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Franchise Fee Caption <br /> Pros <br /> 1) No increase to the tax levy. <br /> 2) Stable revenue stream that can be readily adjusted anytime of the year. <br /> 3) Collects from all street users including schools and nonprofits who pay 429 assessments. <br /> 4) Smaller monthly fees instead of single larger amount on tax statement or assessment. <br /> 5) Collects money from renters, the actual street users,not just the property owners. <br /> Cons <br /> 1) Less transparency in how the revenue is collected. <br /> 2) Would require public outreach to describe the fee and process. <br /> Through staff's research into the options,the franchise fee has emerged as the most positive approach to <br /> funding of a long-tern pavement management program. <br /> If it is the desire of the Council to move forward with a franchise fee, the next step would be to draft and <br /> review a franchise ordinance and authorize the holding of a public hearing. Communication with the <br /> public would be 'integral through this process. The process would culminate with the adoption of an <br /> ordinance and notification made to the utility companies. The entire process for establishing a franchise <br /> fee would take between 4 to 6 months. <br /> Past Street Assessments <br /> The largest challenge identified in making a funding transition is how we make it fair to property owners <br /> that were recently charged a street assessment. There currently are property owners who are paying off <br /> assessments. At this time,we are collecting payments on over$1.6 million of outstanding street <br /> assessments. After discussions with other communities on how they have handled or propose to handle <br /> this issue,we found that we are further ahead in this process than most others and we determined that <br /> due to the timing and condition of our pavements it is difficult to make it any fairer for residents. <br /> As alluded to in the opening paragraphs of this memo,all of the costs of the streets in Elk River have <br /> been born by the residents. Either it was through the purchase of their property, the payment of an <br /> assessment,or general property tax obligation.. <br /> A case can be made that those owners who purchased a new home,call them Owners A, have paid more <br /> for the streets in Elk River than a resident, Owner B,who purchased an existing home and was assessed <br /> for a street upgrade. In addition to Owner A paying for 140%of the road in front of their house, they <br /> have been paying their prorated share of the 66%general city cost of the other reconstruction projects. <br /> Owner B has paid 33% of the costs associated with their street in front of their home through an <br /> assessment and then their prorated share of the 66%general city cost of the project. <br /> Because of the system age and all residents having previously contributed to the system through either <br /> the purchase of their lot or a special assessment,staff feels it is a fair approach to move forward with a <br /> change in policy. The following are some ideas for consideration of the Council: <br /> 1. Charge all properties in the city a franchise fee starting July 2012. Refund about$1.6 million in <br /> outstanding unpaid street assessments. No previously paid portions of any street assessments <br /> would be refunded. <br /> ! / I I I E I I Y <br /> NATME <br />