Agenda - Charter Commission - 08/27/2020

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as the rationale for their current funding structures. Profiles depicting each of the city's funding structures are presented below followed by an examination of stated rationales corresponding to the two research objectives (survey city officials to identify their preferred road funding techniques and why those techniques are best suited towards the particular city). Coon Rapids Coon Rapids uses a combination of special assessments, MSAS funds, and bonding to fund their roads. Their plan for using special assessments was developed in 1997 and aimed to assess 50% of the street surface cost to benefitting properties. The formula is tied to the Construction Cost Index so that assessments would increase as the cost of construction materials increased; however, over time the percentage that properties are assessed has dipped to between 20-30% of project costs as the cost of labor and other associated costs outpaced the Construction Cost Index. Out of the 220 miles of road in Coon Rapids, 40 miles are covered under the MSAS system and the city receives roughly $2.2 million from state transportation funds for maintenance along these routes. The city still assesses the properties adjacent to these routes, but at a lower rate. The city also uses bonds to cover road maintenance and reconstruction costs. Interviewees mentioned that due to the City's good bond rating, and their aggressive approach to maintaining their roads, they believe the City can sustainably manage its debt despite annual debt service increases. Coon Rapids expressed wanting to keep the assessment rate reasonable so that property owners are not surprised with large bills. It creates less "sticker shock.". While assessment rates increase on average by 3% per year (tied to the Construction Cost Index), the city council pushes back on additional assessment increases. Interviewees also mentioned that once a special assessment framework is established it is hard to make changes since residents may feel the process is not fair. Brooklyn Park Upon talking with officials from Brooklyn Park, little funding towards road maintenance and infrastructure came from their general fund, only accounting for 3%. Capital improvement bonds and competing for national and international grants added another 10% for funding towards roads. Special revenues and franchise fees, in particular, were identified as the main funding mechanisms for the road infrastructure, attributing for 85% of these efforts. The attractiveness of franchise fees for Brooklyn Park began in 2016 after an 18-month public outreach campaign. The city council and administration initiated this in order to discover new ways for moving forward in funding the road infrastructure efforts. A type of "pay as you go" approach where equal fees were paid by all residents was desired, which franchise fees are able to achieve. With a balanced political spectrum, there have been no issues with franchise fees and Brooklyn Park views that they will continue to use this method for road funding needs in the foreseeable future. Brooklyn Park had used special assessments for a long period of time, but city officials identified that it was not popular among the local population. Utilizing a public outreach method in 2016, they identified that citizens were looking for something more relatable to a "pay as you go" system, or equity for everyone in road usage. Franchise fees were the best way in order to meet these needs and have been positively received. 7