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April 18, 2021 <br />Chair Warren; <br />Following up on the discussion between the Commission and staff regarding Chapter 7, we want <br />to provide this correspondence to further ensure clarity on the discussion. We are looking for the <br />Charters Commission’s recommendation on changes to Chapter 7 providing/enabling the <br />City/Council to address responsible fiscal operation of the city. Research shared with the <br />Commission at their request revealed Mounds View is one of only two cities in the State of <br />Minnesota (Fridley being the other) that has a levy restriction in their charter. The Current <br />language in the charter, as you know; caps the levy at 2% plus inflation or 5% whichever is <br />less. The other city with a Charter levy provision is Fridley. Their provision is up to 5% of the <br />previous year and up to 8% with a 4/5 vote of council. <br />The current levy provision in our charter effectively prohibits hiring of additional employees <br />without going to a voter approved referendum as well as using reserves to balance the <br />budget. Neither of these enable current services to continue into the future without the layoff of <br />employees. <br />Options may including easing of the levy cap from the current 2% plus inflation or 5% <br />whichever is less to 8% or inflation whichever is greater. Another option would be to remove <br />the reference to inflation (which would effectively take the cap to 5%). The Fridley cap provides <br />a third option which is up to 5% and with a 4/5 majority; up to 8%. <br /> Nyle Zikmund <br />City Administrator