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Attachment A Memorandum - Schilling Consultant Services Date: 01/09/2006 To: Mr. Jeff McDowell, Acting Chairperson Vadnais Lake Area Water Management Organization Cc: Board and staff From: Joel G. Schilling, Principal RE: Special Taxing District - Memorandum Report The following is a memorandum report to the Board presenting results on research into WMO funding and Special Taxing Districts investigation. What is a special taxing district? Property taxes are levied by taxing authorities in Minnesota such as cities (home rule and statutory), towns, counties, school districts and special taxing districts in accordance with Minnesota Statutes (M.S.), section 275.065. A special taxing district is a less traditional taxing authority. They are enumerated as both specific and generic entities within M.S. 275.066 (see Appendix A). It's well to note that watershed districts are the first generic entity listed on line (1) of section 275.066. How does a water management organization generate operating funds? As you are aware there are two types of water management organizations, watershed districts organized under M.S. Chapter 103D and joint powers boards such as VLAWMO organized under M.S. section 471.59. We've already noted that a watershed district is a special taxing district, thus already having the authority to recommend a property tax levy to the county to generate operating funds. Joint powers WMOs are based upon a Joint Powers Agreement (JPA) spelling out how the joint entity of two or more governments will exercise a power commonly held. The JPA derives from Minnesota Statutes, Section 471.59 (joint exercise of powers) with funding authority from Subdivision 3, stating in part: "Funds may be paid to and disbursed by such agency as may be agreed upon, but the method of disbursement shall agree as far as practicable with the method provided by law for the disbursement of funds by the parties to the agreement." The key words are "Funds may be paid to and disbursed by such agency as may be agreed upon, etc." The statute does not specify how funds are to be generated by the parties to the agreement. However from the administrative perspective of metropolitan water management, Minnesota Rule, Section 8410.0030, Subpart 1 advises a WMO that a JPA should contain at a minimum: 01/09/06 46 Bertha Ct., Mahtomedi, MN 55115 -2031 1