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Jun 19 2881 15:13:29 Via Fax -> 651 429 8629 Administrator Page B8Z Of 8B4 are open and standing appropriations thaL do noL need specific legislative aCLion this year, a state shutdown could affect the distribulion. City LGA and HACA are paid on or around July 20. lfa stale shutdown occurs, the Departments of Revenue and Finance will not have the personnel necessary to distribute the payments. The statewide total ofthese two programs is approximately $600 million, $300 million of which would otherwise be distributed in luly. Consider the implications on your reserves and cash flow needs if your LOA and HACA were delayed. Cities faced with potential cash flow concerns should be aware that state law provides a couple of short-term financing tools that ciLies may want to consider using. In particular, Minn. Stat. Sec. 412.271, subd. 3, authorizes sLatutory city treasurers to mark city checks "not paid for want of funds." Once funds become available the treasurer can pay the checks in the order originally issued. Charter cities may find similar authority in their chaners. In addition to marking checks "not paid for want of funds," statutory and charter cities, under Minn. Stat. Sees. 412.261 and 410.325, may borrow money to pay current expenses by issuing tax anticipation certificates. While strictly speaking only charLer cities can issue these certificates in "anticipaLion of state aids," statuLory ciLies may wanL to consider their use in anLicipation of receipL of fall tax payments. Because both these financing tools are subject to a number of conditions and limitations, cities should consult with their city attorney and/or financial advisor before using them Delay in the certification of pay 2002 state aid payments-Cities need to know the level of funding in slate aid programs in order to establish their budgets and set their property tax levies. Assuming current law state aid levels could be problematic given that the preliminary levy that musL be set by September 15 effectively becomes a self-imposed levy maximum. You may want to assume that HACA will be eliminated and that your levy will need to be increased to cover the lost revenoues. Both the House and Senate proposals include significant increases in LOA, but at this time, it is probably safest to assume that t.he 2001 amount will be available next year. ~Iay in the certification or pay 2002 levy lirnits- The, House bill includes two years of levy limits, beginning with the levies set this fall for payment in 2002. The Senate: and the Governor have apparently agreed to levy limits. However, you may not have noLice of the amount. of your levy limit. As suggested by the Revenue Commissioner, iL is probably best Lo proceed as if current law is in place. Delay in the Distribution of Municipal State Aid-The Legislature must biennially appropriate the distributions for Municipal State Aid (MSA). The MSA money is divided int.o maintenance and construction accounts. The next maintenance payment would be made to cities over 5,000 around Lhe 20Lh of July. The Department of Transportation (DOT) estimates the amount would be about $60 million going out to both counties and cities, with about $10 million allocated just for cities. Of course, if government shuts down, employees at the departments of Transportation and Finance would not be making the deposits into the accounts. State aid projecLs would be at risk as well with a government shutdown; if you have projects thaL are awaiting the distribution of these funds, consider developing contingency plans for the projects. The DOT has advised the League that it will be sending cities a letter explaining some of the more significanl DOT implications associated with a state government shutdown. Local Cil)' Sales Taxes-For most cities with local option sales taxes, the state Department of