Agenda - Council Work Session - 05/12/2020

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ability to pay principle talked about raising revenues in ways that would correspond with how much residents are able to afford it. This came up in conversation with the League of Minnesota Cities, when discussing that franchise fees were somewhat regressive; however, there weren't many other options available. Another definition of equity is based on the benefits received principle. Some cities referenced this principle in regard to special assessments, while others referred to this in the ability to charge tax exempt residents (such as through franchise fees). The last, and most commonly utilized definition of equity can be considered the equal payment principle. Cities that referenced equity in this manner spoke about how each resident is responsible for paying equal parts of local roads and not face a significant burden. CONCLUSION This study had two key objectives. First, to survey and interview city managers and engineers to document the range and nature of sustainable road funding mechanisms in suburban cities in the Twin -Cities Metro Region. Second, to understand why cities fund the way they do to better assess how various options may fit into the context of Ramsey. Based on the interviews and surveys collected from eight cities in the 7-County Metro Region the research team was able to document road funding techniques used in each municipality as well as the rationale for their current funding structures. Overall the cities involved in this study seemed to be satisfied with their current funding structures with a number of the cities having updated their road funding policies in the past decade. Key criteria such as equity, defined in numerous ways, led city leaders to make these road financing decisions. While general funds, supported by property tax levies and special assessments, seemed to be the most common funding techniques in our sample, franchise fees seem to be increasing in importance and popularity as cities search for new ways to raise dedicated road improvement funds. As the City of Ramsey is concerned with the future of their road financing, franchise fees could be a good resource that allows the city to collect a reliable stream of revenue from a broad base at a rate that is reasonable and predictable for residents. Given the COVID-19 crisis and the impact it had on collecting comprehensive data, we recommend the City of Ramsey continue to survey cities throughout the state and continue developing ideas and best practices. Should the City of Ramsey decide to move forward with implementation of franchise fees, we recommended extensive public engagement, such examples of which are provided above, to collect feedback and move forward in a way that reflects the City's residents' interests.