06-10-1998 Council Agenda - Laserfiche WebLink

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MINNESOTA Department of Revenue Property Tax Division Mail Station 3345 St. Paul, MN 55146 -3345 Phone (612) 296 -5141 Fax (612) 297 -2166 TO: ALL CITY CLERKS, ADMINISTRATORS, MANAGERS, OR FINANCE DIRECTORS RE: CERTIFICATION OF LOCAL PERFORMANCE MEASURES FOR LOCAL PERFORMANCE AID PAYABLE IN 1999 Minnesota Statutes, Section 477A.05 provides for Local Performance Aid (LPA). In order to qualify for LPA in 1999, a city must affirm that (I) the aid will result in a reduction in property taxes at least equal to the amount of aid received, and (2) the city will spend the aid on programs for which it has developed a system of performance measures and that these measures will allow for the measurement of continuous improvement and will be regularly compiled and presented to the city council at least once a year. The city must identify the program or programs that are to be funded with the aid. The city is eligible for aid if it affirms that it is in the process of developing and implementing a system of performance measures for the program or programs for which the aid is being sought. However, the aid may not be spent on the program or programs until the performance measurement system has been instituted, unless the aid is being used to establish the performance measurement system. Enclosed is a sheet outlining suggested procedures for local performance measurement. This sheet outlines suggested procedures only and your city may develop its own procedures which may better suit your city's needs. Note: The affirmation that the LPA will be used for property tax reduction does not mean that your city must reduce its property tax levy below the amount levied in the previous year, or that your city (if it is subject to the overall levy limitation) must levy less than its levy limit. It means that the LPA will be used to replace property tax dollars that otherwise would have been levied. For levy limit cities, the overall levy limitation reflects changes in LPA. The 1997 amount of LPA is included in a levy limit city's levy limit base. The amount of LPA for the taxes payable year 1999 is subtracted from the levy limit base to arrive at the overall levy limitation for the taxes payable year 1999. If the LPA increases, the levy limit decreases. If the LPA decreases, the levy limit increases. For calendar year 1999, the amount of LPA to be paid will be equal to the amount paid in 1997, $4,107,673, plus an inflation adjustment based on the implicit price deflator. A per capita aid amount will be determined by dividing the total aid available by the total population of all cities that qualify for the aid. Each qualifying city then receives an aid amount based on its population times the per capita aid amount. An equal opportunqv employer TDD: (6/2) 215 -0069 Page 1