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HomeMy WebLinkAbout2010-09-15 PACKET 05.A.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # DATE 515/10 5 4. PREPARED BY: Community Development Howard Blin ORIGINATING DEPARTMENT STAFF AUTHOR COUNCIL ACTION REQUEST: Receive response to September 1, 201 Open Forum questions from the Cottage Grove VFW regarding costs for extension of utilities and the City's fees on charitable gambling. STAFF RECOMMENDATION: Receive response to September 1, 201 Open Forum questions from the Cottage Grove VFW regarding costs for extension of utilities and the City's fees on charitable gambling. BUDGET IMPLICATION: $NIA BUDGETED AMOUNT ADVISORY COMMISSION ACTION: F PLANNING ❑ PUBLIC SAFETY ❑ PUBLIC WORKS F PARKS AND RECREATION ❑ HUMAN SERVICES/RIGHTS ❑ ECONOMIC DEV. AUTHORITY El SUPPORTING DOCUMENTS: DATE N/A $N/A ACTUAL AMOUNT FUNDING SOURCE REVIEWED APPROVED DENIED F ❑ ❑ ❑ ❑ ❑ ❑ ❑ F ❑ 1:1 ❑ ❑ ❑ 1:1 ❑ 1:1 ❑ F F F F1 MEMO/LETTER: Memo from Robin Roland and Howard Blin dated 9/8/10 ❑ RESOLUTION: F ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: F OTHER: ADMINISTRATORS COMMENTS: ? (I lio 4 L Admin istrator --- :�— Date CITY OF COTTAGE GROVE MINNESOTA TO: Mayor and Members of the City Council Ryan Schroeder, City Administrator FROM: Robin Roland, Finance Director Howard Blin, Community Development Director r DATE: September 8, 2010 RE: Response to September 1St Open forum At the September 1 St Open Forum section of the City Council meeting, Howard Kittelson, who is Commander of the Cottage Grove VFW Post, asked the following questions: 1) What were the costs for the extension of utilities in 2007 to the VFW? 2) What is the basis for the City's fees on charitable gambling? Responses to these questions are provided below. This information has also been discussed with Mr. Kittleson since the September 1 St City Council meeting. 2007 Utility Extension In 2007 the septic system for the VFW failed. At the request of the VFW the City agreed to extend water and sanitary sewer service to the site. The VFW agreed to be assessed $31,491 for the improvements. This charge included the lateral utility costs attributable to the VFW site and a portion of the trunk utility area charges. Remaining assessments for the project total $13,822. Due to the emergency nature of the utility connections, the City agreed to defer most of the trunk area charges and apply the area charges against only one acre of the six acre site. This charge approximated the amount of the site which was developed. Typically, when utilities are extended to a property, trunk area charges are applied to the entire property. This agreement saved the VFW approximately $60,000. Copies of the 2007 staff report and agreement for this project are attached. Under Minnesota State Statute 349.213, Cities have the Local Authority to impose a ten percent of net profits contribution requirement on lawful gambling conducted within the city's jurisdiction. As such, the City of Cottage Grove code Chapter 2, section 3 -2 -9 (E) reads: "Contributions required: Each organization conducting lawful gambling within the city must contribute to the city each month ten percent of its net profits derived from lawful gambling to a fund administered and regulated by the city without cost to the fund. For purposes of this subsection, "net profits" are defined as gross profits less reasonable sums actually expended for allowable expenses. The city council will make Honorable Mayor, City Council, and Ryan Schroeder Page 2 of 2 disbursements from the fund for lawful purposes as defined by Minnesota statutes section 349.12(s) 25." Minnesota statutes section 349.12(s) 25 includes such lawful purposes as "(1) ... contributions to a 501( c ) 3 or festival organization" and/or "(7) recreational, community and athletic facilities and activities intended primarily for persons under age 21." Since 2006, the City's Charitable gambling fund has provided contributions to the Youth Service Bureau ($15,000), the Cottage Grove Jaycees ($28,000) and Strawberry Fast ($15,000) as well as to a private benefit ($692). Since 2006, the Cottage Grove VFW has paid the City $15,215.38 (through June 2010). This amounts to 38% of total money collected ($40,102) in that time period from all gambling organizations within the city. CITY OF l lsv�ffl MINNESOTA COTTAGE GROVE TO: Honorable Mayor and City Council Ryan Schroeder, City Administrator FROM: Howard Blin, Community Development Director DATE: May 10, 2007 RE: VFW Utilities Agreement • • The VFW, located at 9260 East Point Douglas Road, has a well and septic system. The septic system was recently inspected by Washington County and found to be failing. The VFW con- tinues to operate by having the septic tanks pumped on a regular basis. Staff has been meeting with the members of the VFW to discuss options for connecting to City water and sanitary sewer services. These utility connections are possible since a sanitary sewer interceptor exists across the west side of the VFW property and a watermain is stubbed to the southeast corner of the property. The means of providing these connections are outlined in this memorandum and an attached report from the City Engineer. = The City Council is requested to approve the following items necessary to connect the VFW to utilities: 1) An agreement which details cost participation and the deferment of some trunk area charges. 2) Feasibility Study on utility extensions. 3) Approval of plans and specifications for utility extensions. 4) Authorization to seek quotes on the construction of utility extensions. The VFW property lies within the Neighborhood 1 South area of the East Ravine. This part of the East Ravine is not scheduled for utility extensions until 2011 or until a comprehensive de- velopment proposal is presented on the Cottage View property, which lies adjacent to the VFW. A Metropolitan Council sanitary sewer interceptor does, however, run across the VFW property and a watermain is stubbed to the southeast corner of the site. Connecting the VFW building to these utilities is a relatively simple project. Absent the potential for negative health Honorable Mayor, City Council, and Ryan Schroeder VFW Utilities Agreement May 10, 2007 Page 2 of 2 effects from the failing septic system on an existing business, utility connections for the VFW would not be considered at this time. The VFW site is 6.1 acres in size, of which only 1 acre is developed. In an attached letter, the VFW has requested that trunk utility area charges and connection fees be deferred on the un- developed area of their site. It is recommended that this request be approved and the deferred area charges be made part of the utility agreement. This approach is consistent with the policy of applying trunk area charges in rural residential areas. Furthermore, the City would collect the remaining charges if the VFW site were fully developed. INT NOT, 111 �, That the City Council approve the agreement with the VFW Post 8752 for utility connections. AGREEMENT REGARDING WATER AND SANITARY SEWER SERVICE AND TRUNK AREA CHARGES - THIS AGREEMENT is made as of 16 2007 by and between the CITY OF COTTAGE GROVE, a Minnesota municipal corporation ( "City") and VETERANS OF FOREIGN WARS COTTAGE GROVE POST 8752, a ,!✓o r'R -�-r CaR / aunder the laws of Minnesota ( "Owner "). Recitals A. Owner is the owner in fee title of certain real estate located at 9260 East Point Douglas Road in the City of Cottage Grove, County of Washington, State of Minnesota, which is legally described on the attached Exhibit A (the "Property "). B. The Property is approximately 6.1 acres in size, and approximately 1.0 acre is improved and operated as a private veterans' club and the remaining 5.1 acres is undeveloped. C. The Property currently uses a private well for water service. Although the Property is not connected to the municipal water system, a water main is located within East Point Douglas Road adjacent to the Property. D. The Property currently uses a private septic system for sanitary sewer. Although the Property is not connected to a municipal sewer system, a regional sewer interceptor owned and operated by the Metropolitan Council is located within an easement on the Property. E. The Property is located within the Metropolitan Urban Service Area (the "MUSA ") but is located outside of the current growth area and is not eligible for the extension of municipal water or sewer service to the Property. The City's current comprehensive plan contemplates that the Property would not receive municipal sewer and water until at least 2011. 310915v2 CAH CT155 -25 F. Recent tests of the septic system on the Property have revealed that the system is failing and that it presents a potential public health hazard. The Owner has determined that replacement of the system is not fiscally practical and has requested that the Property be allowed to connect to municipal sewer and water. G. The City desires to address the potential health hazard by allowing an emergency connection to the municipal sewer and water systems, subject to the terms and conditions of this Agreement. Agreement 1. Recitals Incorporated. The recitals set forth above are incorporated into and made a part of this Agreement. 2. Sewer and Water Main Installation. The Owner petitions for, and the City agrees to undertake and contract for the following public improvements (the "Improvements ") pursuant to Minnesota Statutes Chapters 429 and 444: (a) the extension of the existing water main a distance of approximately 85 feet within East Point Douglas Road adjacent to the Property; and (b) the installation of a 30" sanitary sewer main that will connect to the regional sewer interceptor line and extend approximately 80 feet, where the Property can connect a service line to the sewer main to 3. Owner Warranty. Owner represents and warrants that it holds a fee simple ownership interest in the Property, that it has full legal power and authority to encurnber the Property as herein provided, and that as of the date hereof the Property is not subject to any liens, interests or encumbrances, except as listed on the attached Exhibit B. 4. Assessment. The total estimated cost of the Improvements is $46,338.50, of which the City has determined that $31,491.33 is allocable to the Property and the remainder is a general public benefit. Owner requests that its allocable share of the cost of the Improvements, in the estimated amount of $31,491.33, be assessed against the Property. The remaining balance of $14,847.17, which will be used for oversizing the trunk main capacity and approximately one -third of the engineering costs, which is a general benefit to the public, will be paid by the City from its Trunk Utility Fund. 5. Waiver of Notice and Hearing. The Owner waives notice of hearing and hearing pursuant to Minn. Star. Section 429.031 and notice of hearing and hearing on the special assessments to be levied pursuant to Minn Star. Section 429.061, and specifically requests that the special assessment be levied against the Property without hearings. 6. Waiver of Appeal. The Owner waives the right to appeal the levy of the special assessments in accordance with this Agreement pursuant to Minn. Star. Section 429.081, or reapportionment thereof upon land division pursuant to Minn. Star. Section 429.071, Subd. 3, or otherwise, and further specifically agrees with respect to such special assessments against the Property or reapportionment that: 310915v2 CAH CT155 -25 2 a. Any requirements of Minn. Stat., Chapter 429 with which the City does not comply are hereby waived by the Owner; b. The increase in fair market value of the Property resulting from the availability of the Improvements will be at least equal to $31,491.33, and that such increase in fair market value is a special benefit to the Property; C. The proposed assessment of the cost of the Improvements is reasonable, fair and equitable and there are no other properties against which such cost should be assessed; and d. The Owner further specifically waives notice and right to appeal reapportionment of such special assessments upon land division pursuant to Minn Star., Section 429.071, Subd. 3. 7. Installments. The Owner understands and agrees that the City will provide for the payment of such special assessments in installments over five years bearing interest at seven percent per annum. 8. No Deferment. Owner represents and warrants that the Property is not so classified for tax purposes as to result in deferral of the obligation to pay special assessments; and Owner agrees that it will take no action to secure such tax status for the Property during the term of this Agreement. 9. Installation of Service Lines. The Owner will install, at its sole cost and expense, the service lines that connect the Property to the Improvements. The installation must be completed in accordance with all applicable ordinances and regulations. 10. Plumbing Permit The Owner or its contractor must apply for and obtain a plumbing permit from the City prior to making any connections to the City's utility systems. 11. Sewer Availability and Water and Sanitary Sewer Connection Charges. In addition to the payment of the special assessment described above, the Owner must pay to the City $1,675.00 per SAC unit in sewer availability charges. The number of SAC units for the Property will be determined by the Metropolitan Council's Environmental Services department. The Owner must also pay to the City $3,281.00 in water and sanitary sewer connection charges for the one acre of the Property that currently contains improvements. The sewer availability and water and sanitary sewer connection charges must be paid by the Owner to the City at the time the plumbing permit is issued. 12. Area Charges. Under the City's ordinances, area charges for stormwater, water and sanitary sewer are normally due upon the connection of a property to the City's municipal water and sewer system. The parties acknowledge that the connection to be made pursuant to this Agreement is an emergency connection that is being permitted solely to address the public health concern raised by the failing septic system on the Property and that the connection is not being allowed for the purpose of further development of the Property. The parties agree that it is equitable for the water area charges and sanitary sewer area charges to be levied against the Property at the time of connection for the one acre that is currently developed. The parties further agree that the City shall 31091542 CAH CT155 -25 3 defer the imposition of stormwater area charges against the entire 6.1 acres and defer imposition of sanitary sewer area charges and water area charges for the undeveloped 5.1 acres of the Property until the earliest of the following events: (a) the subdivision of the Property; (b) approval of a site plan for development. All deferred area charges shall be charged at the rate in effect at the time the charges are imposed. 13. Obligation to Pay Notwithstanding any provision in this Agreement, the obligation to pay the $31,491.33 for the Improvements shall remain a personal obligation of the Owner, and any person accepting fee title to the Property after the date of recording this Agreement, by acceptance of the deed conveying fee title, accepts and assumes a personal obligation for the payment of any remaining unpaid balance thereof. Provided, however, that the City agrees not to bring any action or pursue collection of the cost of the Improvements from the Owner or successor unless the special assessments to be levied pursuant to this Agreement are first determined by a court to be invalid or become uncollectible by reason of tax forfeiture of the Property. 14. Restriction on Land Use The Owner, on behalf of itself and its successors in interest, agrees that until January 1, 2011 the use of the Property shall be subject to the restrictions of this paragraph 14. Except as provided herein, the use of the Property shall not be changed to any use that would require, in the reasonable estimation of the City, greater water consumption (determined on an average annual basis) than the existing use as a private veterans' club. The City Council in its sole, absolute and unfettered discretion may approve a change in use if it deems the change to be in the public interest. The provisions of this paragraph shall control, notwithstanding any provision of the City zoning ordinances that might otherwise permit a different use of the Property. 15. Owner Acknowledgement Owner acknowledges that the City has entered into this Agreement in reliance upon the promises and representations made by Owner in this Agreement and that, but for said promises and representations, the City would not permit the Owner to connect the Property to the City's municipal water and sewer system. 16. Term of Agreement This Agreement will remain in effect until the later of (a) January 1, 2011; or (b) the development or redevelopment of the entire 6.1 acres of the Property AND payment in full of the special assessments referenced in paragraph 4 above and the deferred area charges referenced in paragraph 12 above. Upon request by the Owner, the City agrees to execute an instrument evidencing the termination of this Agreement. 17. finding Agreement The provisions of this Agreement shall run with the land and shall inure to the benefit of and be binding upon the parties, their successors and assigns. 18. Remedies The City reserves all remedies available to it in law or equity for the breach of this Agreement. In any legal action or proceeding to enforce the provisions of this Agreement, the prevailing party shall be entitled to recover its costs and expenses, including reasonable attomey's fees. 19. Minnesota law This Agreement shall be interpreted under Minnesota law, without regard to choice of law provisions. 31091542 CAI -I cTr 55 -25 4 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date written above. CITY OF COTTAGE GROVE B }7JlGL Its Mayor By Its City Clerk VETERANS OF FOREIGN WARS COTTAGE GROVE POST 2752 Its By / e_�u ��t ✓ Its G(!l�rr��✓ l STATE OF MINNESOTA SS.: COUNTY OF WASHINGTON The foregoing instrument was acknowledged before me this " day of dtin-c , 2007 by Sandra Shiely and Caron M. Stransky, the mayor and city clerk, respectively, of the City of Cottage Grove, a Minnesota municipal corporation, on behalf of said corporation. Z No tary Public JOSEPH MICHAEL FISCHBACH Notary Public State of Minnesota My Commission Expires ,.. January 31, 2008 310915v2 CAII CT155 -25 STATE OF MINNESOTA ss.: COUNTY OF &, w ,, v y f The foregoing instrument was 2007 llu� 1 1�s the _ respectively, of Veterans of Foreign Wars C laws of Minnesota, by and on behalf of said acknowledged before me this day of by r Lrr " - " r >ti (At'i 1 and �. and CA m, _ ottage Grove Post 8752, a xe - under the Notary Public THIS INSTRUMENT DRAFTED BY: Kennedy & Graven, Chartered 200 South Sixth Street, Suite 470 SHARON R. CARTIER Notary Public - Minnesota (612) 337 -9300 310915v2 CAH CTI55 -25 EXHIBIT A Legal Description of Property That part of the Southwest Quarter of Section 22, Township 27 North, Range 21 West, Washington County, Minnesota: That part of the Southwest Quarter of Section 22, Township 27 North, Range 21 West being the westerly 960 feet of that part lying northeasterly of State Highway No. 10/61, except therefrom the west 595 feet thereof and further excepting: Commencing at the West ' /< corner of said Section 22 thence east along the North line of the Northwest Quarter of the Southwest Quarter 960 feet, thence south and parallel with the west line of said Section 22 847 feet to the point of beginning of this exception; thence continuing south and parallel with the west line 75 feet to the Northeasterly right - of -way line of Minnesota Highway No. 10 -61; thence northwesterly along said right -of -way line 50 feet; thence north and parallel with said west line 75 feet; thence southeasterly with said northeasterly right- of-way line 50 feet to the point of beginning; except Parcel 225A shown on Minnesota DOT Right -of -way Plat No. 82 -83. List of Liens, Interests and Encumbrances 310915v2 CA14 CT155 -25 City of Cotta Grove ® Minnesota 7516 80th Street South / Cottage Grove, Minnesota 55016 -3195 w . cottage- grove.org June 22, 2007 Cottage Grove V.F.W. Post 8752 9260 East Point Douglas Road Cottage Grove, MN 55016 Attn: Bruce L. Heil, Commander 651- 458 -2800 Fax 651 -458 -2897 TDD 651 -458 -2880 Enclosed is a fully executed copy of the Agreement between the City of - Cottage Grove and the VFW regarding water and sanitary sewer service and trunk area charges, for your records. Sincerely, Caron Stransky City Clerk 651 Cc: Howard Blin, Community Development Director Ron Hedberg, Admin Services /Finance Director EQUAL OPPORTUNITY EMPLOYER 19.213, 2009 Minnesota Statutes Page 1 of 2 99213 LOCAL AUTHORITY. Subdivision 1. Local regulation. (a) A statutory or home rule city or county has the authority to adopt more stringent ,gulation of lawful gambling within its jurisdiction, including the prohibition of lawful gambling. (b) A statutory or home rule city or county may require a permit for the conduct of gambling exempt from licensing nder section 349.166. The fee for a permit issued under section 349.166 may not exceed $100. (c) The authority granted by this subdivision does not include the authority to require a license or fee for a license or -rmit to conduct gambling by organizations, gambling managers, gambling employees, or sales by distributors or linked ingo game providers licensed by or registered with the board. (d) The authority granted by this subdivision does not include the authority to require an organization to make specific Kpenditures of more than ten percent per year from its net profits derived from lawful gambling. (e) For the purposes of this subdivision, net profits are gross profits less amounts expended for allowable expenses and aid in taxes assessed on lawful gambling. (f) A statutory or home rule charter city or a county may not require an organization conducting lawful gambling within s jurisdiction to make an expenditure to the city or county as a condition to operate within that city or county, except: (1) as authorized under section 349.16, subdivision 8, or 297E.02; or (2) by an ordinance requirement that such organizations must contribute ten percent per year of their net profits derived om lawful gambling conducted at premises within the city's or county's jurisdiction to a fund administered and regulated by to responsible local unit of government without cost to such fund. The funds must be disbursed by the local unit of cvernment for (i) charitable contributions as defined in section 349.12, subdivision 7a, or (ii) police, fire, and other nergency or public safety - related services, equipment, and training, excluding pension obligations. A contribution made by z organization is not considered an expenditure to the city or county nor a tax under section 297E.02, and is valid and awful. A city or county receiving and making expenditures authorized under this clause must by March 15 of each year file report with the board, on a form the board prescribes, that lists all such revenues collected, interest received on fund alances, and expenditures for the previous calendar year. (g) A statutory or home rule city or county may by ordinance require that a licensed organization conducting lawful ambling within its jurisdiction expend all or a portion of its expenditures for lawful purposes on lawful purposes conducted r located within the city's or county's trade area. Such an ordinance must be limited to lawful purpose expenditures of gross refits derived from lawful gambling conducted at premises within the city's or comity's jurisdiction, must define the city's of )unty's trade area, and must specify the percentage of lawful purpose expenditures which must be expended within the trade -ea. A trade area defined by a city under this subdivision must include each city and township contiguous to the defining (h) A more stringent regulation or prohibition of lawful gambling adopted by a political subdivision under this rbdivision roust apply equally to all forms of lawful gambling within the jurisdiction of the political subdivision, except a Aitical subdivision may prohibit the use of paddlewheels. Subd. 2. Local approval. The board may not issue an initial premises permit unless approval is received from: (1) the city council of the statutory or home rule city in which the organization's premises is located; or (2) the county board of the county where the premises is located. The organization roust submit a resolution from the city council or county board approving the premises permit. The ;solution must have been adopted within 90 days of the date of application for the new permit. r. ...ice-, Ie, 11 1 Q /7[ /In 1� 49.213, 2009 Minnesota Statutes Page 2 of 2 Subd. 3. Local gambling tax. A statutory or home rule charter city that has one or more licensed organizations )crating lawful gambling, and a county that has one or more licensed organizations outside incorporated areas operating wful gambling, may impose a local gambling tax on each licensed organization within the city's or county's jurisdiction. e tax may be imposed only if the amount to be received by the city or county is necessary to cover the costs incurred by e city or county to regulate lawful gambling. The tax imposed by this subdivision may not exceed three percent per year of e gross receipts of a licensed organization from all lawful gambling less prizes actually paid out by the organization. A city county may not use money collected under this subdivision for any purpose other than to regulate lawful gambling. All )cuments pertaining to site inspections, fines, penalties, or other corrective action involving local lawful gambling :gulation must be shared with the board within 30 days of filing at the city or county of jurisdiction. A tax imposed under is subdivision is in lieu of all other local taxes and local investigation fees on lawful gambling. A city or county that 1poses a tax under this subdivision shall annually, by March 15, file a report with the board in a form prescribed by the )ard showing (1) the amount of revenue produced by the tax during the preceding calendar year, and (2) the use of the -oceeds of the tax. History: 1984 c 502 art 12 s 18; 1986 c 467 s 25; 1987 c 327 s 21; 1988 c 705 s 1; 1989 c 209 art 1 s 35; 1989 c 334 t 2 s 44,45; 1989 c 335 art 1 s 220; 1990 c 590 art 1 s 37; 1991 c 199 art 2 s 1; 1991 c 336 art 2 s 34; 1994 c 633 art 2 s 19; It 5 s 96; 1994 c 633 art 2 s 2; 1995 c 264 art 17 s 11; 1998 c 322 s 6; 2000 c 300 s 8; 2001 c 96 s 13; 2005 c 166 art 1 s 2006 c 205 s 28; 2009 c 124 s 58,59 Chapter • '' 3 -2 -9: GENERAL CONDITIONS: E. Contributions Required: Each organization conducting lawful gambling within the city must contribute to the city each month ten percent (10 %) of its net profits derived from lawful gambling to a fund administered and regulated by the city without cost to the fund. For purposes of this subsection, "net profits" are defined as gross profits less reasonable sums actually expended for allowable expenses. The city council will make disbursements from the fund for lawful purposes as defined by Minnesota statutes section 349.12, subdivision 25. (Ord. 631, 9 -4 -1996) MINNESOTA STATUTES 2009 349.12; (2) the ideal gross of pull -tab and tipboard deals or games less the value of unsold and defective tickets and before reduction for prizes, expenses, shortages, free plays, or any other charges or offsets; (3) gross sales of raffle tickets and paddle tickets before reduction for prizes, expenses, shortages, free plays, or any other charges or offsets; (4) admission, commission, cover, or other charges imposed on participants in lawful gambling activity as a condition for or cost of participation; and (5) interest, dividends, annuities, profit from transactions, or other income derived from the accumulation or use of gambling proceeds. Gross receipts does not include rental proceeds from premises owned by an organization and leased to one or more other organizations for the purposes of conducting lawful gambling. Subd. 22. Ideal gross. "Ideal gross" means the total amount of receipts that would be received if every individual ticket in the pull -tab or tipboard deal was sold at its face value. In the - calculation of ideal gross and prizes, a free play ticket shall be valued at face value. Subd. 23. Ideal net. "Ideal net" means the pull -tab or tipboard deal's ideal gross, as defined under subdivision 22, less the total predetermined prize amounts available to be paid out. When the prize is not entirely a monetary one, the ideal net is 50 percent of the ideal gross. Subd. 24. Lawful gambling. "Lawful gambling" is the operation, conduct or sale of bingo, raffles, paddle wheels, tipboards, and pull -tabs. Subd 25 s(Lawful purpose. (a) "Lawful purpose" means one or more of the following: (1) any expenditure by or contribution to a 501(c)(3) or festival organization, as defined in subdivision 15a, provided that the organization and expenditure or contribution are in conformity with standards prescribed by the board under section 349.154, which standards must apply to both types of organizations in the same manner and to the same extent; (2) a contribution to or expenditure for goods and services for an individual or family suffering from poverty, homelessness, or disability, which is used to relieve the effects of that suffering; (3) a contribution to a program recognized by the Minnesota Department of Human Services for the education, prevention, or treatment of problem gambling; (4) a contribution to or expenditure on a public or private nonprofit educational institution registered with or accredited by this state or any other state; C.,opyright zU' 2009 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. MINNESOTA STATUTES 2009 349.12 (5) a contribution to an individual, public or private nonprofit educational institution registered with or accredited by this state or any other state, or to a scholarship fund of a nonprofit organization whose primary mission is to award scholarships, for defraying the cost of education to individuals where the funds are awarded through an open and fair selection process; (6) activities by an organization or a government entity which recognize military service to the United States, the state of Minnesota, or a community, subject to rules of the board, provided that the rules must not include mileage reimbursements in the computation of the per diem reimbursement limit and must impose no aggregate annual limit on the amount of reasonable and necessary expenditures made to support: (i) members of a military marching or color guard unit for activities conducted within the state; (ii) members of an organization solely for services performed by the members at funeral services; (iii) members of military marching, color guard, or honor guard units may be reimbursed for participating in color guard, honor guard, or marching unit events within the state or states contiguous to Minnesota at a per participant rate of up to $35 per diem; or (iv) active military personnel and their immediate family members in need of support services; (7) recreational, community, and athletic facilities and activities intended primarily for persons under age 21, provided that such facilities and activities do not discriminate on the basis of gender and the organization complies with section 349.154, subdivision 3a; (8) payment of local taxes authorized under this chapter, taxes imposed by the United States on receipts from lawful gambling, the taxes imposed by section 297E.02, subdivisions 1, 4, 5, and 6, and the tax imposed on unrelated business income by section 290.05, subdivision 3; (9) payment of real estate taxes and assessments on permitted gambling premises owned by the licensed organization paying the taxes, or wholly leased by a licensed veterans organization under a national charter recognized under section 501(c)(19) of the Internal Revenue Code; (10) a contribution to the United States, this state or any of its political subdivisions, or any agency or instrumentality thereof other than a direct contribution to a law enforcement or prosecutorial agency; (11) a contribution to or expenditure by a nonprofit organization which is a church or body of communicants gathered in common membership for mutual support and edification in piety, worship, or religious observances; Copyright 6 2009 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 6 MINNESOTA STATUTES 2009 349.12 (12) an expenditure for citizen monitoring of surface water quality by individuals or nongovernmental organizations that is consistent with section 115.06, subdivision 4, and Minnesota Pollution Control Agency guidance on monitoring procedures, quality assurance protocols, and data management, provided that the resulting data is submitted to the Minnesota Pollution Control Agency for review and inclusion in the state water quality database; (13) a contribution to or expenditure on projects or activities approved by the commissioner of natural resources for: (i) wildlife management projects that benefit the public at large; (ii) grant -in -aid trail maintenance and grooming established under sections 84.83 and 84.927, and other trails open to public use, including purchase or lease of equipment for this purpose; and (iii) supplies and materials for safety training and educational programs coordinated by the Department of Natural Resources, including the Enforcement Division; (14) conducting nutritional programs, food shelves, and congregate dining programs primarily for persons who are age 62 or older or disabled, (15) a contribution to a community arts organization, or an expenditure to sponsor arts programs in the community, including but not limited to visual, literary, performing, or musical arts; (1.6) an expenditure by a licensed fraternal organization or a licensed veterans organization for payment of water, fuel for heating, electricity, and sewer costs for a building wholly owned or wholly leased by and used as the primary headquarters of the licensed veterans organization or fraternal organization; (17) expenditure by a licensed veterans organization of up to $5,000 in a calendar year in net costs to the organization for meals and other membership events, limited to members and spouses, held in recognition of military service. No more than $5,000 can be expended in total per calendar year under this clause by all licensed veterans organizations sharing the same veterans post home; (18) payment of fees authorized under this chapter imposed by the state of Minnesota to conduct lawful gambling in Minnesota; (19) a contribution or expenditure to honor an individual's humanitarian service as demonstrated through philanthropy or volunteerism to the United States, this state, or local community; Copyright c 2009 by the Revisor of Statutes, State of Minnesota All Rights Reserved. MINNESOTA STATUTES 2009 349.12 (20) a contribution by a licensed organization to another licensed organization with prior board approval, with the contribution designated to be used for one or more of the following lawful purposes under this section: clauses (1) to (7), (11) to (15), (19), and (25); (21) an expenditure that is a contribution to a parent organization, if the parent organization: (i) has not provided to the contributing organization within one year of the contribution any money, grants, property, or other thing of value, and (ii) has received prior board approval for the contribution that will be used for a program that meets one or more of the lawful purposes under subdivision 7a; (22) an expenditure for the repair, maintenance, or improvement of real property and capital assets owned by an organization, or for the replacerent of a capital asset that can no longer be repaired, with a fiscal year limit of five percent of gross profits from the previous fiscal year, with no carryforward of unused allowances. The fiscal year is July 1 through June 30. Total expenditures for the fiscal year may not exceed the limit unless the board has specifically approved the expenditures that exceed the limit due to extenuating circumstances beyond the organization's control. An expansion of a building or bar - related expenditures are not allowed under this provision. (i) The expenditure must be related to the portion of the real property or capital asset that must be made available for use free of any charge to other nonprofit organizations, community groups, or service groups, or is used for the organization's primary mission or headquarters. (ii) An expenditure may be made to bring an existing building that the organization owns into compliance with the Americans with Disabilities Act. (iii) An organization may apply the amount that is allowed under item (ii) to the erection or acquisition of a replacement building that is in compliance with the Americans with Disabilities Act if the board has specifically approved the amount. The cost of the erection or acquisition of a replacement building may not be made from gambling proceeds, except for the portion allowed under this item; (23) an expenditure for the acquisition or improvement of a capital asset with a cost greater than $2,000, excluding real property, that will be used exclusively for lawful purposes under this section if the board has specifically approved the amount; (24) an expenditure for the acquisition, erection, improvement, or expansion of real property, if the board has first specifically authorized the expenditure after finding that the real property will be used exclusively for lawful purpose under this section; or Copyright 0 2009 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. MINNESOTA STATUTES 2009 349.12 (25) an expenditure, including a mortgage payment or other debt service payment, for the erection or acquisition of a comparable building to replace an organization -owned building that was destroyed or made uninhabitable by fire or catastrophe or to replace an organization -owned building that was taken or sold under an eminent domain proceeding. The expenditure may be only for that part of the replacement cost not reimbursed by insurance for the fire or catastrophe or compensation not received from a governmental unit under the eminent domain proceeding, if the board has first specifically authorized the expenditure. (b) Expenditures authorized by the board under clauses (24) and (25) must be 51 percent completed within two years of the date of board approval; otherwise the organization must reapply to the board for approval of the project. "Fifty -one percent completed" means that the work completed must represent at least 51 percent of the value of the project as documented by the contractor or vendor. (c) Notwithstanding paragraph (a), "lawful purpose" does not include: (1) any expenditure made or incurred for the purpose of influencing the nomination or election of a candidate for public office or for the purpose of promoting or defeating a ballot question; (2) any activity intended to influence an election or a governmental decision - making process; (3) a contribution to a statutory or home rule charter city, county, or town by a licensed organization with the knowledge that the governmental unit intends to use the contribution for a pension or retirement fund; or (4) a contribution to a 501(c)(3) organization or other entity with the intent or effect of not complying with lawful purpose restrictions or requirements. Subd. 25a. Linked bingo game. "Linked bingo game" means a bingo game played at two or more locations where licensed organizations are authorized to conduct bingo, where there is a common prize pool and a common selection of numbers or symbols conducted at one location, and where the results of the selection are transmitted to all participating locations by satellite, telephone, or other means by a linked bingo game provider. Subd. 25b. Linked bingo game provider. "Linked bingo game provider" means any person who provides the means to link bingo prizes in a linked bingo game, who provides linked bingo paper sheets to the participating organizations, who provides linked bingo prize management, and who provides the linked bingo game system. Subd. 25c. Linked bingo game system. "Linked bingo game system" means the equipment used by the linked bingo provider to conduct, transmit, and track a linked bingo game. The Co0yright 0 2009 by the Revisor of Statutes, State of Minnesota All Rights Reserved. MINNESOTA STATUTES 2009 349.12 system must be approved by the board before its use in this state and it must have dial -up or other capability to permit the board to monitor its operation remotely. Subd. 25d. Linked bingo prize pool. "Linked bingo prize pool' means the total of all prize money that each participating organization has contributed to a linked bingo game prize and includes any portion of the prize pool that is carried over from one occasion to another in a progressive linked bingo game. Subd. 26. Manufacturer. "Manufacturer" means a person or entity who assembles from raw materials or subparts a completed piece of gambling equipment, and who sells or furnishes the equipment for resale or for use in the state. The term includes a person who converts, modifies, adds to, or removes parts or a portion from an item, device, or assembly to further its promotion, sale, or use as gambling equipment in this state. A person only adding or modifying promotional flares to advise the public of the prizes available, the rules of play, and the consideration required is not a manufacturer. Subd. 26a. Master flare. "Master flare" is the posted display, with registration stamp affixed or bar code imprinted or affixed, that is used in conjunction with sealed groupings of 100 or fewer sequentially numbered paddle ticket cards. Subd. 27. Net profit. "Net profit" means gross profit less reasonable sums actually expended for allowable expenses. Subd. 28. Organization. "Organization" means any fraternal, religious, veterans, or other nonprofit organization. Subd. 28a. Paddle ticket. `Paddle ticket" means a preprinted ticket that can be used to place wagers on the spin of a paddle wheel. Subd. 28b. Paddle ticket card. 'Paddle ticket card" means a card to which detachable paddle tickets are attached. Subd. 28c. Paddle ticket card number. 'Paddle ticket card number" means the unique serial number preprinted by the manufacturer on the stub of a paddle ticket card and the paddle tickets attached to the card. Subd. 29. Paddle wheel. 'Paddle wheel" means a wheel marked off into sections containing one or more numbers, and which, after being turned or spun, uses a pointer or marker to indicate winning chances. Subd. 30. Person. 'Person" is an individual, organization, firm, association, partnership, limited liability company, corporation, trustee, or legal representative. Copyright 0 2009 by the Revisor of Statutes, State of Minnesota. All Rights Reserved.