7.4. SR 06-09-2003 vuve r
TO:
FROM:
DATE:
SUBJECT:
MEMORANDUM
Mayor and City Council
Pat Klaers, City Ad~v,O~strator
June 9, 2003
Legislative Update
Item # 7.4.
The 2003 special legislative session has ended. Information on new laws which impact Elk River was
included in the 5-30-03 info memo. There is not much new information to report to the City
Council at this time. The League of Minnesota Cities (LMC) Cities Bulletin that is scheduled for
June 11, 2003, will provide a summary of the legislative session and this material will be forwarded
to the City Council. This information will be helpful, for the June 16, 2003, City Council legislative
update agenda item.
As noted in the 5-30-03 info memo, the Elk River cuts in state aid were significant but not as large
as what the Governor proposed. Over two years, the city will lose slightly under $1.3 million in local
government aid. This issue will be discussed in more detail during the budget update and during the
budget worksessions later in the year.
In the 5-30-03 info memo, I also noted that the liquor law had changed to allow bars to stay open
until 2 a.m., and that the city did not need to take any action to have this law go into effect. At this
time, I believe that we do need to take some action and we are investigating what steps need to be
followed. City Prosecutor Chris Johnson will be taking the lead with this issue. More information on
the liquor law change should be available by the Monday, June 16 City Council meeting.
S:\COUNCIL\ Pat/Updates\legislative.doc
TO:
Mayor & City Council
FROM:
Pat Kiaers, City Administrator
DATE: May 30, 2003
SUBJECT: Informational Memo
ArtSoup Festival...The third biannual Elk River community arts festival will be
held on Saturday, June 21 from 10 a.m. to 5 p.m. and on Sunday, June 22 from
11 a.m. to 4 p.m. in the do~vnto~vn area between Highway 10 and the Mississippi
River. Additionally, Community Education will be hosting the Handke Hop on
Friday evening. This ArtSoup festival is proving to be a tremendous promo6on for
the city.-ArtSoup is the lead story in the May-June 2003 edition of the EDDY, which
is attached for your information.
e
Legislative Update...The special session of the State Legislature was concluded
late Thursday evening, May 29, 2003. Information is still some~vhat sketchy but I had
a very good conversation with Eric Willette from the League of Minnesota Cities
staff regarding the tax bill on Friday morning, May 30, 2003. Attached for your
information is part of the most recent League of Rlinnesota Cities - Cities Bulletin that
reviews the tax bill. The House version of the tax bill was also approved by the
Senate. The tax bill did not include a ~vage freeze or a reverse referendum provision.
The tax bill does impose a levy Limit for one year (2004) for cities over 2500
population and the bill allows for cities to replace up to 60% in state aid losses.
However, the lev7 limit excludes any of the typical growth adjustment factors for
such things as inflation or increases in households. Exclusions of the growth factors
will impact Elk River as we are, as we all know, a growing city. The tax bill also
preserves the defined "special levies" and accordingly, the city debt for the pavement
rehabilitation program can be considered a special levy outside of our levy limit.
Regaxding cuts in state aids, please see the attached chart from the League of
Minnesota Cites. For 2003, the city will see no reduction in the market value
homestead credit ('MWHC) program. The reduction in local government aid (LGA)
for the city goes from $937,272 to $293,134. This is consistent with the Governor's
proposed reduction of $644,138 in 2003.
In relative terms, there is good news for the city in 2004. Again, the MVHC program
is not cut. The LGA reduction is the same in 2004 as in 2003. The city will again see
a reduction in the amount of $644,138 in 2004. This is dramatically different than the
Governor's proposed reduction of $1,292,865 (for both LGA and M-v'HC) in 2004.
The Governor's proposal was to cut 100% of our LGA and M-VHC funds. It should
be noted that the city does lose $644,138 in LGA in both 2003 and in 2004.
However, in 2004, the city can recapture through a property tax increase, 60% of the
2004 r.eduction. This 60% of $644,138 equals $386,242. Accordingly, if the city
chooses to increase its property tax to recapture its LGA loss, then the net loss will
"only" be $257,656. This means that we still will be starting our 2004 budget at a
lower level than the adopted 2003 budget but the situation is not nearly as
Informational Memo
May 30, 2003
Page 2
devastating as what was proposed by the Governor. AdditionaLly, it should be noted
that the new LGA funding formula provides for the city to receive additional LGA
funds over the next few years. At full funding the city LGA amount will be
approximately $800,000 so ~ve will be back to within about 15% of our 2003 LGA
level by around the 2007-08 ttmeframe.
Two other la~vs of interest are the Conceal and Carry Law and the 2 p.m. closing for
bars law. Please see the attached memo from Chief of Police Jeff Beahen regarding
the Conceal and Carry La~v. Regarding the 2 p.m. bar closing taw, there is no city
acdon required unless the city wants to restrict the bar closing time to
i p.m. We have already had inquiries regarding this new law. The liquor licenses are
up for renewal prior to July 1, 2003.
e
Northstar Commuter Rail...Attached for your reviewis a Spring 2003
Northstar Communter Rail newsletter. Funding for this project was not approved by
the State Legislature and this jeopardizes federal funding, if not killing the project in
its enfizety.
e
Boards, Commission, and Committee I~linutes...Attached for your
information are the:
Park and Recreation Commission...Draft May 14, 2003 minutes
tb'vers Edge Downtown BusinessAssodation...May 14, 2003 agenda and April 9, 2003
meeting minutes
Sherbu'rne Coun[y Board of Commissioners...April 15, 2003 and May 6, 7, and 13, 2003
minutes
fndependentSchoolDistmt #728... May 13, 2003 minutes
Newspaper Articles of Interest...Attached for your'information are the
following newspaper azndcles:
May 19 Star Tribune- discusses plans in the City of Ramsey for its urban village. This
is the article which Councilmember Motto brought up at the May 19, 2003, City
Council meeting.
May 5, 2003, Pioneer Press - discusses the state of the gravel industry in and around
the metzopolitan area and offers some comments on a proposed gravel tax or host
fee.
May 18, 2003, Pioneer Press- discusses the general financial state of ice arenas and
concentrates mostly on the Wakota arena in South St. Paul.
Calendar of Meetings and Upcoming Events... Attached for your
information is the calendar of upcoming meetings and events for June 2003.
S:XCOUNCILXInfomemoKINFOMEMO.DOC