Management Report and Recommendations 12/31/1990

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City of Lino Lakes, Minnesota Management Report, Page 2 — RECENT LEGISLATIVE ACTIONS — The State legislature has made a progression of changes in funding cities. The most significant changes started with the 1988 legislative session and continued through the 1991 — session. Appendix A of this report presents a summary of this legislation and an estimate of the initial year impact on 1) cities - Statewide; and 2) the City of Lino Lakes. Cities must be concerned with at least three aspects of the changes which restructure funding as follows: • The impact of the changes to city funding statewide compared to your City. If your City is less favorably impacted, the ability to maintain basic service and to retain a competitive posture with surrounding communities may erode. • Replacement funding is critical if State aids are severely reduced. Property tax limits coupled with State aid cutbacks could be a financially devastating combination. • Long -range planning cannot be effective if funding levels and sources are not stabilized. The State has needed to revitalize its financial position periodically (the last major crisis was in 1981). The method of achieving the desired result is to pass the financial crisis to local units of government. It becomes difficult or impossible for cities to commit to programs when threats of retroactive funding cuts loom.