The Missouri Municipal Review the Official Publication of the Missouri Municipal League November 2013

The Missouri Municipal Review The Official Publication of The Missouri Municipal League November 2013

In This Issue:

• MML Policy Guide • U.S. Supreme Court Preview • City Fiscal Conditions 2013 • Tactics for 21st-Century Cities Missouri Securities Investment Program A Cash Management Program for School Districts, Municipalities and Other Political Subdivisions

The Missouri Securities Investment Program (“MOSIP”) is a comprehensive cash management program for school districts, municipalities, and other political subdivisions. MOSIP was created in 1991 by the Missouri School Boards Association. MOSIP offers its participants a professionally managed portfolio with competitive money market rates. MOSIP stresses “safety of principal” as the number one Administered by: PFM Asset Management LLC objective and is rated AAAm by Sponsored by: Standard and Poor’s. Missouri School Boards Association • Missouri Association of School Business Officials Missouri Association of School Administrators

Registered Representatives This information does not represent an offer to sell or a solicitation of an offer to buy or sell any fund or other security. Investors should consider the investment objectives, risks, charges and expenses before investing in any of the Missouri Securities Investment Program’s portfolios. This and other information about the Program’s portfolios is available in the Program’s current Information Statement, which should be read carefully before investing. A copy of the Information Statement may be obtained by calling 1-877-MY-MOSIP or is available on the Program’s website at www.mosip.org. While the MOSIP Money Market Series seeks to maintain a stable net asset value of $1.00 per share and the MOSIP Term portfolio seeks to achieve a net asset value of $1.00 per share at the stated maturity, it is possible to lose money investing in the Program. An investment in William T. Sullivan, Jr. Maria Altomare the Program is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other Managing Director Managing Director government agency. Shares of the Program’s portfolios are distributed by PFM Fund Distributors, 1-800-891-7910 x225 1-800-891-7910 x222 Inc., member Financial Industry Regulatory Authority (FINRA) (www.finra.org). PFM Fund [email protected] [email protected] Distributors, Inc. is a wholly owned subsidiary of PFM Asset Management LLC. Member SIPC. Standard & Poor's fund ratings are based on analysis of credit quality, market price exposure, and P.O. Box 11760 • Harrisburg, PA 17108-1760 management. According to Standard & Poor's rating criteria, the AAAm rating signifies excellent 1-877-MY-MOSIP safety of invested principal and a superior capacity to maintain a $1.00 per share net asset value. 772 /West November Port Plaza Drive2013 • Suite 220 • St. Louis, MO 63146 However, The Missouri it should Municipal be understood Review that the rating is not a "market" rating www.mocities.comnor a recommendation to 1-800-891-7910 buy, hold or sell the securities. Missouri Securities The Investment Program Missouri Municipal November 2013 A Cash Management Program for Review VOLUME 78, NO.6 School Districts, Municipalities The Official Publication of The Missouri Municipal League contents and Other Political President Councilmember Jan Marcason 4 / President's Report

Subdivisions Kansas City 5 / Director's Report

Vice President 6 / Why Accounting And Financial Reporting For Mayor Bill Kolas Governments Is Different Than Businesses Higginsville by Jeffrey Winter

12 / City Fiscal Conditions in 2013 Immediate Past President by Michael Pagano and Christiana McFarland Mayor Pro Tem Susan McVey Poplar Bluff e 16 / MML's Municipal Policy 2013-2014 24 / Supreme Court Term Preview: Local Government At The High Court MISSOURI MUNICIPAL LEAGUE by Lisa Soronen and Victor Kessler BOARD OF DIRECTORS The 25 / Can The Threat Of Defunding Education Slow David Bower, Mayor, Raytown; Conrad Missouri Down Tax Cuts? Bowers, Mayor, Bridgeton; Roger Haynes, by Penelope Lemov Securities Investment Deputy City Manager, Mexico; Bill Johnson, Program (“MOSIP”) is a Director of Administration, Fulton; David 26 / MML's 79th Annual Conference comprehensive cash Kater, Mayor, Desloge; Patrick Kelly, Mayor, management program for school Brentwood; Donald Krank, Councilmember, departments districts, municipalities, and other Black Jack; Paul Martin, Attorney, Olivette; political subdivisions. MOSIP was *Norman McCourt, Mayor, Black Jack; *Ron 10 / TechTalk: Seven Tactics For 21st-Century Cities created in 1991 by the Missouri Monnig, Councilmember, Slater; Raeanne by Abhi Nemani School Boards Association. Presley, Mayor, Branson; John “Rocky” Reitmeyer, Alderman, St. Peters; Matthew 28 / MML News / New MML Board Members MOSIP offers its participants a G. Robinson, Mayor, Hazelwood; Frank 29 / MML Calendar of Events professionally managed portfolio Roland, Mayor, Hillsboro; Kathy Rose, Mayor, with competitive money market Riverside; *Carson Ross, Mayor, Blue Springs; 30 / Professional Directory rates. MOSIP stresses “safety of Tom Short, City Administrator, Carthage; principal” as the number one Administered by: PFM Asset Management LLC Robert Stephens, Mayor, Springfield; *Gerry 33 / News From The Bench objective and is rated AAAm by Sponsored by: Welch, Mayor, Webster Groves; *Kevin Wood, 34 / 2013 Index of Articles and Authors Standard and Poor’s. Missouri School Boards Association • Missouri Association of School Business Officials Mayor, Harrisonville. Missouri Association of School Administrators *Past President e Laura Holloway, Editor Registered Representatives This information does not represent an offer to sell or a solicitation of an offer to buy or sell any fund or other security. Investors should consider the investment objectives, risks, charges and expenses Contributing Editors: Dan Ross and Richard Sheets before investing in any of the Missouri Securities Investment Program’s portfolios. This and other AFFILIATE GROUPS: Missouri City Missouri Municipal Review (ISSN 0026-6647) is the official publication information about the Program’s portfolios is available in the Program’s current Information Management Association; City Clerks and of the Missouri Municipal League state association of cities, towns and Statement, which should be read carefully before investing. A copy of the Information Statement Finance Officers Association; Government villages, and other municipal corporations of Missouri. Publication may be obtained by calling 1-877-MY-MOSIP or is available on the Program’s website at Finance Officers Association of Missouri; office is maintained at 1727 Southridge Drive, Jefferson City, MO 65109. www.mosip.org. While the MOSIP Money Market Series seeks to maintain a stable net asset value Missouri Municipal Attorneys Association; of $1.00 per share and the MOSIP Term portfolio seeks to achieve a net asset value of $1.00 per Subscriptions: $30 per year. Single copies: $5 prepaid. Advertising rates share at the stated maturity, it is possible to lose money investing in the Program. An investment in Missouri Park and Recreation Association; on request. Published bi-monthly. Periodicals postage paid at Jefferson William T. Sullivan, Jr. Maria Altomare the Program is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other Missouri Chapter of the National Association City, Missouri. Postmaster: Send form 3579 to 1727 Southridge Drive, Managing Director Managing Director government agency. Shares of the Program’s portfolios are distributed by PFM Fund Distributors, of Telecommunications Officers and Advisors; Jefferson City, MO 65109. 1-800-891-7910 x225 1-800-891-7910 x222 Inc., member Financial Industry Regulatory Authority (FINRA) (www.finra.org). PFM Fund To contact the League Office call 573-635-9134, fax 573-635-9009 or email [email protected] [email protected] Missouri Chapter of the American Public Distributors, Inc. is a wholly owned subsidiary of PFM Asset Management LLC. Member SIPC. Works Association; Missouri Association of the League at [email protected]. The League’s Website address is: www.mocities.com. Standard & Poor's fund ratings are based on analysis of credit quality, market price exposure, and Fire Chiefs. P.O. Box 11760 • Harrisburg, PA 17108-1760 management. According to Standard & Poor's rating criteria, the AAAm rating signifies excellent 1-877-MY-MOSIP safety of invested principal and a superior capacity to maintain a $1.00 per share net asset value. 77 West Port Plaza Drive • Suite 220 • St. Louis, MO 63146 However, it should be understood that the rating is not a "market" rating nor a recommendation to www.mocities.com The Missouri Municipal Review November 2013 /3 1-800-891-7910 buy, hold or sell the securities. President’s Report. . .

also welcome four new elected board your community to be involved. Keep members: Paul Martin, city attorney, up with the League’s legislative updates Olivette; Matthew Robinson, mayor, and respond to alerts. Communicate Hazelwood; Robert Stephens, mayor, regularly with your local legislators and Springfield; Patrick Kelly, mayor, stress how your citizens are affected by Brentwood. proposed legislation. I am so appreciative of the Your MML staff will be working direction from our immediate past hard to provide a united voice president, Susan McVey. Her dedication for Missouri cities and make sure to Missouri cities is unwavering and we lawmakers understand how local look forward to her continued service government impacts a citizen’s day- on the Board. to-day life. The League will be looking This is an interesting time for local for new ways to reach out and engage government. With so many uncertain communities, and continue to serve as developments at the federal level, your resource for inquiries, training, states and municipalities must find new advocacy and outreach. ways to solve challenges. This provides One opportunity for engagement an opportunity for local government is to attend MML’s Legislative to shine. A recent report released by Conference in Jefferson City Feb. 11-12, the National League of Cities details 2014. There, Missouri’s top legislators the fiscal conditions of cities in 2013, and stakeholders will detail what we MML President reflecting improvements happening are all facing during the Missouri Councilmember Jan Marcason even while still facing effects of the legislative session. It’s also the perfect Kansas City economic downturn. For the first time time to visit with your legislator face- since 2006, city finance officers project a to-face and renew ties with your fellow am honored to serve over the small year-over-year increase in general local officials. next year as your Missouri fund revenues measured in inflation- I look forward to working with Municipal League president. adjusted dollars. Find more information you in 2014 as your board president. During the Annual from this report on page 12. Together, we’ll continue working to ConferenceI in September, the While cities continue to move improve the quality of life for Missouri League elected a new vice president, forward, challenges remain for next communities. Be sure to add your Higginsville Mayor Bill Kolas. We year’s legislative session. It is crucial for voice.

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4 / November 2013 The Missouri Municipal Review www.mocities.com Director's Report. . .

to approach me with partnership savings, cities can utilize the online opportunities that may (or may not) RFQ (request for quote) function. This benefit Missouri municipalities. I electronic request permits members evaluate proposals with one focus to select numerous vendors when – how can they help a municipality submitting requests. Members can succeed? With that in mind, I’m pleased place orders on the secure website, to move forward with a partnership that email or fax purchase orders for same- can greatly assist municipalities with day processing. Searches by vendor or your purchasing needs. In addition, product type are simple and quick. it can make finding a capable trusted One way to ensure success in vendor an easier process. this partnership is to encourage your Beginning this fall, MML trusted vendors, and particularly is partnering with The BuyBoard Missouri vendors, to become involved. Cooperative, a nationwide purchasing If you have a trusted source you use on program that has strong experience in a consistent basis and are pleased with serving non-profit organizations. their service/products, please have The BuyBoard obtains competitive them contact me. Our goal is to provide proposals on thousands of products and saving opportunities for municipalities, meets all state-level bid laws. It quickly but we would be very pleased if those Dan Ross offers you a pricing alternative on purchases were being made with Executive Director everything from pencils to public works Missouri companies. equipment, 24 hours a day, seven days If you have immediate questions have shared my views at times a week. There is no minimum purchase about this offering or wish to be in this column regarding and participation is free. contacted directly, please contact me at the power of partnerships. All BuyBoard contracts have MML or David Ricketts with BuyBoard I firmly believe that when already been through a competitive ([email protected] or 913- local Igovernments work together, our 424-5758). procurement process that can save you communities are stronger. the time and cost of bid preparation It is not uncommon for firms and contract award. For additional time

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www.mocities.com The Missouri Municipal Review November 2013 / 5 WHY ACCOUNTING AND FINANCIAL REPORTING FOR GOVERNMENTS IS DIFFERENT THAN BUSINESSES by Jeffrey Winter

here are more than 80,000 user groups differ so too does the revenues through taxes on sales, governmental entities purpose of financial reporting. income, property and other activities. in the United States Governments are created to These types of revenues consisting of counties, provide their citizens with public are referred to as “nonexchange” municipalities,T townships, independent services that businesses are not transactions because they do not school districts and special districts. incentivized to provide. This includes result from a voluntary exchange Each government must adhere a wide variety of services from law between willing participants. In fact, to accounting and financial reporting enforcement to recreational activities the parties who provide the funding standards set by the Governmental to road repair. under nonexchange transactions are Accounting Standards Board (GASB). The users of these services are often not the same parties receiving These standards and the resulting interested in the government’s ability to the services funded – or at least they do financial statements are similar to those sustain the services and their ability to not benefit in direct correlation to the of businesses, but maintain a number do so efficiently. Further, they want to amount of funding provided. of key differences that often prompt know if the burden of paying for current As a result, the nature of individuals with business backgrounds services has already been funded or nonexchange transactions requires to ask the question: Why are the shifted to taxpayers in future years. different accounting considerations standards different for governments? Accordingly, governmental than exchange based revenues. This is a question that the GASB financial statements have been The purpose of capital assets recently tackled in its White Paper constructed to focus on the services also differs between governments and titled, “Why Governmental Accounting provided by governments and the businesses. Capital assets are purchased And Financial Reporting Is – And revenue sources used to provide those to help businesses generate future cash Should Be – Different.” In short, the services. flows. These assets include machinery answer is the standards differ because In contrast, businesses are created for manufacturing companies, buildings the environments of governments to generate wealth for owners that is for those in real estate, and vehicles for and businesses and the users of their measured by net income and earnings transportation services. financial statements differ. per share. These key components Governments acquire capital assets of business financial statements are to provide services to their residents Different Purposes irrelevant to governments as they do (which may be different than the American businesses follow not have shareholders and are not taxpayers in some instances). Therefore, accounting standards set by the focused on generating wealth. it makes sense for governments to look Financial Accounting Standards Board In fact, in the government at the service potential of capital assets (FASB). FASB states that “the objective environment, revenues that greatly when determining if their value has of general purpose financial reporting is exceed expenses year after year might been impaired whereas businesses to provide financial information about be interpreted as evidence of over should examine the asset’s ability to the reporting entity that is useful to taxation, or a level of services not produce future cash flows. existing and potential investors, lenders commensurate with revenues, not of and other creditors in making decisions strong financial performance. Insolvency about providing resources to the entity. There also are key environmental Those decisions involve buying, selling Revenue Generation differences between governments and or holding equity and debt instruments, Another key distinction between businesses related to their potential for and providing or settling loans and governments and businesses is how longevity. The failure rate of restaurants other forms of credit.” revenue is generated. For businesses, and other startup businesses has been FASB has identified investors revenue is generated through sales of well publicized by the media. Even and creditors as the primary users goods and services in a competitive large, well-known corporations are of financial statements. While market. subject to a variety of business risks and governments also have creditors, there While it is true that many occasionally fail. is no equivalent of an “investor” in the governments generate at least some As a result, it is important for government world as it is not possible revenue by offering services (utilities, the financial statements of businesses to own an equity stake in a government. parks and recreation fees, for example), to contain information about the Furthermore, the primary users the revenue is not typically earned in liquidation values of assets and of governmental financial statements a competitive marketplace. The more liabilities. also include citizens and elected significant difference in revenues Conversely, the risk of liquidation representatives. As the needs of these is governments’ ability to generate for governments is extremely low due

6 / November 2013 The Missouri Municipal Review www.mocities.com Aaron G. March, James C. Bowers, Michael T. White, Shannon M. Marcano, Patricia R. Jensen, William B. Moore, Brian E. Engel, Mark S. Bryant, Kimberley S. Spies

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816-753-9200 | www.WhiteGoss.com | [email protected] www.mocities.com The Missouri Municipal Review November 2013 / 7 to their ability to tax citizens. While significantly modified without formal with the primary responsibility for government bankruptcies are currently action of the governing body. Because setting accounting standards for states at all-time highs they still only occur in governments are legally required to and local governments. one of every 1,668 governments (or 0.06 adopt and adhere to budgets as part of GASB has evaluated the needs percent) as of January 2013. their management of public resources, of users of governmental financial GASB requires reporting budget versus statements to create a framework Budgets actual schedules for the general fund and standards that focus on sound The role of the budgets in and major special revenue funds in the management of public resources rather governments and businesses also financial statements. than the ability to generate money. differs. Most businesses rely on budgets t hould e ifferent as part of their internal management I S B D Jeffrey Winter, CPA, is partner-in-charge of structure. This tool enables the business All of these factors contribute RubinBrown’s Public Sector Services Group and to benchmark and track their progress to the need for separate accounting has been serving public sector clients for more throughout the year although there is and financial reporting standards for than three decades. His experience includes providing financial reporting and accounting no legal requirement or responsibility businesses and governments. services to municipalities, counties, school to adhere to the budget. It is impossible for governments districts and state agencies. Winter is a member In contrast, governments use to report on measures such as earnings of the Association of Government Accountants, the Government Finance Officers Association of budgets for those purposes but also per share. Likewise, it would not make the Greater St. Louis and Kansas City Areas, and to control the level of taxation and sense for their financial reports to the special review committee of the Government the spending of resources by the ignore users such as citizens and elected Finance Officers Association. He can be reached the peRfeCt SolutIon government. Government budgets are representatives, or the implications of at [email protected] or (314) 290- legally adopted at the highest level of unique features of governments such as 3408. governance, generally in compliance nonexchange transactions, the purpose with statute, ordinance or charter, and of capital assets, the relative absence Looking for security, return, after appropriate public forums have of liquidity risk, and the role of legally and flexible access to funds? been conducted. adopted budgets. Furthermore, expenditure budgets As a result, GASB operates as an With ICS® and CDARS®, generally cannot be exceeded or independent, standards-setting body your organization can access multi-million-dollar FDIC insurance on demand deposits, money market deposits, and CDs, all through a single bank relationship.

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www.mocities.com The Missouri Municipal Review November 2013 / 9 Tech Talk TACTICS FOR 21ST-CENTURY CITIES 7 by Abhi Nemani e it the burden placed for community-watch groups and on them by shrinking cleanups. federal support, or the Action Item: Work with the local opportunity presented civic tech community and engage by modernB technology, 21st-century citizens for their feedback on city cities are finding new ways to do policy through events, tech and existing things. For four years, Code for America forums. (http://www.govtech.com/data/code- for-Amerca-Innovation-Ecosystem. 6. Bias Toward Open. html) has worked with dozens of Closed systems tend toward cities, each finding creative ways control, while open ones tend toward to solve neighborhood problems, innovation. Open systems begin with build local capacity and steward a the belief that the best idea won’t always national network. These aren’t one-offs. come from the people in the room, or Cities are championing fundamental, in this case, city hall. Instead, as the institutional reforms to commit to an Internet has evidenced time and time ongoing innovation agenda. again, opening up access to data and Here are a few of the ways how: user-driven design, ongoing feedback, opportunities leads to wildly emergent, and rigorous testing and iterations, amazing and valuable outcomes. 1. Create A Space To Experiment. government websites can continually Action Item: Create an open Cities should commit to innovation connect with more citizens, more data policy and adopt open data by creating offices or departments effectively. specifications. dedicated to trying things differently Action Item: Adopt the Gov. UK and making it safe for others to do Design Principles, and require plain 7. Take Tech Seriously. so. Such risk aggregators are the first human language on every interface. Technology no longer lives in step toward reinvigorating a culture of the IT department. Each element of experimentation within city hall. 4. Don’t Be An Island. government – trucks, buildings, pipes, Action Item: Create an office of Our 21st-century public services – has a technology component, new urban mechanics or appoint a chief institutions were created with an 18th- and more often, Web-based and citizen- innovation officer. centruy notion of technology. With no facing apps. That demands rethinking national communication infrastructure, of how each of those very services could 2. Use Good Data For Better we built cities as silos, each operating be delivered via technology. Thus, new Decisions. within a geographical proximity of skills and perspective must seep into Governments – especially cities its own as an autonomous, distinct city hall via fellowships, volunteers, – steward much data, and government unit, though they were tasked with trainings or hiring. officials can use it to make better essentially the same mandate. Things Action Item: Attract tech talent decisions on resource allocation, have changed. Cities can now work into city leadership and create training performance improvement and even together to pool resources and share opportunities citywide to level up the policies. But remember that not all best practices. tech literacy for city staff. data is created equally and data gains Action Item: Share open source meaning with context. technology with a sister city or change Abhi Nemani is a writer, speaker, organizer Action Item: Appoint a chief data procurement rules to make it easier to and technologist. For the past four years, officer or create an office of performance redeploy civic tech. he has helped build the national non-profit, management/enhancement. Code for America, a technology organization dedicated to reinventing government for the 5. Tap Into The Community’s 21st centruy. Currently serving as co-executive 3. Design For/With Citizens. Capacity. director, Abhi leads growth and product In many ways, governments are Technologists are helping write strategy. Find more information regarding Code for America at www.codeforamerica.org. like any other business: They need tools websites and build new tools in their for customers (citizens) to interact with free time; teenagers are texting in their This article is a reprint from www.govtech. them. But governments can’t slice their input to city plans as they walk down com, October 21, 2013. customers into demographic groups, the street; volunteers are coordinating targeting some and excluding others: emergency response with smartphones; government serves us all. Through and neighbors are hosting Meetups

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www.mocities.com The Missouri Municipal Review November 2013 / 11 CITY FISCAL CONDITIONS IN 2013 by Michael Pagano and Christana McFarland

he nation’s city finance personnel costs for pensions, health care from 2011 revenues, while expenditures officers report that the benefits and employee wages. declined by -0.2 percent.4 Looking to fiscal condition of cities the close of 2013, city finance officers in 2013 is improving, Meeting Fiscal Needs project that general fund revenues will althoughT they are continuing to In 2013, 72 percent of city finance increase slightly by 0.1 percent and confront the prolonged effects of the officers report that their cities are better expenditures will grow by 1.5 percent. economic downturn.2 Recovering local able to meet fiscal needs than in 2012 In comparison to previous periods, and regional economies experiencing (See Figure 1). City finance officers’ the past 12 years have been marked slowly improving housing markets comparative assessment of their cities’ primarily by challenging city fiscal and increased consumer spending fiscal conditions from year to year in conditions. Recessions in 2001 and 2008- are strengthening local tax bases and 2013 improved significantly from their 09 were followed by lackluster economic economic outlooks. However, high assessments in both 2012 and 2011, when recoveries. City revenue collections levels of unemployment, uncertainty 57 percent and 43 percent, respectively, typically lag economic transitions. The about federal and state actions, and said their cities were better able to meet revenue and expenditure projections long-term pension and health benefit financial needs than in the previous of city finance officers for 2013 point obligations continue to constrain the year. The 2013 findings reflect gradually to continuing slow recovery. While fiscal outlook for many cities. Cities improving economic conditions in many conditions are no longer deteriorating, operate under an annual balanced- cities after several years of shortfalls and the capacity of city budgets remains budget requirement, which requires service cuts. weakened coming out of the Great that they actively consider adjustments Recession. (For more on the lag between to their fiscal powers – both revenues Revenue And Spending Trends economic changes and city revenues, see and expenditures – over the course of Revenue and spending shifts box on page 15.) the fiscal year. in 2012 and 2013 paint a mixed fiscal The National League of Cities’ picture for America’s cities. General Tax Revenues (NLC) latest annual survey of city fund revenues declined in 2012, the The fiscal condition of individual finance officers finds that: sixth straight year-over-year decline cities varies greatly depending on • Overall, a majority of city finance going back to 2007.3 However, a very differences in local tax structure and officers (72 percent) report that their small increase in general fund revenues revenue reliance. While nearly all cities cities are better able to meet financial is projected for 2013, suggesting that have access to a local property tax, more needs in 2013 than in 2012; city finance officers are expecting little than half also are reliant upon local sales • As finance officers look to the close change in revenues from 2012 to 2013. taxes, and some cities (fewer than 10 of 2013, they project a small year-over- Similarly, general fund expenditures percent nationally) are reliant upon local year increase in general fund revenues declined in 2012 and are projected to income or wage taxes. Understanding measured in inflation-adjusted dollars increase marginally in 2013. the differing performance of these tax – the first increase since 2006: In constant dollars (adjusted to sources and the connections to broader account for inflationary factors in economic conditions helps explain the – Property tax revenues continued forces behind declining city revenues.5 to decline in 2012 and are projected to the state-local sector), general fund decline in 2013, reflecting the lagged revenues in 2012 declined -0.9 percent Property Taxes. Local property impact of real estate market declines; – Sales tax revenues and local income tax revenues experienced marked increases in 2012, with projections for further growth in 2013; – Ending balances increased in 2012 as cities began to rebuild reserves that were used to help weather the aftermath of the Great Recession. • Factors pressuring city budgets include infrastructure costs, public safety costs, employee-related costs for health care, pensions, wages and cuts in state and federal aid; and • Confronted with these pressures and conditions, cities are maintaining local services while continuing to reduce Figure 1.

12 / November 2013 The Missouri Municipal Review www.mocities.com tax revenues are driven primarily by the value of residential and commercial property, with property tax bills determined by local governments’ assessment of the value of property. Property tax collections lag the real estate market because local assessment practices take time to catch up with changes. As a result, current property DeDication. tax bills and property tax collections typically reflect values of property Service. anywhere from 18 months to several experience. years prior to their collection. The effects of the downturn in A law firm the real estate market in recent years dedicated to the continue to be evident in city property practice of tax revenues in 2012-13. Property tax municipal law. revenues in 2012 dropped by -0.4 percent compared with 2011 levels in constant dollars – the third straight year-over- 816-525-7881 [email protected] year decline in property tax revenues. www.laubermunicipallaw.com Property tax collections for 2013 are projected to decline, albeit only slightly, by -0.2 percent. However, improving The choice of a lawyer is an important decision and should not be based solely on advertisements. housing markets in many parts of the country suggest an improving outlook Factors Influencing City Budgets base (51 percent) and the overall health beyond 2013. A number of factors combine to of the local economy (66 percent). Sales Taxes. Changes in economic determine the revenue performance, conditions also are reflected in city spending levels and overall fiscal Revenue Actions And Spending sales tax collections. When consumer condition of cities. Each year, the survey Cuts confidence is high, people spend more presents city finance directors with a City finance officers also were on taxable goods and services, and city list of factors that affect city budgets.6 asked about specific revenue and governments with sales-tax authority Respondents are asked whether each spending actions taken in 2013. As reap the benefits through increases in of the factors increased or decreased has been the case for much of the past sales tax collections. For much of the from the previous year and whether the two decades, regardless of the state of past decade, consumer spending also change is having a positive or negative national, regional or local economies, was fueled by a strong real estate market influence on the city’s overall fiscal the most common action taken to boost that provided additional wealth to picture. Leading the list of factors that city revenues has been to increase the homeowners. The struggling economy finance officers say have increased over amount of fees charged for services. Two and the declining real estate market the previous year are health benefit in five (39 percent) city finance officers reduced consumer confidence, resulting costs (84 percent) and pension costs (80 report that their city has raised fee in less consumer spending and declining percent). Infrastructure (79 percent) and levels. Approximately one in four cities sales tax revenues. However, in 2012 as public safety (69 percent) demands were increased the number of fees that are the national economy started to recover most often noted as having increased applied to city services (22 percent), and and consumer confidence returned, among specific service arenas. Increases one in five (19 percent) cities increased city sales tax receipts increased over in prices or costs of services, also were the local property tax in 2013. Since the previous year receipts by a robust 6.2 noted by the majority of city finance mid-1990’s, irrespective of economic percent, similar to growth levels seen officers (81 percent). Leading factors conditions, the percentage of city finance prior to the recession. Sales tax receipts that city finance officers report as having officers reporting increases in property are projected to increase again in 2013, decreased are levels of federal aid (49 taxes in any given year has been reported although at a slower rate than in 2012, percent) and state aid (48 percent). In a at about this same level, reflecting state- reflecting ongoing caution about the shift from prior years, more city finance and voter-imposed restrictions on local pace of economic recovery and consumer officers report increases in the local tax property tax authority, as well as the confidence.

www.mocities.com The Missouri Municipal Review November 2013 / 13 political challenges of raising property This mix of state actions to balance self-reliant and are much more likely to tax rates. Increases in sales, income or state budgets adds to the cyclical set aside funds for emergencies or other other taxes are even less common, as economic pressures that cities and purposes. continued to be the case in 2013. When other local governments are confronting. Prior to the recession, as city asked about expenditure actions taken Looking across state and local actions finances experienced sustained growth, in 2013, the most common response in response to fiscal stress reveals the city ending balances as a percentage of was reducing the size of the municipal pro-cyclical nature of state-local fiscal general fund expenditures reached an workforce (32 percent). Three of five (62 actions – during economic downturns historical high – since the NLC survey percent) cities report increases in public the decisions that state and local leaders was first administered – of 25 percent. safety expenditures. make to balance budgets often exacerbate However, as economic conditions made The 2010-2013 surveys also asked the effects of the downturn for other balancing city budgets more difficult, about specific types of personnel related levels of government, for employment ending balances were increasingly cuts enacted. In 2013, the most common and for the quality of life and well-being utilized to fill the gap. In 2012, city cut so far was a hiring freeze (38 percent). of individuals and communities. finance officers projected ending At least one in five cities reduced health balances to decline to 12.7 percent of care benefits (24 percent) or pension Ending Balances expenditures. Actual ending balances benefits (22 percent). However, the One way that cities prepare for often register at higher levels than percentage of city finance officers economic downturns is to maintain projected ending balances. For 2012, reporting personnel-related cuts in 2013 adequate levels of general fund ending final ending balances were reported at is lower than in 2012 in all categories balances. Ending balances are similar 21.5 percent of expenditures, suggesting except pension benefits. to reserves, or what might be thought that cities were once again turning to Many cities used some combination of as cities’ equivalents to “rainy day rebuilding these balances as they emerge of these types of actions in an effort funds,” in that they provide a financial from the downturn. Looking to 2013, city to reduce personnel costs. The U.S. cushion for cities in the event of a fiscal finance officers project ending balances Bureau of Labor Statistics’ latest national downturn or the need for an unforeseen at 20.1 percent of expenditures. unemployment numbers, as of August outlay. Unlike states’ reserves, or 2013, revealed that total local government “rainy day funds,” there is no trigger Beyond 2013 employment in the U.S., including mechanism—such as an increase in The reports and projections from municipal government employment, unemployment – to force release of the the nation’s city finance officers reveal is more than 500,000 jobs below the funds; instead, reserves are available for a picture of a gradually improving August 2008 level7. State budgets also spending at any time or for saving for a economy and parallel improving city have been confronted with several years specific purpose. fiscal conditions. However, the pace and of shortfalls and constraints. In many City ending balances that are scope of the economic recovery to date is cases, states have been reducing aid and transferred forward to the next fiscal not sufficient to help cities recover from a transfers to city governments. NLC’s year in most cases are maintained for deep and sustained economic downturn. 2013 survey asked city finance officers many reasons. For example, cities build While projections for final 2013 revenues about the types of state actions they’ve up healthy balances in anticipation of and expenditures show that city fiscal encountered since 2010, including cuts unpredictable events such as natural conditions are no longer declining, those in general aid 39 percent), cuts in state- disasters and economic downturns. projections also suggest that cities are shared and/or state-collected revenues But ending balances also are built up confronting little growth in the near (37 percent), revocation or reduction deliberately, much like a personal future. Positive indicators, including of reimbursement programs or other savings account, to set aside funds for growth in local sales tax and income transfers (26 percent), cuts in funding planned events such as construction tax revenues, are offset by stagnant for services that cities and other local of capital projects. Bond underwriters receipts from real estate taxes as cities governments deliver on behalf of state also look at reserves as an indicator of continue to register the lagged effects governments (21 percent) and transfer fiscal responsibility that can increase of depressed housing markets. of state program responsibility (18 credit ratings and decrease the costs of Beyond 2013, a number of factors percent). Amid the politics of state city debt, thereby saving the city money will be key to the fiscal conditions of budget-balancing, sometimes state in annual debt service costs. Finally, as cities: actions also have been taken that serve federal and state aid to cities has become • Strengthening real estate markets to reduce or limit local authority (21 a smaller proportion of city revenues (although regional markets will vary percent). over time, cities have become more

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14 / November 2013 The Missouri Municipal Review www.mocities.com As water and wastewater Missouri’s own Alliance We can solve problems grow, more and more Water Resources is a every problem of our local communities are national leader in solving realizing that they may be up exactly these problems. on this list. that famous creek: When you’re up the Canoe? capital improvement projects proverbial creek, call technical challenges (573) 874-8080 or visit shortages of licensed personnel www.alliancewater.com government regulations revenue shortfalls.

View Project Profiles at www.alliancewater.com considerably) will help cities turn the corner from property tax revenue THE LAG BETWEEN ECONOMIC AND CITY FISCAL CONDITIONS decline to growth, but the effects will be spread out over several years; What Does This Mean? • Other economic conditions The lag refers to the gap between when economic conditions change – improving consumer confidence, and when those conditions have an impact on reported city revenue employment and wages – will weigh collections. In fact, cities likely feel the impacts of changing economic heavily on future city sales tax receipts conditions sooner. However, because reporting of city fiscal conditions and income tax revenues; occurs, in most cases, on an annual bases, whether through annual budget • Two of the factors that city finance reporting or NLC’s annual survey, those impacts tend to not become officers report as having the largest evident until some point after the changes have started to occur. negative impact on their ability to meet needs are employee- and retiree-related How Long Is The Lag? costs for health care coverage and The lag is typically anywhere from 18 months to several years, and it pensions. Pension and health care costs is related in large part to the timing of property tax collections. Property will persist as a challenge to city budgets tax bills represent the value of the property in some previous year, when for years to come; the last assessment of the property was conducted. A downturn in real • Confronting a gradual economic estate prices may not be noticed for one to several years after the downturn recovery following a deep recession, began, because property tax assessment cycles vary across jurisdictions: cities are likely to continue to operate some reassess property annually, while others reassess every few years. with reduced workforces and service Consequently, property tax collections, as reflected in property tax levels, and city leaders will likely assessments, lag economic changes (both positive and negative) by some continue to be cautious about making period of time. Sales and income tax collections also exhibit lags due to significant infrastructure investments; collection and administration issues, but typically not more than a few • Cities’ fiscal conditions remain months. vulnerable to external policy shifts in the face of a gradual and tenuous economic recovery, including cuts in About The National League Of Cities federal spending and threats to global, The National League of Cities is the nation’s oldest and largest organization national and regional-local economic devoted to strengthening and promoting cities as centers of opportunity, leadership conditions from political stasis on issues and governance. NLC is a resource and advocate for more than 1,700 member cities including the federal budget and U.S. and the 49 state municipal leagues, representing 19,000 cities and towns and more debt ceiling; and than 218 million Americans. Through its City Solutions and Applied Research, • Because cities are required to balance NLC provides research and analysis on key topics and trends important to cities, their budgets on an annual basis, cities creative solutions to improve the quality of life in communities, inspiration and will continue to assess and adjust the ideas for local officials to use in tackling tough issues and opportunities for city appropriate package of fiscal policy leaders to connect with peers, share experiences and learn about innovative actions for the purpose of providing approaches in cities. services, investing in infrastructure, and meeting the health, safety and Michael A. Pagano is dean of the College of Urban Planning and Public Affairs at the University welfare requirements of their residents, of Illinois of Chicago. Christiana McFarland is interim director of the City Solutions and Applied taxpayers, workers and visitors. Research of the National League of Cities. To view full article with footnotes, visit http://www.nlc.org/find-city-solutions/city- solutions-and-applied-research/2013-city-fiscal-conditions. Or, contact MML at (573) 635-9134 or [email protected].

www.mocities.com The Missouri Municipal Review November 2013 / 15 Missouri Municipal Policy 2013-2014 The Missouri Municipal Policy serves as the statement of policy relating to the authority, responsibility and financing of municipal government and to federal and state laws and administrative regulations affecting local government. Policy-making is a very important function of MML. The primary process is that four appointed policy committees meet each July to discuss and debate policy issues facing Missouri municipalities. The result is new or amended policy recommendations that are reviewed and finalized by the Resolutions Committee. These final policy recommendations are presented to the general membership for adoption at the Business Meeting during the Annual Conference. Alternatively, members may modify or offer new policies during the Business Meeting for adoption by the general membership.

2013 Resolutions Committee Members: Jan Marcason, Councilmember, Kansas City Chair, John Sharp, Councilmember, Kansas City Norman McCourt, Mayor, Black Jack Dale Bagley, Mayor, Macon Robert McDavid, Mayor, Columbia Donna Baringer, Alderman, St. Louis Arthur McDonnell, Mayor, Kirkwood Patrick Bonnot, Loss Control & Member Services Director, MIRMA Terry McVey, Counselor, Kennett David Bower, Mayor, Raytown Steve Moore, Councilmember, Fulton Conrad Bowers, Mayor, Bridgeton Jan Neitzert, Executive Director, MO Parks and Recreation Shane Cohn, Alderman, St. Louis Myron Paris, Councilmember, Independence Melodee Colbert-Kean, Mayor, Joplin Frank Roland, Mayor, Hillsboro Tim Fischesser, Executive Director, St. Louis Co Municipal League Kathleen Rose, Mayor, Riverside Barry Glantz, Mayor, Creve Coeur Mike Schneider, Mayor, Overland J.T. Hardy, City Administrator, Sullivan Arthur Sharpe, Jr., Councilmember, University City Bobbie Jacques, Clerk, La Plata Gary Shaw, Councilmember, Joplin Leonard Jones, Alderman, Grandview Scott Wagner, Councilmember, Kansas City Patrick Kelly, Mayor, Brentwood David L. Willson, Mayor, Manchester Bill Kolas, Mayor, Higginsville Kevin Wood, Mayor, Harrisonville

ECONOMIC DEVELOPMENT AND ACCESS TO CAPITAL Assistance Program for Missouri (DREAM) HUMAN RESOURCES The MML supports public and communities. private efforts to provide access to seed Economic Development and Human and venture capital for viable projects ECONOMIC INCENTIVE PROGRAMS Resources Committee by Missouri entrepreneurs. The state The state of Missouri should maintain Chair, Patrick Kelly, Mayor, Brentwood of Missouri, in conjunction with its basic economic incentive programs Barbara Abram, Councilmember, Bridgeton communities, shall make an effort to assist including but not limited to: 1) Community Judy Bateman, Alderman, St. Peters new and expanding businesses with access Development Block Grants, 2) taxable and John Biggs, Mayor, Webb City to competitively priced financing. tax-exempt financing programs, 3) various Don Bormann, Alderman, Centralia tax credits, 4) the Missouri Linked Deposit Baird Allen Brock, Councilmember, MISSOURI WORKS PROGRAM Program, 5) Environmental Improvement Warrensburg The MML supports “Missouri Works,” a and Energy Resource Authority, 6) Errol Bush, Alderman, Northwoods program that combines the Development Missouri Industrial Development Loan John Butz, City Administrator, Rolla Tax Credit Program, the Rebuilding Guarantees, 7) enterprise zones, 8) and, the Linda Christle, Executive Director, Sedalia Communities Tax Credit Program, the Missouri Community Betterment Program. Allan Gray, Councilmember, Lee’s Summit Enhanced Enterprise Zone Tax Credit All such programs should be maintained at Elaine Horn, Mayor, Sedalia Program, and the Missouri Quality Jobs existing or increased levels. Gary Lathrop, Councilmember, Belton Program and rolls their functions into one Joe Lauber, Attorney, Lauber Municipal stream-lined program to promote business INDUSTRIAL REVENUE BONDS Law expansion and attraction in Missouri for job The MML supports the extension and creation and capital investment. expansion of the dollar limit of tax-exempt Andrew Leahy, Alderman, Brentwood industrial revenue bonds to provide Penny Lyons, Mayor, Osage Beach CONFIDENTIAL NEGOTIATIONS financing for business expansions. Vicky McLeland, Clerk, Macon The MML supports changes to Chapter Jim Pepper, Councilmember, O’Fallon 610 RSMo to allow economic development LIFE SCIENCES AND Jerry Reese, Councilmember, St. Charles projects to be negotiated in closed session BIOTECHNOLOGY Bob Russell, Economic Dev Dir, Florissant similar to the exemption that currently The MML supports state efforts to Harold Selby, City Administrator, Pacific exists for real estate. promote life sciences/biotechnology Tom Short, City Administrator, Carthage investments in Missouri. Eric Struemph, Mayor, Jefferson City DOWNTOWN REVITALIZATION Diane Turner, Clerk, Velda Village Hills AND ECONOMIC ASSISTANCE FOR MARKETING EFFORTS Scott Von Behren, Councilmember, Belton MISSOURI PROGRAM (DREAM) The MML supports an increased Debra Wilkerson, Councilmember, Malden The MML supports continuance of the emphasis on marketing the state of Downtown Revitalization and Economic Missouri as a location for business

16 / November 2013 The Missouri Municipal Review www.mocities.com expansions. Marketing efforts should be d. Historic Preservation Tax Credits HUMAN RESOURCES POLICIES expanded to include additional emphasis e. Brownfields Jobs and Investment AFFORDABLE HOUSING AND on high tech companies, manufacturing, Tax Credits HOMELESSNESS agriculture and service operations. A f. Missouri Build Tax Credits The MML urges state agencies to coordinated effort between all appropriate g. Film Production Tax Credit work in conjunction with Missouri state agencies and between state and h. New Markets Tax Credits municipalities as well as private and not- municipal groups promoting business, for-profit organizations to address the industry, agriculture, animal science and TAX INCREMENT FINANCING areas: of homelessness; affordable housing; tourism should be fostered in promoting The MML opposes legislation to exempt supported living services for seniors and the resources already available in Missouri. any governmental entity from being the disabled; and rehabilitation of existing The state of Missouri must continue to required to contribute to the tax increment housing. Legislative oversight committees assist businesses in reaching new markets financing (TIF) allocation fund. The should be established to give these issues for their products and services, including MML opposes any attempt to change the the attention they deserve. an increased awareness of international purpose or types of development permitted opportunities and new technologies. under current TIF statutes. The MML CHILD CARE supports legislation that clearly requires all The MML urges the state to develop MISSOURI DOWNTOWN ECONOMIC applicable taxes to be subject to the TIF. education programs and incentives to STIMULUS ACT (MODESA) ensure development of public/private The MML urges the General Assembly TAX INCREMENT FINANCING partnerships to enhance expanded quality to extend and increase the fiscal caps on the (TIF) AND TRANSPORTATION child care facilities, including care for Missouri Downtown Economic Stimulus DEVELOPMENT DISTRICT (TDD) infants, children with special needs, Act (MODESA) program as well as the REPORT FILING PENALTY weekend and non-daytime shift workers super Tax Increment Financing (TIF) The MML supports a revision to the Tax and the adequate training of child care program. Increment Financing (TIF) report filing law providers. Public and private employers that prohibits cities from initiating a new should be encouraged to provide quality MISSOURI TECHNOLOGY TIF project until the annual report is filed. child care centers through the use of tax CORPORATION The MML also supports legislation to cap credits or other incentives including but not The MML supports full utilization of the penalties for late filing of Transportation limited to cafeteria plans (Section 125 of the the Missouri Technology Corporation and Development Districts (TDDs) annual Internal Revenue Code) and flexible work support of its goals and objectives. reports to $10 per day with the fine not schedules. Technical assistance and training commencing until 14 days after notice by must be available to local providers. RURAL ECONOMIC DEVELOPMENT the State Auditor of the late filing. The MML urges the Department of TRAINING Social Services (DSS) and the Department The MML supports the Department TECHNOLOGY TRANSFER of Health and Senior Services (DHSS) of Economic Development in the creation The MML supports funding for applied to adequately fund services and staff to of a program to provide rural officials research at Missouri-based educational guarantee quality child care for Missouri and practitioners with development of facilities, technology transfer, and the children, particularly to ensure that funds skill sets that would enable them to better commercialization of this knowledge to be available for child care licensing staff to work with businesses to retain and expand create jobs in Missouri. properly license and monitor family, group employment. home and child care centers. The MML also TOURISM PROMOTION supports the licensing of private and faith- STATEWIDE SPORTS COMMISSION The MML supports increased funding based child care centers and encourages The MML urges the state of Missouri efforts for tourism promotion campaigns, the DHSS to develop quality incentives that to consider the economic benefits of including promoting the state of Missouri would promote voluntary accreditation or a statewide sports commission with domestically and internationally as a other similar quality standards for all child the responsibility for assisting in the visitor destination. In addition, cost sharing care providers. recruitment and support of regional between local and state promotional groups sporting efforts. has proven to be a cost-effective way to COMMUNITY EDUCATION increase exposure and should be expanded. The MML strongly supports the use TAX ABATEMENT The MML supports development of art of state funds for community education The MML supports the preservation and cultural industries in Missouri. programs that are proactive and/or of Chapter 353 RSMo, the urban The MML supports the preservation of rehabilitative. Examples of these include, redevelopment law, including the option Missouri‘s natural beauty which makes it a but are not limited to programs that prevent of tax abatement without unwarranted tourist destination. or address issues such as: restriction by other governmental units. • substance abuse; TRANSPORTATION INFRASTRUCTURE • gambling addiction; TAX CREDIT PROGRAMS The MML recognizes the importance • juvenile delinquency; The MML opposes subjecting the tax of transportation infrastructure to Missouri • gang activity; credit program to the appropriations economic development and supports • child abuse; process as this puts Missouri at a continuing reviews of the structure of the • teenage pregnancy and the education of competitive disadvantage. MML supports Missouri Department of Transportation teenage parents (including prenatal the retention, and funding of these tax (MODoT) and of funding resources to and postnatal care); credit programs: address transportation needs: • parenting skills; a. Low Income Housing Tax Credits 1. Consider the economic • drop-out prevention programs; b. Tax Credit for Contributions importance of connectivity. • reduction of unemployment/ Program 2. Provide for mass transit. underemployment; c. Neighborhood Assistance 3. Maintain existing infrastructure • and development of adequate and Program Tax Credits available recreation facilities and programs. www.mocities.com The Missouri Municipal Review November 2013 / 17 NEEDS OF SENIORS AND ADULTS “workforce” housing. not provide a local option on participation or WITH DISABILITIES nonparticipation in the holiday. Should the The MML calls on all levels of FINANCE AND TAXATION General Assembly approve additional sales government to recognize the needs tax holidays, the MML requests that all future of seniors and adults with disabilities Finance and Taxation Committee sales tax holidays include an opt in provision and to help them remain independent. Chair, Stephen Dennis, Mayor, Grandview while still allowing the municipality the Further, the MML urges: John Allen, Mayor, Wood Heights option to opt out in future years. 1) The General Assembly to provide Rob Binney, Councilmember, Lee’s Summit adequate funding to the Missouri Greg Camp, City Administrator, Desloge FEE COLLECTIONS ON ANNUAL Department of Health and Senior Betty Cotner, Finance Director, Town and PROPERTY TAX BILLS Services (DHSS). The DHSS should Country The MML supports legislation authorizing in turn provide adequate funding David Dickerson, Alderman, Harrisonville an entity that collects the property tax for itself for services such as: Medicaid meals, Deborah Guthrie, City Administrator, Eldon or for other taxing jurisdictions to also collect home delivered meals, community Matt Harline, Ast. Dir. of Admin, Fulton any other tax or fee that it authorizes or is senior centers, transportation, and Robert Hensley, Mayor, Velda City authorized by another taxing jurisdiction. ombudsman services. Arnold Hinkle, Councilmember, Black Jack LOCAL EARNINGS/INCOME TAXES 2) The DHSS to make readily available Theodore Hoskins, Mayor, Berkeley The MML favors local control of decisions funding to the local Agency on Aging Darla Langford, Clerk, Oronogo for information and referral services. regarding levels and types of municipal Mary Lowry, Clerk/Treasurer, Jackson taxation and believes it sets a bad precedent to Norman McCourt, Mayor, Black Jack 3) Local governments to encourage senior allow voters throughout the state to overrule Arthur McDonnell, Mayor, Kirkwood volunteerism in their communities. local voters’ decisions to approve rates and Jerry Mills, Councilmember, Kirksville 4) The DHSS to fund and encourage methods of taxation to support essential local development of intergenerational Myron Paris, Councilmember, Independence services such as police and fire protection. mentoring and outreach programs that Don Reimal, Mayor, Independence focus on: education, quality of life, and Cindy Rushefsky, Councilmember, PROPERTY TAX HEARING life experiences. Springfield The MML supports streamlining the Dan Smith, Finance Director, Creve Coeur process by changing the deadline for setting WORKFORCE DEVELOPMENT AND Tony Taggert, Alderman, Ashland the municipal property tax levy as required HUMAN RESOURCES Shonte Young, Alderman, Moline Acres in Section 67.110 RSMo to October 1. To encourage the continued implementation of job training, the BUSINESS AND OCCUPATION PROPERTY TAX RATE CAP MML supports: LICENSES The MML urges the General Assembly 1) Continued emphasis on the The MML supports legislation to authorize and the electorate to raise the caps by 25 cents education and training necessary to municipalities to license, tax and regulate the respectively imposed on municipal property provide a competitive work force in occupation of merchants, manufacturers tax rates by Article X, Section 11(b) Missouri Missouri, including promoting higher and all businesses, avocations, pursuits and Constitution and Chapter 94 RSMo. standards for all levels of education. callings and to, by ordinance, base such 2) Adequate state funding for primary, licenses on gross receipts, square footage, per ROAD AND BRIDGE TAXES secondary and post-secondary public capita, flat fee, graduated scale based on gross The MML supports legislation to require education, including new educational or net receipts or sales, or any other method that the percentages stated in the various initiatives to ensure the availability of of measurement of tax or any combination statutes on road and bridge taxes be spent a Missouri work force equipped with thereof derived or allocable to the carrying for road and bridge projects in incorporated the technical skills to compete in future on or conducting of any business, avocation, cities rather than such expenditures being decades. pursuits or callings or activities carried on in discretionary on the part of counties and road 3) Strong coordination between such cities. districts. agencies involved in the job training, retraining and placement systems and the E-COMMERCE TAXATION TAX ON HOTEL/MOTEL GUESTS business sector; The MML urges Congress and the state of The MML urges the General Assembly to 4) More resources for centers designed Missouri to define that all sales and use tax adopt legislation authorizing all cities to levy to assist high school drop-outs and on sales of tangible property be treated fairly a tax on hotel guest rooms with approval of potential drop-outs to earn high school and equitably whether the sales take place said tax by the voters. The legislation should diplomas or equivalency certification; over the counter, by phone, by mail order, by also require the Department of Revenue to 5) Continued and increased support internet or by any other electronic means. The collect the tax if requested to do so by a city for state job training funds targeted for all MML urges Congress to enact legislation that enacting the tax. businesses and not-for-profit organizations. redefines nexus to include economic nexus 6) More training dollars as an economic as well as physical nexus so that out-of-state TAX RESTRUCTURING incentive to encourage organizations to mail order sales and internet sales are treated The MML opposes the use of a higher target further development of their existing the same as sales within the same state. sales tax rate to replace the corporate and workforce. individual income taxes. Missouri’s cities 7) Working closely with private EXEMPTIONS FROM LOCAL OPTION rely upon sales taxes for general fund and industry and not-for-profits to plan and SALES TAX enterprise fund operation. If the state sales tax implement programs that assist in adult/ The MML strongly opposes the exemption rate is dramatically increased, municipalities youth training, worker reentry, the of any further items from the local option would be crippled in seeking voter approval underemployed, seniors and work reentry sales tax and encourages a thorough review of new sales taxes and Missouri businesses programs for ex-offenders. of current exemptions to examine their would lose retail sales to adjoining states and 8) Preserving economic development validity. Also, the MML continues to oppose the Internet. tools used to support affordable state-mandated sales tax holidays that do

18 / November 2013 The Missouri Municipal Review www.mocities.com CABLE AND VIDEO FRANCHISING the extent of adverse cost, structural and The MML vigorously opposes any federal intergovernmental impacts on cities. TRANSPORTATION NEEDS legislation and regulations that would alter While the MML strongly supports or completely eliminate the ability of local OTHER POST-EMPLOYMENT BENEFITS appropriate funding for transportation governments to enter into and enforce local (OPEBS) purposes in Missouri, the MML opposes the cable franchise agreements unless such Accounting standards, GASB use of sales taxes by the state of Missouri legislation requires the payment of local (Governmental Accounting Standards Board) as the primary source to raise revenue for franchise fees, compliance with local rights- Statements 43 and 45, require all state and meeting the needs of the state’s highways, of-way regulations, payment in lieu of in-kind local governmental agencies to report costs roads and transit systems. The MML services, operational grants and consumer and obligations for other postemployment urges the General Assembly and Missouri protection provisions. benefits in their financial statements. While Department of Transportation (MoDOT) GASB Statements 43 and 45 do not require to devise a comprehensive plan to increase PRESERVATION OF PEG ACCESS that governmental entities actually fund the needed revenue for meeting Missouri’s TELEVISION other postemployment benefits (OPEB), those transportation needs. Such plan should The MML supports the Community Access that do not are in danger of lowered credit dedicate sufficient funding to provide quality Preservation Act (CAP) which removes use ratings, and may be subject to less favorable mass transit services throughout the state. restrictions on public, educational and discount rates in calculating total unfunded This should include funds for systems that government (PEG) access fees, restores PEG OPEB liabilities or mandated revenue stream serve the elderly, handicapped and low- revenue streams, and ends cable operators’ diversions. The MML urges the Governor and income residents. discriminatory treatment of PEG channels. General Assembly to provide municipalities The MML urges Congress to enact the CAP the ability to fund OPEB to ensure that local Act in order to preserve local PEG channels. governments are able to adequately meet MUNICIPAL ADMINISTRATION AND future obligations. INTERGOVERNMENTAL RELATIONS REGULATION OF MUNICIPAL BROADBAND PUBLIC DEPOSITS AND INVESTMENT Municipal Administration and The MML opposes any state or federal OF IDLE FUNDS Intergovernmental Relations Committee legislation that regulates, restricts, or prohibits The MML supports passage of legislation Chair, David Bower, Mayor, Raytown municipalities from providing municipal that would repeal the archaic laws governing John Best, Mayor, Bolivar broadband services. depositories for funds and clarify the Brenda Cirtin, Clerk, Springfield investment authority of statutory cities. Barry Glantz, Mayor, Creve Coeur TAXATION OF CELL PHONES, VoIP AND Such legislation, at a minimum, should Bruce Harrill, City Administrator, OTHER COMMUNICATION SYSTEMS include authority for statutory municipalities Waynesville The MML supports legislation to impose or to choose one or more depositories for Debra Hickey, Alderman, Battlefield maintain local gross receipts taxes on cellular, public funds under conditions and terms Donald Krank, Councilmember, Black Jack land-line and VoIP telecommunications determined by the municipality, including Mark Levin, City Administrator, Maryland providers and other types of personal the choice of facilities outside the city. It Heights communications technology. The MML should also clearly permit investment of Chris Lievsay, Councilmember, Blue Springs also supports legislation that allows wireless municipal funds in obligations of the state; Keith Moody, City Administrator, devices to be taxed while holding harmless obligations issued by the United States; Harrisonville the cities and counties that have enacted sales obligations fully insured or guaranteed by the Andy Morris, City Manager, Moberly taxes to address 911 funding issues. United States or a United States government John Morris, City Manager, St. John agency; repurchase agreements secured by Dan Ross, Executive Director, Missouri UTILITY TAXES United States Treasury securities; obligations Municipal League The MML strongly opposes any legislation of any corporation of the United States Russell Rost, City Administrator, Union capping the rate or reducing the amount of government; prime bankers’ acceptances; and Ron Scheets, City Administrator, Cabool utility taxes imposed by municipalities. deposits, time deposits, certificates of deposit Thomas Schneider, Mayor, Florissant (negotiable or non-negotiable), shares, share Mahesh Sharma, City Administrator, STATE/FEDERAL MANDATES accounts or other interest bearing accounts in Raytown The MML urges members of the General depository institutions chartered by this state Michael Spurgeon, Dir of Admin, St. Assembly and Congress to work with local or by the United States. The MML further Charles officials to determine how to limit the fiscal supports a standardization of collateralization Everett Thomas, Mayor, Northwoods and other burdens of mandates on the requirements for depository institutions. A.J. White, Councilmember, Black Jack operation of municipal government. Collateral should not be required of any Further, the MML supports an assessment depository institution for that portion of the of current state and federal programs, municipality’s deposits covered by insurance regulations and policies to determine of any federal agency.

www.mocities.com The Missouri Municipal Review November 2013 / 19 SELF GOVERNANCE REGULATION OF MUNICIPAL RIGHTS- TAXPAYERS BILL OF RIGHTS (TABOR) The MML continues its strong support OF-WAY The MML opposes efforts by any group for self-governance for all municipalities and The MML supports the authorization to impose further restrictions on state the right contained therein of municipal self- of local governments to impose reasonable revenues and spending through the so-called determination. The MML urges the General nondiscriminatory fees for the use of the Taxpayers Bill of Rights (TABOR). Assembly to refrain from enacting legislation public rights-of-way. in areas that can be better dealt with by local PRIMARY SAFETY BELT government. Additionally, MML supports DEREGULATION IN THE NAME OF The MML supports legislation to the elimination of the minimum population “RELIGIOUS FREEDOM” change Missouri’s secondary seat belt law requirement to achieve constitutional charter While the MML supports free exercise to a primary seat belt law by allowing law city status. of religion, the MML opposes legislation to enforcement officers to stop drivers for failing further erode, under the guise of religious to wear their seat belts. MODERNIZATION OF LOCAL freedom, local authority to protect the health, GOVERNMENT STATUTES safety and welfare of all people, including ORDINANCE VIOLATIONS BUREAU The MML urges the repeal or revision of but not limited to municipal zoning, building The MML supports legislation that would contradictory and/or arcane provisions of codes, sign regulations, child care regulations eliminate the requirement that municipal the statutes that create barriers to efficient and all other applicable local ordinances. prosecutors review and file charges in cases administration of local government. Further, where a defendant pleads guilty and pays the MML supports legislation that permits PHOTOGRAPHIC ENFORCEMENT OF a fine in a municipal ordinance violations the use of electronic and digital archiving of TRAFFIC VIOLATIONS bureau. public records. The MML supports cities’ use of automated cameras to enforce traffic OPPOSITION TO PREDATORY LABOR RELATIONS ordinances and opposes any efforts to LENDING PRACTICES AND THE The MML supports legislation to restrict cities’ current authorized use PROLIFERATION OF resolve issues from the Independence NEA of photographic enforcement for traffic PAYDAY LOAN OPERATIONS v. Independence School District Missouri violations. The MML supports legislation that would Supreme Court decision. Such legislation impose stricter regulations, with penalties, on must preserve traditional management rights, CONCEALED WEAPONS IN MUNICIPAL lenders who engage in unfair and deceptive the fiscal integrity of the city, the delivery of FACILITIES lending practices. The legislation should give services to the taxpayer and the role of the The MML supports language to clarify the the Missouri Attorney General the increased duly elected representatives of the people concealed carry law (Section 571.107 RSMo) to responsibility to investigate and take legal as the final decision-makers on contract permit local governments to adopt ordinances action against predatory lenders. provisions. Also, the MML Board is urged to to prohibit the carrying of concealed weapons In addition, the MML supports legislation appoint a committee to study potential new in all city facilities and parks. that would allow cities to impose limits on MML services in support of local officials in the number of payday loan companies or, the collective bargaining process. BLIGHT/EMINENT DOMAIN if desired by the community, to ban these The MML vigorously opposes efforts operations entirely. MUNICIPAL PERSONNEL POLICIES to prohibit the use of eminent domain The MML strongly opposes legislation to rehabilitate blighted areas. MML also POSTING OF LEGAL NOTICES IN that would interfere with municipal authority opposes any effort that would negatively NEWSLETTERS OR ON WEBSITES to determine personnel policies or merit impact nuisance abatement programs. The The MML supports legislation to allow for system rules and regulations. MML should work with utilities, businesses, publication of legal notices including but not developers, and other groups to inform the limited to financial statements, land use and STATE MANDATES public of the benefits of eminent domain and elections notices in municipal newsletters and The MML urges the Governor, the General nuisance abatement programs. on websites in lieu of the unfunded mandate Assembly and state agencies to provide for Eminent domain is indispensable and is for newspaper publication to help keep the the reimbursement to cities for direct costs most often used as a last resort for revitalizing public apprised of local affairs in a much more of compliance with state laws, policies, local economies, creating much-needed jobs cost effective method. regulations and standards that impose and generating revenue that enables cities to additional costs and responsibilities on local provide essential services. Eminent domain GENERAL ASSEMBLY TERM LIMITS governments, pursuant to the Missouri is a powerful tool; its prudent use, when The MML strongly supports legislation Constitution (Article X, Section 21) commonly exercised in the sunshine of public scrutiny, to initiate an amendment to the Missouri referred to as the “Hancock Amendment.” helps achieve a great public good that benefits Constitution to lengthen term limits for the entire community. Economic policies members of the General Assembly. FINES IN MUNICIPAL COURT and incentives supported by the Governor The MML supports legislation to and adopted by the General Assembly will NATURAL RESOURCES AND URBAN standardize the maximum fine for violation have little effect in encouraging business to DEVELOPMENT of city ordinances at $1,000 for statutory expand or relocate in Missouri to support the municipalities. economic vitality of the state if land cannot Natural Resources and Urban Development be assembled through the power of eminent Committee PREVAILING WAGE domain if necessary. The MML supports Chair, Melodee Colbert-Kean, Mayor, The MML supports legislation to clarify changes in the law to further ensure fair Joplin the existing prevailing wage law to define treatment and just compensation of property Gerry Biedenstein, Councilmember, exemptions from the law for deminimus work owners but any such changes should be Kirkwood on public projects including work involving carefully drafted to permit use of eminent Gary Brown, Mayor, Salem repair and maintenance of public facilities. domain for economic development purposes Jake Crafton, Mayor, Kennett when necessary. Michele DeShay, Mayor, Moline Acres Kent Edmondson, Councilmember, Blue Springs

20 / November 2013 The Missouri Municipal Review www.mocities.com Linda Farmer, Councilmember, Macon exceed the water quality standards as set within reasonable limits, based on cost-benefit Laurie Feldman, Councilmember, St. Charles by the Clean Water Commission and the analysis, accurate testing, and other factors Jerry Grimmer, Councilmember, Bridgeton Environmental Protection Agency (EPA) under scrutiny in the latest DNR reports. Albert Hoag, Councilmember, Belton using watershed-based best management The likely use of the creek or waterway for Kathryn Hofmann, Councilmember, Lee’s practices, including a strong emphasis on recreation should also be a factor. Certainly, Summit green infrastructure strategies, to mitigate sewage from faulty infrastructure should Mary Holden, Comm Dev Dir, Arnold pollutants and storm water runoff. Given the be addressed if harmful bacteria result for Bill Kolas, Mayor, Higginsville enormous costs of constructing wastewater any reasonable period of time. However, George Liyeos, City Administrator, Rock treatment and collection facilities, MML animal waste, certain unavoidable runoff Hill recommends that the General Assembly such as that caused by treating streets for ice Nancy Luetzow, Councilmember, Kirkwood appropriate sufficient funds to provide and snow, and similar pollutants found at Bill Mollenhour, Alderman, Harrisonville adequate technical assistance through the relatively low levels in streams unlikely to be Richard Morris, Alderman, Lake Saint Louis Department of Natural Resources (DNR) to used for recreation should be addressed with Allan Muncy, City Administrator, Macon determine the most cost effective means of state and/or federal funds if they mandate Mark Rees, Engineer, Hannibal meeting state and federal standards. Further, remediation. Kathleen Rose, Mayor, Riverside MML urges the Clean Water Commission and Debi Salberg, Councilmember, Webster the EPA to develop realistic standards based SOLID WASTE MANAGEMENT Groves on 1) documented studies that verify potential The MML encourages municipalities John Taylor, Councilmember, Black Jack health risks and 2) site-specific pollution to participate in a regional approach when Shelley Welsch, Mayor, University City impacts. addressing solid waste issues and urges J. Bruce Woody, City Manager, St. Joseph The MML strongly urges DNR to municipalities to take an active role in Mark Young, Manager, Stormwater Utility, implement the storm water discharge the operation of solid waste management Kansas City permit program in a manner that will not districts. Further, the MML encourages impose delays on municipal and private municipalities to promote efforts to reduce OUTDOOR AIR QUALITY projects. MML opposes any state storm land-fill waste; to address management of The MML encourages all governmental water discharge permit regulation that all recoverable materials; to ensure access jurisdictions in Missouri to initiate and exceeds the scope of the National Pollutant to core residential services and household support programs designed to increase Discharge Elimination System (NPDES) hazardous waste collection in an effort to public awareness and education about the permit application regulations for storm minimize illegal dumping and littering and air pollution issue and how pollution can water discharge. MML strongly urges the encourage waste diversion from landfills; be abated. The MML supports continued EPA and DNR to develop a more simplified to establish public education on waste federal funding for those municipalities that and flexible approach to management reduction and solid waste management for have entered into a contract with the Missouri of municipal storm water runoff than residents and businesses; and to support Air Conservation Commission to monitor air has been imposed on the state’s larger the implementation of programs to reduce, pollution sources within their jurisdictions, municipalities. MML opposes any “end- eliminate or divert other household and including point and area sources. The MML of-pipe” testing requirement in storm water business waste from landfills. encourages all governmental jurisdictions to permits. Storm water regulations should be The MML urges the state agencies and help foster a public concern for clean air by applied equally to all jurisdictions. MML departments involved with implementation leading by example to demonstrate energy strongly encourages the DNR to allow of the state’s solid waste management law to efficiency, the benefits of native landscaping, those municipalities with the appropriate coordinate their efforts with municipal solid use of quality transportation planning administrative capacity to issue land waste activities and initiatives. The MML and use of low-emission and low-fuel disturbance storm water discharge permits encourages state leadership on policies and consumption vehicles in their governmental within their jurisdictions. issues of statewide significance, including activities. The MML requests that the state MML supports additional state funding public education, product stewardship, of Missouri provide adequate financial for comprehensive planning and management sustainable funding, incentives for diversion assistance to municipalities in conforming to at the community and state level for flood goals, and research on technologies and the state standards for clean air. control projects. trends. The state should continue to involve local MML urges DNR and EPA to develop The MML specifically encourages the state officials in the implementation of any air flexible standards for the treatment of to aggressively deal with stimulation of the pollution plan or policy that may be imposed combined sewer overflows that will allow demand and markets for recycled materials. to conform to EPA pollution standards. all municipalities to implement solutions that The MML strongly encourages the federal will meet their geographic and environmental and state government to take an active role INDOOR AIR QUALITY situation. The MML opposes any state in developing uses for recyclable materials The MML supports all municipal efforts regulations that exceed the scope of the as well as the marketing of the products to improve indoor air quality and the air National Pollutant Discharge Elimination developed from recyclable materials. quality surrounding governmental and System (NPDES) permit program regulations. The MML urges Congress to eliminate commercial buildings located within their The MML supports an increase of the the Commerce Clause barrier by authorizing boundaries, including the adoption of NPDES fee of no more than the consumer states and local governments to require that smoking restrictions. The MML opposes the price index, provided that DNR be prohibited municipal solid waste (but not separated adoption of any state law which preempts a from collecting fees from permit holders until recyclables) be transported to municipal solid municipality from adopting local smoking permits have been brought up-to-date by waste management facilities. restrictions or any ordinances that are DNR. The MML urges the General Assembly designed to improve indoor air quality. to enact legislation giving municipalities The MML supports an election on uniform RESPONSIBILITY FOR INCREASING greater flexibility in meeting the post closure statewide smoking restrictions. WATER QUALITY IN CREEKS responsibilities for municipally owned The MML supports all levels of landfills. WATER QUALITY government, with substantial state and The MML strongly urges the General The MML encourages Missouri federal help, collaborating as equals to insure Assembly to protect the yard waste ban, the municipalities to attempt to meet and/or that high levels of harmful pollutants are statewide tonnage fee and the rights of local www.mocities.com The Missouri Municipal Review November 2013 / 21 governments to develop and implement REGIONALISM 3) Special provisions be included for solid waste management strategies, facilities The MML continues to support regional “unincorporated islands” – land surrounded and services. In particular, MML urges the councils and opposes efforts to repeal or by incorporated area; General Assembly to remove and prevent weaken the enabling legislation governing 4) Normal municipal services and their barriers for responsible and sustainable regional councils and their activities. The funding sources be clearly defined; waste management best practices, including MML further supports state funding of 5) Municipalities be given the authority the elimination of the two-year notice regional council activities. to enter into binding pre‑annexation requirement for local governments seeking agreements with landowners with property to contract for solid waste services. LOCAL CODE COMPLIANCE not contiguous to the corporate limits of a The MML urges the General Assembly municipality. HAZARDOUS MATERIAL to enact legislation requiring the mandatory 6) A second election, as provided for in MANAGEMENT referral of development plans by the state Section 71.015 RSMo, is not needed when The MML encourages federal and state or its political subdivisions to the affected two-thirds of the combined voters of the city programs that educate the public and ensure municipal government for compliance with and the area proposed to be annexed approve safe processing, incineration, recycling, local codes and coordination with municipal the annexation proposal in the first election, transportation and storage of hazardous plans. even if a majority of the voters in the area to materials including newer products. be annexed fail to approve the annexation. The MML supports an active investigative PREEMPTION OF MUNICIPAL LAND 7) Procedures should be established to effort to identify sources, violators and USE AUTHORITY encourage territorial agreements between the existing sites of hazardous material. Such The MML strongly opposes any further investor owned electric system that serves the investigative efforts should include advance pre-emption of municipal land use regulations municipality and the rural electric co-op that notification to municipal officials. by the General Assembly. serves the area to be annexed. The MML further recommends 8) The right of a property owner to clarification and limitations of the liabilities COLLECTION OF SPECIAL TAX BILLS voluntarily agree to annexation shall be cities may have for unknown hazardous The MML urges the General Assembly to protected. materials. pass legislation authorizing municipalities 9) Municipalities be granted clear to collect special tax bills for property authority to annex areas along a road or SUSTAINABLE DEVELOPMENT maintenance code violations in the same highway up to two miles from their corporate The MML supports policies, legislation manner as for delinquent property taxes. limits for use in development, creation of and incentives that lend themselves to industry or services that support growth, sustainable development. Such smart growth MUNICIPAL ACQUISITION OF LAND unless there exists opposition from one of the policies and legislation will help establish The MML strongly opposes any attempt contiguous cities. Missouri as a competitive area with cost to limit a municipality’s power of eminent effective public systems. It also promotes domain. The MML further opposes any EXTENSION OF MUNICIPAL SERVICES the re-use of neighborhoods with their requirement to pay “damages” to nearby INTO ANNEXED AREAS existing infrastructure, thereby supporting property owners when a municipality The MML strongly opposes any legislation the established schools, churches, firehouses purchases or condemns land for public that restricts the ability of a municipality and systems that promote stability. However, purposes. The MML also opposes legislation to extend municipal services into newly development outside established systems that would encourage property owners to annexed areas. Further, the MML urges and areas should not be discouraged when challenge, risk free, condemnation settlements the repeal of current laws that restrict the existing systems are at capacity and can offered in good faith. extension of municipal services into annexed be expanded and sustained with new areas. Specifically, amend Section 247.165 revenue from the new development without EXTRATERRITORIAL PLANNING AND RSMo to remove the six month time period negatively impacting existing systems. ZONING POWERS after an annexation for the municipality and The MML supports a triple bottom line The MML supports the amendment of water district to develop an agreement to (sustainability) approach to municipal and Sections 89.144 and 89.145, RSMo to extend to provide water service to the annexed area. state policy and planning efforts balancing all municipalities in the state extraterritorial In the creation or expansion of special economic, community and environmental planning, zoning, subdivision and code use districts i.e. sewer, fire etc. that encroach factors in decision making. enforcement powers in the surrounding or overlap a municipal jurisdiction, the unincorporated areas. Additional provisions municipality should have the legal grounds URBAN GROWTH INCENTIVE should include mandatory representation of to file as an “Exceptor” and be notified via The MML recommends that existing residents in the areas affected on planning certified mail of the filing of the petition. statutes be revised to require that central and zoning boards during consideration of An exceptor is a party that can file water service adequate for fire protection, issues related to their area and the retention exceptions to the legal petition requesting the storm water management infrastructure and of the primacy of the extraterritorial powers formation of the district. state approved sewer service be provided by municipalities regardless of whether or not Current state law only allows municipalities prior to development of a subdivision and the respective county has adopted planning to file exceptions when water districts are to require adequate easements for utilities. and/or zoning procedures. created or expanded. This authority should The MML opposes any regulatory be granted to municipalities when all special changes by the Department of Natural LOCAL GOVERNMENT BOUNDARY districts are created or expanded. When Resources (DNR) that would encourage the ADJUSTMENT creating a special district the filing party should development of subdivisions with separate The MML urges the immediate adoption be required to notify the municipality of the water supply, wastewater collection and of legislation amending the annexation petition to create the special district. The MML storm water management systems developed statutes to provide that: opposes legislation that would require cities to adjacent to a municipal system. Existing 1) The current annexation procedures provide municipal services beyond municipal regulations should be actively enforced by be simplified and expedited to the greatest boundaries. the DNR. extent possible; Municipalities should be given the authority 2) Publicly held land be exempt from the to set urban service standards that apply to all election requirements; providers within municipal corporate limits.

22 / November 2013 The Missouri Municipal Review www.mocities.com ENERGY renters who have left the municipality. Repeal HEALTHIER LIFESTYLES The MML endorses incentives that foster of this law would cause increases in water and The MML encourages all municipal transition to alternative and renewable clean sewer user fees to compensate for the rise in leaders and members of the General Assembly energy sources, produced and delivered in uncollectible accounts. to increase access to and affordability of the state, including but not limited to, solar Further, MML supports legislation healthy food and beverage choices. Equally energy, wind power, geothermal, nuclear providing the authority to municipally as important, communities should maximize energy, synthetic fuels, biomass, methane owned utilities to hold the property owner access and incentives to participate in safe, gas, and the continued examination of and tenant jointly responsible for electric, gas, multimodal transportation choices, mixed improvement in the conservation of energy. refuse collection and other utility bills. used development, and affordable physical In order to prolong the supply of our natural Utility billing polices should be left to local activity, both indoors and outdoors. resources, the MML endorses the policy officials who are ultimately responsible for of energy efficiency in order to ensure the proper management of municipal utilities. RECREATIONAL USE LEGISLATION conservation as the most effective means of The MML urges the state of Missouri to dealing with the energy situation, such as the RECAPTURE AGREEMENTS enact Recreational Use Legislation to protect weatherization of existing buildings. The MML urges the General Assembly to landowners from civil liability if they let their pass legislation authorizing municipalities property be used by others for recreational LAND USE AND PERMITTING to enter into agreements with developers purposes without charging a fee for profit. CONTROLS OVER ALL STRUCTURES, to construct certain public improvements INCLUDING THOSE RELATED TO or excess utility capacity that would benefit MISSOURI’S LAND AND WATER ALTERNATIVE ENERGY SOURCES other properties not yet subdivided or served CONSERVATION FUND PROGRAM New facilities should be harmonious with by such facilities. The city would recapture The MML supports the full funding of other structures and uses as judged by local for the developer a portion of the costs the Land and Water Conservation Fund, in planning and zoning practices and related associated with the construction of these particular, the renewed allocation of LWCF construction codes. A statewide standard public improvements by requiring properties funds to each state. should not supersede local ordinances benefiting from the improvements to pay a because communities differ too much in proportional share of the installation of these The MML Policy Statement is available online at density, architectural features, history, and oversized or expanded public improvements www.mocities.com. other neighborhood factors for one standard before connecting or using said facilities. to address every variable in every community. The MML discourages prohibitions on renewable energy facilities that might include solar panels, wind turbines, windmills, water structures, underground heating and cooling fields and facilities yet to be defined. The MML encourages each locality to consider appropriate policies to encourage reasonable uses.

MOVING UTILITIES IN PUBLIC RIGHTS- OF-WAY The MML strongly opposes any legislation that would prohibit or restrict a municipality’s authority to require a utility company to pay the cost of relocating their facilities located in the public rights-of-way when the request is for a public purpose.

COLLECTION OF DELINQUENT UTILITY BILLS The MML opposes the repeal of the state law authorizing municipalities to hold the property owner and tenant jointly responsible for delinquent water and sewer bills. Approximately 50 percent of Missouri’s municipalities have adopted such a policy, because it is virtually impossible to sue

www.mocities.com The Missouri Municipal Review November 2013 / 23 SUPREME COURT TERM PREVIEW: LOCAL GOVERNMENT AT THE HIGH COURT by Lisa Soronen and Victor Kessler

fter the justices ruled discriminating on the basis of race or “public highway” (including a trail) on on same-sex marriage, other factors also can give rise to an FHA the right of way within one year. If the the Voting Rights Act, claim. Because redevelopment plans Court rules in favor of the private land and affirmative action frequently, though unintentionally, can owner in this case, local government at theA end of June, attorneys and court- have disparate impacts on minorities, efforts to expand Rails-to-Trails will be watchers anxiously awaited the next Mount Holly could expose cities and stymied. The SLLC will file an amicus cases this fall. The highest court in the other local governments to increased brief in this case. land has already agreed to hear cases liability. Sprint Communications Company affecting local government on everything In McCullen v. Coakley, the Court v. Jacobs arose out of a telecom dispute from controversial topics such as will examine the constitutionality of in Iowa. Sprint refused to pay another legislative prayer and demonstrations a Massachusetts law that creates a 35- company’s intrastate access charge for near abortion clinics to more esoteric foot “buffer zone” around reproductive a service and asked the Iowa Utility subjects like federal court abstention. healthcare facilities into which Board (IUB) for confirmation that it Here are a few cases to watch for this demonstrators are not allowed to enter. was under no obligation to do so. The term that may have a big impact on local A 2008 case, Hill v. Colorado, upheld a IUB ordered Sprint to pay, and Sprint government. similar law against a First Amendment challenged the IUB’s decision in federal Town of Greece v. Galloway challenge because it (1) addressed a and state courts simultaneously. Under might redefine the Court’s approach legitimate state concern for the safety the Younger abstention doctrine, the to legislative prayer practices. Under and privacy of individuals using the Eighth Circuit ruled that the district the 1983 case Marsh v. Chambers, the facilities, (2) was “content-neutral” court should not hear the case, if at all, court held that a state legislature could in that it applied to all demonstrators until the state court review of the IUB hire a chaplain to deliver a prayer at equally regardless of viewpoint, and (3) decision was complete. The Supreme the beginning of its sessions as long regulated the “time, place and manner” Court took the case to decide whether it as the practice was not “exploited to of speech without foreclosing or unduly mattered for the purposes of abstention proselytize or advance any one, or to burdening the right of demonstrators that Sprint initially asked the IUB for disparage any other faith or belief.” The to communicate their message. A approval – a remedial proceeding – or Town of Greece’s official policy allows broad ruling by the justices could have if Younger abstention only applies where any person of any or no denomination to sweeping consequences beyond this the state brings a party before the court deliver an invocation at the beginning of particular context, as local governments or administrative board in a coercive town board meetings, and the Town does are continually challenged to strike a proceeding. Most remedial proceedings not approve or even examine the prayer balance between free speech rights and happen on the local level and involve in advance. In practice, all but four the duty to protect their citizens from zoning variances, the denial of gun invocations (two Jewish, one Baha’I, and harassment at clinics, funerals, political permits and the like. The question is one Wiccan) have been led by Christians. events and other locations. The State whether a federal court should be able to The Court will review a “totality of the and Local Legal Center (SLLC) will file review this type of decision immediately circumstances” test employed by the an amicus brief in this case. or whether it should abstain until the Second Circuit to declare the Town’s In Marvin M. Brandt Revocable state proceedings have ended. The SLLC practice an unconstitutional violation Trust v. United States the Court will will file an amicus brief in this case. of the Establishment Clause and revisit decide a case affecting “Rails-to-Trails,” This term is already shaping up to its holding in Marsh for the first time in where state and local governments be an exciting one for local governments. three decades. The case could impact convert abandoned railroad corridors Although the cases set for argument so far many local bodies which begin their into recreational trails. The question in might lack the glamour and media hype sessions with a prayer. this case is, who owns an abandoned of this summer’s rulings on same-sex In Mount Holly Gardens Citizens railroad right of way: the United States marriage, voting rights and affirmative in Action v. Township of Mount Holly, or a private land owner living next to the action, the issues before the Court deal the Court will decide whether the Fair right of way. In 1875 Congress passed a with some of the essential mechanisms Housing Act (FHA) allows plaintiffs law granting rights of way to railroads of local governance across the country. to bring disparate impact claims in through public land. Over the course Whether the justices will rule in favor of addition to disparate treatment claims. of the next century, as trucking became local governments remains to be seen. The FHA makes it unlawful to “refuse a more popular method of transport, to sell or rent . . . or otherwise make numerous railroads abandoned these Lisa Soronen is the executive director of the unavailable or deny, a dwelling to any rights of way. The United States argues State and Local Legal Center (SLLC). In this person because of race, color, religion, that another federal statute allows the role, Lisa files amicus curiae briefs to the United sex, familial status or national origin.” If United States to retain the railroad States Supreme Court on behalf of members of a person is treated differently on account right of way if it is abandoned. If that the Big Seven in cases involving federalism. Lisa of a protected status, he or she may sue is the case, and the abandoned right of organizes moot courts for attorneys representing under the FHA. The question presented way is located in a municipality, the state and local government at the Supreme by this case is whether a policy or municipality automatically receives it Court. Victor Kessler served as the Legal Intern action (here, a plan to redevelop a low- from the federal government for free. If at the State and Local Legal Center, where he income minority neighborhood) that the abandoned right of way is located researched legal issues in Supreme Court cases disproportionately affects a protected elsewhere, a state or local government affecting state and local governments. class of citizens without intentionally receives it for free if it establishes a

24 / November 2013 The Missouri Municipal Review www.mocities.com CAN THE THREAT OF DEFUNDING EDUCATION SLOW DOWN TAX CUTS? by Penelope Lemov

he anti-tax bandwagon ways that drove Missouri’s legislators with suppliers and other businesses. has been pretty crowded to see tax cuts as a means to keep the These steps remove consumer demand these past few years, state’s economy in gear. However, from the economy, which in turn particularly when it comes when the vote to override took place discourages businesses from making to taxingT corporations. Kansas, for one, in September, Nixon’s education new investments and hiring.” slashed its tax rates for corporations last argument prevailed and the legislature Local school districts have year. Arizona’s corporate income tax is failed. (Republican legislators promise eliminated 324,000 jobs nationally set to fall by 30 percent by 2017. And, to bring up the issue again next session, since July 2008, according Bureau of Idaho partially repealed its business but for now the tax cut is dead.) Does Labor Statistics data. “This decline has personal property tax. this mean corporate tax cutting in the been unprecedented,” Leachman and One of the driving forces behind states has hit its limit and that education Mai write. “Normally, local education these tax-cutting policies is jobs: States funding is the blunt instrument that has employment grows each year to keep see a business-friendly environment – turned it back? pace with an expanding student full of tax cuts, credits and incentives Nixon’s education funding population. – as a way of luring businesses to their argument has some big numbers to “In the long term, the savings states or as a way of keeping their back it up. A report from the Center from today’s cuts may cost states much states attractive to existing companies. on Budget Policies and Priorities – more in diminished economic growth,” But a recent tax bill veto fight in issued a day after the legislature failed according to the report that echoes Missouri, raises a question about to overturn the veto – detailed the the argument Gov. Nixon made in his legislators’ appetite for tax cuts when state of public education funding. The effort to preserve his veto. “To prosper, it means defunding essential services report’s authors found that in the past businesses require a well-educated like education or public safety. six years, states have been defunding workforce. The deep education The Republican-dominated education in unprecedented amounts. spending cuts states have enacted legislature passed a bill to cut the That defunding has, in turn, led to huge will weaken that future workforce by corporate tax rate nearly in half (and job losses – losses that run counter to diminishing the quality of elementary lower the state’s top personal income state moves to attract new jobs via tax and high schools.” tax rate as well). In June, Gov. Jay cuts. More specifically, the report, based on state budget documents, found that: Nixon, a Democrat, vetoed the bill on Penelope Lemov is a correspondent with the grounds that the loss in revenue – • At least 34 states are providing less Governing Magazine. around $700 million – would seriously funding per student for the 2013-14 defund education, making Missouri school year than they did before This article is reprinted with permission a less attractive state for business the recession hit. Thirteen of these from Governing Magazine. Find the relocation. Many legislators disagreed states have cut per-student funding article at http://www.governing.com/ and set a September date to override by more than 10 percent. columns/public-finance/col-threat- the veto. • Even though most states are defunding-education-slow-down-tax-cuts. Things got more interesting experiencing modest increases html from there. Texas Gov. Rick Perry got in tax revenues, at least 15 are involved, exhorting the legislature to providing less funding per student go full speed ahead on tax cuts and to local school districts in the new override the governor’s veto. It was an school year than they provided a unusual intrusion into another state’s year ago. legislative process, but that was not • Where funding has increased, it has the only message Perry brought to the generally not increased enough to Show Me State. He also set out to lure make up for cuts in past years. Missouri businesses to Texas, which he Since local school districts are hailed as a low-tax, business-friendly rarely able to replace lost state aid state. Perry’s rationale: Interstate on their own – 44 percent of overall competition for business leads states education spending is from the states – to institute more business-friendly, it’s not surprising there are ramifications economy-growing policies. He doesn’t from these tax cuts. According to the mind, when Louisiana officials come report’s authors Michael Leachman to his state to woo Texas businesses. and Chris Mai, “The spending cuts It makes both states sharpen their have caused school districts to lay competitive game. off teachers and other employees, It was, perhaps, with an eye on reduce pay for the education workers neighboring Kansas and its tax-cutting who remain, and cancel contracts www.mocities.com The Missouri Municipal Review November 2013 / 25 MML's 79th Annual Conference

issouri Municipal League members gathered in Branson, Mo., in September for the League's 79th Annual Conference. This was the League's first annual conference at the Branson Hilton & Convention Center. MoreM than 135 exhibitors shared their services with members, and Steve Uzzell presented a stunning keynote on the topic of "Open Roads, Open Minds." Uzzell shared his award-winning photos as a National Geographic photographer. Be sure to mark your calendars for next September when the League meets for the 80th annual conference in St. Charles.

26 / November 2013 The Missouri Municipal Review www.mocities.com www.mocities.com The Missouri Municipal Review November 2013 / 27 MML news . . .

MML Honored For Municipal MML Welcomes Sarah Garmer to the Team! Governance Institute The Missouri Society of MML welcomes a new Event and Training Association Executives presented its Specialist, Sarah Garmer, to our team! Sarah Awards of Excellence in Association will help organize all of the MML conferences, Management at its annual meeting meetings and training opportunities for members Sept. 17 in Jefferson City. The Missouri across the state. Sarah recently completed a Master Municipal League is proud to have been selected to receive an honorable of Science degree in Recreation, Park and Tourism mention for the Municipal Governance Administration from Western Illinois University in Institute, a program to reward MML Macomb, with an emphasis in tourism and event members' commitment to the continual planning. She has spent a lot of time in Missouri process of learning new skills and visiting family, interning at the Mark Twain abilities in the local government field. Boyhood Home and Museum in Hannibal and The Municipal Governance enjoying many of the diverse tourist attractions Program continues to grow. Nearly and activities Missouri has to offer. Sarah is 150 local officials are participating in Sarah Garmer happy to call Missouri her new home, and looks the program and more than 70 have MML Event & forward to working with members of the Missouri already qualifies as Certified Municipal Training Specialist Municipal League. Officials. Visit www.mocities.com to learn more about this exciting new program from MML.

New MML Board Members . . .

Matthew Paul Martin Bob was Mayor Pat Robinson was has repre- elected in Kelly has elected to the sented local April 2009 served as Hazelwood governments to General an elected City Council in the state Seat A of official for to represent of Missouri Springfield the city of Ward 1 in since 1992. City Council. Brentwood 1994 and Whether as He served for more than served in that city attorney, on the Plans 20 years; first capacity for assistant city and Policies elected as an 15 years until attorney, Committee alderman in he was elected Mayor on April prosecutor, or special counsel, and the Community Involvement 1993 and then mayor in 2001. 7, 2009. Paul has advised governing bod- Committee. He was unanimously Previously he has served on He has served on the ies, drafted legislation, enforced elected Mayor Pro Tem by his the Executive Board for the St. National League of Cities local ordinances, and litigated on peers in 2011 and was sworn in as Louis County Municipal League, Finance, Administration and all kinds of municipal issues. He Mayor when Jim O’Neal resigned chairman of the Mayors of Small Intergovernmental Relations was the lead attorney for local in May, 2012. Voters elected him Cities Organization of St. Louis mayor again in April, 2013. County and the legislative chair Policy and Advocacy Committee governments in the case of Wright for Missouri and Kansas for since March 1999; North County v. State of Missouri, which saved He currently serves on the the International Conference Incorporated Board of Directors Missouri municipalities and fire Board of Directors of Springfield of Shopping Centers (ICSC). from January 2010-December 2012 protection districts millions of Sister Cities Association, the Currently, Kelly serves on the and then on the Executive Board dollars in overtime payments. He Board of Directors of the Urban St. Louis County Economic from January 2013 to the present; is a member of the International Districts Alliance, the Board Collaborative Development St. Louis County Municipal Municipal Lawyers Association of Directors of PIC-West, and Committee and as the ICSC League from June 2013 to the and an officer of the Missouri is vice-president of the Greene Missouri and Kansas State present; and he served on both Municipal Lawyers Association. County Mayor’s Association. In Alliance Public Sector co-chair. the Elm Grove and the Missouri He is also an author and pre- addition, he was recently selected Bottom TIF Commissions. as the back-up member of the He was also a member of the senter on many topics of concern FOCUS St. Louis 2005 – 06 Matthew has served on Regional Homeland Security to municipalities. Leadership St. Louis program. numerous committees on behalf of Oversight Committee. the City including the Hazelwood Stephens owns CascadeM3, Mayor Kelly was formerly Harvestfest Committee, North LLC and has more than 35 years the village administrator for County Athletic Social Club experience in human resource the Village of Twin Oaks and President, Florissant Valley management, corporate and currently is a vice president Jaycees, and St. Martin Des Porres not-for-profit training, general of Business and Community Men’s Club. management, and consulting. Development for Eagle Bank and Trust of Missouri.

28 / November 2013 The Missouri Municipal Review www.mocities.com Editor's Note: In the September 2013 issue of the The Review, the City of Springfield MML Calendar of Events was incorrectly listed as the only municipality in the nation with a December Gold Medal Award-Winning Parks 3-4 56th Annual Missouri S & T Asphalt Conference, Rolla, Mo. and Recreation Department. Instead, the community is the only one in the January nation with the Gold Medal Award- 8 Missouri General Session Convenes Winning Parks and Recreation 21 Last Day of Candidate Filing Department, American Chamber of 28 Final Certification to Election Authority Commerce Executives Chamber of the Year award and accreditation in law enforcement, fire, emergency February management and public works. 11-12 MML Legislative Conference, Jefferson City, MO 25-28 Missouri Park and Recreation Assn. Annual Conference, Lake Three Missouri communities have Ozark, MO been honored as Gold Medal Award- Winning Parks from the National For more events, visit the events calendar at www.mocities.com. Recreation and Parks Association, including Springfield, Lee's Summit and Columbia.

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32 / November 2013 The Missouri Municipal Review www.mocities.com News From The Bench

by David Davis

EMPLOYER REQUIRED TO CHALLENGE TIMELINESS OF A MHRA CHARGE OF DISCRIMINATION BEFORE THE MCHR OR THROUGH A WRIT OF MANDAMUS

by David Davis

Farrow v. St. Francis Med. Ctr., No. SC92793 right to sue on Nov. 16, 2009. On Dec. sought judicial review of the MCHR is- (August 27, 2013) 19, 2009, the MCHR issued its notice of suing a notice of right to sue pursuant right to sue to Farrow. to RSMo § 213.085.2 within 30 days of Farrow was employed by St. Farrow filed her lawsuit against the MCHR’s issuance of the notice of Francis Medical Center as a nurse. She the hospital and its doctor on Mar. 18, right to sue. Because the hospital failed claimed that her employment with the 2010, claiming sexual harassment and to challenge the timeliness of the charge hospital was terminated on Dec. 10, retaliation in violation of the Missouri before the MCHR or within the time 2008 because she refused the sexual Human Rights Act, among other claims. prescribed by RSMo § 213.085.2, the advances made by one of the hospital’s St. Francis Medical Center sought dis- court held that the hospital waived its doctors in Dec. 2005 and Feb. 2006. Far- missal of Farrow’s claims because she timeliness argument.  row filed her charge of discrimination failed to file her complaint with the with the Missouri Commission on Hu- MCHR within 180 days as required by man Rights (MCHR) on Jul. 27, 2009. the statute. The court stated that by is- David Davis is an attorney, founding member Therefore, her charge of discrimination suing the notice of right to sue letter, of Davis Law, LLC and author of the Missouri Local Government Employment Law Handbook. was filed more than 180 days, but less the MCHR presumptively found that than 300 days after her discharge. He counsels and defends local government and the complaint was timely filed because businesses in the areas of employment law, The Equal Employment Opportu- the MCHR did not have jurisdiction to commercial litigation, civil rights and general nity Commission (EEOC) was assigned issue the right to sue unless the charge litigation. Contact him at (314) 863-6868 or to investigate the charge of discrimi- was timely filed. The court held that [email protected]. Follow him on Twitter @DavisLawLLC. nation and issued Farrow a notice of St. Francis Medical Center could have

www.mocities.com The Missouri Municipal Review November 2013 / 33 2013 Index of Articles and Authors

City Profile President’s Report - 4, May 2013 Author Index City Of Eureka: Proud Past, Promising President’s Report - 4, Jul Bliss, Daniel - 26, Jan Future - 6, Jan President’s Report - 4, Jan Bontrager, Drew - 17, May City Profile: Chesterfield Celebrates 25 Davis, Davis S. - 24, May Years! - 16, Jul Municipal Administration Donnewald, Pam - 15, May City Profile: New Fulton Police Station 50 Survival Tips For Elected City - 17, Mar Officials - 22, Sept Eggers, William D. - 12, Sept City Profile: Springfield, 175 Years Distinguished Budget Presentation Ehrenhalt, Alan - 8, Sept Young! - 4, Sept Awards Program - 23, Jul Garrett, Michael - 9, Mar Grandview Celebrates Its Centennial, Small Towns Cooperation Board - 20, Hagedorn, Luke - 13, Mar Builds For Next 100 Years - 22, Jan Jul Hensley, Barbara - 5, Mar Grandview Celebrates Its Centennial, Social Media And Municipal Employees: Hirt, Jeff - 5, Mar Builds For Next 100 Years - 22, Jan Tweet Them Right - 14, Sept Holloway, Laura - 25, Jan The Latest Changes To The Family And Isch, Laura - 6, May Economic/Community Medical Leave Act - 24, May Jadali, Joan - 23, Jul Development Treatment Of Seasonal Employees Katerndahl, Dean - 5, Mar A 1980s Formula For Economic Under Health Care Reform - 22, Mar Development Still Successful - 14, Jan Lacy, Daniel - 20, May Building More Effective Delivery Of Parks and Recreation Lauber, Joe - 14, Jan Economic Development Projects - 26, City Of Cameron Parks And Recreation Lein, Lori - 14, Sept Jan - 17, May Lusk, Lucille - 20, Jul Cashing In: Missouri Communities Mason, Kenneth A. - 22, Mar Support Local Business - 25, Jan Public Safety McMahon, Edward T. - 10, Jan City Of Perryville: City Leaders Share Protecting Employees From Falls - 15, Mello, James E. - 18, Jul Strategies Of Success - 12, Jan May Nixon, Ana - 22, Jan Creating Sustainable Places - 5, Mar Seasonal Influenza And Immunizations Parris, Matthew - 12, Jul Enacting The Marketplace Fairness Act In The Workplace - 20, Mar Will Help Missouri Retailers And The Working Together To Promote Pessina, Michael - 8, May Missouri Budget - 24, Mar Community Health And Wellness In Randolph, Dennis - 22, Jan Enhancing And Improving Overlooked Missouri - 28, Mar Rann, Jeanine - 14, Jan Everyday Nature - 9, Mar Ray, Mike - 8, May Public Works Evaluating Risk: A City’s Guide To Renner, Charles - 18, Jan Environment Ranks High Priority For Analyzing A Request For Economic Rexroat, Dave - 20, Mar Development Incentives - 20, Jan Kansas City - 20, May Roten, Gayla - 14, Jan Leadership By Doing! Chesterfield’s Environmental Protection Agency Shipman, Jay - 33, Jul Recovery From The Flood Of 1993 - 18, Resources - 19, Mar Jul Five Things You Can Do To Save On Spykerman, Mark - 20, Jan Missouri Department of Economic Energy In Your Utility - 18, Sept Strahley, Scott A. - 18, Sept Development Programs - 30, Jan Kansas City’s Largest Infrastructure Sutherland, Mike - 24, Mar Public-Private Partnerships - 18, Jan Project Goes Green - 6, May Tucker, Libbey Malberg - 16, Jul The Distinctive City - 10, Jan Municipal Stormwater Wizardry - 13, Wallace, Ruth - 13, May Unclaimed Property - 4, Mar May Wernig, Darin - 17, Mar Public Works Projects At A Glance - 18, Wood, Julie - 6, Jan May Legislation Worthington, Kyle - 11, May Regional Cooperation For Biosolids Communicating With Legislators - 31, Ziegenfuss, Rick - 8, May Jan Management - 8, May Zweifel, Clint - 4, Mar Devolution And Arrogance: State Can’t The Art Of Snow Removal - 11, May Resist Bossing Around Localities - 8, Sept Technology Disaster Recovery: A Guide To Data Missouri Municipal League Backup - 12, Jul Director’s Report - 5, May On-Hold Communications In The Director’s Report - 5, Jul Digital Age - 33, Jul FAQ: MML’s Municipal Governance Preparing For Electric Vehicles: How Institute - 26, Jul Missouri Communities Can Get Ready - 13, Mar FAQ: Use Tax - 26, Mar TechTalk: Getting Mobile Right: Six Missouri’s Local Government Week - Steps To Success In Government - 12, 28, Jul Sept

34 / November 2013 The Missouri Municipal Review www.mocities.com www.mocities.com The Missouri Municipal Review November 2013 / 35