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Revised — January 16, 2011 <br />for a two-acre lot could total $27,000 or about $225 /month for 10 years. This option places a significant but short- <br />term burden on affected property owners. <br />How would Option 2 (citywide property tax increase) work? <br />The increased tax would be based on property values. For example, the owner of an average $150,000 home <br />could owe an additional $24 /month for up to 40 years. In comparison, the owner of an average $450,000 home <br />could owe an additional $51 /month for up to 40 years. The increase would be added to property tax bills. This <br />option would spread out the costs to all city taxpayers and helps keep assessments low. <br />How would Option 3 (city franchise fee) work? <br />Payable for 40 years, a citywide franchise fee charges all utility customers — including tax exempt properties — a <br />monthly fee regardless of property size or value. In other words, the fee would be the same for a $150,000 home <br />and a $450,000 home. The fee could equal as much as $28 /month for residential customers and $54 /month for <br />Commercial customers. Option 3 spreads out the cost to everyone who will benefit from safer and well- maintained <br />streets. <br />What is the most favored payment option so far? <br />Option 3 (a citywide franchise fee) is the most preferred option of 49% of city residents, according to a June 2011 <br />public opinion survey conducted on behalf of the city. <br />Will the money collected as part of this program be dedicated only to road maintenance and <br />reconstruction? <br />Yes. Regardless of the funding option chosen, funds will be used only for the long -term maintenance and <br />reconstruction of city roads. The city will not divert road funds to fill budget gaps or for spending on other city <br />initiatives. <br />Are there other sources of funding available for long -term street maintenance? What about money spent <br />on The COR — Ramsey's downtown development? <br />No. Unfortunately, the cost of road reconstruction is so large that the city would need to dedicate its entire <br />operating budget for nearly nine years to pay for necessary street maintenance and reconstruction. In fact, much <br />of the city's operating budget including economic development funds and back taxes used for The COR is <br />earmarked for specific city functions and could not be utilized for long -term road work. While about 20% of long- <br />term street reconstruction costs are expected to qualify for state funding or funding from outside sources, the <br />majority of the cost will be the responsibility of Ramsey city taxpayers. <br />When will a decision on the long -term road maintenance and reconstruction program be made? <br />The Ramsey City Council will continue to seek input from residents about the funding options through early 2012. <br />The council is expected to review that input and establish a new policy and funding structure shortly thereafter. <br />Funds will be collected starting in 2012 and are expected to deliver new road reconstruction projects in by next fall <br />(2012). <br />Why did I get a flyer from Connexus regarding this new fee? <br />Connexus Energy is doing everything in its power to control costs just like the City of Ramsey. This fee will show <br />up on your Connexus Energy bill as they intend on passing the costs to maintain the Right of Way to its <br />customers. If you haven't received a flyer from Connexus, it will likely be sent in the near future. <br />Page 2 of 3 <br />