07-06-1993 WS - Laserfiche WebLink

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STAFF REPORT JULY 1, 1993 PAGE TWO 2 . User Fee Based Revenue Sources In late 1992, the City began its policy of establishing user fee-based revenue programs. The street light utility was the beginning of this policy. Since, the implementation of the Street Light Utility, several street lights have been installed and paid for out of a fund that costs residents less than the property tax if the activity had been funded from the General Fund. The electricity costs for the street lights has been paid out of the Utility rather than being placed on the property taxes. The cost of lighting the street lights, installation of new ones, and maintenance of existing lights has been the same for each individual property classification regardless of specific property value. The Street Light Utility is due to sunset at the end of this year, unless the Council takes action to continue the Utility. While I will not make specific recommendations in this area, I will prompt the Council to ask themselves the following questions and decide the issue on the basis of the answers: * Have the economic, social and financial issues which created the need for a Street Light Utility (and other such user fee based programs) lessened or ceased to exist? * Is it truly a better policy to spread the costs of a common, municipal operational program, such as the lighting of street lights, over a tax base based solely on the value of one's property, or * Is it a more reasonable approach to fund such an activity in such a way that the cost is set as a flat fee and does not impact an increase in property values brought about by improvements? * Does the City want to change the policy of establishing and maintaining user-fee based programs? Many years ago, the City of Mounds View made decisions which are now having a dramatic financial impact on the City's ability to maintain current service levels and meet current, future anticipated and unanticipated events such as the various Super Fund litigation matters, loss of State aids, declining revenues resulting from an decline in the aggregate tax capacity of the City, a sustained sluggish economy, declining conditions of the City's housing stock and an infrastructure that cannot last forever without improvements.