Agenda Packets - 2021/12/13 - Laserfiche WebLink

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1) increase the general levy up to 6.5% more than previous year; 2) Up to 6.5% over the previous year plus an additional 2.5% (to a total of 9%) if four or more members of the Council voted in favor of the additional increase; and 3) If inflation exceeds 6.5% then the general levy amount may be increased up to inflation [later amended to be inflation plus 2.5%] with an affirmative vote of four members of the Council. The motion also included that the increase limits will be automatically suspended for one year after the decertification of a Tax Increment Financing District.. The motion was tabled to allow legal counsel to draft. The Commission met again on September 21, 2021 to further discuss and clarify the proposed amendments to Chapter 7. (7-2 vote). The Commission voted to send the proposed amendments to the Mounds View City Council via ordinance process as prescribed and authorized under Minnesota Statutes, section 410.12 subd. 7. (7-2 vote). Impact of Current Levy: Finance Director Beer provided an overview of the City's fiscal situation to the Commission at their April 2021 meeting. The overview included a PowerPoint presentation and two graphs/charts showing 20 and 25 year levy history. Those documents are included in the packet materials. In summary, the current levy cap has had deleterious impact on the City's reserves and ability to hire additional employees, especially full-time employees. The current cap is so restrictive that we are unable to hire additional employees. As council is aware, the only new additional employees since 2007, are three police officers who were hired via two separate voter approved referendums. With respect to the reserves, we are 4 to 6 years from reaching the point of not having adequate reserves for cash flow, emergencies, and unforeseen expenditures. The City has been deficit spending since the levy cap was implemented, utilizing reserves obtained from the sale of city owned land. Lastly, Mounds View has one of the lowest per capita spending ranks and net tax levy per capita rankings for cities over 2500 population in the State of Minnesota. Our per capita spending ranking is 187 out of 226. Our per capita levy is 195 out of 226. These are, in part, due to the levy restriction that negates any new value (construction) from being captured to fund operations, rather, when new property comes onto the assessment rolls, the impact is a reduction to all existing properties as the base grew while the levy limit was capped. Process to Amend the Charter: Minnesota Statutes, section 410.12 details prescriptive processes to amend a charter that allow for change by residents (petition), the Charter Commission, or by Council. In all cases, there is an opportunity for the amendment to be placed before the voters, including by initial petition, request for referendum, or Commission or Council proposal. The Commission chose to send the proposed amendments to the Council to make the amendments by ordinance using the process under Minn. Stat. 410.12, subdivision 7 This process, as described further below, requires the Commission to recommend an amendment to the charter by ordinance and the Council approve the ordinance unanimously. After a unanimous vote and publication, the amendment takes effect after 90 days if no petition for a referendum on the ordinance is received after 60 days.