8.5. Southwest Metro Transit: Support of 1996 Legislative Intiative.1
CITY OF K 6�
CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937 -1900 • FAX (612) 937 -5739
' MEMORANDUM
TO: Don Ashworth, City Manager
' FROM: Sharmin Al -Jaff, Planner II
' DATE: January 4, 1996
SUBJ: "Good News Bus" Legislative Proposal
Attached is a memorandum from Diane Harberts. Executive Director for Southwest Metro Transit
Commission, requesting the City Council adopt a resolution supporting a bill relating to the Metropolitan
Council and the Joint Powers Communities establishin the Southwest Metro Transit Commission as a
' Public Corporation and granting to it and to the Joint o viers Communities various powers relating to the
public transit.
' Southwest Metro Transit is an opt -out transpoi ratio v systeif serving Chaska, Chanhassen, and Eden Prairie
established in 1986. The system utilizes Dial Aide (a door -to -door bus service). Express buses leave
Chaska, Chanhassen, and Eden Prairie during the morning rush hour to take residents to Minneapolis and
' express buses leave Minneapolis during the ev9 ing rush hour�to return residents back to their respective
communities. Reverse Commute is also available which provides the opposite function of the Express Bus.
The system is growing rapidly to accommodate different clientele.
Funding for the system is made available through transit funds collected from the three cities. Ninety
percent of the collected funds are made available to SMTC and tll4emaining 10% funds the regional
._ Q�
' transit system.
SMTC has been investtatng ,alternatives to better manage the , This includes services .provided
as well as fundin Thy Regional Transit Board, which was abolished and succeeded by the Metropolitan
Council, is the reg a agency which' approves °funcJing or the "sys'tern: "Sin I _991, 7, IWegional agency
has attempted to micromdnage�,S1VITC as detailed in the attached memo and exhibits-' is is resulting in
added administrative costs to protect existing services and resources in our_cofifmunities.
Attached is a proposed bill intended to allow Soutliwest�lVletro Transit sufficient authority to meet transit
needs. This authority would permit Southwest M4 olransit Commission or the City to levy transit
taxes at a local level. -
' Diane Harberts will be present at the meeting to answer any questions the City Council might have.
SOUTHWEST METRO TRANSIT
MEMORANDUM
TO: Mayor and City Council Members
City of Chanhassen
FROM Diane R. Harberts, Executive Director
Southwest Metro Transit Commission
(Office Phone: 934 -7928)
DATE January 3, 1996
SUBJECT: "GOOD NEWS BUS" LEGISLATIVE
PROPOSAL
The Southwest Metro Transit Commission (SMTC) is asking for Chanhassen's support of
a legislative proposal to accomplish two major objectives:
• Establishment of a demonstration project which will be a new form of partnership with
the Metropolitan Council by providing for greater local control and accountability in
public transit for the joint powers cities
• A steady and predictable revenue source for both SMTC and the Metropolitan Council
1 11 Axe) ._ . 1 1 41 111IR �
For a variety of reasons, many of which have been recounted in the press lately, transit is
changing in the Twin Cities Metropolitan Area. Many of these changes have a direct impact
on Chanhassen's local transit authority, Southwest Metro. These changes in transit,
combined with significant changes at Southwest Metro, have placed the agency in a
position where it is important to plan ahead for financial stability and security of the
agency's assets. Specifically, the upcoming transit hub project has brought this issue to the
forefront for SMTC.
In July, 1995, the Commission hired the Firstar Financial Services team and charged them
with several tasks:
1) Evaluate the existing operations of SMTC
2) Evaluate and advise the agency regarding the impact of the future
transit hub development
3) Evaluate and advise the agency regarding its future position given the
changes in the regional transit arena
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Chanhassen Mayor and Council
January 3, 1996
' Page 2
Firstar reported its initial findings to the Commission at a workshop in October, 1995, and,
as a result of the report, the Commission directed Staff and agency consultants to take steps
necessary to provide for the financial stability and security of the agency. One of the major
products of this directive is the "Good News Bus Demonstration Project'
' legislation.
The attached documents further explain and support this important legislative initiative.
' Agency staff and consultants will be available at the Council meeting on Monday evening to
answer any questions that may arise. Of course, Council and Council's staff should feel
free to contact me at 934 -7928 at the SMTC offices before the meeting with any questions.
' RAE (JESTED ACTION
That the Chanhassen City Council adopt the resolution supporting the bill
' relating to the Metropolitan Council and the joint powers communities
establishing the Southwest Metro Transit Commission as a Public
Corporation and granting to it and to the joint powers communities various
powers relating to the public transit.
0
RESOLUTION IN SUPPORT '
OF A BILL RELATING TO THE METROPOLITAN COUNCIL
AND THE CITIES OF CHANHASSEN, '
CHASKA AND EDEN PRAIRIE
ESTABLISHING THE SOUTHWEST METRO TRANSIT COMMISSION
AS A PUBLIC CORPORATION '
AND GRANTING TO IT AND THE CITIES
VARIOUS POWERS RELATING TO PUBLIC TRANSIT
WHEREAS, the City of Chanhassen ( "City ") is a party to the Southwest Metro Transit
Commission ( "Commission "); '
WHEREAS, the City in conjunction with the cities of Chaska and Eden Prairie organized ,
the Southwest Metro Transit Commission to provide alternative methods of providing public
transit service for the cities of Chanhassen, Chaska and Eden Prairie ( "Cities" ) and to contract '
to provide transit and transit planning services to other entities as approved by the Commission
pursuant to Minnesota Statutes §473.384 and §473.388; '
WHEREAS, the City of Chanhassen has reviewed a bill for an act relating to the
Metropolitan Council and the Cities of Eden Prairie, Chanhassen and Chaska, establishing the '
Southwest Metro Transit Commission as a public corporation and granting to it and the Cities '
various powers relating to public transit; and amending Minnesota Statutes, Section 473.446, by
adding a subdivision ( "bill "); !
WHEREAS, the City of Chanhassen believes that the demonstration project set forth in '
the bill will be a valuable tool to provide transit services to the citizens of this community, to
acquire and develop properties by the Southwest Metro Transit Commission in connection with '
its transit mission, and to enhance the economic growth of the area; '
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NOW, THEREFORE, the City Council of the City of Chanhassen hereby endorses and
supports passage of the bill establishing Southwest Metro Transit Commission as a public
corporation in order to carry out the goals and objectives of the Demonstration Partnership
Program set forth in the bill.
ADOPTED BY THE CITY COUNCIL of the City of Chanhassen this day
of . 1996.
CITY OF CHANHASSEN
By
Its
ATTEST:
By
Its
rfr\smtc\1egis1at\hassen.Res
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4
0 SOUTHWEST METRO TRANSIT
I. BACKGROUND
ESTABLISHED
In 1986, the cities of Chanhassen, Chaska, and Eden Prairie "opted -out" of the
provision of public transit service being provided by the Metropolitan Transit
Commission (MTC), now referred to as the Metropolitan Council Transit
Operations (MCTO). Under Minnesota State Statute 473.388, referred to as the
Replacement Transit Service Program, the cities were responsible for the
management and delivery of public transit services in their communities. As an
agent for the member cities, the Southwest Metro Transit Commission (SMTC)
was organized under a joint powers agreement effective December 1, 1996.
Seven commissioners, a combination of elected and appointed individuals,
serve on the SMTC board. Regional oversight is provided today by the
Metropolitan Council. Today, there are five replacement transit organizations
serving twelve communities, they are: Southwest Metro Transit, Shakopee
Area Transit, Minnesota Valley Transit, Plymouth Metro -Link, Maple Grove
Transit.
FUNDING
SMTC receives 90% of the local available transit funds collected from the
member cities. The remaining 10% is received by the Met Council for the
regional system. Additional funds available include fares from passengers;
grants; and capital bonds from regional, state, and federal sources.
GOALS
SMTC is charged to:
• Enhance the regional transit system by becoming an integral part of the
regional transit system
• To provide quality and cost effective transit services
• To assure a transit focused perspective by becoming an integral part of
community planning and development
• To ensure financial and organizational capabilities to address community
service needs
W
II. EXISTING TRANSIT OPERATIONS
'
STRENGTHS: (See also Exhibit Al and A2)
'
Unit Closest to Customer Needs
• Since 1987 ridership has increased and average of 18% annually
• Cost containment has been a priority. Cost/Subsidy per Passenger has
decreased an average of 14% annually
'
Laboratory for Innovation
• Flexibility equals success
SMTC provides innovative transit options via express, shuttle, dial -a -ride
'
service
SMTC is viewed as a national leader in reverse - commute service
'
Quality of life is showcased by our community transit services
'
SMTC is the only transit agency in the state to receive an ISTEA Grant worth
$3.5 million for the Transit Hub
'
Leadership of Member Cities
• Local accountability and decentralized decision - making yields substantially
lower costs
Decreased vendor operating costs by 200%
WEAKNESSES /THREATS:
' Since 1991, relationship /micromanaging issues with the regional agency
continue to plague SMTC.
' The regional oversight agency:
• Unilaterally withholds operating funds
• Arbitrarily reduces carryover funds
' Retroactively imposes service rate increases without notice or regard
to standing contracts or state law
' • Manipulates data to discredit SMTC
As a result, an estimated $100,000, or 25% of SMTC administrative
budget, is spent annually to "protect" SMTC service -- resources that could
provide an additional 10 months of bus service in our communities.
III. OPPORTUNITIES FOR CHANGE
GOALS FOR THE ORGANIZATION: '
• Stabilize relationship environment
• Ensure SMTC operation capabilities /protect our assets '
• Prepare for regional system change
• Reduce dependence on regional resources '
• Evolution of maturing organizational structure of agency
STRATEGIES I
• Transit Hub - Revenue Streams /Community Benefits
• MCTO strike experience - potential cost savings to tax payers '
• Ownership of fleet - increases flexibility
• Leadership experience and vision of member communities /commission /staff '
• Team of experts
• Transit redesign plan /limited regional resources
• Minimal impact to regional system /budget ,
• Operationally able to absorb special projects (e.g. Metro Mobility and
reverse - commute) '
IV. SOLUTION (See also Exhibit Bi - Bs)
"Good News Bus Demonstration Project - A Transit Enhancement
Plan for Local and Regional Transit Services"
WinMlin for regional agency and communities:
• Local and regional objectives ,
• Promotes productive relationship between regional agency and
communities '
• Evolutionary: Positive change based on experience of successes
• Consistent with regional transit redesign plan ,
• Provides environment for tax - savings; enhanced service delivery
(See Also Exhibit C - Overview Explanation of Proposed Legislation) '
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ATTACHMENTS
EXHIBIT A -1 Transit Trends
EXHIBIT A -2 SMTC Annual Ridership
Good News Bus Demonstration Project
EXHIBIT B -1 Elements
EXHIBIT B -2 Overview
EXHIBIT B -3 Program Summary
EXHIBIT B -4 Win/Win Solution
EXHIBIT B -5 Why Did SMTC Act?
EXHIBIT C Proposed Legislation
Rwhihir e_1
Replacement Transit
Percentage of change in cost & ridership since 1991
Source: Met Council
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�M COStS
-5
1992 1993 1994
O Replacement Transit systems have reduced
costs 24 %* and increased ridership 38 %.
O While Regional Transit costs have increased
19 %* and ridership has decreased 2% (about
750,000 passenger trips).
■ This adds up to more buying power for
Replacement Transit programs.
■ Before Replacement Transit, in some suburban
communities up to 100% of the transit dollars
collected were spent in other cities.
■ Now Replacement Transit serves suburban
residents and businesses with destinations &
pick -up points throughout the entire region.
Regional Transit
Percentage of change in cost & ridership since 1991
Source: Met Council
:J .
35
30
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Ridership
-5
1992 1993 1994
Replacement Transit Systems Have:
■ Become a model for successful partnerships
between community, government, and
business.
■ Strengthened the regional transit systems'
multi - service approach, using various private
providers to contain costs and increase
ridership.
■ Become a testing ground for new and
creative approaches — such as Bridges to
Work (Reverse Commuting).
■ Enhanced greater participation at the local level.
Rana Of cost & ridership with 1991 as bast
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ON- = = = = = = = M = = = = = = = -00
Southwest Metro Transit Commission
ANNUAL RIDERSHIP
1988-1996
600,000
500,000
P
a
S
S
e 400,000
n
9
e
r 300,000
T
r
i
p 200,000
S
100,000
0
1988
x
r•
P?
0
1996
5 12/11/95
1989 1990 1991 1992 1993 1994 1995
SOUTHWEST METRO TRANSIT
Exhibit B -1
Demonstration Prole t
Elements:
Six (6) year demonstration period
Leaves 12% tax base to MCTO
Full Debt Service portion intact
MCTO relieved of Capital Bonding for SMTC
SMTC Assumes Metro Mobility
SMTC bonding authority
SMTC predictable revenue source
Local Accountability
Joint power cities develop transit priorities that
strengthen the region, while sharing findings and
costs
Determine market -based fare schedules designed to
reduce or eliminate government subsidy
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SOUTHWEST METRO TRANSIT
` 8080 Mitchell Road, Suite 104, Eden Prairie, MN 55344
Exihibt B -2
Phone 612.934.7928
FAX 612.949.8542
' OVERVIEW
TRANSIT ENHANCEMENT PLAN
GOOD NEWS BUS DEMONSTRATION PROJECT
The PLAN:
• SMTC assumes responsibility to plan, fund (including future capital costs), and operate
transit services for its area including Metro Mobility and reverse commute programs
• SMTC contributes greater share of its transit tax revenue to MCTO operations (12% vs.
10% now), and continues to share all of its tax base in support of council transit bonds
• SMTC continues to coordinate planning and operations with MCTO to assure full regional
' integration of transit functions; MCTO continues to define transit service criteria, subject to
approval of Commissioner of I ransportation, if objects to any specific criterion
• Other Regional Sponsors or cities may join, or implement similar programs, with consent of the
' Governor
SMTC PLAN PROMISES:
• MORE TRANSIT SERVICE for SMTC cities and Twin Cities metro area
• BETTER TRANSIT SERVICE for SMTC cities and metro area (better tailored to customer
' needs; decentralized decision - making)
• RELIEVES MCTO of transit operations that are very costly and very difficult for MCTO to
' provide
• ENHANCES interagency planning, information exchange, and operations
• PRESERVES METRO MOBILITY and "reverse commute" service
• All at LOWER PUBLIC COST; increases SMTC contribution of transit tax revenues to
' MCTO operations by 20% (increase Tom 10% of collections to 12 %)
• ENABLES MCTO to avoid capital and operating costs, or alternatively to shift resources to
other regional needs
' • BUILDS GOOD NEWS "SUCCESS STORY' for public transit
• ACHIEVES COLLATERAL OBJECTIVES of reducing S.O.V. miles, pollution and
' congestion, and increasing access of economically disadvantaged people to wider range of
metro area employment and housing opportunities
' • TESTS viability of evolving model for institutional transit sponsorship at very low risk to
existing structures, agencies, and programs
• OPENS PARTICIPATION to other interested Regional Sponsors
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AJoint Powers Agreement by and beiween the cities of Chanhassen, Chaska, and Eden Prairie.
Exhibit B -3 ,
SOUTHWEST METRO TRANSIT Phone 612.934.7928
8080 Mitchell Road, Suite 104, Eden Prairie, MN 55344 FAX 612.949.8542
GOOD DEWS BUS
Program Summary '
The Southwest Metro Transit Commission, a joint powers entity of the cities of Eden
Prairie, Chanhassen and Chaska, has proposed an initiative that would create a
demonstration "Good News Bus" partnership program with the Metropolitan Council.
The six year demonstration project's regional objectives are: ,
• TRANSIT REDESIGN - It allows the Council to focus more on the needs of transit
dependent users in the high density areas, and allow SMTC to pursue a more flexible ,
hands on market driven approach in the suburban areas.
• TAX COLLECTIONS AND DEBT LEVY - SMTC contributes more property tax
collections (estimated to be an additional contribution of $650,000 over the 6 -year
period) to the regional system and continues to pay toward regional debt levy.
,
• RELIEVES THE COUNCIL OF PRIMARY TRANSIT RESPONSIBILITY - The cost of
Metro Mobility transfers from state funding to SMTC as does Capital bonding
'
obligations.
• REGIONAL GOALS /STANDARDS REMAIN - The Council continues to monitor, '
examine and investigate the transit systems linkages.
• DESTINATION: JOBS - Increased access to jobs by inner -city residents. '
The six year demonstration project's local objectives are:
• LOCAL TRANSIT TAX LEVYING - Shifts the responsibility for tax levying and bonding '
back to the three communities - including public hearing.
• MARKET DRIVEN, PARTNERSHIP MODEL - Reduces costs while expanding service
delivery; reduces or eliminates any operating subsidies.
• IMPROVED PUBLIC CONFIDENCE - Shifts focus away from negative emphasis to '
"Good News Bus" developments.
• SPECIAL TRANSPORTATION OPPORTUNITIES - SMTC can further develop its '
priorities in the areas of Metro Mobility, reverse commute opportunities and other
programs with regional priority.
• OPENS DOOR FOR OTHERS - Provides procedures under which others can follow
(Governor and Council determine, W a legislative, time - restricted process).
(12/19/95)
A lornt Power; Aorevmont h,, n «,l h,t. n« fu> !/ G «G /"G. f. 4 G,t,... n._:_:. 13
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me
SOUTHWEST METRO TRANSIT
WIN -WIN Solution
MCTO
Focus on Urban Transit
Predominately Transit
Dependent
Transit Redesign: Urban
Based
Less Cost Effective
in Suburbs
Performance Standards
Increased Revenue
from Property Taxes
Full Debt Service
Levy Intact
Labor Union: ATU
Exhibit B -4
S-
Focus on Diverse, Market -
driven, Transit Needs
Ridership of Choice
Transit Redesign:
Suburban Based
Proven Substantially
Less Expensive
Positive and Workable
Relationship
Local accountability
Public Hearing
Bonding Ability
Stabilized Revenue Source
Labor Union: Teamsters
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Exhibit B -5
Why did Southwest Metro Act?
After anticipating this, and planning for several years, the elements presented
themselves...
• The Transit Hub project - development issues
• The strike experience - cost savings
• The rolling stock acquisition - ownership of a fleet of buses
• Three member cities on board, willing to take risk
• Team assembled (legal expertise, financial advisors, lobbying expertise)
• Provided for other Opt -Outs
• Minimal negative cost impact on region *
• Operationally able to absorb special projects - metro mobility, reverse
commute
• Desire to get initiative into this session, and not wait until 1997
* CONTRACT AND FAREBOX REVENUES - 1996
Replacement (Opt -Out) Service
TOTAL 10,713,059 2,289,714 13,002,773
'Estimated revenues from 1996 Management Plans
12/19/95
15
1996 CONTRACT
FAREBOX'
TOTAL
Maple Grove
911,777
455,275
1,367,052
MN. Valley
5,235,464'
1,465,653
6,701,117
Plymouth
1,689,705
140,086
1,829,791
Shakopee
393,000
0
393,000
Southwest Metro
2,483,113
228,700
2,711,813
TOTAL 10,713,059 2,289,714 13,002,773
'Estimated revenues from 1996 Management Plans
12/19/95
15
Exhibit C
EXPLANATION OF PROPOSED BILL
REGARDING SOUTHWEST METRO TRANSIT COMMISSION
I. OVERVIEW.
The proposed legislation has two objectives:
A. Demonstration Partnership ro am . The proposed p gr p p sed legislation
' establishes a demonstration "good news bus" partnership program between the
Metropolitan Council (the "Council') and the Southwest Metro Transit
Commission (the "Commission "). For a six year trial period, the relationship
' between the Council and Commission is restructured to allow for (i) the Council
to focus more on the needs of transit dependent users in high density areas and
(ii) the Commission to pursue a more flexible, hands on market driven approach
' in satisfying the transit needs of the suburban areas served by the Commission.
This market driven approach will allow the Commission to attract more riders of
choice (as distinguished from transit dependent users) at less real public cost per
passenger, to serve the needs of the elderly and other transit dependent users
located within the suburban area and to provide transit dependent users in the
core city metropolitan area better public transit access to employment
opportunities within the suburban area. The demonstration program relieves the
Council of primary responsibility for providing public transit (including metro
mobility) in the cities of Chanhassen, Chaska and Eden Prairie (the "joint powers
cities "), shifts that responsibility to the Commission and the joint powers cities
and reallocates between the Council and the Commission the transit tax levying
authority on property in the joint powers cities. This provides (i) local
accountability of elected officials in providing public transit for the joint powers
cities and (ii) a steady and predictable revenue source from this tax base for both
the Council and the Commission.
' B. _Sufficient Authority to Meet All Transit Needs To allow the joint
powers cities to vest in the Commission, through the joint powers agreement,
adequate authority for the Commission to provide for public transit services and
the acquisition and development of properties acquired by the Commission in
connection with that mission.
H. DETAILED EXPLANATION
Section 1 . This provision contains all applicable definitions establishes the
Commission as a public corporation and grants to the Commission the powers of
I 3WSS.6 16
a redevelopment agency and the authority to apply any transit tax funds received
by it to the payment of the Commission's transit system costs.
Section 1, subdivision 1 Definitions Identifies the subdivisions
containing applicable definitions.
Section 1. subdivision 2 . Cities Includes all cities or governmental
units which may become a party to the joint powers agreement. Currently
these joint powers cities are the Cities of Eden Prairie, Chanhassen and
Chaska. (Note that under Section 2, subdivision 12, no other governmental
units may become a party to the joint powers agreement without the prior
consent of the Metropolitan Council.)
Section 1, subdivision 3 Commission The Southwest Metro Transit
Commission.
Section 1, subdivision 4 Commission Transit System Costs
Embraces all operating, capital and financing costs of the Commission,
including debt service costs.
Section 1, subdivision 5 Contractor Includes any person who
provides transit services for the Commission under a purchase of services
agreement with the Commission.
Section 1, subdivision 6 Council Metropolitan Council.
Section 1, subdivision 7 Existin Capital Cost Contracts The
Commission has entered into contracts and will, prior to the effective date
of the legislation, enter into one or more additional contracts with the
Metropolitan Council to provide for the payment of certain capital costs of
the Commission's transit system. This definition picks up all those
contracts.
Section 1, subdivision 8 Existing Subsidy Contract This contract
governs the current contractual arrangement between the Council and the
Commission under which the Council exercises control over the operations
of the Commission in exchange for the transit tax subsidy.
Section 1, subdivision 9 Joint Powers Agreement This is the
agreement under which the joint powers cities spell out the powers which
1 the Commission may exercise on their behalf. The definition picks up any
J future amendments.
306355.6
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1 - MO55.6 . 18
Section 1, 10
subdivision Market Value Adjustment Ratio This is
the same adjustment ratio used in the existing law to limit the amount of
'
transit taxes the Council may levy in any year for general purposes, except
that the changes in ratio are based solely on market value changes
'
occurring within each joint powers city.
Section 1, subdivision 11 Redevelopment Agency Describes
'
redevelopment agencies called port authorities under the port authority
laws.
Section 1, subdivision 12 Termination Date July 1, 1996, which is
the date on which the existing operating contract is terminated under the
'
proposed legislation.
Section 1, subdivision 13 Transit Tax Revenues This definition
'
tracks the existing definition of tax revenues currently used under the law
to make transit tax subsidies available to replacement transit cities. The
'
law limits that subsidy to 90% of the revenues raised from such a transit
tax on taxable property within the replacement transit city. Under the
proposed legislation, the subsidy for the joint powers cities is limited to
88% of those revenues (with adjustments for changes in market value) and
the power to levy such a transit tax is transferred from the Council to the
Commission.
'
Section 1 subdivision 14 Public Corporation Establishes
P the
Commission as a public corporation acting on behalf of the cities in
accordance with the joint powers agreement and provides that any
proprietary interest in property previously acquired by the Commission will
'
vest in the Commission as a public corporation.
Section 1, subdivision 15 Additional Powers Grants to the
Commission all development agency powers (except the power to cause the
city to levy taxes which is separately treated under Section 2, subdivision
7). The exercise of these powers is subject to such limitations, if any, as
'
may be imposed under the joint powers agreement. The cities which are
parties to the joint powers agreement are also granted the powers of a
'
development agency city. These powers include the power to issue bonds.
However, the Commission may issue bonds pledging the full faith and
credit of the city only if the city adopts an ordinance allowing for such a
pledge. Subdivision 15 also provides that any transit tax subsidies provided
either under existing law or under the demonstration program discussed
1 - MO55.6 . 18
.� below may be used to pay any Commission transit system costs, - including
debt service on bonds issued by the Commission.
Section 2 Demonstration Partnership Program This section spells out all
of the elements of the demonstration restructuring program.
Section 2, subdivision 1 . Police Underscores that the proposed
legislation is intended to better serve the transit policy and goals previously
set by the legislature.
Section 2, subdivision 2 Termination of Existine Subsidy Contract
and Substitution of Performance Standards Terminates as of July 1, 1996,
the Council's direct contractual control over the Commission's operations
through its existing subsidy contract but requires that the Council continue
to remit for the balance of 1996 90% of all transit tax revenues as
permitted under existing law. From and after the termination date,
performance standards replace the contractual control mechanisms. If the
Commission does not approve the standards, they can only be imposed on
the Commission if the Commissioner of Transportation approves the
standards and does not waive compliance in a specific situation. The
Commissioner of Transportation is given authority to specify the
procedures and actions to be followed in establishing the standards and in
bringing the Commission into compliance with them. -
Section 2, subdivision 3 Stand Still and Override To minimize
disruption prior to the termination date, the Council must secure the
Governor's consent before the Council may exercise contractual control
over the Commission's operations through enforcement of the existing
subsidy contract or reduction or delay of the amount of funding
contemplated thereunder. From and after the termination date, current
laws governing the relationship between the Council and the Commission
are made applicable only to the extent provided in the proposed legislation.
Section 2, subdivision 4 Coordination, Consolidation and Sharing of
Resources Imposes an obligation on both the Council and the
Commission to cooperate with each other to coordinate public transit
operations. The Commission is also obligated to provide such information
as the Council may require to provide adequate information to potential
transit users and to investigate and, if feasible and cost effective, undertake
consolidation and sharing of transit services with school districts and other
providers in the region served by the Commission.
1
306355.6 f 9 I
Section 2, subdivision 5 Service Plan Imposes on the Commission
ommission
a continuing obligation to update annually its service plan for review by the
' Council in the same manner contemplated in the existing law.
Se_ ction 2. subdivision 6 Special Transportation Markets and
Service Imposes duty on Commission to (i) continue to undertake
programs to provide better access to places of employment within the
' region for transit disadvantaged or dependent persons'and to coordinate
these programs with the Council and (ii) provide within the joint powers
cities metro mobility transit service and to coordinate those programs with
' the Council.
' (b) Cily - . The joint powers city may, in its sole
discretion, levy upon all taxable property within the city a
discretionary transit tax for any additional amount the Commission
determines is necessary to pay for the city's share of the Commission
transit system costs.
I 3M5.6 20
Section 2, subdivision 7 Local Funding of Transit Services Sets
'
forth certain provisions regarding local funding of the Commission transit
system costs.
'
(a) Commission Lew Authorizes the Commission to levy a
transit tax upon taxable property within each joint powers city in an
'
amount that the Commission determines is necessary to pay the city's
share of the Commission transit system costs. The maximum transit
tax revenues that may be produced by such a levy, however, is
limited to 88 percent (instead of 90 percent as permitted under
current law) of the revenues that would otherwise have accrued to
the Council if that portion of the transit tax levy had been made by
the Council instead of the Commission as permitted under current
-
law and which the Council could have remitted to the joint powers
'
city (or Commission on its behalf) under the current replacement
transit law. This is achieved by calculating the maximum
'
Commission levy as the maximum amount permitted for the previous
adjusted to the
year, reflect upward or downward any percentage of
change in market value since the last year on all taxable property
located in the joint powers city. In the first tax levy year (1996), the
prior year amount is the maximum amount the joint powers city
could receive in 1996 under existing law except that the percentage
'
of transit tax revenues is 88 percent instead of the 90 percent
permitted under existing law.
' (b) Cily - . The joint powers city may, in its sole
discretion, levy upon all taxable property within the city a
discretionary transit tax for any additional amount the Commission
determines is necessary to pay for the city's share of the Commission
transit system costs.
I 3M5.6 20
c Dis osition of Transit Tax Proceeds Proceeds '
O P eds of any
transit taxes levied by a joint powers city must, upon receipt, be
remitted to the Commission. '
(d) Protection from Lew Limits Both the Commission and
'
city transit taxes are exempted from any levy limits that may
hereafter be imposed by law unless that law specifically includes
those transit taxes.
'
(e) Public hearings Requires that the Commission and the
joint powers cities conduct a public hearing on the Commission's
,
proposed annual budget before it is adopted.
Section 2, subdivision 8 Regional Funding of Public Transit Allows
,
for the Metropolitan Council to make additional financial assistance
,
available to the Commission or any contractor if the Council determines
'
that such assistance serves public transit policy and goals set forth in
existing law. Although the Commission does not contemplate invoking this
'
provision, it provides the Metropolitan Council the flexibility of providing
,
such assistance if the Council determines that such assistance makes sense
,
in a given situation.
'
Section 2, subdivision 9 Exemption from Taxation Grants to the
Commission the same exemption from taxation that is granted to the
,
Council under Minnesota Statutes, Section 473.394.
Section 2, subdivision 10 Inapplicable Override Makes the
'
override'provisions inapplicable to Minnesota Statutes, Section 473.375,
subdivision 11, relating to ride sharing, Section 473.382, relating to local
planning and development programs, and Sections 473.399 to 473.3998,
,
relating to light rail transit.
'
Section 2. subdivision 11 Metropolitan Council Bondin g and
—
Payment of Capital Costs Relieves the Metropolitan Council from any
obligation to bond for any part of the Commission's capital costs except as
,
provided in existing capital cost contracts or as the Council in its sole
discretion agrees to furnish under subdivision 8. The tax base of properties
within the joint powers cities will, nevertheless, contribute to the debt
'
service costs of all Council bonds. Subdivision 11 also empowers the
Council to require that the Commission take such action as the Council
,
1 deems appropriate to protect the tax exempt status of Council bonds.
306355.6 21 1
Section 2, subdivision 12 Additional Cities Requires the
Governor's consent to any other governmental units becoming parties to
' the joint powers agreement. This allows the demonstration program to
apply to any other cities which may become parties to the joint powers
' agreement but only if the Governor consents to such additional party.
' Section 2, subdivision 18 Expiration Since the provisions in
Section 2 are intended to be operative for a six year trial period (tax
payable years 1997 to 2002), all of the provisions in Section 2 sunset on
' January 1, 2003, except for the provision in subdivision 17.
I 30635S.6 22
Section 2, subdivision 13 Information for Council Imposes duty on
'
Commission to semi - annually provide the Metropolitan Council such
information about the Commission's public transit services as the Council
'
finds is necessary to determine the effectiveness of the performance
standards. Imposes other record keeping duties and access to records
comparable to the contractual duty now imposed by the Council under the
'
existing subsidy contract.
Section 2, subdivision 14 Public Accountant, Audits Imposes on
'
the Commission auditing requirements comparable to the requirements
currently imposed by the Council under the existing subsidy contract.
'
Section 2, subdivision 15 Inspections Grants to the Metropolitan
Council the same inspection rights granted to the Council under the
existing subsidy contract.
Section 2, subdivision 16 Surveys Grants to the Metropolitan
'
Council the same rights to require surveys as are granted to the Council
under the existing subsidy contract.
Section 2, subdivision 17 Petition for Similar Authority Sets forth
procedures under which the Governor may make other "replacement
transit" cities and combinations thereof subject to the provisions of Section
2. Before the Governor can invoke such authority, (i) the replacement
transit city (or cities) must petition for such authority and (ii) the Governor
'
must find in the order granting such authority that the replacement transit
city (or combination thereof) has provided public transit in an efficient and
'
effective manner and that the granting of such authority will advance the
policies and goals of the existing public transit law.
' Section 2, subdivision 18 Expiration Since the provisions in
Section 2 are intended to be operative for a six year trial period (tax
payable years 1997 to 2002), all of the provisions in Section 2 sunset on
' January 1, 2003, except for the provision in subdivision 17.
I 30635S.6 22
Section 3 Deduction of Local Transit Levy for Replacement Transit
Cities This provision takes into account that the maximum transit tax that the
Commission may levy within any joint powers city (or other governmental unit
under Section 2, subdivision 17) is intended to replace a like amount of transit
taxes that the Council may levy within the city for general purposes. To achieve
this result, the amendment would work each year as follows:
(1) The Council would calculate the amount of transit taxesit
would need to levy for general purposes in a given year (for example,
$40,000,000).
(2) The Council would then calculate the maximum transit tax that
the Commission may levy within each joint powers city.
J
(3) In allocating the $40,000,000 of transit taxes among the various
counties in the metropolitan area, the Council is required to take into
account that in allocating a portion of that amount to each joint powers
city, the Council and the county auditor must deduct from the portion that
would otherwise be allocated to that joint powers city the maximum transit
tax that could be levied by the Commission upon taxable property within
the city in that year, as if it were included in that portion of the Council's
levy allocable to the city. The net effect of making the deductions is that
the portion of the $40,000,000 that would have been allocated to the joint
powers cities but for the deduction will be reallocated to all the other cities
in the metropolitan transit taxing district.
Section 4 . Effective Date The act only becomes effective after the
governing bodies of the three joint powers cities have approved the act upon
compliance with the standard local consent provisions.
n
306355.6
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