04-10-2019 Council Packet - Laserfiche WebLink

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RELEVANT LINKS: League of Minnesota Cities Handbook for Minnesota Cities 10/15/2018 Expenditures, Purchasing, and Contracts Chapter 22 | Page 5 2. Authority Borgelt v. City of Minneapolis, 271 Minn. 249, 135 N.W.2d 438 (1965). LMC information memo, Public Purpose Expenditures. Determining whether a statute or a city charter provides express authority for an expenditure is relatively easy. In contrast, determining whether a statute or charter provision implicitly provides authority for an expenditure proves more difficult. Cities should consult with their city attorney if they are unsure of the authority related to specfic expenditures. 3. Proper procedure Part II, Procedure for paying claims. If an expenditure has valid authority and furthers a public purpose, the council must follow the proper procedure to make the expenditure. Minnesota statutes set forth the procedures statutory cities must use to pay claims and disburse city funds. B. Invalid expenditures Cities may face the following issues if they end up approving an invalid expenditure: Handbook, Liability. Minn. Stat. § 466.07. Minnesota Office of the State Auditor, 525 Park Street, Suite 500, St. Paul, MN 55103; (651) 296-2551. • Taxpayer lawsuits. The city bears the responsibility for the expenses incurred while defending itself in a taxpayer lawsuit. In some situations, individual councilmembers may incur personal liability as well. • Non-compliance finding by the state auditor. This could result in future special audits and embarrassment for the city. • Public mistrust. The council could lose the trust of the community. • Law changes. If the violation is substantial, the event could prompt the Legislature to adopt more explicit restrictions on expenditures that would impact all local governments. C. Limitation on city expenditures LMC information memo, City Special Elections. Handbook, Property Tax Levy. Handbook, Debt and Borrowing. If either express or implicit authorization exists and the expenditure furthers a public purpose, then the state law generally does not limit city disbursements. In general, there are no requirements compelling voter authorization of expenditures either as to purpose or amount. Although isolated examples of both kinds of restrictions can be found in the statutes, they generally apply only to specific projects. Statutes imposing limitations on tax levies, for example, do not usually impose a limitation on the amount a city can spend, but rather how much money the city can collect through a tax levy. Debt limits impose further restrictions by limiting the amount of money a city can obtain through borrowing.