HomeMy WebLinkAbout06-03-2010 Charter PacketLINO LAKES CHARTER COMMISSION
Special Meeting
AGENDA
Thursday, June 3, 2010
6:30 pm
1. Call to Order and Roll Call
2. Pledge of Allegiance
3. Open Mike / Public Comment
4. Approval of Minutes:
April 8, 2010
5. Old Business
A. Tax Cap Amendment
Three copies of Tax Cap Amendments:
Commissioners ready to discuss, make changes and final copy finished
6. New Business
A. Reminder: Joint meeting with Council, July 8, 2010 at 6:30 PM
6:30 PM
Adjournment 8:30 PM
Caroline Dahl Christopher Lyden
Chair Vice Chair
Kelly Gunderson
Secretary
May 28, 2010
Dear Commissioners,
In your packet for the June 3, 2010 Special Charter Commission meeting, I only
included the sections containing the Tax Cap Proposal. If you need more information
on the three City Charter's "Taxation and Finances" sections, the cities websites are
included below:
Caroline
www.ci.mounds-view.mn.us
Go to City Code and Regulations to find the City Charter, look under Chapter 7
Section 7.03 System of Taxation.
www.ci.fridley.mn.us
Go to Government to find City Code / City Charter, look under Chapter 7
Section 7.02. POWER OF TAXATION.
www.ci.west-saint-paul.mn.us
Go to City Government to find City Charter, look under Chapter 7
Subd. 2. Limitations on Property Tax Levy.
FRIDLEY CITY CHARTER
CHAPTER 7. TAXATION AND FINANCES.
Section 7.01. COUNCIL TO CONTROL FINANCES.
The Council shall have full authority over the financial affairs of the City, and shall provide for the
collection of all revenues and other assets, the auditing and settlement of accounts, and the
safekeeping and disbursement of public moneys. In the exercise of a sound discretion it shall make
provisions for the payment of all liabilities and expenses. The Council shall establish the fiscal year
for the City.
Section 7.02. POWER OF TAXATION.
1. The City shall have, in addition to the powers by this Charter expressly or impliedly granted,
all the powers to raise money by taxation pursuant to the laws of the State which are
applicable to cities of the class of which it may be a member from time to time, provided that
the amount of taxes levied against real and personal property within the City for general City
purposes shall not exceed in dollars, a tax levy that is greater than the prior year tax levy
increased by an inflationary index, or 5%, whichever is least. Said inflationary index shall
be that as defined by the U.S. Department of Labor, Bureau of Labor Statistics, Consumer
Price Index for all Urban Consumers in the Minneapolis, St. Paul metropolitan area. (Ref.
Ord. 592, 1102 and 11/7/00 Amendment)
Nothing in this provision shall be construed to impair any general obligation the City may
have in support of otherwise lawful indebtedness or similar obligation supported by the full
faith and credit of the City, provided, however, that long-term, general obligation
indebtedness shall not be used for the purpose of funding the routine and daily business
operations of the City. (Ref Ord 1152)
2. The City Council may also levy a tax against real and personal property within the City in
addition to said limit as defined in paragraph 1 provided the Council shall:
A. Adopt a resolution declaring the necessity for an additional tax levy and specifying
the purposes for which such additional tax levy is required.
B. Hold a public hearing pursuant to three (3) weeks' published notice in the official
newspaper of the City setting forth the contents of the resolution described in
Subdivision A.
C. Adopt after such public hearing a resolution by an affirmative vote of a least four (4)
members of the Council which shall be presented as a clear and concise 'plain
language' ballot question at the next regular municipal election. (Ref. Ord. 592, 1102
and 11/7/00 Amendment)
D. The additional tax levy shall take effect if 51% of the votes cast at said election are in
favor of its adoption.
�'v 12-20-07
1
West St. Paul Page 3 of 5
provide for the regular payment without specific individual authorization by the Council of salaries and
wages of regular employees, laborers, and fixed charges which have previously duly and regularly
incurred.
Subd. 2. Limitations on Property Tax Levy. The total levy in property taxes for General Fund purposes
shall be limited as follows:
(a) For taxes payable in the calendar year 2007, the General Fund property tax levy plus the state -
certified Local Government Aid (LGA) from the State of Minnesota, shall not exceed $360 per capita for
each resident of the City.
(b) For each year thereafter, the $360 per capita limit shall increase each year based on the Implicit
Price Deflator (IPD) as published by the Bureau of Economic Analysis as of March 31st of the year prior
to the year in which the taxes will be payable. The IPD increase will be applied to the per capita limit
from the previous year to determine the limit of the total combined amount of taxes and LGA. From this
total combined amount, the state -certified LGA far the next year shall be deducted, resulting in the tax
levy limit for the General Fund for the next year.
To determine the population, the Finance Director shall use the United States decennia census figure
from the most recent U.S. Bureau of Census, unless a more recent estimate is available from the
demographer's office of the Metropolitan Council.
Section 7.04 thru Section 7.14 - Ordinance 97-14
Section 7.10 Subd. 1 — Ordinance 99-25
-26
�.•, Section 7.10. Fund to be Kept. There shall be maintained in the City treasury the following funds:
Subd. 1. A General Fund. for the payment of the general expenses of operating the City. Into this fund
shall be paid all money not provided herein or by statute to be paid into any other fund, including, by way
of illustration but not of limitation, monies received as county and state -aids for maintenance of roads
and streets, all monies received from taxes levied on property for the support of this fund, and all
collections from any new taxes hereafter established by the Council or by apportionment of any state,
county, or federal taxes now or hereafter made available by this Charter for the general fund. Any surplus
in this fund not needed immediately for the purpose thereof may be invested by the City Treasurer into
the depositories and the investment funds designated by the Council, as authorized by state statute for
the investment of such funds; any such investments may be liquidated at any time.
Subd. 2. A Debt Service Fund, into which shall be paid all receipts from taxes or other sources for the
payment of principal and interest of all obligations issued by the City except bonds issued on account of
any local improvements to be financed wholly or partly by special assessments and bonds issued on
account of any municipally owned utility. Out of this fund shall be paid the principal and interest on such
obligations when due. Any surplus in such fund not needed immediately for debt service maybe invested
under the direction of the Council in such securities as are authorized by statute for the investment of
such funds; and such funds may be liquidated at any time. To the extent required by law, a separate
account in the debt service fund shall be maintained for each issue of City obligations.
Subd. 3. A Bond Fund, into which shall be paid and disbursed the proceeds of all bonds issued by the
City except bonds issued on account of an local improvements to be financed wholly or partly by special
assessments and bonds issued on account of any municipally owned utility. A separate bond account
shall be kept for each issue of such bonds.
Subd. 4. A Special Assessment Fund, which shall be used to finance local improvements to be paid for,
in whole or in part, from special assessments against benefited property. There shall be paid into this
,may fund: (1) collections of special assessments, with interest and penalties levied against the benefited
http://weststpaul.govofice.com/index.asp?Type=B BASIC&SEC={A9335388-5ED5-404... 5/27/2010
/11D61-114s0� E �'
CHAPTER 7
TAXATION AND FINANCES
Section 7.01 Council to Control Finances. The Council shall have full authority over the
financial affairs of the City except as limited or prohibited by the state constitution, state laws, or
this Charter. It shall provide for the collection of all revenues and other assets, and the auditing and
settlement of accounts. It shall further provide for the safekeeping and disbursements of public
monies by the City Treasurer.
Section 7.02 Fiscal Year. The fiscal year of the City shall be the calendar year.
Section 7.03 System of Taxation. Subject to the state constitution, and except as
forbidden by it or by state law, the Council shall have full power to provide by ordinance for a
system of local taxation. This authority includes the power by ordinance to assess, levy, and
collect taxes on all subjects or objects of taxation except as limited or prohibited by the state
constitution, by this Charter or by state laws imposing restrictions upon the City irrespective of
Charter provisions.
r -----Subdivision 1. The City's annual resolution to levy ad valorem taxes (raising money
against real and personal property) shall not exceed the lesser of the following formulas; either
the prior year tax levy dollar amount increased by a maximum of 5%, or CPI (Consumer Price
Index) plus 2%. The CPI shall be the 12 month average of the most recently published data for
all Urban Consumers in the Minneapolis, St. Paul metropolitan area, as defined by the U.S.
Department of Labor, Bureau of Labor Statistics.
Subdivision 2. The City Council may levy a tax against real and personal property in
excess of the limit set in Subdivision 1 provided the Council shall:
A) Adopt a resolution declaring the necessity for a n additional tax levy and specifying
the purposes for which such additional tax levy is required.
B) Hold a public hearing upon at least 10 days posted and published notice in the City's
official newspaper, City newsletter, and, if available, the City web site, setting forth
the contents of the resolution described in Subdivision 2A.
C) After such public hearing, adopt by an affirmative vote of at least four (4) members of
the Council such resolution language which is readily understandable and a summary
of such resolution will be the ballot question for the electorate at the next regular
municipal election or special election, per this Charter's Section 4.04, as amended,
prior to the final levy approval.
D) If the additional tax levy resolution is then approved by the voters under Chapter 4 of
this Charter then the levy shall be implemented in the following fiscal year or later
date as specified in the resolution.
17
CITY OF LINO LAKES
CHARTER COMMISSION MEETING
DATE
TIME STARTED
TIME ENDED
MEMBERS PRESENT
MEMBERS EXCUSED
MEMBERS UNEXCUSED
STAFF MEMBERS PRESENT
1
: April 8, 2008
: 6:30 P.M.
9:35 P.M.
: Carlson, Dahl, Lyden, Storberg, Trehus, Turcotte,
Williams, Minar, Sutherland, Drennen and Aldentaler
: Penn, Bretoi, Gunderson and Zastrow
: None
: None
CALL TO ORDER AND ROLL CALL
Chair Dahl called the meeting of the Lino Lakes Charter Commission to order at 6:35p.m. on
April 8, 2008
PLEDGE OF ALLEGIANCE
n APPROVAL OF AGENDA
No changes were made to the agenda
OPEN MIKE
No one addressed meeting
APPROVAL OF MINUTES
Commissioner Trehus asked if changes to the minutes be shown in the context of the revised
minutes and that we would then approve the minutes as a complete Draft with changes in place.
Secretary Gunderson will be asked if this can be done.
MOTION TO TABLE by Commissioner Trehus, seconded by Commissioner Drennen, to table
the minutes of January 14, 2010. Motion carried.
OLD BUSINESS
Presentation of Plaque for Commissioner Maher
Commissioner Maher was not present at the meeting, we have not receive a response from her.
2
6. A Mayor Reinert's response to Section 3.01 of the Lino Lakes Charter
Mayor Reinert addressed the Commission regarding Section 3.01 of the Lino Lakes Charter and
citizen's right to speak on agenda items at public council meetings. Reinert was asked to the
meeting to explain why a person attending the January 11, 2010 council meeting was not allowed
to speak and why he said they would be taking no public comment.
Mayor Reinert explained that he knew the person who asked to speak, that he was a
Union Rep. and that he was not a resident of Lino Lakes. Reinert said he should have
explained at that time that the person was not allowed to speak because he was not a
Lino Lakes resident and that Lino Lakes residents would be allowed to speak on agenda
items Comm. Drennen asked Mayor Reinert if he had contacted the PRESS to clarify
why the person was not allowed to speak? Mayor Reinert said no clarification had
been made. Comm.Lyden is concerned that residents living on Lino Lakes borders
would not be allowed to address issues that would have an effect on them due to
happenings in Lino Lakes. Mayor Reinert said that due to the sensitivity of the topic
with this particular situation, with a Union Rep., he felt it was not the best way to
resolve this situation. With border issues, such as the Vikings or Airport he may handle
the situation same way, with only residents allowed to speak, Comm. Lyden said he
is concerned that the Mayor is determining what the a person is going to say even before
they speak. Mayor Reinert stated the person was not allowed to speak because he is not
a resident. Comm. Sutherland addressed the issue that our charter does not have exclusive
language that the definition of the word citizen is meant to be only residents of Lino
Lakes Comm. Trehus suggested that the in the charter the word citizen would probably be a
citizen of just Lino Lakes. Comm. Dahl stated the person should have been allowed to talk and
that the right to speak at public meetings should not be restricted to Lino Lakes citizens only.
Comm. Drennen had three issues he would like to address. What is the definition of the word
citizen in our charter? He is also concerned that the Mayor exercised his prerogative because he
knew what the person might say and that the Mayor does not use his position of authority to
censor speaking. Mayor Reinert assured that there will be no censorship of Lino Lakes citizens,
Comm. Carlson stated that he was satisfied with the Mayors explanation of the issue and that it
had addressed his concerns. Due to the question of the term citizen in our charter, we will make a
formal request to determine if citizen is meant to be inclusive of Lino Lakes residents only.
6. 13 Attorney Bills
Comm. Dahl asked Mayor Reinert to address the on going issue of the council taking the
position that they will not pay our attorney's bill. Mayor Reinert said he is only one of the five
persons on the council that decides the issue. He would like to address the issue at a joint
meeting. The City attorney would be asked to address this. Also, the council has been directed by
their attorney that it would not be legal to authorize payment of this bill. Comm. Sutherland said
that the position taken by the city is that they will pay for frame and amend only. Most of our
attorney's bill is due to our need to respond to the audit initiated by the city council. We cannot
even include a secretary because that would not be included in frame and amend. Mayor Reinert
said we could address our issue with the League of MN Cities. Commissioner's comments were
that this could be a biased source of information, as they are being funded by the city. The
League may just comment back to our city attorney. Mayor Reinert stated that the issue would be
3
put on the agenda for the next work session. Comm. Sutherland stated that even the amount that
had been agreed to have been paid has not yet been paid. In our out standing bill, $107.30, was in
agreement to be paid and has not. The $1,570.35, is due to our need to respond to the audit
initiated by the city council. Mayor Reinert said the $107.30 portion of the bill would be paid.
Mayor Reinert was informed that the Five Year Plan, as per Section 7.05 of the Lino Lakes
Charter, for years 2009, 2010, 2011, 2012, and 2013 has not been passed. Mayor Reinert will
also try to set the schedule so as to have the joint meeting of the council and commission at our
regularly scheduled July 8th 2010 meeting. Having concluded his response to the commission,
Mayor Reinert left the meeting at this point. The commission thanked him for being present.
6. C Budget, Five year plan, and Dougherty bill to Lino Lakes for council authorized audit
of the Charter Commission.
Five Year Plan has not been adopted. The Commission read the copies of the bills presented by
Dougherty's law firm to the city of Lino Lakes for the council requested
Investigation / Audit of the Charter Commission. As per the bills sent the city has paid
$9,289.00 to the Dougherty firm for their charter investigation
6. D Annual letter to the Judge for 2009
Commission liked the draft letter as amended, with an explanation of the council ordered audit,
and that the council had not adopted the Five Year Plan beginning in 2009, as per Section 7.05 of
the charter. Motion to approve the letter with amendments was made by Commissioner Trehus
and seconded by Commissioner Minar. Motion Passed.
6. E Code of conduct Report
Commissioner Sutherland would like to know where the Commission stands on this issue before
more time is spent on a new code. The response from the commission was mostly favorable. It
was suggested that it would be put on the agenda for our joint meeting in July, that the code
would include the council, city staff, and boards, and that a conflict of interest section be
prominent in the code. Motion was made by Commissioner Sutherland and seconded by
Commissioner Drennen that we include the code of conduct in our July 8th joint meeting. Motion
passed with Commissioner Storberg voting no.
6. F Tax Cap Amendment
Commissioner Trehus said that if we plan to have this (the tax cap amendment) on Fall ballot we
are going to have to get this started. Commissioner Sutherland stated we should get this on the
agenda with the council. Commissioner Minar agreed now would be the time to get started.
Commissioner Sutherland said that if this were presented to the council now they would
probably agree to share. Commissioner Carlson suggested that we could also present this as an
amendment by ordinance. There were also suggestions that it go right to a referendum, timing
being an issue. It was decided we will look at the three options from other cities; this wilt be
discussed at a special meeting in June so we would be able to present this at the joint meeting in
July. June 3`d at 6:30 is the date and time set for the special meeting to discuss the amendment.
4
6. G 2010 Goal Setting.
Suggestions were, tax cap, code of conduct, and a better use of Roberts Rules of Order. We
would also set 2011 goal setting as an Oct. agenda item,
NEW BUSINESS
7. A Joint meeting with council
A joint meeting date has been set for our regular July 8th meeting. Items for discussion will be
the charter budget and unpaid bills from attorney Marty, Code of Conduct / Conflict of Interest,
and a tax cap amendment.
A motion was made by Commissioner Storberg and seconded by Commissioner Lyden to send a
thank you letter to Mayor Reinert for attending our meeting. Motion carried.
ADJOURN
MOTION TO ADJOURN was made by Commissioner Sutherland, seconded by Commissioner
Trehus. Motion carried.
Respectfully Submitted,
Harry Carlson, Acting Secretary
Lino Lakes Charter Commission
-' 'o: Lino Lakes Charter Commissioners
From: Commissioner Trehus
Subject: Tax Cap Information for 6/3/10 Meeting
Date: 5/28/10
Dear Commissioners,
It may be advantageous to review some supporting information, so I have taken it upon
myself to offer these materials in preparation for our upcoming meeting. In addition to
this document, there are 5 files attached to this e-mail (so there are a total of 6). It is my
hope that the Commission's officers will provide this information to any members who
are unable to receive it via e-mail, and provide hard copy at the meeting.
The Adobe file "2011_Levylimits--LMC.pdf' is a summary of the tax cap placed on
cities by the Minnesota Legislature that was prepared by the League of Minnesota Cities.
Currently set to expire after next year, this also represents yet anotherapproach to
capping local taxes, in addition to those in your packets from the City Charters of
Mounds View, Fridley, and West St. Paul.
The Adobe file "2008-2010 Lino Levies. • f"as generously provided by the City's
Finance Director and our City Clerk. Primarily, this shows us how much the City
Council voluntarily reduced spending during last fall's budgeting process. (Minnesota
law actually allowed the City an increase of eight -tenths of one percent). It also fills in
the missing data, at least in Lino Lakes, for 2009 and 2010.
Data that supports why Lino Lakes might need a tax cap measure is shown in the other 3
files. Two of them more or less show that before 2010, the City increased expenditures at
a rate well in excess of population growth. The "Comparison" JPEG looks at taxes in
growing twin city suburbs, and the highlighted bar for Lino Lakes has an adjustment
made to the numbers, which are also represented at the bottom of the graphic without that
adjustment.
See you Thursday!
LEAGUE OF
MINNESOTA
CITIES
CONNECTING & INNOVATING
SINCE 1913
How to estimate your 2011 levy limit
Updated 5/21/2010
• Again for 2011 levy limits will only be in effect for cities over 2,500 population. Under current
law, levy limits expire after 2011.
• The language on levy limits is contained in Chapter 275 of Minnesota statutes.
• Slight changes to the levy limit law were made during the 2010 session: HF3729 and Chapter 215.
• The final inflationary increase percentage will NOT be known until later this summer.
• The Dept. of Revenue will be certifying levy limits by Sept. 1, 2010. Cities must indicate to the
Dept. using the PT280 form which special levies they are intending to use by Sept. 30, 2010.
Step 1: Start with your city's adiusted levy limit base for pay 2010 (note that starting with the adjusted
levy limit from last year means that any unused levy authority is retained going forward for your
city). You can arrive at this figure by adding your maximum allowable levy (the limited piece)
for payable 2010 to your certified 2010 LGA, 2010 taconite aid (if applicable), 2010 wind energy
production tax (if applicable) and your 2010 utility valuation transition aid(f applicable). This
is your city's levy limit base.
Step 2: Multiply your levy limit base by 1.68% (the levy limit law says the inflationary increase is the
lesser of 3.9% OR the change in the implicit price deflator (IPD) for local governments). The
2010 legislature clarified that the change cannot be less than zero percent. The most recent data
(May 2010) on the IPD factor from the Bureau of Economic Analysis shows the change in the
deflator at 1.68 percent. [NOTE: this is NOT the final IPD figure that will be used; DOR will use
the most recent data available—likely from June—when it calculates levy limits].
Step 3: Multiply the result of Step 2 by 1 plus one-half of the percentage increase, if any, in the number
of households in your city over the last year.
Step 4: Multiply the result of Step 3 by 1 plus one-half of the percentage increase in the total taxable
market value for all kinds of property as a result of new construction of just commercial and
industrial (CI) property. (This adjustment only applies, in other words, if your total taxable
market value increased AND you had new CI construction). The result is your adjusted levy
limit base for pay 2011.
Step 5: From your adjusted levy limit base for 2011, subtract your 2011 certified LGA (if applicable),
your 2011 taconite aid (if applicable), your 2011 wind energy production tax
(if applicable), and your 2011 utility valuation transition aid (if applicable). The 2010 Legislature
confirmed and clarified that certified aid amounts are to be used in the calculation. At this point,
2011 LGA amounts are estimates only (see spreadsheet on LMC website). Certified aid amounts
for 2011 will be announced by DOR in July 2010.
The result is your 2011 levy limit. See the following pages for detailed information on special levies for
pay 2011.
145 UNIVERSITY AVE. WEST
ST. PAUL, MN 55103-2044
PHONE: (651) 281-1200 FAX: (651) 281-1299
TOLL FREE: (800) 925-1122 WEB: WWW.LMC.ORG
League of Minnesota Cities
How to estimate your 2011 levy limit
Page 2
Special Levies for 2011
There are several special levies allowed beyond this levy limit. Below is a list of the most frequently used
"special levies." Those marked with an "*" are special levies that cities can use for the first time for
payable 2011. For a complete list of special levies, see MS 275.70, subd 5.
• *Levies to recover 2010 LGA cuts in ratified unallotments
• *Levies to recover 2010 MVHC reimbursement cuts in ratified unallotments
• *Levies to recover 2010 LGA cuts in supplemental budget passed by 2010 legislature
• *Levies to recover 2010 MVHC reimbursement cuts in supplemental budget
• *Levies to recover 2011 MVHC reimbursement cuts in supplemental budget
• Levies for bonds and most certificates of indebtedness.
• Voter approved levies.
• Levies to pay for federal or state matching requirements.
• Levies for natural disaster recovery.
• Levies for property tax abatements.
• Levies for increases in PERA employer contributions.
• Levies to repay a federal or state loan for a transportation or capital project.
• Levy increases to fund police and firefighter relief associations.
• Levies related to foreclosure costs
• Levies for police and firefighter wage and benefit costs.
Example of how to estimate the levy limit
Information needed for calculation:
✓ Pay 2010 adjusted levy limit base = $900,000 = levy limit base for pay 2011
✓ Percent change in number of households over last year = 2%
✓ Percent change in total market value of all property types as a result of new construction of
commercial/industrial property= 0%
✓ 2011 estimated LGA= $3,250
✓ 2011 taconite aid= $0
• 2011 wind energy production tax= $0
✓ 2011 utility transition aid = $0
Calculation:
Step 1: $900,000
Step 2: $900,000 x 1.68%= $915,120
Step 3: $915,120 x (1+half of 2%) = $915,120 x 1.01 = $924,271
Step 4: $924,271 x (1+0) = $924,271 x 1 = $924,271 (adjusted levy limit base for pay 2010)
Step 5: $924,271 — $3,250 — 0 — 0 - 0 = $921,021 (2011 levy limit)
For more information about levy limits, contact the following League of Minnesota Cities staff:
Gary Carlson Jennifer O'Rourke Rachel Walker
Director of Intergovernmental Relations Intergovernmental Relations Policy Analysis Manager
(651) 281-1255 or (800) 925-1122 Representative (651) 281-1236 or (800) 925-1122
gcarlsonrudmc.org (651) 281-1261 or (800) 925-1122 rwalkericclmc.ore
iorourkeuclmc.ore
League of Minnesota Cities
How to estimate your 2011 levy limit
Page 3
FAQ: 2011 Special Levies
Q: Are there special levies that we should consider for the first time?
A: Yes. There are several special levies that cities can take advantage of for the first time. These
are special levies to allow cities to recoup the amounts of LGA and/or MVHC reimbursement that
were unalloted by the Governor AND the amounts of LGA and/or MVHC reimbursement that
were cut by the Legislature in the supplemental budget bill of 2010
Q: If we used a special levy in 2010, do we have to use it again in 2011?
A: Technically, the answer is no. However, the Department of Revenue makes adjustments to
your levy limit base once you start using a special levy (i.e. your base is reduced). If you opt to
stop using a special levy, the Department will NOT restore your base. Therefore, it is in the city's
best interest to continue to use a special levy once it starts.
Q: Do we have to use special levies?
A: No. They are optional, keeping in mind the answer above. If your city is going to use one or
more special levies for the first time in 2011, there may be special calculations you need to do in
order to estimate your levy limit base (see below).
Q: If we use special levies for the first time for pay 2011, what information do we need to
provide to DOR?
A: For most of the allowed special levies, the Dept. of Revenue needs baseline data. When you
decide to start using a given special levy, the Department will use the information provided by
cities on the property tax levy report. This report was due to the Department in December of 2009.
If you are concerned that your city's report was incomplete or inaccurate for any reason, you need
to contact the Department in order to work with them on calculating an accurate baseline.
Cities will need to submit form PT280 by September 30th to the Dept. of Revenue. That form
indicates which special levies a city intends to use.
Q: Do we need to submit any forms to the Dept. of Revenue?
A: Yes. Cities will need to submit form PT280 by September 30th to the Dept. of Revenue. That
form indicates which special levies a city intends to use.
Q: Should we use special levies?
A: It depends. The use of special levies is optional. Keep in mind that the inflationary increase
on the limited levy is just 1.68% (note that this figure will be finalized in early July using the data
available at that time and may change slightly). If you are going to see an increase of less than the
inflationary increase PLUS the other 2 percentage adjustments for household growth and
commercial -industrial growth in a category of spending that could be a special levy, it may be of
more benefit to NOT treat that category as a special levy. This way, you retain those dollars in the
calculation of your levy limit base.
League of Minnesota Cities
How to estimate your 2011 levy limit
Page 4
Q: Where does the household data come from for calculating levy limits?
A: The state demographer and Metropolitan Council will certify population and household counts
to the Dept. of Revenue by July 15.
Q: Where does the commercial/industrial new construction data come from?
A: Data on new construction of C/I property is available from the 2009 Fall Mini Tax Abstract
from the Dept. of Revenue. Total taxable market value for all property types in a city will be
available on the 2010 Abstract of Tax Lists in July.
Q: How is new construction within TIF districts or within JOBZ areas handled in the levy
limit calculations?
A: Levy authority is adjusted for a portion of the percentage increase in total taxable market value
as a result of new construction of commercial/industrial property. New construction of C/I
property within TIF and JOBZ areas will count in the calculation of this adjustment.
Select Special Levies Allowed for Taxes Payable 2011
A table listing several of the special levies allowed in the levy limit law is below. For each of
these special levies, the table makes note of whether or not cities that are using the special levy for
the first time must back out the entire 2010 levy amount for a given special levy in order to
calculate the levy limit base. The table also includes additional information on some of the more
complex special levies. DOR will issue highly detailed instructions on special levies when it sends
out the PT280 forms.
Special Levy
If city will use this special
levy FOR THE FIRST
TIME in 2011, does city
need to subtract entire
2010 amount from levy
limit base calculation?
Notes
Unalloted (ratified) 2010 LGA or
MVHC cuts
No.
Supplemental cuts to 2010 LGA
or MVHC
No.
Cuts to 2011 MVHC
No.
Costs attributable to police/fire
wages and benefits
YES.
The special levy is the
entire amount—not just the
change.
If you contract with another city or county
for police services, you need to ask the
provider for documentation as to the
portion of contract costs that go to cover
wage/benefits. Then, you need to
determine the amount of levy you have
used/will use to cover that part of the
contract cost.
Levies for bonds and most
certificates of indebtedness
YES.
The special levy is the
entire amount—not just the
change.
If a city issued an emergency debt
certificate to recover from aid and credit
cuts rather than using the special levy for a
similar purpose, it must use this special
levy to pay the certificate back, not the aid or
credit cut special levy
League of Minnesota Cities
How to estimate your 2011 levy limit
Page 5
Special Levy
If city will use this
special levy FOR THE
FIRST TIME in 2011,
does city need to
subtract entire 2010
amount from levy limit
base calculation?
Notes
Levies approved via voter
referendum
YES.
The special levy is the
entire amount—not just the
change.
Levies to fund matching
requirements for federal or state
grants
Yes—the special levy is for
the change since 2001 only.
To the extent that matching
requirement exceeds requirement in
2001 or it is a new requirement that
didn't exist prior to 2002
Levies to pay expenses incurred
in preparing or repairing the
effects of natural disaster
YES.
The special levy is the
entire amount—not just the
change.
There is also a separate application to
DOR Commissioner.
Levies for property tax
abatements
YES.
The special levy is the
entire amount—not just the
change.
Levies for increases in PERA
employer contribution rates or
for locally administered plans
effective after 6/30/01
YES—the special levy is
for the change since 2001
only.
Cities cannot use a special levy for
PERA rate increases if they are
accounting for those rate increases as
part of the police/fire wages and
benefits special levy and vice versa.
No double counting is allowed.
Levies to repay state or federal
loan used to fund spending on
transportation or other capital
project
YES.
The special levy is the
entire amount—not just the
change.
Levies to fund police and
firefighter relief associations.
YES.
The special levy is the
entire amount—not just the
change.
Levies to pay costs incurred for
securing, maintaining, or
demolishing foreclosed or
abandoned residential properties
YES.
Requires separate application to DOR
commissioner. City must meet
threshold: foreclosure rate of at least
1.4% in 2007 OR foreclosure rate in
2007 in city or zip code area of city
that is at least 50% higher than average
metro foreclosure rate. Foreclosure
rate is number of foreclosures in sheriff
sales records divided by number of
households in 2007.
League of Minnesota Cities
How to estimate your 2011 levy limit
Page 6
Examples of how to estimate your city's levy limit
Example 1: City has small debt levy (also had for pay 2010)
Information needed for calculation:
✓ 2010 adjusted levy limit base = levy limit base for pay 2011 = $900,000
✓ Percent change in number of households over last year = 2%
✓ Percent change in total market value of all property types as a result of new construction of CII =
0%
✓ 2011 estimated LGA= $3,250
✓ 2011 taconite aid= $0
✓ 2011 wind energy production tax= $0
✓ 2011 utility transition aid = $0
Calculation:
Step 1: $900,000
Step 2: $900,000 x 1.68%= $915,120
Step 3: $915,120 x (l+half of 2%) = $915,120 x 1.01 = $924,271
Step 4: $924,271 x (1+0) = $924,271 x 1 = $924,271 (adjusted levy limit base for pay 2010)
Step 5: $924,271 - $3,250 - 0 - 0 - 0 = $921,021 (2011 levy limit)
Example 2: City uses police/fire wage and benefit cost special levy (for 1st time in pay 2011)
Information needed for calculation:
✓ 2010 adjusted levy limit base = pay 2011 levy limit base = $125,000
✓ 2010 levy for police/fire wage and benefit costs = $35,000
(treat as if it would have been a special levy)
✓ Percent change in number of households over last year = 3%
✓ Percent change in total market value of all property types as a result of new construction of C/I =
1%
✓ 2011 estimated LGA= $3,250
✓ 2011 taconite aid= $0
✓ 2011 wind energy production tax= $0
✓ 2011 utility transition aid = $0
Calculation:
Step 1: $125,000
Step 2: $125,000 - $35,000 = $90,000
Step 3: $90,000 x 1.68% = $91,512
Step 4: $91,512 x (l+half of 3%) = $91,512 x 1.015 = $92,885
Step 5: $92,885 x (l+half of 1%) = $92,885 x 1.005 = $93,349 (adjusted levy limit base)
Step 6: $93,349 - $3,250 - 0 - 0 - 0 = $90,099 (2011 levy limit)
DATA
YOY % YOY %
Population Change Tax Levy Change
1998 15053 $ 2,889,626
1999 15760 4.49% $ 3,699,918 21.90%
2000 16791 6.14% $ 4,187,526 11.64%
2001 17380 3.39% $ 4,766,240 12.14%
2002 17942 3.13% $ 5,902,158 19.25%
2003 18368 2.32% $ 6,124,621 3.63%
2004 18725 1.91% $ 6,550,620 6.50%
2005 19698 4.94% $ 7,269,302 9.89%
2006 19736 0.19% $ 7,976,907 8.87%
25.00%
20.00%
0
m
c
0
V 15.00%
ft -
0
0
I
g 10.00%
2
0
a
5.00%
0.00%
Year over Year % of Change
1999 2000 2001 2002 2003 2004 2005 2006
■ Population
■ Tax Levy
2008 TAX COMPARISION AMONG SIMILAR DEVELOPING METRO COMMUNITIE
Andover
Blaine
Centerville
IChaska
Cottage grove
Dayton
Farmington
;Forest lake
Hugo
Lake elmo
Lino w/recon
Prior lake
,Rosemount
1St. Paul park
Victoria
1 ac onia
16 -city averages
16 -city totals
city rate school tax
31.39
31.57
45.81
9.18
35.12'
43.01
43.82
29.44
34.19
17.42
29.141
35.26'
35.97
29.62
20.08'
...............
45.81
15.14
16.11
20.55 18.45
total tax
84.31
90.36
20.431
98.03
94.86'
107.64
118.56
74,39'
80,3E
cert. LGA
$0
cert. levy
$9,991,162
$0 $18,890 ,017
822,920' $1,985 ,64
$50,000: $4,313,324
$0, $12,184,099
$0 $2,665,835
$0' $8,870,078
$0 $6,832,461
$0' $5,189,507
97,984
,713
$8,364,208
11,184 ,627
$1,420,711
$4,138,682
$4,007,385
total $ (E+F) 2007 pop. expendOop % vs. avg.
$9,991,162 30,598 $326.53 5.74%
$18,890,017 56,575 $333,89 -1384%
$2 ,008 ,569 8523.20 35,02%'
8183.53 -52.64%
$360,60; -6.94%
$4,363,324
$12,184,099
$2,665,835
$8,870,078
$6,832,461
$5,189,507
0'
42.44 21.05. 93.66 $0
32.731 29.84 92.721 $214 ,219
37,15i 32.37 { 111.63 $01
32.59 F 28.96 103.06 80
33.80 27.10 ; 95.85 $17 ,946
$113,690,442
97,984
71
$8,364 ,20
$11,184,627
$1,634,930
$4,138,682
$4,007,385
$113,977,581
Average annual reconstruction expense of $2,187,500 (per P1+R financing plan, Spnngsted) i
Lino Lakes' numbers with those of the other cities.
Below are Lino Lakes' numbers without the normalization, for reference:
'Lino Lakes 38.97 ' 28.891 105.87 $0
Source: L que of Minnesota Cities, Metropolitan Council
$8,867,213
adde
$8 67,213
3,839
23,775
33,788
5,015
18,589
17,494
12,022
8,182
$531,57
$477.17
$390,56
$431.67
$317.52
19,861 US.
22,111 $378,28
20,917 $534,71:
5,344 $305.94
$653.82
9,701 $413.09
6,330
294,131
$387,51
37.18%
23.14%
0.79%
11,40%
-18.06%
43.710
-2.38%
37.99%
-21.05%:
68.73%,
6.60%
0.00%
o the levy amount to no
19 ,851 $446.69
15.27%
^1..:
City of Lino Lakes: Population vs. Total Tax Levy
Sources: Metropolitan Concil, Comprehensive Annual Financial Reports, City of Lino Lakes
Year
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Population
Total Tax
Levy
15,053
$ 2,889,626
15,760
$ 3,699,918
16,791
$ 4,187,526
17,380
17 ,942
18,368
18,725
19,698
19,736
$ 4,766,240
$ 5,902,158
$ 6,124,621
$ 6,550,620
7 ,269 ,302
$ 7 ,976 ,907
19,851
$ 8,456,328
19,987
$ 8,868,213
Year
% Chg
Population
% Chg Tax
Levy
1998
Year
% Chg
Population
°% Chg Tax
Levy
4.7%
28.0%
1998
6.5%
13.2%
2001
3.6%,
2008
32.8%
206.9%
23.8%
2003
2.4%
3.8%
19,851
$ 8,456,328
19,987
$ 8,868,213
Year
% Chg
Population
% Chg Tax
Levy
1998
1999
4.7%
28.0%
2000
6.5%
13.2%
2001
3.6%,
13.8%
2002
3.2''
23.8%
2003
2.4%
3.8%
2004
1.9%
7.0%
2005
5.2%
11.0%
2006
0.2%
9.7%
2007
0.6%
6.0%
2008
0.7%
4.9%
25,000
20,000
15,000
10,000
5,000
0
1998
1999
2000
2001
2002
2003
—111— Population
2004
2005
- Total Tax Levy
2006
2007
2008
$10,000,000
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$-
City of Lino Lakes
2010 Adopted Tax Levy
General Fund Levy
Special Levy - PERA Contribution
Adopted Adopted Adopted
2008 2009 2010
7,864,704
38,418
8,247,178
47,994
7,768,238
47,994
7,903,122 8,295,172 7,816,232
Special Levy - Target/Kohls Abatemt 70,114
Special Levy - Legacy/YMCA Abatemt 2006C 42,443
Debt Levy
Certificate of Indebtedness 2005
Certificate of Indebtedness 2006
Certificate of Indebtedness 2007
Certificate of Indebtedness 2008
Certificate of Indebtedness 2009
Civic Complex Bond 1998A **
Public Project Revenue Bond 1999C
Taxable G.O. Imp Bond 2003B
G.O. Improvement Bond 2005A
G.O. Improvement Refunding Bond 2005B
G.O. Tax Abatement Bond 2006C
G.O. CIP Refunding Bond 2006E **
Total Debt Levy
112,557
40,404 -
122,603 120,698 -
66,990 62,948 60,349
82,975 81,732
- - 126,840
191,213 126,788
109,557 104,570
20,741 19,534 23,524
108,041 113,482 124,176
66,148 108,591 140,091
125,580 209,580 322,470
851,277 949,166 879,182
Total Levy 8,866,956 9,244,338 8,695,414
** Is decreased by School District lease
n
B-7