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WSB & Associn(er, Inc. May 20, 2008 Infrastructure a Engineering a Planning a Construction The Honorable Mayor, City Council and Staff c/o Michael Mornson City of St. Anthony Village 3301 Silver Lake Road NE St. Anthony Village, MN 55418-1603 Re: City Assessment Policy on State Aid Routes St. Anthony Village, MN WSB Project No. 1626-22 Dear Honorable Mayor, City Council, and Staff: 15 701 Xenia Avenue South Suite 300 Minneapolis, MN 55416 Tel: 763 541.4600 Fax: 763 541.1700 This letter has been prepared in an effort to discuss funding issues related to the reconstruction of future Municipal State Aid Routes. Attached please find a figure that shows the Municipal State Aid Routes within the City which are anticipated to be reconstructed within the next 15 years. The City currently funds reconstruction of interior roads through the 429 bond process, which requires a minimum 20% of the bond amount to be assessed to the benefited property owners. However, the 429 program is currently not available for funding Municipal State Aid Routes under the City's assessment policy, as the City does not assess the benefits to the adjacent residential landowners. The City's current assessment policy anticipates that funding levels from the State would be adequate to replace existing utilities and street surfaces on the State Aid system. Currently, the funding levels from the State of Minnesota are not adequate to meet the demands of our aging infrastructure. Below are a few comments in regard to the existing funding levels, and needs related to the reconstruction of Municipal State Aid Routes in the City. The State construction allotment to the City of St. Anthony for Municipal State Aid Routes is approximately $170,000 annually. Of this $170,000, $70,000 of it is currently used to pay off a State Aid bond which was issued for the reconstruction of 29°1 Avenue. This bond will expire in 2015. The City has approximately $1.6 million in eligible expenditures which are currently being reimbursed by the State for improvements on 33`d Avenue and 29°i Avenue. These expenses are being reimbursed to the City at a level of approximately $100,000 annually. This $100,000 is the $170,000 construction allotment minus the $70,000 bond payment. This is paid to the City in cash allotments each year. This level of reimbursement will continue approximately through 2015, at which point the bond will be paid and the allotment will go up in excess of $170,000 a year. This means the City will not reasonably accumulate cash in the State Aid account for construction and replacement of Municipal State Aid street and utilities until year 2021. K\ 1626-22\Admin\Docs\CI'R-hmcc-052008.doc