling ia liquor estab, li~hrncn~:,, ', ; ~;.. :~ ·
· ~,, st~ s ~4!&o~,.,~-~o. , .~Ote ~t:~tho state.lotte~ is completely controlled by the state and
,' _"n0'i~OI£fi-ea;S%divisiOn~m'~;..~eqai~e a'io,~allie,.eni~,to operate as a
Io .~..~. ~'.~m.~:l:~!..:or impos~, a .~;.olfee. oh.:~e:busina~, of ooerafine a~
· e ~e~a~',th~.,ee types of, fees cities may institute for gambling:
172: Permit fee ,.,~:. ,~ ~, · ;
certain fOrms.:of gambhng ~xempt
· .t.....r:. ' : . ' ,'': . . .... · ·
h~.ff~Imna~o~Searah.97.egitsg?i,s;dll:?.amj,t_ 1 ?~ 7 ' &VdkVg~KeY=E%3'A%$GVerig ~ 081131200
Page 6 of 8
from state !ieensing. However, because of cross reference problems, it is
not elea~ whether a eit~ may charge a permit fee 0n al
Wp~. ef gambling. ~i.s. ~ee may no~ ex,ed $100.
173. ~ave~tiga~ion fee
· A ei~. ma~ ~s~s ~ ~nvestigafian fee en ~ate-licensed org~izafions.
~e ia~e~fi.gafion fee may not exceed:
. C $500 ~ First Ci~s'elfies ~reater ~ 100,000
· C $100. in ~l a~er
t74. ~ree pereen~ ~ax
~ ~Ie ~e s~ au tomafieally receives a ~?rcent ~ a eiw may
gahb!~ng ~vents (minus prizes aw~ded) on smte-Iicensed
o;g~[~fioas., ~h.e ~ must o~y r~se sUah revenues as' ~e neeess~ to
eeVe;;.eests ~e.~ 'i~cU;s in ~e~lati. ng la~ gamb~ng. A ci:W c~ot
use ~e~ ~. m~euees. ~et ~ny offier pu~ose; Thus, if the city ' s.
expenses ~lI euly be 25 percent of the gambling revenues, the ci~ only
charges a. tax of 23 percent ~d not ~e ~11, m~imu.m ~ree percent. ~ a
ci~ imposes ~is gambling t~, it canot assess an investigation fee
ag~.nst ~e rote,licensed org~izafions.
· ~ a ei.W imposes a gambling ~, it must ~nually by March 15 m&e
a mpo~.to ~e gambling bo~d on a prescribed fo~ showing the
mount of r~enue ~sed by ~e ~ ~d ~e use of ~e t~ proceeds.
CS~ies ~f ~o re'PoPoV' fO~. ~e av~lable from ~e Gambling Consol
Divisien.
o~ Gamblin9 'in the municipal liquor store
175. Authofi~ to tease space
· $~te law ~lo~s gambling o~y on promises owned or leased by the
lite,ed orgai~tion. However, a licensed org~i.~fion may conduct
~ en premises it does not own or lease. Wi~ bo~d pemission, an
org~i.~fion may also conduct bingo on premises it does not o~ or
lease for up. m 1:2 eonse~five days per ye~ in connexion with a counW
f~r, the ~nesam State Fair, or a aiW celebration. Finilly, a licensed
org~izafi°n may conduct gambling, ~er complying ~th all
re~ati, ons~ On premises, it does not own or lease for one day per.ye~ for
not m~e ~ 1~: hours.
~as,. · ClfieS. h~ve authofi~ ~ l~se oi~-o~ed prope~ to private p~es
w~ ~ does. not need ~e pr0pe~ for munici p~ p.~oses.
Be~u:~ of.~e limited space gambling boo~s ~pi~ly require, ~ the
~,~,~r~oa,o..,.~c,( limed sgae. e n~ess~ he,nd the bar ifbmenders sell pull.tabs, ~d
.~i. bee~se eg:~e afldi'fi:on~ revenue and business gambiing.o~en draws,
oi.~. may'lea~ spaeo'in ~e munieipfl liquor store m gambling
org~i~afions, In order, to comply with the statues ~d roles governing
le~ei..~rem~es',, however, my space leased by the gambling operatiO~
' must be physieflty s~p~ated from al! of ~he municipal liquor store
equipm~t~ e~eept for pull.tabs ~at e~ be sold at or behind ~e b~
~he~e.-e~g}Oyees' of'the, liquor store ~e employed as pull-tab sellers
· e gambling o.p.era~o .
h~f~l~#~aaw~v,.~r,'~sear~h97~gi/~9'?is.dlt~' acti£ 1 ~-~- ?&VdkVgwKey=E%3 A%SCVefit~ 0g/13/2001
Page 7 of 8
i76~ The lease agreement
· wa~S~.~a~,.,~t. * Undorthe lawful g~mblingrules, leasesmust be on aform prescribed
by the gambling hoard. ]:he lease must contain, at a minimum, the
fei[owl!ag information:
· C The,aero· of the lessor (the city);
· , C The name ~ the organization;
· C The d~afion of the agreement(must be at least one year);
leased~ with ..the dimensions of the leased area specified in feet, and a
statement el'the number of square feet. leased; and,
· C At!' monetary confideration to be paid by the organization,
~p~.s.s..~..i~ t.~..m!...s.,. ~ fio[l~s p~r mo~ ~r. bi~go, occ~i.o.a.
· The. i'ease mus.t.also generally set forth all Obligations between the city
and.the' o~ganization,
'177., Bartenders and other city employees conducting.
gambling
· Muni .ei~pal liq~or store employees can arguably sell pull-tabs in the
her: The attorney general has given, a falffy broad Cons/ruction to the
statute that authorizes elti:es tO' operate municipal li.quor stores,
indiciting a. ~i.ty may operate the r, tore in the same manner as any
proprietor. The..ritionale. of the Opinion would seem to allow a city to
sell pu!l~tabs, in: th.e muni.aipal liquor store, regardless of the faCt the
statUtes,enl~ aatha~iz.e the ~i:ty to sell int. exi~ting and non-intoxicating
-Iiqua~ talaa.eeo pmd%tsl ice; soft drinks, beverages for mixing liquor,
a~dfoad.for eons .mnp.fian on the premises, h fa~ in order to allow
sales; ~t o!? behind .the ba~' itself, state law appears to require that a
mani~ipat Ikt~or store employee would have t° be hired by the
. gambling, organization to act. as a pull,tab seller.
· While there are no restrictions on the amount of compensation the
o~ganizafiea may pay an individual for services', the limit on all
e~Pens~s, of6O p. emen~ of profits from bingo, and 5.0 p~¢ent from other
hwfa:t' gambling, mus$ be observed.
· EVen. i:f.';~i~y Ii'quit stere employees are thus able to s;ll pull-tabs, the
Leag~!:.e does .not..r. eaommend this practice for several reasons, City
emp!eyees~, are devoting work. time .for the sale of pull,tabs, while the
eib.is ~:~eyiag t. hem f~r that time and the City maintains the
reSpmasil~i:t~ f~r'emp!oyment costs such' as workers' compensation. The
gambling er.:ganizagan must pay. compensation in the form of a cheek
dir....eqfl~, t~.flae..empl:o~ee~ so it is no/:
· .p..assiMe f~ the. er, ganizat ion to pay the ¢i!y its share of these costs.
'rile .ei.~ is likeI:y to be' responsible for any claim, even ifitis related to
tile sale.:ofthe p.'.iull-tabs. ' '
P[nba[] machines
· . ~r~ ~. *tv:oi.~m, ott,, .. P.:ha~alt de.vl~es are' legal and are generally no longer eonsi.dered
z~.~,u~.,~.~.w.'ai:~2gambling de, flees. When. theY do not distribute something of Value. If a
~le~ '
persoa.~aa.wia a prize on such machines, othei' than a chance t° replay,
the machines are gambling devices and illegal.
h~'//vavw.dmna~S0a:mh97.e :gi/..sg~is,dll?..avtio~- 1.7fi9 - ~VdkVgwKey=E%3 A%hCVedtlz. 08/13/2001
Creative Solutions for Land Planning and Design
Hoisington Koegler Group Inc.
3 March 2003
Kandis Hanson
City Manager
City of Mound
5341 Maywood Road
Mound, MN 55364-1627
Dear Kandis:
Henry Kaiser once said that "Trouble is just opportunity in work clothes," We believe that this statement
describes the best way to view the future. There is no doubt that the 2003 leglslative session will change the
nature of municipal finance. You can choose to fret about these changes or to focus on how to best use the
significant resources that remain.
How will you transform the apparent fiscal problems into opportunities? At Hoisington Koegler Group, we
believe that planning is the key to finding the right course in difficult times. By planning, your community can
take steps to shape change according to the vision for your community and your organization. By planning, you
can explore all solutions and find the best course of action, rather than pursue a path that is simply convenient.
By planning, your community will. build the consensus needed t~o act.
When someone says planmng, the most common association is "land use." While much of our work involves
the physical, development of land, the planning:expertise.of HKGi-extends well beyond land use. Our work
touches almost every aspect of city government. We have earned a reputation for '¥isionary reality" - planning
that blends creative exploration with practical solutions.
It is easy to get mired in the magnitude and the uncertainty of the State's budget problems. The list of possible
changes seems to grow each day - cuts to LGA, wage/benefit freezes, new levy limitations, reverse referendums
requirements. If opportunity truly lies within these troubles, how will you fred it? HKGi's experience with
planning shows that several factors lead to the discovery of opPortunity.
Do you have a vision for your community and your organization? Your vision becomes the means for
evaluating options for change. Vision allows change to be measured~ according tc/your aspirations for the
future, not where you are today.
How will development trends affect your financial decisions? Development and finance are inseparable.
Development defines the revenue base for your city. The form and pace of development influence the
demands for public services, facilities and investments.
· Is the make up of your community changing7 The 2000 Census shows many interesting trends in
Minnesota. cities. Understanding demographic and economic trends is essential to effectively plan for
, municipal services':.: Thes'e factors .affect the type of services and' the ability t0' pays. for these services...
· What role does the public play in your decision making7 While the State' Auditor may view certain
services as "non-eSsential," your residents mhy have a different view.
123 North Third Street, Suite 100, Minneapolis, MN 55401-1659
Ph (612) 338-0800 Fx (612) 338-6838
- 1790-
Ms. Kandis Hanson
3 March 2003
Page 2
· !i:i:,;!' ,H~;Will you decide to act? Planning involves more than the generation of good ideas. A process of
shared learning and consensus building leads planning into action.
Responding to the challenge of legislative change requires more than an understanding of your community and its
vision for the future. These troubles create· the opportunity to rethink your .approach to providing and funding
services. Here are some questions that illustrate how you can seek the opportunities present in your community:
Do you use General Fund revenues to finance a higher level .of.SelWice .in. commercial areas.?. A. SPecial.
service district allows property oWners to shoulder more of the financial responsibility for these services.
· Do you make effective use of special assessments7 Using a permanent improvement revolving fund or
"combining" improvements can make better use of assessment income and reduce demand on general
revenues. Assessments are not just a'tool for building infrastructure. Assessments can. also be used to .
finance the maintenance of many formsofpublic improvements.
· How do you pay for parks? A housing improvement area can be used to finance the development of
parks in new subdivisions and the rehabilitation of existing parks.
· Do levy limits impede your ability to undertake public improvements? A tax abatement levyean: be used
to finance public;improvements. Under the current, system, this levy is outside of levy limitations,
· Have you considered using the proceeds of bond issues to finance planning? Bonds can be used to create
an ongoing source of funding for a wide range of planning activities, In some circumstances, bond
proceeds can reimburse past planning expenditures,
· '"What challenges are faeed.~by you;neighbors? Solutions may lie beyond your borders. Combining
services with adjacent cities can saVe money without sacrificing quality.'
The ~'o~itents of this letter i'epresent m0te than a collectioti' of good ideas~ TheSe thoughts grow out. of our daily
work With citie~s tb Underitarid ~0~plex issues and Plan for the future.
· An HKGi led procesS helped the pUbli~ and City officials create Edina's 20/20 Vision. This strategic plan
provides the vision and focus for key community planning initiatives.
· The cities of New London and' Spice~-'and NeW I3oi~don TOwnship ai'e ¢orisidering a plan that would
merge these jurisdictions into a single new city. HKGi facilitated the PlYing process and prepared the
financial analysis for the merger plan.
· HKGi and ~e.City of Ramsey are Working on'an e¢0n6~ic model that will analyze the'f'maneiai
implications of alternative patterns ofgro~ afid'deVeiopment:
· HKGi led a pul~li~ task' force that h~Iped the R0s6mou'nt-Apple Valley~Eagan School District evaluate
~eheduling ~d facility 6ptibns f0f meeting the n~eds. 0f'gf6Wing enfollmetits~. · ·
st. Louis Park has created three special service districts to finance the services in the Excelsior
BOUelvard corrid0f!: HI,Gl worked w{ffi the City' t6 desi~ the districts, analyze the financial.implications
and build consensus with property o~ers.
-1791 -
Ms. Kandis Hanson
3 March 2003
Page 3
HKGi, Hennepin County, and the City of Eden Prairie are evaluating the opportunities for changes in
the development pattern in the Golden Triangle to alter traffic on the regional highway system. HKGi
used GIS data and computer mapping to analyze physical and economic development patterns.
With tight budgets, it is easy to view consultants as discretionary and unnecessary expenditures. This is true only
if the consultant fails to show up in work clothes, to make valuable contributions to your search for opportunities.
For more than 2.0 years~ Hoisington Koegler Group has helped Minnesota. cities h-ce.. ~he challenges of change.
Sincerely,
Hoisington Koegler Group Inc.
Bruce Chamberlain, ASLA
Vice President
-1702-
MOL~ POLICE DEPAI~~
DATE:
TO:
FROM:
SUBJECT:
18 November, 2001
City ~anager~
Sgt. T.M. Truax
Revenue Production
Kandis,
- INTEROFFI CE. M~Tw~O
It was a pleasure talking with you the other night. When I
get a chance to sit down and put a list of ideas
................ i~~7o ..... ~e.~ide~"~t~.a~t~w~`p~i~:~¥~::q~:::~:~:~:~::i~:::~.~.'
meeting the City's shortfall would be a 1% sales tax on
both off sale and on sale liquor sold within the City. I
believe Minneapolis has a sales tax of this nature, or it
may even extend to other items sold within the city, such
as nightclub activities, hotels etc.
While I have not researched this, I offer it as a
brainstorming item. Justification to taxpayers would be
that it is a user tax, rather than a general tax on all
taxpayers. Alcohol produces a lot of business for police
departments, medical response units, and social service
agencies: Unruly patrons, Domestics after people come home
from the bar, DWIs, and a myriad of other societal
problems.. I am not anti alcohol at all, but a case can be
made that the users of this product or a percentage of them
cost the City bundles each year.
If Geno worked the numbers on this, just by taking annual
sales at our liquor store, you could get some idea if the
idea has merit. When you add the annual sales at the VFW,
Legion, and A~ & Almas you may be able to offset a healthy
chunk of your projected shortfall from the state.
Idea two has to do with gas sales. Each year we give S/A a
huge amount of money for fuel: Fire Trucks, Police, and
City Vehicles. Perhaps a senior official should negotiate a
bulk price for fuel annually. This would protect the City
from spikes in prices throughout the year, and perhaps
lower our prices on fuel on a negotiated basis. S/A should
be willing to lower prices to the City, based on its annual
profit virtually guaranteed by our business. If the bidding
process is opened up annually between S/A and PDQ, perhaps
the competitive process will save money.
I know the City of Shakopee buys it's fuel directly for
wholesale, storing it in their own tank near the City Shops
and City Hall. This would involve up front costs in tank
-1793-
Page 1 of 2
MOUND POLICE DEPARTMENT. - INTEROFFICE .MO
installation at the City Shops, but might save money in the
long term.
I have ideas for other cost saving measures, but do not
want to overstep boundaries with anyone. I have been
watching your council meetings on cable T.V. and can
appreciate the shortfall problem from the decision maker's
perspective. My aim is to be helpful, not a pest.
dialogue on the issue. Let me know what you think, in those
matters where you have the liberty to do so. The City Staff
that understand the dilemmas facing you are pulling for
you. Good Luck.
Sincerely,
-Todd Truax
- 1794-
Page 2 of 2
Cutback 'Principles and Prac%~ees: A CheCklist for Managers
I. IN CUTTING BACK AND WITHDRAWING FROM SERVICES THE LOCAL IVIANAGER
MAY WISH TO: ' '
1. institute a review of municipal services by preparing a
comprehensive schedule of services by output and cost (not by
department) and a scheduled periodic review of all programs and
activities (to eliminate those no longer needed).
..... s~'~'~ih~"P'~to'ri~'t~s"'among activities and levels.
3. subject to detailed scrutiny labor intensive services (since
service cuts here mean layoffs); those services subject to steep
current and prospective cost increases; and those available from
other governments and from the private sector in the community.
4. measure the cost of services in a way the taxpayer can understand
(e.g., for garbage collection, calculate the cost per collection
point~ either household or business, rather than just the number of
tons collected).
5. identify mandated services and service levels, federal and state,
statutory, administrative, and judicial, that cannot be cut back;
explore possibilities for reimbursement and/or for transferring
service responsibilities to other local units or the state.
6. consider the effects of cuts on equity, in addition to the effects
on efficiency, personnel levels, and legal compliance.. The burden of
service changes may fall disproportionately on those least able to
pay for alternatives.
7. identify and analyze the trade-offs among current and future
savings, past expenditures, and revenue impact.
8. examine current and prospective changes in the target population,
and changing patterns in the use of services that may suggest
terminating the service or shifting resources (e.g., alternative use
of public buildings).
9 ' identify and involve interested and affected parties in the
process to change services (e.g., unions and client groups). Make use
of public hearings, polls, referenda, questionnaires in newspapers,
and other mechanisms f'or soliciting and informing public opinion and
for establishing priorities and pol£cy.
10. evaluate the possibility and advisability of staged reductions
such as limiting service hours (e.g., library) or reducing frequency
(e.g., garbage collection).
11. use revenue sharing and other federal and state grants' as
property tax offsets or for non-recurring capital outlays. This
maximizes changes in service provision that the local tax. base may
have to support some time in the future.
12. analyze maintenance of effort and matching fund requirements
associated with state and federal assistance programs; exercise
greater restraint in accepting federal or state funds that may carry
long-term local costs.
13. take into account the effect of lower tax rates on payments.in
lieu of taxes and ultimately on intergovernmental payments based on
tax effort (e.g., general revenue sharing).
-1795-
II. IN REDUCING EXPENDITURES, THE LOCAL MANGER MAY WISH TO:
1. establish enterprise funds for services that can be supported by
charges and fees (e.g., utilities, parking and recreational
facilities). This moves the service or facility off the tax rate and
should increase its responsiveness to changes in public demand for
particular services. Appropriate administrative and overhead costs
can be allocated to enterprise activities.
2. consider regional service and utility agreements, resource
............ r~e_co.~e~y..sys~ms.~.~a~dl.p~hasing ¢ons~.i~s, !.ntert.~cat management
d~velupme~t ~eu!e~t~ (~.~-, clrc~li-t--z-ide£ gr~L~mal~J l%av~
advantage of holding down the investment in expertise for a single,
small locality.
3. selectively postpone hiring, procurement, and disbursements in
accordance with a systematic policy.
4. centralize purchasing and procurement for major and bulky items
and institute a competitive bidding policy for certain purchases.
Bidding ca~ be limited to periodic occasions to ensure that the mamn
supplier, under a negotiated contract, is still offering competitive
p~ices.
5. analyze the workload in all departments by time of day and day of
week and eval.uate the use of part-time staffing in recreational,
grounds, and maintenance programs. In public safety departments,
civilians might replace uniformed employees in support positions.
6. consider using private suppliers of service (e.g., janitorial~
sanitation, nursing) in lieu of increasing or maintaining the public
payroll with consequent pension payments and fringe benefits.
7. review insurance coverage and patterns to claims to determine
appropriate level and mode (e.g., self-insurance, risk pools) of
coverage and sources of liabilities.
8. review the alternatives of leasing versus capital purchasing.
9. examine office operations for immediate cost savings in postage,
duplication, travel, and telephone expenses,
10. institute an energy conservation program to produce immediate
cost savings. Adjust thermostat settings, monitor fuel use, and
institute energy-targeted procurement and accounting policies (e.g.,
smaller police cruisers).
III. TO IMPROVE THE RESOURCE BASE THROUGH PLANNING AND DEVELOPMENT,
THE LOCAL MANAGER MAY WISH TO:
1. maximize net collections by sending bills out on time, evaluating
delinquencies, and using in-house or other collection agencies.
2. increase licenses, permits, fines, and fees to statutory limits.
3. link locally-set fees to price increases in the particular service
or to the Consumer Price Index and publicize unit costs of service.
~ 4, institute service charges for services that are inappropriately
subsidized by the property tax and where unit costing is relatively
feasible. Sliding scale fees can be based on income and use (e.g.,
recreational facilities).
5. earn revenues from use of money (investment earnings) and from use
of property through leasing and rentals. Overall cash and debt
management policies can be instituted.
6. take a long-term view of tax resources through negotiated tax
-1796-'
agreements designed to stimulate development activity and generate a
long-term stream of income to the locality.
7. periodically update the inventory and insurance coverage of
physical assets, including land, buildings, and equipment.
8. approach tax-exempt institutions for payments in lieu of property
taxes.
IV. TO IMPROVE PERSONNEL MANAGEMENT, THE LOCAL MANAGER MAY WISH TO:
reduction in the operating budget without personnel cutbacks. To
maintain service levels, this requires increased productivity and a
firm management position in labor negotiations.
2. tie collective bargaining proposals to current and prospective
constraints (ability-to,pay). The long-term, costing of contracts,
including provisions for pension and fringe benefits, can be
undertaken. Minimum manning and similar provisions that are not
linked to productivity or that reduce management flexibility should
be resisted.
3. explore the use of professional negotiating services. Approach
collectiye bargaining with fully developed management proposals. Tie
increases in benefits and salaries to the merit principle and to
productivity increases.
4. consider the value of training programs for supervisory employees
and safety prog.rams for all employees.
5, work with line mangers to establish the goals of public services,
since clear objectives enhance personal performance.
6. reassess performance measures and performance evaluation.
Nonfinancial motivators such as employer and public recognition can
be enhanced while incentives for cost savings are instituted. If
produCtivity improvement clauses are included in contracts, establish
realistic ways to measure results.
7. develop and periodically review the classification and pay plan.
Hiring .schedules can be reviewed position by position and
qualification schedules can be reviewed for potential downgrading and
consolidation of positions.
8. review high turnover and clerical positions for possible
consolidation, automation, and.possible savings from short-term,
selective hiring postpoDements.
9. identify the costs of accumulated benefits and unemployment
compensation associated with personnel cutbacks and review sick leave
buy-back policies. Pension funding can be reviewed for the impact of
unfunded and underfunded liabilities on future operating budgets and
tax rates.
10. evaluate unemployment compensation claims and eligibility
standards. Consider the ways liabilities arise, such as a past
employee laid off by a subsequent employer or an employee who leaves
because the spouse is transferred.
12. examine possible use of volunteers, e.g., through program
sponsored and administered by local.employers. Major local firms may
be willing to lend executive expertise. Retired residents and
interns from nearby colleges constitute another potential source.
From Public Administration Review, March/APril 1980,
-1797-
Ehlers Sponsors School Financing
andgcc,oun lung Seminar April 4
Ehlers & Associates, in association with the
certified public accounting firm MMKR, will be
hosting the 2003 School Finance and Accounting
Seminar on Friday, April 4, at the Sheraton
Minneapolis West Hotel in Minnetonka. This
one-day seminar is designed for school business
officials and superintendents.
This year, the seminar covers:
· The New Independence Standards
for Accountants
· Recent Changes Affecting School Audits
· Structuring Bond issues
· Tools for Financing Capital Projects
· Case Studies of How School Districts Have
Used Different Financing Tools
· Employee Benefit Liabilities
"We are very excited about the topics we are
presenting and hope they will provide ukeful
information for school
officials," said Carolyn
Dmde, Executive Vice
President/Director of Ehters.
"With the budgetary challenges facing school
districts and the State, it is more important than
ever that districts understand all of the financial
tools available to them. We hope to give district
officials some. practical infonnation and ideas
that they can put to use," said Joel Sutter,
Financial Advisor/Senior Vice President of Ehlers.
Ehlers has submitted a request for the approval
of continuing education credits by the Minnesota.
Board of School Administrators for this seminar.
If you have any questions regarding the Seminar,
'contact Ehlers at 651-697-8500~ or check the
Ehlers website at www.ehlers-inc.com.
STRATEGIES DURING CHALLENGING ECONOMIB TIMES
Ten Steps to Surviving a Budget Crisis
By Jim Prosser O Steve Apfelbacber
Minnesota cities will soon be facing the impact
of an unprecedented state budget deficit and
many are suggesting that once again local
governments must "learn how to do more with
less" and become "lean."
The fact is that cities have been practicing doing
more with less and have been getting leaner for
several years. Most of the relatively "painless"
budget cuts have already been made. So this
fact, along with the magnitude and likely
duration of the state budget and economic crisis,
requires a more comprehensive and strategic
approach to survival
Below are top 10 best practices of cities that
have effectively managed their resources and
made the necessary changes in times of budget
crisis, while sdll maintaining public support.
1. Size UP the Problem
The bad news is that the direct loss of some
. portion of state aid is probably }ust one part of
the impact faced by cities. The level of reduc-
tions, timing and duradon may not be revealed
for some time. Stay in touch with the League of
Minnesota Cities and your local legislators and
others who may be the best source of this
reformation. Understanding the short and long
term impacts facing your community is the first
step in developing strategies to cope with
economic crisis.
Factors that should be analyzed include:
· Changes in payment dates
· Federal, state and county service changes
· Changes in the economy at the local, state and
national level
· changes or elimination of regional programs
and services
2. Communicate the Problem
Gaining the public's support for changes in
service and service delivery s~stems is critical to
(BUDGk'T SURVIVAL cent/need on page 2)
-1¢§8-
(BUDGET SURVIVAL continued from pa#e 1)
sustaining those changes. The public
can support changes only if it under-
stands and accepts that the problem is
real. A concerted effort must be made
to forecast the problem that has been
identified - both the short-term and
the long-term impacts.
3. Establish the Process
In order to develop the right solution
to your budget crisis, it is important to
"right-size" the process. If you are
.......... fac__i_n_g a short-term revenue p..roblem
you can look at a process that will --
help identify one-time fixes, such as
deferred capital improvements.
However, if the problem is significant
and sustained, you will have to look at
systematic changes - the way you
provide services and the level of
services you provide. This requires a
much greater public involvement
process.
It wilt be up to elected officials to
ensure they understand the size of the
problem and ensure that staff has
accurately assessed the problem, for
example not trying to fix a long-term
problem with a short-term solution.
Staffs role is developing options such as
changing service delivery, options for
reducing service levels, and identifying
impacts on those service levels.
It is the role of the public to provide
suggestions and reactions to changes
in those service delivery mechanisms
as well as the outcomes for which the
city is striving. Cities must always
remember that well-meaning staff can
develop what could be the right
option, but if the public doesn't
understand and support it, it will be
difficult to sustain over the long mn.
4. Analyze Fund Balances
Many cities are beginning to face that
this is the time to use fund balances. It
is important for cities to analyze cash
flow requirements so they can deter-
mine what excess funds are available.
The reasons for analyzing fund
balances before tapping into them are:
a) Sufficient cash flow must be re-
served because the receipt of revenues
does not generally match the timing of
expenditures.
b) Unusual and unanticipated situations
arise which require greater expenditure
for services, for example, heavier than
Ehlers Advisor · Winter 2003
average snowfalls in a given winter.
c) Revenues can decline because
economic conditions force the state to
change the funding that they had
provided or sales tax or property taxes
may not meet anticipated levels.
d) Reduction in fund balances will draw
the attention of bond rating agencies.
Establish a dear rationale for the use of
fund balances, other steps that will be
taken to balance the budget, and a plan
_.tO re_store__fund balances.
What's your city's
primary purpose? Some
cities do not have a
purpose (mission/vision)
statement that identifies
their core purpose. As a
result, they begin to
provide services that are
not connected to their
core purpose and that in
fact would be better
provided by others.
5. Review Your Strategic Profile
eleCted officials so that they can
choose which outcomes could be
eliminated to achieve budget targets.
The public - residents and employees
- can help identify these outcomes. It
is important to remember this may
have a demoralizing impact on em-
ployees, but it is better to identify
these cuts in an open fashion rather
than have people face the impacts
without providing ir~put.
1n most ca, ge, s', the
type, of budget
cha',zges J'aci,~g
cities are so
sign(/icant that
t'l.9~!y will charzge
the wc(y tbat peopte
' view government.
Each community must
ask what those impor-
tant activities are and what investments
are required that achieve the city's
core purpose and establish priorities
for those services. It'must be recog-
nized that a core service in one
community may be expendable in a
neighboring community. Elected
officials must carry the thankless
burden of sorting this out.
6. Balance Your Focus on Inputs
and Outcomes
Sometimes the problem is just too big
to rely on one tactic alone - increasing
a revenue source or reducing or
eliminating a service. That's when it's
important to prepare "outcome"
budget options.
This is accomplished by identifying the
percentage of your budget that you
must reduce. Staff would then prepare
outcome options equal to twice the
budget target. The options involve
discreet budget outcomes with match-
mg costs. For example: plowing streets
after five inches of snow instead of
two inches, or trimming all the city's
boulevard trees in 12 years instead of
10 years.
Those outcomes are provided to the
- 1799-
7. Explore New Revenue Sources
MOst communities Ixave some un-
tapped internal and ~--~ revenue
sources. Internal revenue sources may
include enterprise funds, such as a
liquor store fund or water
and sewer fund. These are
supposed to be self-
supporting but in many
cases don't necessarily pay
their full share of general '
governmental services.
These funds should be
charged management fees
for activities such as: the
city manager or finance
director spending time
supervising enterprLse
activity; insurance for a specific
building or for workers compensation
or general liability or health insurance
for employees; the cost of the finance
department doing payroll and account-
lng; building rental and maintenance,
and building utilities. In addition, user
fees, service charges and utility rates
should be carefully examined to assure
that costs are being recovered. Many
communities are exploring establishing
franchise fees or utility taxes as options
to eliminating core services.
8. Phase-In the Changes
To the extent possible, it easier to
make cuts in services or increases in
revenue if they can be phased in over
a period of time. For example, if
changes in outcomes result in staff
reductions, look for the opportunity to
use attrition - changing employee
levels gradually rather than laying
people off right away. As an alterna-
tive to eliminating a recreation pro-
gram, consider increasing fees gradu-
ally over three years to cover the full
cost of the program.
9. Review Service Delhrery Options
As we have seen in "Reinventing . :
Government," cities are really in the
business of buying and selling services.
Therefore, it's important to under-
stand what the appropriate level of
service is -- a service indicator --
~re zltemative means of
that service for residents
a lower cost.
Review sharing services with other
governmental units. In most com-
munities, this is the single most
effective strategy to reducing service
delivery costs. Typically, it is the
most politically difficult measure as
well. Most cities do some service
sharing, but cities may find this the
right time to aggressively pursue
Options where they justify certain
capital equipment or retaining
people with special expertise for a
single community.
Some cities are providing services
because of concerns that the private
sector cannot meet the high de-
mands of the citizenry. An option
for consideration is to identify those
"service indicators" and then
incorporate them in contracts with
private service providers.
10. Assess Service Transfers
to determine if they are
a service that others are
able to provide. If a city is provid-
ing a recreation program, is the
county able to do it insteacL? Is due
city providing social service funding
or programs that could better be
provided by a non-profit founda-
tion?
· No city wants to face the significant
.economic or budget crisis, but at
the same time it does provide a
unique opportunity to take a good
hard look at the services you
provide and how you provide them.
And it forces a critical look at the
services that benefit your city most
in achieving community goals.
In most cases, the type of budget
changes facing cities are so signifi-
cant that they will change the way
that people view govermuent.
involve the public in a process that
provokes discussion about the core
purpose of your city, options to
service, and investments
to meet that purpose, in
to an appreciation of the
pain that reductions cause. And that
will be key to sustaining support for
the actions facing many cities.
ENers Advisor · Winter 2003 ....... .
May I Deadline tO
Amend Business Subsidy Criteria
Any city that adopted business subsidy
criteria prior to May 1, 2000, has until
May 1, 2003, to comply with a new
state requirement to include a "specific
wage floor" for the wages to be paid
_.for.4he~obs-q;r~- a~4.
The wage floor may be stated as a '
specific dollar amount or may be
stated as a formula that will generate a
specific dollar amount. This applies to
criteria adopted prior to May 1, 2000.
Basically, a business subsidy provides
benefits like reduced rate loans,
special grants or other forms of
special assistance, including tax
increment financing, from a city or
state agency to a business. In order to
_obt&in_a-subsidy~bu$. iness~-~muc, t .............
match a set of criteria that has been
developed by the city or state agency.
All projects have to be consistent with
a city's comprehensive plan and any
other set of plans or guidelines for'
the community. Please contact your
bond counsel or Financial advisor for
more details.
Most interest rates have cOntinued to drift d6wnward'as of the 'late
February date of this writing, as evidenced by recent tGyear bond' sales
by our clients in the 3 % range! Due to what is -known as a fairly steep
'yield curve,' the interest rates on shorter debt issues am even lower, i.e.,
as 1.5 % for a three-year note. This phenomenon is a good news - bad
news situation, with the good news being that those governmental units
that need to
borrow for Bond Buyer Index, 1990 to Present
new projects February 28, 2003
SO at a ,
substantial
cost savings 6'50°/°
compared 6.00%
with rates ~.~0% ~
during most ~.00% _ . Rinse
of our profes- 4.50%~ November
sional life- ' 4.0o% ~'~
times. The 9O
bad news is .ore ~ ~d
that any ~ ~.rm~ m~aet~t ~/n~ ~n~ rr~u~g in 20 ¥.rs. SOURCE: TM ~ond Burr
· decisions are
tempered by fear and uncertainty surrounding the potential for war(s), a
ch-amatic change in the price of oil, a reduction in state aids, and a
worsening econbmy.
Interest rates, as well as economic conditions, tend to go through cycles.
Low interest rates won't be' with us forever and neither will an unfavor-
able (or favorable) economy. Sound, tong-range financial decision-
making remains the key, especially in uncertain times. '
- 1800-
Ehlers Advisor * Winter 2003
'Why Can't I
months have been ~t or near
their lowest levels in over
30 years. And last year was a
record year for refinanc-
ing of home mortgages.
Refinance My BOnds?
that your municipality or
school district could
save money by refinancing your bonds. By/eel Sutter
Refinancing municipal bonds, however,
is considerably more complex than
refinancing a home mortgage. Even the
..... -t~ rmi~ otogy4s-differen*q--we-m~k-abe ut___
refunding- rather than refinancing - a
bond issue. Another key term is calling
bonds, which means to pay off bonds
before their scheduled maturity date.
· This article introduces other key
concepts Of bond refundings and
explains why the conditions available in
today's market are making it difficult to
refund most existing bond issues.
When Can We Call? '
One key factor when considering a
refunding of municipal bonds is the call
feature on the existing bonds. The call
feature is set prior to the sale of bonds,
and determines which bonds can be
called and at what times. When a series
of bonds are issued that mature over a
period of time (e.g., 20 years), the call
date is usually designated as being' 8 to
12 years after the year of issuance. Bonds
maturing on or before the call date
cannot be called (i.e., paid off prior to
their scheduled maturity date). Bonds
maturing after the call date can usually
be called, but only on or after the
call date.
So, for example, ff you have bonds that
were issued in 1995 and were scheduled.
to mature in 1996 through 2015, the roll
date may be February 1, 2005. This
means that the bonds maturing through
2005 cannot be called, while the bonds
- maturing in 2006 through 2015 can be
called on or after February 1, 2005..
Refimdi~g Basics
In its simplest sense, refunding requires
that you issue new bonds and use the
proceeds of the new bonds to call the
old bonds (and usually to pay all of the
up-front issuance costs). If the interest
rates on the new bonds are lower
than the rates on the old bonds by
a large enough margin, your future
debt service costs will be reduced.
There are two basic types'of bond
refundings. The simplest type, a current
--r~dS~r~dl'~g, -canrtrlLbe-do n e
90 days before the call date. In a
current refunding, new bonds are
issued and the net proceeds of the new
bonds are used to' pay off the old bonds
on their call date. This is a relatively
simple financial transaction, and works
very well ff you are near or past the call
date on your existing bonds.
But a current refunding 'cannot be done
ff the call date on your bonds i~ more
than 90 days in the future. In these
cases, it may be possible to do the
second basic type of refunding, called
an advance refunding.
How Advance Refundings Work
When advance refunding bonds are
issued, the net proceeds of the new
issue are placed in an escrow account
and invested, usually in U.S. Govern-
ment Securities. In the most common
type of advance refunding, called a
crossover refunding, the escrow account
is used to make interest payments on
the new bonds until the call date, at
which time the remaining funds in the
escrow account are used to call the
existing bonds.
In an ideal (or "efficient") advance
refunding, the interest rate earned on the
investments in the escrow account is
exactly equal to the average interest rate
on the new bonds. (Federal regulations
do not allow the interest rate on the
investments to exceed the average
interest rate on the bonds.) Then, for
example, if you axe calling $5 milh'on in
bonds, you can place $5 million in the
escrow account and the investment
earnings in the account will be sufficient
to make the interest payments on the
new bonds until the call date.
Segative Arbitrage
The problem with advance refundings in
today's market is that the interest rates
available on government securi-
ties for the escrow account are
even lower, by historical stan-
dards, than interest rates
on bonds. As a result,
the interest rate on
investments for the
escrow account will be
lower than the interest
rate on the new bonds. For example, we
recently explored an advance refun~g
for a school diltrict with bonds callable in
2009. We estimated that the average
interest rate on the new bonds would be
-- .473-3 2¥'6'7-w-~ -th~' average
the investments would be only 3.18%.
This is a condition known as negative
arbitrage. It means that, each year until
the call date, the interest expense on the
new bonds (paid from the escrow
account) will be greater than the interest
revenue in the escrow account. To make
up for this excess interest expense, we.
would need to issue ruore bonds to
create a larger escrow account. For
example, an advance refunding of $5
million in existing bonds might require
issuing $5.4 million in refunding bonds.
And the effect of issuing that much in
additional bonds usually more than
offsets the benefit of lower interest rates.
So right now, most advance refundings
will either save very little or actually
increase future debt service expense.
What to D~o
If you have bonds outstanding with a
call date some time in the future, aH
hope is not lost. If interest rates stay
even close to where they are now, you
may have an opportunity to do a
current refunding of the bonds when
the call date is near. Furthermore, ff
short-term interest rates increase, it may
be possible to do an advance refunding
some time in the future.
One of the services that Ehlers performs
for our clients is to monitor their existing
bond issues as market conditions change,
and to determine whether it may be
Financially viable to refund the issues. If
this happens, we will contact you to
explain the potential for a refunding.
In the meantime, if you have specific
questions about your bonds or would
like to see our best estimates of the
impact of a refunding, please contact us.
3' :ie.l ,,i?r:D
e.: :;'.. :..i~hler~ & AsSociates is cumin tt ,to . Ros,eville, MN Office:.3060 Centre Pointe Driva · Roseville, MN 55113-1105,651-697-8500
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, .. · 6202 262-785-1520
'iltapentlll~, IL. 0tlio.: 1001 Easl Chi0ag0 Avenue Suite 135 o Napml~e L ~-040 * aa0-ass-~00
-1801 -