HomeMy WebLinkAbout1997.04.21 RESO 1997-0006RESOLUTION 1997-6
A RESOLUTION IN SUPPORT AND FORMATION OF A COALITION
OF CITIES TO DEAL WITH TAX REFORM FOR INVESTOR-OWNED
UTILITIES REGARDING TAX ON PERSONAL PROPERTY
WHEREAS, The City of Hugo derives substantial revenues from personal
property taxes levied on electrical distribution facilities located in the community
equaling 12.03% of the City's property tax base (tax capacity); and
WHEREAS, the Minnesota Department of Revenue, in conjunction with the
Public Utilities Commission (PUC) and the Department of Public Service, has
issued a study dated January 15, 1997 entitled "Analysis of Utilities Taxation in
Minnesota" and has presented such information before the Senate Subcommittee
for Property Tax and Local Government Budget Division, Senator Sandra L.
Pappas, Chair on February 5, 1997; and
WHEREAS, the above -referenced study by the Department of Revenue
recommends the decreased use or elimination of personal property tax as a source
of revenue for local entities; and
WHEREAS, Investor Owned Utilities (IOU's) has proposed legislation which
would remove the personal property tax of their facilities from the available tax
capacities of the affected jurisdictions: and
WHEREAS, jurisdictions who lose tax capacity could see significant increases in
property taxes at the local level as a result of such legislation; and
WHEREAS, proposed replacement revenues, such as "meter" tax, would be
collected and administered outside of local control, decreasing the reliability and
security of the revenues; and
WHEREAS, with the loss of the personal property taxes, the affected jurisdictions
will experience adverse impact on their bond ratings, and problems with
outstanding debt, including issues concerning bond disclosure requirements.
NOW, THEREFORE BE IT RESOLVED, That the City of Hugo shall appoint
Jim Leroux as liaison to work with other similarly -affected- governmental entities.
This person shall serve as a representative of the committee overseeing the activities
of the coalition.
Resolution 1997 -
Page 2
BE IT FURTHER RESOLVED that the representatives will work with the
committee for the purpose of giving direction to lobbyists working on the issue as
well as the generation of a budget and formula for funding of the effort.
Upon roll call, the following voting AYE: Debra Barnes, Andrew Goiffon, Debi
Johnson, Fran Miron
Voting NAY: NONE
Whereupon said resolution was declared pass d adopted this 21 st day of April,
1997.
A%Mon, Mayor
ATTEST:
Mary Creager, City Cl
CITY OF
BECKER
12060 Sherburne Ave., P.O. Box 337, Becker, Minnesota 35308
Phone (612) 261-4302
NIkuk-.:`ras� Aril 11, 1997
Kerr, _ eCrer P
Fran Miron
5524 Upper 146th St. N.
Hugo, MN 55038-9367
Honorable Mayor and Council:
The Investor Owned electricity and gas Utilities (IOU's) are asking the state legislature for an exemption
from personal property or machinery taxes. Our records indicate that this tax comprises 12.03% of the tax
capacity in your City. This represents $471,680 in tax capacity which you stand to lose under the proposed
legislation.
A bill (H.F.1298) was introduced to exempt this tax over a ten year period. Through our efforts and
testimony, the bill was amended to remove the exemption. However, the amendment contains two
provisions which are problematic for utility "host cities". The first proposes a study on this tax and
assumes it is the only hindrance the IOU's have to free competition. The second provision provides for
separating this tax out of the bill (much like the franchise fee shows up on your constituents' cable TV
bills). Both of these provisions are designed to focus the debate on the Cities, Counties, and Schools that
receive the tax and also push the blame for that portion of the rates onto us.
A group of cities has banded together to form the Coalition of Utility Cities (CUC) to lobby on this issue.
We are seeking additional cities to join our efforts and, if possible, donate financially toward our lobbying
costs. We are asking that you adopt a resolution formally joining the coalition. A sample resolution is
attached. Feel free to modify it as you see fit for your City's situation. We need to have a broad base of
support for our lobbying efforts. Often times, legislators respond best to calls or visits from their own
constituents. We need you to do what you can by talking to your local legislators and expressing your
concerns over this issue.
In addition to adopting a resolution, we are asking for member cities to donate to our lobbying efforts. To
date, ten cities have contributed $1,000 or more each. Please do not fell as though you cannot participate if
you do not donate, we need everyone's involvement. We would appreciate any financial help you can
contribute. However, no donation is required for joining the coalition.
If you have questions or concerns or need additional information, please feel free to contact me at (612)
261-4302. Or cantact Jeff Haubrich, CUC Treasurer (City of Red Wing) at (612) 385-3615 or Mike
Robertsons CUC Secretary (City of Oak Park Heights) at (612) 439-4439.
Sincerely:,,
tlRuxdberg
hairman (City o Becker)
CC. Administrators/Clerks