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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 leNi,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 /> Franchise Fee <br /> /# MM�AJi <br /> *7 he arluaAtux leg,impaas an based on eunrnt net tax capado.far 2013 <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 /> P0N ( RE@ or <br /> NATUR <br />