Laserfiche WebLink
City of Elk River <br />City Street Pavement Management <br />Program <br />The City Council is evaluating the option to fund the pavement management program throe � -? the collection <br />of a fr:�,- Ichic- F -- _ -= lieu of assessments and property taxes. <br />What is a Franchise Fee? <br />Every city has a franchise agreement with each utility <br />company (gas, electric, etc.) for their use /rent of city - <br />owned right -of -way for their business purposes. <br />• Right -of -way is city property located adjacent to <br />roadways for utilities, construction access, and snow <br />storage. <br />• By law, cities may charge utilities a fee for use of <br />City-owned right -of -way. Utility providers will likely <br />pass this fee onto their customers <br />How will it be used? <br />The city would fund regular maintenance projects with <br />the money collected from the fee, including overlays and <br />reconstruction, to prolong the lifecycle of streets to 50- <br />60 years. The average life expectancy of local streets is <br />approximately 25 -30 years without ongoing maintenance. <br />Reliance on state funds, property taxes, assessments, <br />and increasingly expensive materials make the pavement <br />management program vulnerable to cuts and delays, thus <br />decreasing street life. The city is currently bonding for <br />new projects which inflates street assessment costs by the <br />added interest costs. <br />Why Now? <br />With proper care, streets in Elk River should last 60 years. <br />Elk River has a growing number of streets requiring costly _ <br />maintenance in the near future. Scheduled assessments in <br />2013 are as high as $8,000 for some homeowners and <br />$20,000 for the average business. <br />To manage the larger street network and fully implement <br />an adequate pavement management plan, the city will <br />need to increase assessments and more than double <br />the property tax levy to $600,000 without an alternative <br />funding source. <br />What are the benefits to Businesses? <br />• More equitable funding plan than assessments based <br />on lot size and property taxes based on property <br />value. <br />• Eliminates the need for bonding and associated <br />financing costs. <br />• Smaller monthly fees instead of large tax statements <br />and assessments. <br />• Collects money from renters who pay utility bills and <br />also use the streets, not just the property owners. <br />• Keeps maintenance and reconstruction on a <br />proactive and timely schedule. <br />Is this a New Tax? <br />By definition, the planned franchise fee is a rental fee or <br />reimbursement with proceeds dedicated to finance the <br />costs of the city street system. <br />Revenue collected from the fee, which will likely be <br />passed on to customers of the utilities, will replace the <br />protion of the property tax levy used to pay for street <br />improvements. <br />How Much will this Cost? <br />Preliminary estimates show the impact to business and <br />industrial accounts as follows: <br />Small Commercial /Industrial - $36 /month <br />(based on utility classifications) <br />Large Commercial /Industrial - $126 /month <br />(based on utility classifications) <br />E r Comments and More Information <br />to our website blog at wwwElkRiverMN.gov <br />to "Elk River Listens" Or call 763.635.1000 <br />March 2013 Elk's, <br />River <br />