Minutes - Council Work Session - 02/14/2012

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Public Works Director Olson explained that a franchise fee of $14 /month/utility customer, would generate $1.53 million or one -half of the total reconstruction projects and all of the maintenance (sealcoating and overlay) activities. Mayor Ramsey noted if the businesses are charged a double franchise fee, more will be collected. Public Works Director Olson explained the $1.53 million included sealcoating and overlaying at zero assessment and a 50% reconstruction assessment and that amount includes the commercial and industrial being charged twice as much as the residential customer. If commercial and industrial pay is the same as the residential uses, there would be a reduction of revenue of approximately $82,000 annually. Mayor Ramsey noted with road reconstruction, the figures are based on a 50% assessment and costs of $1 million per mile. Public Works Director Olson explained the cost of $1 million per mile was reduced to $642,000 per mile without sidewalk and storm sewer but including curb and gutter. That figure was based on Andrie Street. Councilmember Tossey noted it has been forecast there will be a State budget surplus of $700 million which may be going back to repay K -12. However, the Senate Majority Leader has indicated support for property tax relief, maybe a homestead tax credit/exclusion. Councilmember Tossey noted there may be a Legislative decision by April. He indicated he would also like to work on an HRA levy reduction. Mayor Ramsey stated that no one would argue against reducing the HRA and EDA levies. Finance Officer Lund advised that this year the EDA and HRA levies were not affected by the market value exclusion but those levies will be impacted next year. Mayor Ramsey stated he does not favor a franchise fee to finance road construction and prefers to look at everything else possible before considering that option. City Administrator Ulrich stated the next budget topic deals with employee positions. Finance Officer Lund asked for direction on the budget and if the City Council felt an 8.4 levy was a good target to use. Mayor Ramsey stated support to maintain a tax capacity rate of 39 including road maintenance money. Councilmember Elvig complimented staff for bringing forward these ideas, thinking they were on the right track. He noted it was almost at a tax capacity rate of 36, which would almost address the problem with road funding. City Council Work Session / February 14, 2012 Page 9 of 10