Management Report and Recommendations 12/31/1998

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MOM Honorable Mayor and Members of the City Council City of Link Lakes Page 28 Levy Limits Although the original House bill would have extended levy limits for two years and would have implemented a reverse referendum procedure for certain levy increases, Chapter 243 only includes an extension of levy limits for one additional year. The levy limit calculation for taxes payable in 2000 will begin with the levy limitation for 1999, not the actual 1999 property tax levy. In other words, if a city did not levy to the levy limit maximum for taxes payable in 1999, the city will retain this unused levy authority. For taxes payable in 2000, levy limitation includes adjustments for: 1) inflation (currently estimated to be approximately 1.39 percent), 2) for the city's growth in households, and 3) the city's growth in new construction of commercial and industrial property. The general levy limit law continues to include a provision that allows a city to exceed the limitation. However, to exceed the state - imposed levy limits, a city is required to place the issue on the ballot in a special election. Distribution of Interest on Property Tax Delinquencies Chapter 243 modifies the distribution of interest on property tax delinquencies. The law change was spurred by a property tax delinquency case in Hill City (Aitkin County) where a major property owner had not paid property taxes. Under current law, 50 percent of all penalties and interest collected on real and personal property taxes are distributed to the county in which the property is located, and the other 50 percent are distributed to all school districts within the county. - Under the new law, if the taxes have been delinquent for more than one year, the 50 percent non - school share of interest from tax delinquencies will be shared between the city (or township) and county that levied the taxes on the property. The interest will be shared between the city and the county in - proportion to the levy for taxes payable in the year the interest was collected. Differential Taxation Chapter 243 generally allows a local govemment cooperation and combination plan to be structured to phase -in a higher tax rate for the local govemment unit that had a lower tax rate before combination. The law provides that the higher tax rate is phased -in in equal proportions over a period of up to six years. The law also provides the tax rate phase -in is to be " based on the time it takes to provide equal municipal services to the residents of the area with the lower tax rate. This provision is substantially the same as current law provision for annexation under MN Stat. § 414.035. Effective beginning for taxes levied in 1999, payable in 2000. Bleacher Safety The legislature established safety requirements that apply to all bleachers over 30 inches above grade or the floor below. The open spaces between footboards, seats, and guardrails must not exceed four - inches, unless improved safety nets are installed, and vertical perimeter guardrails with no more than four -inch rail spacing between vertical rails or other approved guardrails that address climbability (as determined by the state building official) and are designed to prevent accidents must be provided. Cities that have not adopted the state building code are responsible for enforcement of the code's bleacher safety requirements for all bleachers within the city, but may enter into joint powers agreements with other municipalities for this purpose.