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And in approximately year 60, either a reclaim and repave project or a full reconstruction would occur, after which
<br />the maintenance cycle would begin all over again.
<br />Based on staff's recommended long-term street maintenance program, the estimated costs needed to regularly
<br />maintain all city streets over the next 5, 10 and 60 year periods were calculated and tabulated in Figure 1
<br />(attached). These costs assume all city streets will be maintained and reconstructed "as is" with no change to street
<br />components (curb and gutter, pavement material, utilities, etc.), lane widths, traffic control, or pedestrian facilities.
<br />Long -Term Street Maintenance Program Funding Options
<br />Funding source options for street maintenance projects have traditionally included the use of special assessments
<br />(sealcoats and overlays only), MSA annual allotments, GO bonds, and general levy budgeting. However, these
<br />traditional funding sources are becoming less and less reliable as funding sources for such projects. This is
<br />primarily due to shrinking budgets, resulting in fewer dollars being budgeted annually for street maintenance
<br />projects, as well as greater public opposition in the form of public petitions being presented against such projects.
<br />Because of the City Charter, rejecting a street maintenance project in Ramsey is relatively easy for homeowners to
<br />do, making it harder to apply special assessments, leading to significant project delays. Both these issues negatively
<br />impact the city's ability to regularly and economically deliver street maintenance projects.
<br />In 2013, our Municipal State Aid (MSA) allocation for street maintenance on MSA routes was $443,377 and our
<br />construction/reconstruction allocation was $576,844. However, all MSA fund allocations over the next several
<br />years will be applied towards debt from previous projects so these funds are not currently available, but they will be
<br />at some point which could potentially be used to supplement franchise fee revenue in the future.
<br />Ideally, the funding source used for the long-term street maintenance program would be reliable, providing a
<br />defined amount year after year to fund the program as needed, plus it would be a dedicated fund, preventing
<br />portions of it from being diverted to other uses. In addition, an ideal funding source would be viewed by taxpayers
<br />as being reasonably beneficial, equitable and transparent to allow taxpayers to better understand what they are
<br />paying and where it is being spent.
<br />New funding sources have therefore been researched. Such funding sources include the use of federal and state
<br />grants, Public -Private Partnerships, special legislation (such as Street Improvement Districts), and franchise fees. Of
<br />these newer funding sources, only franchise fees can provide the reliable, dedicated funding source needed to ensure
<br />that streets maintenance projects can be completed on a regular schedule, thereby allowing the city to maintain city
<br />streets as economically as possible, and to ensure that all street can be maintained to an average PASER rating of
<br />6.5 as identified in the city's newly adopted Strategic Action Plan. In addition, franchise fees would be collected
<br />from property renters as well as owners, and also from tax-exempt properties, which seems to be a reasonable
<br />approach given such properties are often significant traffic generators.
<br />State law provides cities the authority to impose franchise fees to utilities operating within the public right-of-way.
<br />This fee can be dedicated solely to help pay for the maintenance of existing city streets and would help eliminate
<br />the need to apply special assessments against property owners to help fund our long-term street maintenance
<br />program. Franchise fee revenues in the amount of $1,700,000 would be needed to fund the gap between the
<br />$500,000 that is budgeted through the general fund and the $2,202,376 needed annually over the next 5 years to
<br />fully fund the long term street maintenance program based on estimated costs. This would require a monthly fee of
<br />$8 per each electric and gas utility provider in Ramsey, which would equate to a $16 monthly fee for a resident
<br />using both electric and gas utilities.
<br />By consensus, Council has directed that they would like to stop using special assessments in the future for funding a
<br />portion of the street maintenance program. In the past, special assessments were levied against abutting property
<br />owners on sealcoat and overlay projects. The amounts of the assessments varied from several hundred dollars to
<br />over seven thousand dollars. In the future, this cost would climb substantially as the city starts to complete street
<br />reconstruction projects. If the current assessment policy, which allows for assessments of 50% of the total project
<br />costs on overlay projects, were to be followed, assessments on reconstruction projects could cost tens of thousands
<br />of dollars. This amount, which may not be defensible if challenged, would likely be unmanageable for many
<br />property owners, even if assessed over ten years. Rental rates would likely be affected too as rental property owners
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