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Jun 1928B1 15:12:52 Yia Fax t_", LMC -) 651 429 B629 Administrator Page B81 Of 8M {L( I I.lIaiJu" ..J .'r/in",,,,,lu O~i.... Ci{i~1i im.llnu{j"'l' ",".,./I.:".~ 145 University Avenue West, St. Paul, MN 55103.2044 Phone: (651) 281.1200. (800) 925.1122 TDD (651) 281-1290 LMC Fax: (651) 281-1299 LMCIT Fax: (651) 281.1298 Web Site: http://www.lmnc.org MEMORANDUM To: City Manager, Administrators and Clerks From: James F. Miller Re: Potential Slale Budgel Shutdown Dare: June19,2001 The Minnesota Legislature adjourned at midnight on May 21, 2001 without reaching an agreement to appropriate money to fund operations of state government for the biennium that begins on July 1, 2001. Under the Minnesota Constitution, funds from the state treasury cannot be expended by an agency unless the Legislature has made an appropriation. Although the Legislature is continuing to exchange and discuss budget proposals, unless it agrees to approp"riate money for state government operations in the next 21h weeks, non-critical operations of slate agencies may be forced to cease effective July 1, 2001. If this occurs, state employees of non-critical operations cannot report to work until an appropriation has been secured. The implications of a state shutdown could extend beyond the state to counties and cities. The Commissioner of Revenue distributed a memo to all local units of government about the implications of the budget impasse. The major message in that memo is to proceed to plan for 2002 as if current law will not be changed. However, issues remain about how to plan for the: remainder of 2001 and 2002. Current law does not anticipate a state shutdown and we have never had to consider the implications of such an event. Listed below are several issues that you should consider as you prepare for your city's operations in the short term. Please note that state agencies have not finalized their plans for a shutdown and that some of these potential implications may be avoided if certain aspects of state operations are deemed essential and thus are not shut down. Although we continue to believe that a state shutdown is not likely, cities should begin making plans for such an event. Potential Impacts Delay In the distribution of 2001 state aid paymentS-Although the LGA and HACA formulas