01-14-1985 Council Packet - Laserfiche WebLink

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RS-5. FE' S (M) makes no sense to grant that power and then to deny them the power to set off -sale liquor and on -sale wine license fees as well as Sunday liquor and bottle clttb fees. There is no evidence to show that lifting the statutory cap would lead to unjustified fee increases. Some sort of reasonable increases in off -sale license fees could be expected in light of the fact that the statutory maxim.,m fee hasn't been increased for over 30 vears. RS-6. SPECIAL ASSESSMENT FINANCING (h) The law on interest charges on �speeial assessments should he changed so that a city may charge an interest rate that more full` reflects the cost the financing ` Special assessments financed by bonds. In 1982 the legislature changed the law governing the :statutory interest ceiling for municipal bonds. The new law, which provides for a floating monthly maximum interest rate, creates s problem cancerning the interest rate which a municipality may charge on special assessments. The interest rate which may be charged is determined according to the maximum rate allowed to be paid on municipal bonds for the month in which the resolution authorizing the special assessment is adopted. If a city sells the assessment bonds in a later month, the interest rate payable on the bonds may be greater than that allowed to be charged for the special aspessment. The city is left having to absorb extra costs. The League recommf:nd: that the law he changed to ensure that a city may charge an interest rate on special assessments at least one percentage point higher than the rate payable on the bonds which finance the assessment. Special assessments financed internally by a cit. M.S. 429.061, subd. 2, res icts to 8 percent the interest rate a city may charge on internally financed ..,)ecial assessments. The League recommends that the allc:able interest rate he increased to more accurately reflect the cost to the city of internally financing assest:oner's. M.S. 412.32 should he amended so that all Minnesota cities are able to issue five-year equipment certificates in an amount not to exceed one percent of the city's assessed valuation in any given year. Nc reverse referendum prevision should apply unless the city wishes to exceed the one percent limit. Statutory cities in Minnesota have the power to issue certificates of indPhrednecs, payable in not more than Live years, to purchase fire, police, ambulanct, street construction, or maintenance equipment. (M.S. 412.301.) If the amount of the certi` cates exceeds one percent of the city's assessed valuation, a reverse refs-endum provision applies. In 1983, the Legislature granted similar financing powers tc Minnesota's home rule charter cities (M.S. 412.32). without any reverse referendum provision. However, the total principal amount of the certificates (or "capital notes") issued in a fiscal year it limited to no more than one -tenth of one percent of the city's assessed value that year. In many cities, this limit is prohibitively low, and effectively prevents the city from r'naking use of the authority granted in tt;is statute.