3.4. SR 04-09-2001 - Laserfiche WebLink

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** Item 3.4.** MEMORANDUM TO: Mayor and City Council FROM: Lori Johnson, Finance Director DATE: April 9, 2001 SUBJECT: Personal Property Tax Legislation Sherburne County is requesting that the City Council adopt the attached resolution in support of the legislation reducing the class rate on personal property for generation equipment and replacing the same with trust funds. The city f~rst became involved with this issue in 1997 as the result of efforts by power companies to lobby the legislature for property tax relief. In response to discussion about proposed property tax reductions for electric generation facilities, the Coalition of Utility Counties and the Coalition of Utility Cities were formed. Sherburne County has played a major role in the Coalition of Utility Counties' efforts to protect the tax base that comes from generation facilities; a sizable part of the county's tax base comes from generation facilities and reductions in the taxable value of these facilities would greatly impact the county's tax rate. The City of Elk River's tax rate would not change significantly if reductions were made because less than three percent of the tax base comes from generation facilities. In 1997 the City Council chose to become active with the Coalition of Utility Counties because of our close relationship with Sherburne County. Over time we have become less active as this has been a time consuming and complicated issue. We feel that Sherburne County has represented the city's interests well. The coalitions have been working hard to make the best of this legislation by protecting the host cities and counties to the greatest extent possible. Attached is additional information from Sherburne County regarding this issue. Obviously, this is of great importance to the city, not so much because of the change this may have in the city's tax rate, but because of the significant change it may have in the county's tax rate. Typically, when the Council considers adopting the tax levy, it looks at not only the city's tax rate, but also the total tax rate including the county and school. Action requested: The City Council is asked to consider the attached resolution in support of the legislation reducing the class rate on personal property for generation equipment and replacing the same with trust funds.