Agenda - Council - 02/08/2021 - Laserfiche WebLink

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FF-17. Tax Hearing and Notification Process Issue: Cities must set a preliminary levy by September 30, which is the levy used to compute the parcel -specific property tax notification forms. With only a few limited exemptions (e.g., voter -approved levies, levies for natural disasters and levies for certain tort judgments), this preliminary levy, by law, becomes the maximum that cities can levy the following year. As a result, cities may be unable to budget for unforeseen needs that arise after September 30. The 2009 Legislature eliminated the separate tax hearing requirement and replaced it with a requirement that the public be allowed to speak at a regularly scheduled meeting on the budget and tax levy. These changes erroneously repealed an exception to the tax hearing and notification process for cities adopting their levies at or less than the current rate of inflation. City officials have found it difficult to explain to local taxpayers not only the effects of their budget and levy decisions but also the separate effects of the actions of the state Legislature. Response: Cities should have the authority to increase the final levy from the preliminary levy with the approval of the commissioner of the Department of Revenue, to meet additional, unforeseen and uncontrollable needs, including arbitrator awards resulting from labor negotiations, the impact of new and existing federal or state mandates including administrative rules, or other non -discretionary budget factors. The tax hearing and notification law should be carefully reviewed to assure 140 that the legislative intent is reflected in the statutes. Specifically, the League of Minnesota Cities supports the following: a) Modifying Minn. Stat. § 275.065 to clearly and fully exclude cities of population 500 and under from the budget and levy hearing requirements; b) Reinstating the exception to the tax hearing and notification requirements for cities with more than 500 residents with a proposed levy increase below the implicit price deflator (IPD); and In order to assist local officials with the challenge of explaining legislative changes to the property tax system, legislators should attend and be encouraged to participate in local government budget hearings in their districts. FF-18. General Election Requirement for Ballot Questions Issue: Under current state law, when cities are required to seek voter approval on a ballot question or where statutes allow voters to petition for an election on a council action (reverse referendum), these referenda can generally be held at a general or special election. This flexibility allows cities to respond to local circumstances in a timely manner. Response: Cities should be allowed to conduct elections on ballot questions at a date and time set by the city council and that complies with existing election notification statutes. FF-19. City Fund Balances Issue: As a component of a prudent financial management plan, cities maintain a