Bart Fischer, Senior Public Administrator, WSB and Gary Carlson, Intergovernmental Relations Director at the League of Minnesota Cities (LMC) unpack the issues communities should pay attention to post-legislative session.

This year, there was an interesting confluence of state and congressional legislation that will impact cities more than any other time in history. The pandemic and recovery efforts will have a tremendous impact of congressional action on our cities and understanding and navigating these impacts can be extremely important in the coming months.

BF: It seems like it wasn’t that long ago that we were talking about the top issues to pay attention to going into this session, Gary. Thanks for taking the time to dive into the takeaways with me post-session.

GC: Anytime Bart. It was an exciting session with a lot of moving parts. I think one of the biggest takeaways was the impact to our state budget and the American Recovery Act. There are still many question marks and unknowns about the federal package, but if you go back a year ago, we were facing a $2.4 billion deficit and we’ve ended up with quite a surplus due to a recovering economy and the federal government. At the beginning of the session, cities and counties were watching closely as the pandemic impacted tax collections and how it would affect local government aid (LGA) distributions and road funding. Relief packages have bolstered our economy and made the economic recession much less impactful. We were expecting to see deep cuts in state aid, but the legislature put over $5 million into LGA to preserve funding for all cities.

In addition to increased funding for communities, we were also looking for some flexibility in the use of TIF to account for the impact of the pandemic. TIF districts that were created between January 1, 2018, and June 30, 2020, now have three more years to complete development activities.

BF: It’s great to hear some positive news after a year of so many challenges. The pandemic has certainly had significant impacts on our communities. Anything outside of the pandemic or relief packages that communities should be paying attention to?

GC: Yes – the Local Option Sales Tax. For many years, we’ve been having conversations about authorizing local sales taxes without the need for legislative approval. In recent years, the legislature has been trying to define what these sales taxes can be used for. This session, they have further defined allowable uses to be capital projects of regional significance that are generally buildings, park improvements or trails that provide benefits to both residents and non-residents. For example, civic centers, libraries, regional parks and trails, etc. This year, almost every county or city that sought approval for a Local Sales Tax option were approved at least in some part, with the notable exception of proposals for roads and water/wastewater projects. I expect that the trend towards sales tax as a local funding source will continue. 

BF: That’s great news.  Anything else related to taxes?

GC: We’ve been seeking streamlined sales tax exemption for local government construction projects for many years. This year, the sales tax refund process was extended to include public safety facilities when a city or county uses a construction contractor to make the initial purchase of materials. We’re really happy to see this happen. This has the potential to reduce costs by nearly 7%. Contractors will basically provide documentation of the sales tax paid on construction materials and the city can file to get a refund of that money. This is a huge benefit especially if you think about the rising cost of building materials.  

BF: Speaking of public safety, I heard that communities are now able to create multi-jurisdictional fire departments. Can you speak to that?

GC: Yes, this is an issue that many communities have been fighting for years. A group of cities or towns can now form a fire protection district and use economy of scale to fund fire protection more thoroughly. This option allows many cities to be more efficient and it’s a good government reform effort as well. I think you’ll start to see a lot of cities and townships start to explore this option as many around the state are struggling to find enough volunteer fire fighters to staff their stations.

BF: Any final thoughts on this session?

GC: I think the biggest challenges cities and counties have in front of them is determining how to use the federal funds from the American Recovery Act.  So far, 21 cities have received their distributions directly and there are 800+ more still waiting. Determining how to spend the funds will be a long-term project for many communities. Right now, cities can use the funds for a number of things; however, in relation to infrastructure, it is limited to water, sewer and broadband projects. There is some talk that Congress will allow the money to be used more broadly for infrastructure related projects. Communities of all sizes have different needs and adding some additional flexibility will really help with other infrastructure needs.

BF: Thank you, Gary.  As always, I appreciate your expertise and valuable information.

Connect with the League of Minnesota Cities Intergovernmental Relations staff.


Bart Fischer

Bart Fischer has over two decades of experience in public administration. Throughout his tenure, he’s worked in five Minnesota communities as the city or assistant city administrator.  Bart joined our firm in 2019 as a senior public administrator and focuses on lending his public service expertise to our clients.

Gary Carlson

Gary Carlson has 37 years of experience in government affairs. As the Intergovernmental Relations Director at the League of Minnesota Cities, Gary leads the League’s legislative efforts that matter to cities including aid to cities, economic development, employment and human resources, pensions and retirement, public finance, taxes, tax increment financing (TIF) and workers’ compensation.

By Brad Oswald, Director of Survey Operations, WSB

Some elements of engineering are bright and shiny. Surveying is not classically considered bright and shiny. The work of a surveyor often goes unnoticed, but it is an important step to delivering a project on time and within budget.

A surveyor measures land, considering the topography of a project site, to delineate where to put infrastructure like pipes, wind turbines, solar arrays and more.

You may need a surveyor if you are:

  • Buying or selling a home or piece of land
  • Dividing a larger piece of land into smaller pieces
  • Installing a fence or pipeline

At WSB, developers, construction companies and their contractors rely on surveyors to perform boundary and land surveying on small and large projects. Boundary surveying is when a surveyor establishes the boundaries of a project site. A surveyor can tell you exactly where the boundaries of your property are, so you know what is and isn’t yours, and what’s developable. Next, a land survey will identify any easements or encroachments on the project site to determine where site improvements can be placed. The surveyor then provides a base map to engineers, who start designing the site. Once the site is designed, a surveyor will stake the design on the ground, so contractors know where to build on the site.

These steps help prevent any legal or monetary liabilities. A new homeowner may want to build a fence on their property. If they build that fence without surveying the property, they could be hit with a lawsuit if the fence encroaches on the neighboring property. Consider it on a much larger scale. A developer may plan to install wind turbines on a site. After paying the thousands of dollars to install the turbine, they could find that the turbine is encroaching on a neighboring property. Surveyors can mitigate these problems long before the wind turbine is in the ground.

Right now, the surveying industry is facing a challenge.

Less people are entering the industry. The engineering industry must come together to underscore the importance of surveying. Opportunities in the space are growing, too, as industries are focusing on increasing renewables projects across the country, even the world. These projects include pipelines, wind turbines, solar arrays, transmission and transportation projects.

Technology is also enhancing the field. With more satellites orbiting the Earth, improved GPS technology makes the job not only more efficient, but more interesting. Drones are also being utilized on larger project sites.

The work of a surveyor is critical to delivering a project, as designs and builds are based on surveys. The workforce must grow with the industry to ensure all projects are successful.

Brad has 23 years of experience in the land surveying industry with the last 18 focused on management, project delivery and mentoring. He has extensive experience in the electric and federal market sectors providing boundary, ALTA/NSPS, topographic surveys and construction staking.

[email protected] | 248.686.4745

By Shawn Williams, Sr Environmental Scientist, WSB

Wetlands are vital and dynamic ecosystems that provide numerous benefits to society, including improved surface water quality, flood control, groundwater recharge, and of course wildlife habitat. Wetlands are regulated aquatic resources in the state of Minnesota.

The Wetland Conservation Act (WCA) ensures that all wetlands that are disturbed, brought into non-aquatic use, or its function and value are significantly altered are restored or replaced. In the past, the posts/pilings that are used to install solar arrays have not been considered a wetland impact that would require compensatory mitigation under the WCA. The reality is that solar arrays bring wetlands into non-aquatic use and may, or may, not negatively impact the wetland’s quality or function.

Historically, solar arrays have been sited within or near farmed wetlands (wetlands that are plowed).  If solar developers restore the disturbed wetlands following construction, such as with native plant species, the function and value may actually improve, despite the shading from the solar arrays.

To help local governments evaluate the potential impacts to a wetland’s function and value, the Minnesota Board of Water and Soil Resources (BWSR) issued guidance that provides a suggested approach for evaluating projects when they involve the installation of solar panels on posts/pilings in wetlands.

The guidance document can be found on the BWSR website and includes three steps:

  1. Evaluate the wetland’s condition
  2. Determine the wetland’s current functionality, and
  3. Evaluate the effect of the project on the condition and function of the wetland

WSB’s experienced Natural Resources staff are available to assess wetlands to determine the general quality and function/value they provide to the ecological setting and society. The regulatory review and technical assessment will determine if the project wetland impacts require replacement.

Please contact Shawn Williams at 612-360-1305 or [email protected] for additional information or project support.

Shawn has over 16 years of professional environmental consulting experience. He prepares site permit applications, avian surveys, wetland delineations and reports, habitat assessments, and threatened and endangered species reviews. He is trained in wetland delineation methods, wetland plant identification, floristic quality assessment methods, NPDES compliance, and Geographic Information Systems (GIS).

[email protected] | 763.287.8531

Alyson Fauske, Sr Municipal Project Manager, WSB

As of May this year, many states are experiencing abnormally dry conditions with some regions in drought. These drought conditions significantly impact municipal water supplies which leads to water restrictions.

The type of water that cities supply to their residents is treated for a number of economic and environmental reasons. Cities measure the annual average demand and peak demand, but drought conditions like we’re experiencing now, fall outside of annual averages.

During drought conditions many cities implement additional water restrictions, and many residents don’t understand how these restrictions can help restore water levels within a matter of hours. Although it doesn’t seem like limiting irrigation or water use would have much of an impact, it significantly improves a city’s supply.

Enacting water restrictions alleviates the demand and can prevent communities from falling below fire protection and boil water levels. The diagram below shows an example of a water tower’s levels in a week. Water towers have censors that measure elevations. There is a minimum water level within the water tower to provide adequate fire protection. In our example, that level is 21 feet, meaning if there were a fire and the water tower level was below 21 feet there may not be adequate supply to fight the fire.

There is also a minimum level that needs to be maintained in the water tower to ensure that the pressure in the system is high enough to keep contaminants from entering the water system. In our example, if the water elevation drops below 10 feet a boil water notice would be implemented.

Graph of water supply levels affecting water restrictions

There are several actions that communities are taking today to help limit water usage including developing water reuse systems and plans, adjusting landscaping to include more native, drought resistant plantings and grasses, and reducing overall water consumption.

Instances of severe drought remind us that water is not a limitless resource and that forces outside of our control can have major impacts on our infrastructure. 

With 20 years of engineering experience in the municipal industry, Alyson Fauske has built her career providing municipal engineering services throughout the Twin Cities. Her portfolio of work includes street and utility reconstruction, technical analysis and field observations, direct project planning and management, and comprehensive and capital planning services.

[email protected] | 763.512.5244

What does the popular online video game Fortnite and WSB have in common? Active 3D visualization.

Visualization is the process of building a model of a project site that can aid in the iterative design process and construction of a project. The technology has been used for decades and can be categorized as passive or active.

Passive visualizations are 3D visualizations that have been created from individually rendered frames and cannot be updated in real time. The supplemental tools to work on a passive visualization are filters and photoshop. The process of designing a project through passive visualization is inefficient and expensive. That’s why, in 2017, the technologically advanced engineering firms, including WSB, moved towards active visualization. Active visualizations allow us to produce project renderings in real time and make edits to those renderings in seconds. The software engine and graphics cards we use to create active or real-time visualizations at WSB are the same technology used for developing industry leading games.

Active visualizations can be used to create renderings on several different project types. From landscaping to transportation, any project with a design phase can take advantage of the state-of-the-art technology. This is important because active visualization can offer several benefits including realism, flexibility and certainty.

Realism

Until active visualization software was created for Fortnite, the engineering industry relied on passive visualizations and its tools. The visualizations looked fine but were not realistic. Consider a municipal client who may be interested in rebuilding three blocks of their downtown. Within an active visualization, a client can pick a place anywhere in the three-block radius and “walk” through the town with the use of only a computer and a mouse or keyboard. They can see the color of the buildings, the species of the trees and flowers planted alongside the sidewalks and even review the various concrete dyes within the scene, all within real-time, and all while changing the time of day to review color hues.

Flexibility

A client gets a clear picture of what those new three city blocks will look like because of the realism of the designs and that influences flexibility. Active visualization is flexible because the software allows a designer to make changes in seconds. For example, if a client did not like the color of the buildings in the rendering, a designer can change it in real time. This is great for trying new and different ideas. It can also help a client save money by making clear decisions about other design elements before ordering materials such as light poles, wayfinding signage, flowers and trees or other design elements.

Certainty

Active visualization allows a client to make quicker decisions in a design so they are certain they will be happy with the result. The certainty for the client also helps build trust during public engagement processes. The realism and flexibility of the renderings lead to less interpretation by a viewer, whether they are a client or community member.

Active visualization has become the standard at WSB for municipal and landscape architecture projects and will no doubt start to be used for other projects soon. The benefits of realism, flexibility and certainty help ensure each project is delivered on time, on budget and at the highest quality.

By Paul Kivisto, P.E., Senior Structural Engineer, WSB

Did you know that the average life span of a bridge is 60 – 70 years? There are a number of ways to reach or exceed that average. Newer materials like high performance concrete and epoxy/stainless steel rebars certainly improve the quality and longevity of a bridge. Regular bridge inspections are not only legally required, but by inspecting and documenting issues with your bridges you can hopefully slow the expected deterioration and make repairs early which often costs less.

MnDOT, counties, cities, townships, and tribal governments are all responsible for managing bridge assets within their jurisdiction. Many of these entities have inspectors on staff to perform inspections, while others contract out that work to private firms like WSB. Maintaining regular and accurate inspection data is necessary to ensure public safety, reduce liability, maintain accurate budgeting, and comply with state laws and regulations.

Five important aspects of bridge inspections

About Documents, Frequency, and Inspection process

MnDOT releases the Bridge and Structure Inspection Program Manual (BSIPM) which summarizes inspection guidelines. In Minnesota, all bridges and culverts over 10’ long and carry traffic or are over roadways must be inspected. An initial inspection is required within 3 months of opening to traffic. The typical inspection frequency is 24 months, with shorter time periods for bridges in poor condition. The bridge owner can request longer than 24-month cycle for culverts. The latest version is May 2021 and can be viewed here: https://www.dot.state.mn.us/bridge/inspection.html.  

Bridge Condition Codes

BSIPM Chapter B – Bridge Inspection Field Manual and Chapter D – Recording and Coding Guide should be used by inspectors during all inspections. Physical condition and geometric properties of each bridge are recorded on inspection and inventory forms.

  • Overall condition codes from the National Bridge Inventory (NBI) range from 9 (new) to 0 (closed) and track the overall condition of the superstructure, substructure, deck, culvert, and other elements.
  • More detailed element level inspections record percentages of elements in conditions ranging from 1 (new) to 4 (severe deterioration).

The owner must report inspection and inventory data through the Structure Information Management System (SIMS) database to MnDOT every year.  MnDOT in turn provides the data to the Federal Highway Administration (FHWA).

Channel Inspections/Waterway/Scour

One of the leading causes of bridge failures is scour or undermining of the substructures in, or adjacent to, water. Scour is the term used to describe the erosion of soil surrounding a bridge’s foundation. When fast-moving water moves sediment from around the foundation, it creates scour holes adjacent to substructures that must be identified and monitored. Degradation of channels can cause shifts in the channel and may increase the risk of undermining. Bridges that cannot be inspected by wading and probing must be included in the statewide underwater inspection program on a 48-month cycle. Channel cross-sections are required for scour critical bridges and recommended for unknown foundations and scour susceptible bridges.

Additional causes of bridge deterioration to be aware of include:

  • Rebar and steel corrosion due to chlorides
  • Delamination and spalling on concrete members
  • Shrinkage cracking in concrete
  • Fatigue cracking on steel beams
  • Vehicle impacts to members
  • Leaking expansion joints
  • Bearings moved out of position
  • Timber decay

Drone Inspections

Increasingly, drones are used to provide access to hard-to-reach portions of bridges. They have photographic and video capabilities that allow them to identify cracking, spalling, and other deterioration that is otherwise challenging to document. Drones have the additional benefit of using Infrared (IR) cameras to identify delamination and distress below the surface.

Engaging with the Inspection Data

Agencies should use inspection data to help identify maintenance, preservation, improvement, and replacement projects. It is critical that accurate inspection data be maintained to track deterioration over time and prioritize maintenance work. Additional detailed inspections may be needed to help put together a system-wide scoping analysis or bridge management plan (BMP).  A thorough BMP can help identify funding needs over a given budgetary cycle.

Paul has more than 36 years of experience in bridge construction, bridge management, bridge inspection, and bridge design. In his role as Metro Region Bridge Construction Engineer for MnDOT’s Bridge Office, Paul was responsible for writing foundation recommendations, bridge preservation and improvement recommendations, constructability reviews, recommended repairs, and identified projects for inclusion in MnDOT’s bridge preservation program.

[email protected] | 612.201.9163

The Minnesota Pollution Control Agency (MPCA) and Minnesota Department of Natural Resources (DNR) recently released their $700 million plan for improving the drinking water supply in 14 communities that are currently dealing with unsafe levels of perfluoroalkyl and polyfluoroalkyl substances (PFAS) in their water. The government’s plan includes building or expanding:

  • Six new water treatment plants
  • Treating 33 municipal wells
  • Connecting 296 homes to municipal water systems
  • Providing home water filtration systems to homeowners with private wells

WSB was fortunate to be involved with the city of St. Paul Park to help them find a solution to increasingly dangerous PFAS levels in their community. In June of 2018, the Minnesota Department of Health informed St. Paul Park that the PFAS levels in two of its three water wells was exceeding the recommended levels that are safe for public consumption. WSB partnered with the city to design a water treatment facility and remove PFAS from the community drinking water and surrounding environment.

[pull-quote quote=”PFAS are a family of manmade chemicals that do not naturally decompose due to their heat and water-resistant structure. Studies have found that consuming drinking water with elevated levels of PFAS, overtime, can be associated with high cholesterol, reduced immune response, thyroid disease, kidney cancer and other distressing health problems.”]

After completing a rapid column filtration pilot study, acid-washed granular activated carbon filtration was selected as the most feasible, long term solution to treat PFAS in the city’s drinking water.

  1. Steel pressure filtration vessels contain granular activated carbon filter media that facilitate the transfer of contaminants onto the media as the liquid stream passes through the vessels.
  2. When the contaminant level in the carbon bed reaches the saturation point, the carbon is removed and regenerated at an off-site facility or disposed.
  3. After the media becomes fully absorbed with PFAS, the media is removed from the vessel and refilled with high quality activated carbon.

The project utilized an innovative modeling software, Matterport, to video scan the interior of the plant and provide a three-dimensional layout. This model allows city staff to provide accurate virtual tours of the plant remotely. Matterport also serves as an asset management tool for storing critical operations and maintenance data for each piece of equipment inside the plant. This innovative tool allows staff supervisors to reference and provide instructions to their teams from a remote location. Leveraging Matterport software ensures important equipment data, plant drawings, and schematics can be accessed from any location with Wi-Fi or internet connection.

Great emphasis was placed on the design to protect the environment and provide a sustainable facility. The plant produces almost no emissions that affect the environment other than space heating during the winter months. Nearly no wastewater will be emitted from the plant in the long term other than discharging backwash wastewater into the sanitary sewer system about once every two to three years when the filter media is exchanged for new media. On site, a large oak tree situated about 20 feet from the plant was preserved during construction. Since the plant was constructed in a city park, all areas that were affected by construction were restored with landscaping and grass that creates a natural flow to the surrounding athletic fields.

Since the plant was placed into service, no PFAS contaminants have been detected in the effluent water that is distributed to city customers. The quality of the drinking water has been excellent and exceeds all drinking water and health standards.

There are many recurring transportation funding opportunities in Minnesota that are open for applications now and into early 2022. The list below provides additional details on each of the funds. Now is the time consider if your community has transportation projects that fit these programs. If you believe that your community qualifies and would like help with the application or if you’re not sure your project is a good fit, contact Bart Fischer ([email protected] or 651.286.8484) to learn more.

  • MnDOT’s Greater MN (Non-Metro) Highway Safety Improvement Program (HSIP) – This program aims to reduce traffic fatalities and serious injuries involving vehicles, bicycles and pedestrians on all public roads. It is open for applications September 3, 2021 – November 24, 2021. Eligible projects are categorized as proactive – projects that address known risk factors; and reactive – projects that address a sustained crash location.
  • MnDOT’s Metro Highway Safety Improvement Program (HSIP) – The HSIP solicitation for metro area counties will occur in spring of 2022. Like the Greater Minnesota HSIP, this program aims to reduce traffic fatalities and serious injuries involving vehicles, bicycles and pedestrians on all public roads. Eligible projects are categorized as proactive – projects that address known risk factors; and reactive – projects that address a sustained crash location.
  • MnDOT’s Safe Route to School (SRTS) Infrastructure – Applications will be accepted October 4, 2021 – January 7, 2022; letters of intent are due by October 29th, 2021. The program funds capital projects that promote and encourage more students to walk or bike to school by making routes to schools safer and more accessible. $7.5M is available, with minimum awards of $50k and maximum awards of $500k. There is no matching requirement.
  • State Park Road Account Solicitation – This MnDNR solicitation is open now through November 1, 2021. Funds are intended to improve local access roads to state parks, state campgrounds, public water access points, and other eligible recreational areas. Projects awarded funding must follow applicable state aid construction project requirements.
  • Federal Land Access Program (FLAP) Funds – This program funds construction projects on public highways, roads, bridges, trails or transit systems that are located on, adjacent to, or provide access to federal lands for which title or maintenance responsibility is vested in a state, county, town, township, tribal, municipal, or local government. A 20 percent match is required. Applications are due by December 15th, 2021. A preliminary review of applications is available for draft applications submitted prior to November 19, 2021.
  • Metropolitan Council’s Regional Solicitation – The next round of applications for the Metropolitan Council’s Regional Solicitation process will take place in the spring of 2022 to fund projects in 2026 and 2027. This solicitation, which is open for counties and communities within the seven-county Twin Cities metropolitan area, seeks applications for: roadways including multimodal elements; transit and travel demand management projects; and bicycle and pedestrian facilities. During the last round of the Regional Solicitation in 2020, approximately $200 million in federal transportation funds were awarded to 56 projects in 36 different cities and townships. 

Meghan Litsey, Director of Environmental Compliance, WSB

Minnesota has experienced drought before, but this year is unique. Drought conditions began earlier than normal and are anticipated to continue through October. Despite recent rainfall, it will take much more precipitation to ease drought impacts as we head into fall. Although drought has major impacts on many facets of municipal infrastructure, it can also have many impacts on ongoing construction projects.

NPDES Construction Stormwater Permit impacts

Vegetation is key to closing out any ongoing project. As construction season begins to come to an end and projects begin close-out activities, the ongoing drought presents several challenges. The NPDES Construction Stormwater General Permit requires permanent uniform perennial vegetation with a density of 70% of its final growth. Given the challenging conditions this year, some projects may need to consider delaying permanent seeding until conditions improve. 

Alternatives to consider

Rather than applying permanent seed mixtures and risking failure, waiting until conditions improve is worth considering. Another option to think about is dormant seeding. Dormant seeding can be an effective method of maximizing growth in the spring, especially when native species are involved.

Five ways to stay in compliance

  1. Always be ready for the next rain event. Continue to install and maintain erosion and sediment control best practices and stabilize exposed soils within permit timeframes.
  2. Control dust with water or chemical application, as needed.
  3. If delaying permanent seeding, use stabilization placeholders, such as straw mulch, erosion control blanket, or hydraulic mulch, to cover exposed soils until permanent turf can be completed.
  4. Continue to perform weed control to prevent excessive weed growth. This may include tilling, mowing, and/or herbicide applications.
  5. If permanent vegetation has been established and there are bare areas that need to be supplemented, use interseeding and overseeding to obtain uniform coverage.

Although vegetation may be minimized when looking at a project’s big picture, it has considerable impacts on stormwater runoff. The U.S. Environmental Protection Agency estimates that 20 to 150 tons of soil per acres are lost every year to stormwater runoff from construction sites. The NPDES Construction Stormwater General Permit monitors stormwater runoff during and after construction, protecting many of Minnesota’s natural and water resources. Establishing quality vegetation, even during a drought, can be a challenging feat but is necessary to maintain compliance and protect our water resources.

Meghan Litsey is director of our Environmental Compliance team and has over eight years of experience. She specializes in providing environmental compliance services in construction site permitting, SWPPP design and inspection, and MS4 program development. 

[email protected] | 763.287.7155

Bart Fischer, Senior Public Administrator, WSB & Gary Carlson, Intergovernmental Relations Director, League of Minnesota Cities (LMC)

The Minnesota Legislative Session is well underway and as usual, there is a lot of ground to cover. I recently spoke with Gary Carlson, Intergovernmental Relationship Director at LMC, to discuss the current session and the top issues communities should be paying attention to.

BF: Thanks for taking the time out of what I imagine is a busy schedule right now to dive into this topic with me, Gary. There are many ideas being discussed right now at the Capital, but what are some of the most current issues communities should be paying attention to?

GC: This is an exciting and busy session and as you know, the League works on a variety of issues, but I think there are a few topics that should be front of mind for both cities, counties and even private developers. Let’s first discuss the status of the state budget.

BF: Great! A new budget forecast was released recently. What are the takeaways?

GC: It was a relatively positive forecast. The state’s projected outlook went from a deficit to a positive budgetary balance meaning the state will have some money available for projects, although the bulk of the improvement is considered to be one-time resources, which raises concerns about long-term spending commitments. However, one-time resources increase the chances of a bonding bill, which is positive for our communities as it relates to funding sources for capital projects.

BF: That’s good news, especially with the uncertainty over the past year caused by the pandemic. What else should we be paying attention to?

GC: Good transition – the American Rescue Plan Act was just approved by the Senate and the House. This $1.9 trillion stimulus package means a lot of funding for Minnesota that can be used for a wide array for purposes. Minnesota is expected to receive approximately $4.8 billion total. Of that $4.8 billion, the state will receive $2.6 billion, and cities and counties will each receive a little more than $1 billion. It appears this funding will be fairly flexible, and communities should start thinking about any one-time improvements or projects that can be completed using this funding.

BF: That certainly could have a large effect on our communities. Anything at a more local level occurring?

GC: Yes, sales tax authority. Currently, there are 22 cities and counties seeking local sales tax authority. These are being proposed for projects ranging from libraries, road infrastructure, ice arena upgrades, public safety facilities, etc.  This is a growing trend, and more and more cities are looking for a dedicated sales tax to fund capital projects that they feel have significance in their communities.

BF: Yes, it seems more communities are taking that approach in recent years. I’ve heard some talk surrounding the sales tax exemption process. Can you speak to what’s happening there?

GC: The sales tax exemption process for local government projects has been a focus for nearly six years. Most cities and counties are forgoing the sales tax exemption process when working with a contractor for a local project because of its cumbersome nature. It also can be financially risky to pre-purchase materials, etc. We have a bill in to do a general simplification of the process. This is really important and could save cities and counties a lot of money. The legislature is considering a general law to streamline the process however, in the past several years, they have opted to only grant project-specific exemptions. I would encourage cities to put a request in for this and watch how things develop at the capital in the next year. If we’re not successful in securing a general law change, cities should consider mounting an effort to work with their legislators to position those bills.

BF: Any high-level takeaways from the pandemic or lasting effects communities should be prepared for?

GC: The housing market is crazy and that is great news – it means a larger tax base, but there is a countervailing force creating significant uncertainty for retail and business properties and it is unclear just how deep the long-term effects of the pandemic will be on that sector of the tax base. There are conversations occurring that the effects of the pandemic will hit communities in 2022 as more commercial and industrial properties seek an appeal of their property taxes or struggle to continue operations. This is a long-term topic to be thinking about and something to keep in mind as communities plan their budgets in the future.

BF: Thank you, Gary. This is all really great information.  Is there a place we can watch the action unfold and go to for updates?

GC:  The League’s government relations staff provide weekly updates on legislative activity impacting cities. Information can be found at: https://www.lmc.org/news-publications/news/news-types/legislative-news/

Bart Fischer

Bart Fischer has over two decades of experience in public administration. Throughout his tenure, he’s worked in five Minnesota communities as the city or assistant city administrator.  Bart joined our firm in 2019 as a senior public administrator and focuses on lending his public service expertise to our clients.

Gary Carlson

Gary Carlson has 37 years of experience in government affairs. As the Intergovernmental Relations Director at the League of Minnesota Cities, Gary leads the League’s legislative efforts that matter to cities including aid to cities, economic development, employment and human resources, pensions and retirement, public finance, taxes, tax increment financing (TIF) and workers’ compensation.

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