8.d) Cities Make Plea for Street Improvement District Authorityof GREATER 4%
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April 9, 2014
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The Honorable Mark Dayton
Governor of Minnesota
Room 130, State Capitol
75 Rev. Dr. Martin Luther King, Jr. Blvd.
St. Paul, MN 55155
The Honorable Paul Thissen
Speaker of the House
Room 463, State Office Building
100 Rev. Dr. Martin Luther King, Jr. Blvd.
St. Paul, MN 55155
The Honorable Tom Bakk
m MUNICIPAL
111 C�iMLSSI�ON
The Honorable Erin Murphy
House Majority Leader
Room 459, State Office Building
100 Rev. Dr. Martin Luther King, Jr. Blvd.
St. Paul, MN 55155
The Honorable Kurt Daudt
House Minority Leader
Room 267, State Office Building
100 Rev. Dr. Martin Luther King, Jr. Blvd.
St. Paul, MN 55155
The Honorable David Hann
Senate Majority Leader Senate Minority Leader
Room 226, State Capitol Room 147, State Office Building
75 Rev. Dr. Martin Luther King, Jr. Blvd. 100 Rev. Dr. Martin Luther King, Jr. Blvd.
St. Paul, MN 55155 St. Paul, MN 55155
RE: Municipal Street Improvement District Legislation: HF 745 (Erhardt)/SF 607 (Carlson)
Dear Governor Dayton, Speaker Thissen, Majority Leader Bakk, Majority Leader Murphy,
Minority Leader Daudt and Minority Leader Hann,
On behalf of Minnesota's 853 cities, we thank you for recognizing the pressing need for road
repairs across multiple jurisdictions statewide. We sincerely appreciate you supporting efforts to
advance funding to fill potholes and restore roads to a drivable condition.
Unfortunately, the deterioration we are seeing on state and local roads is not the result of one bad
Minnesota winter. Roads that are properly maintained are significantly less vulnerable to damage
than roads that have been neglected. The current poor condition of road pavement throughout the
state is the result of deferred maintenance due to fiscal constraints. While one-time revenue will
April 9, 2014
Page 2
be helpful in the short term, a long term solution is not only necessary, but critical to preserving
expensive assets.
The cost to perform maintenance on schedule is a fraction of the cost of making repairs to
crumbling roads. According to the United States Dept. of Transportation, for every one dollar
spent on maintenance, a road authority saves seven dollars in repairs. By the time a road is
crumbling, the opportunity to make modest investments has passed.
Cities are in a uniquely difficult position as it pertains to road maintenance and reconstruction.
While the state and all 87 counties receive funds from the Highway User Tax Distribution Fund,
only cities over 5,000 population (currently 146 of 853 cities) arc eligible for state aid dollars.
Within state aid cities, revenues are not keeping up with needs. Currently 84 percent of city
streets are paid for with a combination property taxes, local government aid and special
assessments. Each of these funding mechanisms has limitations, which we would be more than
willing to discuss with you in further detail. The point is that cities are falling woefully behind on
street maintenance and have long recognized the need for a new funding option.
We are writing to respectfully ask for your assistance in securing passage of a funding tool that
would help cities pay for street maintenance and reconstruction. The legislation, SF 607
(Carlson)IHF 745 (Erhardt), is a bipartisan bill that would allow cities to create street
improvement districts. It is a local option that we strongly believe should be made available to
cities statewide. Our preferred version of this initiative is attached.
Cities have attempted for several years to secure passage of legislation that would enable them to
implement street improvement districts. Just since 2013, 100 cities have adopted resolutions of
support for enacting street improvement district authority. The legislation would authorize cities
to establish street improvement districts within their boundaries to fund municipal street
maintenance, construction, reconstruction and facility upgrades. If enacted, this legislation would
provide cities with an additional tool to build and maintain city streets. Most importantly, this
tool would allow cities to perform maintenance at the optimal time—that is, when it is most cost
effective.
In 2013, the counties secured expanded wheelage tax authority and local option sales tax
authority to fund transportation projects. In spite of passing through all policy and finance
committees having jurisdiction over the bill, the street improvement district initiative did not
reach final passage. A version of the cities' street improvement district bill was included in the
House's omnibus tax bill in 2013, but the provision was removed in conference committee.
We strongly urge you to seek inclusion of the street improvement district language in a
conference committee report that will reach final passage in 2014. We appreciate your attention
to this important issue and stand ready to answer any questions you might have.
April 9, 2014
Page 3
Please direct any correspondence on this issue to Anne Finn, Assistant Intergovernmental
Relations Director, League of Minnesota Cities, at (651)281-1263 or afinn[7a,lmc.org.
Sincerely,
Shaunna Johnson
Administrator, City of Waite Park
President, League of Minnesota Cities
Susan Arntz
Administrator, City of Waconia
President, Metro Cities
Randy Wilson Jim Hovland
Mayor, City of Glencoe Mayor, City of Edina
President, Coalition of Greater Minnesota Cities Chair, Municipal Legislative Commission
4f
Jeff Thompson
Mayor, City of Paynesville
President, Minnesota Association of Small Cities
C: Rep. Ron Erhardt
Sen. Jim Carlson
Rep. Frank Hornstein
Sen. Scott Dibble
Rep, Ann Lenczewski
Sen. Rod Skoe
Commissioner Charlie Zelle
Attachments: Street Improvement District Language
List of Cities That Have Adopted Street Improvement District Resolutions
t
LEAGUE of
MINNESOTA
CITIES
CONNECTING & INNOVATING
SINCE 1913
2013-2014 Street Improvement District Support Resolutions
As of April 9, 2014
Albert Lea
Hawley
Proctor
Alexandria
Hendrum
Ramsey
Arden Hills
Hopkins
Red Wing
Barnesville
Hoyt Lakes
Rochester
Bemidji
Hutchinson
Rogers
Bird Island
Jordan
Roseville
Bloomington
Lake City
Royalton
Braham
Lake Crystal
St. Augusta
Brainerd
Lake Park
St. Cloud
Breezy Point
Le Center
St. Joseph
Brooklyn Center
LeRoy
St. Francis
Cambridge
Lonsdale
Sartell
Canby
Luverne
Sauk Rapids
Center City
Madison Lake
Scandia
Champlin
Maple Grove
Sebeka
Chaska
Maple Plain
Shoreview
Chisholm
Maplewood
Shorewood
Clara City
Mayer
Sleepy Eye
Cloquet
Mendota Heights
Stillwater
Comfrey
Minnetonka
Tracy
Coon Rapids
Minnetrista
Truman
Crookston
Moorhead
Verndale
Crosby
Morgan
Wadena
Crosslake
Mountain Lake
Waite Park
Currie
New Prague
Walnut Grove
Delano
New Ulm
Watkins
Dodge Center
New Prague
West St. Paul
East Grand Forks
North Mankato
Wheaton
Edina
Norwood Young America
Windom
Fairmont
Nowthen
Worthington
Falcon Heights
Oak Park Heights
Wyoming
Grand Rapids
Pelican Rapids
Zumbrota
Granite Falls
Pine City
Grant
Pipestone
145 UNIVERSITY AVE. WEST PHONE: (651) 281-1200 FAX: (651) 281-1299
ST. PAUL, MN 55103-2044 TOLL FREE: (800) 92S-1122 WEB: WWW.LMC.ORG
HF 745 2nd Engrossment - 88th Legislature (2013 - 2014)
Minnesota State Legislature
Minnesota House of Representatives
HF 745 2nd Engrossment - 88th Legislature (2013 - 2014) Posted on 04/02/2013 03:I2pm
KEY: stere = removed, old language. underscored = added, new language.
Version List Authors and Status
1.1 A bill for an act
1.2 relating to municipalities; authorizing municipalities to establish street
1.3 improvement districts and apportion street improvement fees within districts;
1.4 requiring adoption of street improvement plan; authorizing collection of fees;
1.5 proposing coding for new law in Minnesota Statutes, chapter 435.
L6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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Section 1. T435.391 MUNICIPAL STREET IMPROVEMENT DISTRICTS.
Subdivision 1. Definitions. a For the purposes of this section the fol.lowing terms
have the -meanings given them.
their repair; millin • overlaying; drainage and storm sewers; excavation; base work;
sabgrade corrections; street lighting; traffic signals; signage- sidewalks; pavement
markings;_ boulevard and easement restoration; impact mitigation; connection and
reconnection of utilities: turn lanes; medians; street and alley returns; retaining. walls;
fences lane additions; and fixed transit infrastructure trails or pathways. "Fixed transit
infrastructure" does not include commuter rail rolling stock light rail vehicles or
transit way buses; ca ital costs for ark -and -ride facilities; feasibility studiesplanning,
alternative analyses environmental studies engineering, or construction of transit ways-,
or operating assistance for transit ways.
(d) "Maintenance" means striping, seal coating, crack sealing, pavement repair,
(fl "Municipality" means a home „rule charter or statutory cites
(g) "Street improvement district"means a geographic area designated by a
municipality and located within the municipality within which street improvements and
maintenance may be undertaken „and financed according to this section
(h)_ "Undeveloped parcel" means,a parcel of land that abuts an unimproved municipal
ctrpat and that is not can/Ad by me inirinai Cn-nr - -nn - ..,..- ... tt,- - ..F - -
Subd. 2. Authorization. A municipality may establish,by_ordinance municipal
street improvement districts and may defray all or part of the total costs of municipal street
Subd. 3. Uniformity.
classification of real estate.
Subd. 4. Adoption of Plan. Before establishing a municipal street im rovement
district or authorizing a street improvement fee, a municipality must propose and adopt as
street im rovement Ian that identifies the location of the municipal street improvement
in tree municipal street improvement plan.
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HF 745 2nd Engrossment - 88th Legislature (2013 - 2014)
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2.31 Subd. 6. Collection; up to 20 years. (a) An ordinance adopted under this section
2.32 must provide for billing and payment of the fee on a monthly, quarterly, or other basis
2.33 as directed by the governing body. The governing body may collect municipal street
2.34 improvement fees within a street'improvement district for a maximum of 20 years.
3.1 (b) Fees that, as of October 15 of each year, have remained unpaid for at least 30
3.2 days may be certified to the county auditor for collectionas„a special assessment payable
3.3 in the following calendar year against the affected property.
3.4 Subd. 7. Improvement fee. A municipality may imp„ose_a, municipal street
3.5 improvement fee by ordinance. The ordinance must not be voted on or adopted until after
3.6 public notice is provided and a public hearin is held in the same manner as provided in
3.7 subdivision 4.
3.8 Subd. 8. Not exclusive means of financing improvements. The use of the
3.9 municipal street rn rovement fee by a municipality does not restrict the municipality from
3.10 imposing other measures to pay the costs of. local street improvements or maintenance,
3.11 except that a municipality must not impose special assessments for proiects funded with
3.12 street improvement fees.
3.13 Subd. 9. Undeveloped parcels; fees. A municipality may not „impose _a street
3.14 improvement fee on any undeveloped parcel located within an established street
3.15 improvement district until at least three years after either the date of substantial completion
3.16 of the paving of the previous unimproved municipal street or the which a previously
3.17 unoccupied structure is first occupied, whichever is later.
3.18 EFFECTIVE DATE.This section is effective July 1, 2013.
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