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Page 1 of 2 <br /> <br />DATE: February 9, 2015 <br /> <br />TO: Honorable Mayor and City Councilmembers <br />Patrick Klaers, City Administrator <br /> <br />FROM: Terry Maurer, Public Works Director <br /> <br />SUBJECT: Municipal State Aid (MSA) System Update <br /> <br />There are a number of projects planned in the City over the next couple of years that are eligible <br />to use MSA funding. As such, it seems appropriate to give the Council an update on the <br />financial status of the MSA system. But first, a brief background on the MSA system overall <br />may be helpful. <br /> <br />The MSA system was established in 1956 as a way to provide funding to counties and cities <br />(over 5,000 in population) for their use on roadways that make an integrated network of <br />highways, county roads and city streets. This funding is in recognition that traffic from outside <br />the communities travel on main streets through the communities and should help to fund these <br />streets. The funding source is three fold; gas taxes, vehicle license fees and motor vehicle sales <br />tax. The distribution is established by State Constitution; 62% to the highway system, 29% to <br />the county system and 9% to cities over 5,000 in population <br /> <br />In 2014 these three funding sources amounted to $1.760 billion dollars. The cities’ 9% share <br />amounted to $154.6 million dollars. In 2014 there were 148 cities with a population of 5,000 or <br />greater. The cities’ 9% is then distributed to these 148 cities by two measures; population and <br />needs (needs is simply a mathematical calculation to determine on an “apples to apples” basis <br />how much it would cost to build out the entire MSA system which is then used to distribute 50% <br />of the city’s 9% share). Generally, each city on the MSA system is allowed to designate 20% of <br />their local mileage as MSA routes (currently the Arden Hills MSA system contains 7.53 miles). <br />In 2014 funds distribution each person was worth $20.95 and each $1,000 of need was worth <br />$12.04. Arden Hills’ 2014 MSA allotment was $317,145. A 25% portion ($72,286 in 2014) of <br />our annual allotment is designated for maintenance and submitted directly to the City in the year <br />it is allotted. The remaining 75% ($237,859) is placed in the City’s construction account at <br />MnDOT until it is requested for an MSA eligible project cost. <br />AGENDA ITEM – 1A <br /> <br /> <br />MEMORANDUM <br />