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street reconstruction or bituminous overlays <br />without voter approval. The two-thirds <br />council approval requirement is further <br />subject to a reverse referendum process <br />whereby a number equal to five percent of <br />those voting in the last municipal general <br />election can petition for a referendum to <br />approve the issuance of the bonds. <br />Response: Street maintenance is one of <br />the essential functions of cities in <br />Minnesota. The laws governing issuance <br />of bonds to maintain streets should be <br />amended to allow the approval of the <br />bonds by a simple majority of the council. <br />The existing reverse referendum process <br />assures that taxpayers could trigger a <br />referendum on the issuance of bonds if <br />they can meet the five percent petition <br />threshold. <br />FF-36. Special Assessment Election <br />Requirements <br />Issue: City Councils are best situated to <br />recognize the need to replace infrastructure <br />and when to schedule the replacement <br />projects. Cities are often only able to carry <br />out these and other vital improvements by <br />issuing bonds and assessing some amount of <br />the cost to property owners. <br />Issuing bonds to finance most local <br />improvement projects requires a special <br />election unless the city can legally collect at <br />least 20% of the project costs through <br />special assessments. As a legal limit, cities <br />cannot collect special assessments from any <br />property greater than the increase in fair <br />market value bestowed to that property by <br />the improvement (the "special benefit test"). <br />On occasion, the increase in property values <br />as a result of the improvement can fail to <br />add up to the 20% threshold necessary to <br />finance projects without requiring a special <br />election. <br />151 <br />Response: In order to facilitate the <br />financing of public infrastructure <br />projects, the threshold for requiring voter <br />approval for issuance of improvement <br />bonds under Minn. Stat. 429.091 should <br />be reduced to 15 percent. This change <br />would provide more flexibility for cities <br />with their <br />construction/bonding/assessment <br />decisions and may be more likely to <br />survive a challenge while still providing <br />value to the property owner. <br />FF-37. Federal and State Pandemic <br />Assistance <br />Issue: In response to the COVID-19 <br />pandemic, Governor Walz implemented the <br />recommendations of the legislature and <br />allocated $841 million of the state's share of <br />the Coronavirus Relief Fund (CRF) <br />authorized by the CARES Act (P.L. 116- <br />136) to cities, counties and townships. <br />Although the impacts of the pandemic are <br />projected to extend into the foreseeable <br />future, the federal restrictions on the CRF <br />funds limit the use to unbudgeted expenses <br />related to the pandemic that are incurred <br />from March 1, 2020 through December 30, <br />2020 and the state is requiring cities to <br />expend these funds by November 15. Any <br />portion of the city's distribution that is not <br />used by that date must return it to the county <br />or for cities in Hennepin and Ramsey <br />Counties to a hospital. <br />The CARES Act also prohibits cities from <br />using any portion of the CRF distribution to <br />replace losses of revenue resulting from the <br />impacts of the pandemic. Losses of property <br />taxes, sales and other special taxes as well as <br />fee and other revenues due to the impacts of <br />the pandemic have resulted in significant <br />budget challenges for cities. <br />Response: Cities need additional <br />flexibility to cover eligible costs that may <br />