7.0. SR 03-23-1998 - Laserfiche WebLink

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CIP Worksession Page 5 The most important of the above categories is the concern over funding of street projects. This is also the most di6qcult funding issue to understand and which to be fair to all benefited property owners. All municipalities fund street improvements differently, and there is no one way to do it right. Each city must find its own right way for financing street improvements. A word a caution to the City Council relates to how easy it is to say to developers that "we will do the project later and assess it out" when developments are improved, but experience tells us that this is (liflqcult to accomphsh. For example, the Council is reminded of the Jarvis Street proposal in southeast Elk River which is not moving forward at this time, but which could have been a requirement of the commercial project that was approved in 1997. How the Elk River finances new and reconstructed streets is currently a mixed bag. The city typically assesses out a reasonable share of the cost to benefited property owners, even ff the projects are initiated by developers. Often, in addition to assessments, part of the cost of new or reconstructed streets is financed with MnDOT, county, city MSA, or city capital projects funds. On the other hand, we try to have developers pay 100 percent of "their" streets and the city tries to assess out 100 percent of overlay projects to benefited property owners. Overall, the city generally uses a combination of assessments and city or state (and sometimes county) financial participation in street projects. The biggest problem financially for the city is the bruited amount of MSA funds available and the limited amount of capital projects funds available for street projects. More and more city participation is being requested and this is (ti~cult to accomphsh with the bruited funds that are available. A few words of explanation need to be said about the bruited revenues being added to the city capital projects fund. The city receives money into this fund through "recychng' MSA funds whereby the city uses MSA monies for the project but assesses some of the cost out to benefited property owners. When these assessments are paid to the city they then flow into the capital projects fund to help finance the city's share of street projects. If the city does not assess out some costs on MSA projects, then this fund will be exhausted. The capital project fund also occasionally receives monies through one time defeasing of pubhc improvement bonds. It should be noted that to date, the city has rarely used tax revenues for its share of street projects. The city does use tax dollars for its seal