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AnnMarie Brink - US Bank

home : news : news June 27, 2017

6/8/2017 2:49:00 PM
Council gets serious tackling long-deferred paving repairs

North Branch “pavement management” has been pretty much non-existent the last decade or so-- and the city council is newly-determined to address street needs.  Funding, as always, is the big problem.  The council was advised the city could expend $1.2 to $1.3 million to just keep pace with delayed and current needs.

City engineer Lee Gustafson walked the council through this year’s street projects in a special council session last week; and with member Robert Canada absent, council directed Gustafson to seek bids for overlay on both state aid account segments and city streets for the best price.  

Sections scheduled for 2017 overlay include: Isanti Trail, Harder Ave., Hemmingway Ave., Cougar Trail and 400th Street. City streets are Branch Ave., Oak Street, and along the one block north of Oak-- on 7th, 6th, 5th, and 4th Avenues.  
Council approved a transfer of $145,000, budgeted elsewhere in public works, into the 2017 projects to help cover the non-state aid covered costs.

And, North Branch will try to do bids for both state-aid and city streets over the next three years, as the engineer suggested.

“Eighteen miles (of street) have never even seen an overlay, that are over 20 years old,” Gustafson explained.

The two decade mark is usually where serious deterioration approaches replacement/repair and goes beyond  maintenance.  Gustafson said the difference on the cheapest to most costly project scale inflates 10-times.

To try and generate some revenue for streets the council briefly reviewed “franchise fees.”

The electric and gas utilities billing classes are the basis for the fees (commercial, residential, etc.)  A normal energy use residential customer might see $12 per month as a fee.  
The mayor asked about vehicles “just passing through” but still impacting the longevity of the roads. Is there a tool to collect money for these vehicles-- and NOT a toll.  Council member Kelly Neider asked about propane users?  They wouldn’t get a fee assessed she was told.

The council mentioned implementing fees in 2018, but there’s much research and analysis to be done first.

Gustafson and WSB will do research on revenue options and report back, so council can act on any fees swiftly.

Council member Jim Swenson questioned if the city can do a local sales tax?  

Finance Director Richard Hill said he has the MN Department of Revenue looking into  sales taxes generated in North Branch and reporting back on the potential for revenue.

North Branch is still digging out from poor decisions and debt incurred many many years ago.  In 2019 the debt burden improves but the next three or even four years will remain somewhat challenging, Hill explained.

The city over nine levy cycles has kept overall growth in levy to well below two percent.  The general fund levy decreased from 2011 to 2015 and only started to climb up for 2016 and 2017.  The amount of the levy needed for debt service and abatements in 2015 was 53 percent or $2.3 million.    In 2017 debt and abatement owed was about 42 percent of levy.

Hill said the schedule for debt pay-off will allow to add back in some operating dollars five years out.  

In the meantime, North Branch is paying assessments for improvements to itself-- because development properties the city purchased and extended services to and installed roads were not bought up as projected.

 










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AnnMarie Brink - US Bank

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