Agenda - Council Work Session - 01/25/2022

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Policy Priority: Funding for Non -State Aid City Streets ISSUE: Minnesota has over 141,000 miles of roadway, and more than 22,500 miles —or 16 percent -- are owned and maintained by Minnesota's 853 cities. The Minnesota Constitution limits eligibility for dedicated Highway User Tax Distribution Fund dollars to up to twenty percent of streets in cities with populations over 5,000 (147 of 853 cities). This means almost 85 percent of municipal streets are ineligible for Municipal State Aid (MSA) funds and must be paid with local funding. Funding challenges are compounded by city cost participation requirements in state and county highway projects, which divert resources from city -owned streets. Maintenance costs increase as road systems age, and no city --large or small —is spending enough on roadway capital improvements to maintain a 50-year lifecycle. For every one dollar spent on maintenance, a road authority --and therefore taxpayers --save seven dollars in repairs. According to a report released in late 2012 by the governor's Transportation Finance Advisory Committee, cities collectively need an additional $400 million per year to bring city streets up to an economically competitive standard. RECOMMENDATIONS: City streets are a separate but integral piece of the network of roads supporting movement of people and goods. Cities need greater resources and flexible policies in order to meet growing demands for street improvements and maintenance. The City of Ramsey supports: A. dedicated and sustainable state funding source for non-MSA city streets in large and small cities statewide; B. enabling legislation that would allow cities to create street improvement districts (similar to storm water districts or sidewalk improvement districts already allowed under Minn. Stat. § 435.44); and C. the creation of a new fund within the Local Road Improvement Program that would provide grants to cities burdened by cost participation requirements related to trunk highway and county state - aid projects. Outcome • A couple of local funding street funding bills were introduced and were not passed into law: • Street improvement district authority HF 1565/SF 1998 (Rep. Steve Elkins, DFL-Bloomington, and Sen. Ann Johnson -Stewart, DFL-Wayzata) was a League initiative that would have provided authority for cities to establish street improvement districts to fund street maintenance, construction, and reconstruction. This bill was passed out of the House Local Government Division and did not receive a hearing in the Senate. • Tab fee surcharge for city street funding No HF/SF 1335 (Sen. Jim Carlson, DFL-Eagan), was a League initiative that would have imposed a $10 surcharge on license tab fees and on motor vehicle title transfers to be dedicated to city streets in large and small cities. It would raise $57 million per year for this purpose. The bill was not heard in the House or Senate. 2020 City of Ramsey Legislative Platform Page 5 of 9