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City’s decaying roads present $15 million puzzle

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City’s decaying roads present $15 million puzzle
Woodbury Minnesota 8420 City Centre Drive 55125

Woodbury’s crumbling streets are a $15 million bubble that’s got a city-appointed committee contemplating additional fees and taxes to close the funding gap.

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The city’s Roadway Rehabilitation Task Force is hashing out a few recommendations to fix the problem caused by a faulty blacktop mix used in the 1990s when many of the streets were built.

The nine-member committee appointed by city officials earlier this year is unanimous in using $5 million from the city’s reserves to cover some of the costs to resurface or in some cases rebuild the streets.

But they’re not so unanimous in raising taxes or utility bills through what is called a “franchise fee” that would tack up to 5 percent on each homeowner’s gas and electricity bill.

“It really singles out the nonprofits and the schools to charge them additional fees that can be passed back to us as taxpayers anyways,” task force member Brett Anderson said.

Franchise fees are a commonly used revenue source in the metro area including neighboring communities Cottage Grove and Maplewood.

Eden Prairie implemented the fee to help pay for roads and Edina for sidewalks, bike trails and other pedestrian-related improvements.

“The fee is a dependable revenue stream, as the community grows, so will the revenue,” said assistant to the city administrator Mary Van Milligen. “The fee is not subject to levy limits.”

If Woodbury were to implement a franchise fee of 1 percent on both gas and electric, Xcel Energy estimates revenue generated would be about $810,000 annually and the average homeowner would pay about $1.75 a month.

But Roadway Rehabilitation Task Force Chairman and City Council Member Christopher Burns said he struggles with this option as a funding source.

The option, he said, is “one that I don’t personally care for at all” but there is also another recommendation, which would raise taxes another way, that he’s not in favor of.

Woodbury currently assesses one-third of road project costs, while paying for two-thirds.

The task force is considering keeping that assessment policy in place, but also adding a minimum fee, whether it’s $1,000 for townhomes or $2,000 for single-family.

“We have some disagreements among our committee members on that,” Burns said. “It’s not a terribly large revenue generator but it is one we’re considering.”

Using $5 from the city’s $12 fund balance that’s dedicated to projects like these seems to be the best option, while bonding for the rest when necessary.

“That’s the reason why the city has a fund balance to address issues that come up,” Anderson said.

Premature deterioration of the city’s roadways came up as a surprise during a tough 2012-13 winter season.

The city began receiving an increasingly high volume of calls regarding crumbling streets and the initially budgeted $5 million amount was not enough to fix a widespread problem that spans almost every section of Woodbury, a suburb that began quickly developing in the 1990s.

The task force has not yet reached a consensus on where to get the $15 million, but the group anticipates coming up with a final recommendation for the City Council to adopt this fall.

“I’m not in favor of raising my taxes at all,” Anderson said, “but I understand that infrastructure needs to be replaced. It’s just the way it is.”

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Riham Feshir
Riham Feshir is a reporter and photographer for the Woodbury Bulletin. Her coverage includes Woodbury City Hall, Washington County Board of Commissioners and business news.  Follow Riham on Twitter @RihamFeshir for the latest updates.
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