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Page 1 of 2 <br /> <br />AGENDA ITEM – 1D <br /> <br />MEMORANDUM <br /> <br />DATE: September 16, 2019 <br /> <br />TO: Honorable Mayor and City Councilmembers <br /> Dave Perrault, City Administrator <br /> <br />FROM: Todd Blomstrom, Interim Public Works Director/City Engineer <br /> <br />SUBJECT: Municipal State Aid Status <br /> <br /> Budgeted Amount: Actual Amount: Funding Source: <br /> $1.47 million $1.47 million State Aid Account <br /> <br />For Council Consideration <br /> <br />Staff requests an opportunity to review the municipal state aid funding process and fund balance <br />availability for street improvement projects. Staff is seeking City Council direction regarding <br />use of future construction funding allotments. <br /> <br />Background <br /> <br />The City of Arden Hills is allotted approximately $300,000 annually of construction aid for state <br />aid road improvement projects. State statutes allow for cities to request and receive advances on <br />this allotment dependent on MSA cash balances. If a city receives an advance, future annual <br />allotments are used to repay the advance. The City last received an advance in 2015, and the <br />final repayment of the advance was made with the 2019 allotment. As of 2019, our MSA <br />construction account balance sits at a zero balance. The City now has the option to either <br />continue to receive its annual allotment (the next one is due in 2020) or request an advancement <br />of MSA construction funds (approximately $1.4 million). <br />Below is more background on MSA, the City’s previous usage, and considerations for the <br />Council moving forward. <br />Cities with a population greater than 5,000 receive state funding assistance each year for <br />construction and maintenance of local streets designated as municipal state aid routes. Funding <br />comes from transportation related taxes, such as the state gas tax, and is distributed follow a