Dave Kennedy Memo re Section 7.03 - July 14, 2006 -

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1LIakyj[Q.7_10IDili LTJ TO: Scott Riggs FROM: Dave Kennedy DATE: July 14, 2006 SUBJECT: Mounds View Charter: Proposed New Chapter 7 You've asked for my comments on the proposal being developed by the City Charter Commission to amend Section 7.03 of the Charter relating to taxation. The amendment is so extensive that I can only offer some general comments at this time. The amendment must be studied and analyzed much more thoroughly before submission to the voters for approval or to the Council for adoption by ordinance. I will point out some technical problems in the amendment below that will correspond to the numbers marked on the text itself. General Comments I don't think it advisable to repeal the present text of 7.03 which is a general grant of authority to set up any kind of taxing system not otherwise prohibited. Granted there are precious few such local taxes still available, but a Charter looks to the future and such authority might come in handy someday. Retaining the language does no violence to the rest of the proposal. The substance of the amendment is a system of levy limits for ad valorem taxes and, presumably, a number of fees and fund reserves. The state does not presently impose levy limits on cities but it has in the past and may in the future. It is probable, but not certain, that state imposed levy limits would pre-empt the limits proposed and they surely would if the Charter permitted higher limits than the statute. The amendment should probably state clearly that it applies only in the absence of state limits. (Levy limits could conceivably apply to the fees in Subdivision 2 since the 2006 tax legislation now treats "fees" as "taxes". Article 13, Section 15, Laws 2006, Chapter 259) If this proposal is to be submitted to the voters, the Commission should be aware that the City Council must fix the form of the ballot question in language "... sufficient to identify the amendment clearly". I think framing the ballot question for this complex amendment will be quite difficult. As a general matter the text of the proposal is quite long and should be edited accordingly. Many provisions may be dropped entirely as pointed out below. 293823v1 DJK NW210-4