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Properties utilizing Tax Abatement or located in TIF Districts would not contribute to the program <br />funding as well as benefitting properties exempt from property taxes such as churches, schools and <br />nonprofits. The $1.5 million dollar levy would be added as a line item labeled pavement management or <br />something to that effect. <br />The second option is the implementation of a franchise fee. A $1.5 million franchise fee would be <br />charged to the power and gas service providers within the city. The utility providers would then pass this <br />cost on to their customers as a fee listed on their monthly bill. The flat fee is a tax increase and we would <br />propose to inform residents of the pavement management program funding plan and its benefits. St. <br />Louis Park generates revenue for its pavement management program through this option. <br />A franchise fee is the preferred approach based on public input and the benefits over the general tax <br />option, by other communities who have looked into alternative funding of their programs. <br />A breakdown of the estimated taxes verses a franchise fee payable by different value homes and <br />commercial /industrial properties is depicted in the following graphic. The graphic shows what a <br />monthly payment would be from each property in order to generate $1.5 million dollars in revenue. <br />*The actual tax levy impacts are based on current net tax capazty for 2093 <br />The numbers presented for the franchise fee are based on estimated total accounts as received from the <br />Elk River Municipal Utilities. The final number of accounts and amount of the fee would need to be <br />refined through the implementation process with all affected utility providers. <br />Each approach described above has positives and negatives. We have tabulated staffs opinions of <br />positives and negatives of each option below: <br />Special Levy Tax -based Option <br />Pros <br />1) Simple transparent collection of revenue through general tax process. <br />2) Recognized taxing process understood by the public. <br />Cons <br />1) Larger levy and higher dollar amount on tax statements. <br />2) Unfairly distributes higher costs to higher valued properties. <br />3) Does not collect money from tax exempt street users. <br />4) Tax amount could only be adjusted annually and would vary based on property valuations. <br />p I I I R I I I <br />NATURE <br />