HomeMy WebLinkAboutFinancing Local Government in the 1980s CITY OF OAK PARK HEIGHTS, MINNESOTA
SPECIAL REPORT
FINANCING MINNESOTA LOCAL GOVERNMENT
IN THE 1980's
MARCH, 1982
SPECIAL REPORT
FINANCING MINNESOTA LOCAL GOV=NMENT IN THE 1980`s
TABLE OF CONTENTS
PAGES
INTRODUCTION AND OVERVIEW 2 - 5
DETAILED ANALYSIS AND REVIEW:
History of Loral Property Taxes 5 - 15
Local Government Aid 16 - 18
Education Aids 19 - 21
Property Tax - Levy Limitations 21 - 22
Generally Accepted Accounting Principles vs, "Shifting" 22 - 25
CURRENT POSITION OF THE STATE BUDGET AND CASH FLOW
OPERATING RESERVES 25 - 27
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ANOTHER SHIFT - BACK TO LOCAL PROPERTY TAXES 28 - 29
SUMMARY AND CONCLUSION 29 - 32
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City of Oak Park Heights
Special Report, Page 2
The following Introduction and Overview section of this Report will attempt to
define the present position of local. government in this State. However, the present
situation and problem is not simple, but rather, extremely complex. The financial
environment for Minnesota Cities and other local government was changed greatly in 1981.
The remaining sections of this Report will attempt to detail those changes which have
occurred and offer a perspective of the meaning of those changes. We have prepared the
schedules contained in this Report from data compiled by various departments and agen-
cies of the State of Minnesota as well as data from your City and data from your County.
INTRODUCTION AND OVERVIEW
The primary purpose and function of local government is to collect financial re-
sources and then to expend these financial .resources providing services deemed necessary
and beneficial to the local community. In the State of Minnesota, these financial
resources are collected at the State level (individual income taxes, corporate .income
taxes, and general sales taxes) as well as at the local level (property taxes, licenses
and permits, and other charges for services rendered). This process of collecting taxes
at one level of government to finance services provided by another level of government
adds to the complexity of financing local government. Additionally, (and more
important), the direct relationship between the level of services to be provided and the
cost of those services becomes clouded, if not lost.
Prior to 1972, local government units substantially controlled both functions (level
of services to be provided and level of taxation to finance those services) with little
control by State government. Each local government unit had the autonomy to decide its
own level of services and its own level of taxation. This autonomy placed direct respon-
sibility for both level of services and taxation with each governing body. Accordingly,
the direct connection between level of services and the cost of those services was
easily and readily visible.
City of Oak Park Heights
Special Report, Page 3
Since 1971, this direct connection between responsibility and the corresponding
authority has been greatly diminished, if not lost. Local government still assumes the
responsibility for providing local services. However, the resources available to
finance these services are controlled by the State. The taxing authority of all
Minnesota local government units is greatly controlled by State Statutes relating to
levy limitations.
Levy limitations started when the 1971 State Legislature (Second Extra Session)
adopted the "Omnibus Tax Bill of 1971 ". This legislation placed statutory limits on the
taxing authority of all Minnesota local government. In conjunction with these levy
limits, the State provided local government with increased State aids to offset the
reduced property tax revenue. Ac::ordingly, total property taxes decreased from
$1,040,698,000 in 1971 to $973,209,000 in 1972. These levy limitation Statutes have
continued since 1971 to the present time. Additionally, State aids paid to local
government continued to increase from 1971 to 1981.
The levy limitation formulas (as applicable to Cities) were based upon a combination
of local goverment aid; plus general- purpose property taxes; plus population. The com-
bination of State control over: (1) tax -levy related State aids and credits to local
government; (2) tax --levy related State aids and reimbursements to individual taxpayers;•
(3) total local government aid; and, (4) levy limitation formulas, allowed. - the State to
exercise control over the primary financial resources available to .•linnesota Cities,
Villages, Townships and Counties. By having the ability to exercise control over the
primary financial resources available to local government, the State can effectively
exercise control over the level of services provided by those government units.
State aids paid to all _local government (Cities, Counties, Schools and other) and
other State aids paid to individual taxpayers (as a reimbursement for property taxes)
totaled approximately $1,880,000,000 for the State's fiscal year ended June 30, 1981.
This .represents approximately 50% of the State's General Fund budget for that period.
These aids have been increasing at the rate of 6% to 9' for the past two years. Other
City of Oak Park Heights
Special Report, Page 4
State government expenditures for the State's General Fund have been increasing at the
rate of 10o to 160 over the period. However, the State's net non- dedicated (General
Fund) revenue has been increasing at the rate of approximately 3 over this same period.
Accordingly, the State budget situation is serious. More important, the State is no
longer in a financial position of continuing this high level of aid payments to local
government nor local property taxpayers. Even more important, local government
(especially Minnesota Cities) are still under the control of levy limitations even
though the State has taken action to limit (and even reduce) the level of aids paid to
local government.
State Legislative actions taken in 1981 and March, 1982 have started to reverse the
past trend of increasing aids to local government. Education aids paid to local school
districts have been substantially decreased. Local government aids paid to Cities,
Counties and Townships have also been decreased. Additionally, State financing of spe-
cial programs (i.e., diseased tree control) have been curtailed or eliminated with the
burden being left to local government.
To offset a portion of these aid reductions, the State has eased the levy limitation
formulas for certain units of local government. Minnesota School Districts have
regained some of their authority to levy property taxes to offset the State Education
Aid reductions. Minnesota Counties have regained some of their authority'to levy pro-
perty taxes to offset the high cost of certain public welfare programs. Minnesota
Cities have not regained any taxing authority to offset State aid .reductions nor the
increasing costs of providing local services.
Minnesota Cities are (and may continue to be) caught between limited and State -
controlled revenues; and, increasing and inflation- controlled expenditures. This
situation will soon severely restrict the ability of Minnesota Cities to provide their
services at past levels. The cost and /or levels of services must decrease; or, Cities
must regain some of their taxing authority to finance the existing level of services.
City of Oak Park Heights
Special Report, Page 5
Minnesota Cities and other local government are dependent upon the State because of
the high level of aids received from the State. When State revenues are limited, State
aids paid to local government must share in the State's budget reductions. However,
these aid reductions will cause a serious imbalance in the budgets of local government
unless the cost of providing local services is decreased or local government is given
the option of increasing local property taxes. Minnesota School Districts and Counties
were given such options to some degree. Without similar authority, Minnesota Cities may
not be able to continue local services deemed necessary. A minimum level of local. ser-
vices (public safety, public welfare, education, etc.) is and should be the concern of
both State and local government. Local government should have the option and ability to
continue those services and /or le -gels of services deemed necessary by the local
community.
HISTORY OF LOCAL PROPERTY TAXES
Total property taxes levied by all local government units in Minnesota from 1968
through 1981 were as follows:
(All Amounts in 1,000's of Dollars)
Cities/ Other Total
Year School Villages/ Taxing Taxes
Payable Districts Counties Townships Districts Levied
1968 $ 322,745 $ 164,688 $ 142,004 $ 4,397 $ 633,834
1969 412,368 188,708 158,363 4,782 764,221
1970 489,309 204,609 174,203 5,339 873,460
1971 595,312 237,678 201,739 5,969 1,040,698
1972 520,288 245,925 192,248 "14,748 973,209
1973 538,988 253,247 191,462 16,255 999,952
1974 586,031 280,068 211,020 21,840 1,098,959
1975 649,515 320,331 240,522 53,928 1,264,296
1976 683,329 335,647 252,617 52,001 1,323,594
1977 757,026 374,951 284,906 55,563 1,472,446
1978 777,953 402,924 298,235 59,585 1,538,697
1979 817,858 433,053 306,789 70,613 1,628,313
1980 855,277 485,890 331,708 85,963 1,758,838
1981 850,256 549,366 384,222 97,804 1,881,648
City of Oak Park Heights
Special Report, Page 6
The above amounts .represent total property taxes levied by local government. These
amounts however, do not represent total. property taxes paid by local property taxpayers.
A portion of each annual - tax levy (as certified by local Councils and Boards) is paid by
the State Department of Revenue directly to the various local government units. These
payments are usually referred to as tax credits and are categorized as follows for 1981;
• Homestead Credits
• Agricultural Credits
• Wetlands Credit and Reimbursement
• Native Prairie Credit and Re iioursernent
• Reduced Assessment Credit
After the net taxes are certified to specific parcels and properties, additional
credits are paid or reimbursed to the individual taxpayers by the State Department of
Revenue in the form of property tax refunds or renters credits. These refunds and cre-
dits have no affect upon the level of property tax revenue available to local government.
These refunds and credits affect who pays the property taxes, not how much a taxing
authority may levy under the levy limitations statutes.
City of Oak Park Heights
Special Report, Page 7
The following table summarizes total property taxes levied in the State of Minnesota
(by all local government units) and the percents of such taxes paid by the State and by
the local property taxpayer (after State reimbursements) for the calendar years 1968
through 1971 (before the "Omnibus Tax Bill of 1971 ") and for the calendar years since
1971:
Percent of Total Tax Levies
Net Taxes
Total State Credits Paid To: Paid By
Year Tax Levies Local. _Individual Property
Payable (In 1,000's) Government Taxpayers Owners
1968 $ 633,834 12.430 .10% 87.470
1969 764,221 12.47 .79 86.74
1970 873,460 12.37 .89 86.74
1971 1,040,698 12.26 .89 86.85
1972 973,209 13.66 2.20 84.14
1973 999,952 14.01 2.20 83.79
1974 1,098,959 18.82 2.86 78.32
1975 1,264,296 17.76 2.69 79.55
1976 1,323,594 18.63 9.17 72.20
1977 1,472,446 17.93 9.12 72.95
1978 1,538,697 18.14 12.68 69.18
1979 1,628,313 18.16 11.67 70.17
1980 1,758,838 24.08 10.59 65.33
1981 1,881,648 28.25 9.13 62.62
As the above schedule indicates, State Credits remained relatively constant at
approximately 130 of total property taxes from 1968 through 1971. Since 1971, State tax
credits have been increasing to a degree that (by 1981) the State of Minnesota was
absorbing 37`0 of the property taxes levied by all Minnesota local government units.
City of Oak Park Heights
Special Report, Page 8
As the previous schedule clearly indicates, the State of ,:dinnesota has become the
single largest. ap yor of local property taxes in this State. It's portion of the local
property tax burden increased from 13% in 1971 to 37% in 1981. This increase was the
result of State- mandated Legislation over the past ten years. Some of the more signifi-
cant legislative changes and the resulting estimated aid increases were as follows:
1972 - Agricultural Mill Rate Differential of 8.3 mills given to
property taxpayers located in agricultural areas ($15,835,000
increase over 1971). This mill rate differential was effec-
tive for the school district tax levy only.
1974 - Increased homestead credits from 350/$250 per parcel maximum
to 45`x/$325 per parcel maximum. ($66,620,000 increase over
1973).
1976 - Increased and additional credits paid directly to homeowners
and renters
Homeowners:
Senior Citizens /Disabled $ 26,164,000
Under age 65 49,792,000
Renters 11,416,000
Total increase over 1975 $ 87,372,000
1978 - Further increased credits paid directly to homeowners and
renters:
Homeowners:
Senior Citizens /Disabled $ 6,306,000
Under Age 65 31,671,000
Renters 22,940,000
Total increase over 1977 $ 60,917,000
1980 - Increased homestead credits from 450/$325 per parcel maximum
^^ to 50%/$550 per parcel maximum ($117, 224,000 increase over 1979).
1981 - Increased homestead credits from 50-0 /$550 per parcel maximum
to 58 %/$650 per parcel maximum ($75,9 20,000 increase over 1980).
City of Oak Park Heights
Special Report, Page 9
The preceding schedule (Page 7) indicates the percent of local property taxes paid
directly or reimbursed by the State of Minnesota versus the percent actually incurred by
property owners. The following schedule shows the dollar amounts of tax related aids
and credits paid by the State for the years 1968 through 1981:
(All Amounts in 1,000's of Dollars)
State Credits Paid To: Total
Local Individual State Total Percent
Year Government Taxpayers Payments Increase Increase
1968 $ 78,769 $ 639 $ 79,408
1969 95,305 6,029 101,334 $ 21,926 28%
1970 108,055 7,736 115,791 14,457 14
1971 127,596 9,243 136,839 21,048 18
1972 132,921 21,441 154,362 17,523 13
1973 140,044 21,959 162,003 7,641 5
1974 206,847 31,436 238,283 76,280 47
1975 224,504 34,010 258,514 20,231 8
1976 246,528 121,382 367,910 109,396 42
1977 264,062 134,249 398,311 30,401 8
1978 279,129 195,166 474,295 75,984 19
1979 295,723 190,032 485,755 11,460 2
1980 423,500 186,256 609,756 124,001 26
1981 531,616 171,820 703,436 93,680 15
State credits paid to local government include: (1) homestead credits; (2) agri-
cultural credits; and (3) other credits. State credits paid to individual taxpayers
include: (1) circuit breaker /property tax refunds; and, (2) renters credits.
City of Oak Park Heights
Special Report, Page 10
The preceding amounts and increases as compared to inflationary increases over the
past ten years (1971 to 1981) reflects the following:
1. Percent increase in the Consumer Price
Index (C.P.I.-U, Minneapolis - St. Paul
Area) October, 1971 to October, 1981 136% Increase
2. Percent increases (1981 over 1971):
A. Total property taxes levied by all
Minnesota Local Government Units
$840,950,000 increase. 81% Increase
B. Total State credits paid to Local
government units and to private
individuals - $566,597,000 increase. 4144 Increase
C. Net property taxes paid by property
owners - $274,353,000 increase. 30o Increase
All of the above data reflects and relates to total property taxes and total State
payments thereof. As such, only part of the full picture is seen. Most State -paid
credits relate to residential property only. Another part of these credits relate to
agricultural property only. No ,part of these credits relate to commercial, industrial
or other non-residential and non- agricultural property. The follo;iing schedule (Page
11) summarizes Minnesota property taxes in terms of type of property and taxpayer.
ALL MINNESOTA LOCAL GOVERNMENT UNITS -
m F
o �
ESTIMATED DISTRIBUTION OF GROSS AND NET PROPERTY TAXES PAID ° q
1974 - 1981 o
G a
0
-r fy
w �
(All Amounts in 1,000's of Dollars) D F
1974 1975 1976 1977 1978 1979 1980 1981 0
e -
Total Property Taxes Levied $ 1,098,959 $ 1,264,296 $ 1,323,594 $ 1,472,446 $ 1,538,697 $ 1,628,313 $ 1,758.838 $ 1,881,648
Paid By State of Minnesota:
To Local Government:
Homestead Credits 189,373 206,709 220,254 234,563 243,964 254,089 371,3 447,233
Agricultural Credits 1 17,474 17,795 26,274 29,499 35,165 41,634 52,187 70,456
Other Credits 13,927
To Individual Taxpayers:
Homeowners 7,160 6,796 82,752 85,387 123,364 109,933 87,140 58,016
Renters 24,276 27,214 38,630 48,862 71,802 80,099 99,116 113,804
Total State Payments 238,283 258,514 367,910 398,311 474,295 485,755 609,756 703,436
Net Property Taxes Paid By
Property Owners $ 860,676 $ 1,005,782 $ 955,684 $ 1,074,135 $ 1,064,402 $ 1,142,558 $ 1,149,082 $ 1,178,212
F LkULNI PAID BY FROPLR fY OWNLRS 78.32% 79.55; 72.20% 72.95N 69.18; 70.17% 65.33; 62.62;,
NET PROPERTY TAXES - BY
TYPE OF PROPERTY:
Non-Commercial/Industrial:
Agricultural $ 126,448 $ 143,697 $ 150,284 $ 175,37j $ 190,412 $ 215,796 $ 236,239 $ 218,200
Residential 348,929 417,134 447,139 519,967 519,493 537,396 474,456 464,227
Aparl 67,210 76,568 80,067 85,354 92,572 97,548 108,128 123
Sub -Total 542,587 637,399 677,490 780,696 802,477 850,740 818,823 806,406
Less: State Reimbursements (31,436) (34,010) (121,382) (134,249) (195,166) (190,032) (186,256) (171,820)
No Property Taxes Pn i d 51 1 , 151 603, 5139 3 u , 10 G-16,44 7 607, 311 660,706 o52, 5o7 v34, 5t3o
Cornmercia! /Industrial /Utilities /Other 349,525 402,393 399,576 427,688 457,091 481,850 516,515 543,626
Net Property Taxes Paid
By All Property Owners $ 860,676 $ 1,005,782 $ 955,684 $ 1,074,135 $ 1,064,402 $ 1,142,558 $ 1,149,082 $ 1,178,212
Percent Increase (Decrease) 2.71% .16.86 (4.98 % 12.39% (.91 % 7.34% .57% 2.54%
City of Oak Park Heights
Special Report, Page 12
One of the primary concerns of the Minnesota State Legislature has been local pro-
perty taxes paid by agricultural and residential taxpayers and renters. Accordingly,
most of the credits and reimbursements paid by the State relate to these taxpayers.
Since 1974, total property taxes levied by all local government increased by
$782,689,000 or 710 over seven years. However, the portion of this increase actually
paid by non-commercial and non-industrial property owners was $123,435,000 as follows:
(All Amounts in 1,000's of Dollars)
Percent
Property Tax Payor 1974 1981 Change Increase
Local Property Owners:
Non-Commercial/Industrial:
Agricultural $ 126,448 $ 218,200 $ 91,752 730
Residential 348,929 464,227 115,298 33
Apartments 67,210 123,979 56,769 84
Sub-Total 542,587 806,406 263,819 49
Less: State Reimburse-
ment (31,436) (171,820) (140,384) 447
Net Taxes Paid 511,151 634,586 123,435 24
Commercial/Industrial/
Utilities/Other 349,525 543,626 194,101 56
State of Minnesota:
Paid to local government 206,847 531,616 324,769 157
Paid to individual tax-
payers 31,436 171,820 140,384 447
Total Property
Taxes Levied $ 1,098,959 1,881,648 $ 782,689 71%
As the above schedule illustrates, the level of tax increase varies greatly as to
type of property. The actual variance is even greater than illustrated because the
State Reimbursements (directly to private individuals) has not been allocated to the
specific type of property. However, these reimbursements were made on non - commercial/
non-industrial property. Those taxpayers (as a group) incurred a 24% net increase in
property taxes over the seven year period. Commercial/industrial property incurred a
56% increase and the State incurred a 195% increase over the same period. These vari-
ances are in accordance with the past State policy of limiting and controlling local
property taxes on agricultural and residential property.
City of Oak Park Heights
Special Report, Page 13
An effect of that State policy was a shift in the tax burden away from agricultural
and residential property. This effect is evident in the followirrcl schedule.
Percent of Property
Taxes Levied
Property Tax Payor 1974 1981
Local Property Owners:
Non - Commercial /Industrial:
Agricultural 11.51% 11.600
Residential 31.75 24.67
Apartments 6.11 6.59
Sub -Total 49.37 42.86
Less: State Reimbursement (2.86) (9.13)
Net Taxes Paid 46.51 33.73
Commercial /Industrial /Utilities /Other 31.81 28.89
State of Minnesota:
Paid to local government 18.82 28.25
Paid to individual taxpayers 2. 86 9.13
Total Property Taxes Levied 100.00% 100.00%
As shown above, the State shifted the tax burden away from agricultural and residen-
tial property. Additionally, the State has shifted this tax burden away from all pro-
perty taxpayers. In 1981, the State of Minnesota paid or reimbursed a full 37% of all
local property taxes. This amounted to $703,436,000 or approximately 16% of the State's
General Fund operating budget.
The preceding schedules and data relate to total property taxes for all local
government units in the State. This data can be used for comparison purposes to analyze
property taxes paid to an individual City with two modifications. The first modifica-
tion is State credits or reimbursements to private individuals after they have paid the
property taxes. These credits or .reimbursements have been detailed previously. The
second modification relates to school districts. Agricultural aid is paid only to
Minnesota school districts. As such, a larger portion of school district tax levies (as
compared to City and County tax levies) are paid by the State.
City of Oak Park Heights
Special. Report, Page 14
For comparative purposes, the following state—aide percents are applicable to all
local government units (except Minnesota school districts), as to who paid the annual
certified tax levy.
Tax Payor 1978 1979 1980 1981
Local taxpayers and fiscal
disparities 83.89% 84.01% 78.46% 74.16%
State of Minnesota 16.11 15.99 21.54 25.84
Totals 100.00% 100.00° 100.00% 100.00%
Current property tax collections (including the delayed payment of homestead credits
and other State credits) for the City of Oak Park Heights for the years 1978, 1979, 1980
and 1981 were as follows:
Tax Payor 1978 1979 1980 1981
Local Collections:
Local Taxpayers $ 282,920 $ 290,391 $ 347,219 $ 424,388
Fiscal Disparities 788 1,172 1,455 3,323
Sub - Totals 283,708 291,563 348,674 427,711
State of Minnesota 12,857 14,402 26,228 36,311
Totals $ 296,565 $ 305,965 $ 374,902 $ 454,022
Shown on the basis of percents (for comparison to the above listed state- -wide
percents), property tax collections for the City of Oak nark Heights for the same period
were as follows:
Tax Payor 1978 1979 1980 1981
Local Collections:
Local Taxpayers 95.40% 94.91% 92.61% 91.46%
Fiscal Disparities .27 .38 .39 .71
Sub - Totals 95.67 95.29 93.00 92.17
State of Minnesota 4.33 4.71 7.00 7.83
Totals 100.00% 100.00% 100.00% 100.00%
The above illustrations are indicative of the past level trends of State homestead
credit aids to local government. The major change in 1980 and 1981 (over 1978 and 1979)
was an increase in the maximum homestead credit from $325 in 1979; to $550 in 1980; to
$650 in 1981. Additionally, the percent of property taxes subject to homestead credits
increased from 45% for 1974 through 1979; to 50% for 1980; to 58% for 1981.
City of Oak Park Heights
Special Report, Page 15
Homestead credits (and other tax - related credits to be paid by the State) are calcu-
lated by the Counties based upon State rules and regulations as part of the property tax
certification and collection process. These amounts are then tabulated and the summary
data is transmitted to the State Department of Revenue. Prior to 1982, the State
Department of Revenue would issue payments to the local taxing authorities (Cities,
Counties, Schools, etc.) based upon the amounts determined by the Counties which were
deducted from individual tax statements. By this process, the local taxing authority
received its total certified tax levy (except for delinquencies and abatements) either
from local taxpayers or the State Department of Revenue. Also by this process, the
local - taxing authority could adopt an annual budget based upon total - revenue to be
received as a result of its certified tax levy. finis situation no longer exists for
1982.
The State's budget for the 1981 - 1983 bienniu-1 places a limit on the total amount
to be paid by the State for homestead credits on the 1982 local tax levies. This over-
all limit was set at $481,600,000 by the December, 1981 Special Session. However, this
over- -all _limit was not allocated to specific Counties and the Counties had no way of
calculating homestead credits on individual parcels (nor individual taxing authorities)
under this limitation. This limitation will be applied by State reductions to amounts
calculated by the Counties. Accordingly, the local - taxing authorities will no longer
receive the full amount of its total certified tax levy. Additionally, the local
government unit will not be informed of the amount of this decrease until after the
State Department of Revenue tabulates the summary data from the Counties (i.e.,
mid - 1982).
The March, 1982 Regular Session of the Minnesota Legislature was faced with addi-
tional State budget reductions. Their solution included a $30,000,000 or 6-•1/4% reduc-
tion to the homestead credit limit set by the Dece -.ber, 1981 Special Session. This
decrease further reduces the 1982 revenue resources available to local government units.
City of Oak Park Heights
Special Report, Page 16
LOCAL GOVERNMENT AID
Homestead credits (and other property tax related credits and aids) are not the only
aids paid to local government. Minnesota Cities, Villages, Townships, and Counties
receive "local government aid" as one of the primary aids received from the State.
Local government aid started in 1972 as part of the "Omnibus Tax Bill of 1971 ". This
aid replaced the "per capita" and "exempt property reimbursement" aids previously paid
by the State to local government.
Local government aid payments to individual Cities, Villages, Townships, and
Counties are computed based upon a State established per capita amount plus the
following factors for each individual government unit:
® Population
®
Average total mill rate for the previous three years
® Real estate assessment /sales ratio
The per capita amount was designed to compensate for the inflationary costs of
financing local government. The combination of the above three factors was the State-
determined method of allocating the total amount appropriated by the State to the indi-°
vidual units of local government. The effect of this formula is to pay greater aid to
those local units with a heavier property tax burden and less aid to those local units
with a smaller tax burden. The ".real estate assessment /sales ratio" factor is a method
of compensating for the different valuation policies and procedures of the individual
Local assessors.
The following schedule summarizes total State payments of local government aid and
the amounts received by the City of Oak Park Heights for the calendar years 1972 through
1981 and 1982 budgeted:
City of Oak Park Heights
Special Report, Page 17
City of
State Total Oak Park Heights
Amount Percent Percent
Year (In 1,000's) Change Amount Change
1972 $ 98,733 $ 16,251
1973 106,567 7.94% 17 8.13%
1974 135,133 26.80 80,674 359.08
1975 138,389 2.41 77,386 (4.08)
1976 159,854 15.51 77 .14
1977 171,689 7.40 77,386 (.14)
1978 197,798 15.21 77,434 .06
1979 225,054 13.78 77,434 --
1980 245,565 9.11 79,564 2.75
1981 249,716 1.69 75,994 (4.49)
1982 (Revised
Budget) 240,725 (3.60) 73,203 (3.67)
Total Increase 1440 350%
The 1981 State amount of $249,716,000 represents the total- paid to local government
after the 8.3% reduction announced by the State in 1980. The 1982 State amount of
$240,725,000 represents the total to be paid to local government units after - the 11.080•
reduction as a .result of the November and December, 1981 Special sessions of the
Minnesota Legislature. The 1982 Regular Session of the :Minnesota Legislature maintained
this level of local government aid. As these amounts indicate, the State has already
implemented a policy of reduced local government aid. Additionally (and equally as
important), the State has implemented a policy of paying these aids only during the last
half of each calendar year. Prior to 1981, local government aid was paid four times
City of Oak Park Heights
Special Report, Page 18
each year (i.e., March, July, September and December) in four equal installments. After
1981, this aid is paid six times each year (July through DecercLher only) in six equal.
installments. The revised payment schedule eases the State budget situation and cash -
flow situation at the expense of cash -flow requirements for local government units.
(See later commentary under Generally Accepted Accounting Principles vs. "Shifting ".}
Prior to 1981, Minnesota Cities and Counties required a minimum cash -flow reserve
equal_ to one -half of the annual general -- purpose tax levy only. Because of the change in
payment dates for local government aid, Cities and Counties now require a greater mini-
mum cash -flow reserve to compensate for this change. The minimum required cash -flow
reserve for the City of Oak Park Heights has changed as follows because of the State
change in payment dates.
Before the Change After the Change
in Timing of in Timing of
State Aid Payments State Aid Payments
1982 Budgeted :Levy (Includes Homestead
Credit) $ 471,081 $ 471,081
1982 Anticipated Local Government Aid N /E, 73,203
Total $ 471,081 $ 544,284
Minimum Required Cash -Flow Reserve
(One Half of Total) $ 235,500 $ 272,100
City of Oak Park Heights
Special Report, Page 19
EDUCATION AIDS
Minnesota school districts do not receive local government aid from the State.
Instead, they receive education aids. These aids are determined under various formulas
and factors applicable to the financial structure of the local school districts. These
education aids (excluding Endowment School Aids, Federal School Aids, and other educa-
tion aids not paid from the State's General Fund) were and are budgeted to be as follows
for the State fiscal years indicated:
Percent of
State General (In 1,000`s of Dollars)
Fiscal Year Ended Fund Budget Amount Change
June 30, 1980 280 $ 952,697 $ 52,318
June 30, 1981 (1) 28 1,021,038 68,341
June 30, 1982 ( 28 1,157,872 136,834
June 30, 1983 20 754,404 (403,468)
As the above schedule indicates, Minnesota Cities and Counties are not the only
local government units being affected by the State budget situation. Education aids for
the above fiscal periods are detailed as follows:
Fiscal Year Ended June 30,
Education Aids 1980 1981 1982 1983
Foundation Aid $ 646,105 $ 665,488 $ 748,221 $ 560,020
Transportation Aid 88,435 106,230 122,546 87,363
Special and Compensatory
Aid 88,345 95,103 109,413 106,159
Vocational Education Aid 108,528 141,063 136,833 123,743
Other Education Aids 21,284 13,154 40,859 38,013
Sub - Totals 952,697 1,021,038 1,157,872 915,298
Adjustments:
Funding "Shift" ( 134,000)
Budget Reduction (1) (1) (26,894)
Totals $ 952,697 $ 1,021,038 $ 1,157,872 $ 754,404
(1) Recission /Restoration School Aids paid during the last six months of 1981
totaling $243,670,800 are included in the June 30, 1981 fiscal period. The
State "budgeted" these aids for its June 30, 1982 fiscal period.
City of Oak Park Heights
Special Report, Page 20
Education aids are computed and paid based partially upon school enrollment or
"pupil units ". School enrollment for the past several years has been declining and was
(or is estimated to be) as follows on a state --wide basis:
Percent
School Year Pupil Units Decrease
1979/80 1,004,313 1.97%
1980/81 919,424 8.45
1981/82 884,197 3.83
1982/83 862,400 2.47
The declining enrollment estimates are responsible for a portion of the decreased
Education Aids. however, the primary causes of decreased Education Aids for the school
year ended June 30, 1983 are "funding shifts" and a change from State financing to local
property tax financing. This change represents a policy change from the State policy of
the 1970's.
Since 1971 and continuing through mid - -1981, the State's policy was - to limit school
district property - taxes and finance a large portion of the cost of education by State
taxation. Beginning with the 1982 tax levy (to finance the 1982/83 school year), the
past State trend has been reversed. This should be an indication to all Minnesota local
government units of the future trend of financing the cost of local government services.
State Education Aids (payable from the State General Fund) are budgeted to be
$754,404,000 for the 1982/83 school year or $403,468,000 less than the 1981/82 school
year. This represents a 35% decrease. A portion of this decrease will be financed by
additional local property taxes and property tax "funding shifts ", as follows:
1. Increased basic maintenance tax Levies (Estimated:
1982 - $632,500,000 over 1981 - $494,200,000) $ 138,300,000
2. Additional 2 mill tax increase to help offset
State Education Aid reductions (State Estimate) $ 43,000,000
3. "Funding Shift" - Requires that one -sixth of
the 1982 school district tax levy be counted
as revenue for the 1981/82 school year instead
of the 1982/83 school year as under prior law.
(State Estimate) $ 134,000,000
City of Oak Park Heights
Special Report, Page 21
The above amounts represent estimates only. Actual amounts will not be known until
the actual 1982 - tax levies are compiled on a state-wide basis. However, school district
tax levy mills for school districts located in Washington County (excluding I.S.D. #f832)
increased by 12% to 36% and averaged an 18% increase. This increase is a direct result
of the 1981 Special Legislative Session and the Education Aid decreases stated above.
PROPERTY TAX - LEVY LIMITATIONS
One major aspect of the "Omnibus Tax Bill of 1971" was a new policy called levy
limitations. There are two basic levy limitation concepts. One applies to local school
districts. The other applies to Cities, Villages, Townships and Counties.
School district levy limitation formulas generally limit the amount of taxing
authority given to local school districts based upon the adjusted assessed valuation of.
the district and school enrollment. The actual annual computations are made and
controlled by the State, 1 local school districts have limited authority to exceed
these State determined levy limits.
City (including Villages and Townships) and County levy limitation formulas
generally limited the amount of taxing authority given to local units based upon per
capita formulas. These per capita formulas allowed - tax increases subject to population
increases, plus State - determined percent increases. The per capita amounts were based
upon local taxes (including State -paid credits) and local government aid. The com-
bination of the - two (on a per capita computation), were not allowed to increase over a
given percent (first 6% and then 8 %) in any given year. More important, as the local
government aid was increased, the local property tax could actually decrease. Since
1971 (the inception of the "Omnibus Tax Bill of 1971 "), total local property taxes for
Cities and Counties increased by $494,171,000 or 112%; while total local government aid
increased by $150,983,000 or 153 %. Levy limit formulas for Cities and Counties
controlled both property taxes and local government aid prior. to 1981.
City of Oak Park Heights
Special Report, Page 22
Starting in 1981 (and continuing into 1932), the State began limiting its payments
of local government aid. The 1981 aid was initially reduced by 8.30. Cities and
Counties were allowed to transfer this revenue decrease to local property taxes. The
1982 aid was initially set at the 1981 level before the 8.3% reduction. This was later
reduced by 11.08% after the final 1981 Special Legislative Session. Effectively, Cities
and Counties have not received an increase in local government aid since 1980. More
important, Cities and Counties are not allowed to transfer the 1982 "lost revenue" to
property taxes or other revenue resources.
Minnesota Cities and Counties are now under a flat 8% levy limitation for their
general-purpose tax levy, adjusted only by increased homestead units. The new levy
limitation formula is generally m ^re restrictive than - the old formula. More important,
the 8% increase is applied only to the property taxes and not to local government aid
which has been decreasing. The combination of tax levy and local government aid
generally represents the major portion of a unit's general government operating budget.
These revenues combined will generally be allowed to increase at less than 8% per yeas_.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES VS. "SHIFTING"
All organizations (governmental and commercial) measure their financial position and
financial operations in accordance with prescribed rules and regulations known as
"generally accepted accounting principles ". Accounting principles and financial.
reporting standards for Minnesota Cities, Counties and School Districts are generally
determined or interpretated by: (1) the National Council on Governmental Accounting
(NCGA); (2) the American Institute of Certified Public Accountants (AICPA); and, (3) the
State of Minnesota and its various agencies and departments.
These organizations (as a group) have defined and determined the modified accrual
basis of accounting for units of local government and their governmental funds or
operations. Generally speaking, modified accrual accounting means: (1) revenues are
recognized in the accounting period in which they become measurable and available to
City of Oak Park Heights
Special Report, Page 23
finance expenditures of the fiscal period; and, (2) expenditi -res should be recognized in
the accounting period in which the liability is incurred. Tr.e modified accrual basis of
accounting, budgeting and financial reporting is recommended for all and followed by
most government units within the State of Minnesota except the State of. Minnesota.
In its Annual. Financial Report for its fiscal year ended June 30, 1980, the State's
policy for grant expenditures recognition (all aids and credits paid to local government
units, the State education system, the State retirement systems, etc..) is to recognize
these expenditures in the fiscal year from which appropriated and at the point the grant
is approved for payment by the administrating authority. These "grant" expenditures
totaled $2,700,000,000 or 84% of the State's total expenditures for the fiscal year
ended June 30, 1980. Any amounts unpaid and unencumbered at June 30, 1980 are not
counted as an expenditure until the administrative authority a these "grants" for
payment. Following this "accounting principle" the State has devised a simple method of
balancing its budget for each biennium. This simple method is to change or delay the
authorized date of payment of State obligations (i.e., until after June 30th). This
method of balancing operating budgets is not available to local government units because
they are required to follow generally accepted accounting principles, instead of
accounting principles based upon convenience or simply the need to show a balanced
budget.
The State's method of "balancing" its budget has come to be known by the term shift-
ing (i.e., shifting of expenditures to a future fiscal period and /or shifting of reve-
nues from a future fiscal period).
During the first half of 1981, the State of Minnesota approached the end of its 1979
1981 biennium, at which time a balanced budget or positive fund position was required.
To achieve this balanced position at June 30, 1981, - the State withheld payments to local.
school districts totaling $243,670,800 (by State estimates). This amount was paid to the
City of Oak Park Heights
Special Report, Page 24
local school districts subsequent to June 30, 1981. The State "balanced" its June 30,
1981 budget by deducting this amount from the 1980/81 Education Aids and shifting the
same amount to the 1981/82 Education Aids. This use of the shifting concept allowed the
State to present itself as being "balanced" at June 30, 1981. The local school
districts counted these aids as revenue for the 1980 /81 school year and had expended
these monies financing the cost of education for the school year ending June 30, 1981.
Without this "shift", the State would have been "unbalanced" by approximately
$240,000,000 at June 30, 1981.
During 1981 and continuing through March, 1982, the State of Minnesota worked on
adopting and revising a State budget for its July 1, 1981 through June 30, 1983
biennium. That budget (as of March, 1982) reflects the following major "funding
shifts":
1. June 30, 1981 Education Aids shift as
described above. $ 243,670,000
2. June 30, 1983 Funding Shifts:
A. Education Aids - Increasing the holdback
from 10% to 15% ($95,700,000 at 65%
at 500) $(31,000,000)
B. Homestead Credits -° Delaying payments to
local school districts to match the
payment schedule for Education Aids
(State Estimate) $(36,270,000)
C. Local Government Aid -° Delaying the March,
1983 payment until after June ($240,724,000
at 25 %) $(60,180,000)
D. Renters Credits °- Delaying payment of 1982
renter's credits from filing date of personal
income tax returns (April 15, 1983) to after
August, 1983. (Estimated at 1070 of 1982) $(100
E. School District Property Taxes - Early
recognition of up to one-sixth of school
district property taxes (State Estimate) $(134,000,000)
City of Oak Park Heights
Special. Report, Page 25
F. Accelerated collection of one- -half of
Sales Tax due for June sales for vendors
with monthly taxable sales in excess of
$40,000 (State Estimate) $ (31,000,000)
The above listing of "funding shifts" does not represent a complete list, but only
major items identified in the preparation of this Report. The listing, however, is
indicative of the means and measures utilized by the State to "balance" its biennium
budget.
CURRENT POSITION OF THE STATE BUDGET AND CASH -FLOW OPERATING RESERVES
The preceding schedul-es and data have reviewed and analyzed the history of State
financing of local government since the "Omnibus Tax Bill. of 1971 ". The primary goal of
that and subsequent legislation has been a shifting of the financing of local government
from the local taxpayers to State taxpayers, in accordance with public policy established
by the State. The current cash -flow /budget condition of the State is indicated by
recent correspondence sent to local government officials.
In letters dated February, 1982 sent to "All Local Taxing District Finance
Officers ", by the State of Minnesota, Department. of Revenue, the following paragraph was
included:
As you recall, last year you did not receive your state aid
payments for either November 15 or December 15. The state
aid checks you expected to receive on November 15 and
December 15 were not sent to you because the state dial not
have the funds to make the payments.
City of Oak Park Heights
Special Report, Page 26
In a memorandum sent - to Minnesota School District Superintendents, by the Minnesota
Department of Education in December, 1981, the following statement was included:
SUBJECT: REDUCTION OF DECEMBER AID PAYMENTS DUE TO LACK OF
FUNDS IN STATE TREASURY
As you are probably E.ware, the third special
session of the legislature recessed on December 22
until December 30. Thus, the Department of
Finance has informed me that due to the lack of
new provisions for dealing with the cash-flow
shortage, the State will not he able to make most
of the payments to school districts scheduled for
the end of December.
The amounts of aid to be paid will be based on
the Department's estimation of district cash
needs. This is estimated by considering the
working capital balance and aid plus levy reve-
nues received to date. It is anticipated that
the majority of districts will receive no
payment, and the remaining districts will receive
reduced payemnts.
The State of Minnesota for the past decade has been absorbing a greater and greater
portion of the cost of operating local government. These costs have been financed by
taxes collected at the State level - primarily individual income taxes, corporate income
taxes and general sales taxes. This process was effective and the public policy was
served throughout the 1970's. However, as stated in the above correspondence, "the
State did not have the funds to make the payments" in 1981 and early 1982.
The present situation is most critical. The State is continuing its policy of
limiting local property taxes (for Cities) and of absorbing a substantial level of the
operating costs of all local government. However, the State no longer has the financial
ability to carry out this public policy. More important, the level of services provided
by local government is not decreasing at a rate corresponding to the State's diminished
financial abilities. The combination of the following factors have resulted in a
situation of deficit financing when one considers the State and all units of local
government within the State as a group.
City of Oak Park Heights
Special Report, Page 27
1. The State's financial commitments (to itself, State Departments,
Semi -State Departments, the State Education System, State retire-
ment systems, and local government) are substantial and increasing.
2. The State's revenue estimates are substantial. but diminishing even
when the recent tax increases are taken into consideration.
3. The State has little or no operating reserves to absorb its revenue
short -falls or meet its real and minimum cash -flow requirements.
4. The State continues to utilize the concept of "shifting" to "solve"
its budget situation.
5. The State continues to deny local government units adequate taxing
authority to compensate for the decreased financial abilities of
the State.
6. The State (by doubling the maximum homestead credits from $325 to
$650 over a two year period) has artifically lo,aered the level of
property taxes paid by homestead property owners. Consequently,
these property tax payments do not .reflect the full cost of the
services being provided by local government. To the contrary,
property tax statements could be construed to reflect a decreasing
cost or level of local services.
7. The doubling of maximum homestead credits from $325 to $650 per
parcel resulted in the State absorbing a greater portion of the
cost of services provided by .local government. Homestead credits
totaled $818,546,000 for 1980 and 1981. This represents a
$320,493,000 increase over 1978 and 1979 or a substantial portion
of the State budget problem for its 1981 - 1983 biennium. State
tax rates (individual income, corporate income, and general sales
tax rates) were not materially increased until July, 1981 to com-
pensate for these increased aids. Accordingly, the State budget
was out of "balance" at June 30, 1981 and continuing into the
State's 1981 - 1983 biennium.
8. While State -paid homestead credits were increasing and the actual
property taxes being paid by homestead property owners were arti-
ficially lowered, the cost of service being provided by local
government was subjected to the effects of nigh inflation (i.e.,
12.18% for 1979; 10.68% for 1980; and, 15.33% for 1981 as measured
by the Bureau of Labor Statistics for the Minneapolis - St. Paul,
Minnesota - Wisconsin area). Consequently, any future increase in
local property taxes will be construed to be a sharp increase.
This sharp increase is partially the result of increased costs, but
equally the result of the artifically lowered levels of property
taxes on homestead property.
City of Oak Park Heights
Special Report, Page 28
ANOTHER SHIFT -- BA CK TO LOCAL PROPERTY TAXES
Local government units are now starting to feel the effects of the State budget
situation and the impact on local property taxes because of the reversal of the State's
policy of limiting local property taxes. 1981 and 1982 mill rates for local government
units located in Washington County were as follows:
Mills
Percent
Taxing Authority 1981 1982 Change Change
Washington County 26.330 24.293 (2.037) (7.740)
School Districts:
I.S.D. #200 43.621 51.973 8.352 19.15
I.S.D. #622 40.327 51.541 11.214 27.81
I.S.D. #624 43.701 59.431 15.730 35.99
I.S.D. #831 49.118 55.189 6.071 12.36
I.S.D. #832 46.309 46.851 .542 1.17
I.S.D. #833 44.680 53.149 8.469 18.95
I.S.D. #834 42,. 226 49.839 7.613 18.03
Cities:
Afton 22.143 17.968 (4.175) (18.85)
Bayport 19.976 16.669 (3.307) (16.55)
Birchwood 18.519 16.551 (1.968) (10.63)
Cottage Grove 20.666 22.061 1.395 6.75
Dellwood 16.936 15.058 (1.878) (11.09)
Forest Lake 24.079 21.219 (2.860) (11.88)
Hastings 27.686 28.616 .930 3.36
Hugo /Oneka 17.001 15.433 (1.568) (9.22)
Lake Elmo 11.294 11.135 (.159) (1.41)
Lakeland 10.740 8.201 (2.539) (23.64)
Lakeland Shores 9.309 9.101 (.208) (2.23)
Lake St. Croix Beach 8.242 7.691 (.551) (6.69)
Landfall 20.575 (20.575) (100.00)
Mahtomedi 17.562 15.010 (2.552) (14.53)
Marine 22.040 18.981 (3.059) (13.88)
Newport 24.357 22.286 (2.071) (8.50)
Oakdale 17.704 15.282 (2.422) (13.68)
Oak Park Heights 10.840 11.938 1.098 10.13
Pine Springs 2.009 1.797 (.212) (10.55)
St. Mary's Point 7.272 8.016 .744 10.23
St. Paul Park 19.074 21.274 2.200 11.53
Stillwater_ 25.760 24.169 (1.591) (6.18)
White Bear Lake 15.033 13.096 (1.937) (12.88)
Willernie 26.428 15.317 (11.111) (42.04)
Woodbury 18.727 19.180 .453 2.42
Arithmetic Averages:
School Districts 44.283 52.567 8.284 18.71
Cities 17.359 15.042 (2.317) (13.35)
Cities (Without Landfall) 17.225 15.669 1.556 9.03
City of Oak Park Heights
Special Report, Page 29
1982 local property taxes are the first property tales to reflect the reversal of
the State's policy of limiting property taxes. County taxes decreased moderately to
reflect a shift in the financing of the cost of public welfare from the State to .local
government. School taxes increased to reflect a shift in the financing of the costs of
education from the State to local government. Both of these shifts are the result of
State legislative action taken in 1981. City taxes generally decreased because the
State continued the 80 levy limits for Cities even though State aids to Cities are
decreased for 1982.
SUMMARY AND CONCLUSION
The means of financing the cost of services provided by local government in
Minnesota is a complex process. The public policy of collecting taxes at the State
level to finance services being provided at the local level tends to increase the
complexity. Remembering the basic purpose or function of local government may help to
understand the concept better.
The basic purpose or function of local government is to collect financial resources
and to expend these resources to provide services deemed necessary, beneficial and
worthy to the local community. From a financial viewpoint, it matters Little how these
services are financed (i.e., through taxation at the State level or by direct taxation
by the local government unit). It matters only that these services are adequately
financed and that they are financed on a current and timely basis. Should the available
financial resources decrease (as is now happening), the level and/or cost of services
must also decrease or alternative financial resources must be obtained. State and local
government cannot expend financial resources which do not exist (i.e., which have not
been taxed). To do so is deficit financing.
1981 has been a pivotal year for Minnesota local government units. The purpose of
this Report is to detail the changes which have occurred and to offer a perspective of
the meaning of these changes. This however, does not present a solution to the
City of Oak Park Heights
Special Report, Page 30
situation. The State of Minnesota has (f or the time being) determined a solution to
their budget situation. A large part of the State's solution has been to pass the
problem on to local government. This is most evident in the December, 1981 and March,
1982 State budget amendments. It is now left to local government to determine a final
and lasting solution.
Options available to local government fall into two primary categories:
1. Decrease the cost and /or level of services being provided.
2. Determine and utilize alternative financial resources.
A final and lasting solution should and will probably be a combination of factors in
the above primary categories. Determining the level and degree of each factor are the
critical choices facing all elected and appointed local government officials. These
choices have not and will not be easy. However, the position of the State has been made
clear. This problem is to be solved by local government. The level of aids provided by
the State during the 1970's will not continue into the 1980's. The State of Minnesota
no longer has the financial ability to maintain the level of financial support as it did
in the 1970's.
As stated previously, the present situation is pivotal. The only certainty is
change and that this change must be directed by local government and local government
officials. Local government is no longer in a position of waiting for the State to
determine the answers. The State has determined and implemented actions to pass a
substantial portion of this problem on to local government. The rules governing the
financing of Minnesota local government in the 1980's will not be the same as in the
1970's.
Local governments possess the ability and authority to reduce the level of services
below that now being provided. However, local government has only limited authority to
increase its financial resources to finance those services and levels of service deemed
necessary. The present 8% levy limitations on Minnesota Cities plus decreasing State
City of Oak Park Heights
Special Report, Page 31
aids will soon become extremely restrictive (probably in 1983). An easing of the levy
limitation restrictions seems necessary as an alternative to severe reductions in levels
of services now being provided by Minnesota Cities. Without additional financial
resources, the only option available to Minnesota Cities will be to decrease the cost
and /or level of services being provided. To obtain these additional financial
resources, the State must be induced to ease the present levy limitation restrictions.
Fortunately for the citizens and local taxpayers of the City of Oak Park Heights,
the past financial management of your City has been prudent and in accordance with your
financial structure and available financial resources. Except for the effects of the
State budget situation, your City has expended its financial resources only as they have
been made available and you have retained operating reserves at sufficient levels to
provide financial security and financial integrity. Having these reserve balances
should provide the City sufficient time to address the effects of the State budget
situation. Without such reserve balances, the City would be caught in a position of
responding quickly (and without adequate preparation time) to the effects of the State
budget situation. The true extent of the effects of the State budget situation on
Minnesota local government was not decided until the end of the December, 1981 Special
Session. The extent of these effects were later confirmed by the March, 1982 Regular
Session.
Minnesota local government now knows that it will bear a major share of the respon-
sibility for solving the current State budget situation. Having this knowledge helps to
define the problem facing your City and all Minnesota local government. All local
government elected and appointed officials should address the questions of:
1. Which local services must be continued and at what levels?
2. How may local government improve the efficiency of providing
local services?
3. Which local services are to be eliminated or diminished?
U
City of Oak Park Heights
Special Report, Page 32
4. What additional taxing authority can be obtained to
finance those local services deemed necessary and
beneficial?
5. What alternative financial resources can be utilized to
finance those local services deemed necessary and
beneficial?
Minnesota Cities and all Minnesota local government are faced with these questions
as a result of recent and pending changes in the method of financing local services.
Determining "acceptable" answers to these questions is the responsibility of local
governing bodies and will be a formidable task. This Report was designed to assist in
understanding why the situation exists and its severity. We are available to review and
discuss the contents of this Report with your City Council and /or City Administration
upon request.
Respectfully submitted,
DE LA HUNT VOTO & CO., LTD.
Certified Public Accountants
April 28, 1982