New way of paying for street projects to go before Legislature
A bill that allows cities to collect fees from property owners to fund municipal street maintenance, construction and reconstruction is expected to get further consideration in the Minnesota Legislature this session.
Supported by the League of Minnesota Cities, the street improvement district legislation was introduced in 2013 as Senate File 607 and House File 745.
It would allow property owners to fund expensive street projects by paying relatively small fees over time.
Additionally, the street improvement district tool could be used to minimize or eliminate the need for special assessments, which are often burdensome for property owners and difficult to implement for some cities, according to the league.
To date, more than 100 city councils in the state have passed either resolutions or letters of support in favor of the legislation.
The Alexandria City Council supported the resolution last April on a 3-2 vote. The city’s resolution said that existing funding mechanisms from the state are inadequate to keep city streets in good shape.
During the discussion that led up to the council’s vote, City Engineer Tim Schoonhoven noted that Alexandria has 125 blocks of street that need complete reconstruction at a cost of several millions of dollars.
He said the legislation would be a tool the city could use instead of putting off street projects that keep getting more expensive.
Schoonhoven cited Rosewood Lane as an example. A project to overlay the street was estimated at $300,000 a few years ago but the city held off on doing it. Now, the project will cost $1 million.
Keeping streets in good shape with periodic improvements is much cheaper than doing nothing until the entire street needs to be replaced, Schoonhoven said. Creating a street improvement district would give the city funding to do that.
“You need any tool you can get,” Schoonhoven said.
He added that the street district could be set up like the city’s stormwater district, which collects fees for a variety of drainage projects.
Council members Virgil Batesole and Todd Jensen voted against the measure. Batesole said it amounted to another fee. “To me, it’s another way for the council to stick it to taxpayers,” he said.
In a news release issued last week, the league said that studies have shown that, without ongoing maintenance, the average life expectancy of local streets is about 25 to 30 years.
However, routine maintenance projects, such as seal coating and overlays, can prolong the life cycle to between 50 and 60 years.
For every $1 spent on maintenance, a road authority potentially saves $7 in repairs at a later date, the league noted.
Bill supporters maintain that, under current funding streams, cities lack viable options for timely maintenance that could possibly save taxpayers millions of dollars down the road and also ensure a strong infrastructure to attract business development in their communities.
“Street improvement district authority is a much better solution for taxpayers than waiting until there’s a desperate situation for funding,” said Mark Maloney, director of public works for Shoreview. “We need a funding tool that allows us to build and maintain our transportation infrastructure to retain our businesses, to attract new businesses, and encourage our existing businesses to expand and create new jobs.”
SF 607/HF 745 moved through much of the legislative committee process during the 2013 Session. Currently, it is awaiting action by the tax committees in the House and Senate. The initiative might also be included as a local funding provision in a larger transportation funding package.
The league serves more than 830 members through advocacy, education and training, policy development, risk management, and other services. For more information, visit www.lmc.org.