05/09/2005 Council Packet - Laserfiche WebLink

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Available Funding Sources 19 �• It is also important for the City to understand the implications of using all or a portion of its available tax abatement capacity for funding the PMR. Since the amount of' tax abatement available for use by the City is limited, any amount used for the PMR would reduce the amount available as an economic 3 development tool. For this reason, we have not recommended abatement as a funding source for the PMR. X Special Service District Minnesota Statutes Chapter 428A defines a special service district as a specific 3 (Minnesota Statutes area within the city where special services are rendered and the costs of the Chapter 428A.01.428A.101) special services are paid from revenues collected from service charges imposed rX within that area. The service charges can be fixed on any equitable basis, but shall be reasonably related to the special services provided and shall be as 3 nearly as possible proportionate to the cost of furnishing the service. The 1996 3 Legislature authorized cities to create special taxing districts to finance improvements and maintenance activities in commercial areas without special legislation. This authority is scheduled to sunset on June 30, 2005 and enabling legislation will be required for special service districts created thereafter. 1 The governing body of a city may adopt an ordinance establishing a special service district. Only property that is used for commercial, industrial, or public utility purposes, or is vacant land zoned or designated on a land use plan for commercial or industrial use and located in the special service district, may be 3 subject to the charges imposed by the city on the special service district. Other types of property may be included within the boundaries of the special service district but are not subject to the levies or charges imposed by the city on the 3 special service district. 3 Special service districts can be a viable financing tool when other traditional public finance options may not be available. For example, upgrading or 3 replacing public improvements in downtown areas do not lend themselves well to special assessments, user charges or jurisdictional -wide property taxes. 3 The primary disadvantage of special service districts lies with its creation. The process for using it is complicated. A city cannot initiate the process to create a 3 district unless it is petitioned to do so. Property owners representing 25% or more of the net tax capacity and 25% of the land area in the district subject to the service charge must sign the petition. The process to impose the service e charge is subject to the same petition requirements. The petition only starts the process. 1 3 3 3 a Springsted Following the receipt of the petition, the city schedules a public hearing. After the hearing, if the city decides to create a district or impose the service charge, then a copy of the summary of the ordinance or resolution taking the action must be mailed to the same property owners in the district notified of the hearing within five days of adoption. The resolution or ordinance may not take effect for at least 45 days. During that period, the action may be vetoed if - 1 8 8 - City of Lino Lakes - Pavement Management Plan Financing Repo