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For Immediate Release
Contact: Julie Liew, jlliew@flaherty-hood.com
PDF version

With first Greater Minnesota governor in decades, city leaders see major opportunity with Walz Administration

ALEXANDRIA, MINN.—For the first time in more than three decades, Minnesotans have elected a governor who resides in Greater Minnesota. With Governor-elect Tim Walz’s outstate roots and campaign-trail focus on uniting rural and urban interests into “One Minnesota,” rural city leaders are optimistic that the upcoming legislative session will see a renewed emphasis on advancing Greater Minnesota priorities.

“It’s no secret that a strong Greater Minnesota strengthens the entire state,” said Audrey Nelsen, a member of the Willmar City Council and vice president of the Coalition of Greater Minnesota Cities (CGMC). “Tim Walz didn’t shy away from that message on the campaign trail. As city leaders and residents of Greater Minnesota, it is our job to make sure he doesn’t lose that focus when he takes office.”

That message reverberated this week as more than 100 mayors, city councilors and city staffers from across Greater Minnesota convened in Alexandria for the CGMC’s annual two-day fall conference. At the event, CGMC members adopted the organization’s policy positions and discussed priorities for the 2019 legislative session, including securing an increase in Local Government Aid (LGA), funding for wastewater infrastructure and finding solutions to the state’s child care shortage. They also emphasized the need to work closely with Walz and the Legislature to ensure that Greater Minnesota has a seat at the table when it comes to crafting the state budget and other legislative priorities.

While the 2018 election appeared to highlight Minnesota’s so-called rural/urban divide—with rural areas continuing to lean heavily Republican and Democrats picking up 16 seats in the suburbs and strengthening their hold on the urban core—many city leaders say talk of the divide is overblown.

“Everyone is sick of the divisiveness,” Nelsen said. “There are so many issues that matter to all Minnesotans, not everything has to be red versus blue. We all need safe roads, clean water and good jobs. There is plenty of common ground to be found if our state lawmakers are willing to look for it.”

For CGMC members, the main issue in which they hope Walz, the GOP-led Senate and the DFL-led House can come to agreement is on a boost in Local Government Aid (LGA). With the tax bill slated to be one of the main items on the agenda when the Legislature convenes in January, the CGMC is seeking a $30.5 million LGA increase, the amount needed to bring the program back to its 2002 level. Because the costs for cities continue to rise each year, the organization is also seeking to add a permanent annual inflationary increase for LGA into law.

“There is probably no single issue that embodies the concept of ‘One Minnesota’ as clearly as Local Government Aid,” said Bradley Peterson, executive director of the CGMC. “The exact purpose of the program is to level the playing field to make sure that all communities can provide essential services and quality-of-life amenities regardless of their wealth.”

CGMC members have reason to be optimistic about the prospects of an LGA increase this year. Walz repeatedly affirmed his support for bolstering the program during the gubernatorial race, and there is strong bipartisan support for LGA among rural, urban and suburban legislators alike.

“LGA is a great example of a program that bridges the divide between large cities like St. Paul and small ones like St. Charles,” Nelsen said. “If the push for ‘One Minnesota’ is going to work, Governor Walz and the Legislature will have to look for issues like LGA where they can put politics aside and work together to improve our communities and state.”

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The Coalition of Greater Minnesota Cities is a nonprofit, nonpartisan advocacy organization representing 97 cities outside of the Twin Cities metropolitan area. The Coalition educates legislators about issues important to Greater Minnesota. Visit the CGMC online at greatermncities.org and on Twitter @greatermncities.

The American Society of Civil Engineers (ASCE) released a report card on Minnesota’s infrastructure this week, and it’s not one we’ll want to take home and display on the refrigerator. Overall, Minnesota’s infrastructure received a “C” grade from the group, with grades in the nine individual categories ranging from a “B” in aviation to a lowly “D+” in roads.

When comes to our roads, CGMC In Brief readers are familiar with the surprising statistic that despite ranking 22nd in population and 12th in land mass, Minnesota is home to the fifth-most road miles of any state. Maintaining that large of a system is a huge challenge, the ASCE notes, and Minnesota’s funding shortfall continues to grow with no clear or easy answers in sight.

Other grades in the report included a “C” in wastewater and “C-“ in drinking water, which further highlights one of the CGMC’s top goals in recent years — the need for more state investment in clean water infrastructure.

You can see all of the grades and the full report card here.

During the last legislative session, the Legislature funded $98 million worth of projects in the bonding bill through a new type of revenue bond to be paid back using the Environmental and Natural Resources Trust Fund (ENRTF). The projects funded using these bonds includes $38.3 million for the Point Source Implementation Grant Program (PSIG), $14.6 million for the Water Infrastructure Fund (WIF) for wastewater projects, and $6 million in matching funds for U.S. EPA funding — all programs that the CGMC supports and are widely used by our member cities.

Last week, a coalition of eight environmental groups served the State of Minnesota with a lawsuit challenging the constitutionality of the funding source for these projects. The environmental groups claim that financing these projects with bonds paid for out of the ENRTF violates the State Constitution. 

We are in the process of investigating this matter on behalf of the CGMC and its members. There is still some uncertainty, but we do know is that this lawsuit endangers the PSIG and WIF funding contained in the 2018 bonding bill and could impact several of our members who were slated to receive this funding. Sale of the bonds to fund these programs could be postponed or even cancelled as a result of the proposed lawsuit, delaying important wastewater and related projects for multiple CGMC members.

You can read more about the lawsuit in this Star Tribune article and this article from MPR.

We will continue to monitor this situation. If you have any questions, please contact Elizabeth Wefel at eawefel@flaherty-hood.com.

Registration is now open for the CGMC Fall Conference! The conference will be held Nov.15-16, 2018 at Arrowwood Resort & Conference Center in Alexandria and will feature presentations, discussions and speakers on a number of important topics. The packed agenda includes:

  • Luncheon presentation by Myron Frans, commissioner of Minnesota Management and Budget
  • Keynote dinner featuring Tom Hauser, chief political reporter for ABC5 Eyewitness News
  • Legislative panel discussion on child care
  • 2018 election recap and analysis
  • A discussion featuring Greater MN and metro-area elected officials who are working to bridge the rural/urban divide
  • Presentation on annexation and why could be a significant issue in the next legislative session
  • Full membership meeting to discuss and adopt the CGMC’s policy positions and priorities for the upcoming legislative (it’s critical that your city lend its voice to this discussion!)
  • …and more!

CONFERENCE DETAILS
See this CONFERENCE AGENDA & VENUE INFORMATION for full details.

REGISTER TODAY!
Please register online at greatermncities.org/FallConf18. The deadline to register is Nov. 7. 

HOTEL INFORMATION
* Please note that attendees are responsible for their own hotel reservations.*

Arrowwood has a block of rooms reserved for CGMC Fall Conference attendees at a discounted rate of $94 (plus tax). Call Arrowwood at 320-762-1124 by Nov. 1 to book a room under the CGMC’s block.

Note: There are plenty of rooms available at Arrowwood on the night of Nov. 15, but only a limited number of rooms are available on Nov. 14 (the night before the conference). In order to accommodate those who wish to come to Alexandria on Nov. 14 (and may be unable to stay at Arrowwood), we have reserved a small block of rooms for the CGMC at Hampton Inn & Suites in Alexandria. The cost is also $94. Call Hampton Inn at 320-763-3360 by Oct. 29 to make a reservation (rooms are available both Nov. 14 and Nov. 15).

QUESTIONS?
If you have any questions about the conference, please contact Julie Liew at jlliew@flaherty-hood.com or (651) 259-1917.

Newly elected CGMC President Ron Johnson was recently featured in an article in Prairie Business, a monthly magazine that focuses on business and economic development issues pertaining to Minnesota, North Dakota and South Dakota.

In an interview with editor/reporter Tom Dennis, Johnson discussed his nearly two decades of service on the Bemidji City Council, his long-time involvement with the CGMC (including the fact that he has only missed one CGMC conference in 18 years!) and the important role the CGMC plays in keeping Greater Minnesota strong. Johnson also spoke at length about how many of the issues that the CGMC works on – such as LGA, child care and transportation – have a major impact on economic development and business growth in Greater Minnesota.

The Minnesota Environmental Science and Economic Review Board (MESERB), a joint powers organization to which many CGMC cities belong, is hosting a free workshop on “Wastewater Permitting: Solutions to Address Chloride & Other Salty Parameters” on Sept. 27 in Hutchinson.

Public works directors, wastewater operators and other city officials are invited to this informational meeting and discussion to learn about some of the concerns MESERB has identified in regard to Minnesota Pollution Control Agency (MPCA) permit limits related to chloride and/or other salty parameters. The meeting will also provide information on ways in which cities and water districts can address these limits.

If you would like to attend, please register online at bit.ly/SaltyParameters by Monday, Sept. 24. We encourage you to share this meeting information with other public works and wastewater officials in your city.

Meeting Details:
11:30 a.m. – 2 p.m., Thursday, Sept. 27
Hutchinson Event Center
1005 MN-15
Hutchinson, MN 55350
*Lunch will be provided*

The CGMC is hosting a breakfast on Friday, June 22 as part of the League of Minnesota Cities conference in St. Cloud. CGMC transportation lobbyist Shane Zahrt will lead a discussion, titled “Pile-up at Funding Junction,” focusing on the past, present, and—most importantly—the future of transportation funding in Minnesota. The emphasis will be on why current funding is falling short and what responsible, sustainable funding might look like.

The CGMC breakfast will be held from 7:30-8:30 a.m. at the Bell/Alexander Rooms on first floor of River’s Edge Convention Center. The breakfast is free and open to both CGMC members and non-members, so we encourage you to invite others to attend as well. Registration is not required, but please let us know if you are planning to join us by sending an email to RSVP@flaherty-hood.com.

For Immediate Release
May 30, 2018
Contact: Julie Liew, jlliew@flaherty-hood.com
PDF version

Below is statement from CGMC President and Granite Falls Mayor Dave Smiglewski regarding the passage of the 2018 bonding bill.

“We are excited that Gov. Dayton has announced that he will sign the 2018 bonding bill into law. This bill includes critical funding for clean water infrastructure grant and loan programs, transportation projects, economic development initiatives, colleges and universities and other numerous projects that are important to Greater Minnesota cities.

“We would like to thank Sen. Senjem and Rep. Urdahl for crafting a balanced bonding bill that recognizes infrastructure needs across the state. We are grateful that our legislators and Gov. Dayton were able to put their differences aside and pass a bonding bill that funds vital projects, creates jobs and invests in a better future for our communities.

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The Coalition of Greater Minnesota Cities is a nonprofit, nonpartisan advocacy organization representing 97 cities outside of the Twin Cities metropolitan area. The Coalition educates legislators about issues important to Greater Minnesota. Visit the CGMC online at greatermncities.org and follow us on Twitter @greatermncities.

In the final hours of the Legislative session, the Legislature passed a bonding bill that includes approximately $123 million in funding for the Public Facilities Authority clean water infrastructure grant and loan programs. Funding for these programs is one of the CGMC’s top legislative priorities for 2018, and many CGMC members are on the list to receive grants and/or low-cost loans through the PFA programs this year.

It is essential that Gov. Dayton signs the bonding bill and does not line-item veto any of the clean water infrastructure funding. Even if your city is not seeking PFA funding this year, it is essential to continue to fund these programs so that funding is available when your city needs it.

Take action now!
Contact Gov. Dayton today and urge him to sign the bonding bill without line-item vetoing any of the funding for clean water infrastructure programs. Tell him that:

  • Funding for clean water infrastructure grant and loan programs is vital to Greater Minnesota communities.
  • Cities cannot hold off on making critical repairs and upgrades to their water facilities — this funding is needed now.
  • If funding does not come into fruition this year, cities will either continue to fall behind on infrastructure upgrades/repairs or be forced to drastically raise rates on businesses and residents to cover the costs.

Contact Info
Call Gov. Dayton at 651-201-3400 or 1-800-657-3717 or send him an email using this online form: https://mn.gov/governor/contact-us/form/

Questions?
If you have any questions, please contact Elizabeth Wefel at 651-259-1924 or eawefel@flaherty-hood.com.

The legislative session ended as scheduled late last night, but the final outcome is still not exactly clear. At least two of the three major bills everyone thought the Legislature needed to address this year seem headed for a likely veto. The fate of the tax bill and supplemental budget bill appear very much in doubt as there was little actual negotiation between the Legislature and Gov. Dayton in the final hours of the session and both bills are filled with several provisions the Governor likely finds objectionable. The bonding bill seems the most likely to be signed, but even that is not without controversy.

Once presented with the bills, the Governor has 14 days to determine if he is going to sign them, issue a veto, or leave them unacted upon which would be a “pocket” veto. See below for more details and stay tuned for further developments as Gov. Dayton decides the fate of legislative measures.

Consensus on bonding bill emerges at 11th hour
The bonding bill is always one of the last bills to be finalized during the legislative session, and this year was no different. The all-too-familiar script played out this week when the House successfully passed its version of the bonding bill off the floor on May 14, but the Senate version failed to pass off the floor two days later. This set up a waiting game of when a bonding bill would “emerge” and the guessing as to what would be in it.

True enough, a conference committee was called midday Sunday (just hours before the Legislature’s deadline) and a bill materialized. The bill passed the conference committee with little trouble, but it was not immediately brought to the floor as pressure built. The halls of the Capitol were rampant with rumors that the Senate would not have the votes to pass the bill and last-minute arm twisting, negotiating and maneuvering reached a fever pitch.

The final bill ultimately passed in House by a vote of 113 to 17 and in the Senate by a vote of 42 to 25, with both bodies reaching the supermajority required to pass a bonding bill.

The final bill included funding for CGMC priorities including $5 million for the Greater Minnesota Business Development Public Infrastructure (BDPI) Grant Program, more than $120 million for clean water infrastructure (see more below), and hundreds of millions of dollars in authorization for transportation projects.

While there is a strong expectation that Gov. Dayton will sign the bill, it is his prerogative to line-item veto projects. There is also a chance that he could veto the whole bill. If he does, it would be largely over a disagreement over some of the mechanisms used to fund projects out of monies associated with the Environmental Trust Fund and the state’s Legislative-Citizen Commission on Minnesota Resources (again, see more below).

If your city has a project in the bonding bill, we strongly encourage you to reach out to the Governor’s office and urge him to sign the bill.

Legislature uses new funding mechanism to get money for clean water programsIncreased funding for the Public Facilities Authority’s (PFA) clean water programs is one of the CGMC’s top funding priorities for 2018. The bonding bill passed by the Legislature last night contained approximately $123 million for the PFA to provide grants for wastewater and drinking water projects. However, the bill created a new funding mechanism for Point Source Implementation Grants (PSIG) that could lead to a line-item veto of those funds. 

The bill includes general obligation bond funding of $14 million for state matching funds for federal Environmental Protection Agency grants and $25 million for drinking water grants from the Water Infrastructure Fund (WIF). In addition, it includes $25 million for grants to specific political subdivisions. 

Where it gets little murky is that the Legislature also created a new class of appropriation bonds that will be funded by the Environmental and Natural Resources Trust Fund (ENRTF), which are lottery funds typically used to fund grants recommended by the Legislative-Citizens Commission on Minnesota Resources (LCCMR). These new appropriation bonds will add $6 million to the state matching funds for the EPA capitalization grants, $14.6 million to WIF for wastewater grants, and $38 million to PSIG.

A number of groups are objecting to the creation of the appropriation bonds, claiming that the funding mechanism defeats the intent behind the constitutional amendment creating the ENTRF. There is a danger that Gov. Dayton could veto this portion of the bill because of the funding mechanism. Please keep your eye out for an “Action Alert” from the CGMC asking members to call on the Governor to support the bonding bill, including the new funding for PFA programs.

If you have any questions regarding this portion of the bonding bill, please contact Elizabeth Wefel at eawefel@flaherty-hood.com.

Transportation funding makes its way into bonding, supplemental budget bills
Corridors of Commerce – Disappointment set in for many Greater Minnesota residents on May 1 when the Minnesota Department of Transportation (MnDOT) announced that $400 million in Corridors of Commerce funding it was authorized to allocate would go to projects inside the metro area or immediately adjacent to it. Advocates for many important Greater Minnesota transportation projects had been waiting for years to make the type of progress that this funding presented, and were dismayed when the dollars flowed elsewhere.

In response, the CGMC and other Greater Minnesota transportation advocacy groups called on the Legislature and Governor to make it right by allocating additional funds to Corridors of Commerce and directing all of those funds to Greater Minnesota projects. This set in motion a chain of events that resulted in $400 million in Corridors of Commerce funding being approved in the final bonding bill that passed both the House and Senate just minutes before the Legislature adjourned. These dollars are accompanied by language that is designed to direct a significant share of them to projects like Highway 14, Highway 23, and potentially others if funding allows.

All that these projects need now is the Governor’s signature on the bonding bill. If you have a project you care about, please contact the Governor’s office and encourage him to sign the bonding bill.

Local roads and bridges – The Local Road Improvement Program, which provides grants to local governments for road projects and is typically funded through the bonding bill, received around $78 million in total funding. Approximately $28.6 million of those funds are earmarked for specific projects, leaving about $50 million to be awarded as grants. These grants are awarded through an application and selection process that will likely take place later this year. Stay tuned to the CGMC in Brief for updates.

City street funding Legislators continue to express sympathy for small cities which receive no funding for their city streets through the existing constitutional formulas. This year’s House transportation bill would have included permanent funding for the Small Cities Assistance Program, but that funding was reduced to a one-time appropriation of $8.5 million for FY2019 only in the final supplemental budget bill. It is still unknown whether Gov. Dayton will sign the supplemental budget bill, which totals nearly 1,000 pages and touches on numerous issues.

For MSA cities—those with a population greater than 5,000 residents—efforts to increase city street funding largely fell on deaf ears. While the House advanced efforts to put more funding into the Highway User Tax Distribution Fund, which would have trickled down to MSA cities through the formula, no other permanent increase came out of this session.

Constitutional amendment for transportation fails
Throughout this legislative session, talk of a possible constitutional amendment to re-dedicate existing general fund revenues to transportation simmered in the background and nearly boiled over in the final weeks as the House took up and passed the measure. Ultimately, the measure failed to gain enough support in the Senate and was never brought to the floor for a vote. Thank you to all of our members who contacted your legislators and urged them to oppose this amendment.

The CGMC voiced concerns along the way because of the significant detrimental impacts the proposal would have had on our state’s general fund. Once fully phased in, the measure would have re-directed around $279 million a year in existing general fund revenues.

The CGMC supports long-term sustainable funding for transportation, but has long opposed efforts like this one that would jeopardize the integrity of the state’s budget in the process.

Legislature passes tax bill, but Governor threatens veto
The Legislature passed a tax bill on the final day of the session which would align Minnesota’s state tax system with the recently reformed federal tax reform. The bill cuts some business taxes while decreasing the individual income tax rates for the two lowest income tax brackets.

Gov. Dayton asserted that the bill did not do enough for middle-class Minnesotans, and sought $138 million in emergency school funding. The GOP bill provided new money (by forcing the state Department of Natural Resources to repay the use of school land), while making existing education funding more flexible. The Governor opposed the GOP plan.

The Governor has up to two weeks to sign the bill. If he chooses not to sign it, the Legislature can still pass a federal tax conformity bill before the 2019 tax filing season. DFL legislative leaders support vetoing the bill.