Assessments curbed with franchise fees

Once in a while, a different way of doing things comes along and you just want to share it.

In most cities, residents are assessed for repairing and overlaying streets. Sometimes that amounts to thousands of dollars for property owners.

In my hometown of Elk River, the council has just approved a new way of financing the repair of our streets.

Instead of assessing the property owners and businesses with those whopping charges, the council has started a franchise fee system where homeowners pay $9 per month, small commercial and industrial properties pay $29 to $41 monthly, general commercial properties pay $120 to $140 monthly and large commercial industrial properties pay $170 monthly. This includes nonprofits, such as schools and churches.

City Engineer Justin Femrite figures this fee will bring in $1.4 million per year that, when combined with state aid, will fully fund the pavement management fund.

Without this fund, homeowners this year were facing up to $8,000 in assessments for street repair and an average business $20,000.

The good news is this year they will not have to pay those assessments. The not-so-good news is those in the past who have been assessed will still have to pay the money, although the city is working out some kind of a rebate.

St. Louis Park has been using a form of this method for years. It makes sense that all of us should pay a little something each month, since we all drive on all of the roads. Why should we be saddled with paying for the road in front of our house?

There’s another savings for us taxpayers. The city no longer will have to sell $270,000 in street improvement bonds, plus pay the interest and costs of handling the bonds.

Street repairs will be done on schedule, uninterrupted by residents who protested the assessment and threw the repairs off schedule.

City Administrator Cal Portner was looking for a way to avoid those painful street assessment hearings where residents pleaded for relief of assessments they said they could not afford. He patterned this new franchise fee plan after one in law to handle storm water drainage.

Femrite calculates that figuring out 60 years, this new method will save 70 percent of the costs, figuring no bonds, no interest rates, no interest rates for the property owners and having the work done on time.

The Elk River City Council made every effort to let residents know about this new method. They mailed out brochures explaining it to 7,000 residents, told business property owners about it in an insert with the Chamber of Commerce newsletter and had an open house to explain it.

Just thought you’d like to know there is a way to avoid those painful assessment hearings as well as paying those thousand-dollar assessments for the street in front of your house.

For more information, call Portner at 763-635-1001 and Femrite at 763-635-1051.  — Don Heinzman  (Editor’s note: Heinzman is a columnist for ECM Publishers and a member of the ECM Editorial Board.)