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Mounds View City Council October 11, 1999
<br /> Regular Meeting Page 24
<br /> to redo her road, the Streets Policies Committee has recommended the citizens affected on that
<br /> road will meet at public hearings for their specific road, and will decide what type of street they
<br /> desire. He explained if the residents decide to have the "Cadillac" of roads, they can, although
<br /> they will still be required to 25 percent of its cost. He added if they decide they want to keep the
<br /> beautiful trees, it will be their decision, and the City will not come in with rules or mandates.
<br /> Council Member Marty noted that he and Mayor Coughlin were members of the Streets Policies
<br /> Committee at its onset, and these were the discussions that were coming forward. He
<br /> commented after he and Mayor Coughlin were off the committee, the Streets Policies Committee
<br /> came forward with their recommendations. He stated he was very impressed with their work.
<br /> He stated Mary Malerick, Chairperson of the Streets Policies Committee has indicated that the
<br /> neighboring cities of New Brighton, Spring Lake Park, Blaine, Roseville, Fridley, and St.
<br /> Anthony have had a tax through the operating levy, or separate funds through sewer and water or
<br /> street lighting, which have been instituted and in place for some time for street replacement. He
<br /> explained that until now, the City of Mounds View has not had anything in place to generate
<br /> revenue to replace the streets. He stated he did not know how they had gotten this far without it,
<br /> but believes it is high time that something is done.
<br /> Council Member Marty stated the cities of Arden Hills and White Bear Lake have street funds of
<br /> which they can only utilize the interest, and not the principal. He noted much could be done with
<br /> the interest on a 30 million-dollar fund, however, Mounds View does not have anything set
<br /> aside. He explained that 1.5 percent, in the form of a franchise fee, will provide approximately
<br /> $125,000 a year, and for a $700,000 per mile road, this amount will not go very far. He stated
<br /> this was why he was hoping to be able to apply more of the franchise fee directly toward the
<br /> street fund.
<br /> Council Member Marty stated he had attended the League of Minnesota Cities conference in
<br /> June, along with other Council Members and members of staff. He noted this was the
<br /> conference at which Council Member Stigney had won a $1,000 door prize. He stated he
<br /> attended a seminar at this conference, in regard to explaining taxes to the citizens, and had
<br /> questioned one of the experts teaching the seminar, in regard to Tax Increment Financing. He
<br /> stated the expert indicated, with commercial and business taxes being lowered by the State in the
<br /> last couple of years, cities with Tax Increment Financing situations could be in for some difficult
<br /> times. He stated that some of the cities entering into new Tax Increment Financing programs are
<br /> specifying this is not just based upon taxes, but the minimum payment. He explained that the
<br /> City had researched a Tax Increment Financing situation this spring, in terms of minimum
<br /> payments, to insure the City will not be caught short if the State continues to lower the business
<br /> and commercial taxes. He noted, however, the expert speaker further indicated the only way
<br /> cities can cover themselves, or possibly recoup, if the State's course of action follows true with
<br /> the past couple of years, is to maintain their franchise fee. He advised this is the only means the
<br /> City has to correspond with the taxes coming into the City, and if commercial and business taxes
<br /> continue to be decreased, the only way to cover the operating expenses of the City is the
<br /> franchise fee.
<br /> Ms. Olson stated that Mounds View does not need to be concerned about this, as the majority of
<br /> the City's commercial Tax Increment Financing Districts are "pay as you go" situations. She
<br /> explained whether or not the actual tax capacity percentages decrease, this will not hinder or hurt
<br /> the City. She stated however, there is a potential problem with the Council's desire to look at the
<br /> potential of meeting the "big plan", prior to making any future Tax Increment Financing
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