ACTION ALERT – Urge Gov. Dayton to support clean water by signing the bonding bill

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.

End of legislative session raises more questions than it answers

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.

ACTION ALERT – Tell your senator to squash the proposed constitutional amendment

A proposal to add a new amendment to the Minnesota Constitution that would re-direct approximately $300 million a year from the state’s general fund to transportation is still alive at the Legislature. A bill that would put the amendment on the ballot this November is being voted on in the House today, where is it expected to pass. That means our best hope of defeating this harmful amendment now lies in the Senate.

Take action now!
Contact your senator, Senate Majority Leader Paul Gazelka and Senate Minority Leader Tom Bakk as soon as possible and urge them to oppose the proposed constitutional amendment.

Tell them that:

  • By re-directing and dedicating general fund dollars, this amendment poses a serious threat to other important priorities such as Local Government Aid, education and elder care.
  • This amendment would jeopardize the stability of the state budget.
  • Measures that pit schools and public safety against roads and bridges should not be put up for a vote, especially when there are other viable options to increase funding for transportation, such as raising the gas tax or license tab fees.

Contact info

Questions? If you have any questions about the proposed constitutional amendment, please contact Bradley Peterson at bmpeterson@flaherty-hood.com or (651) 259-1911.

Register for the CGMC Summer Conference!

Registration is now open for the CGMC Summer Conference! The 2018 conference will be held July 25-27 at the Verizon Center in Mankato and is co-hosted by the cities of Mankato, North Mankato and Saint Peter. During the conference you will:

  • Learn about emerging trends and challenges facing Greater Minnesota communities
  • Find out how the results of the 2018 legislative session could impact your community — and what races to pay attention to in the upcoming November elections
  • Hear from the candidates vying to be Minnesota’s next governor during a gubernatorial candidate forum
  • Explore the cities of Mankato, North Mankato and Saint Peter by taking part in city tours and during a cities-sponsored reception & dinner
  • Learn about new services, businesses and organizations at the exhibitors’ tradeshow
  • Forge connections with other city leaders from across Greater Minnesota by sharing your ideas, concerns and hopes for the future

CONFERENCE DETAILS
See this CONFERENCE AGENDA & VENUE INFORMATION for more detailed information about the 2018 conference.

REGISTER TODAY!
Please register online greatermncities.org/summer18. The deadline to register is July 18.

HOTEL INFORMATION
The Hilton Garden Inn in Mankato has a block of rooms reserved for CGMC Summer Conference attendees at a discounted rate of $119 (plus tax) per night. You can make a hotel reservation using this ONLINE RESERVATION LINK or by calling the Hilton Garden Inn at 507-344-1111. The block closes July 4.

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

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

Do Minnesotans value roads and bridges more than schools and public safety?

Below is a guest column written by Dave Smiglewski, president of the CGMC and mayor of Granite Falls, and Todd Holthaus, president of the Board of Directors of the Minnesota Rural Education Association and superintendent of Hills-Beaver Creek Schools.

Do Minnesotans value roads and bridges more than schools and public safety?

While that exact question won’t be on the ballot, there is a very real possibility that Minnesotans will have to ponder that query when they head into voting booth in November.

A proposal making its way through the Minnesota House and Senate would ask voters to change the State Constitution to permanently dedicate the revenue attributable to the sales tax on auto parts to roads and bridges.

These funds, almost $300 million per year, currently go to the state’s general fund — the same pool of money that supports things like schools and Local Government Aid (LGA).

Make no mistake about it, Minnesota’s roads and bridges need help. However, diverting money away from the general fund will either cause pain to other important state programs or require the state to raise taxes to make up the shortfall. That is why we urge legislators and the public to reject this proposed constitutional amendment.

As rural leaders, we are especially concerned about the potential impact this diversion of funds would have on Greater Minnesota.

Rural schools are particularly reliant on the state’s per-pupil formula. With significantly less in household income and property tax base than the metro area, it is much harder for rural schools to fill the gap if state funding fails to keep up. When times are good, education tends to see inflationary increases. When the general fund is in trouble, education funding is often held flat, causing our schools fall behind.

Likewise, rural Minnesota cities are especially dependent on LGA, which helps cities with less property tax base provide services such as police and fire protection, infrastructure, parks and libraries — all critical to having a safe and thriving community.

When the general fund suffers, LGA is among the first items on the chopping block. As we have seen in the recent past, property taxes go up, service levels go down and rural communities suffer when LGA is sacrificed due to state budget cuts.

The threat to our rural schools and cities is more than theoretical. During a hearing in the Senate Transportation Committee, Sen. Scott Newman, one of the chief authors of the amendment, acknowledged that LGA and education are typically the first budget items cut by the Legislature when there is an economic downtown.

Going to voters for a constitutional amendment may seem like an attractive way to get dedicated funding for transportation, but amendment proponents need to be honest about its real cost. The $300 million this amendment would divert from the general fund is not free money; it is coming from other places in state government.

Measures that pit schools and public safety against roads and bridges should not be put up for a vote, especially when there are other viable options to increase funding for transportation, such as raising the gas tax or license tab fees.

This amendment would put many important priorities at risk. Ask your legislators to vote “no” on the proposed constitutional amendment.

Constitutional amendment still in mix as session heads into final stretch

A proposal to have Minnesotans vote on a constitutional amendment to dedicate the portion of the sales tax attributable to revenue on auto parts continues to march along, especially in the House. The proposed amendment had hearings in the House Tax Committee and Ways and Means Committee this week and is poised for action on the floor whenever House leadership decides the time is right.

The progress on the Senate side is more complicated, with Senate Majority Leader Paul Gazelka (R-Nisswa) acknowledging in an MPR story that they may not have the votes, especially if no Democrats are willing to vote for the bill. The measure is currently awaiting action in the Senate Tax Committee, where it has been languishing for weeks. Sen. Roger Chamberlain (R-Lino Lakes), chair of the committee, is rumored to be opposed to the amendment.

During a meeting on Tuesday, the CGMC Board of Directors affirmed its opposition to the amendment because of the negative impact it would have on the state’s general fund and the threat that poses to the LGA program. When fully phased in, it is estimated that the amendment could sequester up to $300 million a year for roads and bridges that currently goes into the general fund. For context, that is more than half of the entire yearly appropriation to LGA.

The CGMC continues to oppose the amendment despite the inclusion of dedicated money for the small-city streets program (approximately $12.5 million a year once fully phased in) because the risk to the general fund is greater than the benefits that the amendment may bring.

Even before Minnesotans get a chance to vote on the amendment (should it pass the Legislature), the state’s surplus will likely be completely spent by this Legislature when you factor in the costs of this year’s efforts on tax conformity, the supplemental budget bill, the pension bill and tax cuts from last year’s tax bill.

Stay tuned for more developments and potential action alerts on this issue as the session comes to a close.

Speak up for Greater Minnesota cities!

Join us Wednesday, May 9 for an end-of-session lobby day and ice cream social to help make a “final push” for Greater Minnesota priorities at the Legislature. Some of the issues we will be advocating for include:

  • A robust, fair and balanced bonding bill that includes significant funding for water infrastructure and the Business Development Public Infrastructure Grant Program (BDPI)
  • An increase in LGA funding to finally bring the program back to its 2002 level
  • Funding for child care facilities and training programs to help reduce the child care shortage in Greater Minnesota
  • Defeat of a proposed of constitutional amendment that re-directs general fund money to transportation (at the likely expense of LGA, education and other important needs)

The lobby day & ice cream social are FREE to attend, but we ask that you register at greatermncities.org/IceCream2018/ or by calling Dana Johnston at 651-225-8840. Please register by Monday, May 7.

The tentative schedule for the day is as follows:

  • 10:30 a.m. – Legislative update and messaging (in Room 500 North in the State Office Building, located across the street from the State Capitol)
  • Lunch on your own
  • 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)

Note about parking: Free parking is available at the Flaherty & Hood office located at 525 Park Street in St. Paul, but you must print off this parking pass (good for May 9 only) and put it on your dashboard in order to comply with the lot’s parking restrictions.

If you have any questions, please contact Julie Liew at jlliew@flaherty-hood.com or 651-259-1917.

MnDOT’s 2018 Corridors of Commerce funding awards completely fail Greater Minnesota

Below is statement from CGMC President and Granite Falls Mayor Dave Smiglewski regarding the allocation of $400 million in Corridors of Commerce project funding, which was unveiled May 1:

“The Corridors of Commerce awards announced this morning demonstrate a massive failure on MnDOT’s part to address transportation needs statewide. Corridors of Commerce was clearly designed to be statewide program aimed at connecting regional corridors to one another and to the metro area. There is far more to Minnesota than a 40-mile radius around U.S. Bank Stadium in Minneapolis, but you certainly wouldn’t know that from looking at the 2018 awards.

“We demand that the Legislature take immediate action to suspend MnDOT’s decision so that the program can be reevaluated and brought in line with its original purpose.”

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The Coalition of Greater Minnesota Cities is a nonprofit, nonpartisan advocacy organization representing 96 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.

Water infrastructure costs threaten to cripple rural communities

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.

Sign up to be an exhibitor at the CGMC Summer Conference!

Promote your business or organization by being an exhibitor at the CGMC Summer Conference! The CGMC is an advocacy organization representing 96 cities outside the metro area. Our upcoming annual summer conference will be held July 25-27 at the Verizon Center in Mankato, Minn. More than 100 mayors, city council members, administrators and other community leaders are expected to attend.

Exhibitors will have ample opportunity to interact with attendees so that they can learn about the services or products you provide. Here are some details about what exhibitors can expect from this event:

  • Set exhibiting hours from 10:30 a.m. to 3:30 p.m. on Thursday, July 26.
  • The conference agenda includes designated time allotted for attendees to meet with exhibitors.
  • The dedicated exhibitor space next to the presentation rooms will offer ample space for displays and conversations with conference attendees.
  • Exhibitors will also have the opportunity to socialize with city officials during meals and special events, including the keynote lunch, afternoon cocktail reception and Legislative Awards Dinner that evening.

More details are available on this Exhibitor Information & Registration Form. Exhibitors are encouraged to register early as space is limited.