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"There is nothing particularly wrong with this trend," Carlson stated. "Special
<br />assessments are not popular, but neither are property taxes. Most communities
<br />a -ying to strike the proper balance between these two revenue sources."
<br />In the growing sub i, Carlson st , the choice between property taxes and spe-
<br />cial assessments is .ometimes dicta,ed by state law. "The legislature imposed
<br />limits on local property tax levie• 1 1971," he explained. "Growing Suburbs
<br />quickly bump into these limits as t•.y make the capital improvements that grown:
<br />requires."
<br />Metropolitan municila, are raising about as much pro•erty tax reve,,,.e ouL-
<br />side the levy limitf. as Jr, them, C'-rlscn said. Not only are special
<br />assessments excluded from the levy li ,ts, he said, but levies of metropolitan
<br />transit, airport and waste control agencies are also excluded.
<br />"Property taxes and the general obligation bonds teat are backed by property
<br />value spread the cost of ci,y services ac-oss all residential, commercial and
<br />industrial properties," Carlson stated. ;pecial assessments assign the cr-t of
<br />services directly to the immediata beneficiar:es.
<br />"Whlc,, syscc.J is fairer? What balance is appropriate for a given city 'hes^
<br />are crucial questions," Carlson said. "The levv limit introduce an ar .icial
<br />and unnecessary barrier to a rational search for answers."
<br />C :lson said that municipal dF , bo'' fr•.;t;Aneral obligation bonds and special
<br />assessment bond:;, appears manageible. "Debt r•t-rvice as a percent o: current
<br />rev,:nua varied all he way from zero to 318 ;.ercent, but the range isn't as
<br />broad as it appears," C-Arlson e.cplsined.
<br />"We have three debt -free cr. cities: Bayport. Inuependence and North Oaks," h_
<br />said. "North Oaks pent nc ig n- capital improvement,- in 1985, arc' the other
<br />two spent very little. These ar- al., sttblE communities w:ch good manageme;:_
<br />and a light dem,^^d for city pro;,ided services."
<br />Ca lson said the 318 pr,r_ -;_ 'igure came from Arden bills. "This is a special
<br />case where a distortion occurs. %id. "Arden Hills refune i bonds last
<br />year. Our reperting system cam+. . payment of old bonds a. c• It service,
<br />but it does not count the new " -s revenue. Th? truth is ..,at Arden Hills
<br />.as had close to average d�i,t service costs in recent years, and will probably
<br />cc 1t?nu,_ to •lo so."
<br />Carlson said that cities which use sh o t-teem borrowing also r high rat:
<br />of debt servic•_ `o current revenue. Other cities, he said, ha,(� ...- ge one-time
<br />3ebt service costs berm a they defer princ ,)a: paym,_nts to the final year f a
<br />tond iss-.e while paying only is:tereF durir, , the term of the .slue.
<br />"We have placed special 4s on uniform ac,,,-unL ; so t`. we can me .
<br />direct comb icons between cities,' Carlson pointed out. "� arisons become
<br />tricky in the debt service category, hnwever, `.ecause of inir,u� :o..dl
<br />circumstances."
<br />Carlson said that Moody's bone' rating ,.igency encourages cities L(� keep e-ebt
<br />ser,i, at less tha. !0 percent of current revenue. d the median Figure
<br />amonk mccro cities ',. 198' was abort 2? h Yetcent.
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