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This is a copy of an item REQUEST FOR COUNCIL ACTION from the Council packet of 5/6/02 DATE: 05/06/02 ITEM NO.: Department Approval: Manager Reviewed: Agenda Section: Item Description: Special Assessments Policy Discussion BACKGROUND At the April 8, 2002, council meeting, staff presented information comparing the special assessment policies of surrounding communities. Discussion was focused around three key areas. The first issue was whether or not streetscape projects should be assessed, and if so, to what level. The second discussion topic considered the current assessment policy on state aid designated roadways. The third and final topic was the assessment of commercial properties for roadways. Council direction to staff at the conclusion of this discussion was to return to the council in four weeks with additional analysis and options for potential streetscape assessment language. This memo also contains options and additional information relating to the current assessment policy on MSA designated streets. The Council also determined after discussion not to consider change to the commercial assessment rates in the current policy at this time. TRANSPORTATION FUNDING The transportation network in Minnesota is funded through several mechanisms. They include federal aid, state aid, property taxes, and special assessments. Federal aid is distributed to local govermnents in the form of grants for specific qualifying projects. State aid flows to local governments from the highway user tax distribution fund. Roughly 50% of the money in this fund is derived from tax on motor fuels, and the remaining 50% is revenue from vehicle registration tax. Only 9% of these monies are funneled to local governments in the form of municipal state aid for local roads. Eligibility for municipal state aid street funding is limited to cities with a population of 5,000 or greater. Each eligible city may designate up to 20% of its total street mileage to the state aid system. Selection criteria for the designated system requires the streets to connect to generally higher volume roadways at each endpoint. These streets generally carry a higher volume of traffic than other non-designated local roads. One-half of the fund is distributed to cities according to population, and the other half according to each city's money needs for its MSA streets. Special legislation crafted in 1993 allowed cities in Ramsey County to add jurisdictional tumback roads to local governments to be added to a city's state aid system over and above the base 20% designation.