81-11-10 CITY OF MOUND
Mound, Minnesota
AGENDA
MOUND CITY COUNCIL
November 10, 1981
City Hall
7:30 P.M.
Minutes of November 3, 1981
Minutes, Advisory Planning Commission (Information Item)
ACTION ITEMS:
A. Application for Rezoning - Duane Schaller
Box 26, Wychwood - Map 12
Rezoning from A-I to A-2
B. Dean R. Fleming, 3111 Priest Lane
Lot 1, Block 1, Highland Shores - Map 11
Street Front Variance
C. Continental Telephone Company - Porperty Address
5468 Lynwood Blvd.
Lots 12, 13, 14 & 15, Koehler's Addition to Mound-Map 5
Street Front Variance of Fence Height
D. Application for Street Vacation
Jeannette Rivers, 4737 Aberdeen Road - Map 14
Oxford Lane from Aberdeen Road to Hanover Road
(set date for Public Hearing - December 8, 1981)
E. Thomas L. Davison, 2054 Shorewood Lane
Lot 10, Block 1, Shadywood Point - Map 6
Lake Frontt Side Yard & Lot Size Variances
F. Century Auto Body, 5533 Shoreline Blvd.
Lots 5 & W. 50' of 6, Auditor's Subd. 170 - Map 5
Sign Permit
G. Michael D. Corbin, 2179 Noble Lane - Map 5
Lots 15, Part of 14 & 16, Block 3, Abraham Lincoln Addn.
Street Front & Side Yard Variances for Garage
3. Motion to Hennepin County requesting signal light installed
at intersection of County Road 110 and 15 be discontinued
or set at a flashing red (Stop Sign) position
4. Refund of Outside Reader Fee - $20.00
5. Woodchipping Report - Chris Bollis
6. Resolution to Congressional Delegation regarding request
Fireman's Relief Association Tax Exempt Status (see
attached report)
7. Comments and Suggestions from Citizens Present
(please limit to 3 minutes)
Pg. 1078-1084
Pg. 1085-1091
Pg. 1092-1093
Pg. 1094-1098
Pg. 1099-1102
Pg. ll03-1109
Pg. lllO-1112
Pg. Ill3-1116
Pg. Ill7-1120
Pg. ll21
Pg. 1122-1123
Pg. 1124-1126
Pg. 1127
PAGE 1077
AGENDA - November 10, 1981 (continued)
8. Downtown Advisory Committee Actions - Paul Pond
Approve - Plan Concept Development
Phase I - Summary Analysis - $578.00
Phase II - Group Workshop/Public Input - $940.00
Phase Ill - Public Facilities - $300.00
9. Update - Bohnhoff vs. City of Mound (WHAT NOW?)
10. Minnegasco Franchise Ordinance
A. Report by City Attorney
B. Report by City Manager
C. Copy of Proposed Ordinance
ll. Building Permit Refund Request - $795.50
(Clinton Voorhees, 4932 Bedford Road
12. Weekly Financial Report (attached material)
13. Letter from MoT.C. o Elimination of 51-N bus route
14. Status of 1980-81 Road Project Legal Appeals
A. Priscilla S. Anderson
B. Gregory Thomas Krause
15. LMCD - Dock License Application
(400 individual dock permits)
16. Discussion Item - Gordy Swenson
(Councilmembers Attendance)
17. Payment of Bills
18. Information/Miscellaneous
A. List of City Employees
B. Organizational Chart
C. American Legion Report
D. Can't tell (But will take orders)
E. Letter from Rudy Boschwitz
F. Letter from Dave Durenberger
G. Business Week - Special Report
H. School Board Minutes
Pg. 1128-1132
Pg. 1133-1134
Pg. 1135-1146
Pg. 1147-1149
Pg. 1150-1152
Pg. 1153-1155
Pg. 1156-1157
Pg. 1158-1163
Pg. I164
Pg. 1165-1172
Pg. 1173
Pg 1174
Pg 1175
Pg 1176
Pg 1177
Pg 1178
Pg 1179-1181
Pg 1182-1201
Pg 1202-1205
PAGE 1077 a
REGULAR MEETING
OF THE
CiTY COUNCIL
164
November 3, 1981
Pursuant to due call and notice thereof, a regular meeting of the City Council of
the City of Mound, Hennepin County, Minnesota, was held at 5341Maywood Road in
said City on November 3, 1981, at 7:30 P.M.
Those present were: Mayor Rock Lindlan, Councilmembers Pinky Charon, Robert
Polston, Gordon Swenson and Donald Ulrick. Also present were City Manager,
Jon Elam; Police Chief, Bruce Wold; Water Superintendent, Greg Skinner;
Building Inspector, Henry Truelsen; City Attorney, Curt Pearson; City Engineer,
John Cameron; Secretary Fran Clark and the following interested citizens:
Gregg Malik, Harold and Charlene Miller, Art Peterson, William Wilson, and
Ron Blaschko.
The Mayor opened the meeting and welcomed the people in attendance.
MINUTES
The Minutes of the October 27, 1981, Regular Council Meeting were presented for
consideration. Swenson moved and Charon seconded a motion to approve the
Minutes of October 27, 1981, Regular Council Meeting, as submitted. The vote
was unanimously in favor. Motion carried.
PUBLIC HEARINGS- STREET VACATIONS
PORTION OF WEST SIDE OF THREE POINTS BLVD. FROM GLEN ELYN TO END OF LOT l,
BLOCK 23, SHADYWOOD POINT
The City Manager explained that Gregg Malik :is asking for this vacation
so that he may construct a garage on his property without encroaching
on the street right-of-way. The Planning Commission recommended vacating
16' of the street right-of-way providing the utilities won't be infringed
upon. The only objection to this vacation came from Continental Telephone
because of three existing buried cables located in this right-of-way
that is part of thei.r underwater route across Lake Minnetonka that feeds
the North Shore. Since their original objection Mr. Malik has agreed
to grant Continental Telephone an easement for their existing cables
and they have removed their opposition.
The Mayor opened the public hearing and asked for any comments or
objections.
Gregg Malik commented that not only did he need this addition for his
garage but also because this addition will allow him to enter his
basement from the inside of his houseinstead of having to go outside
to get into.his basement.
William Wilson, the neightbor across the street from Mr. Malik,
asked if this vacating was going to affect him. The City Manager
explained that this vacation will not affect him. It will only
reduce the right-of-way from 66' to 50' The City Engineer agreed
that this vacation will not affect Mr. Wilson.
There were no other comments so the Mayor closed the public hearing.
The City Attorney suggested that if the Council vacates this right-of-way
the resolution should read subject to the property owner granting an
easement to Continental Telephone".
/072'
165
November 3, 1981
Councilmember Polston moved and Swenson seconded the following resolution.
RESOLUTION #81-360 RESOLUTION TO APPROVE THE VACATION OF 16'
OF THE WEST SIDE OF THREE POINTS BLVD. FROM
GLEN ELYN TO END OF LOT l, BLOCK 23, SHADYW00D
POINT CONTINGENT ON MR. GREGG MALIK GRANTING
AN EASEMENT TO CONTINENTAL TELEPHONE
The vote was unanimously in favor.
Motion carried.
OUTSIDE CORNER OF LESLIE ROAD ADJACENT TO LOTS, 7, 8, 9, 14, 15 AND
16, BLOCK 21, WYCHWOOD
The City Manager explained that in vacating this portion of Leslie Road
the Council would be freezing Lot 7 from Leslie Road and the owners of
this lot were assessed for 10' in the street assessment.
The City Attorney explained his letter of Octpber 28, 1981, in which
he recommended against vacation because the title to all six of the
lots would be affected by this vacation. The reason being that there
is no way to determine how the vacated lands would be apportioned among
the six lots.except by a court proceeding which would be quite costly.
The Mayor opened the public hearing for comments or objections.
Art Peterson (the person asking for the vacation) commented
that the reason he wants the vacation is so he can extend his
fence from his lot line to the curb on Leslie Road and without
the vacation he would be encroaching on road right-of-way.
Harold and Charlene Miller (owners of Lot 7) commented that they
had no objection to Mr. Peterson's fence but that they were
against the vacation because they want their 10' feet on Leslie
Road.
The City Attorney suggested that the people owning these lots could
treat this area as a commons area and work out an agreement between
themselves who should maintain the area and what improvements they
would like to add but that if the City needed to do any utility or
other work on the right-of-way the City could dig up or remove any
improvements and would not be responsible for compensating or replacing
these items.
There was considerable discussion between the Council and Mr. Peterson.
The Mayor closed the public hearing.
Swenson moved and Polston seconded the following resolution.
RESOLUTION #81-361 RESOLUTION TO DENY VACATION OF THE OUTSIDE
CORNER OF LESLIE ROAD ABUTTING LOTS 7, 8, 9,
14,15 AND 16, BLOCK 21, WYCHWOOD AND APPROVE
A REFUND OF THE VACATION FEE OF $50.00 TO
ARTHUR J. PETERSON, APPLICANT
Motion carried.
The vote was unanimously in favor.
VARIANCE APPLICATION - GREGG MALIK
The City Manager explained that this variance is connected to the earlier
public hearing on the street vacation of a portion of Three Points Blvd.
The Planning Commission recommended granting this variance based on the
number of feet vacated in order for Mr. Malik to buil~ his garage.
166
November 3, 1981
Councilmember Ulrick asked how many feet the corner of the garage would
be from the back of the curb. Mr. Malik stated 16' The Council agreed
that this is a hardship case because where Mr. Malik i~ placing the garage
is the only place on his lot that he can place it.
Polston moved and Swenson seconded the following resolution.
RESOLUTION #81-362 RESOLUTION TO CONCUR WITH THE PLANNING COMMISSION
AND GRANT A VARIANCE OF 16' FROM THE CORNER OF THE PROPOSED
GARAGE TO THE BACK OF THE CURB TO GREGG MALIK,
LOT l, BLOCK 23, SHADYWOOD POINT
Motion carried.
The vote was unanimously in favor.
TREE REBATE PAYMENTS
Polston moved and Swenson seconded a motion to approve the Diseased Tree
Rebate Payments - List #22, in the amount of $2,722.00. The vote was
unanimously in favor. Motion carried.
MOUND/SPRING PARK WATER CONNECTION
The City Manager asked that the Council set the bid opening date for the
Mound/Spring Park Water Connection for December 8, 1981, at 10:00 A.M.
He also pointed out that on October 19, 1981, the Spring Park Council
passed a resolution to proceed with the CSAH 125 water connection and
approved the plans and specifications.
Councilmember Polston still felt that instead of the Spring Park/Mound
Water Connection, a.storage facility in Island Park would be better.
Councilmember Ulrick commented that he was happy to see the municipalites
cooperating with each other.
Ulrick moved and Swenson seconded a motion to set the bid opening date
for the Mound/Spring Park Water Connection on CSAH 125 for December 8, 1981,
at 10:O0 A.M. in the City Hall at 5341Maywood Road, Mound, MN. The vote
was unanimously in favor. Motion carried.
PICK-UP TRUCK - WATER DEPT.
The City Manager explained that the purchase of a pick-up truck for the
Water Dept. was approved in the 1982 Budget. Greg Skinner was present
to answer any questions on the specifications presented for approval.
Councilmember Ulrick asked why Greg had specified a diesel engine instead
of a gasoline engine. Greg answered that the diesel is more maintenance
free and gets better gas mileage than gasoline.
Charon moved and Swenson seconded a motion to approve the specifications
for the pick-up truck and set the date for the bid opening for December 8,
1981, 11:00 A.M. in the City Hall at 5341Maywood Road, Mound, MN. The vote
was unanimously in favor. Motion carried.
COMMENTS AND SUGGESTIONS FROM CITIZENS PRESENT
The'Mayor asked if there were any comments or suggestions from any of the
citizens present. There were none.
}
167
November 3, 1981
DAY AFTER THANKSGIVING DAY
Swenson moved and Polston seconded a motion to give City employees the
day after Thanksgiving off as a holiday. Discussion on this followed.
The City Manager recommended that the Council not give this day off
because of the increased work load since the reduction in the staff but
agreed that if an employee wanted to take a vacation day it would be
alright with him. Councilmembers Polston and Swenson disagreed with
the City Manager's recommendation on the basis that City employees are
not given bonuses or incentives and they felt this was something the
Council could do instead. Roll call vote was 2 in favor with Charon,
Ulrick and Lindlan voting nay. Motion failed.
LOTS 27 & 28, KOEHLER'S SECOND ADDITION TO MOUND'
The City Manager explained that these two lots were taken by the City in
1973 for park land. They arenot presently accessible and are nothing
more than a weed patch that the City must mow. The owner of the lots.
to the west would like to buy these lots. The City would have to release
its interest in these lots so they can go up for auction next Spring~
It was his recommendation, after contacting all. department heads and
finding no objections, that the City release the lots.
The Building Inspector raised some questions about'the release of these
lots.
Ulrick moved and Swenson seconded a motion to tabl~ action on Lots 27
and 28, Koehler's Second Addition.to Mound until ~rther study is done,
The vote was unanimously.in favor. Motion carried.
llO STREET LIGHTS ADJACENT TO THE NEW ARENA
The City Manager explained the Mr. Ron Blaschko, who lives, on Alder Lane,
came in to complain about the fact that there are .four street lights being
installed across the street from his house on the back side of the Arena.
Mr. Blaschko's bedrooms are on.that side of the house and will be
illuminated during the night. The Ice Hockey Arena Association also
supports a reduction in the lighting on that side of the building.
Concerns of the Council were safety and vandalism. Mr. Blaschko stated
that he was all for safety and agreed that lights do cut down on vandalism
but he felt both could be accomplished with less lights.
Ulrick moved and Polston seconded a motion to reduce the lighting on
Alder Road by 50%, directing the City Engineer to contact the contractor
and instruct him stub out units 42 and 44 (without cutting off the
anchor bolts) with the poles and lighting to be retained by the City.
until the impact is seen and making sure that the stubs are well marked
for safety reasons. The vote was unanimously in favor. Motion carried,
SEWER CAPITAL OUTLAY FUND TRANSFER
The City Manager explained that the Auditor has recommended the Council
pass a resolution for the close out of the Sewer Capital 0ut.lay. Fund
to the Sewer Fund. This will close out an unused Fund, while helpin9
to reduce the existing $84,O00.O0 deficit in the Sewer Fund.
168
November 3, 1981
Ulrick moved and Charon seconded the following resolution.
RESOLUTION #81-363 RESOLUTION CLOSING THE SEWER CAPITAL OUTLAY FUND
BY TRANSFERRING THE JANUARY 1, 1981, FUND BALANCE
OF $48,O45.O0 TO THE SEWER FUND
The vote was unanimously in favor. Motion carried.
CITY FINANCIAL SITUATION
The City Manager brought the Council up-to-date on the City's financial
situation, by pointing out the following:
1. We may get the November State Aid Payment from the State.
2. Insurance costs may go down and save some money there.
3. Liquor revenue looks like it will be up somewhat this year and
give the City some extra revenue.
4. Sewer rates will have to be raised because Metro keeps raising
the City rates.
5. All departments have been under Budget the last 3 or 4 months
but with the already $61,OOO.OO deficit the City still doesn't
have anything to show for it.
INFORMATION/MISCELLANEOUS
SPORTS CENTER BUS DROP
Polston moved and Swenson seconded the following resolution.
RESOLUTION #81-364 RESOLUTION APPROVING THE BID FROM C.C. MC CROSSAN,
INC. (SPECIFICATIONS PER COUNTY HIGHWAY 110
IMPROVEMENT PROJECT) FOR THE SCHOOL BUS DROP
ZONE AT THE ARENA IN THE AMOUNT OF $17,654.51
AND INSTRUCTING THE CITY ATTORNEY TO DRAW UP
A CONTRACT FOR THIS WORK.
The vote was unanimously in favor.
Motion carried.
CANCEL CERTAIN ASSESSMENTS AGAINST LOT 4, BLOCK 14, MOUND TERRACE
The City Manager explained that this is the lot that last week
was approved to be sold to Palmer & Nancy Koosmann. It is wetlands
but it has a sanitary sewer and sanitary sewer lateral assessment
against it and because it is an unbuildable lot, the recommendation
is to cancel these two assessments. Mr. & Mrs. Koosmann have
agreed to assume the $4,671.97 1980 Street Improvement Assessment
against this property but do not want to pay the other two.
Ulrick moved and Swenson seconded the following resolution.
RESOLUTION #81-365 RESOLUTION TO CANCEL CERTAIN SPECIAL
ASSESSMENTS THAT ARE ON LOT4, BLOCK 14,
MOUND TERRACE
The vote was four in favor with Mayor Lindlan voting nay. Motion
carried.
TRANSFER OF FUNDS
Swenson moved and Polston seconded a motion to authorize the transfer of
certain Funds listed on the Bills for November 3, 1981. The vote was
unanimously in favor. Motion carried.
169
November 3, 1981
PAYMENT OF BILLS
Swenson moved and Polston seconded a motion to approve the payment of
the bills as presented on the pre-list in the amount of $34,O71.45,
when funds are available. Roll call vote was unanimously in favor.
Motion carried.
EXECUTIVE SESSION
The Council moved into Executive Session to discuss a legal-matter at 10:30 P.M.
The Council came out of Executive Session at 10:45 P.M.
Ulrick moved and Swenson seconded a motion to adjourn at 10:45 P.M. The
vote was unanimously in favor. Motion carried.
Jon Elam, City Manager
Fran Clark, Secretary
Autocon Industries 257.30
.Charles Anderson 547.10
Buffalo Bituminous 2,944.50
Boustead Electric 22~.1§
Burlington Northern 533.33
" " 175.00
Bowman Barnes 65.50
Climax, Inc. 97.15
Commissioner of Revenue 2,985.41
Fran Clark 15.90
Dorothy DeLaney 40.56
Dustcoating, Inc. !,411.70
Dependable Services 33.00
Judy Fisher 10.70
Jon Elam 14.88
Hennepin County 562.50
Jones Chemicals 192.20
Bob Johnson 857.14
IBM 373.20
Glen Litfin Excav 75.00
Long Lake Ford Tractor 66.59
Rick Mauderer 50.00
Mound Police 21.07
City of Mound 68.49
Mound Postmaster 89.91
City of Mpls 56.00
MS Print, Inc 241.75
Mound Bank 9.10
Metro Fone Communications 35.40
Reo Raj Kennels 235.50
C.S. McCrossan 243.00
Michael Polley 150.18
D.F. Schmidt Constr . 3,702.50
Soil Testing Services 203.00
T & T Maintenance 22.75
Wurst, Carroll & Pearson 1,500.00
Waconia Ridgeview Hosp 13.00
Griggs, Cooper 5,283.08
Johnson Bros. L]q ~,~.5~
Old Peoria 1,363.06
Ed Phillips & Son 2,734.26
TOTAL BILLS 34,071.45
TRANSFERS
Street to Imp & Equip Outlay !,666.66
Park " " " 333.33
Finance " " 80.17
Elections " " 25.00
Diseased Trees" " 176.66
Sewer " " " 375.00
Water " " " 416.67
Cemetery " " 25.00
Street to Shop & Stores 430.39
Sewer " " " 97.38
Water " " " 403.54
Police" " " 642.60
Liquor to General 1,500.00
.7
MINUT£S OF THE
MOUND ADVISORY PLANNING COMMISSION MEETING OF
October 26, 1981
Present were: Chairman Russell Peterson; Commissioners Roy O'Donnell, Margaret
Hanson, Gary Paulsen, Frank Weiland, Lorraine Jackson and George Stannard; Coun-
cil Representative Gordon Swenson; City Manager Jon Elam; City Inspector Henry
Truelsen and Secretary Marjorie Stutsman.
MINUTES ~
The minutes of the Planning Commission meeting of October 19, 1981 were presented
for consideration. Weiland moved and Hanson seconded a motion to accept the min-
utes as presented. The vote was unanimously in favor.
BOARD OF APPEALS
1. Rezoning of Block 26, Wychwood from Residential A-1 to Residential A-2
Roger Reed represented Applicant, Duane Schaller. Applicant wants land re-
zoned so he can sell Lots 20 and 21 as a building site.
Discussed and Commission questioned where driveway to house to be built on
these lots would be as access onto road bad at this point? It was suggested
Schaller give an easement for a drive over lot his driveway is on.
Weiland moved and Hanson seconded a motion that City'would inform residents
of Block 26 that a request has been made to rezone from A-1 (10,000 sq. ft.
area) to A-2 (6,000 sq. ft. area) and that the Planning Commission is recom-
mending the rezoning. The vote was unanimously in favor.
The Planning Commission asked the City Manager to look into the original reason
for the A-1 zoning of this block as all the area south and east is for 6,000
square feet for a single family dwelling.
Street Front Variance
Lot l, Block l, Highland Shores
Dean Fleming was present.
O'Donnell moved and Hanson seconded a motion to recommend approval of the
wooden walkway deck as requested with stipulation it be no more than 18
inches off the ground with no rail. The vote was unanimously in favor.
Street Front Variance of Fence Heighth
Lots 12, 13, 14 & 15, Koehler's Addition to Mound
Gary Dostal and Collin Holzwart from Continental Telephone Company were
present; also present was James Riley, owner of the property.
Intent of the Telephone Company is installation of a 6 foot high fence all
around lot with double gate on South and West sides to protect area from
vandalism and stop traffic crossing lot/lot used mostly for vehicle storage,
but Northeast corner adjacent to building would be used for storage of high
usage materials. Discussed snow removal damaging fence if too close to road
and the blocking of view/traffic hazard.
Hanson moved and Paulsen seconded a motion to recommend approval of a vari-
ance for a 6 foot high chain link fence providing it be no closer than l0
feet to any curb and providing this doesn't conflict with any recommendation
of the Police and Public Works Departments. The vote was unanimously in
favor.
Planning Commission Minutes
October 26, 1981 - Page 2
Subdivision of Land
Lots 10,11,12 & 13 and Part of 8,9 & 14, Block 6, Whipple
Applicant
was not present. Application has no survey or legal descriptions
of the proposed division of land.
Paulsen moved and Hanson seconded a motion to table. The vote was unanimously
in favor.
o
Street Vacation of Oxford Lane from Aberdeen Road to Hanover Road
Applicant, Jeannette Rivers, was not present. City Manager reviewed the
circumstances that prompted Mrs. Rivers to apply for the street vacation
and noted that she has maintained this area for 30 years and wants to retain
it as a driveway to her property.
Discussed whether this might landlock Lots 17, 18, 19 & 20, Block 9, Devon.
(Hanover could be put through.)
Weiland moved and Hanson seconded a motion to recommend that the City vacate
the street as requested, but retain an utility easement over the entire 30
feet of right-of-way for existing Sanitary Sewer and Gas line and that no
further filling, excavating or construction be allowed on the vacated street.
Stannard and O'Donnell voted nay; all others voted in favor. Motion carries.
Stannard stated there were many reasons not to vacate--main one is access to
lots on Hanover; O'Donnell feels most of road being used for utilities, etc.
The City Manager reported that "Vacations" cost much more than the $50 fee charged--'
losing proposition to vacate; perhaps the
City shouldilook into alternative such as
a maintenance agreement or at least, raise the fee to $100.
O'Donnell moved and Weiland seconded a motion to recommend to the Council
that the fee for a "Vacation Application" be increased from $50 to $100.
The vote was all in favor except Paulsen voted nay. He is opposed as it is
an ambiguous amount of money; thinks it should be based on realistic figure.
Variances-Street Front, Side Yard and Lot Size
Lot 1, Block 23, Shadywood Point
Gregg Malik was present. Presently has a vacation request before the Council;
noted that the letter from the Telephone Company is wrong; there are no phone
lines in street on side proposed to be vacated; a revised letter to that effect
will be forthcoming and Malik is, on that basis, requesting a 16 foot vacation.
However, will still need a street front variance for his proposed garage addi-
tion; side yard and lot size are existing deficiencies.
O'Donnell moved and Hanson seconded a motion to recommend Council vacate
the maximum amount (16 feet) of Three Points Boulevard that they can and
recommend granting the variance necessary based on the amount of vacation
to build garage requested and also acknowledging the side yard setback and
lot size deficiencies. Stannard and Weiland voted nay; all others in favor,
motion carries. Reason against is that against allowing building within
5 feet of right-of-way.
Variances-Lake Front, Side Yard, Lot Size and Accessory Building
Lot 10, Block 1, Shadywood Point
Thomas Davison was present.
Planning Commission Minutes
October 26, 1981 Page 3
Davison plans to lift house and make a two story home of it. Also brought
in letters from neighbors stating they had no object~on to h~s plan to llft
home and add a floor and also add a deck on lake side of home; deck would
also act as a fire escape.
Jackson moved and Hanson seconded a motion to recommend granting the vari-
ance as requested and recognize the existing non-conformancies (5.5 side
yard setback, 3.4 ft. accessory building and lot size deficiencies).
The vote was unanimously in favor.
Sign Permit for Century AutoBody at 5533 Shoreline Boulevard
Lots 5 and W. 50 Ft. of 6, Auditor's Subd. 170
V. G. Cossette was present.
Discussed the request for a portable sign with flashing lights at length;
Commission opposed to the flashing lights and nothing in ordinance allowing a
portable sign.
Stannard moved and Hanson seconded a motion to recommend approving the
4 Ft. X 8 Ft. sign if attached to the building and illuminated internally
only and providing there are no flashing lights or arrows. The vote was
all in favor except Peterson voted nay--thinks sign should be fastened
parallel to building.
Street Front and Side Yard Variances for Garage
Lots 15, Part of 14 and 16, Block 3, Abraham Lincoln Addition to Lakeside Park
Michael Corbin was present. A letter was brought in from neighbor stating
they had no objection to proposed garage. Also, placement of house on survey
is thought to be incorrect. Inspector to check.
Hanson moved and Jackson seconded a motion to recommend approval of a 6 foot
side yard variance and a front yard variance for the proposed garage. The
vote was all in favor except Stannard and Weiland abstained as they felt
there was not enough information.
ADJOURNMENT
Stannard moved and Hanson seconded a motion to adjourn. All in favor, so
adjourned to the next Planning Commission Discussion meeting, November 9th.
Attest:
October 21, 1981
TO: The Planning Commission
FROM: The City Inspector
SUBJECT: Planning Commission Meeting October 26, 1981 - Recommendations
on Appeals
BOARD OF APPEALS
1. Duane Schaller, 4967 Wilshire Boulevard
Block 26, Wychwood Rezoning
Note that all other blocks of land in the Westerly 1/2 of Wychwood
Addition are zoned so as to allow 6,000 square feet of land area for
a single family residence - Block 26 for some unknown reason requires
10,000 square feet of land.
It would appear to be in the best interests of both the citizens and
the City of Mound for Block 26 to be rezoned to A-2 (6,000 sq. ft.),
so as to lessen the non-conformancy of that particular block and also
to achieve more continuity of the C~ty's residential zoning.
2. Dean R. Fleming, 3111 Priest Lane
Lot l, Block l, Highland Shores
Street Front Variance
No rear yard variance is needed; only a street front variance. The
variance needed is for the total width of the proposed deck or 14 feet.
Maybe thought should be given to the probable allowance of such struc-
tures within the street front setback in the proposed new ordinance.
Continental Telephone Company - Property at 5468 Lynwood Boulevard
Lots 12,13,14 & 15, Koehler's Addn. to Mound
Street Front Variance
of Fence Heighth
I don't feel as though a 6 foot high fence either open or closed type
this close to the Central Business District is aesthetically good or
in the best interests of the City.
Edward J. McGrath - Property at 3249 Warner Lane
Lots 10,11,12 & 13 & Part of 8,9 & 14, Block 6, Whipple
Subdivision of Land
I think the intent is to split off part of the lot to defer some of
the street assessment cost. Recommend denying the request.
Jeannette Rivers, 4737 Aberdeen Road
Street Vacation of Oxford Lane from Aberdeen Road to Hanover Road
The City has a sewer main in this right-of-way. Also this would cut
off natural grade access to probable buildable land in Block 9. Deny.
Planning Commission Meeting October 26, 1981
Recommendations on Appeals - Page 2
Gregg Malik, 4908 Three Points Boulevard
Lot 1, Block 23, Shadywood Point Variances - Street
Front & Lot Size
Variance depends on amount o£ land vacated. I am totally against
structures on right-of-way line; bad situation; feel no variance
should be given---over building for the land area.
Thomas Davison, 2054 Shorewood Lane
Lot IO, Block l, Shadywood Point
Lake Front, Sideyard
& Lot Size Variances
Because of the width of the structure, it is impossible to comply to side
yard setbacks; but strongly advise structure be made to comply to at
least one side yard setback of 10 feet.
City Inspector
HKT/ms
lc&?
REVISED
AGENDA FOR THE
MOUND ADVISORY PLANNING COMMISSION MEETING
OCTOBER 26, 1981
Minutes of the meeting of October 19, 1981.
BOARD OF APPEALS
Ao
Duane Schaller, 4967 Wilshire Boulevard
Block 26, Wychwood - Map 12
Rezoning from A-1 to A-2
Dean R. Fleming, 3111 Priest Lane
Lot l, Block l, Highland Shores - Map l l
Street Front Variance
Continental Telephone Company - Property Address: ~468 Lynwood Boulevard
Lots 12, 13, 14 & 15, Koehler's Addition to Mound - Map 5
Street Front Variance of Fence Heighth
Do
Jeannette Rivers, 4737 Aberdeen Road
(Applicant owns Lots lO & ll, Block 5, Devon) - Map 14
Street Vacation - Oxford Lane from Aberdeen Road to Hanover Road
Thomas L. Davison, 2054 Shorewood Lane
Lot lO, Block 1, Shadywood Point - Map 6
Lake Front, Side Yard & Lot Size Variances
Century Auto Body, 5533 Shoreline Boulevard
Lots 5 & W. 50 Ft. of 6, Auditor's Subd. 170 - Map 5
Sign Permit
Go
Michael D. Corbin, 2179 Noble Lane
Lots 15, Part of 15 and 16, Block 3, Abraham Lincoln Addn. to Lakeside Park-Map 5
Street Front and Side Yard Variances for Garage
ONOUO
ONO~O
- '' ,~ / /
,~ON ,'o,~ ~ZON',,,,~ ,~,~s,, ~ ~ ,¢ ~ ~
IS T~ A PETITION A~A~D? YES ~, NO ~
State ~h~ this ~ezoning~ i~ g~e~
general pu~ose ~d intent of the ordin~ce to sech~
safety, general welfare, and s~st~tial Justice
Reslaents ~8 o~ners of proper~y ~1t~n 350
.I
That Block 26 be rezoned. Date .10-26-81 i~,
Council Action
Resolution No. D~te
KEY FOR MAP
BLUE = A-2
RED = A-1
ORANGE = B-DUPLEX
E ON
i6
?~ bJock ii Oil mdrih
. I?
:,24
~'-.:
II
LANARK
ROAD
APPLICATION FOR VARIANCE
CITY OF MOUND
NAME OF
APPLICANT
Address
INTEREST IN PROPERTY
Tele phone 4~'
Numb
FEE $ 0..5-, 0 0
ZONING
PROPERTY
ADDRESS., .__'D//
PLAT PARCEL
LOT_, / BLOCK /
FEE OWNER (if other than applicant)
Addre s s
Te le phone
Number
VARIANCE
FRONT
YARD
SIDE
YARD
REQUESTED: NOTE:
/4 FT.] ACCESSORY
BUILDING [ FT.l
FT.] LOT SIZE [ FT.I
[ ..~FT.I LOT SQ. ~,~ ~///
N. C. U. * or
1. Attach a survey AND scale drawing
showing location of proposed improvement
in relation to lot lines, other buildings
on property and abutting streets.
2_. Give ownership and dimensions of
adjoining property. Show approximate
locations of all buildings, driveways,
and streets pertinent to the application
by extending survey or drawing.
3_. Attach letters from adjoining affected
property owners showing attitude toward
request.
OTHER (describe)
. _ . . ' - .' . .,.. ' ~' :_ < .--..
/~ ~ ~ , , . zi , ~' ~ -' ~X
. ./ ~ , /_
.~ A bmld~ng permit must be applied for within one year from the date of the
~ council resolution or variance~an~ed becomes null and void.
~ Variances are n~ansferab~J ~:~ ~ / /
_OCT '.5 'APPLICANT. r5. ~.,...~~.ECr<-e"¢~ DATE
PLANNING COMMISSION RECOMMgNDATION Approval of the wooden walkway deck as
Li~ requested with stipulation it be no more than 18 inches off the ground with no rail.
DATE; October 26, 1981
COUNCIL AC TION:
RESOLUTION NO
DATE
;:-'non- conforming use
/
CTq'4 %uqq, .~;., y'i...;~J .,fq,o4,~q I. ' /.
:.Ca,'.~,,.,; j.0 ,,% ,o!.., }'[-:aD , ,/
·
~o?~
APPLICATION FOR VARIANCE
CITY OF MOUND
NAME OF
APPLICANT Continental Telephone Company
FEE $ 25.00
ZONING Commerci al
PROPERTY
ADDRESS 5468 Lynwood Boulevard
PLAT 61650 .. PARCEL 1225
Address 3500 West 80th Street .LOT 12-13-14-15 BLOCK
Te le phone
Minneapolis, Minnesota 55431 Number ~35-77]5 ADDITION Koehler Addition to Mound
P.I.D. 13-117-24-33-0030
INTEREST IN PROPERTY Leased from owner
FEE OWNER (if other than applicant)
Address 3820 Toqo Road, Spring Park,
James Riley
Te le phone
Minnes0ta 55384 Number 471-9074
VARIANCE REQUESTED:
;treet
FRONTI FT.,'] ACCESSORY[
YARD BUILDING
YARD FT LOTSIZE
· FOOTAGE
NOTE:
F T:]
FTJ
N. C.U. or
OTHER (describe)
REASON FOR REQUEST:
1. Attach a survey AND scale drawing
showing location of proposed improvement
in relation to lot lines, other buildings
on property and abutting streets.
2. Give ownership and dimensions of
adjoining property. Show approximate
locations of all buildings, driveways, .
and streets pertinent to the application
by extending survey or drawing.
3. Attach letters from adjoining affected
property owners showing attitude toward
request.
Street front variance of fence heighth
A building permit must be applied for within one year from the date of the
council resolution or variance granted becomes null and void.
Variances are n~~ra~. ///~.z~-J
APPLICANT _ _ · DATE 10/1 2/81
S~a~tur e
Gerald M. Jense-n, Division Equipment Enqineer
PLANNING COMlV[[SSION RECOMMENDATION Approval of a variance for a 6 foot high
chain link fence providing it be no Closer than 10 feet to any curb and providing this
doesn't conf]|ct w|th any recommendation of the Po]ice and Public Works Departments.
--~ DATE October 26: 198]
COUNCIL AC TION:
RESOLUTION NO
DA TE / O ~] ~]
*non- conforming use
l._07-
IIol
, Continental Telephone
o! Minnesota, Inc,
3500 ~es~ 801h Si,, Sune 500
Minneapolis, AAinnesoto 55431
(612) 835-7715
November 4, 1981
Jim Elam
City of Mound
5341 Maywood Road
Mound, MN 55364
Dear Mr. Elam:
SUBJECT: Security Fence at
5468 Lynwood Boulevard
Enclosed is a revised drawing of the fence location showing the 10 foot
setback along both streets except in the northwest corner of the property as
we discussed.
Call me if you need any additional information.
Sincerely,
Collin Holzwarth
Building Engineer
CH:jl
Enclosure
xc: J. Riley w/Enc.
C. Ferrell w/Enc.
i.
iF'*
~,, CP./..r, '
',..277;~ ~' ..... J ....
i.J ',.'J'-,'t ,t ./Ar,.',/
1981
AVPLICA~T
APPLICATION FOR S'Fi~EI;T VACATIO.'.'
, CITY 0I" 140UN[~
,';l£,~',0o ;'4 //~', '~ d / .~, IM /,)
LEGAL DESCRIPTION OF PROPERTY OWNED BY APPLICANT: PLAT PARCEL
LOT ,~ /'~ ~'// BLOCK ~ SUBDIVISION ZDF~.~,j
STREET TO BE VACATED
,//4,'~','~,---,~ ,,~, ,~
REASON FOR REQUEST BM~=
SIGNATURE OF APPLICANT
/ ;
Applicant's Interest jn Property
Residents and owners of property abutting the street to be vacated:
Recommended by Utilities: NSP -.- ; Minnega$co...~ .... .$._~ontinenta] Tel.
_. ,.~. ~.~- ,d~
Recommended by City: Public Works..LZ~_~; Fire Chief m:~.J;, Engineer ~
Police Chief .
Planning Commission Recommendation: Vacate Street as requested, but retain an
utility easement over the entire 30 feet of right-of-way for existing Sanitary Sewer
and Gas line and that no further filling, excavating or construction be allowed on
the vacated street.
Date
October 26, 1981
Council Action
o
z
3~ 0 ~
DEVON LAi~
11,4 I
ROAN( ~(E LANE
Minnegasco
Minnesota Gas Company
733 marquette avenue, minneapolis, minnesota 55402
October 21, 1981
Mr. Jon Elam
City Manager
City of Mound
5341Maywood Road
Mound, Minnesota
55364
RE: Proposed vacation of Oxford Lane from Aberdeen
Road to Hanover Road
Dear Mr. Elam:
Here is a sketch showing the location of our existing 5/8-inch PE
gas pipe within that part of Oxford Lane proposed to be vacated.
Provided our gas pipe can remain inplace and will not be affected
by any future filling, excavation, or construction, we have no
objection to this proposed vacation.
I would appreciate your keeping me informed on this matter.
Very truly yours, '
William R. Schram
Real Estate Technician
WRS/lck
Attachment
~1Oll
COMBS-KNUTSON ASSOCIATES, INC.
CONSULTING [NGINEEP,$ ! LAND SUI~V[YOfl$ · ?LANN[I~S
October 23, 1981
Reply To:
12800 Industrial Park Boulevard
Plymouth, Minnesota 55441
(612) 559-3700
Mr. Jon Elam
City Manager
City of Mound
5341 Ma. ywood Road
Mound, MN 55364
Subject:
Proposed Vacation of Oxford Lane
from Aberdeen to Hanover
File #2113
Dear Mr. Elam:
We have reviewed the proposed vacation of Oxford Lane as
you requested. We see no problem with vacating this unimproved
street. The undeveloped lots in Block 9 could be served in the
future by extending Hanover Road.
The City should retain a utility easement over the entire
30 feet of R/W if Oxford Lane is vacated. Existing sanitary
sewer is located approximately in the center on a portion of
the R/W.
If you need any further information, please contact me.
Yours very truly,
McCOMBS-KNUTSON ASSOCIATES, INC.
jo~~hn Cam~~
lr
Minneapolis- Hutchinson - Alexandria- Eagan
printed on recycred paper
Iio ?
CITY of XlOUND
5341 MAY~,~,_~Q~, ROA[,
MOUND1 MINNESOTA
(612) 472-1155
October 21, 1981
TO:
FROM:
SUBJECT:
City Manager
Public Works Department
Vacation of Oxford Lane
The Public Works Department can foresee no future need for that portion
of Oxford Lane from Aberdeen Road to Hanover Road.
A utility easement will have to be kept on the first 125' south from
Aberdeen Road as there is a sewer main and manhole in that portion of
the right of way.
Respectfully,
Robert Shanley
Public Works Director
Iio?
CITY
of MOUND
:5341 MAYV','OO~. ROAD
MOUND MINN£E,CTA 55364
(612) 472-I 15f_
TO:
Minnegasco
Northern States Power Company
Continental Telephone Company
Public Works Department
Police Department
~ire Department
Engineer
FROM: The City Man.ager
SUBJECT: Vacation of Street - Oxford Lane from Aberdeen Road to Hanover
Road
The City of Mound has a request for the vacation of Oxford Lane from
Aberdeen Road to Hanover Road. See copy of map attached.
Do you foresee a need for this portion of Oxford Lane (unopened)?
JE/ms
Encl.
I ~ ~-~
APPLICATION FOR VARIANCE
CITY OF MOUND
NAME OF
APPLICANT~,~/
FEE $ Z~--~--~' ~
PROPERTY
ADDRESS
PLAT
INTEREST IN PROPERTY
PARCEL
/ ~2 B LOCK
Telephone
Number ~ ~-~~ ADDITION ~
~ -/z' -/z? - o~ -3/-~
FEE OWNER (if other than applicant)
Address
Telephone
Number
VARIANCE REQUESTED:
FRONT
SIDE FTJ
NO T E:
ACCESSORY
LOT SIZE ~
N. C. U.~ or
1, Attach a survey AND scale drawing
~howing location of proposed improvement
in relation to lot lines, other buildings
on property and abutting streets.
2. Give ownership and dimensions of
~djoining property. Show approximate
locations of all buildings, driveways,
LOT SQ. ~ and streets pertinent to the application
FT. FOOTAGE ~/,~.O~'-- by extending survey or drawing.
- 3. Attach letters from adjoining affected
property owners showing attitude toward
request.
OTHER (de scribe ~~~~~.~
REASON FOR REQUEST:
A building permit must be applied for within one year from the date of the
council resolution or variance granted becomes null and void.
Variances are not t~r~ferable~ ~
0 i~PPLicAN~ /~r/~ _DATE
Signature
PLANNING COMMISSION RECOMMENDATION Granting the variance as requested and
recognize the existing nonconformancies. (Lift house and make a two story home of it
and add a deck 6' X I6' on Lake Front of house)
COUNCIL ACTION:
RESOLUTION NO
DATE / / I 0
*non- conforming use
CERTIFICATE of §URVEY
UNDFll /AY DUi[CT SUI'~I¥1SION AND IHAI I AM I DUtY ~GISTERED [AND SUliYETO!
UNDEI THE LA, W~ OF~E S~ATE OF MINNE$OIA,. ..
WAYS[ l~ I.C)I~G ~[:G. NO. 7612
O]:LR
SCALE
2021 EAST H[NN£PIN AYE. · SUITE 231 · MINNEAPOLIS, MINNESOTA 55413 · i&12) 331-1&S0 i"' ' 50 feet
Section 18, Township 117 North, Range 23 West
9
r,'ee°~,~4
Loi~e ~1iooel°ol~°
I0
Survey for: Tom Ddvison
Survey
· DENOTES IRON PIPE MONUMENT FOUND
O DENOTES IRON PIPE MONUMENT SET
NO VISIBLE ENCROACHMENTS ON OR FROM
LOT IO
of: Lot I0, Block I, "SHADYWOOD POINT"
CITY OF MOUND
HENNE PI N COUNTY, M 1NNESOTA
/111
November 6, 1981
TO:
FROM:
City Council
Jon Elam, City Manager
NOTE: Refer to Planning Commission Minutes for changes in the application
agreed to by Century Auto Body.
JE:fc
111,3
APPLICATION FOR VARIANCE
CITY OF MOUND
ZONING
.ME OF
APPLICANT
INTEREST iN PROPERTY
PROPERTY
ADDRESS
PLAT ~, /~ ~0~ PARCEL
k,/~C ~-0O LOT.J4 ~5 ~ BLOCK
Telephon~
DmTION
13-119- ~ 3
17o
FEE OWNER (if other than applicant)
Addre s s
Telephone
Number
VARIANCE REQUESTED:
FRONT IYARD FT.J
ACCESSORY
BUILDING
SIDE J
YARD FT
LOT SIZE
I
LOT SQ.
FT. FOOTAGE
N,C.U.-~ or.,.
OTHER (describe)
REASON FOR REQUEST:
NOTE:
1. Attach a survey AND scale drawing
showing location of proposed improvement
in relation to lot lines, other buildings
on property and abutting streets.
Z. Give ownership and dimensions of
adjoining property. Show approximate
locations of all buildings, driveways,
and streets pertinent to the application
by extending survey or drawing.
3. Attach letters from adjoining affected
property owners showing attitude toward
request.
A building permit must be applied for within one year from the date of the
council resolution or variance granted becomes null and void.
Variances are not .transferable.
Signature
PLANNING COMMJ[SSION RECOMMENDATION Approving the 4 Ft. X 8 Ft. sign if
attached to the building and illuminated internally only and provid[n9 there are no
flash~a9 l~9hts or arrows.
DATE October 26, 1981
COUNCIL ACTION:
RESOLUTION NO.
DATE ///V
'non-conforming use
_~111
i 3NI~IVV,,i
xc]oe o_Lnv
'I79£§§ NIAI 'CINFIOIAI
'CIA-18 NI'13~IOHS ,~[:c:jc~
(]NV
N
SlOqCu,~$
s§eq
lelei~l XpJm, S
'alqelsn.ip¥ ~.
sqlnE]
8L. ql!~ ~oJJV
5ujqseld ,OLd'
seqnl ~,nd~,nO.!H
~,uaosa~onl.-i ,,g~ ~
s!nbJei~l pe~,q§!-I
peP!S elqnoo 8xl~
APPLICATION FOR VARIANCE
CITY OF MOUND
FEE
ZONING
NAME OF
addres 5
INTEREST IN PROPERTY
Telephone
PROPERTY
ADDRESS~
PLAT ,, PARCEL
__LOT ~ B LOCI<
Number J~7~ ADDITION
FEE OWNER (if other than applicant)
Addre s s
Telephone
Number
VARIANCE REQUESTED:
FRONT
YARD
SIDE
YARD
FT.]
FT.[
j AR
RD
N. C. U.* or
OTHER (describe)
REASON FOR REQUEST:
ACCESSORY
BUILDING
LOT SIZE
LOT SQ.
FOOTAGE
NOTE:
FT.[
1. Attach a survey AND scale drawing
showing location of proposed improvement
in relation to lot lines, other buildings
on property and abutting streets.
2. Give ownership and dimensions of
adjoining property. Show approximate
locations of all buildings, driveways,
and streets pertinent to the application
by extending survey or drawing.
3. Attach letters from adjoining affected
property owners showing attitude toward
request.
i
,J ,j
A building permit must be applied for within one year from the date of the
t d'o~{ncil resolution or variance granted becomes null and void.
Variances are not transferable.
APPLICANT ,-~-."/'- .,~ ~; 4,-,x~.-- DATE
Signature
PLANNING COMIvL[SSION RECOMMENDATION Approval of a 6 foot side yard variance
and a front yard variance for the proposed garage. DATE October 26, 1981
GOUNGIL AGTION: RESOLUTION NO.,
DATE ?//7
*non- conforming use
!/
Fl~t of Survey
Lot- 14, 1~, ~nd 16, Block
L~ooln Addition to L~l~n~d~
~ound, }'J nn~ ~onka
/ C~rtl£icate of Survey:
I h~reby certify that this is a ~a-ua and cor-
rect repr~mentation of a sue-ray of the boundaries
.f of the/South 38 feet of L~t 16, all of Lot 15, and
that p~r% of Lot 1~ lyin~ East of the Southerl~ extenst0n
of th~ West l~ne of said L~% 15~ a]_l l~ Block 3~ "Abraham L~ncol~
Addition %o Lakeside ~ar~, Fou~, F~t~n~tonka. together ~lth the North~es~r~
~f of ~ca~d stye% ad Joking ~aid ~% 15 ~d ~aid ~lon of said ~% 14,
~ ~e location of a~ e~mt~g ~ngs' if ~, t~on. It ~es not p~
Scale~ 1" = 30'
I~t. : 3-1-77
Land S~n-veyor and Planner
///g
Iff
/ Certificate of Survey:
I hereby certify that this is a ~ and cor-
j r~ct representation of a s~n-vey of the boundaries
f/' of thelSouth 38 feet of Lot 16, all of Lot 15, and
that part of Lot 14 lying East of the Southerly extens~0n
of the ~;est line of maid L~t 15, all i~ Block 3, "Abraham Lincoln
Addition to Lakeside Park, Mound, Minr~tonYa", together with the Northwesterly
half of vacated street adjoining said Lot 15 and said portion of said Lot 14,
and the location of all ex/sting buildings, if an~, %?~reon. It doom not pur-
port ~o show encroachments, ~f any.
Scale: 1" = 30'
Data : 3-1-77
: Iron =mrk~r
Gordon R. Coffin Reg..t~ 6064
Land Surveyor and Pl-ouer
Long Lake, Minno ~ota
November 6, 1981
TO:
FROM:
City Council
Jon Elam, City Manager
Most everyone I've talked with has been amazed at how well the traffic has
been flowing through downtown since 110 reopened. The reason, it seems,
is that the intersections main roadblock, the three-way signal has not been
reactivated.
The County, it seems, is willing to deactivate the signal and put it in a
flashing position - red position which indicates a stop sign. They do
require a Resolution from the City Council before they will do this.
It seems to me, it's worth a try. If problems arise, we can always go back
to the signal by just flipping a switch in the signal.
JE:fc
~o Jon Date 10-30-81
From ~ Deloris
Subject: Refund of outside reader ..... $20.00
Ronald Johnson, 4416 Dorchester Road, demolished
his cabin and had a meter and reader. I charged
Mr. Johnson for an outside reader on his Building
Permit which should be refunded as it was paid
some time ago.
//22.
BUILDING PERMIT APPLICATION
CITY OF MOUND
5341 Maywood Rd., Mound, Minnesota
OWNER
DATE
TELEPHONE NO
d
^D, RESS ) -4,
LOCATION OF PROPOSED IMPROVEMENT
LOT BLOCK
COMPLETION DATE
APPLICATION REQUIREMENTS
Survey [] Energy Comp.
Plat Plan [] Elevations
Structural Plan [] Watershed
TYPES OF CONSTRUCTION
NEW CONSTRUCTION
~ Single Family Sq. Ft
~ Multi-Family Sq. Ft
[] Commercial Sq. Ft.
[] Industrial Sq. Ft
~ Garage o Size Sq. Ft
[] Deck - Size Sq. Ft
O Patio - Size Sq. Ft
[] Fence - Size Ln. F
PERMIT FEE $ ~ ~ 1, O0
PLAN CHECK FEE $ ) ~.~O. ,5 0
SURCHARGE
WATER CONN. FEE $
TAPPING FEE $
EXCAVATION FEE $
TOTAL $
PID ~' / Q
TELEPHONE
ESTIMATED VALUE ~/~,
O
ZONING
-117 - 3 / o l Y,
'~ 79,90
PERMIT APPROVAL
FINAL INSPECTION
REMODE lNG
[] Add~t~or~jcl,,--~ r~-~$q. Ft..
[] Interiowg~
~ bUD ~vel -
~ Siding
~ Utility Bldg. - Si~ Sq. Ft
~ Council Re~lution No
DATE
DATE
OCCUPANCY CERTIFICATE
DATE
[]
[]
[]
PLUMBING PERMIT NEEDED: {~/1-,
In case permit is granted, I hereby agree to do the proposed work in accordance with description above set forth and
according to the provisions of all ordinances of the City of Mound and of all s~alutes of the State of Minnesota in such
cases made and provided. All building permits expire ~ after date ~og~uanee. /' /~
November 6, 1981
TO:
FROH:
City Council
Jon Elam, City Hanager
Enclosed is Chris Bollisls report where he is making a recommendation to
eliminate the woodchipping program in 1982, because of its
ineffectiveness. I support this recommendation, but if the Council does
wish to continue it then I would suggest that fees be increased to at
least $50.00 per hour with a minimum fee of $25.00 per visit. This will
at least made it more in line with what the private contractors charge
and should encourage more people to have the tree contractors do the
full clean-up instead of just cutting down the tree and leaving the
clean-up to the City.
JE:fc
October 26, 1981
TO: City Manager
FROM.: Park Director
SUBJECT:. Wood Chipping
As you requested at our budget meeting, I have been looking over the
services provided by my department to see which ones are necessary and
if any can be terminated.
As a result, I have come up with one service which I recommend that we
eliminate. That is the Wood Chipping Program. This service was a by-
product of our Dutch Elm program. We purchased a chipper to aid in
disposal of Elm trees and then offered it to the public for a fee to
help them dispose of tree and shrub trimmings.
The cost for this service is $20 per hour for the chipper, dump truck
and two men to operate.it. This cost is then broken down into 15 min-
ute periods at $5.00 each; so for each 15 minutes that the chipper and
me~ are on the job, the charge is $5.00. There are several problems
that arise from this service:
These rates now do not cover the cost of wages or equipment. A
rate which would cover cost would be a minimum of $60 per hour;
$30 for the two pieces of equipment and $30 per hour for the two
men. This would make the minimum charge $15 which would probably
eliminate most calls for the service.
Poor cooperation by customers. Many people feel that because they
are paying for the service that no preparation is required on their
part. We ask that the brush be stacked neatly by the curb so we
can feed the chipper in the most efficient manner. Many times we
arrive at the job site to find the branches scattered all over the
yard or the pile down in the back yard or worse yet, the pile so
tangled up that we would have to spend 1/2 hour just getting it
ready to chip° The chipper is also limited as to the size of
branches that can be chipped. Because of this, we cannot take any-
thing over 2 inches in diameter. As a result of these limitations,
the service is not very complete and some people just do not under-
stand why we sometimes can't finish the job as they expected.
Time Limitations; Since the Park Department has only two employees,
we have had to limit the amount of time spent on chipping to one
day per week. In most cases, we can finish all appointments in
one day, but there are occasions when we can't, so then we must
allot part of the next day for chipping or explain to the customer
that they must wait un~il the next week.
Memorandum to: The City Manager
Subject: Wood Chipping
October 26, 1981 - Page 2
The most important time problem and the one which I feel is the
biggest reason for eliminating the service, is that it reduces our
park maintenance time to 3½ or 4 days per week. I feel that the
time spent on a wood chipping program which benefits so few and
does not pay for itself would be better spent on the upkeep and
development of our parks which benefit so many.
Another time limitation has resulted from our personnel reorgani-
zation which has added more duties to my position, which in turn
allows me less time for maintenance work.
Maintenance Cost. Although the chipper is well made, there are
regular costs for repairs to keep it operating properly. Blade
sharpening is required about once a month at a cost of $40 plus
two hours of our labor to reinstall them. Regular service (oil
change, etc.) is done about once every three months. This Spring
we did have a major breakdown which resulted in repair costs of
over $500 and the machine was out-of-service for two weeks.
As a final note, we seem to have a great difficulty in collecting our
bills for this service. The percentage of non-payment or slow payment is
quite high when figured against the total number of jobs. I am not sure
as to the reason for this, but when a $10 bill must be rebilled three
times and then taken to Small Claims Court, the cost for the service climbs
even higher.
Chris Bollis
league of minnesota cities
November 2, 1981
TO:
Mayors, Managers and City Clerks
FROM:
Stan Peskar, General Counsel
RE: Federal Tax Status of Local Fire Fighter and Police Relief Association
Information and Action Request
As man~ of you are aware, the federal IRS, based on revenue ruling 81-58, will rescind
the tax exempt status of all those Minnesota Firefighter and Police Relief Associations
which are now exempt under Internal Revenue Code Section 501 (c)(4), beginning with
calendar year 1982.
cle Internal Revenue Service takes the position that 501 (c)(4), is an inappropriate
assification for exemption for such relief'associations, since they feel that benefits
to the general public from operation of these associations are secondary to the purpose
of providing benefits to the individual members. The effect of taxability, of course,.
would be that any taxes paid from the Special funds~Of the aSsociations would deminish
special fund assets needed to fund promised pensions and other benefits and would thus
directly add to fund requirements to be met out of the state Police and Fire Aid pro-
gram and local tax levies for the special fund of each association.
The state-wide organizations of the Minnesota Police, full-time firefighter and volunteer
firefighters relief associations have communicated the taxability problem to the Minnesota
congressional delegation, and League staff has followed up with information on the impor-
tance of these matters to Minnesota cities. ~ legislation is being sought to
authorize exemption of these orqaniza,tions in a mann~F§imilar to that provided for
teachers' retirement under section 501 (c)(11). This effort miqht be asslsteo Dy your
communication with your representative a~d Senators Durenburger and BosChwitz.
S~ould it continu~ tO appear that these associations are not e×mmpt undmr present law
~n-d should the attempt to secure federal legislation fail, or remain in doubt past
November, a League task force ot city ot~iciais will likely be crea~ed ~o develop
Toolicies proposing legislation a~ ~he st'ate level, to cieari¥ make ~h~s~ celieT associa-
ns governmental entities Or instrumentalities, and thus not subject to federal taXati~on.
If you or a representative from your city are. interested in participating on this ta~k
force should one be needed, please drop me a letter.
or the immediate future, your concerns about this IRS policy change should be conveyed
to the Minnesota Congressional delegation. Later we may need to bring the problem to
the attention of Minnesota legislators.
300 hanover building, 41~0 cedar street, saint paul, minnesota 55101 [~12] 222-2861
SP:rmm //~ '~
REED & POND
ATTORNEYS AT I-AW
MOUND. MINNESOTA 5~3~4
November 2, 1981
Mr. Jon Elam
City Manager
City of Mound
5341 Maywood Road
Mound, M2~ 55364
RE: Downtown Advisory Committee Meeting of November 2, 1981
Dear Jon:
Downtown Advisory Committee had its meeting on November 2, 1981
and recommended approval of the follo~ing amounts for pass on the
downtown plan:
Step 4: Plan Concept Development
Phase I: Summary Analysis $578.00
Phase II: Group Workshop/Public Input $940.00
Step 3:
Phase III: Public facilities not to exceed $300.00
Also enclosed is a copy of Rob Chelseth's memorandum outlining
the various steps yet to be completed. Would you please put this
item on the next City Council Agenda.
Very truly yours,
REED & POND
PLP/jh
enc.
472-1
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
Downtown Advisory Committee
Rob Chelseth, City Planner
2 November 1981
Program Status
At this time, the vast majority of work on three of the four
phases identified under Step 3 has been completed. The following
outline summarizes the current project status:
Step 3: Total Budget - $4,326.-
- complete - Phase I: Commercial Surveys
o complete - Phase I1: Land/Building Survey
- to be done - Phase Ill: Public Facilities - $1,296.
- complete - Phase IV: Development Programs
Step 4: Plan Concept Development ($2,118 - not started)
~r~~~--. Phase I:
~~/ ~-. Phase Il:
~'~--~" Phase Ill:
Summary Analysis ($578.)
Group Workshop/Public Input ($940.)
Plan Draft ($600.)
Step 5: Plan Refinement - Project Feasibility ($4,326 - not started)
CITY of MOUND
MEMORANDUM
5341 MAYWOOD ROAD
MOUND, MINNESOTA 55364
(612) 472-1155
TO:
FROM:
DATE:
SUBJECT:
Downtown Advisory Committee
Rob Chelseth, City Planner
5 November 1981
Notice of Next Two Key Meetings
At its last meeting, the Downtown Advisory Committee scheduled two
very important meetings. Please note the new locations for the
meetings and save a place for them on your calendar.
A one hour luncheon meeting is scheduled for Monday, November 9th,
12:00 Noon at the Park Bench Eatery in Spring Park (on County Road
15) This is a critical meeting, as the Committee will be reviewing
the background information developed so far in preparation for our
next planning meeting.
An evening I'Needs Assessment Workshop" has been scheduled for Wed-
nesday, November 18th, at 7:00 P.M. at the Community Services Center
in Mound. The Downtown Advisory Committee will meet in the large
meeting room; to get there, ente~ from the parking lot on the North
side of the building.
AGENDA - NOVEMBER 9th, 1981
1. Review of Minutes from the November 2nd meeting.
2. Complete discussion of Section C. Public/Private Development
Programs/Budgets
3. Review of all background study materials.
4. Discussion of format for November 18th meeting.
5. Other business
6. Adjourn
Again, these next two meetings will involve preparing for and making
key decisions affecting the entire outcome of the process.
We hope you will be able to attend.
/13o
l-iinutes - D0wn 0wn A0vis0ry CommitTee- i<0ve r ber 2, 1951
12 noon at Branty's
Present, Paul Pond, George Stevens, Orv Huseby, Ron Carlson, Donna
Quigley, Georg[ann Daly, Ron Norstrem, Bob MeClelland, Mary Campbell
Also: Rob Chelseth, Diane Arneson
A group photo was taken outdoors.
hi~w]tes of the October 19th meeting were approved.
Rob Chelseth will check with Pete Ward regarding retail merchant
survey. Will respond to Paul Pond before the next meeting.
George Stevens reported there are plans in the private sector for
development of a shopping mall in'Mound. Location not disclosed.
Proposed center may be 90,000 sq. ft. and house a new Super Valu,
Snyders,-and 20 other businesses. George Stevens will keep the
committee advised as plans progress.
Chelseth reported on pro~ram status. The s,~mmary analvsis of Step 4
will be 'presented at the November 9 meeting. A group workshop of
the committee as a whole is planned for Wednesday evening, November
18th ar the School District Offices (conference room) from 7 p.m.
until finished (Between 10 .and 11 p.m.) Diane Arneson will reserve
the room. Ideas for the final plan will be offered by members that
evening - ranked ~ prioritized. This is not a public meeting. Mary
Campbell will ask Gerry Longpre for Chamber workshop materials for
committee per~sal before evening workshop.
%.~hen committee ideas have taken shape, Chelseth will solicit inp~]t
from key groups in the commn]ity and the public at large.
~qcClellsnd suggested meetings be moved to the Soda Fountain. Chelseth
will inquire whether meeting space is available and advise members
by mail with meeting notice.
Input will be solicited from co,~ncil members, Chamber members, and
~ound merchants. Arneson sug%ested oublic meetings be held two
1131
DAC/2
evenings at the Westonka Comn~n~iry Library, Key ~'o,~p contacts co'lid
be scheduled for December° No l~blic meetil~s ,mt[1 after Janizary 1,
1982. The Chamber's board meets November 24th at ? a.m. Merchants
meet December 1, Use the Community Services brochure list of
organizat ions,
Norstrem moved and Huseby seconded a motion to authorize spending
funds for the parking space co, mt, not to exceed $300 - a portion
of Step 3, Phase II $1296 which has not yet been approved. Motion
carried.
Norstrem moved and CamDbell seconded a motion to recommend funds
for Step 4, Phases I & II. Motion carried.
November 9th meeting at noon in new location. Check meeting notice.
November 18th eveni~ workshop meeting at Westonka Community Center,
conference room 7 p,m. start. Security person Will stay only as
late as 11 p.m,
Adjournment was at 1~20 p.m.
Diane Arneson, Secretary
/13fL
.;88-B
Casualty & Surety Division
110 South ?th Street
Minneapolis, Minnesota 5540~
340-5o00
October 28, 1981
Wurst, Carroll & Pearson
1512 1st Bank Place W.
Minneapolis, MN 55402
Attn: Curtis A. Pearson
RE: FILE NO: S 37 278316 RG
INSURED: CITY OFMOUND
RE: STEVE R. BOI~Nq{OFF
Please excuse my lat~ response to your letter of 10/1/81. This file
got sidetracked in our paper processing system and for that reason
I am late in responding.
During th~ course of investigation of this loss I convinced myself that
the City of Mound has ample notice of this situation. The claimant's
Mr. &Mrs. Bohnhoff have a complet file and documenting the fact that
the City of Mound had notice of this problem back in the spring of 1978.
The City of Mound had notice that this was causing damage to their boat
house in the spring of 1979 and the City of Mound knew of the existance
of this pipe 'as the City of Mound personnel informed Bohnhoff that the
pipe actually existed. In addition there's visual evidence that this pipe
existed because it drains to the surface on the beach of the lake near
the Bohnhoff's property.
Again I would like to call your attention to the definition of t~e word
occurrence in ourpolicy. Once a condition or an occurrence is noted
and the insured has notice of this problem coverage ceases. Any events
that occur after this notice would not be considered an accident or an
occurrence under the terms of our policy. Therefore I would have seemed
tome that in as much as the City had notice back in 1978 or 1979 that
this problem exists and that it was damaging Bohnhoff property that there
would be no coverage under our policy according to the wording as described
above.
Under these circumstances I have no basis upon which to change our earlier
position on denial of coverage.
Very truly yo~,
Edward L. Sonnenburg
November 6, 1981
TO:
FROM:
City Council
Jon Elam, City Manager
Enclosed is the package on the renewal of the City of Mound's Franchise
Agreement with the Minnesota Gas Co.
I have developed a Franchise Fee Proposal. It says basically that by
ordinance that we can charge a Franchise Fee up to 4% of the total gross
revenues generated in the City of Mound the previous year.
For the 12 months through August 31, 1981, that amounted to $1,730,OOO.
Thus a 1% fee would generate $17,3OO; 2% - $34,600; 3% - $51,9OO; 4% -
$69,200. In 1982 rates are estimated to increase around 25%. Rate
increases beyond that will be increasing rapidly as gas is decontrolled.
We all know our present financial condition. 1982 promises to be one of
the most difficult years for the City of Mound in a long time. 1983 and
beyond could even be worse with a loss of Revenue Sharing, etc. We need,
I think, an additional $100,OOO. by 1983 to avoid having to reduce City
Staff another 3-4 positions (beyond the 8-9 we are already down)
January l, 1983.
Clearly I just don't know where the financial resources are going to
come from. Thus a Franchise Fee, while not the best choice, appears to
me to be the only feasible way to generate the necessary income for
at least the next 4-5 years.
I, thus, recommend the Fee be put at the 4% level, but that we keep
the revenue set at the $1OO,OOO. level and as natural gas rates increase
in the future that the Fee be reduced to 3%, say in 1985, 2% in 1990
and 1% in 1995.
JE:fc
1135"
A. THOMAS WURST
GERALD T. CARROLL
ALBERT FAU LCON £R
JAMES D. LARSON
LAW OFFICES
WURST, CARROLL ~x PEARSON
MINNEAPOLIS, MINNESOTA 55402
October 22, 1981
TELEPHONE
(612) 336-8911
Mr. Jon Elam, City Manager
City of Mound
5341 Maywood Road
Mound, MN 55364
Re: Gas Franchise Fee
Dear Mr. Elam:
You have asked whether the City of Mound might impose a
franchise fee upon the Minnesota Gas Company upon the renewal of its
franchise. More specifically, you asked whether a fee based upon a
percentage of gross receipts could be imposed.
It is clear that the City may impose a franchise fee upon the
gas company, and it may be based upon gross operating revenues or
gross earnings from operations in the municipality. Minn. Stat. 216B.36,
the Minnesota Public Utility Act, specifically provides for such a
fee where it provides in relevant part:
"Any public utility furnishing the utility
services enumerated in Laws 1974, Chapter 429 or occupying
streets, highways, or other public property within a
municipality may be required to obtain a license, permit,
right or franchise in accordance with the terms, condi-
tions, and limitations of regulatory acts of the municipality,
including the placing of distribution lines and facilities
underground, and under the license, permit, right, or
franchise, the utility may be obligated by any municipality
to pay to the municipality fees to raise revenue or defray
increased municipal costs accruing as a result of utility
operations, or both, including but not limited to a sum of
money based upon gross operating revenues or gross earnings
from its operations in the municipality so long as the
Mr. Jon Elam
October 22, 1981
Page 2
public utility shall continue to operate in the munici-
pality, unless upon request of the public utility it is
expressly released from the obligation at any time by
such municipality."
Other cities currently have such a franchise fee in effect:
Albert Lea (3% of gross receipts); Benson (5% of gross earnings); Marshall
(5% of gross earnings); North St. Paul (not more than 4% of gross operating
revenues). We enclose these franchises for your review.
We have discussed the issue with Minnegasco. They concede that
the City may impose such a fee by ordinance. We believe that they will
attempt to discourage the City from imposing such a fee. We enclose a copy
of a letter from Minnegasco which briefly states some of the policy
considerations they will probably bring before the Council.
The imposition of such a fee will require changes in the Minnegasco
billing process. They will be required to separate Mound customers from
the rest of the billing schedule. The fee may be imposed only upon gross
operating revenues from Mound service. The utility will also impose an
additional charge for the billing cost associated with collecting the fee
for the City. Current Public Utility Commission rules require that the
franchise fee appear as a separate item on the customer's bill.
.To summarize, in our opinion the franchise fee may be imposed,
it may be a percentage of gross operating revenues, and it must be imposed
by ordinance. Essentially, the question is one of policy for the Council.
If you have any questions regarding this matter, please feel free
to contact us.
JDL:cnm
Enclosures
Very truly yours,
~s D. Larson
/137
Minnegasco
Minnesota Gas Con~l)any
733 marquette avenue, minneapolis m~nnesota 55402
October 20, 1981
Mr. Jim Larson
1100 First Bank Place West
Minneapolis, }~ 55402
Dear Mr. Larson,
Enclosed is a copy of the letter from the Minnesota Department of
Public Service that we discussed in our recent phone conversation.
Please also note that the following arguments present a strong
case against the use of this type of taxation.
This tax is:
Regressive per $1,000 of home valuation.
An extra burden on commercial and industrial activities in
the community and impairs their competitiveness and thus
their growth.
A heavier load on the residential customer than on the
commercial or industrial customer.
~A necessity which is exempt from state sales tax in the
winter months.
Discriminatory if placed only on gas and not on electricity,
oil, propane, coal and wood.
Sincerely,
D..-M. LeAtherman
Central Region Manager
544-9442
DML:nlk
January 6, 1976
TO:
[ ROH:
ALL I1TILITI[s UNDER 'TILE JURISDICTIr)N OF TIlE lllI'![!ESOTA DEPART!IEr:T
OF PUgLIC S[RVIC[
LA'IR[i,IC[ J. AI)n[qsnN,
llli'!!IESOTA OEPARI;'ti~.'T OF t-'UBL!C SERVICE
RE: ALLO~,AI,ICE OF I:IIiIICI:'AL FP, A?'CIIISE ~[~S 2$ P, PER,~TI'Ir, [7P[NS[
Various local ~,ow:rn~.~ental units ill the State of F!innesota
assess franchise or lie,rose fees, ornss receipts taxes, or sirdlar
levies on utilities which onerate t,'ithin their jurisdictions. The
llir, nesota Public Service Conmission i,s of the o.ninion that a utility
should char,e b]ck such a levy to its customers :?ithin the levying
jurisdiction. It will scrutinize each future ap,licat~on for a
rate increase to determine ,.;hetl'er the utility has included any
such levy as an o?eratinn exnense. All such claims will be
disallowed. The Commission will require the utility to charne
back the levy to its custon~ers uithin the levyinn Jurisdiction.
I
ORDINANCE
STATE OF MINNESOTk
COUNTY OF HENNEPIN
CITY OF HOUND
AN ORDINACE GRANTING THE MINNESOTA GAS COMPANY, A DELAWARE CORPORATION,
ITS SUCCESSORS.AND ASSIGNS, PERMISSION TO CONSTRUCT, OPERATE, REPAIR AND
MAINTAIN IN THE CITY OF MOUND, MINNESOTA, A SYSTEM OF MAINS, PIPELINES
AND OTHER FACILITIES FOR THE MANUFACTURE, DI'STRIBUTION AND SALE OF GAS
SUBJECT TO CERTAIN TERMS AND CONDITIONS.
THE COUNCIL OF THE CITY OF MOUND, MINNESOTA, DOES ORDAIN AS FOLLOWS:
SECTION 1. DEFINITIONS. The following terms shall mean:
1.1. In this ordinance "City" or "City Council" and "City Manager"
mean respectively, the City of Mound, the Council of the City of Mound and
the City Manager of the City of Mound. If at any time the powers of the
City, the City Council or the City Manager shall be transferred to any
other authority, board, office or officers, then such authority, board,
officer or officers shall have the rights, powers and duties herein given
to the City, the City Council and the City Manager, respectively.
1.2. "Company" means Minnesota Gas Company, a Delaware Corporation,
its successors and assigns.
1.3. "Streets and public places" shall mean the streets, avenues,
alleys, parkways, roads, squares, parks, bridges, viaducts, utility easements
and public places in the City.
1.4. "Notice" means a writing served by any party or parties on any
party or parties. In case of the Company, notice shall be mailed to an
officer thereof at 737 Marquette Avenue, Minneapolis, Minnesota, 55402. In
the case of the City of Mound, notice shall be mailed to the City Manager.
1.5. "Gas" as used herein shall be held to include manufactured gas,
natural gas, reformed natural gas, a mixture of natural gas and manufactured
gas, or other form of gaseous energy.
SECTION 2. GRANT OF FRANCHISE. The City hereby grants the Company, for a
period extending to January 1, 2002, the right to import, transport, sell
and distribute gas for heating, illuminating and other purposes within the
limits of the City as the boundaries thereof now exist or as they may be
extended or revised in the future. For those purposes the Company may
establish the necessary facilities and equipment and may maintain storage
Page 2
and peak shaving plants, gas mains, service p]pes and any other necessary
appurtenances in and along the streets and public places in the City. The
Company may also do all reasonable things necessary or customary to accomplish
those purposes, subject, however to the further provisions of this franchise,
The Company may further manufacture and store gas within the City for purposes
set forth above provided that before the Company constructs any new structure
or converts any existing structure for the manufacture or storage of gas, the
.... Company shall first obtain '~he approval of the struCture and the location
thereof from the City. Such approval by the City shall not unreasonably be
withheld.
SECTION 3. SERVICE RATES.
3.1. The Company shall provide reasonably efficient, adequate and non-
discriminatory service to all members of the public within the City applying
for such service in accordance with the rules and regulations of the Company
and the Minnesota Public Service Commission.
3.2. Rates to be charged by the Company for gas service in the City
shall be subject to the jurisdiction of the Minnesota Public Service Commission.
3.3. Unless otherwise provided by the Company's rates or rules and
regulations filed from time to time with the Minnesota Public Service Commission,
gas service provided by the Company to its customers in the City shall not be
interrupted or disturbed except under the following circumstances.
(al When it is necessary to interrupt service to perform
maintenance to the system in accordance with the Company's
rates and rules and regulations filed with the Public
Service Commission.
(b) During such times as the pipeline supplier is unable to
furnish adequate supplies of gas, provided however, the
Company has taken all reasonable steps to secure a
supplemental supply of gas for residential customers.
(c) In the event of bona fide emergencies when it is necessary
to curtail gas service to maintain the best possible service
to priority loads or to maintain the necessary pressure on
the Company's system.
(d) When ordered to do so by a public regulatory body having
jurisdiction to issue such an order.
(el Because of. acts of God.
Page 3
(f) Becuase of unforseeable conditions beyond the control of the
Company.
(g) For any other reason or reasons provided for in the rates,
rules and regulations of the Company filed with the Hinnesota
Public Service Commission.
4.1. The Company shall serve a copy of any proposed changes to its
rules and regulations on file with the Minnesota Public Service Commission pertaining
to curtailment , interruption or disturbance of service, for reasons other than
failure to pay for'service, with the City at least (10) days prior to said changes
becoming effective.
SECTION 4. NONEXCLUSIVE FRANCHISE. This is not an exclusive franchise.
SECTION 5. LAYING MAINS. The Company agrees to lay such of its mains and pipes
as come within its requirements for service as soon as reasonably possible to do so.
The Company will give reasonable written notice to the City Manager of its plan to
lay mains in any part of the City. The laying of such mains shall be in accord with
established City planning and engineering.
SECTION 6. STREET OPENING.
6.1. The Company shall not open or disturb any street or public place
for any purpose without first having obtained permission to do so from the proper
City officials. The mains, services and other property placed in the streets and
public places pursuant to such permission shall be located, if possible, in the
streets or portion of the streets and public places as shall be approved by the City.
The Company shall, upon completion of any work requiring the opening of any street
or public place, or during construction if ordered by the City, restore the same,
including the paving and its foundations, to as good condition as formerly and shall
maintain the same for two (2) years thereafter in good condition. Said work shall
be performed with due diligence and if the Company shall fail promptly to perform
and complete the work, to remove all dirt and rubbish and to put the street or the
area adjacent to the street in good condition, the City shall have the right to put
the street or public place in good condition at the expense of the Company; and the
Company shall upon demand pay to the City the cost of such work done for or performed
by the City. Notwithstanding the foregoing provisions of this section, the Company
may open and disturb the surface of any street without permission where an emergency
exists requiring immediate repair of a gas main or gas service. The Company in such
event will report such action not later than the second working day thereafter and
in such form as required by the City.
!i¥2..
Page 4
6.2. No street opening may be made unless adequate traffic control
measures are provided.
SECTION 7. RELOCATING.
7.1. Whenever the City shall grade, regrade or change the llne of any
street or public place or construct or reconstruct any public utility system
therein and shall, in the proper exercise of its police power, and with due regard
to seasonable working conditions, when necessary, order the Company to relocate in
said street or public place, the Company shall locate its facilities at its own
expense. The City shall give the Company reasonable notice of plans to grade,
regrade or change the line of any street or public place or to construct or
reconstruct any public utility system therein.
7.2. The Company shall be required to relocate its facilities at its
own expense where grade changes are made by the City for improved drainage or
improved traffic conditions, provided, however, if a subsequent relocation or
~i~cations shall be ordered because of a grade chan~-wi~hin ten (10) years from
and after the first relocation, the City shall reimburse the Company for such
non-betterment relocation expense which the Company may incur on a time and
material basis. If subsequent relocations are required because of the extension
of public utilities to previously unserved areas, the Company may be required ~ .........
relocate at its own expense at any time.
7.3. Any relocation, removal or arrangement of any Company facilities
made necessary because of the extension into or through the City of a federally
added highway project shall be governed by the provisions of Minnesota Statutes
Section 161.46 as supplemental or amended; and further it is expressly understood
that the right herein granted to the Company is a valuable property right and the
City shall not order the Company to remove or relocate its facilities without
compensation when a street or public way is vacated, improved or realigned because
of a renewal or a redevelopment plan which is financially subsidized in all or
in part by the federal government or any agency thereof, unless the reasonable
non-betterment costs of such relocation and the loss and expense therefrom are
first paid to the Company.
7.4. Nothing contained herein shall relieve any person or persons
or corporations from liability arising out of the failure to exercise reasonable
care to avoid injuring the Companies facilities while performing any work
connected with grading, regrading or changing the line of any street or public
place or with the construction or reconstruction of any public utility system.
!i'-13
Page 5
7.5. Where the City orders the Company to relocate any of its
facilities, the Company shall proceed wlth such relocation. Iq such relocatlon
is done without an agreement first bei.ng made as .to who shall pay for the
relocation cost, such relocation of the facilities by the Company shall not be
construed as a waiver of its right.to be .reimbursed for the relocation cost.
If the Company claims that it should be reimbursed for such relocation costs it
shall notify the City within ten (10) days after receipt of such order.
SECTION 8. NOTICE TO COMPANY OF STREET IMPROVEMENTS.
8.1. The City shall give the Company reasonable written notice of plans
for street improvements where paving or resurfacing of a permanent nature is
involved which notice shall contain the nature and character of the improvements,
the streets upon which improvements are to be made, the extent of the improvements
and the time when the City anticipates that it or its contractor is going to start
the work and if more than one street is involved, the order in which this work is
to proceed. Paving or resurfacing of alpermanent nature refers only to.Portland
cement concrete or high type bituminous.
8.2. The notice shall be given to the. Company a sufficient length of
time, considering seasonable working conditions in advance of the actual
commencement of the work to permit the Company to make any additions, alterations
or repairs to its facilities deemed necessary by it and the Company assumes full
responsibility for liability associated with its maintenance and repair activities.
8.3. In cases where streets are at final width and grade, the City has
installed underground public utility mains and service connections to the property
line abutting the streets prior to permanent paving or resurfacing of such streets,
and the Company's main is located under such paved surface of the street, the
Company shall be required to install gas service connections and reasonable main
extensions prior to such paving or resurfacing, whenever it can reasonably be
expected that gas service will be required during the five (5) years following
the paving or resurfacing.
8.4. Once notice is given by the City to the Company in accord with
this section, the City may modify its plans.. The Company shall make reasonable
inquiry to ascertain the status of previously announced City plans.
SECTION 9. LOCATION OF FACILITIES.
9.1 All mains, services, governors and other property and facilities
shall be so located, constructed, installed and maintained as not to endanger or
unnecessarily interfere with the usual and customary trade, traffic, travel upon
and use of the streets and public places of the City. The Company shall keep and
maintain ail of its property in good condition, order and repair, so that the same
Page 6
shall not menace or endanger the life or property of any person.
9.2. The Company shall provide field locations for all its
underground facilities when requested within a reasonable period of time. The
period of time will be considered reasonable if it compares favorably with the
average time required by the cities in Hennepin County to locate municipal
underground facilities for the company.
SECTION 10. INDEMNIFICATION. The Company shall indemnify and hold harmless the
City, its officers, employees and agents from all liability on account of injury
to persons or damage to property caused by the Company's construction, maintenance,
repair or operations in the City, unless such injury or damage is the result of
the negligence of the City, its officer, employees or agents.
SECTION ll.. FRANCHISE FEE. It is agreed by the City and Company that the City
of Mound at any time during the term hereof can impose on the Company, as full
compensation for the rights hereby granted a franchise fee of not more than
four percent (4%) of the Company's gross operating revenues as hereinafter defined,
such fee to be payable not later than April 1 or each year and to be based upon
the gross operating revenues of the Company for the preceeding calendar year or
the part thereof after such fee becomes effective. Such fee shall be imposed
by ordinance duly adopted by the City Council and shall not become effective until
at least sixty (60) days after written notice thereof has been served upon the
Company by registered mail. The percent fee may be changed by the City Council
by ordinance from time to time, however, each change shall meet the above notice
requirements and the percent imposed must remain firm for at least one (1) year,
and the total fee shall not exceed four (4) percent. Such ordinance shall not
prevent the Company from adjusting its charges in such manner as it deems
appropriate for the purpose of reimbursing the Company for the payments to be
made to the City, and the Company may indicate on its bills the customers portion
of said fees. Such fee shall not exceed any amount which the Company may legally
recover prior to the payment to the City by imposing a surcharge equivalent to
such fee in its rates for gas service to customers within the City. The term
"gross operating revenues" means all sums excluding said surcharge, received by
the Company from the sale of gas within the corporate limits of the City. The
foregoing time and manner of collecting said surcharge is subject to the approval
of the Minnesota Public Service Commission which the Company agrees to use its
best efforts to obtain.
Page 12
SECTION 12. CHANGE IN FORM OF GOVERNMENT. Any change in the form of government
of the City shall not affect the valld~ty oF this Franchlse. Any governmental
unit succeeding the City shall, without the consent of the Company, automatically
succeed to all of the rights and obligations of the City provided in this
Franchise.
SECTION 13. VACATION OF PUBLIC WAYS. Except where required solely for a City
improvement project, the vacation Of any street, alley, public way or public
ground, after the installation of a gas facility shall not operate to deprive
the Company of its rights to operate and maintain such gas facility, until the
reasonable cost of relocating the same and the loss and expense resulting from
such relocation are first paid to the Company.
SECTION 14. WRITTEN ACCEPTANCE. The Company shall, if it accepts this
ordinance and the rights and obligations hereby granted, file a written acceptance
of the rights hereby granted with the City Manager within sixty (60) days after
the passage of this ordinance.
SECTION 15. PUBLICATION EXPENSE. The expence of publication of this franchise
ordinance shall be paid by the Company.
SECTION 16. ORDINANCES REPEALED. All other ordinances or portions of ordinances
inconsistent herewith are hereby repealed.
SECTION 17. ASSIGNMENT. The Company upon notice to the City shall have full
right and authority to assign all rights conferred upon it by this franchise
ordinance to any person, persons, firm or corporation. The assignee of such
rights, by accepting such assignment, shall become subject to the terms and
provisions of this ordinance.
SECTION 18. EFFECTIVE DATE. This ordinance shall take full force and effect
from and after its passage and publication.
Passed and approved
Mayor of the of
Minnesota
ATTEST:
Clerk of the of
, Minnesota
November 6, 1981
TO:
FROM:
City Council
Jon Elam, City Manager
SUBJECT:
Refund Request
Mr. Clinton Voorhees has requested a refund of his Building Permit Fee.
He has decided not to build his house as he proposed (see legal action
material from 11-3-81 Council Meeting) and thus I don't see why we
shouldn't approve the refund.
His Permit cost $911.50. We are deducting $96.00 for Engineering
technical review (McCombs-Knutson) and two hours of Hank's time
@$10.00 per hour. Thus the refund total should be $795.50.
JE:fc
BUILDING PERMIT APPLICATION
CITY OF MOUND
5341 Maywood Rd., Mound, Minnesota
5474
OWNER
ADDRESS
TELEPHONE NO d~/f-"l~3 3/
55"/0 Y' Zn'
LOCATION OF PROPOSED IMPROVEMENT
LOT 21-~¢-~30Dg. -LOCK / ~ PID'
ESTIMATED VALU~ ·
ZONING
APPLICATION REQUIREMENTS
Survey ~/Energy Comp.
Plat Plan [~Elevations
Structural Plan a~Watershed
[] ~eating Layout,
[~ewer-Water Location
[] County Driveway Permit,
TYPES OF CONSTRUCTION
NEW CONSTRUCTION
~ff"Single Family ~)_ ~ X ~ ~ Sq. Ft. ! [l/-¢ . REMODELING[] Addition
UJ Multi-Family - Sq. Ft, [] Interior
[] Commercial - Sq. Ft, [] Sub Level
D Industrial Sq. Ft.. [] Roofing
~Garage - Size ~, ~'~ ~ -~ Sq. Ft ~ ~, ~ Siding
~D~k Size --
~ Patio - Size Sq. Ft
~ Fence - Size Ln. F
PERMIT FEE $ / ?/ 6'C) PERMIT APPROVAL
PLAN CHECK FEE $
sa,csa~
S.A.C. ~ g~ 0 ¢INAL INSPECTION
WATER CONN. FEE $
TAPPING FEE $
~xc~v~T~ON F~E, /- ~ U OCCUPANCY CE~TI~IC~T~
TOTAL *
-Sq. Ft.
-Sq. Ft.
- Sq. Ft.
-Sq. rt
[] Utility Bldg. - Size Sq. Ft
[~/Council Resolution No.V¢- TO ~
DATE
In case. permit is granted, I bereb)- agred to do the proposed work in accordance with description above set forth and
according to the provisions of all ordinances of the City of Mound and of all statutes of the State of Minnesota in such
cases made and provided, All building permits expire one year after date of issuance.
DATE ...................... APPLICANTIq~_ .....
lea oe of minnesota oi ies
November 2, 1981
TO:
FROM:
RE:
Mayors, Mana§ers and City Clerks
Peggy Flicker, Legislative Counsel
Threat to City Finances Grows
LMC MEETING WITH GOVERNOR/DELAYED PAYMENT PROBLEM MORE SERIOUS THAN PREVIOUSLY REPORTED
Representatives of the League met with the Governor and key aides last Thursday, where.
they were informed of even more sizeable payment delays (or cuts?) that Minnesota
cities may have to endure.
:nding on legislative action between mid-November and mid-December, cities may
ive neither their December 15 LGA nor homestead credit payments. As earlier, no
promises were made as to when 1981 LGA or homestead credit paj~nents will be made or
even whether they will be paid in full whenever they are made. Also, it is still
highly likely that both 1982 homestead credit and LGA paj~nents will be cut. The open
questions are the extent to which the cuts will be felt by property taxpayers or 1982
city budgets.
NEED FOR COMPREHENSIVE LEGISLATIVE ACTION SOON
1. Cash Flow Problem
The Governor is recommending that the Legislature act to change "S.F. 1",the special
legislation passed early in 1981 that is now being interpreted by the Governor to
insulate the schools from any cuts or delays in any state payments (aids or homestead
credits). If the Legislature does not act quickly to bring the schools into the
picture, then cities will have to continue to bear a grossly disproportionate share
of the cash flow problem - and take delays in both LGA and homestead credit payments
due in December.
Deficit
There are some indications that the Governor and some legislators may not want to
deal with the longer range deficit problems during the special session. Postponing
the problems will only mean that cities will have to live longer with financial
uncertainty and be less able to plan for likely cutbacks in 1982.
(OVER)
300 hanover building, 480 oedar street, saint paul, minnesota 55101 [812] 222-2881
1/ o
WHAT YOU SHOULD DO
1. Contact the Governor and Your Legislators
Emphasize the need for a special session to handle both short-term cash flow and
longer range deficit problems.
Tell your legislators to support changes in "S.F. 1" so the cash flow and deficit
problem can be spread more equitably among local governments and cities' deficits
can be avoided. Ask that the state commit itself to pay 1981 payments in full
eventually. Any necessary cuts should be made in 1982 only.
Let us know the impact on your city of delays or cuts in both LGA and the homestead
credit. If you call or write soon, your input can help the Board in its work tO
develop a League position at its special meeting on November 5.
PF:rmm
Deficit
reported
':* [St tfall
at., at says shor
illi6n 'a-y l it $S60 iilib6
.m~ only when ~h~J' d~tric~ '~ &"Y. ~"~ ' ~[["w?5
~ .... ~...a. ~ .... sa ~e '~ vl~ en~gh ~oney f~ ,the,~8 7
[~nd ~s~lF defer another'~ mil-"*:' XWhJle s~e ~x. ~v~9~ nowT'
· 1 on due ~1 gov~nm~p~ In ~-~T are pro~ct~ ~ ~ ~w~ thin
~em~r, which he ~id he has au- :. ~, t~ ~get deficit ~ ~
='~the ~d ~tl ~w'p~lM ~ c~tifi8 su~fl~ly moro th~ t~
~m f~m deleing ~e $81,4 mil- [ ~mount budgete~ State.officials
· on ~h~ ~dl due ~y the e~ of. ~td the ~pa~e~. 0f' Weirdo;
t Novem~r and~nother $170.7 mil-' for example, ~Jll ~ ~ $90 mil-
l I~h d~e ~ the~nd of ~m~r. f lion short inst~ of t~e ~5 mll-
Qule ~d he will pro~ that. lion p~j~t~ ~arller ~au~
~h~l di~c~ r~ higher ~el~ and ~
~ able ra~e nYtnfere~t tn ~ p~h M~l~g cut~c~ ' '
~ ihem for the' Io~ of any interest',': ' O~e ~ld ~ ~R'~' n~ek
[ ~e~'Ft~t ff t~y r~c.~*~ t~e : ~e for the s~te f~i
~ ~te aid money ~d ~V~st~ He ~ But, 'he~ ~d; Minn~ ~ f~*
~ a~ prom~ t~t h~ p~ ~ corer · men~ll~ st~ ~d'vJ~l ~ ~ths
, ~t~ ~1 il& w~uld not ~f~t, ~p~ble~ we face ~
,~e to~ amount or'e~ ~d re- ~andtem~ra~.'~ ~ ~- '
~lv~ by ~ny ~h~l d~fl~t InJhe ............... L ~ ~ .~;
$ ~e ~ ~s ~d a sJml~ ~11- --~ir ~r-blPm~ Oe the national r~
~ w th ~e UnJversit of Minn~ ..... f' ~ ......
.... ~ - cessmn and emphaslz~ that m~t
Mane n~ ~q muK n& payments
........ of the Un~t~ S~tes ~t~ ~
only when the untvers:ty s re ........ .....
.~,l~l ~low ~ ~ClIl~ le ~ .~ Th~ U~. ~BI~ "~ In~
{ ~',.. '~ '...' '.: ... ~vid~ls~tesllke~nne~
~e~l budget pwblems la the ~ ~Mnte -~ Innopr ~n nff~ f~ ~
~ia~ session" or what Items he' ' ....... ~;..~. ..... 7'- =-
~.;L~g~h~ d~gree, even ~thln ~ re ief progr~ He ~ that
inelr *own part~ caucuses ,over --.. ne~ ' "" * '
whether t~ snoum tackle the ~ --
.... ~ ...... t -~ee out Qf eve~ iour
.'huge ~nget G~iiClt~a ~K certain -o
"t0 set off [ Mttle over where to cut' 'ftc llecUs m taxes to ~h~ls, lodal
_ . ,-- - -- tovernmems and indl~duals m ~
~a w~ther t~e~ ~d ~ ~ ~g ~he hi~hq~t
'mcre~es~r nora oH until the ,~unt he ~ '
~.;~any ]e~ls a or] 02y, t. gB',,.~'a ~n~fer ~tton" {or much
lH~t along with, the money ~ssues, the m0ne,, ~ coiled, ~u,e ~d .
~ve~l other ~t~ve~ial. Items~ ~cnus~of thts,','o~hnn~ ~n StJ
, will ~ on ~e ~] s~n asea- Paul are ~rly tl~ In ~h times
~ da ~nd ~ly ~ R ~ ~ra~ on~ l~e these We have fuU d~creUon
~ ~B~ FUH into ~ regul~ ~ssm~ - ' f
........... ~ ~ over only J smaU ~ 0 the jlate
~ ~ reoeral law require0 t~aT the h,,a~t,, f~u~e~d '
~ ~ext t?e the ~gi~latq~ ~ ~ ~ ~t~'~g~ck~'~a~ ~ ~u~d
~ '-' ew re'era' est 'c" . mean Io~J core.meats would
}~t~ n . a ,1 ~ ri ~$ lfl'~.have~l~lsherpro~nytax~
~elr~ ano onemplo~en{ co~-,, tn mnV .n fa th~ In~
,~n~tlon. Qule al~ bu ~ld that if ,' _ _ - , ,
,,~e called a special session.he. ' ~,- ~-'~ ~ · ,. ,
would ~k the ~Glsl~t~ ,~ go[~
a~on8 with new f~erel lawe
'lowing b~esses and fa~erl ~[~ -
~x break t~u~h deprec~Oo~
it's the ~ond t~me.th[0
O~e ~as ~en forced to p~nt 'a J.
let, ac~r~lng to state Finance
pmlment figures released ~ay.
~gent of the budget s~te lnw~,
makers ena~e~USt ~x ~o~
~he new f~ of Mlnn~'l'
~1 ~n wM made a~er;
~*~c~ wUl~ 1768 mll.oo for the.
~ ~ ~ he~ offer the pr~lct~ ',
s~ of pm~t~ ~m of t~
qmenM ~ scSI di~lc~ ~ of
hlgh~ stud~t en~lment than
c~ fisur~ ia a s~h ~ ~nn~
thh ~S on telev~ion and ~%
dto sMtio~ a~und the ~te. ·
~ ~bin8 ~e magnRude of
~ "If we were ~ ah~t down~
~pietely shut down--for the en-
tre ~en~um, ali the InstJtutJo~
~ ~ the ~ent off.bile
Welfare, includin~ hospitals for
the men'fly Ill; the whole
meat of Co~tions, Includin8 nil
the p~M~; ail ~ven camp~es
the Minnesota State
sy~em and ali 18 campus~ of the
Mmn~ ~mmunlty ~lleRe sys-
t~, we w~ld nye J~ than $5~
me,clarions to the Le8lslature
Within the next two wee~ on how
to c~ the Sap, ~
~up to BOW, ~ule~as ~ld he will
r~mmend s~ndmg cut~ck~ but
n~ · tax increase. He d~d not ~y,
In h~ s~ch de[iver~ In the re-
ception ~m of lhe governor'~ o~-
~ flc~ in the ~pltol, whether he still
f~ls t~t he ~n m~e enough
~ ~ to make up the $~B8 mil.
I~n ~ho~f~ll without raising
Qule al~ announ~ that he will
~11 nn emergency so.ion of th~
Although the state r~ently ~r-
- [n~ ~h, ~ca~ of the r~t~
I~ ~x reven~ nra coming
th~n ant~c~l~ and the state
soil sho~, he ~ld. Finance officials
have ~id the state may ~ In the
~em~r.' ' "'
Metropolitan Transit Commission
801 American Center Building St. Paul, Minnesota 55101 612/221-0939
October 26, 1981
Mr Jon Elam
City Manager
5341 Maywood Road
Mound, MN 55364
Dear Mr Elam
The Metropolitan Transit Commission has also been getting some
phone calls about changes in the route 51 schedule.
Therefore, our schedules department has prepared the attached
information bulletin describing the proposed service changes.
This bulletin should be ready for distribution to route 51
passengers later this week.
If you have any further questions on schedules and bus service
in our area, please call the MTC Service Planning and Scheduling
Department at the above telephone number.
Sincerely
liS'.3
ADVANCE NOTICE OF ROUTE %51, MOUND-WAYZATA-MINNEAPOLIS SERVICE CHANGES'
The MTC has received a number of phone calls about proposed changes to Route
%51. In order to alleviate confusion and wrong information, we are providing
you with this advanced outline of service changes. Not all of the details can
be included in this notice, THEREFORE, IN THE LATTER PART OF NOVEMBER, ROUTE
AND SCHEDULE DETAILS WILL BE MADE AVAILABLE. Service changes are scheduled to
start on December 19, 1981.
Service Reductions
Recently, Route %51 was carefully checked to determine if any service changes
were needed. Consistently low ridership and high subsidies will cause the
elimination of the following Route ~51 trips and route segments:
Route %51N on Co. Rd. 19, Co. Rd. 151 and Co. Rd. 110 is
being eliminated entirely due to low ridership. Buses
will continue to run on 3 Points Blvd. in Mound and Co.
Rd. 51 in Orono.
Route %51S, the limited service via Ferndale Rd. along
Browns Bay will be eliminated entirely.
Ail buses are being routed via the Service Road at the
Ridgedale park-and-ride or Ridgedale Center to improve
service to that location, (exception: Route #51C, Cargill
Express). No buses will stop on US Hwy. 12 between
Plymouth Rd. and Ridgedale Drive in either direction.
All buses will follow Hwy. 12 to 13th St. in downtown
Minneapolis. Service along Wayzata Blvd. and Hennepin
Avenue between Hwy. 12 and 13th St. will be eliminated.
The last roundtrip on Sunday evenings leaving HenneDin and
8th Street at 9:31 p.m. and leaving Mound at 10:34 p.m.
will be eliminated. Also, the roundtrip leaving Hennepin
and 8th Street at 7:29 p.m. will be rescheduled to leave
about two hours earlier. A new pocket schedule will be
issued before any changes become effective.
On weekday mornings, less service will be scheduled to run
outbound to Mound. On weekday evenings, less service will
be scheduled to run in inbound to Minneapolis.
Schedule Improvement
Route %51 buses have often been unable to keep on schedule since the travel
times were set in the 1960's. Since then, the greatly increased levels of
development, ridership and traffic along the route have caused schedule
reliability problems. These reliability problems are being remedied in these
ways:
· Added running time will be included in the new schedule
-2-
Rush hour service will be speeded up by having most ~51
buses to/from points west of Wayzata make only selected
stops between 1-494 and Fm~y. 100, with no stops between
Hwy. 100 and downtown Minneapolis. ~hese buses will
always carry 'limited stop' on the overhead sign. At the
same time, most Route ~51W buses will continue to make all
local stops along ~wy. 12 to downtown Minneapolis. These
buses will carry "local service" on the overhead sign.
Ail weekend and holiday service including Saturday buses
will operate on ~ennepin Avenue instead of Marquette and
2nd Avenue South. ~owever, Route ~51 weekday service will
continue to follow Marquette and 2nd Avenue South.
WATCH FOR A FUTURE NOTICE SOMETIME IN THE LATTER PART OF NOVEMBER.
DETAILS WILL BE AVAILABLE AT T}{AT TIME.
Thank you for your cooperation and patience.
JD/kal
10/22/81
MORE
STATE OF MINNESOTA
COUNTY OF HENNEPIN
DISTRICT COURT
FOURTH JUDICIAL DISTRICT
In the Matter of the City of Mound
1980-81 Street Improvement Project
Assessments.
Priscilla S. Anderson,
Appellants,
V.
City of Mound, a Minnesota
Municipal Corporation,
Respondent.
NOTICE OF APPEAL
Appellants state and allege:
I.
Priscilla S. Anderson, a widow, is the owner of the follow-
ing described property, located in the City of Mound, Hennepin
County, Minnesota:
The South 300 feet of the West 460 of Lot 59
Auditor's Subdivision Number 168; also, Lots 17,
18, 19, 20 and 21, Block 1~, The Highlands.
All of the above said property is zoned cnly for residential
purposes and is being occupied and used by appellant, Priscilla
S. Anderson, a widow, for single family residence purposes.
II.
During the course of respondent's 1980-81 Street Improvement
Project, municipal storm sewer, curb and gutters, and general
street grading and resurfacing were executed and constructed,
which included pipes laid in the street abutting appellants'
property and which provide services to said property.
III.
By action of respondent's City
1981 the following assessments were
filed against appellants' property,
1.) South 300 feet of Lot 50,
Number 168 and Lots 17-21
The Highlands. PID #23-1
Assessment:
One unit @ $1828.15/unit
250 frontage feet@ $11.70/front foot
25000 square feet @ $0.1017/square foot
4 feet driveway @ $6.00/foot
2 water services@ $300.00/service
Council on September 30,
approved and ordered to be
to-wit:
Auditor's Subdivision
inclusive, Block 1,
17-24-42-0007.
$1828.15
$2925.50
$2542.50
$ 24.00
$ 60O.00
Total
$7919.65
IV.
The present assessment against appellants' property for
1980-81 Street Improvement Project is invalid, arbitrary, contrary
to law, excessive and unconstitutional for the following reason:
The assessment exceeds the benefit provided to the parcels so
assessed.
Vo
The Respondents have incorporated the majority of the area
of Lot 59, Auditor's Subdivision Number 168 into the municipgl
storm sewer system constructed in 1980-81. The Respendents'
storm sewer employs the Appellants' property as a sump for the
surrounding area runoff. No easement has been acquired by the
Respondents for this or any other proper purpose.
VI.
The present assessment constitutes a taking of appellants'
property without due process and a denial of equal protection
of the law, contrary to the Fourteenth Amendment of the United
States Constitution and Article I, Sections 7 and 13, of the
Constitution of the State of Minnesota.
WHEREFORE, appellants request that the proposed assessment
be cancelled, annulled and set aside, and they be awarded costs,
disbursements and reasonable attorneys' fees herein.
WILLIAM F. KELLY & ASSOCIATES
Will~iam F. ~Kelly ~/
Attorneys for AppellantS!
351 Second Street
Excelsior, Minnesota 55311
474-5977
-2-
STATE OF MINNESOTA
COUNTY OF HENNEPIN
DISTRICT COURT
FOURTH JUDICIAL DISTRICT
GREGORY THOMAS KRAUSE and
Mary Kathleen Brown Krause,
husband and wife,
Appellants,
-vs- NOTICE OF APPEAL
CITY OF MOUND, a
Minnesota Corporation,
Respondents.
IN THE FtATTER OF THE ASSESSMENT OF CERTAIN LANDS
FOR ASSESSMENT FOR SEWER SERVICE, WATER SERVICE,
AND DRIVEWAY on WARNER LANE, MOUND, MINNESOTA
TO:
ADMINISTI~ATOR AND CLERK OF THE ABOVE NAMED DISTRICT
COURT, CITY OF MOUND, ITS CITY COUNCIL, AND ITS
CITY CLERK.
PLEASE TAKE NOTICE, that Appellants herein, GREGORY THOMAS KRAUSE
and MARY KATHLEEN BROW~ KRAUSE, husband wife, .taxpayers of the hereinafter
described property, on their behalf, do hereby Appeal, pursuant to Minnesota
Statutes, Section 42g.981, to the above named District Court for the adoption
of an Assessment for certain improvements to Warner Lane, City of Mound,
Minnesota, for sewer service, water service and area service under the label
and designation as Number 25-117-24 21 0139.
That Appellants are informed that their land which is included
in this proceeding and proposed to be assessed in connection with the above
referenced project, are legally described as follows:
Lots 9, lO, and ll, Block 19, blhipple
That Appellants are informed that the City of Mound has adopted
an assessment procedure not based on a benefit to the affected property.
That the assessment against subject property is indicated to be $5,477.14.
The proposed Assessments are improper and illegal, and are arbitrary,
unreasonable and in addition are unfair, inequitable, unequal and dispropor-
tionate, and further that the market value of Appellants' above described
property has not been enhanced by reason of the above described project to the
extent of the special assessment; that the improvements for which the costs
are sought and assessed do not create special benefits, but rather general
benefits; that all properties which are benefited by such improvements have
not been tncluded wtthln the assessment district, but the manner of Imple-
mentation and assessment of such improvement as against this property ts
inconsistent with the assessment polfctes are previously enacted by the Ctty
of Mound.
Gregory Thomas Krause
~ary Kathleen Brown Krause
THOMSEN, NYBECK, JOHNSON,
BOUQUET & VAN VALKENBURG, P.A.
BY: James Van Valkenburg
Attorneys for' Appellants
Suite 102
7250 France Avenue South
Edina, Minnesota 55435
835-7000
DATED:
October/~
__,, 1981.
-2-
HELGE THOMSEN
GLENN G, NYBECK
GORDON V. JOHNSON
JOHN K. ~OUQU£T
JANIES VAN VALKENBURG
JACK W, CARLSON
DENNIS IVl. PATRICK
THOI~SEN, NYBECK,JOHNSON, BOUQUET & VAN VALKENBURG, P. A.
LAW OFFICES
SUITE IO~-7250 FRANCE AVENUE 5OUTH
HINNEAPOLIS (EDINA)~ HiNNESOTA 55435
September 24, 1981
O~ COUNSEL
RICHARD D. WILSON
ROBERT E. ZECK
City of Mound
5341Maywood Road
Mound, Minnesota 55364
RE:
Gregory T. Krause
3312 Warner Lane
Mound, Mn. 55364
Gentlemen:
We have your notice regarding the total assessment
of $5,477.14 against the above property for street and curb
and gutter. It is our opinion that the property is not
benefitted by this amount and accordingly we object to the
assessment in that sum.
Yours truly,
JVV:jd
cc: Chase-Brackett Co.
Mr. Gregory T. Krause
THOMSEN, NYBECK, JOHNSON,
BOUQUE~ VAN:.VALKENBURG,P.A.
//i~Ja~Us V~n~,~'Tkenburg
Attorngy~nd Agent for
Gregory T. Krause and
Mary Kathleen Krause
25-117-24 21 0139
Krause Gregory T
3312 Warner Lane
Mound, MN 55364
Dear Mound Property Owner:
CITY of
MOUND
5341 MAYWOOD ROAD
MOUND. MINNESOTA 55364
o, (612) 472-~. 155
37q ?o/60.2.75-'
The enclosed official notice is intended to advise you of a Special Assess-
ment Hearing to be conducted by the City Council of Mound at 7:00 p.m. on Sep-
tember 30, 1981, in the Little Theater at Shirley Hills School, 2650 Wilshire
Boulevard. The notice relates to specific improvement projects, 1980 Street
Improvements and M.S.A. Streets (Tuxedo Boulevard and ~ree Points Boulevard),
previously authorized by the City Council, which has been or is in the process
of being completed.
Minnesota Statutory requirements provide that this assessment hearing be
held prior to certifying and levying the final improvement assessment costs to
the Hennepin County Finance Department. The assessment will be collected over
succeeding years by the Hennepin County Treasurer's Office along with the real
estate taxes. The purpose of the bearing is to advise the affected property
owners of the final improvement costs to be assessed and the methods of
apportionment and payment to be used.
'i .IF YOU HAVE ANY SPECIFIC QUESTIONS CONCERNING THE QUALITY OR EXTENT OF THE
vCONSTRUCTION WORK UNDER THE IMPROVEMENT PROJECT(S) RELATING TO YOUR PROPERTY,
PLEASE CALL JON EL~, CITY MANAGER, AT 472-1155 BETWEEN 8:00 A.M. AND 5:00 P.M.
OR COME TO THE CITY OFFICE AT 5341 MAIq4OOD ROA~. IF YOU C3~N, PLEASE CONTACT US
PRIOR TO THE HEARING DATE (SEPTEMBER 30, 1981).
ll3e proposed assessment cost was computed using $1,828.15 per unit, ~11.70
per front foot, and ~0.1017 per square foot. The following is the breakdown
and total proposed assessment for your individual property.
Unit 1 Frontage 218.8 Area 10490 Driveway 3.7
$1,828.15 $2,559.96 $1,066.83 $22.20
Sew. Ser. 0 War. Ser. 0 Credit Total Assm't.
$0 $0 $0 $5,477.14
The final assessment amounts will be' computed based upon the formula and bene-
fits as ordered by the City Council at the assessment hearing. Usually, the
final amounts are the same as the proposed amounts.
Some further information for your reference, regarding the proposed special
assessments, is given as follows:
1. Minnesota Statutory requirements regulate the special assessment pro-
cedures to be used (Minnesota Statutes Chapter 429). ~.
2. An owner may appeal an assessment to District Court pursuant to Minne-
sota Statutes Section 429.081 by serving notice of the appeal upon the Mayor or
Clerk Treasurer of the City within 30 days after the adoption of the assessment
and filing such notice with the District Court within ten days after service
upon the Mayor or City Clerk Treasurer.
3. No such appeal as to the amount of an assessment pertaining to a spec-
ific parcel of land may be made unless the owner has either filed a signed
written objection to that assessment with the City Clerk Treasurer p~ior to the
public hearing or has presented the written objection to the presiding officer
at the public hearing.
4. Payment in full with no interest charges may be made within thirty
{30) days from the date the City Council adopts the assessment roll.. Payments
can be made at Mound City Hall. If you wish to make a partial payment, the
payment must be in $100.00 increments. If the total assessment is less than
$300.00, no partial payment can be accepted.
5. If the assessment is paid more than 30 days after Council action but
on or before November 15, 1981, interest will be charged to December 31, 1981.
6. If the assessment is not paid on or before November 15, 1981, the a-
mount will be spread over the assessment period. The first year payment will
include interest for fifteen (15) months (October through December of 1981 and
all of 1982). Following years will have interest computed for 12 monthS.
Payments will become due with your real estate taxes.
7. During each subsequent year, payment of the remaining balance may be
made and must be paid on or before November 15 to have special assessments re-
moved from the following year's tax statements. Partial payments are not
allowed.
8. The assessment will be spread for 15 years at the current interest
rate of eight and two tenths percent (8.2%) per year on the remaining
principal.
9. The City of Mound does have a deferred assessment policy based ~n
hardship for Senior citizens 65 years or older who have an income of less than
$10,001 and who reside on and own homestead property. Information on this pro-
gram can be secured at the City Offices prior to the public hearing.
10. The City has also previously participated in the Hennepin County Grant
Program for Special Assessments. Information on this program can be secured at
the City Offices prior to the public hearing.
11. If you have two or more adjacent non-conforming lots which are listed
as separate parcels on your tax statement, you may have been assessed one unit
charge for each parcel. By combining these into one conforming parcel, one of
the unit charges could possibly be removed. Please check with the City Office
prior to the public hearing on September 30.
Again, if you have any questions or comments, please contact us prior to
the assessment hearing if possible.
We sincerely appreciate your cooperation.
CITY OF MOUND
By
LAKE MINNETONKA CONSERVATION DISTRICT
PUBLIC HEARING NOTICE
NEW DOCK LICENSE
FOR CITY OF MOUND
Notice is hereby given that the Lake Minnetonka Conservation District
will hold a public hearing at the Deephaven City Hall, 20225 Cottage-
wood Road at 8 p.m. on Wednesday, November 18, 1981 for the purpose of
increasing individual dock permits from 380 to 400 in the City of
Hound.
~~E~irector Frank Mixa,
Lake Minnetonka Conservation District
Applebaums
A.A. Battery Co.
Acro-Minnesota
Aztec Irrigation
Chuck Anderson
Gayle Burns
Holly Bostrom
Brock-White Co.
F.H. Bathke Co.
Bryan Rock Products
Bill Clark 0il
Coast to Coast
Robert Cheney
Diseased tree rebates
Firehouse Mag.
Fire Control Extinguisher
Glenwood Inglewood
Lloyd Gronberg
Henn Co. Sheriffs Dept
Eugene Hickok & Assoc
Henn Coop Seed Exch
Harris Warehouse & Canvas
Hardrives
INternatl City Mgmt Assn
Lowell's
F. Jedlicki
The Laker
Lutz Tree Serv.
Marina Auto Supply
Minn Comm
Mound Hdwe
Mound Postmaster
Mound Fire Dept
MN Fire Protection Council
Metro Waste Control
Natl Fire Prot. Assn
Planning & Develop. Serv.
Timothy Piepkorn
Power Group Trust
Pitney Bowes
F.N. Shaffer
Spring Park Car Wash
Suburban Tire, Inc.
Stephens Buick
Thrifty Snyder Drug
Village Chevrolet
Unitog Rental
Wilcox Paper
Westonka Community Serv
14.96
150.00
295.15
127.33
322.50
22.92
243.00
31.7o
13.80
139.41
4,823.23
348.o3
334.00
2,722.00
14.97
86.35
39.50
99.00
116.O0
682.00
45.5O
100.91
2,805.90
165.O0
45.83
13,734.39
123.98
4,1OO.O0
439.93
28.50
59.82
3OO..O0
4,103.27
5.OO
1,683.O0
166.83
727.50
480.O0
91.67
49.50
928.00
76.0O
7O.3O
23.68
28.40
69.51
260.75
208.74
8,292.00
Westonka Sanitation
Water Products
Widmer Bros.
Xerox
Ziegler, Inc.
TOTAL BILLS
LIQUOR BILLS
Blackowiak
Central Wardhousing
Real One Acquisition
Regal Window Clean
Security Alarm
Bradley Exterm.
Kool Kube
A.J. Ogle
Butch's Bar Supply
Coca Cola
Day Distrib.
East Side Bev.
Gold Medal Bev.
Home Juice
City Club Distr.
Midwest Wine
The Liquor House
Pepsi Cola
Pogreba Distr.
Thorpe Distr.
Tombstone Pizza
Total Liquor Bills
50.00
592.91
4,897.00
39.42
2o.5o
55,439.59
32.00
291.40
675.OO
10.75
386.19
19.O0
108.O0
1,729.90
93.45
272.55
2,705.95
2,768.24
188.55
25.96
2,057.90
989.56
3,117.37
190.50
3,804.15
3,619.87
14.50
23,100.79
GRAND TOTAL---ALt BILLS 78,540.38
/O
November 5, 1981
McCOMB$-KNUTSON ASSOCIATES, INC.
CONSULTING ENGINEERS ! LAND SURVEYORS · PLANNERS
Reply -ro:
12800 Industrial Park Boulevard
Plymouth, Minnesota 55441
(612) 559-3700
Mr. Jon Elam
City Manager
City of Mound
5341 Maywood Road
Mound, MN 55364
Subject:
1981 Watermain Improvements
County Road #110
File #4730
Dear Jon:
Enclosed is Payment Request No. 4 for the above project in
the amount of $13,734.39, which is also the final. As you will note
on the payment request, the original contract amount was $116,221.00.
The final construction amount of $119,111.04 includes the extra work
covered by change order numbers 1 through 3.
Due to delays in the County's work on County Road #110, it was
not possible for our contractor to complete his work in the alotted
time. For this reason, we recommend no liquidated damages be assessed
The work has now all been completed in general compliance with the
contract documents and we recommend acceptance and final payment in
the amount of $13,734.39.
If you need any further information, please contact me.
Yours very truly,
McCOMBS-KNUTSON ASSOCIATES, INC.
William H. McCombs, P.E.
WHM:lar
Enclosures
Minneapolis- Hutchinson - Alexandria - Eagan
printed on recycled ~333er
CONTRACTOR PAY E~TIMATE NO. 04 PAGE
4 730
O1
ENGINEER: MCCOMBS-KNUTSON CONTRACTOR: F.F. JEDLICKI, INC.
18800 IND PK. 8L~ 5411 BARTLETT BEVD
PLYMOUTH, lin 5~441 HOUND, MN 5So"~4
DATE: 10/31/81
-- CONTRACTOR PAY ESTIMATE SUMMARY --
THIS PERIOD TO DATE
WORK COMPLETED
COMMERCE BOULEVARD (COL~TY ROAD 110) 8,188.84 119,111.09
MATERIALS ON SITE
COMMERCE BOULEVARD (COL~,'TY ROAD 110) 0.00 0.00
ADJUSTED TOTAL 8,188.84 119,111.09
LESS RETAINAGE - 5% PREVIOUS, 0% CURRENT -5,548.14 0.00
TOTAL AMOUNT DUE FOR WORE COMPLETED TO DATE
LESS PREVIOUS PAYMENTS
13, 'Z~4.38 llB, 111. O~
-0.00 10S,376.70
TOTAL AMOUNT DUE 13, 7-:-:4.39 13,734. ~
-- S~MARY OF PREVIOUS PAYMENTS --
ESTIHATE NO. DATE AMOUNT TOTAL
1 07/31/81 87,846.8S 87,846.85
8 08/31/81 13,874.28 41,780. S~
3 10/31/81 63, GSG. 17 lOS, 376.70
APPROVED:
ENGINEER: HCCOMBS-~UTSON
APF'RO~[~'
CONTRACTOR: F.F. JEDLICKI, INC.
CONTRACTOR F'AY ESTIMATE NO. 04 F'A~E
4 730
CIl~f OF ~OUt~D. ~INt~ESOTA 1981 t~AIEP~AIN IMPROVt~MENT~
CDKMERCE BOU"~EVARD (COUNTY ROAD 110)
ENGINEER: MCCOHBS-~{NUTSON CONT~tqCTOR: F.F. JEDLICKI, INC.
18800 IND PK. BLVD 5411 Eka. RTLETT BEVD
PLYMOUTH, HN 55441 MOUND, MN 55364
DATE: 10/31/81
-- PAYMENT SUM, MARY FOR WORK COMPLETED TD DATE --
IllEM ITEM CONTRACT UNIT .... THIS PERIOD .....
NO. DESCRIPTION QUANTITY L~IT PRICE QUANTITY AMOUNT
! 4' DIP WATERMAIN 10.0 LF 16.00 0.0 0.00
8 6' DIP WATEEHAIN 850.0 LF ]3.00 85.0
3 10' DIP WATERHAIN 8,475.0 LF 17.00 0.0 0.00
4 HYDRANTS (NEW) G.O EA 800.00 0.0 0.00
5 RELOCATE EXIST. HYDRANTS S.O EA 450.00 0.0 0.00
6 6" GATE VALUES 8.0 EA 300.00 1.0 300.00
7 10" GATE VALVES S.O EA 700.00 0.0 0.00
8 FITTINGS 6,3:S0.0 LBS 1.50 0.0 0.00
9 3/4' CONNECTION 59.0 EA 85.00 8,0 SO.O0
10 1' CONNECTION 10.0 EA 85.00 8.0 SO. O0
11 B' CONNECTION 8.0 EA 100.00 0.0 0.00
12 3/4' CUR8 STOP 87.0 EA 60.00 8.0 180.00
13 1' CURB STOP 4.0 EA 70.00 1.0 70.00
14 8' CURB STOP 3.0 EA 100.00 0.0 0.00
iS 3/4' SERVICE PIPE 1,000.0 LF 6.00 7.0 48.00
16 1' SERVICE PIPE 800.0 LF 6.00 30.0 180.00
17 2' SERVICE PIPE 850.0 LF 10.00 0.0 0.00
18 REPLACE CURB STOP & E~3X 10.0 EA 100.00 0.0 0.00
19 LO~R WATER SERVICES 548.0 LF 7.00 0.0 0.00
80 INSULATE WATERMAIN 8,000.0 SF 1.50 ,.~.0 48.00
81 GRANULAR BAC){~ILL 8,000.0 CY 3.00 0.0 0.00
88 JACKING SO.O LF 100.00 0.0 0.00
83 TEMPORARY WATER SUF'PLY 1.0 L.S 6,000.00 O.S 3,000.00
84 RF'LC UNMARKED CDRF' 31+00 1.0 L.S 406.00 0.0 0.00
25 LOW W~ @ GRANDVIEW E 110 1.0 L.S 1,197.53 0.0 0.00
86 LOW WH @ GRANDVIEW W 110 1.0 L.S 8,009.82 0.0 0.00
87 EXTRAS ADDED BY CITY 1.0 LS 2,289.00 0.0 0.00
88 EXTRA WORK 1.0 LS 4,003.84 1.0 4,003.84
...... TO DATE
QUANTITY AMD
84.0
877.0
2,417.0 41
B.O 6,4
4.0
~4.0 4,8
5.0
6,980.0 10,4
56.0 1,4,
13.0
3.0
~.0
3.0
908.0 5,4
116.0
90.0
0.0
316.0
8,871.0
850.0
SO. 0 5, O~
1.0 6,
1.0 4~
1.0 1,
1.0 8,0(
1.0 8,8(
1.0 4,0(
TOTAL COMMERCE BOULEVARD (COUNTY ROAD 110)
8,188.84
119,
I//
.0
CONTRACTOR PAY ESTIP1ATEi ~o. 04
CITY OF HOllO, HIHNE~T~ 19B1 MA~AIN IHP~NTS
COHMERCE ~EVA~ (CO~ ~AD ilO)
O3
ENGINEER: MCCOMBS-t<NUTSDN CONTRACTOR: F.F. ~EDLICKI, INC.
12800 IND PK. BLVD ~411 BARTLETT BL~)
PLYMOUTH, MN 55441 HOUND, MN 553G4
DATE: 10/31/81
-- PAYMENT SU~,,P. AP, Y FOR MATERIALS ON SITE --
THIS PERIOD
ITEM ITEM CONTRACT UNITS INVOICE UNITS TOTAL
NO. DESCP, IPTION QUANTITY DELIVERE~ PRICE ON SITE ITEM VALUE
INVOICE
PRICE
TO DATE -
UNITS
ON SITE
TOTAL
ITEM
TOTAL COMMERCE BOULEVARD (COUNTY ROAD 110)
0.00
CONTRACTOR PAY ESTIMATE NO. 04 ):-AGE
4730
CITY OF HOUND, MIN.qESDTA 1981 WATERHAIN IMPROt~HENTS
COMMERCE BOULEVARD (COUNTY ROAD 110)
04
ENGINEER: MCCOMBS-){NUTSON CONTRACTOR: F.F. JEDLICKI, INC.
18800 IND PK. BLVD 5411 BARTLETT BLVD
PLY)iDUTH, MN 55441 MOUND, MN 55,5~
DATE: 10/31/B1
-- SUMMARY DF CHANGE DRDERS --
CHANGE ORDER ND. 01 07131/81 3,G13.:)S
ITEM ITEM
ND. DESCRIPTION
B4 RI>LC UNMAP~,~ED COEF' 31+00
85 LOW WM @ GRANDVIEW E 110
86 LOW b~l @ GRANDVIEW W 110
.PREVIOUS
QUANTITY UNIT PRICE
0.00 L.S 0.00
0.00 L.S 0.00
0.00 L.S 0.00
CHANGED AMDUNI AMDUNT
QUANTITY UNIT PRICE DEDUC?ED ADDED
1.00 L.S 406.00 406.0:
1.00 L.S 1,197..53 1,197.5~
1.00 L.S B,OOg. B8 8,009.88
PREVIOUS CONTRACT PRICE 116,881.00 + CHANGE
3,613.35 = REVISED CONTRACT AMOUNT 119,834.3
O~
ENCINEER: HCCDHBS-KNUTSON CONTRACTOR: F.F. J~DLICKI, INC.
12800 IND PK. BLVO 5411 BARTLETT BLVO
PLYMOUTH, I~N 5.5441 HOUND, HN
DATE: 10/31/81
-- SUHMARY OF CHANGE ORDERS --
CHANGE ORDER NO. OP 08/31/81 2,289.00
ITEH ITEM PREVIOUS.
NO. DESCRIPTIDN QUANTITY UNIT PRICE
27 EXTRAS ADDED BY CITY 0.00 LB 0.00
....... -CHANGED .........
QUANTITY UNIT PRICE
1.00 LS P,2Bg.00
AMOUNT AMOUNT
DEDUCTED ADDED
PREVIOUS CONTRACT PRICE 119,834.5'5 + CHANGE
P,2Bg.00 = REVISED CONTRACT AHDUNT 1P2,1P3.35
//7
~_'qNTRACTOR PAY ESTIMATE NO. 04 PAGE
4730
CITY OF MOUND, MINNESOTA 1981 ~R~IN I~P~O~EN~S
COH~ERCE ~EUAP~ (CO~TY ~AD 110)
O6
ENGINEER: MCCOMBS-KNUTSDN CONTRACTOR: F.F. JEDLICKI, INC.
i~BO0 IND PK. BLUD S411 BARTLETT
PLYMOUTH, MN 55441 MOUND, MN S.%~4
DATE: 10/31/81
-- SUNMARY OF CHANGE ORDERS --
CHANGE ORDER ND. 03 10/31/81
4,003.24
ITEM Il'EM PREVIOUS
ND. DESCRIPTION DUANTII~ UNIT PRICE
2B EXTRA ~RK, 0.00 L$ 0.00
CHANGED AMOUNT AMOUNT
QUANTITY UNIT PRICE DEDUCTED ADDED
1.00 L$ 4,003.24
PREVIOUS CONT,{ACT PRICE 1P.2,123.35 + CHANGE
4,003.24 = IU~¥ISED CONTRACT A~DUN? lP6,1P6.S!
ORIGINAL CONTRACT PRICE 116,221.00 + CHANGE
9,905.59 = EUISED CONTRACT AMOUNT 1P6,1P6.S!
SUMMARY OF 'EXTRA WORK IN CHANGE ORDER NO. 3
Replace G.V. & Remove MH @ Co. #15 & Commerce
- Locate odd sized services & requisition parts
- Locate mismarked services
Odd Sized Materials Used
- 1-1/4" service pipe @ $9.00/LF
- 1-1/2" service pipe @ $9.00/LF
- 1-1/4" Connection @ $85.00/EA
- 1-1/2" Connection @ $90.00/EA
- 1-1/2" Curb Stop @ $95.00/EA
65 L.F. =
55 L.F. =
2 EACH =
7 EACH =
3 EACH =
Total Extra Work, Change Order No. 3
$1,202.24
240.00
396.00
585.00
495.00
170.00
630.00
285.00
$4,003.24
INFORMATION / MISCELLANEOUS
CITY OF MOUND EMPLOYEE LIST
NOVEMBER 1981
DEPARTMENT NAME PHONE POSITION
CITY MANAGER DEPT. Jori Elam 472-1155 City Manager
Fran Clark 472-1155 Adm. Assist.
FINANCE DEPT.
PARKS, PLANNING &
INSPECTION
POLICE DEPT.
PUBLIC WORKS
SEWER DEPT.
STREET DEPT.
WATER DEPT.
LIQUOR STORE
Gayle Burns 472-1155 Accounting Cleri
Judy Fisher 472-1155 Accounting Cleri
Lois Sandquist 472-1155 Utility Billing
Delores Schwalbe 472-1155 Assessing Clerk
Christopher Bollis 472-1155 Park Coordinatol
Don Rother 472-1155 Dock Inspector
Marjorie Stutsman 472-1155 Adm. Assist.
Henry Truelsen (until 11-30) 472-1155 Building Inspec'
Bruce Wold 472-3711 Police Chief
William Hudson 472-3711 Detective/Junvel
Karin Balgaard 472-3711 Animal Warden
Shirley Hawks 472-3711 Police Secreta
Ronald Bostrom 472-3711 Policeman
Gary Cayo 472-3711 Policeman
John Ewald Ill 472-3711 Policeman
Steve Grand 472-3711 Policeman
Herman Kraft 472-3711 Policeman
Scott Racek 472-3711 Policeman
William Roth 472-3711 Policeman
Bradford Roy 472-3711 Policeman
Richard Schnabel 472-1251 Mechanic
Joyce Nelson 472-1251 Clerk-Typist
Damon Hardina 472-1251 Maintenance
Donald Heitz 472-1251 Maintenance
Robert Shanely 472-1251 Director
Gerald Henke 472-1251 Maintenance
Eugene Hoff 472-1251 Maintenance
Richard L. Johnson 472-1251 Maintenance
James Krause (retires 1-1-82) 472-1251 Heavy Equip. C
Greg Skinner 472-1251 Director
Greg Bergquist 472-1251 Meter Installe
Michael Reese 472-1251 Maintenance
Nelson Schernau 472-3093 Manager
Julie Clyne 472-3093 Clerk
Chris Jolicoeur 472-3093 Clerk/Part Ti
Norma Werts 472-3093 Clerk
//7
I
I
I
I
L.
American Legion Post 398
DATE October ~1. lq8]
GambllnE report
CURRENT MONTH YEAR TO DATE
GROSS: _~ 2z~ 05. OO ~. 2!c)c)~. OO
EXPENSES:
Sales tax ~14.53
Supplies 282.74
PAYOUT AS PRIZES:
397.27
1400.00
~2932.~9
15700.00
PROFIT: ~ 607..73 ~ 6362. '~ 1
DISTRIBUTION OF PROFITS:
Rye~ ~yndrome ~200.00
Sen~or c~t~eps 60.00
Aq~nO 85.00
Checking account
,~3~5.oo
~635.91
~7076.17
?/
nc.
OMESTEADERS
5137 TUXEDO BOULEVARD
MOUND. MN 55364
612/472-4833
~ '~-~ sCotch S~yi~ Oatmeal
SI~0-T~ii~TTLE
OATMEAL
Sart your day with ail the nutritional
value of wheat including the naiural
fiber. That's what Elam's 1000/0
Whole Cracked Wheat Cereal offers
you. All mltural...nothing i~ removed
and nothing is added.. _ '. -
SAVE 39¢ ' ~
Discover how delicious cerea~ made
from stone ground whole oats tastes.
When cooked, it makes a porridge.
(similar to the kind featured in Goldi-;
lo~ks'and the 3 bears) to get you going:
on those cold mornings. It
natural fiber to help promote better
hutrifional health. .-
SAVE 43¢ ~
Steel Cut oatmeal -~
Delicious, chewy pieces of the whole
oat grain with all its natflral ffoer are
cut by steel knives on milers'turning
one against the other. The result is a
'nnbul]~ nourishing, filling ho~ break-
fast cereal that'll make you fed"
to be alive".
SAVE 43c
:~o,': 1.55
WASHINGTON. O.C- ~0$t0
October 28, 1981
Mr. Jon Elam
City Manager
5341Maywood Road
Mound, Minnesota 55364
Dear Jon:
Thanks for contacting me concerning a possible reduction in
General Revenue Sharing (GRS) funds. It's always helpful to hear
from the people back in Minnesota. Your opinions influence my
decisions on the Senate floor.
Perhaps you are aware that I have been a long-time supporter
of the General Revenue Sharing program. I feel we should have
more programs that provide "no strings attached" funding to
states and localities. Such programs allow states much needed
flexibility to respond to the needs of their own state without
having to comply with costly government regulations. Revenue
sharing is probably the most efficient government program and
should serve as a model for the block grants which were recently
included in the Omnibus Reconciliation bill.
As you may now have heard, GRS was included in President
Reagan's overall 12 percent budget reduction proposal for Fiscal
Year (FY) 1982. It is not certain at this time whether Congress
will consider the second round of cuts as a package like we did
last spring or if there will be s/~pa~ate votes on the various
components. ~
I want to assure you that I will do all I can to retain
current funding levels for revenue sharing and make sure it is
not included in an omnibus budget reduction bill, if there should
be one. H.~owever, if the proDosed__reductions are packaged, it
will be difficult for me {o v--ot~ a~ainst the en{ire package.
Again, thanks for getting in touch with me. Be assured that
I will have your views in mind when this important subject
receives attention on the Senate floor.
Sincerely,
iud7 Boschwitz
United States Senator
RB/mc //
WASHINGTON, D.C. 20510
October 31, 1981
Jori Elam
City Manager
City of Mound
5341 Maywood 'Road
Mound, Minnesota 55364
Dear Jon:
Thank you fcr contacting my office concerning General
Revenue Sharing.
I was an early supporter of the revenue sharing program,
because it partially returned to the states a windfall in
revenues the federal government realized as inflation pushed tax
payers into even .higher federal income tax brackets. Revenue
sharing was a way of returning to the states what amounted to an
automatic income tax increase for which Congress was never
required to vote.
Now that the Congress has adopted my amendment to index
inflation out of the federal income tax effective in 1985, we
can rethink the role of general revenue sharing. In my capacity
as Chairman of the Senate Intergovernmental Relations
Subcommittee, I put sc~e of my thoughts in a letter to the
President, a copy of which is enclosed. I am also a member of
the Finance Committee that handles revenue sharing.
Until we devise a better approach, revenue sharing is the
one program that offers states and localities both revenues and
the flexibility they require to deliver public services
efficiently to their citizens, and I am strongly supporting it.
Again, thank you for contacting my office.
touch.
DD/stf
Enclosure
Please stay in
~V Dave----~urenberger
United States Senator
//?
CNA/IL,E1 MC: C. MATI, flAI. ,M., MD, LAWTON CXILEa, Fi.A.
COM M I'rTI~ ON
CK:)'V~N M I~ITAL.
WASHINGTON. D.CL 10110
September 23, 1981
The President
The White House
Washington, D.C.
20500
Dear Mr. President:
Over the past nine months you have taken the first steps
in a rearrangement of our federal system that many thought
impossible. I commend you on the beginning you have made.
I am, however, concerned over reports that you are
considering major cuts in General Revenue Sharing over the
next two years with an eventual goal of phasing out the
program completely. This would be a mistake.
As you know, I was an early and ardent supporter of the
General Revenue Sharing Program. The justification for a
program that shared--a proportion of the federal income tax
with the States in the late sixties and seventies was that
the federal government realized a substantial inflation
windfall in revenues as taxpayers were pushed into ever higher
tax brackets. It was for this reason that I supported the
notion of siphoning off that inflation windfall and returning
it to the States.
With our decision to index the federal income tax this
no longer is a justification for the General Revenue Sharing
Program. Were this the only change that had occurred over
the last decade I would be the first to support repeal of a
program that had outlived its purpose. But indexing is not
the only change that has taken place since we first passed
General Revenue Sharing.
Throughout the 1970s Congress passed many new categorical
grant programs. Increasingly, mandates and cross cutting
requirements were attached to these programs that place an
enormous burden on State and local governments. General
Revenue Sharing is the one program that makes this burden
bearable.
One of the most welcome moves of your Administration
has been to reduce these mandates and requirements through
block grants. This process has just begun. We remain in
Page Two
The Honorable Ronald Reagan
September 23, 1981
a period of transition, and General Revenue Sharing is the
most effective means available to States and localities to
meet the substantial burden that remains on them. Only
General Revenue Sharing provides the flexibility that
is essential to meet these demands.
To eliminate this program now would not only severely
disrupt the financing of State and local government, it
would threaten your long range efforts to revamp the
federal system as well. The campaign pledge you made to the
States to make the reenactment of Revenue Sharing among your
highest priorities as President rings loudly in their ears.
To give the appearance of backing away from the promise now
would undercut their support that will be essential to the
long range effort you have begun. The short run budgetary
gain from the proposed cuts are overwhelmed by these long
run costs.
Until Congress and the Administration have the time to
deliberate on how best to address the financing of State and
local government, it is ill advised to remove the program
that does them the most good presently. This is not to say
that the particular program we know as General Revenue Sharing
should necessarily be inviolate. It does mean that the nation
cannot afford to eliminate it until the New Federalism is
given more definition and a workable alternative to the
program is found.
Mr. President, I will vigorously oppose any proposal to
cut Revenue Sharing at this time. I urge you to reconsider.
Dave Dur~nberger
U. S. Senator
BusinessWeek
;SPEC
~ .'-* : -',~*~ .:~.*~ ~;-.--~-. ~ ~::~F-~4~:~"~:z~2
_HoW well _will the Reagan
economic revolution ~ork?.
Most attempts to answer
that question so far have
· states and citie~ .to
-is ~thefing, and
and local revenues
shrinking. The
focused on the'ore'rail U.S." so severe as t'o-c
economy and on the finan-~' ~crisis:: for*'. 'stat'~'":and l°d
cial markets. But .the true ,,. - - ..,. '.
test'of Reagafiomics will come at-~e-~a~e i...-~"~.'t~'t'f°llow,''the editors Of ~uS~ss
' and local level. The President is shifting more :-: ;'document the extent of the.crisis and
of the burden of government away from--:*i::".~ its implications for economic grc
Washington at a time when the local infra:-' .' '-' the growing rivalry between regions, as
structure is decaying, when'the .ability of- '~''' as its probable' political a. nd s?ia.l~:.,im:
STATE AN~~OVERN~~I~ TROU~L ~
THE DECAY THAT THREATEN
Reagan's plan to spur 'business investnient could be jeOpardized by ali
have led in recent weeks to
doubts over the prospects
for President Reagan's
economic program, Ameri-
cans at large still seem to
be committed to its central premise--
that a revolutionary curtailment of the
government's role in the economy should
release resources .to the private sector
and create a new era of noninflationary
growth. Vast tax and spending cuts have
been passed that are intended as en-
abling legislation for unleashing the pri-
vate sector. But in its zeal to put the
U.S. back on a fast-growth track, the
w combining
with an inability to borrow in a way that
is making it extremely difficult for
Washington's great partner in the feder-
al system, state and local government, to
fill its traditional role of producing the
basic government infrastructure for
growth--such elementary things as
bridges, roads, sewage, water, and mass
transit. So serious is the decay of the
nation's infrastructure and so poor the
prospects for its refurbishment that
many sophisticated businessmen and
economists believe the U. 8. is entering a
period of severe crisis for state and local
government.
~n's physical infrastructure is
only part of the state and local authori-
ties' problem. Compounding the crisis
are cuts in federal funding in the no less
important area of human capital--job
training, vocational education, and
health care. Letting such public services
decline could have high costs not only in
social and political terms but also in
terms of the operating environment for
business.
Proposition 13 in California and similar
tax-spending-limitation moves in 18 oth-
er states has shown, the American pub-
lic is sick .~ ired,.f~ a 'n hi h local
~taxes, even n ~x rene~ means accept]n~
~ reduction ]n services and living with
~tholes in the streets~ bridgeh that are
on .the verge o~' colla'pse~ and an inter-
s~te highway system_that_is about 95%
complete but already needs $26' 5illion in
repairs. ~
-'BS'F'the current crisis is far more
severe than in the past. For a series of
forces is now at work that calls into
question the ability of local governments
throughout the nation-not only in the
traditionally depressed Northeast and
Midwest but even in the fast-growing
Sunbelt-to provide the infrastructure
needed for economic growth. These
forces ar~
MASSIVE CUTS IN FEDERAL AID TO STATE
AND LOCAL GOVERNMENT. After growing
almost fourfold in the 1970s, federal
grants-in-aid will be drastically reduced,
falling from $88 billion in 1980 to $78.6
billion in 1983 (chart).
A REDUCED STATE AND LOCAL TAX SASE.
With the cut in federal taxes--especially
for business--some 30 states that tie
their taxes to federal taxes will face
declining revenues. -
RECORD-BREAKING INTEREST RA'TE8. The'
rates that states and cities have had to
pay for money have almost doubled since
1977. The average municipality now has
to pay 85% of what the U. S.
has to pay for long-term money;, only
two years ago it was 70%. So
have borrowing costs become that
such financially sound states as
nia have recently suspended new
offerings.
A REDUCTION IN THE ATTRACTIVENESS
8TAME AND LOCAL BONDS. To spur
saving and investment, the Reagan
ministration has lightened the tax
particularly in the upper brackets,
has provided special tax-exempt
ment vehicles such as'the All
tificates and has broadened the scope
Individual Retirement Accounts.
has reduced the attractiveness of
exempt municipals to the rich
been their traditional purchaser~
The effect of these four forces is to~
municipal finance in an
vise at a time of growing need.
According to the Urban Institute,
glect in maintaining the country's
Acceptance of decay
To a nation that has already experi-
enced the virtual bankruptcy of New
York City in 1975, the forced reorganiza-
tion of Cleveland's finances in 1978, and
the recurring difficulties of many cities
and states, including Michigan and Mis-
souri, in meeting their payrolls, the idea
that local governments are once again in
dire straits may seem like nothing to get
alarmed about. Indeed, as the passage of
1970-~ :~
**, · Billions of i972 dollars:
:~.~:.~:: ':~ Data:Ct*ms
SPECIAL
! : ":' ~TATE AND I~O~~--~VERNMENT :~N TROUBLE "'
*SCONOMIC GROWTH
of vital state and local facilities' : .
lng infrastructure will push mainte-
nance investment alone to over $660 bil-
lion in the next 15 years. This is as much
as state and local government has spent
on new investment in the past 20 years;
it is equal to 20% of the entire U.S.
gross national product in 1980.
If state and local government cannot
find a way out of this bind, the effects
will be devastating. It is perfectly true
that the private sector has carried the
responsibility for economic growth
throughout the history of this nation.
But at virtually every stage of the na-
tion's history, growth was dependent on
a balance, between rivate and public
investment.
~t canal boom of the early 19th
century was financed mainly by private
sources, but public subsidies provided a
favorable investment climate. This was
even more true of the railroad boom of
the late 19th century. The growth of the
nation's great manufacturing centers,
with their dense concentrations of popu-
lation, was dependent on public spending
for streets, bridges, and mass transit.
The great auto boom of the 20th century
could never have occurred without huge
public investment in r~ads and high-
I I I
ways. Similarly, the great post-World
War II airliner boom was dependent on
complementary public investment. There
is no reason to believe that this histeri-
cai necessity for balanced investment
has come to an end. So even fi, initially,
President Reagan's economic program
does unleash a surge of private invest-
ment, it would be likely .to abort if state
and l_ocal government cannot find the
w~herewith .a~to build the pubqic iacilities
needed for support.
L In the past decade, the crisis of state
and local government has occurred
mainly in the Frostbelt. But it would be
a serious mistake to infer that the states
of the Sunbelt will therefore be immune
to the infrastructure crisis of the 1980s.
For just as New York City needs a $5
billion investment in mass transit to
prevent a further erosion of jobs and
population, Houston needs to invest
heavily in new freeways or mass transit
in order to prevent the traffic congestion
that threatens to strangle its growth.
The crisis of the 1970s became highly
visible because some cities and states
were hanging by their financial finger-
nails and had to reduce expenditures
sharply and restructure debt. Bankrupt-
· ~:: . Data: ~ Econom~q'ica
SPECIAL REPORT
cies and near-bankruptcies may also oc-
cur during the 1980s. But these lurid
financial episodes only serve to worsen
the real growth problem. For in the past
local POliticians have responded to finan-
cial stress by postponing the mainte-
nance of existing capital plant and defer-
ring the building of new plants, much
the same way an executive in the private
sector acts when his company is in
financial bind. Says New York
Comptroller Edward V. Regan,
always delay public investment, but
the end it catches up with you."
A wave of anxiety
The Reagan Administration
that, until now, a good part of the
structure crisis has been the result not
insufficient spending but of
wasteful spending. It maintains, for
ample, that subsidies to mass transi'
not cost-effective and
treatment program, which cost $3.4
lion in 1980, is in need of overhaul.
believes that federal spending for
should be confined to major
essential for national defense. These
guments reflect the
basic philosophy that more and
federal functions should be shifted
state and local government. And
Administration maintains that it
taken a large step in that direction
consolidating 57 separate federal
grams into 9 new or modified categoriC. ]
of block grants.
Although many state and local
rials may have welcomed the added fle~
ibility in the way they can spend fede. l~
money, the Reagan-imposed austeri~l
particularly the proposed second
of budget cuts, is now stirring a wave~
.~x.iety among l~cal officel~51de.rsr
c~[uding many key Rdpublican goverm~t]]
End mayors. They ~ea~ that t~e
~ave been set adrift,
there may simply not be enoughmo~l
from any source. They say that Re.aga~]~
new federalism has assigned them a
that they plainly do not have the ~-II
sources to fill. As a consequence, a
perate hunt is on for new ways for
and states to raise revenues and~
increase the borrowing power ncede~
attack the infrastructure crisis. But~
one thinks funding solutions will
easy. //T
BUSINESS WEEK: October 26, 1981
tlFRASTRUCTURE: A NATIONWIDE
NEED TO BUILD AND REPAIR
' i_~ll~i or years cities and states
have neglected their basic
life support systems. Vot-
ers demanded more police-
. .,~!!~ men and teachers and a
cap on transit fares; timely
road repair and bus maintenance seemed
less important. And politicians readily
complied with the voters' priorities and
neglected their local infrastructures.
When they did spend money for invest-
ment, they favored new structures over
repairs: a picture of a ribbon-cutting was
surely worth more votes than one of a
sewer line being repl.aced. This strategy
may have gotten politicians reelected,
but it left the infrastructure to
crumble.
Recently, however, growing numbers
of bursting water mains, flooding base-
ments, creaking bridges, collapsing
roads, and stalling buses have awakened
the public and elected officials alike to
the problem of the deteriorating infra-
structure. Yet the Reagan Administra-
tion's $35 billion first-round budget cuts
and proposed $13 billion second round,
coming when the municipal capital mar-
kets are in chaos, could prevent this new
awakening from being translated into'
effective action. If that occurs,'
Spreading urban stress: In New York,
a collision on the deteriorating subway
system and a water-main break; and a
traffic jam in Houston,. which could .-~.~._.~
become paralyzed without mass transit.
.qPFCIAL REPORT BUSINESS WEEK: October 26, 1981
the result would be supremely ironic.
For the economic expansion Reagan is
~redictin~g requires a strong an~y
p~blic in]~a.struct~e. Industry. ~t
e~and ~hout ade~.a~ wa~r and
wage systems and well-maintained
~ds~ brid~es~ a~ mass transit svs~ms
~ get its employees ~ work and i~
Says Pat Choa~, author of A~ca
~n Rui~ and currently an economist at
· ~w Inc.: "I don't want ~ sound like the
J~ Gran~lle of public wor~, but the
fact is that much of Ameri~'s i~ra-
st~cture is on the ve~e of ~l]apse."
The problem is ~ ~despread, he says,
that "three-quar~rs of Ameri~'s ~m-
munities can't pa~icipa~ in Re~an's
economic ~o~h pro~."
The de~y is e~dent in all pa~ of the
nation's s~k of public ~pi~l:
STREETS AND HIGHWAYS. More than
8,000 ~. of the intersm~ highway sys-
~m's 42,5~ mi. and 13% of i~ bridges
are now beyond their desired se~ce
life and must ~ rebuilt. And just
maintain current se~ levels on the
roads and highways outside urban areas
that are not part of the inters~ sys-
tern ~11 require more f~ds for rehabili-
tation and reconst~ction during the
1980s--$700 billion--than all levels of
government s~nt on aH public works
investments during the 1970s.
aRiOGES. It ~ll cost ~1.1 billion
replace or rehabilim~ the more than
200,000 deficient bridges--two out of ev-
e~ five--in the nation.
LOCAL GOVERNMENT
SEWERS. To meet existing water poilu-
'' ~ion control standards, federal and local
governments will have to invest more
than $31 billion in sewer systems and
wastewater treatment plants over the
next five years.
WA~ The 756 urban areas with popu-
lafions over 50,000 will have to spend up
to $110 million over the next two decades
just to maintain their water systems.
Even more money will be required to
develop more water sources for fast-
growing areas in the Southwest and
WesL
MASS TRANSIT. Spurred by the Admin-
istration's proposed elimination of oper-
ating subsidies and other pressures, up
to one-quarter of the country's 300 met-
ropolitan transit systems might have to
cease operation by 1985. The New York
City Transit Authority must raise $5 bil-
lion to rebuild its rusty, dilapidated rail
and bus systems. Chicago's system
raised its fare to 90¢ from 60¢ this year,
and scheduling, maintenance, and finan-
cial problems still abound.
Deterioration of the infrastructure
hurts growth because its costs must be
borne by America's businesses. U.S.
Steel Corp. is losing $1.2 million per year
in employee time and wasted fuel rerout-
lng trucks around the Thompson Run
Bridge, in Duquesne, Pa., which is
posted for weight restrictions because it
is in such disrepair. Companies wanting
~ertai.n -arts .of d._owntown
Boston mu~t b~ar the additional cost of a
sewage ho ding ~ n to avm, over oad-
IN TnOUBLV,
~tern in oeak hours. And
'panics in Manhattan66
year for each additional five-minute
lay on the subways and buses. '~-,i.'
In real terms, Rea first-
budget cuts represent a 25%
in state and local
come
mass
cuts will induce state and local
ments to shift their own funds to
vices and out of infrastructure.
while Reagan's second round of
12% across the board--is being
by Congress, there is little doubt
the final result will be to shrink
further the money available for
of local public capital. _ .':m~w
7 ·
Not only older cities
The blow these cuts will deal to
cities will be especially severe, for
where the problems are most
Financially strapped New York
must spend $40 billion to repair
rebuild its 6,000 mi. of streets, 6,20~
of sewers, the 775 bridges it
the 1.5 billion gal.-per-day water s
Cleveland needs $124 million to
tate more than 40.of its
Chicago is seeking $3.3
from the feds--over the next five
to rehabilitate ever
bridges, sewers, and mass transit.
But even cities in the Sunbelt,
:i ,' :-i: How state and local infrastructure is deCayin
' Average age of : - ' __ '-".~' Average age of buildings ' ' :'- Average age of equipme
~.- highways and streets - ' ' and vehicles
- _fire a~ ~1~ stations, a~ ~u~: - ~ - :'~f~' ' ,.' . .
~" ?":~ ~:: 5-. excl~es ~ls a~ ho~itals 7.0
~'5 0 ~
22.0 ,..:. :' 16. 6.5
21.5 15.5 ~ ~
14.5 5
.... ~74
1970 ~/~ ' 1970 ' 1970
'~-- ~' ~ .~.~;'L ;:."': ~ ~ . ~_ . ~ Yea~*~ . :' .:,~
& Yea~ ' ~'~, J'~J",? ;' q' ~ - Da~: B~eau ~ E~m~ ~al~ts [ag~ we~h1~ by gross value} ~,~,,;:;',.
BUSINESS WEEK: October 26, 1981 SPECIAL
[' .... ~ ~2'STATE ~N:~D LOCAL GOVERNMENT IN 'I'ROUBLE :~ ~ 't
have newer physical plants
and rapidly expanding tax
bases, face problems with
their infrastructures. Fast-
growing Dallas must raise
some $700 milliomfor water
and sewage trea(nient facili-
ties over the next decade and
more than $109 million to re-
pair deteriorating streets.
And booming Denver has be-
gun informally delaying its
repair and maintenance
schedules.
Obviously youth and
growth do not guarantee
sound and adequate infra-
structures any more than age
and stagnation necessarily
condemn the physical plant to
decay. Maintenance, management, and
revenues explain why Cincinnati's infra-
structure is stronger than Cleveland's
and why the bridges run by the Port
Authority of New York & New Jersey
are better kept than those controlled by
New York City. And sophisticated main-
tenance management is why Dallas' in-
frastructure, while not perfect, is in bet-
ter shape than most.
The lack of maintenance has inflicted
severe damage on the roads, bridges, and
mass transit systems that form the life-
line of the nation's business. Bad roads
and bridges keep some 25% of America's
communities out of the growth business,
says Choate. Even the relatively new
interstate highway system is spotted by
dilapidation. The federal government,
which did not provide funds for "the
three Rs"--resurfacing, restoration, and
rehabilitation--until 1976, blames the
states for failing to keep the highways in
good repair. The states complain of the
federal government once again saddling
them with the responsibility of main-
taining whatever W. ashington builds.
The Reagan approach is to take most of
its overall cuts in funds for secondary
and urban roads and to use them for the
interstate program, which will require
$53.8 billion through 1990 to complete
and repair. This would leave the states
and localities to bear the entire cost of
local roads. The federal government now
pays 75% of that.
This proposed retreat from aid for
local roads means that the potholes that
already dominate many local roads will
only proliferate. In New York City,
where street repair slowed to a near-
standstill in the late 1970s, streets,
which engineers say have about a 25-
year life, are being replaced at a 700-
year rate; the replacement rate is 49
years in Cleveland, 50 years in Balti-
more, and 100 years in Oakland.
The deterioration of the mass transit
A New Jersey collapse: Two U. $. bridges in five need repairs.
systems that move people to and from
work has been even more profound. No-
where is this more evident than in New
York City. The Metropolitan Transpor-
tation Authority of the State of New
York 'q_iterally stopped preventive main-
tenance in 1975/' when the city's fiscal
crisis hit, says City Council President
and MTt, beard member Carol Bellamy.
The results were stark: The number of
serious breakdowns en route rose to
12,291 in 1977 and tripled to an esti-
mated 36,000 this year; and the number
of miles traveled by the average subway
car before having to be laid up for major
repairs dropped from 13,627 in 1977 to
6,500 in 1981.
. The ~r~.'s plans to borrow some $5 bil-
lion to rebuild its system have been set
back by high interest rates and will suf-
fer further from Reagan's proposed cuts,
which could reduce capital aid by $30
million and operating assistance by $165
million over three years, forcing higher
taxes or a 15¢ fare increase, to 90¢, says
Steve Polan, special counsel at the MTA.
And if the rebuilding is delayed, transit
failures will choke the economic vitality
of the .region even further.
In Massachusetts,
operating subsidies will
eline $18 million in fiscal
and $28 million more over
next two years. "The
third that goes we can
with," says James F.
Massachusetts' Trans
tion Secretary. "But when
cuts go up to $20 million,
could have some
One of their problems will
caused by
tion, which will leave
munities' in the southeast
the state without servi
'~he state is going to have
come in and acquire the
ways and then get some
er to come in and run
lines," explains Carlin. ~ ~
Since fast-growing cities in the
belt have avoided reliance on
help for their still small'transit
the cuts will not hurt them as much.
Metro bus system in Houston does
use federal money for operating
penses, so it will not be
ately by any bridget cuts. Most of
federal money for two bus
facilities has already been
And work on contraflow lanes and rai~
tracks for buses will continue with
money. Nevertheless, Houston's plans
develop a rail line to link
Houston with downtown will be
even though the city will continue
fund engineering studies with some
million in local taxes.
The vital connections
Similarly, Dallas, which has been
in reacting to the need for a
cated system, is now faced with
the full burden of financing its
mass transit needs unless the
helps. Although the voters just last
rejected the establishment of a
transportation authority, mass
like sewers, is vital for growth. If l
continues at its present rate,
development of a mass transit
cities like Dallas and Houston
eventually be paralyzed.
Inadequate and dilapidated
lines and wastewater treatment
are also stalling economic activity
in stagnating cities that have to
their systems up to
dated standards and in growing
that need additional capacity.
water treatment plants in 47% of
communities surveyed by
Dept. in 1978 were operating at 80%
more of capacity, while the
accepted effective full capacity
tion rate is 70%. That means that
BUSINESS WEEK: October 26, 1981 SPECIAL
plants and homes could not be hooked up
to those systems. The Florida Environ-
mental Protection Dept., for example,
recently prohibited Orlando, one of the
fastest-grow~.'ng areas in the U. S., from
adding more homes to its .overloaded
sewer system. The moratorium was
lifted only when Orlando signed court
decrees promising to build more sewage
treatment plants.
If the Administration's plans for dis-
tributing treatment plant funds go
through--it wants to limit funds to the
cities' needs as of 1980--Orlando and
other growing cities and suburbs w~ll
]~ave to build capac_~ty for new popula-
tion without fed-eraI mone_v. Capital
~ending i~or wastewater treatment fa-
cilities by all levels of government has
tripled since the Clean Water Act was
passed in 1972, making it the largest sin-
gle public works program now under'
way. The Administration wants to cut
the estimated remaining federal costs
for treatment plants to $24 billion from
$90 billion. And Reagan would slice an-
nual federal expenditures from $3.5 bil-
lion to $2.4 billion.
:~ ...~S D Loca o~ ERNMENT IN TROUBLE:-~', .-~: -
create problems. Houston is receiving
75022 federal matching funds for a larg~
sewage plant, which the city needs to
meet federal clean water standards.
Once that is spent, City Controller Kath-
ryn J. Whitmire does not expect any
more federal funds. "If we don't have
federal assistance, we'll finance as much
as is feasible through revenue bonds
based on user fees," she says. "But for
large additional projects, we'll have to
turn to the developers; we've already
seen developers ready to participate."
But some experts point out that this will
_ra~_se th"'~--'~-" e c--o_s~ o~ new cons-tructi~
th__at could slow growth.
Huge investments also will be re-
quired in water systems over the nex4
two decades to maintain economic vitali-
ty. "The history of much of the West is
the history of its water projects," says
Choate. "And water will determine its
quiring many cities and states to up-
grade their prisons. "If the xee~leral gov-
ernment doesn't give the local govern-
ments amd states the money for jail and
prison construction," says Susan Walt-
ers, an infrastructure expert at the
Council of State Planning Agencies, "the
trend of mandating jail replacement by
the judiciary means that streets, water
systems, and schools will go." ~:
Cities and states are scrambling to
find ways to buffer their infrastructures
from these revenue shortfalls. One ap-
proach being considered by cities that
Water and the West
If Reagan's changes become law, there
will be less money to spend overall, but
changes in the allocation formula will
benefit some cities and cost others. It
could end up penalizing growing areas
and helping older cities. Baltimore, for
example, needs to spend nearly $1.5 bil-
lion, or $1,880 per capita, to get its sew-
ers and waste treatment system in
shape, according to estimates by the
U. S. Environmental Protection Agency.
With current levels of federal aid, it has
been spending around $35 per capita per
year, according to the Washington-based
Urban Institute, which has made a ma-
jor study of infrastructure needs. Rea-
gan's proposals are expected to give Bal-
timore more money. But in the Chicago
area, where the sewer systems overflow
raw. sewage into homes and lakes and
rivers alike with a disturbing regularity,
the Metropolitan Sanitary District is
less likely to get the 'funds it wants to
build a $3.4 billion, 131-mi. "deep tun-
nel'' to upgrade its system. It has al-
ready sunk $1.2 billion into poilu{ion
control and will probably have its flood
control moneys slashed by Washington.
Reagan's approach could also reduce
grants going south of the Mason-Dixon
Line and west of the Mississippi. Right
now there is little concern among local
officials, partly because the spending re-
quirements to meet standards on these
newer systems are love. $3 per capita for
Tulsa, Tucson, San Jose, and Dallas.
But over the long run the cuts could
future." The water systems in much of
the West have not been well maintained,
and they will require additional spend-
ing in'the 1980s. Since the federal gov-
ernment does not support local water
systems, Reagan's cuts will have no
direct impact. But where water is con-
trolled by cities instead of independent
authorities, the cuts in other areas could
force pohticians to divert funds that
would normally go to maintain the water
system, and that could increase prob-
lems in the future.
In the East, too, money will have to be
spent on water, but there the problem is
storage, treatment, and distribution.
"One half of the water lines are so
decrepit that they need to be replaced,"
says Choate. New York City, for exam-
ple, loses 100 million gal. of water per
day because of leaks.
The squeeze on state and local govern-
ments is not coming only from Reagan's
austerity push. Even while federal capi-
tal aid is being slashed, court-mandated
improvements in jail conditions are re-
SPECIAL REPORT
still control their sewers and water sup- ii
plies and other facilities is to turn these i;-
over to independent operating authori-
ties that have pricing and bonding pow- 7;
er. Experts have noted that, since they
have their own revenue sources, the au-
thorities' maintenance programs have
been insulated from the fiscal squeeze
that has led many municipalities to
skimp on maintenance. They "generally,
maintain their capital plants better an~
have healthier financing," says Urban i
Institute economist George E. Peterson. !
"There's not a pothole in the George
Washington Bridge," says Peter C. i
Goldmark Jr., executive director of the .
Port Authority of New York & New Jer-
sey, the largest multipurpose operating
authority in the U. S. "We resurfaced it
two years ago." The City of New York,
by contrast, has so neglected mainte-
nance on the Manhattan Bridge that it
must sharply limit traffic there for sev-
eral years while it rebuilds.
A long recovery ':=
-Yet independent authorities have l
their drawbacks: Every time one is set'.
up, it limits the flexibility of the govern-
ment to shift funds to meet its most
pressing priorities. There is no way?ty
officials can subsidize street repair outj
~f water feesr for example, if the water
~.ystem is operated by an independent~ ~.
authority, bays Yeterson, head o~
]'nfrastructure study:. "if yo~
{hat model so every gervice has its ownj
financing and operating authority, it.
eliminates all trade-offs between scr~
vices. How far can you go?"
The crisis in America's infrastructure
has been building for decades, and its
resolution will take decades. '~rhis is not
a crisis for the short-winded," says
former New York City Budget Director
David A. Grossman. "Most rebuilding'
will take a decade or decade and a half,"
adds ?RW's Choate. Yet even with such a
long horizon, there is no doubt that the
cuts Reagan has made and the cuts he
has proposed portend a major setback to
the rebuilding of America's infra-
structure.
BUSINESS WEEK: October 26, 1981 ~
BORROWING'GETS HARDER
AS THH DEMANDS INTHNSIFY
istorically among the best
credit risks in the financial
markets, the state of Cali-
fornia'approached Wall
Street underwriters this
September with plans for a
$100 million bond issue for parks and
water cleanup. The plan looked almost
boringly routine in an era when state
and local issuers tap the debt markets
for amounts approaching $1 billion at a
crack and use the money for things as
offbeat as building fast-food restau-
rants. But California financial planners
were in for a rude shock. Interest rates
leaped beyond the state's serf-imposed
statutory limit of 11% for public debt--
effectively shutting the state out of the
bond market. The borrowing still has not
been done.
California is not alone. States and
cities across the country are facing a
borrowing crunch of unprecedented di-
mension, because of their inability or
unwillingness to pay high enough inter-
est rates. Local governments have issued
about $2.5 billion in stopgap, short-term
notes this year in anticipation of retiring
them when they can again bring bonds
to market. The amount of bonds autho-
rized but unissued is at least three times
that, according to securities industry es-
timates~bringing the total of bonds
held back to about $10 billion.
All .i_n all, the combination punch of
~high interes~ate~ a~ ~Iocke~-oorro~-
~n~ wi~mean more hnanmal pressure off
states and cities at a time when they cari
least afford it because o~ the sharp
~ral cutbacks in aid. Debt service as a
percentage of total 6xpenditures will rise
for those that can borrow, local govern-
merits' credit ratings will erode, and
they will be forced to resort more and
more to short-term financing, which will
make long-term planning for upwards of
$700 billion in capital needs in the 1980s
all but impossible.
In New York, the state legislature has
approved $600 million in borrowing pow-
er for the New York City subway sys-
tem, but State Comptroller Edward V.
Regan says that the borrowing "is out of
the question" so long as rates for 20-year
municipal bonds are as high as 12.73%,
the current average yield. In Massachu-
setts, Development Secretary Byron J.
Matthews says: "I can't think of one
project in the state that has moved for-
ward under a general capital improve-
ment bond for the last several months,"
and Boston has been virtually shut out
of the long-term bond market because of
its own fiscal problems. Chicago cannot
float notes for its transit system,
even Denver, a high-growth city in
booming region, is holding back $19
lion in bonds for water system '
ments.
The amount of long-term bonds
'in the tax-exempt municipal market
compassing states, cities, and all
and regional agencies) this year is
pected to register the largest drop in
decade, from $48.3 billion to about
billion. More important, the amount
that financing used to meet basic
structure needs, such as waterwork
sewers, transportation, and schools, hl
been about $10 billion a year for mol
than a decade. The other $30 billion or
goes to areas not crucial to local govem
ments' basic mission--for example, cm
struction for private industry, financir
for single-family housing, and buildir
power plants for use by the priva'
sector.
With competition in the tax~exem]
market increasing, states and cities hal
witnessed an un re edented erosion
i~ for the first time in~_~
le-ffst a eca e. ~s means even ~g
BUSINESS WEEK: October 26. 1981
SPECIAL REPO~RT
rates for many issuers and, ultimately,
more fiscal problems.
"I'm terribly worried about the state
of the municipal market," says James J.
Lowrey, a New York-based adviser to
municipal issuers. Lowrey predicts that
the insolvency or near-insolvency in
places such as New York City, Chicago,
and Cleveland in recent years may be
repeated again and again elsewhere as
cities find both their revenues and avail-
able credit squeezed. ·
Eventually, the logjam of pent-up bor-
rowing demand should break; financing
for critical infrastructure such as water-
works and mass transit cannot be put off
forever. But state and local borrowers
who do venture into the long-term mar-
kets are finding that the days of deep-
discount money--at rates substantially
below the private sector's borrowing
costs--are gone. Indeed, the tax-exempt
rates paid by state and local borrowers
for long-term bonds have recently ex-
ceeded 80% of the cost of comparably
rated taxable corporate bonds--far
higher than the 65% historical
standard.
Vying with the big boys
The spread has narrowed because of
fundamental changes in investor prefer-
ences and federal tax policy, which go
far beyond the cyclical trend of higher
interest rates. Even if interest rates
moderate, the structural changes in de-
mand for state and local debt, generally
referred to as municipal bonds, or
"munis," will have serious implications
for the abiliW oI_local~governments
-Until now, their borrowing problems
have attracted little attention. Indeed,
on the surface, the muni market appears
to be booming. Although states' and
cities' long-term financing is down this
year, it still exceeds corporations' long-
term borrowing, and individual investor
demand is robust. But the future of the
municipal bond looks bleak.
The municipal market's most funda-
mental problem is simply that_~_%he, jRp-
p.~ of available credit is not ke_eDing
~]th borr~Wer~'- 6~m~nds. Salomon
~6os. credit sag~ Henry Kaufman says
that municipalities face "crowdin~ Out;'
fr~om the long-term capital markets by
t~-e ffuge ~orrowing needs of the federal
g.'~erament, widely e~[pect~'d to total $50
billion i~ the fourth (~uarter alone.
"National polic~ now . . . pit~ states
and municipalities squarely against the
economy's most powerful borrowers, the
federal government and large business
corporations," says Kaufman. "In this
kind of struggle, state and local govern-
ments cannotwan.'" Corporations and
SPECIAL REPORT
LOCAL GOYERNMENT
the federal government, Kaufman con-
tends, can virtually "raise money at
will",in the markets, although they may
have to pay more, while local issuers are
fettered by interest rate ceilings, voter
referendums, legislative authorizations,
and political pressures.
:' Although annual municipal borrowing
has risen by $20 billion in the past 10
years, it has not kept up with inflation.
Net new capital raised by states and
localities has fallen sharply as a percent-
age of the entire U.S. capital markets
(chart, page 154)--a trend that can only
be intensified in the future by the feder-
al government's soaring borrowing
needs.
A less appa. a~~s what Kauf-
man calls ~--the rapid
svlvania. That still leaves tax-exempt
~ore than $10 million for a list of
quasi-private purposes--pollution-con-
trol additions to industrial plants, for
instance--that account for perhaps 25%
of all long-term municipal financing.
"The major question for this decade in
public finance is who will get the tax-
exempt money-the local hamburger
chain or the local highway system," says
Ronald Forbes, head of the Municipal
Finance Study Group of the State Uni-
versity of New York at Albany. The
. Denver Water Board's finance director,
Robert E. Wiedemann, bemoans the pro-
liferating uses for tax-exempt bonds.
"Anytime you have more of something,-
it's going to drive up the interest rates,"
he says. But issuing IDBS is one of the
Matthews of Boston, which has been virtually shut out of long-term bonds:
Nationwide, that market is expected to show its biggest drop In a decade this year.
growth in the use of tax-exempt bonds to
finance projects that have little to do
with traditiorlal ~tat~ ~ncl city re.,qpnn~i-
b~[ties. 'The mg.~t enntrnversial of the
fiontradi~ional borrowing uses~as been
t~2exempt .industrial development
bo.nds (ml~s). Although Congress re-
itricted i~s in 1969, state-authorized
development agencies are still allowed to
act as issuers of tax-exempt bonds to
finance private industry construction--
the ostensible public purpose being the
jobs and economic growth thereby cre-
ated. In the past five years states have
eagerly jumped on the n)s bandwagon,
paying little heed to the competition that
these issues provide for the general
financing done by local governments.
President Reagan has vowed to curb
such bonds, and Administration sources
hint that they will seek to end the tax
exemption on interest on ~ssues of un, er
SY0 rn~]on, ~hich~nave financial a string
of' McDonald's restaurants~ K
s.tores~ and even a topless ~ar in Penn7-
few things that states can do, short of
direct tax abatement, to attract busi-
ness. ~'We're willing to let the federal
government make some tough [budget]
decisions that will have an impact on the
states," says Governor Christopher S.
"Kit" Bond of Missouri. "But now it
seems that they're trying to take it away
on the borrowing end." Bond is especial-
ly upset about a recent Internal Revenue
Service m~ling that individual municipal-
ities could no~ e~c~ the"$10 million
~all-]ssU~-ee~ing by lumping together
~aller issue~ in one offering..~ '
No matter what the fate of mss, state
and local governments will still find
themselves competing for credit against
powerful, independent public authorities
whose borrowings are also.jamming the
market. One of these, the Washington
Public Power Supply System (wrrss),
has recently become the largest single
issuer of tax-exempt debt. Ironically,
while most independent authorities have
been strong borrowers because their
BUSINESS WEEK: October 26, 1981
117,
' ..... St'iTz A -iS"'Lo-C'TL G0' ;ER ' ENT'IN TROL!B'L'E ....
at two of five nuclear power plants
WPPSS iS building have become severe,
and the authority has found the bond
markets dosed to these two projects. A
state commission seems close to winning
approval for mothballing the project for
30 months, but bondholders will be left
in the lurch--uncertain of whether the
authority can be bailed out or return to
the markets in time to meet debt service
after 1983. ·
Owing in part to investor apprehem
sions about the authority, wPPSS paid a
record 15% when it borrowed in the
bond market for its three less-troubled
plants in September. "This kind of thing
has a ripple effect," says one municipal
bond dealer. '°the wrPss rate drives up
everybody else's rate--particularly an
:issuer in Washington." Indeed, Moody's
dropped the state of Washington's bond
rating a notch on Oct. 7, which could
drive up the cost of a planned one-year
note offering by $1 million. Moody's
cited revenue shortfalls, but bond deal-
ers feel the fears of state liability for
wPPSS also may have been an ingredient
in the downgrading.
bonds were secured by user fees, wrrss [our] notes below the 12.1% [All Savers]
is having colossal problems that threat- rate." Adds Paul R. Thompson, finance
en the entire municipal market. ' "ttirector of Detroit: "All Savers drives
Construction delays and cost overruns another nail in the coffin of the tax-
The crowning blow
The Reagan Administration has dealt
a severe, if unintended, blow to the
municipal bond with its new tax policies.
Interest from municipal bonds is, of
course, free of federal income tax. But
with personal income taxes scheduled
for a 23% reduction by 1984, individual
investors have that much less reason to
~t income. The reduction
from 70% to 50% in the top rate for
unearned incom% moreover, means that
exempt market for municipalities."
The Reagan-instilled disincentives to
municipal investment come at a time
when the market is depending more and
more on individuals to soak up municipal
paper. Individuals, who have historically
bought about 25% of all new municipal
issues, have increased their share of the
l]ween 50% and 75% in 1981,
i~hyields, ' -- ~ ,.-
Part of the prob]e-m is that institu-
tions such as commercial banks and
property and casualty insurers have all
but ]eft the market, either because they
have found other ways to shelter their
, .
k Ockehng' ra es
:for ax-exempt
h unicipal bonds
just when Cuts
in federal aid
Start tO take hold
profits or because they have little left to
shelter. Thus, if the Reagan tax pro-
grams make municipal bonds less at-
tractive to individuals, municipalities
will have to raise interest rates as an
incentive. That means the historic rela-
tion between municipal and corporate
rates may be skewed for good.
"We have legislated away, without
knowing it, the subsidy for municipal
financing," says Felix 13. Rohatyn,
chairman of New York's Municipal As-
sistance Corp., which has helped pull the
nation's largest city from the brink of
insolvency. "We~~sing monez at
e~ssent_ially taxable ra~s a
very fundamental elYange. Even if
rates come down in general, munieinal
rates will stay at a par with taxable
(~nes."
Rohatyn adds that "we could never
have brought New York City back to tis-
cal health under the financing conditions
prevailing today"--words with a fore-
boding ring for cities that are struggling
to get back on their feet. "New York had
its crisis early," he says. "But for cities
like Cleveland, Chicago, Detroit, St.
Louis, Buffalo, and Philadelphia, there
interest from competing investments,
s,'fihh as high-yielding money market ra~u-
tual funds, Wql also De taxec[ less tor
m_any investors, ~nd there is more incen-
tive to seek capital gains in common
s~tocks or real estate.
For many munici!Sal issuers and deal-
ers, the crowning blow came with the
authorization of the new, tax-free All
Savers certificate. Because the one-year
deposits will compete directly with mu-
nicipal debt of equal or similar maturity,
dealers and issuers alike fear that inter-
est costs will be driven up significantly.
The Municipal Finance Officers Assn.
estimates that states and cities will pay
up to an extra $1.1 billion in finance
costs in the first year of All Savers, and
they are lobbying hard to prevent the
program's renewal after that. Says
Michigan's deputy budget director,
Douglas Roberts: "Nobody's going to buy
will be worse troubles in the
With the pressures building,
and cities are resorting to more shc
term debt and a host of "creative
lng" gimmicks. Issues of debt obligati~
maturing in less than ohe year
expected to be about $30 billion
year, a record 42% of the total. The
of Columbus, Ohio, and the state
.necticut have broken ground by
tax-exempt commercial paper-a
likely to be picked up elsewhere. In
issue, New York's M~,C gave bond
the option to buy more bonds at
ifiterest rates in the future-desirable
investors if interest rates go down. A
the state of Washington planned to
$400 million in one-year notes on Oct.
giving buyers the option to sell th
back at face value after a month--de
able to investors if interest rates go
The Impact of a default
In one of the most innovative
financing plans, New York
politan Transportation Authority
intends to sell buses and rail cars
investors and then lease them back
system use. The plan allows the
put up only 80% of the cost of the
equipment, with the investors suppl
the remaining 20%--in effect
the system's borrowing demands
capital expenditures.
But these may be nothing more
desperation moves. "Local issuers
never rely on short-term obligations
capital projects--and that's the
their borrowing need," says
Kaufman. These
vanc~ kn
notes do not
Issues
backfire, depending on interest
movements. Equipment leasing
subject to ms scrutin~y and may
limited applications outside urban
sit. "The reason I fear for munici
issuers is that they really don't
wide range of financing choices
to them," says Kaufman.
Most serious of all, credit market
lysts now believe that the chances
default by a major municipal issuer
the wrrss, for instance--are as high
they have been since New York
euphemistic "moratorium" on
payments in 1975. The fact that
tors have always looked upon the tour
ipal bond as one of the safest
ments would, or~ly serve to increase
shock value of a failure. If such a def
came without warning, it could frighten
lenders to the point of holding back cred-
it in general-to corporations and incli-
viduals as well--with an unfathomably
adverse impact on the economy.
BUSINESS WEEK: October 26, 1981
STATE AND L'OCAL GOVERNMENT IN TROUBLE
A REVENUE SQUEEZE LEADS
TO STOPGAP SOLUTIONS
eductions in federal grants
Rto state and local govern-
ments are coming at a time
when many cities and
states are already finan-
' cially strapped and facing
slow growth or even declines in revenues
from other sources. Revenue losses are
not a new problem for many cities, par-
ticularly the older ones in the Northeast
and Midwest. Indeed, the rate of growth
in state and local receipts from all
sources during the 1970s slowed to less
than half the rate during the 1960s. For
the 1980s, the Reagan Administration's
cutbacks will intensify this already de-
veloping trend and place increasing pres-
sure on the nation's cities to find the
wherewithal to continue to provide basic
public services for their residents while
financing economic and community de--
velopment.
Although grants to cities and states
represent only 14.2% of the federal
budget, they are the target of one-third
of the Administration's sweeping budget
cuts. Funds for these programs have
been slashed by 14% for fiscal 1982--
25% after inflation--and the Adminis-
tration's new program to contain the
deficit threatens a further 12%
reduction. Even excluding the !
latest proposal, by 1983 revenue
dependency on~ Washington will
have dropped 28% from the peak
in 1978 (chart).
u~p t~ea_lities will be forced to pick
great, st sla~-k ih the area.of
sooal services, where more than
lialf of the total budget reductionfi
i?or tisca~ 19~z Wllt llxt two br.o.a~.
f6nctions. Income security and
~ograms, including food
stamps, child nutrition, medicaid,
Aid to Families with Dependent
Children (AFDC), and Trade Ad-
justment Assistance, will lose
about $13 billion. Programs for
education, training, and employ-
ment, such as the Comprehensive
Employment & Training Act and
public service employment, will be
cut by about $7 billion. In addition,
~che responsibility for administer-
ing many of these programs will
be transferred to the local level
from the federal government.
Although most of Reagan's cuts
are in social services, they will
BUSINESS WEEK: October 26, 1981
nevertheless have a devastating effect on
the ~infrastructure. The reason is that,
while local politicians want to boost
infrastructure spending, they find unem-
ployment, loss of income, and loss of city
services even more devastating political-
ly. If the Reagan crunch comes, says
Executive Deputy Mayor Rudy Nothen-
berg, the city's chief financial officer,
then San Francisco's first priority would
be its "defense department"--that is,
police and fire protection--public trans-
portation, and the municipal hospital for
the indigent, even if that meant skimp-
ing on infrastructure repair. In New
York City, too, Reagan service cuts could
cost the infrastructure dearly. "Our first
priority, if the cuts go through, must be
the life-support services: police, fire pro-
tection, health services, and transit oper-
ations,'' says City Comptroller Harrison
J. Goldim "The infrastructure would
have to be allowed to deteriorate even
further--which would be disastrous."
The effect of these revenue losses
across the various areas of the country is
regionally neutral, according to an April,
1981, 'report by the Office of Manage-
ment & Budget. However, in a private
study, Andrew J. Moody, director of
Sdt, ~ lo;al governments ~ b,
a'lot less from
metropolitan forecasting at Chase Econ-
ometric Associates, concludes: '"rhe im-
pact of the Administration's budget cuts
will vary considerably across states and
will depend upon the type of programs
that are cut." If that is true, some cities
could be hit hard--particularly in the
highly urbanized and older industrial-
ized states in the Mid-Atlantic, New
England, and East North Central re-
gions.
To cope with these losses, city officials
face a limited set of traditional revenue-
raising alternatives. In the current
mate of fiscal restraint, politicians are
reluctant to advocate higher taxes, and
many cities do not have taxing authori-
ty. Most cities have tax limitations that
preclude new tax revenues. Moreover,
many states, such as Michigan and Ohio,
are financially hard pressed themselves
and are unable or unwilling to offer
cities much relief. Because approxi-
mately 30 states "piggyback" their tax
rates to the federal tax structure, the
Administration's new tax cuts mean less
revenue for those states. Accelerated de-
preciation and other tax-exempt income,
such as that from All Savers certificates,
will cut further into state coffers.
Adjustment will be particularly
difficult for the older cities in the
Northeast and Midwest where rev-
enue growth has suffered from a i
declining industrial base that has
gradually eroded the area's tax
base along with the credit ratings
of some of the major cities (table,
page 163). Cleveland, which lost
23% of its population in the 1970s
and defaulted on its debt in 1978
is a prime example. The city ex~
pects to lose nearly $30 million for
infrastructure repair and millions
more for community development
projects, and Cuyahoga County
will forfeit an additional $40 mil-
lion for a number of welfare pro~
grams, 60% to 70% of which goes
to Cleveland residents. Cleveland
officials are concerned about the
long-term impact. "While the city
today is in a strong financial posi-
tiqn, we are not able to pick up the
cutbacks in social and welfare pro-
. grams," says William J. Reidy,
Cleveland's finance director. Cur-
rently, the unemployment rate
among the city's black teenagers
SPECIAL REPOR'~
about 60%, according to Larry A. Retal-
llck, executive vice-president of the Ur-
ban League of Greater Cleveland, and he
fears that conditions may be ripe for
unrest.
In Boston, the federal cuts fall on top
of the revenue-slashing effects of Propo-
sition 21/2, approved last November,
which reduced property taxes to 21/2% of
fair market value, cut the automobile
excise tax by 50%, and gave renters a
state tax exemption equal to half of their
annual rent. ~s were the
m_~or source of revenues T'Gr [he city,
and losses resulting from Proposition 21/2
w~l am0'unt to $100 million this year ~ut
of a budget of about $1 billion. Now the
f~oeral cutbacks win trim a'further $50
million, mostly from economic develop-
ment projects and employment training
programs.
In an effort to make do with less,
David S. Mundel, Boston's intergovern-
mental relations director, says the city
has developed three basic strategies.
First, it is continuing to finance the most
efficient programs. Second, it is at-
tempting to bolster charitable contribu-
tions and now requires many job-train-
ing programs to get matching funds
from private industry. Finally, the city
has proposed a variety of increases in
taxes and fees, such as a boost in park-
ing-violation rates and a condominium-
conversion tax. This third route might
prove fruitless, however, because any
changes in city taxes require state ap-
proval, and Governor Edward $. King
has vowed to veto any tax increases.
Mundel adds that there is a general mis-
conception that budget cuts will trim
only the fat and sloth out of public ser-
vice. "But given the size of these cuts,"
he says, "we're forced to do less." Mun-
del notes that there is a basic difference
between what Boston and the federal
government are experiencing:. The feder-
al government is only slowing down its
rate of growth, he says, but Boston is
actually growing smaller.
Sr^TE AND L'0C^L GOV ' NM .N, I
zoo, and other cultural facilities to eo-
ple Who come to Denver from all over
the st<~te. "We are going to have to live
with these ldnds of ar~menm on a con-
tinuing ~is," ~ys Randy W. Ha~mn
of the ~lor~o ~mmission on Sm~ &
~1 Gove~ent Finan~. Denver offi-
cials are &~sing ~ raise user fees ~ an
effo~ ~ regain revenues and m~e the
problem more ~sible ~ the public. As
of ~t. 1, for instance, an out-of, eiW res-
ident mint pay $1~ for a libra~ ~.
Many cities in Texas and other ener-
~-rieh Southwestern and Mountain
s~s, which r~ive pa~en~ ~om en-
er~-severan~ roes, are in a ~t~r
~sition ~ adjust ~ the loss of federal
money, but that d~ not mean the eu~
~11 go unnoticed, pa~ieularly in s~ial
se~ees. S~, Texas has lost ~0
million in funding for s~ial pro~m~
and the Dallas-Fo~ Wo~h area alone
has fo~ei~d $7 million. A~r~ng ~
William E. Buchanan of the Texas Hu-
~ HoUst0~' .
Newer cities hurt, too
While the problems will be most acute
in the older cities, newer areas also will
feel the revenue bite. Because of the fed-
eral cuts, state tax relief, and a sluggish
economy, Colorado will barely manage a
balanced budget this year after expect-
ing a $144 million surplus. As a result,
the state will not be able to replace the
$155 million in federal cuts to various
state and local agencies. Infighting has
begun because Colorado's inability to
help Denver has exacerbated state vs.
local tensions. City officials argue they
should not have to bear the entire bur-
den of providing health care, museums, a
SPECIAL REPORT
N TRbUBLE
Witsman worries a~out the atat~ and
local bureaucracy that might grow up
around the block grants. "I am not
opposed to the notion of block grants,
but I am opposed to them going through
the states. That is a contradiction of phi-
losophy, layering a new level of bureau-
cracy on top," he says. Witsman fears
that administration costs might eat
away money the city could use. George
A. Athanson, mayor of Hartford, Conn.,
foresees cities fighting states and inner-
city groups fighting eit-y hall. "Mean-
while," he says, "Reagan will be sitting
at Camp David saying, 'Isn't it wonder-
ful, our national government is not in-
terfering.'"
Indeed, Bernard L. Weinstein, profes-
sor of economies at the University of
Texas at Dallas, believes that the cut-
backs will profoundly change the rela-
tionship between federal and state gov-
ernments and, in particular, between the
states and the cities. "My major con-
· indlanapOiis
Los AngelUs'... ~,..--, ;~
-~.~.~-:~ '~ ~:;i~'
Atlanta .= .......... . Aa
'z Colu~bUii; Ohio :'iJ:Aa ............ San Jose,'~
Kansas CI~, Mo.::.:Aa
man Resources Dept., 53,000 people in
Dallas-Fort Worth will be forced off
~DC, and 175,000 will be dropped from
the food stamp program.
These and other problems that state
and local governments are experiencing
in adjusting to the Administration's cut-
backs cast doubts on the success of the
White House's block-grant programs.
The Administration plans to consolidate
the funding for a number of similar cate-
gorical programs into broad block grants
while giving states the responsibility to
administer the programs and to spend
the money as they see fit. But it will not
be that easy.
First, the states have fewer federal
funds to handle the increased responsi-
bility. Second, states complain that the
promised flexibility to spend the money
as they wish is not there. And third, the
cities are concerned that they will get
lost in the allocation shuffle and that
worse, not better, relations with state
governments will result as municipali-
ties fight for their share.
Chicago's Budget Director F. Tim
cern," he says, "is that Washington has
pushed this stuff without thinking about
what the responsibility of each level of
government should be. Who should do
what?"
City officials from both North and
South also express concern that the Rea-
gan cuts will create more problems than
they will solve. _Man. v view the transfer
o.f. federal respon~bilitib-~-~ Cities that
ar~e ill-equipped to handle the new bur,-
'd~n as merely a shift of the financial
stress on the leoeral government to the
citoes, and many leel that the Adminis-
tration has moved too far too fast.
"We are undertaking a major Iederal
policy without understanding its impact
on the cities," says Anita A. Summers,
adjunct professor at the Wharton School
of the University of Pennsylvania. Sum-
mers emphasizes that this impact de-
pends crucially on the untested axioms
of supply-side economics. "If the supply-
side theory does not work, then I think
the Northeastern cities will receive a
severe blow, if not a mortal blow," she
maintains.
1173
BUSINESS WEEK: October 26. 1981 ~
STATE AN, D LOCAL GOVERNMENT IN TI{OUBLE
ff0 /Bff .l GY IS WHAT COUNTS
THE WAR BETWEEN STATES
~.' "~' e,e~ resident Reagan's econom-
r ic policies may, in the long
run, revitalize the U.S.
,~ economy and bring new
' :. fiscal health to the states
'.~ ~-~:: of the Northeast and Mid-
west. But for the time being those poli-
cies will intensify the war between the
energy-rich and energy-poor states.
While that war has some of the charac-
teristics of the Sunbelt vs. Frostbelt
fights of the 1970s, neither the align-
ments nSr the issues are the same. Some
Sunbelt states, notably Florida, have de-
veloped typically Northern urban prob-
lems, while such frosty places as Wyo-
ming and, above all, Alaska, are rolling
in energy wealth. The growing impor-
tance of energy will change the nature of
the intensifying competition among
states for industry and jobs.
Without access to federal government
funds and a relatively weak tax base,
even many states of the Old South,
which had been able to attract industry
from the Northeast and Midwest with
generous tax-forgiveness incentives, will
find themselves at a disadvantage. Like
the states in the Frostbelt, they can ill
afford to give up tax revenues if they no
longer have Washington financing to
help with building roads, sewers, and
basic facilities. ~/:rich states do no_t,
have to worry about sUc~.., t_rade-.o.ff.s
since they have abundanLreven~em
~-The Adr~ims--'tration and representa-.
fives of the energy-poor states, mainly
those concentrated in the Midwest and
Northeast, have engaged in a heated
argument about whether the Reagan tax
and budget cuts discriminate among
gions. The Office of Management &
Budget has published a study arguing
that the benefits of tax reductions and
the pain of budget cuts are evenly dis-
tributed around the nation. But Repre-
sentative Carl D. Pursell (R-Mich.),
chairman of the bipartisan Northeast-
Midwest Congressional Coalition's
budget task force, counters: "If you look
at what is happening in the distribution
i II I
How the states rate in' the struggle
Wash,
:: Wyo. :
BUSINESS WEEK: October 26, 1981
' /l?q
SPECIAL REPORT
STATE
of dollars in the budget, there's a major
transfer of money to the Sunbelt."
Regardless of who is right, some
states are much better equipped than
others to offset federal spending cuts
with state funds. The massive runup in
energy prices since the mid-1970s has
greatly increased the disparity in the tis-
cal capacity of states. Energy producers
dominate the list of states with the larg-
est and fastest-growing per capita tax
bases (map, page 166), according to a
comprehensive measure of income devel-
oped by the staff of the Advisory Com-
mission on Intergovernmental Reid-
tions.
Taxes and decontrol
Last year, seven states received more
than 20% of their revenues from sever-
ance taxes levied on the production of
minerals, mainly oil, gas, and coal. A
decade ago, only one state--Louisiana--
relied so heavily on ~s. Sever-
ance taxes, which ra-nge as high as Mon-
tana's 30% levy on coal, have become a
major bone of contention in interstate
relationships. The Midwest Governors
Conference estimates that residents of
its 13 member states paid $700 million in
severance taxes to other states in 1979
and will pay more than $2.5 billion in
1985.
Accelerated decontrol of natural gas
prices, which the Administration will
soon recommend, will exacerbate the sit-
uation. The Northeast-Midwest Insti-
tute, the research arm of the congres-
sional coalition, estimates that, with de-
control, severance tax receipts will total
$280 billion through this decade. '"Npth-
ing_scares us more right now than nat--~-
~a'-~ ~-~-de~Ontrolf says Krhode--I~l~nd
C~overnor J~-~bseph Garra_~v~. 'rhe~3
Midwestern governors, 11 of whom are
Republicans, recently voted unanimously
to oppose immediate decontrol of natural
gas.
The energy-consuming states also feel
that severance taxes put them at a dis-
advantage in attracting and keeping
business and jobs. While they are being
forced to raise taxes to make ends meet
and are running the risk of driving
employers away, the energy producers
are able. to rely on revenue sources that
do not increase the cost of doing business
in their states. "It's going to become
apparent that Texas, Louisiana, and
Montana, for example, are using their
energy revenues competitively," says
.Representative Barber B. Conable (R-
N. Y.), ranking Republican on the House
Ways & Means Committee.
The energy-poor states, which find
themselves squeezed between Washing-
ton's budget cuts and what they view as
AND LOCAL GOVERNMENT I
rapacious tax policies by energy-produc-
ing states, are bent on retaliation. At
their August meeting, the Midwestern
governors set up one task force to study
a "soil-deoletion tax," in effect a sever-
an~q~ce---"~x on foo~l_~ pro~luc~qdn-,~a~d another
to consid~ how the region's__a-bun-dant
~:-aterr ource ul us- to~oueeze_
~t oft__he water-poor WesL "The
f~ar is ~at~;re going toget intO a war
with the energy-rich states," says Rhode
Island's Garrahy. "You'll have states
coming up with all kinds of schemes to
tax each other, and it will be bloody
murder."
Consuming states are attempting to
stop energy-rich states from imposing
severance taxes. Earlier this year, the
Supreme Court denied a bid by Com-
monwealth Edison Co. in Chicago, joined
by several state and local governments,
to have Montana's coal tax declared an
unconstitutional restraint on interstate
commerce. But in its decision, the court
made it clear that Congress, if it wished,
::
the'
yegiona. 1 dispariw, i
have' &Sappeared; !
N°rthe ners i
could restrict the states. A number of
bills have been introduced in Congress to
do just that, although the prospects for
passage are bleak. Another idea gaining
force is a_ fe_deral severan¢¢ tax with t~qe
proceeds ~-~rmarke--d for expanded reve-
"I don'~ee a-ffything else'
ucc the threat," says Tom
Cochran, executive director of the
Northeast-Midwest Institute. But many
state and local politicians, looking at the
federal government's own fiscal plight,
are dubious about any new money com-
ing from Washington, despite Reagan's
promise to return revenues to the states.
"As sure as we're talking, the only way
we'll see anything returned is with equal
or greater budget cuts," says Maryland
House of Delegates Speaker Benjamin
Cardin, a Baltimore Democrat.
Faced with their limited ability to get
directly at severance taxes, many con-
suming states are looking for ways to
BUSINESS WEEK: October 26, 1981
N TROUBLE'
grab their share of the oil bounty. Last
year, New Jersey imposed a special tax
on petroleum refiners, while New York
and Connecticut attempted to levy gaso-
line excise taxes that could not be passed
through to retail buyers. All three taxes
were struck down by the courts. New
York is trying to redraft its tax to meet
the legal requirements, while Connecti-
cut is considering taxing oil companies
on a share of their total profits rather
than just their income earned in the
State.
The common problems of energy-con-
suming states are pushing them into
joint efforts. Such long-standing region-
al blocs as the Midwest Governors Con-
ference are becoming more assertive.
Regional congressional groups, such as
the New England Congressional Caucus,
are stepping up their activities. Florida
Governor Robert Graham is pushing for
a Southern "common market" to coordi-
nate regional taxation and development
policies. The New England Energy Con-
ference is negotiating for Canadian gas
and hydroelectric power. The Midwest-
ern governors are planning a similar
agency both to negotiate for their energy
needs and to develop the region's coal
and grain resources as synthetic fuel
feedstock.
Harsh political realities
But these regional arrangements can
do no more than nibble at the edges of
'the problem. Politicians from energy-
consuming states believe that solutions
must begin with the federal government.
And they see precious little sign that the
Reagan Administration is interested in
addressing the issue.
"Our major problem is in getting the
federal government to recognize that
there is a problem," says Senator David
Durenberger (R-Minn.), chairman of the
Senate subcommittee on intergovern-
mental relations. "There are people in
the White House who think that all the
problems of regional disparity have been
solved because the South is going to rise
again."
Faced with these harsh political reali-
ties, the energy consumers are reduced
to fighting a rearguard action against
~ea~ures- m e el pro ems
worse. The one thqhg they-are dead let
a-~-~hst is any further transfer of federal
responsibilities to states without a corre-
sponding shift of revenues, and this
bodes ill for Reagan's latest budget-cut-
ting proposals. "If we turn back more
responsibility for welfare to the states,
we'll have a world-beater of a problem,"
says Durenberger. "Every state just
does not have the fiscal capacity to pick
up the cost."
SPECIAL REPORT
S?A?H AHD ..LOCAL BUDgF. TS
BECOME A BRAKE ON GROWTH
: ..... ~ resident Reagan's program
of fiscal austerity is put-
i ting many state and local
.~ governments in what econ-
" ' omists regard ~
[~"~-~ ........of all worlds: that_of hgv-
~ to cut s~en-dln~g and r ' e ~aj~e
~ Such 17olieies are a double
whammy for both business and consum-
ers. Higher taxes, of course, discourage
consumers from buying and business
from investing. And cutbacks in state
and local government spending, which
totaled $355 billion in 1980, will simply
mean less demand for many goods and
services.
The growing risc. al squeeze on state
and local governments will further re-
duce that sector's role as a major source
of economic growth. Borne by the baby
boom and the spread of suburbia, state
and local government spending in the
postwar period grew by leaps and
bounds in response to the demand for
roads, bridges, schools, hospitals, water,
and sewage treatment--as well as police
'and fire protection and social services.
Spending by state and local government
far outpaced that of the overall economy
for almost 25 years, and by 1975 it
accounted for 15% of gross nation-
al product.
That trend was brought to an
abrupt halt during the 1974-75 re-
cession. The importance of the
state and local sector in the econo-
my has been shrinking since the
mid-1970s as stagflation has cut
into the growth of real incomes
and the public has demanded low-
er taxes and fewer services. Rea-
gan's fiscal austerity, which will
cut Washington aid to state and
local governments heavily, is ex-
pected to accelerate that trend
(chart).
Both monetarist and supply-side
advisers of Reagan argue that this
will have little impact on the eeon-
Jthe
ree
r~ources or the priva seetoL
~ resurgence of ca~)ital invest-
men"~fiT~d busine..s~-activity ih ~e~-
el'al caused by reining in govern-
.m~nlk will more t~an offse~
~,-lb their view.
cuts
And~an by the Office of
analysis
Management & Budget in April
concluded that the cuts in state and local
government spending would not prevent
the economy from hitting the Adminis-
tration's growth targets.
Weighing the importance of govern-
ment spending is, of course, a major
unresolved issue among economists. Tra-
ditional Keynesians such as George Per-
ry of the Brookings Institution believe
lthat it is very important. "The reduction~
in state and local spending--the result of~
cutbacks in federal spending--eonsti-]
tutes one of the things that is,contribut-I
ing to an e~mer~ingrecession_,' he says.,[
A political dilemma
But even many conservative econo-
mists maintain that the cutbacks in
state and local government spending will
have some impact on overall economic
growth, at least in the short run. As
Rudolph Penner, of the American Enter-
prise Institute, put it in a recent article:
'"rhere is a great deal of controversy as
to whether one dollar of grants provokes
more or less than one dollar of state and
local expenditures, but there is no doubt
that total spending rises as a result of
Reagan's program will further'
shrink the economic impa~
of state and local spen ing..i-.i; -
14
BUSINESS WEEK: October 26, 1981
the grant system." Federal grants to
state and local government will drop by
about $10 billion over the next three
years under Reagan's program. Wash-
ington aid will also be cut back substan-
tially in other areas.
The dilemma for many states and
local governments is that it will not be
easy politically to cut many services. In
some areas, such as education, where
demand is weakening because of the end
of the baby boom, further restraint will
be relatively easy. Most economists
agree that a major factor influencing the
growth of state and local spending in the
postwar period has been the need to "ed-
ucate the baby," as Penner puts it. But
spending on education has slowed dra-
matically in the last decade as the baby
boom was absorbed, and demographics
indicate that this trend should continue
at least for much of this decade.
The shift to an older population that
began in the 1970s and is expected to
continue into the 1990s, could, however,
have an equally dramatic impact on the
demand for other state and local govern-
ment services. In the past decade the
fastest-growing areas of state and local
government spending have been
for health care, including hospital
construction, and for social and
other welfare services. This has
been in large part a response to
by the Administration's cuts.
At the same time, the transfor-
mation of the baby boom genera-
tion into young adults is expected
to keep the demand for housing
strong, even though it is in a
depression now because of high
interest rates. Even if much of the
new housing is multifamily and
built in older suburbs, as many
economists believe, the demand for
accompanying police and fire pro-
tection and administrative ser-
vices, also among the fastest-
growing in the past decade, is like-
ly to continue. But in many ser-
vices needed to support housing,
such as aid for roads, and
sewers,
water installations, Washington
aid is being slashed. And this
reduction is taking place at a
time when such vital underpin-
SPECIAL g~}RT~
nings are in a rapid state of decline.
The business community as a consum-
er of state and local government services
will also be hurt by such cutbacks.
"State and local governments account
for about 85% of capital construction,
often with government aid, and that is
going to shrink," notes Manuel Carballo,
a lecturer on public policy at Harvard
University. "Yet already sewers, roads,
water systems are in a very sad state
of repair.. Things that businessmen
rely on as staples are going to be
jeopardized."
Offsetting the benefits
The business community, as w. ell as
the young adults and the older popula-
tion, have considerable political clout.
Politicians around the country are al-
ready finding themselves in the uncom-
fortable position of having to cut popular
services or raise taxes. Conservative Re-
publican Governor John Rhodes has
stirred up a political storm in Ohio's
Republican-controlled state senate by
proposing to raise taxes to avoid a
budget deficit.
A great number of economists believe
that states and cities will have no choice
but to raise taxes. Many are prohibited
by law from running deficits, and it is
increasingly difficult for almost all state
and local governments to borrow in the
financial markets.
As American Enterprise _Institute's
Penner put it in his article: "It may seem
implausible to assume that total tax bur-
dens will be increased rapidly in an era
that is supposed to be characterized by
new conservatism and virulent tax re-
volts. In particular, it may be quite
unreasonable to assume that the state
and local sector will grow rapidly rela-
tive to net national product when so
many states are passing constitutional
limits on tax rates and spending. Yet the
recent history of New York State and
New York City has taught us that it is
not difficult to get around constitutional
limits,,and at the federal level President
Carter felt it permissible to recommend
in his 1981 budget one of the largest tax
increases in recent peacetime history."
There is little chance that Reagan will
back off the recent tax cuts, which are
the centerpiece of his whole program.
ases imstate and 19cai govern-
s will certainly offset gomd Of
t~~d-e~aq ta~ ~fits. Kd {f
t~nd r~61~ of_the, e~. ort_s o["stTate aqd-
'o~al g~)Vern~ue~ts~_ cut some s~ending
~whil. e matntmnin~ oF~i)nc~e~iing~others
i~--a net decline in outlay_s, as many econ-
om-~T~beli~eve, the ~6mbination will have
a significant impact on overall economic
growth.
At Varig, our award-
winning reputation was
built on our extraordinary
on-board service. In first-
class, not only do we serve
two gourmet meals, they're
graciously presented with
all the accoutrements
you'd find in a fine
restaurant. Like English
China, crystal glasses, real
silverware and Irish linen.
You'll also find we've
provided both our upper
and lower first-class
cabins on all our 74Ts
(and the first-class
sections on our DC-10's)
with sleeper seats as well
as movies.
Our unsurpassed
service doesn't stop with
first-class. In fact, some
say Varig's economy
service is superior to the
What some airlines
consider seryice,Varig would
consider a d sservice.
-,~L't¥OEL A M.IlA
GROUP VICE PRESII)E. XT,
AVO.V PRODL'C'TS, L'VC
first-class service on other
airlines. A dinner in
econom}; for example,
features such specialties
as Italian Antipasto, Veal
Scallops with Mushrooms
and French Pastry. And we
serve an equally
elaborate breakfast.
Varig offers daily 747
service between New
York and Rio. DC-10's
from Los Angeles and
Miami and Trans-Pacific
DC-10 service from Los
Angeles to Tokyo.
Today; service like
Varig's is hard to find.
Perhaps that's whv so
many busy executives
actually plan their
schedule around ours.
Send for Varig~ informati,~'
Businessman's Guide to Brazil.
Commercial Mgr., Varig Brazilian
Airlines, 622 Third Ave., N.YC. 10017
How the well-traveled, travel.
BUSINESS WEEK: October 26, 1981
STATE AND 'LOcA'L GOVERNMENT IN TROUBLE
& GHALLH GH TO TIIF. GOP'S
GRASS'ROOTS P0WHIt
: ..... ~ he state and local squeeze
~ '~' is creating an explosive po-
litical situation that is
sending many politicians
running for cover. Mayors
and governors of both par-
ties are slashing budgets and hoping
that President Reagan's promised
"American economic renaissance" mate-
ria]izes--and soon. If it does not, Demo-
crats threaten to turn next year's elec-
tions into a referendum on Reagan eco-
nomic policies that could undo impres-
sive Gor political gains at the grass
roots.
Traditionally, most state and local--
and many congressional--elections have
hinged on mostly narrow local issues.
But because Reagan's program to reduce
the size and role of government is begin-
ning to have a dramatic impact on states
and municipalities, the distinction be-
tween purely local concerns and national
issues is blurring.
For the Democrats, the spreading tur-
moil over state budget shortfalls, service
reductions, and offsetting tax increases
is viewed as a potent new issue with
which to shackle cop officeholders in
1982. Says Democratic pollster Patrick
Caddelh "The White House is making a
lot of state and local races into national
contests keyed to economic perform-
ance." To Republicans, the fiscal crunch
gripping the cities and states presents a
potentially worrisome problem. Says
cop pollster Robert Teetec. "People say
they want to reduce government spend-
lng, but we are about to find out what
happens when they are directly affected
by a cut in services."
Adds Richard S. Williamson, assistant
to the President for intergovernmental
relations: "We realize there are going to
be dislocations in the states. But the
smart politicians who stress fiscal man-
agement are going to survive." William-
son also admits, however, that the politi-
cal futures of grass-roots Republican of-
ficeholders and that of President Reagan
are now inextricably linked. "Never be-
fore," he says, "has the party's future
been tied so closely on the success of one
man's program."
In some states, danger signs are al-
ready flashing for the Republicans. In
Virginia and New Jersey, the only states
electing governors this fall, Republican
candidates who closely identified them-
BUSINESS WEEK: October 26, 1981
selves with President Reagan's economic
policies are trailing badly.
The coP's biggest potential trouble
spot, however, is the Great Lakes region,
where the fiscal squeeze is most severe,
and where six key Republican governor-
ships from Minnesota to Pennsylvania
are up for grabs in 1982. "It's all start-
lng to come home to the GOP Midwestern
governors," says Democratic pollster
Peter Hart. "Democrats have an excel-
lent chance for a pickup here.., if they
can convince voters that Reaganomics is
shifting a burden from the federal level
to the state level."
In Minnesota, first-term Governor Al-
bert H. Quie has seen his political for-
tunes plummet over his handling of the
state's budget. Even before Reagan took
office, Minnesota was in a severe fiscal
bind becr~use Quie's 1979 scheme index-
lng the state income tax to inflation had
cut deeply into revenues. Quie has been
compelled repeatedly to propose new
spending cuts as tax receipts fell short of
his predictions, and his approval rating
in statewide polls has nosedived. "Our
governor is in deep trouble," admits Sen-
ator David F. Durenberger (R-Minn.).
"Everyone wants to run against Al
Quie."
Although Michigan's Republican Gov-
ernor William G. Milliken has not yet
decided whether to seek a fourth term or
to run for a Senate seat, budget-cutting
has taken its toll. Milliken's success at
building a bipartisan coalition including
black voters and union members has
enabled him to roll up big majorities in a
heavily Democratic state. But as he is
forced to propose hundreds of millions of
dollars in cuts in the state's $4.8 billion
budget, signs of strain are appearing.
Says Donald F. Ephlin, a United Auto
Workers vice-president: "Some of the
governor's political charm has worn
off."
Should Milliken seek reelection, he
could face a tough opponent in Represen-
tative James J. Blanchard (D-Mich.),
who is expected to contrast his leading
role in pushing the Chrysler bailout
through Congress with Milliken's sup-
port for budget cuts and his plan to offer
business $300 million in tax breaks.
Trumpets one Democratic strategist:
"Michigan is now among the top five
prospects for a Democratic pickup in
'82.'
When cuts hit home
In Illinois, Republican Governor
James R. Thompson is putting his try
for a third term on the line with his
unswerving support for Reagan econom-
ic policies. Former Governor Dan Walk-
er has already announced his intention
to challenge Thompson in 1982. And ex-
Senator Adlai E. Stevenson III, who is
expected to jump into the race, is run-
ning about even with Thompson in early
polls. "Thompson has said that as long
as the cuts are evenhanded across the 50
states, he is not going to speak out
against Reagan's spending-control pro-
gram," says Illinois State Senate Presi-
dent Philip J. Rock (D-Oak Park). "Once
the cuts hit home, though, he is going to
be stuck [defending] them."
Pennsylvania cop Governor Richard
L. Thornburgh is also gambling that
public acceptance of reduced spending
goes beyond rhetorical support. Thorn-
burgh has been forced to seek across-
the-board spending cuts to offset the loss
of $152 million in federal grants and a
reduction of $115 million in business tax
revenues stemming from changes in fed-
eral tax laws.
Thornburgh won with only a 53% ma-
jority in 1978. He could clearly be hurt if
the Philadelphia black voters who pro-
vided his margin of victory desert him
next year over reduced social spending.
"We have begun to shave programs that
were formed when we labored under the
false pretense that there were unlimited
SPECIAL REPORT
STATE
resources," says Thornburgh. "The vast
majority of blacks are taxpayers" whose
support for his policies, he insists, is
"very high."
GOP moderates who have been more or
less forced to get in step behind Reagan's
economic policies, despite private mis-
givings, are not the only politicians feel-
ing the heat. Ohio Governor James A.
Rhodes, long a stalwart of the GOP'S con-
servative wing, has touched off a rebel-
lion among Republicans in the GOP-COn-
trolled state senate over his request for
"temporary" tax increases totaling $1.3
billion over two years. Rhodes, who has
made a career out of attacking Demo-
crats for raising taxes, saw his plan
rejected for lack of support and has now
lost the initiative to Democratic legisla-
tors who are pushing an alternative tax
package.
Republicans are not the only potential
victims of voter backlash to a new wave
of fiscal distress. In Massachusetts, con-
servative Democratic Governor Edward
AND LOCAL GOVERNMENT
ceived as a long-term plan to cure infla-
tion .... But at the moment, all that we
can do is duck and wait for the program
to take effect."
The costs of recession
If public patience wears thin, though,
it is clear that Republicans, who have
built their platform on the promise of
prosperity, stand to lose the most. At the
party's low ebb in 1974, in the wake of
the Watergate scandals, the GOP held 18
governorships and controlled at least one
house in only 11 legislatures. In a re-
markable revival, the party has fought
back to win 23 governorships and gain
control of at least one house in 21 legis-
latures. Last year, the Republicans won
control of the Senate and now need a net
gain of only 27 House seats in 1982 to
take over the House for the first time
since 1954. If the states' and cities' fiscal
plight is alleviated by a buoyant econo-
my, says the Gor's Mahe, "1982 could be
N TROUBLE
out, could hurt G0P canc~iclate~ {n ½ndu~-
trial states and the Deep South. C.J.
McLin Jr., president of Black Elected
Democrats of Ohio, predicts that black
voter turnout in his state will rise 8% to
12% next fall. "My constituents have a
fear of the future economically," he says.
"They are beginning to realize the value
of the vote."
Although minorities and the urban
poor may take their grievances to the
ballot box next November, few political
leaders or social scientists see that un-
happiness spilling over into the streets.
"The long hot summers of the 1960s
occurred when the Democrats were in
power and were perceived as sympathet-
ic to blacks," says Stanford's Lipset
"But it is clear that we're in for a lot
more hollering all around."
President Reagan's White House
strategists are well aware that his radi-
cal reordering of state-federal relation-
ships is producing new tensions. But
they remain convinced that the Presi-
Republican governors feeling the pinch: Michigan's Milliken is under fire for backing tax breaks for business, Ohio's
Rhodes was outvoted on a state tax package, and Pennsylvania's Thornburgh may be deserted by blacks in next year's elections.
King, who pushed the state's Proposition
21/a tax-limitation proposal, has paid a
severe price politically for ensuing cuts
in services. Notes Stanford University
political scientist Seymour Martin Lip-
set: "King got elected to cut the budget,
did what he promised-and he's getting
shellacked."
Nor do some GoP governors, such as
Pennsylvania's Thornburgh, feel that
cuts in state spending are an absolute
formula for disaster at the polls. "I see a
willingness to give the President's poll-
cies a chance," Thornburgh says. Adds
OOP political strategist Eddie Mahe Jr.:
"I am optimistic that even if people are
hurting, they may back what is per-
BUSINESS WEEK: October 26, 1981
the realigning election we did not quite
manage in 1980." But what if the her-
alded surge of growth fails to appear?
Says Representative Jack F. Kemp
(R-N. Y.): "If we're in a recession in 1982
. . . Republicans are in trouble."
The risk to Republicans grappling
with fiscal distress in the states is that
the Reagan program will energize their
opposition. "Those on the short end of
the stick--the victims of budget cuts--
are going to turn out in higher num-
bets," predicts Senator Carl Levin
(D-Mich.). And even a marginal spurt in
'82 political participation by blacks, a
group whose political potential has never
been fully realized because of Iow turn-
dent's economic recovery program will
soon take hold and cure many states'
problems before the economy becomes a
cutting issue in the 1982 elections. "Rea-
gan, like Dwight D. Eisenhower, will see
his popularity stay fairly high no matter
what happens to his economic program,"
says one White House aide. "What hap-
pens to other Republicans around the
country will be interesting to observe."
Just how interesting remains to be
seen, and some Republicans are visibly
nervous. "The President is in for the
long haul," says Representative Ralph S.
Regula (R-Ohio), a Reagan loyalist. "Of
course, that isn't going to help Republi-
cans who are up in 1982."
I177
SPECIAL REPORT
STATE AND LOCAL GOVERNMENT IN TROUBLE
AHD ( ITIHS ( URH THEIR ILLS
Whatever the promise of
President Reagan's eco-
nomic program in the long
run, the short-term reality
for most of the nation's
state and local govern-
ments is a period of austerity and uncer-
tainty over how to redefine their own
roles and cope with greater responsibili-
ties. These may be more than problems
of adjustment as Washington's bi~dget-
ary and tax cuts ripple through to local
jurisdictions in reduced federal aid and,
for many, a smaller tax base. There is a
strong sense among local officials that
elements of the Administration program
are in fiat contradiction with each other
and the overall economic goals.
"You can't just turn over fiscal re-
sponsibility to the local governments
without giving them the fiscal capacity
to meet the new demands," says econo-
mist Roger Vaughan, deputy director of
New York State's Office of Development
Planning. The results of this fiscal
squeeze must inevitably be felt in the
services, social programs, and capital
spending administered by the states and
cities. Governor Hugh L. Carey of New
York compares the federal cutbacks to
walking out of a restaurant without pay-
ing the bill and claiming that this re-
duces the price of food.
Ideas abound among economists and
other public affairs experts for amelio-
rating the plight of the cities and states:
LOCAL TAXING POWER. The
fiscal capacity of state and
local governments could be
strengthened through both
the taxation and borrow-
ing routes. The states
should be able to make ef-
fective use of some user
fees, excise taxes, and
highway tolls o~92a;--llr e-
ed!a~pted by Wash~n~o_n.
On the financing side,
the state's plight clearly
has been exacerbated by
the All Savers certificates.
Continuing this device be- t;
yond 1982 would compound .
the disaster for the munic-
ipals market. An old idea
to make local financing
more competitive would be
to give states and cities the
option of !s~suing. taxable
bonds, whose necessarilwhigher interest
r'~tes~aaI~e-~i~j~d by t}~-federal
go,__vernmen, t-a meth-"-'-'-- ~ ~ that many ta~--
experts say would be less costly to
Washington than tax-exempts. At the
same time, Washington should eliminate
or set some limits on industrial revenue
bonds to prevent abuses.
NL~N TAX CONCEPTS. Metropolitan areas
that contain decaying central cities could
share in overall growth through develop-
ment of regional tax plans. In the Min-
neapolis-St. Paul area, for example, 144
communities contribute taxes on in-
creased property values into a common
pool, which redistributes the money
based on population.
Potential warfare between the energy-
rich states and the energy consumers
could be halted by placing a federal limit
on state severance taxes for coal, oil, and
natural gas. A complement would be a
federal severance tax on these resources,
particularly those produced on federal
lands, to fund revenue-sharing for the
energy:p~o~ ~ta~e~. A ~cifall protit§
~ax on natural gas, when ]~t is ~lecon-
trolled, coulddo the same.
LA RECONSTRUCTION BANK. A'new agen-
cy-perhaps on the lines of Herbert
Hoover's Reconstruction Finance
Corp.--could be created to provide capi-
tal for the revitalization of U. S. indus-
try, the cities, and the nation's deterio-
rating infrastructure of roads, bridges,
and other public plant. "At present there
New York's Vaughan: If local governments are to have more control,
they will need the "fiscal capacity to meet the new demands."
BUSINESS WEEK: October 26, 1981
is no instrument capable of dealing with
a problem like Chrysler or New York
City, except on an ad hoc basis, in front
of congressional committees," says Felix
G. Rohatyn, who helped New York solve
its financial crisis as head of the Munici-
pal Assistance Corp. (MAC). While Roha-
tyn does not want government bureau-
crats to get into the business of picking
"winners" and "losers," he believes such
a structure, "publicly accountable but
operated outside of politics," is needed to
generate the massive injections of per-
manent equity capital required to rein-
vigorate much of U.S. enterprise that
may not benefit directly from the Tax
Reduction Act of 1981.
A NATIONAL CAPITAL BUDGET. Public
works spending in the U.S. could be
rationalized by creating a national capi-
tal budget. The nation lacks any compre-
hensive framework for deciding what
should get built or financed by what
jurisdiction of government, much less an
inventory of public facilities, an assess-
ment of their condition, or estimates of
projected capital needs and maintenance
costs. ~capital budget mig~
lead to increases i- ~ n public wd'rk~ s~d-
~ when lawmakers contrast the out-
lays for, sa~, a Tdiinessee-Tomb(gbeb
Waterway (p~ge 58) with the little or
nothing being spent for coal ports, but it
would also give government a way to
control a large part of its domestic non-
defense spending.
A COMMITMENT TO HUMAN
CAPITAL. A new commit-
ment could be made to hu-
man capital development
parallel to that just made
to physical capital through
the 1981 tax act. With fed-
eral job and other pro-
grams being pared, the
biggest danger is that
many working poor will
decide they cannot afford
to work, dropping them
into the welfare trap. The
Administration should
consider alternatives to
turn welfare recipients
into taxpayers and main-
.~ tain a skilled labor force.
,~ One such alternative,
_ ~ suggested by New York's
Vaughan, would be a dedi-
cated fund for training
SPECIAL REPORT
progTams financed on the lines of the
unemployment insurance system as "an
earned entitlement." It could be paid for
by a national payroll tax on workers and
employers, taking a plethora of current
programs out of the general revenue sys-
tem and permitting some consolidation.
STRENGTHEN PRIVATE PARTICIPATION.
The private sector's role in providing
services now handled by government
could be strengthened. For several years,
the American Enterprise Institute has
sponsored a project to explore and ex-
pand the role of "mediating structures"
in U.S. society--the family, churches,
neighborhood ethnic organizations, and
other groups whose roles have often been
taken over or even impeded by govern-
ment in the last 50 years, a~ President
uaehing a'n~.w
s_~y for the--White House of private~-
sector Efforts to Solve social Droblem_s
~~uc~ess6s '~igh-t ~e repli-
cated throughout the nationr sees the
need "for an appropriate balance of roles
and missions between government and
the traditional private structures." At
the same time, however, Robert Wood-
son, a black scholar who heads A~q's
neighborhood revitalization project,
warns that "budget-cutting and volun-
tarism alone do not constitute a social
policy." Woodson does not see withdraw-
al of government support as a panacea
but wants instead to see such aid get to
the neighborhood level and "not the mid-
die-class providers who now direct ser-
vices to the poor/' The public-private
partnership idea is now being promoted
by such groups as the National Alliance
of Business, the Committee for Econom-
ic Development, the American Council of
Life Insurance's Clear!nghouse on Cor-
porate Responsibility, and John W.
Gardner's Independent Sector.
If the Reagan Administration's bud-
get problems force it to turn to revenue-
raising ideas, Congress will get the op-
portunity to reconsider parts of the new
tax law that critics assert will worsen
the imbalances between declining indus-
tries and regions of the U. S. and those
now on a strong growth track--particu-
lady the new accelerated depreciation
and leasing rules. But short of such a
retreat on the President's program, op-
tions still abound for ameliorating the
new crisis of the cities and states. With-
out such concessions to reality, Reagan's
new federalism may amount to little
more than a political slogan. ·
Reprints of this special report are available. For
information and prices, call Business Week
reprints at 609-448-1700, Ext. 5550, or write
Business Week Reprints, P. O. Box 457, HightS-
town, N. J. 08520
SPECIAL REPORT
il you'd like to know more about Lynchburg, drop us a line.
MR. HUBERT SIMS' APPLES are only
one good reason to visit Lynchburg, Tennessee,
in the fall of the year.
You'll find Mr. Sims (along with his wife)
up on the courthouse square. And not far
away you'll find the Jack Daniel Distillery,
where smooth-sippin' Tennessee Whiskey is
still made. (We have a man who carries you
on tour and shows you
how we make it.) If you
come about now, you're CHARCOAL
sure to leave with some MELLOWED
good apples. But 6
DROP
whenever you come, we 6
believe you'll take BY D~toP
home a good time.
Tennessee Whiskey · 90 Proof · Distilled and Bottled by Jack Daniel Distillery
Lem Motlow, Prop., Inc., Lynchburg (Pop. 361), Tennessee 37352
Placed in the National Register of Historic Places by the United States Government.
BUSINESS WEEK: October 26, 1981
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