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� Schwartz, Duane From: Sent: To: Subject: Beets, Neal Wednesday, May 01, 2002 8:25 AM Miller, Chris; Schwartz, Duane FW: City Assessment -----Original Message----- From: Jim Mulder [mailto:JMulderC�mncounties.org] Sent: Wednesday, May 01, 2002 6:52 AM To: �neal.beets@ci.roseville.mn.us' Subject: RE: City Assessment Neal: Sorry, I will insert it in the message. Jim Mulder Date: 2/12/02 To: Members, Roseville From: Jim Mulder 1880 Shady Beach Re: Street Assessment City Council Policy I found the discussion surrounding the issue of special assessments on Monday, April 8, 2002 to be particularly interesting and through this letter wish to contribute to that discussion. The challenge surrounding this debate is that it is like looking at a multi-sided, multi-colored structure. Depending on which angle you are looking from, you will see the structure very differently. In addition, the solution or resolution of the issue is not found in a choice between right and wrong or good and bad. The challenge of the decision is the choice between right and right or value vs value. Gas Tax and Gas Tax Distribution As the council is aware, Minnesota collects a twenty-cent gas tax on each gallon of gas sold in Minnesota and deposited in the Minnesota Highway User Tax Distribution Fund (HUDTF) . Besides the gas tax, motor vehicle registration fees and some state general fund dollars are deposited in the MHUDTF, which is distributed for a number of purposes. I'he funds are distributed as per the state constitution, sixty-two percent for the state for state roads (i.e. highway 36), twenty-nine percent for county roads and the County State Aid Highway Fund (CSp,H) (i.e. County Road C) and nine percent to cities larger than five thousand populations and the Municipal State Aid (MSA) account. It should be noted that although the 62/29/9 distribution is part of the state constitution, how the money is distributed between counties in the CSAH system and between cities in the MSA system is statutory. Under current law, each city larger than 5000 population receives funding under a 50/50 formula. Fifty percent of the money in the MSA fund is distributed per capita to eligible cities and fifty percent is distributed on needs (the amount needed to bring a city's MSA designated roads to state standard and maintain them at such). Unfortunately, there is not enough money to do that for all MSA roads so you get only a percentage of the total available equal to the percentage needs your city is to the total of all city needs. The bottom line is that even though Roseville gets a nice hunk of change ($938,000 est. in 2002) for MSA roads, local revenue sources are needed to supplement construction and maintenance of these roads. That is why when the city engineer says there is flexibility, the flexibility comes from what the road needs are and what resources are available. The gas tax itself is what I would describe as an indirect user fee as compared to a direct user fee. A direct user fee is a fee paid for a service that is unique to the payer. A building permit is a classic example of a direct fee where you pay for the service that you receive. The gas