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LMC Property Tax 101. <br />State of the Cities Report 2012. <br />Minn. Stat. § 471.572. <br />Minn. Stat. §§ 444.16 - 444.21. <br />HANDBOOK FOR MINNESOTA CITIES <br />CHAPTER 25 <br />III. Property tax related tools <br />A. Local general fund <br />City general levies collected with property taxes may fund local <br />improvements. Cities identify local improvement needs in the annual <br />budgeting process and may assign a percentage of the general city levy to <br />fund ongoing capital improvements. Though property taxes fund essential <br />infrastructure needs, cities report property tax collection shortfalls due to <br />the dramatically increased number of foreclosures. <br />B. Infrastructure replacement reserve <br />fund <br />Another financing mechanism is the creation of an infrastructure <br />replacement reserve fund. A city council may establish a reserve fund by a <br />two - thirds vote of all its members through ordinance or resolution, and may <br />annually levy a property tax for the support of the fund. The city must hold <br />a public hearing on the question and comply with other procedural <br />requirements. <br />The proceeds of property taxes the city levies specifically to support this <br />fund must go into the reserve fund. The city may dedicate any other <br />additional monies to the fund. <br />Before levying property taxes for the reserve fund, the city must publish an <br />initial resolution authorizing the tax levy in its official newspaper. If, <br />within 10 days after the publication, voters file a petition with the clerk, the <br />council must submit the levy question to the voters at a regular or special <br />election. For the petition to be valid, it must be signed by a number of <br />qualified voters greater than 10 percent of the number who voted in the last <br />general city election. <br />If the city establishes a reserve fund, the council may submit a question to <br />the voters asking if the city should dedicate the fund to a particular type of <br />capital improvement. If a majority vote in favor of the restriction, the <br />reserve fund may only be used for that purpose. <br />C. Storm sewer improvement districts <br />Creating a storm sewer improvement district (SSID) provides another tool <br />to fund specialized city infrastructure. After two weeks published notice <br />and a public hearing, the council of any city may, by a two - thirds vote of <br />council members, pass an ordinance establishing an SSID. After passage, <br />the council must record the ordinance with the county auditor and /or the <br />county recorder. <br />This chapter last revised 12/1/2012 <br />25:5 <br />