01-10-2007 Council Agenda - Laserfiche WebLink

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• Remainder Distribution Index: This takes the amount remaining after making the adjustments in the Parameter Filter and allocates it to cities, which are on the formula. Currently this is a simple mathematical calculation —it is the ratio of the amount remaining in the appropriation compared to the theoretical full funding amount. While this is a simple way of computing this it could be done in several other ways such as taking cities tax rates into consideration. • "Pure" LGA Amount Times Distribution Index: The mathematical calculation, which brings together the two sides of the overall equation. • Actual LGA Allocation: What each city will receive —is the combination of funds a city may receive due to the Parameter Filter and the Pure LGA amount applied against the Distribution Index. WHY LGA REFORM? Circumstances faced by fully developed and older cities in the Twin Cities metropolitan area are not fully reflected in the criteria noted above. Examples include the following: • AGE OF HOUSING: The pre /post 1940 housing age criterion was selected in the early 1980's when research documented the relationship of housing age to several other factors, such as crime rates, safety service costs, etc. While that relationship is believed to still be valid, research is needed to verify the relationship in 2006. However, with the passage of time, fully developed and older suburbs now have substantial quantities of housing similar in nature to 'old', pre 1940 neighborhoods. Should the formula be adjusted to account for this 'aging in place'? An option might be to add an additional cluster such as; o Pre 1940 o 1940 -1975 o Post1975 Related to the age of housing is the treatment of multi- family housing development that blossomed in the suburbs in the 1960 -1980 era and now constitutes a significant proportion of the home stock in many older communities. • ABILITY TO PAY: The ability to pay calculation uses a statewide average property tax rate regardless of location or city circumstances. Many older and fully developed cities and suburbs in the metro area may be above the statewide average property tax rate but below the average rate for comparable metro area cities. Should the formula distinguish between metro and out state property tax and home value conditions? • PER CAPITA ALLOCATIONS: Per capita 'set asides' are essentially 'revenue sharing' policies that reflect perceived needs that area not built into the allocation formula. Set asides exist currently in two specific cases: -7 5