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.
We will continue to monitor this situation. If you have any questions, please contact Elizabeth Wefel at firstname.lastname@example.org.
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!
See this CONFERENCE AGENDA & VENUE INFORMATION for full details.
Please register online at greatermncities.org/FallConf18. The deadline to register is Nov. 7.
* 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).
If you have any questions about the conference, please contact Julie Liew at email@example.com or (651) 259-1917.
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.
11:30 a.m. – 2 p.m., Thursday, Sept. 27
Hutchinson Event Center
Hutchinson, MN 55350
*Lunch will be provided*
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.
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.
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/
If you have any questions, please contact Elizabeth Wefel at 651-259-1924 or firstname.lastname@example.org.
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 email@example.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.
Below is a guest column by Little Falls City Administrator Jon Radermacher. As of April 30, it has been published in the Brainerd Dispatch, Austin Daily News, Albert Lea Tribune and other Greater Minnesota newspapers.
To paraphrase the famous line, “St. Paul, we have a problem.”
Cities across Minnesota are in the midst of a water infrastructure funding crisis, and with just weeks left in the legislative session, we desperately need our lawmakers at the State Capitol to do something about it.
My community is one of hundreds in the state currently facing massive costs to upgrade our wastewater treatment facility. It will cost the city of Little Falls more than $17 million to upgrade our wastewater plant to replace aging infrastructure and meet stricter discharge limits to comply with new state permit requirements. This amount does not account for annual operating costs or other necessary infrastructure expenses like water and sewer pipes, street maintenance and storm water.
For a community of only 8,689 residents and where the median income is just $37,020, these costs place a tremendous financial burden on our citizens and businesses.
Little Falls is not alone. More than 300 cities in Minnesota currently have plans to undergo water infrastructure projects in the near future. The Minnesota Pollution Control Agency estimates it will cost $5 billion over the next 20 years to address municipal wastewater projects, not to mention drinking water and storm water needs which will cost billions more.
While this funding crisis reaches across the state, its impact is felt more acutely in Greater Minnesota, where distance makes it nearly impossible for cities to share resources and facilities like they can in the metro area. The high concentration of residents and businesses also keeps rates down in the metro, where the average monthly residential wastewater rate is less than $23.
Little Falls’ average residential cost is already $38 a month, and even if the city receives an anticipated $7 million state grant, average residential rates will still have to rise to about $51 a month to cover the cost of the plant upgrade.
When costs are this high, especially in a place where incomes are lower to begin with, it becomes extremely difficult for a small community to retain and attract residents and businesses, much less grow. Our lawmakers need to know that these costs are going to cripple rural communities unless the state steps in with additional financial assistance.
There are two bills in play at the Minnesota Legislature this session that would help address this growing crisis.
The first would put $167 million in state bonding into the existing grant and loan programs administered by the Public Facilities Authority. Gov. Dayton included this proposal in his bonding plan, and many legislators from both parties have voiced support for this funding.
As negotiations over the bonding bill continue, this provision absolutely must be included.
The second bill creates a supplemental grant program to provide additional state funding for communities with prohibitively expensive projects and where residents are already paying significantly higher rates than the metro-area average. Since clean water is both a state and local responsibility, this bill is necessary to set a limit on how much city residents and businesses can reasonably be expected to pay for it.
Minnesota prides itself on having clean water and strict water-quality standards. However, the equipment and technology needed to meet new standards doesn’t come cheap, and right now far too much of the cost burden is falling on our local communities.
This infrastructure crisis already affects many cities, including mine, and it’s not going away any time soon. If our state lawmakers are not worried about it now, just wait until their sticker-shocked constituents come to them to complain about their water bills.
If you live in rural Minnesota and you care about clear water and the livability of your community, contact your legislators and tell them they must pass a bonding bill that funds clean water infrastructure.
With less than a month left in the legislative session, the House and Senate Capital Investment Committees are busy assembling their bonding bills. The top bonding priority for Greater Minnesota cities this session is funding for clean water infrastructure grant and loan programs.
With billions of dollars of need statewide over the next 20 years, it is essential that the Legislature pass a large bonding bill that includes at least $167 million for water infrastructure programs (as included in SF 2668/HF 3122).
While vital to helping our communities, this funding alone will not be enough to make wastewater and water upgrades affordable for many of our cities. The Legislature should also create a supplemental grant program (SF 3075/HF 3332) that will ensure city sewer rates will not bankrupt rural residents.
Take action today!
It is critical that CGMC city leaders email or call Capital Investment Committee Chairs Rep. Dean Urdahl and Sen. Dave Senjem, House Speaker Kurt Daudt, Senate Majority Leader Paul Gazelka and your own legislators.
Ask them to pass a bonding bill that includes at least $167M for clean water infrastructure grant and loan programs for cities and also funds a new supplemental grant program. Let them know that:
- Funding for clean water infrastructure grant and loan programs is a “must-have” component of a strong and balanced bonding bill.
- At least $167 million is needed this year to keep up with the growing demand caused by aging infrastructure and the need to comply with new and proposed regulations. Anything less $167 million means cities will continue to fall behind on upgrading and repairing infrastructure.
- Most cities lack the resources to pay for these costly upgrades. Without financial assistance from the state, including the funding provided under the proposed supplemental grant program, user rates for residents and businesses will skyrocket.
- Dave Senjem: firstname.lastname@example.org, 651-296-3903
- Dean Urdahl: email@example.com, 651-296-4344 or 800-920-5861
- House Speaker Kurt Daudt: firstname.lastname@example.org, 651-296-5364 or
- Senate Majority Leader Paul Gazelka: email@example.com,
- Contact your own senator and representative: Who Represents Me?
For more legislators’ contact information, visit:
Need more information?
Please read these CGMC handouts for more information about these important bonding proposals:
- Support $167M for clean water infrastructure grant and loan programs
- Support funding for a new supplement grant bill for water infrastructure
If you have any additional questions, please contact CGMC environmental lobbyist Elizabeth Wefel at firstname.lastname@example.org.
As has become recent tradition for the CGMC, we will be holding an end-of-session lobby day and ice cream social to make a final push for our top priorities in the waning days of the legislative session. The event, which will be held in St. Paul on Wednesday, May 9, will give Greater Minnesota city officials and other community leaders a chance to meet with legislators and demand that they pass bills that address CGMC priorities such as LGA, wastewater infrastructure and child care.
The tentative schedule for the day is as follows:
- 10:30 a.m. – Legislative update and messaging (Room 500 North in the State Office Building, located across the street from the State Capitol)
- Afternoon – Meetings with legislators (attendees should make appointments with their own legislators; we may also ask some attendees to participate in additional meetings with key legislators)
- 2-3 p.m. – Ice cream social with legislators and legislative staff (L’etoile du Nord Vault Room in the Basement of the State Capitol)
Lobby Day is FREE to attend, but we ask that you register at greatermncities.org/IceCream2018 by Monday, May 7 so that we can coordinate meetings. Free parking is available at the Flaherty & Hood office located at 525 Park St. in St. Paul, just one block from the State Capitol, as long as you print off this parking pass (which is good only for May 9) and put it on your dashboard.
We hope to get as many city officials to attend as possible! Please share this Lobby Day Flyer and encourage other city officials and staff to join us. If you have any questions, please contact Julie Liew at email@example.com or 651-259-1917.
CGMC city leaders to Legislature: State must take action on clean water funding crisis
High infrastructure costs could cripple rural communities unless state steps in
ST. PAUL—With cities across the state facing billions of dollars in costs to upgrade wastewater infrastructure to replace aging equipment and comply with new regulations, city leaders held a press conference today to call on the state to play a larger role in tackling Minnesota’s clean water funding crisis.
“I don’t use the word ‘crisis’ lightly, but that is exactly what towns across Minnesota are facing right now,” said Lakefield City Clerk Kelly Rasche. “Extremely high water infrastructure costs will cripple our communities unless the state ups its game and provides more funding.”
Rasche and other city leaders with the Coalition of Greater Minnesota Cities (CGMC) joined together at the press conference to ask the Legislature to support two bills that aim to address the massive expenses being piled on cities to repair or replace their water treatment facilities.
The first bill, SF 2668/HF 3122, authored by Sen. Gary Dahms (R-Redwood Falls) and Rep. Dean Urdahl (R-Grove City), allocates $167 million in state bonding for three key grant and loan programs administered by the Public Facilities Authority (PFA).
However, city officials say that caps and limitations on the PFA funding programs mean that they are no longer sufficient to meet the needs of communities across the state. Moreover, the growing need equates to more cities vying for the limited pool of state dollars. More than 300 cities are currently planning for upcoming water infrastructure projects, while the Minnesota Pollution Control Agency estimates it will cost $5 billion statewide over the next 20 years to pay for wastewater infrastructure alone.
That is why the CGMC is also spearheading efforts on a second bill, SF 3075/HF 3332, authored by Sen. Torrey Westrom (R-Elbow Lake) and Rep. Urdahl, that would provide supplemental grant funding to increase the state’s share of the costs for wastewater infrastructure.
“The current bonding proposal for $167 million is a good start, but with hundreds of cities seeking funding, it’s not going to go very far,” said Glencoe City Administrator Mark Larson. “Clean water is a state and local responsibility, but right now too much of the burden is falling on city residents and businesses.”
The city of Glencoe is facing $22.3 million in costs to replace portions of its facility that are more than 50 years old, adhere to new pollution discharge limits, build a new lift station and other upgrades. Under the current grant programs, the city only qualifies for approximately $5.5 million in state funding, which means the city and its ratepayers will be on the hook for the rest of the project costs unless the state steps up with more money.
Lakefield, a small city with a population of 1,691, is also bracing for potentially massive rate increases to pay for a $22 million upgrade to its wastewater system in order to comply with new permit requirements. According to Rasche, the city’s average residential water and sewer rates would have to nearly double to $190 a month to cover this cost without financial assistance from the state.
“Our rates are already higher than most other cities,” Rasche said. “The potential increases are so high that we are concerned people won’t want to live in our town. How do they expect our small cities to survive?”
While cities across the state have water infrastructure needs, those in the metro area are able to keep rates down because of the lower cost of serving a highly concentrated population. This is not an option for most Greater Minnesota communities.
For example, Albert Lea needs to undergo a project that is estimated to cost $72.5 million. Without state help, the city’s wastewater rates would have to nearly triple to an average of $1,082 a year. In contrast, the average annual residential rate in the metro area is only $274.
“These costs are hitting Greater Minnesota cities especially hard,” said Albert Lea City Manager Chad Adams. “That is why we need a benchmark, a limit to how much local businesses and homeowners can reasonably be expected to pay.”
The CGMC’s supplemental grant bill (SF 3075/HF3332) would set that benchmark by either limiting the local costs for wastewater treatment to 50 percent of the total project costs or by limiting the local wastewater rates to no more than double the average annual costs in the metro area. Cities would receive additional state funding based on the option that results in a greater amount.
“Yes, it is going to be expensive for the state to provide additional funding. But if it’s too expensive for the state, it’s definitely too expensive for our small communities,” Rasche said. “This is a wake-up call to our legislators to let them know that our cities need their help and we need it now.”