5.5. SR 05-13-1996ITEM 5.5.
~ity of
iver
FROM:
DATE:
SUBJECT:
MEMORANDUM
Mayor & City Council
Lori Johnson, Assistant City
Administrator
May 13, 1996
Local Performance Aid (LPA)
As you are aware, the 1996 Legislature approved a law which ties a new aid
called Local Performance Aid to city performance measurements. Attached is
some League of Minnesota Cities material explaining the new law and
performance measures.
In the future, the city will be required to have implemented a performance
measurement system in order to qualify for this aid. However, for aid
payable in 1997, the city need only indicate that it is in the process of
implementing a system of performance measures. If the City Council
approves a motion indicating that it will implement a performance system,
Elk River will receive approximately $14,376 of LPA in 1997.
Action Requested
The City Council is asked to approve a motion directing staff to create a
performance measurement system to be reviewed by the City Council and
approved for implementation as required to qualify for 1998 LPA.
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
N,zmber ]4
A~fil19,1996
New law links performance to city aid
Gar7 Carlson
In the beginning, the Legislature
created LGA and HACA. And they saw
that they were good. Starting in 1997,
cities and counties will also have LPA.
The 1996 version of the omnibus
tax bill includes a provision referred to
by its author as Local Performance Aid.
Championed by Representative Andy
Dawkins of St. Paul, LPA is an attempt
to associate general purpose homestead
and agricultural credit aid with perfor-
mance outcomes. According to
Representative Dawkins, local perfor-
mance aid is intended to assure that
state revenue sharing with cities and
counties will be based on a defensible
formula and therefore, be continue into
How do you qualify for LPA?
In the first year, each city and
county will be eligible to receive
performance aid if they have either
implemented performance measure-
ment systems for the services they
provide or are in the process of creating
or implementing performance measure-
ment systems.
What are performance
measurements?
According to Representative
Dawkins, performance measurement
include simple measures of workloads
for the services provided by the
governmental unit. Workloads can
include number of employee hours
worked on certain projects, tons of
garbage hauled, number of police calls,
or any other measures of workloads
that my be compiled by the city.
According to Representative
Dawkins, the collection of workload
data by each local unit of government
is the first step toward ultimately
generating measures of service
efficiency and effectiveness. He wants
each city and county to be able to
evaluate the services they are providing
and be able to determine if the service
is achieving its goals or is being
provided at an effective level.
Representative Dawkins intends
for each city and county to be eligible
to receive performance aid in the first
year. The Department of Revenue will
mail out an application form for local
performance aid on or around May 15
of each year. The form will require
Page 3 -- Deadline extended
The application deadline for the
C.C. Ludwig Awar~, Leadership
Award and City Achievement
Awards has been extended to
May 8.
Page L1 -- Law summaries
Summaries of the new laws
passed during the 1996 legislative
session begin on page L1.
each city to certify that they qualify for
local performance aid. The application
must be signed by the mayor and one
member of the city council. Local
performance aid will be distributed to
each city with the local government aid
and homestead and agricultural credit
aid payments in July and December of
each year. Local performance aid will
See LPA, page 6
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be annually inflated by the price of
government inflation index that is
currently used for the local government
aid distribution.
Local performance aid is funded
by reducing each city and county's
HACA by $1 per capita and adding an
additiona' $1 million of state resources
to the overall pool. Combined, these
two performance aid revenue sources
will generate approximately $4.1
million to fund the program for cities.
Each qualifying city will receive a per
capita LPA distribution based on the
total available city LPA resources
divided by the total population of all
qualifying cities.
The future of LPA
Representative Dawkins hopes to
expand the local performance aid
program next legislative session. In
discussions with the League of Minne-
sota Cities, he indicated that he would
like to increase the funding for the
program by $200 million which reflects
the current of excess of property tax
collections over income taxes. Accord-
ing to Representative Dawkins, adding
new resources to the performance aid
program will be tied to more stringent
eligibility criteria for local units of
government. Rather than simply
gathering workload measures, local
units may be required to begin examin-
ing efficiency and effectiveness of the
services provided to their local resi-
dents. Of course, details of these future
requirements have yet to be fully
developed.
If you have any questions about
local performance aid, please contact
Gary Carlson at the League of Minne-
sota Cities or the property tax division
of the Minnesota Department of
Revenue. ~-
April 15, 1996
Mr. Gar), Carlson
League of Minnesota Cities
14.5 University Avenue West
St. Paul, MN 55103
Dear Mr. Carlson:
...As the chief author of the "Local Performance Aid" provisions of this year's
omnibus tax bill (H.F. 2102, Article 3, Sees, 48 and 49), I want to be clear that my
intent is that every city and every county qualify for performance aid for calendar year
1997. The threshold to qualify is very low: "affirm that it is in the process of develop.
lng and implementing a system of performance measures."
So long as a city council or a county board has this as an item on the agenda prior to
June 30.1 996, that city or county will qualify for perforrnance aid. In fact, any city or
county that presently tracks "workload input ... has already begun the process of
developing and implementing performance measures, in others word~, ifa city or
county tracks the number of employee hours worked, number of appllcationr pro-
cessed, ton~ of garbage collected, number of police arrests, etc., that city or county
qualifies...
However. I also want to be clear that my intent is that cities and counties will make a
good faith effort over the course of the next year to move beyond simple work. load
measurement and get to the next levels of performance measurement in due course_.
As you kno~; the final report of the Local Government Aid Distribution and Govern.'
ment Service Delivery Subcommittee included an Appendix C which had examples
from Minnesota cities and counties that already have performance measurement in
have your jurisdictions refer to that appendix for examples of what the
legislature is expecting.
Finally. as i also explained at our meeting, it is my intent w reconvene the Local
Government Aid Subcommittee ... prior to the start of the next legislative session to
determine what will be in the 1997 tax bill regarding standards for local performance
aid and that it is my hope that the 1997 legislature will appropriate $200 million for
the next round of performance aid, but this **'ill only happen if cities and counties make
a good faith effort to meet the legislative intent contained in the 1996 tax bill and this
letter.
Please call me with any questions you might have, and I thank you for your coopera-
tion in disseminating this letter.
~incerely.
Andy Dawkins
State Representative
Page 6 LMC Cities Bulletin