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Minnesota’s Municipal Transportation System

Minnesota’s Municipal Transportation System. Senate Transportation and Public Safety Committee February 11, 2013 Anne Finn, LMC Transportation Lobbyist . About the League of MN Cities.

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Minnesota’s Municipal Transportation System

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  1. Minnesota’s Municipal Transportation System Senate Transportation and Public Safety Committee February 11, 2013 Anne Finn, LMC Transportation Lobbyist

  2. About the League of MN Cities • The League serves 832 of Minnesota’s 853 cities through advocacy, education and training, policy development, risk management, and other services • The League also operates an insurance trust for cities

  3. About Minnesota’s 853 Cities • 139 are in the seven-county metropolitan area • Of the 714 cities in greater MN, only 36 have a population > 10,000 • 352 cities have a population < 500 • 500 cities have a population < 1,000

  4. Bottom line: Minnesota’s cities are diverse

  5. Airports

  6. Airports • 135 publicly owned airports in MN • Metropolitan area has MSP + 6 reliever airports • Remaining 129 are in greater MN • In greater MN, airports are typically owned by a city

  7. Muncipal Airports: Funding • State Airports Fund (SAF) is the primary state funding source for aeronautics • SAF comes from dedicated taxes on aviation fuel, aircraft registration, and airline flight property • Money in the fund is appropriated biennially to MnDOT as part of the transportation budget

  8. Municipal Airports: Funding Challenges • In 2003, legislature transferred $15 million from the State Airports Fund to the general fund • Amount was repaid in 2008, then taken again in 2009 • Funds have not been transferred back, meaning some airport maintenance delays

  9. City Streets

  10. City Streets • Municipal streets make up 19,000 miles (about 14 percent) of roadways in MN • Made up of collectors and residential streets • The design and quality of city streets is significant to all users and is critical to local economies

  11. City Streets: Maintenance • Maintenance of this system is essential if cities are to maximize investments • Every $1 spent on maintenance saves $7 in repairs/reconstruction

  12. City Streets: Maintenance

  13. City Streets: New Construction • New construction is sometimes necessary • To accommodate growth • To attract economic investments • Cost of new • $1 million per mile • Includes engineering, all underground work, C&G, sidewalk, landscaping, etc. • ROW acquisition is extra.

  14. City Streets • City street system is divided into two systems: • Municipal State Aid (MSA) • City street system

  15. Municipal State Aid (MSA): Where does it come from?

  16. Municipal State Aid (MSA) Eligibility • Municipal State Aid (MSA) funds up to 20% of streets in cities over 5,000 population • Currently, 147 (of 853) cities receive MSA • MSA roads make up just 16 percent of total city mileage • Additionally, MSA streets have design requirements

  17. Shortcomings of MSA • Most cities are ineligible for MSA • In MSA cities, MSA funds are often exhausted by cost participation in state/county projects • Property taxes supplement MSA on MSA streets

  18. Non-MSA City Streets: The 84% • The city street system (city-owned streets not receiving MSA) makes up the remaining 84% of city streets • Non-MSA city streets are funded with property taxes, local government aid and special assessments • Less common: assistance from county, developer fees

  19. City Street Funding Challenges • City budgets are strained • Special assessments are unpopular, difficult to administer • Maintenance is affordable, but not always a priority • Tax exempt property does not pay

  20. City Street Funding by the Numbers • According to Office of the State Auditor • In 2012 cities collectively budgeted $476.5 million (15.3% of total expenditures) for street maintenance and repair • In 2012 cities collectively budgeted $153.8 million (3.7% of total expenditures) for street construction and improvement

  21. Municipal Street System is Aging

  22. Existing Funding is Flat to Declining • Unlikely • Eligibility for MSA by more cities, more streets • Special assessments, property taxes suddenly becoming popular

  23. The Cost of Doing Nothing • What if revenues remain flat? • Deterioration of city streets will accelerate • Cities will struggle to attract and retain businesses • Property taxpayers will shoulder burden

  24. Street Improvement Districts

  25. How would it work? • Authority needed • Cities would have ability to establish one or more districts • Projects would be identified when district is established • Fees would be collected within district to fund projects in the plan

  26. What is a street improvement district? • Would allow cities to collect fees for: • Maintenance • Construction • Reconstruction • Fixed transit infrastructure • Trails and pathways

  27. Benefits • Enabling legislation only • Modeled after existing authority • Mechanism is fair • Allows maintenance and reconstruction to stay on schedule • Allows property owners to pay relatively small fees over time

  28. Conclusion

  29. More Information Anne Finn 651-281-1263 afinn@lmc.org

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