Agenda - Council Work Session - 05/12/2020

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new/experimental funding mechanism, which started in 2018. Criteria the city was looking for when changing to a new model was primarily equity, but also benefit tests. However, this particular form of funding is still fresh, and the City Council is still reacting and examining the changes. In addition to the criteria of equity, the city's political makeup favors keeping costs and taxes low for residents, which is seen as a constraint in finding new funding mechanisms. Public engagement has been limited in City 5, but they continue to follow proposed legislation in order to find new and innovative ways to fund road infrastructure. City 6 City 6 uses a combination of property tax, franchise fee and MSAS for streets. The City does special assess tax exempt properties, however; other property owners are not assessed for the cost of street projects as a street levy and franchise fee revenues support the pavement management plan. Several years ago, the City completed a 10-year pavement management plan which helped to balance out the annual project cost in an attempt to even out the utilization of resources, while also ensuring the City's Pavement Management Index remains favorable. The City implemented a street infrastructure levy many years ago and recently increased franchise fees to provide additional revenue for streets. The pavement management plan was increased from a five to ten- year plan just a few years ago. The City had a very open process when raising the franchise fees several years back. In addition, they provide several publications and public announcements that highlight the City's street infrastructure levy and how the City's tax rate may differ from other communities that chose to special assess. City 7 City 7 uses a number of funding tools to cover the costs of their road maintenance and reconstruction activities including general revenues generated from property taxes, special assessments, and MSAS funds. The city's property tax revenue generates roughly $2.55 million annually for street improvement projects covering about 45% of project costs (1.05% effective property tax rate). The city's special assessment revenue generates roughly 37% of project costs, and has a sliding rate depending on property type (residential = 50%; high density residential = 75%; and commercial/industrial = 100%). The city also accesses MSAS funds amounting to an average of $3.14 million per year. The current funding structure has been in effect for 30 years. City 8 While it varies from year to year, special assessments are the largest portion of City 8's road infrastructure projects, attributing for 70%. The remaining funding towards these efforts come in the form of municipal state aid, government bonds, and general taxes. This funding model has existed for 25 years and the approach has met the city's goals of funding these particular needs by offering equity, feasibility, and adequacy. Additionally, over the past 25 years there have been no public engagement in either measuring the popularity of the current road funding model or gaging the public in alternative methods that may provide more efficiency. City 8 has looked into street improvement districts as an innovative approach to funding road maintenance for their municipality.