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Home My WebLink About4K - MVTA Annual Levy STAFF AGENDA REPORT DATE: ~K Assistant City Manager Blair Tremere Consider Approval of Authorization of Advance of Annual Levy to Minnesota Valley Transit Authority (MVTA) March 17, 1997 AGENDA#: PREPARED BY: SUBJECT: BACKGROUND: This item is based upon the request of the MVTA to its member communities for an advance on the annual transit levy authorized but not yet collected (see attached letter). DISCUSSION: The annual levy of $301,171 is contemplated in the 1997 City Budget; there are city funds available from which the advance can be drawn until the initial ta..'i: receipts are received at mid-year. The MVTA needs the $37,646 advance to provide a normal cash flow. ALTERNATIVES: The Council has the following alternatives: 1. Authorize an advance in the amount of $37,646 from the transit levy account to the MVTA. 2. Deny the requested advance. 3. Table the request to consider further information as the Council may direct. RECOMMENDATION: Alternative #1. ACTION REQUIRED: Motion and second to authorize payment of $37,646 to the MVTA as an advance on the 1997 transit levy amount of $301, 171. 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER . 1 . ~' .-n&~ z- Burnsville Transit Station 100 East Highway 13 · Burnsville, MN 55337 Ph. (612) 882-7500. Fax: (612) 882-7600 February 28, 1997 Mr. Frank Boyles City Manager City of Prior Lake 16200 Eagle Creek Avenue Prior Lake, MN 55372 RE: Advance of future tax receipts Dear Mr. Boyles: Some time ago, the Minnesota Valley Transit Authority (MVTA) submitted for approval by our member cities, an amendment to the existing Joint Powers Agreement which would have authorized the power to issue debt. After several months of review by the cities, differing points of view emerged with respect to interpretation of state statutes. At the MVT A Board meeting on February 26, 1997 1vfVT A staff was authorized to work with each member city to fund our cash flow need by recommending an advance of future tax receipts. This recommendation was based on a letter from James F. Sheldon, attorney for the cities of Apple Valley and Eagan as a lawful compromise (attached). As you may recall, a change in legislation passed in 1996 provides MVTA member cities the option of levying their share of the transit tax directly rather than applying to the Met Council for funding. With this change, the Met Council is no longer providing funding to MVT A. (With the noted exception being the City of Rosemount which did not elect this option and the Council is providing some funding for this city). Consequently, for the first six months of 1997, MVfA has little funding and no previous reserves from which to draw. It was for this purpose a change in the Joint Powers Agreement was initially pursued. Providing this advance will enablE> tr::mc;;itse~vic'il~ tn rnntinue without interruption QUi:' goal is get to the point where we will have suffi~if>nt fllnds in reserve to cashflow the agenc . We believe we w. lish thi . 1997. We recognize that by _ rOVl ing funds to MVTA you may need to charge interest on this money. - Public transportation for Apple Valley, Burnsville, Eagan, Prior Lake, Rosemount, Savage Mr. Frank Boyles February 28, 1997 Page 2 For the Ci of Prior Lake base o May 28, 1996, a total of $301,171 is the 1997 a able Ie limit. We estimate an a vance of approximately 12.5% or $37,646 would provide sufficient funds to cash flow )vrv lA untll the July paYment is receIved. Agam, we realize the advance would be cjeducted at this time. A check by April 30, would provide sufficient funds to bridg~_ the gaE. ~ On behalf of the staff and riders we sincerely appreciate your cooperation and on-going support. If you would like to discuss this in further detail, please do not hesitate to call me. Sincerely, ~~ ~cu.- Beverley Miller Executive Director c: Tom Kedrowski Ralph Teschner attachments: Sheldon Letter Dept. of Rev worksheet . :~ '~'RRY S. SEVERSQN MME.'; I:, SJ 1~L1.XJN r.1I<""i\aL (i. IXJUGUfo;RTY" I\IICIIAHI. E. M(JLF~"lO~ r.ORr:1'1 .'\". SOl.FF_'iT SEVERSON, SHELDON, DOUGHERTY & MOLENDA, P.A. A f'RQr-t!S~IO/llAL A.'\SOCIA"10N A'1-roRlIIEYS AT L^W SHARON 1(. lULLS ROBERT 8. BAlIF.R CHRISTOPHER A. CiROVE SHARI L. :'iT1:RUO GERALD tJUO) E. Ol!140SS lANA M. BACON surrn (.00 7 JOlt WEST 1-l71'H STREET APPLE VAU.F.Y. M1NNF-SOTA35IZJ.iS:l1l (612) 432-3136 February 6. 1997 n:1.eF'AX NI.fMBl:R .~n3780 MI. Thomas L, Hedges Cicy Administrator Cicy of Eagan 3830 Pilot .Knob Road Eagan. MN 551.22 RE: M.innesota VaHey Transit Authority Funding Under Local Levy Option Dear Tom: You advised tbatthe City of Eagan is levying a transit tax pursuant to Minnesota Slatutes 473.388 to fund its Minnesota Valley Transit Authority (hereinafter"MVT A") commitments. The City will receive its transit tax receipts tmder the local Ie\'}' in mid-year and at year-end as it usually receives its other tax payments. TI,e MVT A is an organization of six member cities which together under the Joint Powers AgreemenL operate a transit system in the six member cities. The transit system is not a separate entity but rather is a combination of the six member cities operating under a joint powers agreement pursuant to state statute. The current fimds available to the six cities operating as the MVT A will not last, according to projections. W'lul the future receipts of taxes under the local option levy. You have asked whether the City may spend its existin g flDlds prior to receipt of its local levy option funds for its MVr A uses. We answer in the atEm1ative. The Ciry cUl'Tently spends fund baJances fO.r existing operations throughout the year. The City only receives tax payments periodicaJ.1y throughout the year from taxing sources. The CitYs operation orebe MVT A is no different situation, Therefore, the City of Eagan is fully authorized to expend its fund balances as it sees appropriate under the lawful public pwpose as authorized. If you have any questions, please feel rree to contact me. Very truly yours. J~~ ]'r;ti Sh~ " ,. TEL: May 30,96 7:47 No.OOl P.Q9 ~~'~:'~~~~~~~~~W~~]~]{S;~~SJt.::.~ :"~";t]~:~:~~~'t.:7' ':~'p: "".:7.2"~~'::~~~fE"7~:~"k."'~:!~'~~~.:'~~i~~~i~Ut!~r2;~'~~~~~;;'~:~~ :.~:;~ t.... _........... ......._.__......~_,.. ~l ...0 - [lOI1- a e ,-,"'-"-' ._.~---' . . m: t '~.~;j.?:l}~'~~;~ ~~:;$,i:'~;;;~.:~:i ~i..~-/:~:-i:~~ ~..:'::~'::.~-7:;~~~ ;:;i~,:s:~~~~.:;:;~;:'~~ ~~~"~?:'~:~?; :.~~~ '~~'i~::';f~ ~~€..~3;f;" ~~~: :;. ~.,..... ..... .. D"'~ bI". 1.00"" T" .....,,_.... ..S...--"'"'..._....~.L.- ..-....-...L.. " ....... ..... . ". 0"'.' ,. ':.' .... ~;~;:... :;';;~<~' L;ava e~' ;'7... I~ ranslt ernces':' ~ evv' '. iniltati()ft.~...~:-:~::.:.:.: ~K.<: ~::: t~f:?fi' .:~ t;.1~:.o-:~i~~tnJ~,~~t.~ ~~.~rI~i~?~€:.:~~.!:-"t.~~P~Jl:7d~2~~j~:;J~~~.3~.f:~~E~~~~~~:~~;~~=1: -d~~:iJ:-:~.~?~~~~.0.i ~~~~'~L ~:~~~ :........ .. .:.~.. OF- era m. ... os s..an ta ha en ltures........ ....... i~~'K...: ~ ~>~:>~~:; -:~:,.::~::.~~;....~~l::.~.~;:.~~:_~:.;~.~l~::~::~)~==:..;.~.:i:,~~~:::E_~_~:::::'~'~ ~~ ~~~7,j::";:' ~::::;~~. ~:: .~:'~ :~:; :{;~; '.; .:' ~E;: ':.:.':~~~ ~ ~ ~~ ~,;. .. ..-.., .. '0' ....... . ......- --... . ... f1\Jf S' '413" 388" S" 1::d' Jl'f.\'. . . . 0.. . ..... ...... .- . .. t2~ ::~:...+~. ~-/: :~+~~ ~s~.?f::&lt~ i~ ;~S~~.~~...,:_.::~; ;~;.~ ~h::'~ ~~~: '. i. .~..Jtl;t:.;~.;; 1,: li ; ~;~~~V\JE~[~{t ~ ~-:tS:/ : i.: :.~;~ 1. Payable 1996 Mc::l. Council Transit Tax Revenues in City a. Nct Tax Payable (Spread Levy) b. Fiscal Disparity Distribution Tax c. Homestead and Agricultural Credit Aid (HACA) d. Total (a + b + c) $ 197,370 34,151 67,804 299,325 $ 2. Beginning Le',,)' Limit Base for City (88% of Line Id) $ 263,406 3. Payable 1995 Total Taxable Market Value. 4. Payable 1996 Total Taxable Market Value. 5. Payable 1996/Payable 1995 City Market Value Ratio (4/3) $ $ 470,730,200 538J220,400 1.143373 6. Payable 1997 Levy Limit (2 x 5) $ 301)171 . Includes tax increment values) fiscal disparity values, and powerline credit values. However, the amounts sho\V11 are after (1) limited market value adjustments and (2) market value exclusions for improvements made to qualifying homestead property ("This Old House" exclusions). Prepared by: Minnesota Department of Revenue Propcrty Tax Division May 28, 1996 ...; '" .' . --~ " "