Agenda - Council Work Session - 03/24/2009

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Street Improvement District for funding street reconstruction The League of Minnesota Cities is encouraging cities that want authority to implement a street ~ improvementdistdct to ~equest special legislation. Street improvement district authority would allow a city to collect fees from property owners within a district to fund municipal street maintenance and reconstruction on a routine schedule, thereby protecting taxpayer investments. In recent sessions the League, along with the City Engineers Association of Minnesota, has requested this authority for all cities, but efforts have been met with resistance from several business and housing organizations. Given the Legislature's refusal to provide broad authority for implementation of street I improvement districts, the League believes there.is an opportunity for limited authority if individual cities are willing to make a case and seek special legislation. Cities are encouraged to look at the street improvement district resource kit at http://www.1mc.org/page/l/street- improvement. is\? and to consider seeking special legislation. The League will assist interested cities in requesting the bill draft and hearings, and with working with key legislators. In light of current budget constraints we may have to consider deferring maintenance activities, or limiting the amount of work that can be undertaken during certain years. Implementing a street improvement district would dedicate funds to a separate account only 'to be used on infrastructure improvements within that district. The district boundaries are set by the City and could include the entire City, or only a portiones). It allows fees to be collected from tax exempt properties, and spreads the costs of improvements over time. This is an alternative to the standard one-time special assessments that could be burdensome to property owners, and the City in proving benefit, if challenged. To develop a district and collect fees a five year plan would need to be presented at a public hearing, and fees set to accomplish the goals of that five year plan. The proposed improvements within a district could be quite similar to the current Capital Improvement Plan (CIP), and free up money within other allotted funding sources. Having the authority to create a district does not obligate the City to do so; it is only another funding option to consider, and it could also be used in connection with an assessment policy. ' To be considered for special legislation the City would need to pass a resolution requesting statutory authority, and forward to OU; legislature asking them to sponsor the bill. This resolution and potential subsequent special legislation could be very generic in form, with the tougher decisions on projects, and fees to be determined at a later date on the local level. A copy" of a sample resolution and special legislative authority request are attached for your review. -29-