Agenda - Council Work Session - 05/12/2020

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Bonds Secure investments, easy to sell Lower rate of return as there is less risk involved in the bond defaulting Money earmarked for specific projects Bonds must be paid back with interest Most government bonds are tax exempt, saving you a good portion of money on the project you are trying to accomplish Periods of recession could cause defaulting of bonds due to slumping tax revenues Other Sources MSAS funds allows cities to access funds from the state gasoline tax to supplement local funding streams Other than MSAS, substantial funds generated from other sources are rare and unreliable Innovative funding techniques Interviewees also discussed a number of innovative funding techniques that they are interested in seeing added to Minnesota municipalities road funding toolbox. The policies - street improvement districts and a city wheelage tax - would help to expand the ability of cities to raise dedicated road maintenance revenue. Street improvement districts would grant cities the authority to collect fees from property owners within established districts to fund road maintenance projects, similar to the State's storm sewer improvement districts. Legislation for the funding tool passed the Minnesota House in February 2020 (HF 1095) but its companion has not yet been scheduled for a hearing in the Minnesota Senate (SF 1271) (League of Minnesota Cities, 2020). The wheel tax policy would allow Minnesota city to receive wheelage tax revenue. Currently, the wheelage tax authority lies with Minnesota Counties, but the proposed legislation would enable a $10 surcharge on license tab and title transfers to be applied back to cities. The legislation has been introduced in both the Minnesota House and Senate however to this date no further actions have been taken. Importance of public opinion Many of the cities that were interviewed and surveyed discussed the particular methods they used to engage the public and secure support for road improvement funding mechanisms. Considering the previous unsuccessful attempt to pass franchise fees in Ramsey in 2019, the city may find public engagement techniques used in other cities to be particularly useful. For example, one city created an online forum to provide a space for the city to answer the public's questions while also allowing citizens to engage with each other regarding the different alternatives. Another city used a combination of public meetings, written correspondence, website information, and a mailed newsletter. And, while it is difficult to determine how successful the outreach efforts have been, the city mentioned that the mailed newsletter has been rated as the resident's favorite source of road improvement information. A third city found success in implementing franchise fees through a series of structured meetings designed to collect community feedback and provide small group presentations to the community making the case for franchise fees (Narvaez, 2017). Finally, one city provides several publications and public announcements that highlight its street infrastructure levy and how it compares to other communities. Varying definitions of equity Our conversations with cities highlighted three distinct definitions of equity that factored into evaluating road funding criteria. These equity definitions could be described as: 1.) Ability to pay principle, 2.) Benefits received principle, and 3.) Equal payment principle. Cities that utilized the