consultants are sandburs

Tuesday, October 15, 2013

RAMSEY - FRANCHISE FEES - A few ideas, not previously posted.

The posing of an either/or policy question on assessments, franchise fees, or additional general levy increases to meet a generic public duty of the city - maintaining roads - might not be totally wise.

There may be what I might call "my road" hypochondria, in analogy to the use of copays in medical coverage to lessen the potential for hypochondriacs abusing the system.

Road hypochondria would be the irate phone call to city hall, "I paid my @%^^*%# franchise fee, so fix my road. It has cracks. There is a dip in a place along the two mile stretch."

If there is a frontage foot based or other partial assessment, say for illustrative purposes 10%, then there is that degree of discouragement for ones otherwise wanting cosmetic change or such; and a 10% of cost assessment is unlikely to be litigated or prevail in litigation as being greater in amount than the "benefit" to a property. If franchise fees end up used, such a copay approach is a consideration.

Earmarking: Another consideration, as with the ACE Solid Waste situation at present, the collected passed through franchise fee (if, indeed that is the case now with ACE), that revenue stream can go into general funds without earmarking, since earmarking disturbs the general best balance of one levy stream or it and other FAR LESSER fee-based streams of city income going into general funds and then an unbiased unearmarked allocation from general funds is made annually to cover all city expenses anticipated as necessary, and more so than for things going unfunded. It is a better way to govern.

What's up, doc? Last, at the last Charter Commission meeting there was discussion of an Andre Street possible "improvement" that involved cost of a study where the residents then used Charter protections to kill the proposal.

The involved protective Charter provision language used to kill that project was not made a part of the Charter over road work considerations where an assessment, if fully assessed out at 100% of cost, would likely not ever go beyond four figures. That Charter protection is expressly there, historically, because of the threat of forced hookup at GIGANTIC cost, to sewer/water if it is run down your street - the one you reside on.

I recall one 2030 Comprehensive Plan session, back then, when Brian Olson before he departed for greener pastures honestly and forthrightly - and refreshingly - admitted that as things then stood a property with 300 frontage feet would for sewer/water connection likely be assessed fifty grand. Five figures! Dead mid-five figures. Big time worry. Connection fees being the big part of that big ticket, and trunk routing costs, the big deep trenches such as a few years back happened at the north end of Sunfish Lake Blvd. The big ticket item is NOT and never was the added contractor costs along a normal residential road.

Years ago, (I am informed because it was before I came to live in Ramsey), when the city was mostly dirt roads and tarring the roads in the first instance was under discussion, it then was questioned "Should we do it now or should we wait for the sewer/water grow-out?" They tarred, and that's the "mid-1970's to mid-1980's roads that will have to be rebuilt." Why, the "need to be rebuilt" part? The road in front of where I live was tarred back then, and it's fine. It got crack sealing and an overlay within the last four-five years, and cracks well will reappear where they were before, and can be tarred as before, and there is little traffic with the main wear and tear being the ACE trucks and the the other franchised garbage collection trucks. Occasionally there is a UPS or FedEx van, but over the road trucking picks other routes than Ramsey's regular residential streets. The wear and tear thing seems to be a red herring. Is there some burning need to do curbs and gutters, where nothing's changed and that sort of cosmetic stuff was never needed up to now? On the normal residential streets where the single family detached homes on large lots are the neighborhood norm? Sidewalks, where not needed because walking several miles a day along the back streets, I encounter perhaps one car per mile, one way, and the courtesy to walkers is to swing to the far side of the street, which is not a problem to do at low-to-no traffic levels? What's in the engineering detail? Nobody's disclosed that in adequate detail, as I understand things. Curbs and gutters would only serve to make it harder to plow the sideroads with the grader, where three feet get routinely taken from the lawns along the side of the road that doesn't have the mailboxes on them. Roads like that are fine as is. No rebuild needed. No tarting up, no cosmetic detail, at costs beyond any conceivable benefit, in such established neighborhoods.

That kind of "what's up" worry is why the Charter has the citizen-friendly language within it about "improvements" and how residents along a proposed "improvement" can kill the thing by a collective will and vote. Sewer/water is the big ticket item, road upkeep is substantial, but not gigantic. Upkeep not being identical to "upgrade" which is in the eye of the beholder. Especially so when "upgrade" has sewer/water dimensions, and especially if that's not an up-front discussion where the sunshine is.

There is a Met Council downward will to make all of Ramsey served by sewer/water centralized services, with wells and septic systems no longer an option, and long term it likely will happen but as Keynes said, long term we're all dead.

Until death, massive sewer/water imposition can be opposed.

So, tell me, in the engineering analysis, its most devilish details, is it costed out that any roadway that needs not maintenance, via crack seal or overlay, but that will be deemed in need of rebuilding - is the costing then set to in concert run the sewer and water, as "efficient?"

That is not an inconsequential question in contemplating the underlying engineering representations being made as part of the franchise fee discussion, and the setting of what franchise fee levels might be needed to raise what levels of income? If sewer/water is part of the equation, the numbers get much bigger, against us.

Does any reader know that answer? Is there stealth extension of costly sewer/water hidden away from the main daylight, the sunshine, of the debate?

I got some prompt feedback that I am in error. The recent assessment practice has been on a per property basis, not on a front-footage basis, with the large home - small property with four cars in a family being more wear and tear than the large lot - small home two car family, so that splitting hairs on footage or number of autos or such was a greater inconvenience and less fair than assessment cost sharing based on a per residential property along a normal residential street. County roads, with residences there, are treated differently - not being a part of city jurisdiction at all anyway. Front footage, and cul-de-sac reality also entered into the thinking, where larger cul-de-sac homes, on large lots, have minimal frontage but could involve multiple vehicles for each.

________FURTHER UPDATE________
Obviously, with per parcel pricing, on a hypothetical 10% assessment possibility, 90% of the cost along a stretch would be covered by levy as needed [up to levy limit where, if really needed and not whipped cream curb/gutter froth or such with our sandy soil drainage already doing the job on our residential road grid, i.e., with no pointless luxuriating on the roadbeds in the engineering, then and only then a brief interim franchise fee situation might kick in from such a point to year's end; or better, the less pressing projects could be postponed].

In that scenario, with 90 % levied cleanly, a remaining 10% along a road stretch, as a dollar amount, could be divided by the number of properties along the stretch to get a per parcel partial cost assessment.

Doing things that way is clean, easy, and easy for property owners to understand. And no devious franchise fee regressive imposition would apply absent a true emergency shortfall and then it would be limited to a duration of less than one year, i.e., none of that stuff would be created that can get upped once first imposed, extended to multiple uses, extended to other franchised utility entities, or never put to a sunset rest.

Such a scaled back levy-based scenario is defensible. Much more so than a franchise fee with its indefinite risks and possible misuse. Moreover there is the taxation vs. fee dimension. Local property taxes are deductible from taxable income for federal income tax purposes, a consideration urged as important by more than one speaker at the public hearing last week.

It's plain common sense to use the levy, so in the best of worlds we'd expect something like that.

Let us hope.

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