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cp08-06-1998 cAGENDA • SPECIAL MEETING - HUTCHINSON CITY COUNCIL THURSDAY, AUGUST 6, 1998 (a) PRESENTATION AND RECOMMENDATION BY COMPASS GROUP ►I . w (a) RESOLUTION SETTING DATE OF SPECIAL ELECTION FOR TUESDAY, SEPTEMBER 15, 1998, AND ESTABLISHING WORDING FOR BALLOT QUESTION. Action — Motion to reject — Motion to approve I • P. Elul ►Y • n U ARNOLD, ANDERSON & DOVE PROFESSIONAL LIMITED LIABILITY PARTNERSHIP 0 DAVID B. ARNOLD' STEVEN A. ANDERSON O. BARRY ANDERSON' LAURA K. FRETLAND PAUL D. DOVE" JANE VAN VALKENBURG RICHARD O. McOEE CATHRYN D. REHER WALTER P. MICHELS. 111 JAMES UTLEY IAL10 ADMITTED IN TEXAS AND NEW TOIIK Mr. Ken Merrill Hutchinson City Center 111 Hassan Street SE Hutchinson, MN 55350 Re: Sales Tax Issues Our File No. 3188 -98367 Dear Ken: RESIDENT ATTORNEY G. BARRY ANDERSON August 6, 1998 OF COUNSEL ARTHUR L. DOTEN 5891 CEDAR LAKE ROAD MINNEAPOLIS. MINNESOTA 66416 (612) 546 -9000 FAX (012) 545 -1793 501 SOUTH FOURTH STREET PRINCETON. MINNESOTA 55371 (0 1 21 369 -22 1 4 FAX 161 2) 359-5500 • I am enclosing herewith the form of the proposed ballot question for discussion at this afternoon's meeting at 3:00. I do want to bring to your attention the provisions of Minn. Stat. §275.60 and §275.61, a copy of which are enclosed with this correspondence. Under the provisions of Minn. Stat. §275.61, it is my conclusion that we need to include the language at the bottom of the ballot dealing with what happens if the property taxes are used to pay for these improvements even though that is unlikely to occur. I do think that we can include the qualifying language "rather than from sales tax revenues as planned" to indicate the fact that this is unlikely to occur. You will note that NImn. Stat. §275.60 requires some mandatory bold face language when general obligation bonds are involved. The language required reads "by voting yes on this ballot question you are voting for a property tax increase." It is my opinion that such language is misleading, inaccurate and simply wrong and violates the legislative requirement that ballot questions must be clear and concise because in fact a yes vote does not mandate a property tax increase. I note with interest that the City of Rochester reached a similar conclusion and did require the inclusion of the language presently shown on the proposed ballot question before you now and did not require the language dealing with property tax increases. This matter is not without doubt and, I suppose, a challenge is always possible. The numbers with respect to the disclosure language at the bottom of the ballot will need to be filled in by Ehlers and they should probably be sent a facsimile transmission immediately to request that information as soon as possible. • I look forward to seeing you at 3:00 pm this afternoon. ATTORNEYS AT LAW 101 PARK PLACE HUTCHINSON, MINNESOTA 85350 -2563 (320) 587-7 57 5 FAX (3aO) 5674096 'CERTIFIED AS A CIVIL TRIAL SPECIALIST BY THE MINNESOTA STATE BAR ASSOCIATION "CERTIFIED AS A REAL PROPERTY LAW SPECIALIST BY THE MINNESOTA STATE BAR ASSOCIATION • Mr. Ken Merrill August 6, 1998 page 2 Best regards. Very truly yours, ARNOLD, ANDERSON & DOVE, PUP � , I Barry�Ann rson GBArm enc. CC Jerry Gilligan r1 U • PROPOSED BALLOT QUESTION Shall the City of Hutchinson make the following needed improvements: A. Constructing and improving a multi -use civic and community center; B. Constructing and improving a senior citizens facility; C. Constructing a sheet of ice for youth recreational purposes; And finance the cost thereof by imposing a sales and use tax of one -half of one percent and an excise tax of $20.00 per retail sale of motor vehicles on all taxable transactions within the City of Hutchinson and issue general obligation bonds in an aggregate amount not to exceed $5 million plus the cost of issuing the bonds to pay for these improvements? Sales tax revenues are pledged to pay the bonds but the bonds are general obligations and will be guaranteed by the City's property taxes. ❑ Yes • ❑ No If the bonds were paid entirely from property tax levies rather than from sales tax revenues as planned, the amount of such increase levy as a percent of market value would be % and the total amount of such taxes in the first year of any such levy would be • 275.60 TAXES; LEVY, EXTENSION 22 Subd. 4, MS 1988 [Repealed. 1989 c 277 art 2 s 77: 1 Sp19S9 c 1 art 5 s 511 Subd. 5. MS 1990 [Repealed. ISp1989 c 1 art 5 s 511 Subd. 6. MS 1990 [Repealed. ISp1989 c 1 art 5 s 511 275.59 [Repealed. ISp1981 c 1 art 5 s 131 275.60 LEVY OR BOND REFERENDUM: BALLOT NOTICE. Notwithstanding any general or special law or any chatter provisions. but subject to see. Lion I24A.03. subdivision 2. any question submitted to the voters by any local governmental x subdivision at a general or special election after June 8. 1995. authorizing a property tax lev or tax ate increase, including the issuance of debt obligations payable in %k hole or in part . from property taxes, must include on the ballot the folloxving notice in boldface I%pe. BY VOTING "YES" ON THIS BALLOT QUESTION. YOU ARE VOTING FOR A PROPERTY TAX INCREASE." For purposes of this section and section 275.61. "local govemmental subdivision" in- cludes counties. home rule and statutory cities. «owns. school districts, and all special taxing - ; districts. This statement is in addition to any general or special law's or any charter provisiexa 1 :hat 20N ern the contents of a ballot question. This section does not apply to a school district bond election if the debt ser pay the d merits are to be made emireh from transfers of revenue from the capital fund to the debbt set- Nice fund. History: 1991 c 291 arr 1 s 23; ISp1995 c 3 i t I s 53 275.61 VOTER APPROVED LEVY; MARKET VALUE. • For local govemmental subdivisions other than school districts, any levy, including tk: issuance of debt obligations payable in whole or in part from property taxes, required tobei approved and approved by the voters at a googol or special election for taxes payable in 1993; and thereafter, shall be levied against the referendum market value of all taxable prup A y governmental the govemental subdivision, as defined in section 124A.02, subdisision 3b. n7 1 levy amount subject to the requirements of this section shall be certified separately to the count' auditor under section 275.07. The ballot shall state the maximum amount of the increased levy as a percentage of rrx-i ket value and the amount that will be raised by the new referendum tax rate in the first year is to be levied. History: 1991 c 291 an I s 29: 1992 c 511 art 2 s 22: 1996 c 471 arr 3 s 21 NOTE- This.a,,.. v added b lays 1991. chapier _'91. article I. se von '_9. i> enalive for mf A p blicly -d r far lixea pxy 1993 and efter. except that am cm ar caunly that cotdocted a referendum ix pr to I.tay I. 1992. and had pu thrw its property ou ners using levy amoums thaL if adopted rellea nct tax lap-0- ie exempt fmm this pro on ,i,h mrtuds W r referendum. If the city ar count, intrnds m lot' the = on net tax capucm under this salmon. it mull octtifY to the mmrm � re venue the infrnn a ion oecessm)' for de comndssiona to determine y ine that the uirements of this exception here been tnd. 991. chatter 291 . article 1. section bs, as amended b) taws 1992. chupler s I I. article'_. s ctiw 59. 275.62 TAX LEVIES; REPORT TO THE COINLNIISSIONER OF REVENUE. 3 Subdivision 1. Report on taxes levied. The commissioner of revenue shall establA procedures for the annual reporting of local government levies. Each local govemmental shall submit a report to the commissioner by December 30 of the year in which the tax Is k� ied. The report shall include. but is not limited to, information on the amount of the tax lat'ipl by the governmental unit for the following purposes (1) debt, which includes taxes levied for the purposes defined in Minnesota Sta 1991 Supplement, section 215.50, subdivision 5, clauses (b), (c), (d), and (e); (2) social services and related programs, which include taxes levied for the p defined in Minnesota Statutes 1991 Supplement section 275.50. subdivision 5. clauses U). and (v); (3) libraries. which include taxes levied for the purposes defined in Minnesota S.,� 1991 Supplement, section 275.50. subdivision 5, clause (n); and (4) other levies, which include the taxes levied for all purposes not included in clam (1). (2) or (3). , 229 Subd. 2. Local gos'ernmeuts ret r governmental unit' means a county. greater y t c ity 2 .50 0 , 0 un that es p a t to statury the levy year. Po ulation es timate. F Subd. P at m. g 275 1 u or by an 1� made under section 4A.02. whic r. mate for the calendar year precer Subd. 4. Penalty for late report ce: aid pay aired in subdivision I by January ' ments to the local governnle led k vned (l) for a county. the aid o amount 2) for other local 90v eminent ..011 to 477A.014 shall be red History: 1992 c 511 arf 5 s 11 1 i 0 Council Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION PROVIDING FOR AN ELECTION ON THE DESIRABILITY OF CONSTRUCTING CERTAIN MUNICIPAL IMPROVEMENTS AND IMPOSING A ONE HALF OF ONE PERCENT (1/2 %) SALES AND USE TAX AND AN EXCISE TAX OF TWENTY AND NO /100 DOLLARS ($20.00) PER RETAIL SALE OF MOTOR VEHICLE FOR THE PURPOSE OF FINANCING SAID CONSTRUCTION BE IT RESOLVED, by the City Council of the City of Hutchinson, Minnesota, as follows: 1. A special election is hereby called and shall be held on September 15, 1998, between the hours of 7:00 o'clock a.m. and 8:00 o'clock p.m. at which election the question of issuing bonds and imposing a sales and use tax and an excise tax shall be submitted to the voters. 2. Notice of the submission of said question at said election shall be given by publication of the notice of election in the official newspaper once a week for at least two weeks prior to the election, with the first publication to be not less than fourteen (14) days before the date of election. • The City Administrator shall also post a copy of said notice in his office at least fourteen (14) days prior to the election date. Said notice shall be in substantially the following form: Cl NOTICE OF SPECIAL ELECTION SEPTEMBER 15, 1998 CITY OF HUTCHINSON, MINNESOTA NOTICE IS HEREBY GIVEN that a special election will be held in and for the City of Hutchinson, Minnesota, on Tuesday the 15' day of September, 1998, between the hours of 7:00 o'clock a.m. and 8:00 o'clock p.m., at which the following question will be submitted: Shall the City of Hutchinson make the following needed improvements: A. Constructing and improving a multi -use civic and community center; B. Constructing and improving a senior citizens facility, C. Constructing a sheet of ice for youth recreational purposes; And finance the cost thereof by imposing a sales and use tax of one -half of one percent and an excise tax of $20.00 per retail sale of motor vehicles on all taxable transactions within the City of Hutchinson and issue general obligation bonds in an aggregate amount not to exceed $5 million plus the cost of issuing the bonds to pay for these improvements? Sales tax revenues are pledged to pay the bonds but the bonds are general obligations and will be guaranteed by the City's property taxes. Yes No If the bonds were paid entirely from property tax levies rather than from sales tax revenues as planned, the amount of such increase levy as a percent of market value would be % and the total amount of such taxes in the first year of any such levy would be The polling places for said election shall be as follows: Precinct No. No. 1 -3 Polli❑ Pg lace Recreation Building All registered and qualified voters of the City are entitled to vote at said election within the respective precincts in which they reside. DATED this 6' day of August, 1998. BY ORDER OF THE CITY COUNCIL Ken Merrill Finance Director 3. Pursuant to Minnesota Statutes, Section 205.16, subdivision 3, the City Administrator shall also post a copy of the sample bond ballot in his office at least four (4) days before said election and at each polling place on the date of election. The sample bond ballot shall be in substantially the following form: OFFICIAL BALLOT BOND ELECTION CITY OF HUTCHINSON, MINNESOTA SEPTEMBER 15, 1998 Shall the City of Hutchinson make the following needed improvements: D. Constructing and improving a multi -use civic and community center; E. Constructing and improving a senior citizens facility; F. Constructing a sheet of ice for youth recreational purposes; And finance the cost thereof by imposing a sales and use tax of one -half of one percent and an excise tax of $20.00 per retail sale of motor vehicles on all taxable transactions within the City of Is Hutchinson and issue general obligation bonds in an aggregate amount not to exceed $5 million plus the cost of issuing the bonds to pay for these improvements? Sales tax revenues are pledged to pay the bonds but the bonds are general obligations and will be guaranteed by the City's property taxes. Yes No If the bonds were paid entirely from property tax levies rather than from sales tax revenues as planned, the amount of such increase levy as a percent of market value would be % and the total amount of such taxes in the first year of any such levy would be INSTRUCTION TO VOTERS: If you approve of the above question, mark a cross (X) in the "YES" square opposite said question. If you disapprove, mark the cross (X) in the "NO" square opposite said question. 4. The City Administrator is authorized and directed to cause to be printed ballot strips, if appropriate, and official bond ballots for the use of the voters at said election. 5. The furnishing by the City Administrator to the McLeod County Auditor of the notice set forth in paragraph 3 hereof at least 30 days prior to the election, as required by Minnesota Statutes, Section 205.16, Subdivision 4, is hereby ratified and affirmed. 0 6. The polling places for each precinct for the election shall be as set forth in the notice of election and the election officials for each polling place shall be designated by a separate resolution of this Council. 7. The City Council shall declare the results of the vote upon said issue when it meets as a canvassing board following said election. Mayor Attest: City Administrator The motion for the adoption of the foregoing resolution was duly seconded by Council Member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 0 9