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MEMORANDUM DATE: AgendaItem 1.D April 20, 2009 TO: Mayor and City Council FROM: Ron Moorse, City Administrator Sue Iverson, Finance Director SUBJECT: Street Improvement Project Assessment Policy Background The Council has had general discussions regarding the review of the City’s street improvement assessment policy, in light of the current PMP project, and in light of assessment options used in other cities. This memo provides information regarding two assessment options in comparison to the City’s current assessment policy. The current policy and options are as follows: Current policy: Assess 50% of the street improvement costs Option 1: Assess 20% of the street improvement costs* Option 2: Assess 0% of the street improvement costs* *For Options 1 and 2, the reduction in the amount of assessment revenue would be offset by an increase in the amount of tax levy revenue. Evaluation of Options Tax Levy Impact The key impact of the assessment policy options is the increase in the tax levy required to fund the street improvement projects. The attached charts show the impact of options 1 and 2 in relation to the 2009 PMP project, and in relation to the PMP projects proposed in the 5 year Capital improvement Plan (CIP). While the chart related to the 2009 PMP project shows the need for a $353,000 tax levy increase to offset the reduced assessment revenue, the 5 year chart shows the need for a $ 233,000 tax levy increase, due to the plan not including a large street improvement project in every year.