02/04/2008 Council Packet - Laserfiche WebLink

Home Search

• • • Gordon Heitke January 28, 2008 Page 11 of 13 Section 8.09. Taxpayer Referendum. Subdivision 1. This subdivision states the general rules for reverse referendum. Assuming the conflict with Section 8.08 above was corrected, the petition process applies only when an improvement is funded in part through "general revenue." That term is defined nowhere in the charter, leaving significant questions about when a petition for referendum is called for. Does the term refer only to the City general fund? Or does it mean any revenues without legal limitations on their use (which might include at least portions of specialized funds like water and utility funds). Given the significance of this provision, a more precise definition is imperative. Subdivision 2. This subdivision describes the council action after expiration of the petition period; confusion about the length of that period is discussed under Section 8.08 above. The only other concern in this subdivision is that if a valid petition is timely filed, the Council is required to submit the public improvements to the voters. This result deprives the council of its legislative discretion to abandon the project or find alternative financing rather than move forward with an election. It is also inconsistent with reverse referenda provisions in other areas of law, where a successful petition simply means that the activity in question may not proceed unless approved by the voters. See, e.g., Minnesota Statutes, Section 475.521 (capital improvement bonds) and Section 412.301 (city certificates of indebtedness). Subdivision 3. This subdivision describes the ballot and I have no comments on the language. However, it is important for all parties to understand that the actual ballot is required by state law to contain other information, including the statement "by voting yes on this ballot question, you are voting for a property tax increase." See Minnesota Statutes, Section 275.60. Further, if the election is successful, any tax levy will be made against the so -called "referendum market value" rather than tax capacity. This means that homestead owners pay at a higher rate than for activities that are not subject to referendum (such as special assessment bonds that are secured in part by assessments and in part by tax levies). Subdivision 4. This subdivision indicates that the "City Council may not initiate the same or substantially similar public improvements" within twelve months after an improvement is defeated by referendum. There are two areas of ambiguity. First, it is not clear if this language limits only an improvement initiated by the Council under Section 8.04, subdivision 5, or any improvement financed in part with general revenues (even if initiated by a 25% petition), or even a 100% petitioned project (which is "initiated" by the council under Section 8.04, subdivision 3). Second, the phrase "same or substantially similar improvement" is vague. Is an improvement with a higher or lower cost the same or substantially similar? How much deviation from the prior project is needed to permit initiation before the end of the twelve -month waiting period? Similar language in the existing Charter has proven difficult to interpret, requiring the council to wait for the full period in virtually all cases to avoid questions about the validity of a project initiated earlier. 327632v3 SIB LN140 -86