5.5. SR 03-24-2003 - Laserfiche WebLink

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Impact fees have been established in over half of the states, including Wisconsin. In Minnesota, the Supreme Court weighed in on the issue in the case of Country Joe vs. City of Eagan, identifying a number of specific standards that a city must meet in order to legally levy impact fees. This subject has been the focus of considerable planning efforts among Minnesota cities, who have considered procedures that ensure that the legislation can meet the standards defined by the Court. The sponsors of this report also suggest that in order to support regionally beneficial growth policies, cities could be authorized to waive impact fees as an incentive for new developments designed to address future growth and other changes in the region. 5. Allocate a portion of the existing 5% special fund to cities under 5,000 population. Another recommendation that would channel funds to small cities ineligible to receive any state aid funding is to allocate a portion of the "5% Special Fund (5% of the total HUTDF funds) to such a fund specifically targeted to smaller, non-MSA eligible cities. Because this fund is now distributed between the Flexible Highway Account and the Township Road and Bridge Fund, it would obviously be difficult to reduce the current funding level to those accounts. However, it is noted that any increase in gasoline taxes, license fees or the transfer of MVST funds to the HUTDF would result in an increase to the 5% Special Fund. Accordingly, it is suggested that a portion of that increase could be allotted to a new account for cities under 5,000 population. 6. Allocate a portion of the Motor Vehicle Sales Tax revenues to a special fund for cities under 5,000 population. The Constitutional amendment which established the MSA and CSAH programs envisioned a system in which counties assumed the jurisdiction of collector and arterial streets within cities under 5000 population, as well as the principal responsibility to improve and maintain those roads. CSAH rules also provide that counties must program their CSAH improvement program so that the allocation "earned" by the money needs of the cities under 5000 must be spent in those cities (collectively). Many counties have adopted policies and programs which implement that approach. However, for various reasons, some cities have not been able to obtain the needed improvements to their arterial and collector street systems. This factor was demonstrated in the 2001 Legislative Study of State Funding for Local Road Improvements, and in the 2002 legislation which proposed the creation of a "Local Road Improvement Fund". The direct appropriation of MVST funds for this purpose is suggested as an option in the event the more complete program proposed by that legislation is not adopted. 7. Increase the level of funding to the Municipal State Aid program. As described in Section 2 of this report, the Municipal State Aid program provides a total of roughly $120 million annually to the 130 Minnesota cities with populations over 5,000 to support about 2,800 miles of city roadways. The size of the MSA system continues to grow as more and more cities eclipse the 5,000 minimum population threshold, however, the base funding for the MSA system is determined by the state Constitution and remains at nine percent of total Highway User Tax Distribution Fund revenues. While state MSA allotments have certainly been helpful to cities in their efforts to construct and maintain these eligible road systems, recent reports by Mn/DOT's State Aid for Local Transportation and other reports indicate that the MSA roadway surfaces continue to age and deteriorate. 42